Mergers and acquisitions: Investors straying from foreign market

It seems that foreign investors are staying away from Canada. A recent Statistics Canada report indicated that  these investors reduced their holdings in Canada by more than $12 billion. Apparently, some of this decrease has been attributed to cross-border mergers and acquisitions. This has been the most significant decline since 2015.

As of this past April, non-Canadian investors have reduced their Canadian debt securities by more than $4 billion. By the same token, Canadian investors aren't putting as much money into securing foreign holdings either. As matter of fact, Canadians reduced their foreign holdings by $194 million as of this past April after investing more than $1 billion in March.

Foreign investors also reduced their Canadian debt securities as well as equity securities. Canadians invested $143 million in foreign equities in April. More Canadians were selling U.S. equities than purchasing them. It seems Canadian investors are choosing to invest in their own economy, rather than venturing away from Canadian borders.

Mergers and acquisitions drive many other areas of business and lawyers in Canada experienced in this facet of the law understand risk and may be able to advise clients accordingly with their investment goals whether those include foreign or domestic investments. Lawyers may be able to assist in a number of ways including securing acquisition financing, facilitating cross-border transactions, offering help in joint ventures and helping to manage buyouts. In offering advice, a lawyer may be able to help a client to manage and/or minimize risk when it comes to building his or her investment portfolio on a long-term basis.

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