UPDATE 1-Foreigners resume buying Canadian securities in July

Mon Sep 17, 2012 8:40am EDT

* Foreign investment in Canada securities C$6.67 bln in July

* Foreigners had reduced holdings by C$7.76 bln in June

* Canadian firm issued new equity as it bought a foreign firm

* Canadian investment in foreign securities C$4.56 bln in July

* Investment in foreign securities was C$4.12 bln in June

OTTAWA, Sept 17 (Reuters) - Foreigners resumed their net purchases of Canadian securities in July, taking on C$6.67 billion ($6.88 billion) after having reduced their holdings by C$7.76 billion in June, Statistics Canada said on Monday.

The biggest component was a C$6.10 billion purchase of Canadian bonds, after large retirements in June. The acquisition was partly offset by a C$4.12 billion divestment of money market paper.

Investment in equities amounted to C$4.69 billion. "New equity issues led the inflows over the month, with the bulk related to cross-border merger and acquisition activity," the government agency said.

It involved a Canadian company's issuing of new stock to shareholders of a foreign company that it bought. Statscan did not name the firms involved.

Canadian authorities have said foreign investors view Canada as a safe haven. So far this year foreigners have made C$41.23 billion in net purchases, a substantial amount though down from C$54.31 billion seen in the first seven months of 2011.

Canadian investment in foreign securities rose to C$4.56 billion from C$4.12 billion, with net purchases of foreign stocks hitting a four-month high of C$2.28 billion.

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