Supply risks building, crude oil has potential to hit $80 a barrel

By Navneet Damani Oil prices gained more than 1 per cent, ending a run of weekly declines on signs that Iran sanctions may limit global supply and that a trade war may not curb China’s appetite for US crude. This week, traders will likely focus on factors that could see oil prices trade over $70 per barrel. In the tug-of-war for market attention between supply and demand, the supply side seems to be winning now. News of slowing supplies and higher demand drove prices up over 5 per cent in the week.PerspectiveIran sanctions – Worries that the sanctions on Iran will remove significant volumes of crude from the market underpinned prices last week. For Iran, its oil customers have started to drastically wind down purchases of Iranian crude ahead of the US sanctions. Iran’s exports plunged by 6,00,000 bpd compared with July loadings due to plummeting flows to India, Tehran’s second-largest oil customer. During August 1-16, Iranian oil exports averaged 1.68 million bpd. This compares with average exports of 2.32 million bpd for the whole of July and 2.10 million bpd in the first 16 days of July. Demand from Japan remained steady, but South Korea is not importing Iranian condensate for the second consecutive month in August. Demand in Europe was up strongly, especially from Italy. In another blow to the Iranian regime, French oil major Total SA (TOT) has confirmed that it would end a multi-billion dollar gas project in the country because it is unable to obtain a project-specific waiver from the US authorities. Traders are worried that Iranian sanctions could severely undersupply the oil market as soon as Q4 2018.Demand worries – Traders are expressing caution due to concerns over Chinese demand and the impact of the US–China trade dispute. The trade talks ended with nothing major accomplished. Instead, both countries activated another round of duelling tariffs on $16 billion worth of each other’s goods. China imposed tariffs on a second round of US goods in retaliation of US tariffs, targeting oil products and coal for the first time and leaving open the possibility of including crude oil and LNG next. On the positive side, China’s Unipec will resume purchases of US crude oil in October after a two-month halt due to the trade row between the world’s two largest economies.Inventory report – US crude oil stockpiles fell more than expected as imports declined and refinery runs held close to record highs while gasoline and distillate inventories rose. Crude inventories fell 5.8 million barrels compared with expectations of a decrease of 1.5 million barrels. Crude stocks at Cushing, Oklahoma, the delivery hub for US crude futures, rose by 772,000 barrels. Gasoline stocks rose 1.2 million barrels, compared with expectations of a 488,000-barrel drop. Distillate stockpiles rose by 1.8 million barrels against expectations of a 1.5 million barrels increase. US crude production rose 1,00,000 bpd to 11 million bpd last week.US energy companies cut nine oil drilling rigs last week, dropping to 860, the biggest reduction since May 2016. Traders also watched for a potential supply disruption in the North Sea, where workers are planning three oil and gas platform strikes next month. Oil production will stop during the strikes, which means about 45,000-50,000 barrels per day will be taken off the market.Mexico’s president-elect Andres Manuel Lopez Obrador (AMLO) will reportedly suspend oil auctions for at least two years. AMLO wants to revise some of the energy laws that govern the oil and gas sector, which could dramatically alter the landscape for foreign oil and gas companies. This would signal that the continuity of the oil opening may be in doubt. Mexico’s oil production has been declining for over a decade, falling to 1.9 million barrels per day recently, down from 3.4 mbd in the mid-2000s. The IEA sees output falling by another 130,000 bpd this year, due to the ageing offshore oil fields although that is a narrower decline compared with the 235,000 bpd the country lost last year. AMLO is aiming to boost production by 600,000 bpd over the next two years, which will be a monumental task.Market participants also tracked comments on Saudi Arabia’s decision to go ahead with public listing of its state owned oil company Aramco. Saudi energy minister Khalid al-Falih firmly had refuted media reports that the kingdom had shelved its long-mooted plans to list Aramco shares. The listing has been repeatedly pushed back as Saudi Arabia sought a higher oil price environment and officials clashed over how to proceed, including over disclosure requirements and the venue for the listing. Hedge funds and other money managers cut their bullish wagers on US crude futures to the lowest level since mid-June.Outlook: Overall, traders continue to argue over supply since the impact of the Iran sanctions won’t be known until November. In the meantime, the bears will continue to try to build a case for a drop in demand because of the trade dispute. The wild cards this week will be worries over the impending strike which will strip more supply from the market, and the US Dollar. A weaker dollar could drive up foreign demand for dollar-denominated crude oil. We expect that Brent crude oil is likely to remain range-bound within a $65-75 per barrel range. With short-term focus switching to supply, we see some additional upside potential towards $80 per barrel.(The author is AVP-Commodity research, MOFSL)

