SHANGHAI/HONGKONG (Reuters) – Global investors feel relieved that the two-year-old crackdown against the country’s technology sector has ended. However, they are reluctant to believe the government.

As China relaxes its COVID-19 restrictions, and as a result of promises made by China’s high-ranking policymakers including Vice Premier Liu He to aid an economy in the throes of recession, foreign investors have returned to China’s mainland markets since May.

Further evidence that regulatory restrictions that have crippled tech sector are easing is this week’s report from Didi Global, a ride-hailing company. Jack Ma’s Ant Group, a fintech affiliate to conglomerate Conglomerate. Alibaba (NYSE:) Are getting out from under the regulatory doghouse

Investors are not attracted to a cheap and battered market or the possibility of economic stimulus in the country.

I don’t think the crackdown has ended. The Chinese will continue to do whatever they want when it suits them. Jimmy Lee is chief executive of The Wealth Consulting Group. He said it this way: “It’s so easy.”

Lee anticipates that U.S. shares of Chinese companies will remain volatile but says, “For now, I think the government wants its economy to recover and is giving investors reason to be optimistic.”

The news Thursday that China’s central leadership has given Ant Group a tentative go-ahead to resume its initial public offerings (IPO) closes a crackdown which began in November 2020 with the stalling.

Unidentified Shanghai-based fund manager said that an Ant IPO would signal a strong message to the market. He cautioned that Ant was not technically ready to go public as it still hasn’t obtained the necessary licenses for its revamped company and “even if Ant were listed, Ant has changed significantly”.

Andy Maynard of China Renaissance is head for equities and buys Chinese stocks as he awaits the Ant IPO.

Maynard said that it was a “grudging thawing” of regulatory pressure. If the economy was positive, and COVID weren’t an issue, then they wouldn’t be continuing to hammer on tech heads.”

TWO FROM THREE

Thomas Hayes (chairman and managing member at Great Hill Capital), a New York-based hedge funds, holds Alibaba as the largest position. Hayes says that this was the moment when Ant named Laura Cha (Hong Kong exchange’s chairwoman) to its board. Now, he is waiting for the realization of his thesis about a meaningful rally.

Hayes stated that there will be bumps in the road, but the tide is changing. He also said that Alibaba’s 60% increase since March was only the beginning of what he expects to be an explosive rally.

Brian Jacobsen (a senior investment strategist with Allspring Global Investments), a Charlotte-based asset manager, stated that although there were still some uncertainties, his team was now more comfortable discussing Chinese stocks.

He said, “Investors have to accept the risk and determine if they have taken too much of a loss.”

The shares of the Mainland are very cheap. Refinitiv data shows that Chinese companies are expected to see an increase in earnings of 12.4% by 2022, but the forward 12-month price to earnings ratio for Chinese companies is 9.62. This makes them second in Asia, after South Korea.

According to Stock Connect flows data linking Hong Kong markets with mainland markets, foreign investors are on an unprecedented buying spree since May 27. They bought A-shares in June worth 29.6 Billion Yuan ($4.4 Billon) as opposed to 16.8 Billion Yuan during May.

“We have seen some money return from abroad, some of it long-term, and some that doesn’t go away immediately. According to the Shanghai fund manager, money has returned from Europe, the Middle East and even America.

The three biggest risks facing the economy, regulation, COVID-19 lockdowns, and the possibility of Chinese shares being removed from U.S. Exchanges are all well-known to investors.

The S&P China ADR index is down 55% since Nov. 2020, the month Ant’s IPO stalled, marking the start of the regulatory crackdown.

Alibaba shares rose by almost a third in April, however they are down nearly two-thirds since their peak in October 2020.

Jimmy Lee stated, “I can confirm that Jack Ma’s disappearing act still factors into my view on Chinese free markets in China and how it may impact valuations of certain companies.”