Foreign investors increased their holdings of Canadian securities by $20.8 billion in April, thanks largely to Manulife Financial Corp.’s acquisition of Boston-based John Hancock Financial Services Inc., Statistics Canada says.

The agency said Thursday the main reason for the large figure was the completion in April of the $15-billion deal that saw Manulife takeover John Hancock . New shares issued by Manulife were used to acquire the shares of Hancock, which was the biggest Canadian takeover of a foreign company.

Meanwhile, Canadian investors continued to add to their holdings of foreign securities, primarily foreign bonds. Statistics Canada said foreign investors bought $2.5 billion worth of Canadian stocks in April.

BMO Nesbitt Burns Inc. chief economist Sherry Cooper said the Manulife deal heavily skewed the April numbers. “”As a rough estimate of how heavily the results in April were distorted by this one transaction, net inflows to Canadian stocks in the “other transactions” category hit $18.3 billion in April.

“Given all that lead-up, it is nevertheless impressive that there was still a relatively healthy net inflow of just over $2 billion into all other Canadian securities in the month,” she said in a report.

“Recall that the Canadian dollar suffered one of its largest monthly declines on record in April (down 4.5%), hit by concerns of a hard landing in China, Nortel’s latest woes and a generally stronger U.S. dollar.”

StatsCan said that since April 2003, foreign investors have been net buyers of existing Canadian issues in each month, purchasing $16.8 billion worth over the 12-month period.

Foreign investors increased their holdings of Canadian bonds by $1 billion in April after an increase of $2.2 billion in March.

Bonds continued to be the investment of choice for Canadians investing in foreign securities in April. Canadians invested $1.3 billion in foreign bonds vs 200 million in foreign stocks.