the real reason of why SP is down is the trust, below analysis from AFR is good for people to read.
https://www.copyright link/markets/...ts-the-rush-of-china-listings-20180413-h0yq3j
The Australian Securities Exchange has moved to halt the rush of Chinese companies seeking to list locally after a string of failed floats, rejecting 21 mainland companies over the last two years.
The new figures show the ASX has not allowed a single mainland company to float this year and signalled its increasingly tough line by de-listing a further six China stocks.
The ASX's move, which has included tightened listing rules and guidance, has however come too late to prevent a string of shareholder disputes from China stocks already listed, as many languish on the local market amid poor transparency and corporate governance.
Figures compiled by AFR Weekend show China-based companies are among the ASX's worst performing sub-sector, with 76 per cent of those stocks listed since 2010 trading below their issue price.
The chief compliance officer at the ASX, Kevin Lewis, said the exchange had tightened admission rules and guidance to address the challenges presented by companies from emerging markets, including China.
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"Rule changes however take time and can't happen overnight. We have to consult with our regulators and other stakeholders. The final rule changes have to be approved by ASIC and, until recently, also the relevant minister," he said.
The poor performance of China stocks comes amid related-party transactions, unusual capital raisings and suggestions the ASX has been used as a vehicle by some vendors to get funds out of China.
More broadly the ASX and corporate regulator, the Australian Securities and Investments Commission, have been under pressure in recent months to better police the poor disclosure and reporting standards of some listed companies.
The problems, particularly around corporate governance, experienced by most China stocks are part of these general grievances.
"The ASX and ASIC need to find some way to clean up the corporate governance and disclosure issues of many of these China stocks," said one fund manager
Figures compiled by AFR Weekend show there are 26 China stocks listed on the ASX of which just five are trading at or above their issue price.
The ASX said it has rejected 50 stocks from listing over the last two years, of which 21 were from China.
It stressed however there was no specific ban on China stocks and said each listing was judged on its merits.
The big uptick in China listings came from 2014 onwards and since then the ASX has gradually tightened guidance and listing rules around the minimum spread of investors and minimum free float of shares.
The main change has been around companies needing to have 20 per cent of their stock available to be freely traded, up from just 5 per cent previously.
There are also new requirements around local directors with ASX experience and 75 per cent of the free float being held by local shareholders.
These rule changes were formalised in December 2016, but have come too late to prevent the current raft of problems.
One company in dispute with its minority shareholders is e-commerce play 99 Wuxian, which has seen its stock price fall 90 per cent over the last three years, amid poor transparency, related party deals and cosy relationships with brokers and investment banks.
Another problem stock is Traditional Therapy Clinics (TTC), which has seen its share price fall 90 per cent since late 2016, amid concerns it was having difficulty getting money out of China.
Despite its operating business appearing very healthy, it is trading at half its cash backing and at a ratio of one times next year's earnings.
This makes it among the cheapest stocks on the market, but investors remain wary.
Chairman Geoff Ross confirmed to AFR Weekend the company was having difficulty getting capital out of China and that it was unable to pay a dividend for 2017.
"At this stage we have not got approval to get capital out of China, it is a complex process," he said via phone.
The company has been far more cryptic in its public announcements.
In response to a general query from the ASX in September last year TTC said it had "never not been granted approval to repatriate funds [from China] for the purposes of dividends.
In February it promised to update shareholders about dividends when it released its annual report in March.
It is yet to issue this update.
Adding to concerns about its ability to get money out of China was the company completing a $2 million capital raising via a share placement for working capital in August last year, despite having $22 million in cash, according to its accounts.
Beijing tightened foreign exchange controls last year in response to the falling yuan and a general rush from investors to take money out of China.
Restrictions on getting money out of China have become so acute for another ASX-listed company, Ding Sheng Xin Finance Co, that it was unable to pay its auditors and therefore has not lodged accounts to June 30 last year.
Its stock, which has been suspended since August, has fallen 92 per cent over the last two years and it is likely to be delisted from the ASX at some point.
The ASX said it has delisted six Chinese companies between 2015 and 2018.
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