Canadians divested a record $3.2 billion in foreign stocks in January but continued to buy foreign bonds, Statistics Canada said today.
“Sales of U.S. stocks accounted for most of the divestment, with Canadian investors selling $2.4 billion worth, amounting to the largest ever monthly selloff of U.S. stocks by Canadian investors,” the agency said Thursday.
Canadians bought $717 million in foreign bonds in January, down significantly from the $2.1 billion bought in December.
“Purchases were solely in U.S. treasuries as Canadian holdings of all other foreign bonds decreased,” StatsCan said.
Meanwhile, foreign investors bought $1.8 billion worth of Canadian securities, consisting entirely of debt instruments, the agency said.
Their holdings of Canadian bonds increased by $638 million in January, mostly offsetting a December divestment of $701 million.
Buying was entirely concentrated in $2.1 billion in federal government bonds as all other sectors experienced a decrease in foreign holdings, the agency said.
“Total net new issues of Canadian bonds – new issues less retirements – reached its lowest level since January 2003 (-$1.7 billion).”
New issues in foreign markets by all sectors combined totalled $157 million, a 20-year low.
“Foreign investors purchased $1.2 billion in Canadian money market paper in January, more than reversing their sales of the previous two months,” StatsCan said.
“U.S. investors were by far the largest purchasers, buying $1.9 billion worth in January, with the rest of the world offloading some of their holdings.”
Foreign investors increased their holdings of Canadian stocks by $342 million, but that was entirely offset by sales of $350 million in existing shares.