Just finished watching this new doco on Netflix, quite a dramatic look into Chinese listed companies on the US exchanges and some of the people trying to expose dodgy practices. Worth a watch and a timely reminder to do your own research!
I am currently working in the FinTech industry and have an interest in investing in my spare time.
I wonder if they include they AIM listed Chinese stocks that went wrong. Hutchinson China is the only one that has worked out I think. I guess it was a bit suspect that companies from the other side of the world would list in London. They always had "credible" reasons. I recall the main one was the listing backlog in China/HK. However, they are effectively saying there is no small cap market in Asia they can turn to (Singapore/OZ) and they need to fly to London. The whole idea comes across as bizzare. A flight from Hong Kong to London is 12 hours. How can Chinese companies really maintain a connection with UK investors if they are listed here?
The London Stock Exchanges idea to attract new listings from China was just crazy. Why would good companies list here rather than Hong Kong. Even if they were ok they would move to Hong Kong in the balance of time i.e. West China Cement. What is the point of attracting companies that won't make London their long-term home for listing.
In the US I think the issue was reverse takeovers. This is where new listings don't go through the IPO scrutiny. Instead a Chinese company takes control of a shell company that is already listed. I think this is where Anthony Bolton was burned when he launched his China fund.
An interesting question is why did Hutchinson China do well. I think because it is a subsidiary of Hutchinson group and therefore has good corporate governance. My general experience is that corporate governance standards in Hong Kong are lacking.
No mention of AIM or the UK. In fact, just the US.
Yes, a lot of it is based on the reverse takeovers of shells and yes, I believe Bolton got burnt on this at the beginning. I think he and subsequently Dale Nicholls (I think it is) learnt their lesson. As my largest holding by far, I guess it was a fortunate lesson for them as I was able to buy at 80p :)
