Global| Jan 17 2013Foreign Investors Acquire Larger Amounts of U.S. Securities in November
Summary
Foreign investors purchased $61.5 billion worth of U.S. long-term debt and equity securities in November, according the U.S. Treasury's International Capital ("TIC") data, published yesterday. This marked a noticeable pick-up from [...]
Foreign investors purchased $61.5 billion worth of U.S. long-term debt and equity securities in November, according the U.S. Treasury's International Capital ("TIC") data, published yesterday. This marked a noticeable pick-up from $25.4 billion in October and $17.8 billion in September. Net purchases increased for Treasuries, for corporate and other private bonds and for equities, while foreign buying of federal agency debt slowed.
Treasury bonds and notes saw net buying of $26.4 billion by foreign investors in November, compared to $12.0 billion in October and net sales of $17.3 billion in September. Federal agency securities purchases have slowed the last two months to $8.2 billion in October and $2.7 billion in November, after firming during August and September, with $18.6 billion and $17.8 billion, respectively.
Corporate and other private bonds have undergone net liquidation by foreign investors most of the time since the middle of 2008, with a 12-month moving average at or below zero since mid-2009. So the modest net purchases in three of the last four months may hint at an improving trend for foreign interest in these securities. In November, foreign investors bought $10.9 billion, following $3.9 billion in net purchases in October, net sales of $6.4 billion in September and net purchases of $10.8 billion in August. By contrast, the entire span from December 2011 through June 2012 saw monthly net liquidation. November's amount was the largest single month of purchases since March 2010.
Similar to corporate bonds, foreign interest in corporate equities seems to have increased in the last few months. Foreign investors bought $21.5 billion in U.S. stocks in November, just $1.3 billion in October, but $23.8 billion in September. September and November appear to mark an upturn from a year-long span of basically no net acquisition by those investors.
By country, Chinese activity gets the most attention; investors there acquired an average of $7.6 billion monthly from July through October, but seemed to take a break in November, with just $473 million total net purchases. This included liquidation of $902 billion in Treasuries. Other participants obviously more than made up for that slowing, especially investors in the U.K, Euro Area and Cayman Islands buying Treasuries and British Virgin Island investors making stock purchases, among other regional transactions.
The TIC data are found in Haver's USINT database. The information there also includes aggregate flows in Treasury bills and other short-term assets as well as banking system data covering claims on and liabilities to foreign counterparties.
| Net Foreign Purchases of Long-Term U.S. Securities (Bil.$) | ||||||||
|---|---|---|---|---|---|---|---|---|
| Monthly Average | ||||||||
| Nov | Oct | Sep | Aug | 2011 | 2010 | 2009 | ||
| Total | 61.5 | 25.4 | 17.8 | 78.5 | 41.1 | 75.7 | 53.2 | |
| Treasuries | 26.4 | 12.0 | -17.3 | 42.9 | 36.0 | 58.6 | 44.9 | |
| Federal agencies | 2.7 | 8.2 | 17.8 | 18.6 | 6.7 | 9.0 | -1.0 | |
| Corporate bonds | 10.9 | 3.9 | -6.4 | 10.8 | -3.8 | -1.1 | -3.4 | |
| Corporate stocks | 21.5 | 1.3 | 23.8 | 6.2 | 2.10 | 9.1 | 12.7 | |
| China (All security types) | 0.5 | 8.4 | 5.8 | 9.4 | -2.2 | 2.4 | 9.3 | |
Carol Stone, CBE
AuthorMore in Author Profile »Carol Stone, CBE came to Haver Analytics in 2003 following more than 35 years as a financial market economist at major Wall Street financial institutions, most especially Merrill Lynch and Nomura Securities. She has broad experience in analysis and forecasting of flow-of-funds accounts, the federal budget and Federal Reserve operations. At Nomura Securites, among other duties, she developed various indicator forecasting tools and edited a daily global publication produced in London and New York for readers in Tokyo. At Haver Analytics, Carol is a member of the Research Department, aiding database managers with research and documentation efforts, as well as posting commentary on select economic reports. In addition, she conducts Ways-of-the-World, a blog on economic issues for an Episcopal-Church-affiliated website, The Geranium Farm. During her career, Carol served as an officer of the Money Marketeers and the Downtown Economists Club. She has a PhD from NYU's Stern School of Business. She lives in Brooklyn, New York, and has a weekend home on Long Island.
