Markets may have rallied in the immediate aftermath of the surprise results in the U.S. presidential election, but Canadian investors dumped U.S. securities in November, according to the latest data from Statistics Canada (StatsCan).
The national statistical agency’s monthly data on international securities transactions for November, released on Thursday, shows that Canadian investors reduced their holdings of foreign securities by $7.9 billion in the month. StatsCan reports that this came largely through sales of U.S. equities and treasuries.
The drop in foreign holdings was the first since January 2016. StatsCan reports that Canadian holdings of foreign debt securities declined by $4.8 billion overall in November as investors sold $2.8 billion of U.S. treasury bonds and $864 million of U.S. treasury bills. However, the results weren’t a complete washout for U.S. fixed-income as Canadian investors added U.S. corporate bonds, but also sold non-U.S. bonds.
At the same time, Canadian investors also sold off $3.1 billion of foreign equities in November, StatsCan reports, ending eight straight months of acquisitions. All of this came in the U.S. as well, as investors sold $5 billion in U.S. equities, while adding $1.9 billion in non-U.S. foreign shares. The selling action in U.S. stocks came despite a 3.4% gain for equities in November, the StatsCan report notes.
As for foreign investors, they accumulated an additional $7.2 billion in Canadian securities during the month, which, combined with the divestment of foreign securities, generated a net inflow of $15.1 billion into the Canadian economy in the month.
Foreign acquisitions of Canadian equities reached $5.5 billion in November, StatsCan reports, with investments in Canadian bonds coming in at $2.9 billion as investors purchased corporate bonds, but sold provincial government bonds.
Foreign holdings of federal government bonds were virtually unchanged. Finally, foreign investors also reduced their holdings of Canadian money market instruments by $1.1 billion in November.
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