Canadian Investment in Foreign Securities Hits All-Time High

Canadian Investment in Foreign Securities Hits All-Time High

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(Bloomberg) — Canadians bought up a record amount of foreign securities at the end of last year as investors piled into US stocks. 

Investment in securities outside the country hit C$29.4 billion ($21.8 billion) in December, according to data released Friday by Statistics Canada. That’s the largest net outflow of purchases into foreign stocks and bonds in the history of records going back to 1988.

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The unprecedented outflows coincide with a sustained rally in the US stock market at the end of last year. The purchase of securities abroad was driven by US large-cap technology shares and investment fund shares tracking broad US equity market indexes, the agency said. In total, Canadian investors bought a net C$23.2 billion in US stocks during the month.

The data confirm Canadian investors’ elevated demand for global securities – specifically in the US – amid increased market optimism that major central banks have finished hiking interest rates and expectations for a soft landing in the North American economies. The outflow in December also follows a record level of investment into US government bonds in November, as Canadian firms took positions as global bond markets rallied.

Canadian investment in non-US shares also contributed to December’s record – outflows hit C$6.3 billion, largely into European equities.

Foreigners had less appetite for Canadian equities at the end of the year, divesting a net C$532 million shares after a C$5 billion outflow in November. Still, foreign investment into Canadian debt was C$11 billion, led by purchases of federal government bonds and money market paper. 

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(Adds amount of US stocks purchased.)

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