Foreigners saw Canada as a hotspot in November

Foreign investors continued to buy Canadian securities late in 2010, according to Statistics Canada, acquiring an additional $8 billion in November, the most recent month for which data is available.

Foreign buyers focused on debt issues, which made up $7.1 billion of the overall total. New private corporate bonds – mainly U.S.-denominated – accounted for $2.4 billion, while in new federal government enterprise bonds attracted $1.6 billion.

On the secondary market, foreigners preferred federal government bonds, buying $3.2 billion worth. Money market instruments attracted $836 million in net foreign investment.

Canadian equities saw a slowdown in foreign investment, however, attracting just $115 million in new capital. To put that into perspective, the previous two months had seen $6.3 billion in net inflows.

On the other side of the ledger, Canadian investors bought $5.8 billion in foreign securities, with debt accounting for more than the net total. Canadians bought $7.5 billion in foreign bonds, which represents a high-water mar not seen since March 2007.

U.S. government bonds made up $5.7 billion of the total, following two years of “significant divestments,” StatsCan points out. Canadians pulled out $1.2 billion from their holdings of foreign money market instruments.

Foreign equities were sold off to the tune of $499 million in the month.

“Net sales of non-US foreign stocks reached a four-month high of $1.5 billion, as Canadian pension funds removed sizeable amounts of Asian equities from their holdings,” the StatsCan report explains. “This activity was partially offset by acquisitions of U.S. stocks, as US equity prices edged down 0.2% after two months of gains.”

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.