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Apr 19, 2010 - International investors cool to Canadian bonds

Reuters
April 19, 2010

Foreign investors added $6.72 billion in Canadian securities to their portfolios in February, down from $11.84 billion in January, Statistics Canada said on Monday.

The investment fell short of the $10 billion estimate by analysts in a Reuters poll.
Although Canadian bonds were the investment instrument of choice for non-residents, they acquired them at a slower pace than in the previous three months.

They purchased a further $7.77 billion of bonds compared with $10.03 billion in January, and dumped $855 million in money-market instruments and $193 million in stocks.

"Secondary market purchases of federal government bonds accounted for half of the inflow, with the remainder almost equally split between new provincial bond issues and outstanding private corporate bonds," StatsCan said.

Canadian investment in foreign securities was the highest since March 2009 at $3.92 billion, following a divestment of $5.79 billion in January. Residents bought $1.81 billion in bonds, focusing on 7-year U.S. government bonds, as well as $1.36 billion US in mainly non-U.S. stocks and $749 million in money market instruments.

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