Foreign investors snapped up a record $53.2 billion worth of Canadian securities in 2004, due in large part to their record investment in Canadian stocks, Statistics Canada says.

“A number of large deals throughout 2004 led to a record level of money being raised on equity markets in Canada attracting foreign investors,” the government agency said today.

Foreigners increased their holdings of Canadian stocks by $35.8 billion in 2004, the highest level of foreign investment in Canadian equities ever.

At the same time, Canadian investors were busy buying foreign securities.

“Overall for 2004, Canadian investors purchased $16.2 billion in foreign securities. Of this, outlays of $15.1 billion were made in foreign bonds — almost double the amount from the year before and by far the largest ever yearly investment by Canadian investors in the foreign bond market,” StatsCan said.

In December alone, foreigners bought $3.9 billion worth of Canadian securities, while Canadians offloaded $482 million in foreign securities.

Foreigners bought an additional $4.6 billion worth of Canadian stocks in December, up from $1.7 billion the month before.

They also shed $321 million worth of bonds, almost entirely concentrated in Government of Canada bonds.

Non-residents sold off $4.4 billion worth of bonds, but that was largely offset by $4.0 billion in purchases of federal government enterprise issues, including $2.6 billion in net new issues, the largest amount in that sector since June 2002.

“For the year as a whole, foreign investors picked up $20.2 billion in Canadian bonds; a substantial increase over the $7.0 billion purchased in 2003 but just half the high of 2001,” the agency said.

“Foreign holdings of Canadian money market paper fell a further $421 million in December after $256 million worth was sold off in November.

“Throughout 2004, foreign investors regularly sold their holdings of money market paper culminating in an overall reduction of $2.7 billion for the year,” the agency said.

“Bucking a trend in which Canadian investors have been fairly consistent in their purchases of foreign securities, they ended 2004 by selling $482 million worth.

“The divestment occurred in foreign stocks with $2.4 billion being sold off – a record monthly divestment of foreign stocks by Canadian investors,” the agency said.

“More than two-thirds of December’s sell off occurred in overseas equities. Partially offsetting this was the purchase of $1.9 billion in foreign bonds.”