UPDATE 1-Foreigners return to Canadian securities in Feb

Wed Apr 16, 2014 8:39am EDT

(Adds sectoral breakdown)

* Foreigners buy C$6.08 bln in Canadian securities

* Sold C$4.28 bln in December, bought C$1.22 bln in January

* Bought C$2.18 bln bonds, led by fed govt business enterprises

* Buy C$2.33 bln in money market paper but sell fed govt paper

* Canadians buy C$6.03 bln in foreign securities

OTTAWA, April 16 (Reuters) - Foreigners returned in a big way to Canadian securities in February, acquiring C$6.08 billion ($5.53 billion) worth, after a modest C$1.22 billion purchase in January and a C$4.28 billion divestment in December.

Statistics Canada said Wednesday that February's purchases by foreigners were matched by C$6.03 billion of Canadian purchases of foreign securities, led by bonds and non-U.S. equities.

After two months of sales, foreigners bought C$2.18 billion of Canadian bonds in February. This was led by C$3.95 billion in purchases of federal government business enterprise bonds, the most since May 2009. (Examples of such enterprises are Export Development Canada and the Canadian Broadcasting Corp.)

Holdings of federal government bonds waned through secondary market sales and retirements.

Foreigners invested C$2.33 billion in money market paper though they sold federal government paper.

"Non-residents have now divested federal government paper for a fifth straight month, reflecting the continued reduction in the overall outstanding amounts of these instruments over this period," the federal agency said.

For the sixth straight month, foreigners added to their stock portfolios, garnering C$1.57 billion of equities.

($1=$1.10 Canadian) (Reporting by Randall Palmer; Editing by Bernadette Baum)

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