By Navneet Damani Oil prices gained more than 1 per cent, ending a run of weekly declines on signs that Iran sanctions may limit global supply and that a trade war may not curb China's appetite for US crude. This week, traders will likely focus on factors that could see oil prices trade over $70 per barrel. In the tug-of-war for market attention between supply and demand, the supply side seems to be winning now. News of slowing supplies and higher demand drove prices up over 5 per cent in the week.PerspectiveIran sanctions - Worries that the sanctions on Iran will remove significant volumes of crude from the market underpinned prices last week. For Iran, its oil customers have started to drastically wind down purchases of Iranian crude ahead of the US sanctions. Iran’s exports plunged by 6,00,000 bpd compared with July loadings due to plummeting flows to India, Tehran’s second-largest oil customer. During August 1-16, Iranian oil exports averaged 1.68 million bpd. This compares with average exports of 2.32 million bpd for the whole of July and 2.10 million bpd in the first 16 days of July. Demand from Japan remained steady, but South Korea is not importing Iranian condensate for the second consecutive month in August. Demand in Europe was up strongly, especially from Italy. In another blow to the Iranian regime, French oil major Total SA (TOT) has confirmed that it would end a multi-billion dollar gas project in the country because it is unable to obtain a project-specific waiver from the US authorities. Traders are worried that Iranian sanctions could severely undersupply the oil market as soon as Q4 2018.Demand worries - Traders are expressing caution due to concerns over Chinese demand and the impact of the US–China trade dispute. The trade talks ended with nothing major accomplished. Instead, both countries activated another round of duelling tariffs on $16 billion worth of each other’s goods. China imposed tariffs on a second round of US goods in retaliation of US tariffs, targeting oil products and coal for the first time and leaving open the possibility of including crude oil and LNG next. On the positive side, China’s Unipec will resume purchases of US crude oil in October after a two-month halt due to the trade row between the world’s two largest economies.Inventory report - US crude oil stockpiles fell more than expected as imports declined and refinery runs held close to record highs while gasoline and distillate inventories rose. Crude inventories fell 5.8 million barrels compared with expectations of a decrease of 1.5 million barrels. Crude stocks at Cushing, Oklahoma, the delivery hub for US crude futures, rose by 772,000 barrels. Gasoline stocks rose 1.2 million barrels, compared with expectations of a 488,000-barrel drop. Distillate stockpiles rose by 1.8 million barrels against expectations of a 1.5 million barrels increase. US crude production rose 1,00,000 bpd to 11 million bpd last week.US energy companies cut nine oil drilling rigs last week, dropping to 860, the biggest reduction since May 2016. Traders also watched for a potential supply disruption in the North Sea, where workers are planning three oil and gas platform strikes next month. Oil production will stop during the strikes, which means about 45,000-50,000 barrels per day will be taken off the market.Mexico’s president-elect Andres Manuel Lopez Obrador (AMLO) will reportedly suspend oil auctions for at least two years. AMLO wants to revise some of the energy laws that govern the oil and gas sector, which could dramatically alter the landscape for foreign oil and gas companies. This would signal that the continuity of the oil opening may be in doubt. Mexico’s oil production has been declining for over a decade, falling to 1.9 million barrels per day recently, down from 3.4 mbd in the mid-2000s. The IEA sees output falling by another 130,000 bpd this year, due to the ageing offshore oil fields although that is a narrower decline compared with the 235,000 bpd the country lost last year. AMLO is aiming to boost production by 600,000 bpd over the next two years, which will be a monumental task.Market participants also tracked comments on Saudi Arabia's decision to go ahead with public listing of its state owned oil company Aramco. Saudi energy minister Khalid al-Falih firmly had refuted media reports that the kingdom had shelved its long-mooted plans to list Aramco shares. The listing has been repeatedly pushed back as Saudi Arabia sought a higher oil price environment and officials clashed over how to proceed, including over disclosure requirements and the venue for the listing. Hedge funds and other money managers cut their bullish wagers on US crude futures to the lowest level since mid-June.Outlook: Overall, traders continue to argue over supply since the impact of the Iran sanctions won’t be known until November. In the meantime, the bears will continue to try to build a case for a drop in demand because of the trade dispute. The wild cards this week will be worries over the impending strike which will strip more supply from the market, and the US Dollar. A weaker dollar could drive up foreign demand for dollar-denominated crude oil. We expect that Brent crude oil is likely to remain range-bound within a $65-75 per barrel range. With short-term focus switching to supply, we see some additional upside potential towards $80 per barrel.(The author is AVP-Commodity research, MOFSL)

