Investors reduce holdings of foreign securities by $665 million in September

Statistics Canada says the divestment in foreign bonds exceeded the investment in foreign money market instruments and equities.

The agency says non-resident investors followed a similar pattern and reduced their holdings of Canadian securities by $267 million, with a large divestment in Canadian bonds.

It says this reduction occurred in spite of significant acquisitions of Canadian money market instruments and equities over the month.

Canadians shied away from foreign bonds again in September, but partly compensated by a $552-million purchase of foreign money-market instruments, with interest rates in decline and U.S. short-term rates at their lowest level since May 2004.

The acquisition of foreign money market instruments in September was driven by U.S. treasury bills.

Canadian holdings of foreign bonds decreased a further $2.8 billion in September, entirely in U.S. government bonds.

StatsCan says that for three months in a row, Canadians have made robust investments in foreign stocks during a period of declining prices and escalating volatility on global stock markets.