Foreigners invested more in Canadian securities in January than any month since September 2010, taking advantage of favourable yields on short-term bonds to add federal government debt to their portfolios.
Statistics Canada said Thursday foreign net investment in Canadian securities was $13.29-billion in the month, up from $9.40-billion in December.
Foreign acquisitions of Canadian bonds, $10.09-billion, accounted for the bulk of the total, following a record investment in bonds last year of $95.9-billion. The federal government's two-year benchmark bonds were the most popular, the agency said. Yields on short-term bonds were higher than their U.S. equivalents in January, and yields were lower on longer-term bonds.
Investors also continued to purchase Canadian stocks and money market paper but at a slower pace than in December.
Canadians' net investment in foreign securities was $1.98-billion in January following a net divestment of $1.94-billion in the previous month. Canadians resumed foreign stock purchases after a three-month sell-off, adding $1.8-billion.
They also bought U.S. Treasury bills but unloaded U.S. government bonds in the month.
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