Indian Oil earmarks Rs 22,000-crore capex for FY19

Indian Oil Corporation (IOC) today said it has lined up Rs 22,000-crore capex plan for the current fiscal year and will commission the Ennore-Manali LNG pipeline on schedule by the end of the year.Sanjiv Singh, the chairman of the nation’s largest oil …

Indian Oil Corporation (IOC) today said it has lined up Rs 22,000-crore capex plan for the current fiscal year and will commission the Ennore-Manali LNG pipeline on schedule by the end of the year.Sanjiv Singh, the chairman of the nation's largest oil marketing company, said the board has approved a capex plan of Rs 22,000 crore for FY19, of which around Rs 6,000 crore will be towards upgrading refineries to meet BS-VI emission norms.Addressing reporters after the the AGM here, Singh also said the company is confident of commissioning the over Rs 4,000-crore, the 1,170-km-long pipeline linking its Ennore LNP terminal near Chennai to Manali in Himachal in 2018.The over Rs 5,000-crore LNG terminal at Ennore will be commissioned as schedule by October, he added."More than 50 per cent work on the pipeline is already completed and we have tied up with all our target customers in Manali and most of them in Chennai region as well, Singh said.On crude imports from Iran, Singh said there is no clarity how the sanctions will pan out from November 4 and accordingly they have tied up many national oil marketing companies to ensure that crude supplies are not disrupted."We don't procure crude from private suppliers. We have sounded out enough national oil companies for supplies to source oil depending on the impact of the US sanctions on Tehran," he said.He also denied that IOC has reduced its intake from Iran as saying on a net-net basis there is no cut down."There could have been some fluctuations in some months but overall we are procuring as per our contracts," said Singh.Giving a break-up of the capex plan, finance director AK Sharma told PTI that around Rs 6,000 crore will go into refinery upgrades to meet the BS-VI emission norms, Rs 4,000 crore into marketing of which half will be used to procure new LPG cylinders, and around Rs 3,000 crore into new businesses like bio fuels, and Rs 1,000 crore into Paradeep petrochemicals expansion among others.On fund raising plans, though Sharma said the company does not need any funds now, towards the end of the fiscal year, they will hit international bond markets along with a domestic debt market, as the firm has not tapped it for long.According to the annual report presented to the shareholders today, the company sought shareholders' approval for raising around Rs 20,000 crore through an NCD issue this year.The company has around Rs 53,000 crore of debt as of June, of which 70 per cent are forex loans.The chairman also said, IOC, which was the first oil company to set up an electric vehicle charging station a few years ago in Nagpur, will increase its footprint more. But he did not offer more details.On new businesses, especially after entering the city gas distribution arena on its own after the last month's auctions, he said IOC is very bullish about this segment and will invest over Rs 15,000 crore into this vertical over the next three years.It can be noted that IOC has a joint venture with Adani group for city gas distribution and at the auctions last month it has on its own won rights to seven cities, including Coimbatore and Salem in Tamil Nadu and Guna in MP. Together with its JV partner Adani, it has marketing rights in nine more cities, including Allahabad.He also said in the medium term, the company expects around 15 per cent profit to come from the gas business, and 15-20 per cent from petrochemicals vertical.On the ethanol plant, Singh said the first 100 tonne per day plant in Panipat, with an investment of Rs 500 crore, will be commissioned over the next two years. The company has also taken land for two more biofuel plants in UP and Gujarat, he added.

