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Canadian investors pull back from foreign equities

Canadian investors acquired $5.3 billion in foreign bonds as the Fed began raising interest rates. The acquisition was split between US corporate bonds ($2.6 billion) and other foreign bonds ($2.4 billion), leading to a net reduction of $14.4 billion in foreign securities.

Foreign investors made easy holding

Meanwhile, foreign investors acquired $13.5 billion in Canadian securities, mainly bonds, although it was the lowest investment since April 2021.

Total net investment in bonds was $17.7 billion, including $18.3 billion in private corporate bonds, primarily new bonds in foreign currencies and issued by Canadian chartered banks.

Foreign investors pulled back from private corporate paper and other money market instruments. Canada’s short- and long-term interest rates rose higher in January.

Although foreign investors slashed their stake in Canadian shares by $731 million, that was only after a $16.9 billion acquisition last month.

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