July 17 (Bloomberg) -- Foreigners made their largest purchase of Canadian securities in two years in May, led by demand for provincial and federal government bonds.
The net purchases worth C$21.4 billion ($19.9 billion) in May included C$15.9 billion of bonds, and were more than double the April total, Statistics Canada said today in Ottawa.
Demand for bonds was led by a net C$6.3 billion purchase of provincial debt, the biggest since April 2009. Non-Canadian investors also bought C$6.9 billion of federal government debt, the most since May 2012 after sales of C$15.4 billion over the five prior months.
“Foreign investment was focused on longer-term debt instruments during the month,” the statistics agency’s report said. “This activity occurred against the backdrop of large increases in the net supply of bonds by the federal and provincial governments.”
International investors also bought C$2.88 billion of Canadian money-market paper more than they sold and C$2.63 billion of the country’s equities in May.
The May purchases by foreigners brought the year-to-date total to C$37.4 billion, compared with C$31.2 billion in the same period last year.
Canadians bought C$2.03 billion of foreign securities in May, led by stocks.
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