Fears of a domestic recession and global economic slowdown prompted foreign investors to sell
Canadian stocks at the fastest rate since 2007, according to data from Statistics Canada.
The federal agency said that foreign investors sold $12.6 billion of Canadian equities in June,
the third consecutive month of net outflows.
June marked the fastest pace of foreign sales in 15 years and occurred after data showed
inflation in Canada at a 40-year high.
The biggest outflows were seen in Canadian bank stocks, which are now 15% below the highs
they reached this past February.
Decade-high inflation and fears of a recession have weighed on Canada’s stock markets all
year, and some foreign analysts, notably in the U.S., have soured on Canadian stocks.
While some Canadian stocks have rebounded in recent weeks as companies report better-than-
expected quarterly earnings, some predict that the current bump in share prices will be
temporary and that equities will continue to selloff throughout the fall.
So far this year, the benchmark Toronto Stock Exchange (S&P/TSX Composite Index) is down
5% compared to a 10% decline in the S&P 500 index in the United States.
