MNI Analysis:Frgn Investrs Boost Exposure To Non-CAD Cdn Corps>

--Foreign Investment In Canadian Securities +C$20.8B in October

--Canadian Investment In Foreign Securities +C$16.5B in October

By Yali N'Diaye

     OTTAWA (MNI) - Foreign investment in Canadian securities increased 

C$20.8 billion in October, led by record purchases of bonds, Statistics 

Canada reported Monday. 

     Foreign investors boosted exposure to Canadian bonds by a record 

C$27.9 billion, led by new issues of private sector corporate bonds 

denominated in foreign currencies (C$17.7 billion, with more than half 

issued by Canadian banks). 

     As a result, foreign investment in Canadian private corporate bonds 

rose by C$18.6 billion on the month, the largest investment since March 

2015. 

     Overall, foreign investment in Canadian corporate bonds increased 

by a record C$20.3 billion. 

     Foreign investors also increased exposure to government bonds by 

C$7.7 billion, with investment in federal government bonds up C$6.0 

billion and investment in other governments up C$1.7 billion. 

     Meanwhile, foreign investors cut exposure to Canadian money market 

instruments by C$8.8 billion, the largest such divestment on record. 

     During the month, long-term Canadian interest rates fell nine basis 

points and short-term rates were down seven basis points, while their 

U.S. counterparts rose 16 basis points and four basis points, 

respectively. The loonie depreciated by 2.6 U.S. cents agasint the 

greenback. 

     Foreign investors continued to invest in Canadian shares, with a 

C$1.6 billion increase, following a C$3.5 billion rise the previous 

month. 

     Over the month, Canadian stock prices rose 2.5% and U.S. stock 

prices were up 2.2%. 

     Canadian investors, for their part, favored U.S. stocks over bonds 

in October, with investment in U.S. shares reaching C$12.0 billion. 

Total investment in foreign equity and investment fund shares was up 

C$14.2 billion. 

     Canadian investors purchased C$2.6 billion foreign bonds, with a 

focus on U.S. corporates (C$1.8 billion). 

--MNI Ottawa Bureau; email: yali.ndiaye@marketnews.com 

[TOPICS: MACDS$,M$C$$$]