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Free AccessMNI DATA ANALYSIS:Foreign Investors Favor Cdn Corp Bonds In May>
By Yali N'Diaye
OTTAWA (MNI) - Foreign investors acquired C$2.2 billion of Canadian
securities in May, the smallest increase since last December, with a
focus on corporate bonds, data from Statistics Canada showed Monday.
Meanwhile, Canadian investment in foreign securities increased
C$5.7 billion in May, following two months of divestments, led by bonds.
--FOCUS ON CORPORATES
Foreign investors increased exposure to Canadian corporate bonds by
C$8.6 billion, bringing the total year-to-date to C$41.9 billion, up
from C$35.5 billion during the same period in 2017.
Purchases were split between government enterprises (+C$3.9
billion) - which can include agencies such as Canada Mortgage and
Housing Corporation and Export Development Canada - and private
corporations (+C$4.6 billion).
--GOVERNMENT DEBT SELLING
On the other hand, foreign investors cut exposure to Canadian
federal government debt by C$1.5 billion.
Year-to-debt divestment in Canadian federal bonds was C$35.1
billion, compared to a C$2.0 billion investment between January and May
2017.
Foreign investors bought C$3.2 billion in U.S. dollar denominated
bonds, C$2.8 billion in Canadian dollar denominated bonds, and C$1.4
billion in non-USD foreign currency bonds.
The spread between U.S. and Canadian long-term yields widened by 73
basis points in May.
--EQUITY DIVESTMENT
Foreign investors also reduced exposure to both Canadian shares and
investment fund shares by a total of C$2.8 billion, the first divestment
in six months.
Redemptions of Canadian equities related to mergers and
acquisitions explained a large share of the divestment.
Canadian stock prices rose 2.9% in May.
--CANADIAN INVESTORS FAVOR BONDS
Likewise, Canadian investors favored bonds in their acquisitions of
foreign securities.
Debt purchases totaled C$9.2 billion, mostly bonds (C$8.5 billion).
Canadian investors reduced exposure to foreign equities by C$3.5
billion.
--MNI Ottawa Bureau; email: yali.ndiaye@marketnes.com
[TOPICS: MACDS$,M$C$$$]
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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.