Foreign investment in Canadian securities reached its highest level for 2005 with non-residents purchasing $5.4 billion worth in November. Two-thirds of that amount was in the form of bonds, StatsCan said today.

Foreign investors bought $3.5 billion worth in Canadian bonds in the month, the third consecutive month of foreign buying.

The purchases were almost exclusively in federal government and federal government enterprise issues, with foreign investment of $1.9 billion and $1.2 billion respectively.

Canadians acquired $2.3-billion worth of foreign securities in November, roughly split between foreign stocks and money-market paper, while for the first time in more than a year Canadians sold off some of their holdings of foreign bonds.

American investors bought $1.4 billion in Canadian bonds following a reduction in their holdings of $2.7 billion the month before, the agency said.

On a currency basis, $2.4 billion-worth was invested in Canadian-dollar denominated bonds in November, the largest investment in Canadian dollar bonds in 12 months.

After purchasing $1.6-billion worth of Canadian stocks in October, foreign investors made a further $1.7-billion investment in November, the fifth straight month of foreign investment in Canadian equities.

“In what has become somewhat predictable, non-residents continued to invest heavily in shares of Canadian natural resource firms in November, despite a drop in overall natural resource prices over the month,” Statistics Canada said.

“At the same time, Canadian stock prices rebounded, up 4.2% for the month.”