UPDATE 1-Foreigners return to Canadian securities in January

Mon Mar 17, 2014 8:36am EDT
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* Foreigners invest C$1.09 bln in Jan, sold C$4.28 bln in Dec

* Canadians buy C$2.34 bln in foreign securities in Jan

OTTAWA, March 17 (Reuters) - Foreigners acquired a modest C$1.09 billion ($980 million) in Canadian securities in January, after a divestment of C$4.28 billion in December, with January purchases of Canadian stocks more than offsetting sales in debt instruments.

Foreign investment in Canadian securities has declined - to a net C$42.79 billion in 2013 from C$83.21 billion in 2012 - as the United States and other countries have recovered from the recession, reducing Canada's star status as one of the countries least affected by the downturn.

Non-residents made their fourth straight monthly divestment of federal government money market paper in January, and withdrew C$1.42 billion from the Canadian money market overall. They cut their holdings of Canadian bonds by C$330 million after a C$10.91 billion divestment in December.

But they made up for January's sales of debt instruments with C$2.84 billion in acquisitions of Canadian equities, marking a fifth consecutive month of purchases totaling C$25.53 billion.

Canadians made their fourth straight month of net purchases of foreign securities, adding C$2.34 billion, led by stocks and bonds. Purchases of U.S. government bonds were partly offset by divestment in U.S. Treasury bills.

$1=$1.11 Canadian)