Foreign investors cut holdings of Canadian securities in June

  • World
  • Tuesday, 18 Aug 2020

OTTAWA, Aug. 17 (Xinhua) -- Foreign investors reduced their holdings of Canadian securities by 13.5 billion Canadian dollars (about 10.2 billion U.S. dollars) in June as they divested in both debt and equity securities, according to Statistics Canada on Monday.

Meanwhile, Canadian investment in foreign securities hit 10.6 billion Canadian dollars, led by acquisitions of U.S. equities.

As a result, international transactions in securities generated a net 24.1-billion-Canadian-dollar outflow of funds from the Canadian economy in June. This activity followed five straight months of net inflows of funds which amounted to 132.3 billion Canadian dollars.

Foreign investors reduced their holdings of Canadian debt securities by 7.8 billion Canadian dollars in June, following two straight months of acquisitions totalling 88.3 billion Canadian dollars.

Foreign investors reduced their holdings of federal government debt securities by 1.1 billion Canadian dollars in June.

In June, Canadian long-term interest rates were unchanged at 0.54 percent while short-term interest rates edged down to 0.21 percent, their lowest level since February 2010.

Nonetheless, over the first six months of 2020, the total amount of debt securities owed by the Canadian federal government was up by 44.6 percent. Foreign investors contributed strongly to this financing activity as their holdings of these instruments increased by 25 percent over this period.

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