MNI DATA ANALYSIS:Foreign Investors Buy Cdn Short-Term Debt>

By Yali N'Diaye

     OTTAWA (MNI) - Foreign investment in Canadian securities rose C$5.7 

billion in January after declining C$1.5 billion in December, with a 

focus on short-term debt and equities, data released Friday by 

Statistics Canada showed. 

     Meanwhile, Canadian investors continued to add exposure to foreign 

securities, with holdings up C$13.3 billion after a C$22.0 billion 

increase in December. 

     Canadian investors focused on foreign equities, where they invested 

C$11.6 billion, while only adding C$1.8 billion of foreign debt to their 

portfolios. 

     -- SHORT-TERM FOCUS 

     Foreign investors favored the front end of the Canadian yield curve 

during the month when the Bank of Canada raised its overnight rate 

target by 25 basis points to 1.25%. 

     Investment in money market instruments rose C$6.1 billion, the 

largest investment since October 2016, led by private corporate paper 

(C$6.7 billion), mainly denominated in foreign currencies. 

     The Canadian dollar appreciated by 1.6 cents against the greenback 

over the month. 

     Overall foreign investment in Canadian debt securities rose C$2.8 

billion. 

     --BOND DIVESTMENT CONTINUES 

     Foreign investors further cut exposure to Canadian bonds in January 

by C$3.3 billion, following a C$4.3 billion divestment in December. 

     Investment declined across all bond sectors, led by government 

bonds, where investment fell C$3.0 billion. 

     Foreign investors cut exposure to federal government bonds by C$1.6 

billion and to provincial bonds by C$1.4 billion. 

     Foreign investors also reduced holdings of Canadian private 

corporate bonds for the first time since June 2015 (-C$0.1 billion). 

     Meanwhile, Canadian equities continued to attract foreign 

investors, with a C$2.5 billion investment in January. 

--MNI Ottawa Bureau; email: yndiaye@mni-news.com 

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