November 16, 2017 / 2:05 PM / in a month

Bonds drove Sept foreign investment in Canadian securities

OTTAWA (Reuters) - Foreign investors accelerated their purchases of Canadian securities in September, scooping up bonds after the Bank of Canada raised interest rates for a second time, data from Statistics Canada showed on Thursday.

International investors bought C$16.81 billion ($13.17 billion) in Canadian securities after acquiring a downwardly revised C$9.77 billion in August.

The increase was driven by C$18.73 billion in purchases concentrated in federal bonds with short-term maturities.

Long-term interest rates rose 29 basis points in September after the Canadian central bank raised interest rates to 1 percent in its second rate increase this year.

Meanwhile, Canadians reduced their purchases of international securities, buying just C$2.41 billion as investments in foreign equities and debt slowed significantly.

Canadians bought C$1.73 billion of foreign stocks, with the bulk of that in U.S. shares, which rose 1.9 percent in September. Investors bought just C$198 million in foreign bonds, mainly U.S. Treasuries and corporate bonds.

Reporting by Leah Schnurr; Editing by Steve Orlofsky

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