(Adds details of release, background)
OTTAWA, July 16 (Reuters) - Net foreign investment in Canadian securities dropped to C$2.18 billion ($1.66 billion) in May from C$9.09 billion in April as non-residents sold off stocks and money market paper, Statistics Canada said on Monday.
Although outsiders have bought Canadian securities every month so far this year, May's inflow was the lowest in 2018.
Foreigners purchased a net C$7.29 billion in bonds as they focused on private corporate issues and government business enterprise bonds. They sold off federal government bonds for the sixth straight month.
Non-residents sold C$2.80 billion worth of Canadian stocks - the first divestment in six months - as investors redeemed equities in the wake of merger and acquisition activity. They also disposed of C$2.31 billion in money market paper.
Canadian investors increased their holdings of foreign securities by a net C$5.69 billion as they bought C$8.45 billion in bonds. At the same time they sold C$3.53 billion in shares and acquired C$770 million in money market paper. ($1=$1.31 Canadian)
Reporting by David Ljunggren Editing by Nick Zieminski