(Makes clear most -- not all -- purchases of federal government bonds were on the secondary market)
* Foreign investment hits record C$26.11 billion
* Foreigners buy C$16.67 billion of bonds, most in 3 years
* Canadians buy modest C$1.32 billion in foreign securities
July 16 (Reuters) - Foreign investment in Canadian securities hit a record C$26.11 billion ($25.60 billion) in May, pushed up by heavy purchases of government bonds, Statistics Canada reported on Monday.
Canada emerged from the global financial crisis in better shape than most developed nations, making it an attractive market for investors worried about turmoil in Europe and the patchy U.S. recovery. In May, long-term Canadian interest rates exceeded those in the United States by the largest spread since September.
The previous record high amount of foreign investment in Canada was C$22.88 billion in May 2010.
Nonresident investors bought C$16.67 billion of Canadian bonds, the most since May 2009. Of that, C$9.47 billion were federal government bonds purchased ma inly o n the secondary market.
Nonresidents also bought C$7.35 billion worth of money market instruments. By the end of May, those holdings hit a record C$69.89 billion.
Despite May’s overall record figure, total foreign investment in Canadian securities in the first five months of 2012 fell to C$42.32 billion from C$45.66 billion a year earlier.
Canadians purchased a more modest C$1.32 billion worth of foreign securities, buying C$1.72 billion of stocks and C$442 million of bonds while reducing their holdings in money market instruments by C$844 million.
$1=$1.02 Canadian Reporting by Alex Patterson; Editing by David Ljunggren and Lisa Von Ahn