Canadians dump foreign stocks and bonds
Canadians dumped a record value of foreign stocks and bonds in June, based upon official figures released Monday.
Foreigners bought more Canadian stocks and bonds for the seventh month in a row.Statistics Canada said domestic investors sold $9.5 billion more in stocks and bonds from other countries than they purchased in June.
The only time in the past three years that Canadians sold anything approaching a similar dollar value in foreign financial assets was last August when investors dumped $7.4 billion worth of other countries' stocks and bonds.
The federal statistical agency said domestic investors sold their overseas assets because of the poor economic prospects in other countries.
"Canadians reduced their holdings of foreign securities in the face of lacklustre global equity markets and a deteriorating U.S. credit market," Statistics Canada said.
In difficult investing markets, Canadians often sell foreign securities as a way of reducing currency risk or to cut exposure in countries with which investors might not be as familiar.
By contrast, foreigners purchased a net $7.2 billion in Canadian securities and bonds, the seventh month in a row that investors from other countries have bought more financial assets in this country.
In the April-to-June quarter, foreigner buyers purchased $27.6 billion more in securities than they sold.
Canadian bonds, generally a less risky investment than stocks, were especially attractive to the overseas set as foreign buyers purchased $6.2 billion worth of these instruments in June.
That meant that, in the quarter, overseas buyers bought the largest value of bonds in Canada since the fourth quarter of 2001.
Generally, foreign investors buy Canadian stocks and bonds if the loonie is rising relative to the American dollar or if they like the country's economic prospects compared to other economies.
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