Country Garden shares see-saw amid confusion over Mahathir’s foreign property ownership ban

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A model of the Forest City development is showcased at a Country Garden showroom in Johor Bahru, Malaysia. Photo: Reuters

Published: 5:15pm, 27 Aug 2018Updated: 11:32pm, 27 Aug 2018

Shares of Country Garden Holdings, the developer of the biggest private residential township in southern Malaysia, see-sawed in Monday trading amid confusion over comments by the country’s prime minister about letting foreigners buy property in the Forest City project.

The project, located on four artificial islands near Singapore, is being built by the Foshan-based Chinese developer, and has been sold predominantly to Chinese investors who have been enticed to the project by long-stay, non-permanent visas that buyers can apply for.

“One thing is certain, that the city that is going to be built cannot be sold to foreigners,” Malaysian premier Mahathir Mohamad said during a media conference in Kuala Lumpur, according to a report by Reuters. “We are not going to give visas for people to come and live here.”

The stock, which had risen by as much as 3.9 per cent earlier on Monday, returned almost all of its gains for the day on the Hong Kong exchange after Mahathir’s comments were published, ending the day 2.5 per cent higher at HK$12.14. The Malaysian premier’s office in Putrajaya, outside Kuala Lumpur, did not immediately respond to requests for clarification.

The confusion may have been caused by a 10-year multiple-entry visa that Malaysia’s government grants under its “My Second Home” programme, aimed at enticing pensioners and investors to take up temporary residency in the country with every purchase of high-end property.

As many as 1,439 Chinese citizens received such visas in the first eight months of 2017, top among all recipients under the programme, and five times more than South Korea in second place, according to data by the Malaysian tourism ministry, which hosts the programme.