MNI DATA ANALYSIS:Foreign Investors Exit Canadian Bonds in Dec>

By Yali N'Diaye

     OTTAWA (MNI) - Foreign investment in Canadian securities was down 

C$2.0 billion in December, mostly as a result of divestments in Canadian 

bonds, data released Friday by Statistics Canada showed. 

     Investment in Canadian debt securities was down C$3.6 billion, led 

by a C$4.0 billion divestment in bonds. 

     Investment in Canadian equity and investment fund shares rose C$1.7 

billion. 

     Meanwhile, Canadian investors flocked to foreign securities, 

increasing exposure by a record C$22.0 billion, led by equity and 

investment fund shares, which attracted a record C$19.8 billion. 

     --CANADIAN BOND DIVESTMENT 

     Foreign investors cut exposure to Canadian bonds by C$4.0 billion, 

including a C$4.8 billion divestment in government bonds. 

     Foreign investors particularly shied away from provincial bonds, 

which recorded a C$4.2 billion divestment, the largest since June 2015. 

     Within the corporate sector, the picture was mixed, with private 

corporate debt attracting C$6.5 billion, mostly new bonds. 

     Meanwhile, foreign investment in Canadian government business 

enterprises fell C$5.7 billion, the largest divestment since June 2013. 

     During the month, Canadian long-term interest rates rose 10 basis 

points and short-term rates were up 17 basis points, while the Canadian 

dollar depreciated against the greenback. 

     --2017 POSTS RECORDS 

     Despite the C$2.0 billion decline in foreign investment in Canadian 

securities, it reached a record C$188.5 billion in 2017, including 

C$148.6 billion in Canadian bonds. 

     Canadian investment in foreign securities also posted a record in 

2017, with C$84.7 billion, led by investments in U.S. shares (C$56.8 

billion). 

     The C$84.7 billion investment included a record C$22.0 billion 

investment by Canadian investors in foreign securities in December 

alone, led by a record C$19.8 billion in equity and investment fund 

shares. 

     The latter was split between U.S. shares (C$11.4 billion) and 

non-US shares (C$8.4 billion). 

--MNI Ottawa Bureau; email: yndiaye@mni-news.com 

[TOPICS: MACDS$,M$C$$$]