Canadian investors increased their holdings of foreign securities by $6.1 billion in February amid rebounding demand for both foreign stocks and bonds, Statistics Canada reported today.

Meanwhile, non-residents acquired $3.8 billion worth of Canadian securities over the month, their largest monthly purchase since April 2007.

StatsCan said Canadian dollar-denominated outstanding bonds accounted again for the majority of the foreign investment.

February marked a $2.6 billion acquisition of foreign bonds, following two straight quarters of sell-offs in the context of the global credit market meltdown.

Over the month, Canadian investors bought $2.4 billion worth of U.S. government bonds, fuelled by strong demand for medium-term bonds (five to 10 years) as the yields on those instruments advanced.

Canadians also invested modestly in U.S. corporate bonds ($113 million), while purchases of non-U.S. bonds remained minimal ($72 million).
Continue Article

Canadians divested to a small extent ($284 million) in February, nearly all of it being non-U.S. foreign paper, after investment in foreign money-market paper reached a six-year high of $2.5 billion in January.

Domestic holdings of both U.S. government Treasury bills and other U.S. paper remained almost unchanged.