In October, foreigners decreased their investment in Canadian securities, particularly in private corporate debt. Simultaneously, Canadian investors also reduced their holdings of foreign securities.
According to Statistics Canada, nonresident investors sold a net 15.75 billion Canadian dollars ($11.75 billion) worth of Canadian securities in October. The divestment marked the largest since March and was largely driven by the substantial retirement of short- and long-term instruments denominated in U.S. dollars. However, foreign purchases of Canadian government paper reached the highest level since June, including federal and provincial government instruments.
Moreover, exposure to Canadian equities among nonresident investors declined during the month, particularly in banks and manufacturers.
Conversely, Canadian investors, who had been consistently investing in foreign securities for the past four months with a total of approximately C$42.8 billion, sold C$8.2 billion worth of foreign securities in October. The main contributor to this drop was the sale of around C$8.3 billion worth of U.S. shares, which was the largest amount since March and predominantly focused on large capitalization companies.
As a result, there was a net outflow of approximately C$7.55 billion in funds from the Canadian economy due to international transactions during October.
