A first quarter rebound in global stock markets boosted Canada’s international investment position, according to new data from Statistics Canada.
The national statistical agency reported that Canada’s net foreign asset position rose by $86.7 billion in the first quarter to $696.1 billion.
“This increase mainly reflected higher equity prices and was moderated by the appreciation of the Canadian dollar against all major foreign currencies,” it said.
StatsCan noted that in the first quarter, the U.S. stock market rose by 13.1%, Europe gained 11.7%, and the Canadian equity market gained 12.4%.
Yet, these equity market gains were somewhat tempered by a rise in the Canadian dollar against the major foreign currencies during the quarter.
StatsCan said that the loonie gained 2.1% against the U.S. dollar, 4.1% against the euro, 2.9% against the Japanese yen and 0.1% against the U.K. pound during the quarter.
“The appreciation of the Canadian dollar led to a decline of $105.0 billion in Canada’s international assets, and of $39.8 billion in its international liabilities,” it noted.
Overall, the value of Canada’s international assets increased by $295.8 billion in the quarter to $5.35 trillion, and the value of international liabilities rose by $209.1 billion to $4.65 trillion, StatsCan reported.
StatsCan said that the rise in stock prices boosts the value of Canada’s international assets more than it impacts liabilities, because international assets are more exposed to equities — the value of international assets is 69% exposed to equities, compared with 42% for liabilities.