A record $18 billion worth of renminbi-denominated debt was sold off by foreign investors in March, reports the Financial Times. Offshore investors sold a net RMB 113 billion worth of Chinese onshore bonds in March, according to Financial Times calculations based on data from Hong Kong’s Bond Connect investment program.
That took outflows over the past two months to RMB 193 billion as concerns mounted over China’s economic growth outlook and the debt’s diminishing yield advantage over bonds denominated in US dollars.
“These are by far the greatest outflows since China began opening up its domestic bond market,” said Becky Liu, head of China macro strategy at Standard Chartered, adding that when combined with net selling of stocks, foreign investors had dumped a total of about RMB 234 billion in Chinese securities over the past two months. She said the bank expects “persistent outflows” in the second quarter.