Foreign Investors Buy $46.6B of Canadian Securities in October

Foreign investment in Canadian securities surged in October, reaching its highest monthly level since March 2022, according to data released by Statistics Canada.

Non-resident investors purchased $46.6 billion worth of Canadian securities during the month. The inflows were driven primarily by debt securities, which accounted for $34 billion, while equity securities attracted $12.6 billion.

Investment activity has rebounded notably since July. Over the past four months, foreign investors have bought $126.9 billion in Canadian securities, largely concentrated in bonds. This marks a clear reversal from the first half of the year, when non-residents reduced their holdings by $22.4 billion.

As a result, international securities transactions generated a net inflow of $58.2 billion into the Canadian economy in October — the strongest monthly inflow since March 2022.

In contrast, Canadian investors pulled back from foreign markets during the month. They reduced their foreign securities holdings by $11.6 billion, marking the largest divestment since January 2023 and the first month of net selling in eight months.

Canadian investors divested from both foreign equities and debt securities, with most activity focused on U.S. assets. They sold $6.1 billion in foreign shares, including $6.6 billion in U.S. equities, partially offset by $0.4 billion in non-U.S. equity purchases. The October pullback followed strong U.S. equity buying in August ($16 billion) and September ($10 billion).

On the fixed-income side, Canadian investors divested $5.4 billion in foreign debt securities, largely due to sales of U.S. government bonds totaling $6.9 billion. At the same time, holdings of other U.S. government paper increased modestly by $0.6 billion.

Overall, October data highlights a sharp divergence in capital flows, with foreign investors increasing exposure to Canadian assets while domestic investors trimmed positions abroad.