Foreign investment in Canadian securities picked up in March as investors purchased money market instruments, even as they reduced their bond holdings for a fourth consecutive month, Statistics Canada said on Thursday. Non-residents bought a net C$6.1 billion ($4.8 billion) in Canadian securities in the month, up from C$4.3 billion in February.
Investors picked up C$6.3 billion in money market instruments, including private corporate and provincial government paper. But foreigners cut their holdings of Canadian bonds by C$690 million, driven by a record C$13.6 billion reduction in holdings of federal government bonds. The decline was offset by a C$11.3 billion purchase of private corporate bonds.
At the same time, Canadian investors reduced their holdings of foreign securities by C$1.9 billion, the first divestment in four months.
Canadians sold C$10.5 billion in foreign shares, including US and non-US foreign shares. US stock prices were down 2.7 percent in March, the statistics agency said.
But Canadians bought C$7.1 billion in foreign bonds. The differential between US and Canadian long- and short-term rates widened in March to favour US investments, the report said.