In September, foreign investors decreased their holdings of Canadian securities by 15.09 billion Canadian dollars ($10.97 billion), primarily due to the retirement of bonds. Statistics Canada reported that there was a significant reduction of 17.55 billion Canadian dollars in foreign holdings of Canadian bonds, with retirements in September reaching a high of approximately 2.4 billion Canadian dollars, the highest amount since December 2018. This retirement affected both government and corporate bonds, coinciding with Canadian long-term interest rates reaching their peak in September since December 2007.
Despite the reduction in bond holdings, non-resident investors purchased 1.62 billion Canadian dollars worth of Canadian shares for the month, marking an end to nine consecutive months of selling.
On the other hand, Canadian investors acquired 11.60 billion Canadian dollars worth of foreign securities, with the majority being international bonds. This increase resulted in Canadians ending the third quarter with the highest investment in foreign securities since the fourth quarter of 2021.
While the monthly investments in foreign shares slowed to 1.74 billion Canadian dollars in September, it totaled approximately 20.3 billion Canadian dollars for the quarter, representing the highest amount since Q4 2021.
Overall, these international transactions led to a net outflow from the Canadian economy of 26.69 billion Canadian dollars in September alone. For the third quarter, the outflow reached a record high of 41.4 billion Canadian dollars, perfectly offsetting the inflow of 39.4 billion Canadian dollars recorded in the first six months of the year.
