Non-residents bought $916 million worth of Canadian securities in January after purchasing $1.3 billion worth in December, Statistics Canada reported today.

Meanwhile, Canadians invested $131 million in foreign securities, down significantly from December as acquisitions of foreign money market paper were partially offset by sales of foreign stocks.

Non-residents added $6.4 billion worth of Canadian bonds to their portfolio holdings in January, the largest acquisition in the past 10 months, StatsCan said.

January’s activity was concentrated in corporate bonds, with non-residents buying $3.3 billion of federal government enterprise bonds and $2.2 billion of private corporate bonds.

In addition, non-residents invested $1.2 billion in federal government bonds, all in outstanding issues.

Investment in provincial government bonds was limited to $216 million as purchases of outstanding bonds were partially offset by retirements.
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Currency-wise, non-residents added new Canadian bonds denominated in U.S. dollars while buying outstanding bonds denominated in Canadian dollars. Investment from the United States accounted for half the month’s foreign purchases as the interest rate differential between Canada and the U.S. favoured investment in Canada.

Non-resident investors reduced their holdings of Canadian money market paper in January by $2.1 billion, after buying $782 million in December. Treasury bills accounted for over 80 per cent ($1.8 billion) of January’s foreign divestment. The balance was from a second consecutive monthly reduction in holdings of federal government enterprise paper ($387 million).