JLR India registers 83% growth in 2017-18: MD

Luxury carmaker Jaguar Land Rover (JLR) India has recorded 83 per cent growth in the overall domestic market and over 50 per cent in Rajasthan during 2017-18, a top company official said today.The state already has a base of 700 customers.We grew 83 pe…

Luxury carmaker Jaguar Land Rover (JLR) India has recorded 83 per cent growth in the overall domestic market and over 50 per cent in Rajasthan during 2017-18, a top company official said today.The state already has a base of 700 customers.We grew 83 per cent in the domestic market and over 50 per cent in Rajasthan during 2017-18, Rohit Suri, president and MD of JLR India, said while launching a new retail facility here.A new ultra-modern retail facility launch is in line with an objective to meet the rising popularity of the JLR cars in tier-2 cities, he added.

DRDO wants to sell super radar tech for fighter jets

India’s defence research and development organization (DRDO) wants to sell tech that it says it has developed for a `super radar’ for fighter jet aircraft and has asked the Indian Industry to submit proposals for transfer of technology (ToT).The Electronics and Radar Development Establishment (LRDE) has said that it is ready with its “Active Electronically Scanned Array Radar (AESAR)” technology and has four licenses to offer to the Indian industry. The lab has asked interested companies to submit their profiles to apply for the project.The AESAR is a key requirement for all future jet fighter purchases by India, with efforts also on to integrate it to the indigenous Light Combat Aircraft (LCA) Tejas that are on order by the Indian Air Force. In a recent note, DRDO gas said that its fire control Radar can be configured for use on any fighter class aircraft and has sought Expression of Interest (EOI) from prospective bidders.“Active phased array technology in the Radar enables user to achieve high mission reliability with multi-target tracking capability. The radar operational modes are designed to assist the fighter pilot in the execution of various combat missions in air-to-air, air-to-ground and air-to-sea operations,” the DRDO note says.AESA radars are at the heart of modern fighter aircraft and are integrated on all cutting edge jets like the Dassault Rafale and Boeing F/A 18 besides the fifth generation F 22 and F 35 fleet. These radars enable jets to detect enemy targets from a standoff distance without getting exposed. They can also track and target multiple threats simultaneously, giving one jet the ability to take down several targets. An AESA radar will also be a defining parameter for the upcoming contest to supply 110 fighter jets to India under a Make in India scheme.Israeli company ELTA is equipping 58 of the Indian Air Force Jaguar jets with AESA radars as part of the upgrade plan. No other Indian Air Force fighter had the AESA radar yet but India is processing a global tender for AESA radars for a new fleet of 83 LCA MK 1A fighters for which also ELTA has been down selected.The integration of an AESA radar was a key parameter for the air force to clear the order for 83 LCA Mk 1A fighters, after years of blocking the indigenous fighter on concerns that it would not be combat worthy.

India’s defence research and development organization (DRDO) wants to sell tech that it says it has developed for a `super radar’ for fighter jet aircraft and has asked the Indian Industry to submit proposals for transfer of technology (ToT).The Electronics and Radar Development Establishment (LRDE) has said that it is ready with its “Active Electronically Scanned Array Radar (AESAR)” technology and has four licenses to offer to the Indian industry. The lab has asked interested companies to submit their profiles to apply for the project.The AESAR is a key requirement for all future jet fighter purchases by India, with efforts also on to integrate it to the indigenous Light Combat Aircraft (LCA) Tejas that are on order by the Indian Air Force. In a recent note, DRDO gas said that its fire control Radar can be configured for use on any fighter class aircraft and has sought Expression of Interest (EOI) from prospective bidders.“Active phased array technology in the Radar enables user to achieve high mission reliability with multi-target tracking capability. The radar operational modes are designed to assist the fighter pilot in the execution of various combat missions in air-to-air, air-to-ground and air-to-sea operations,” the DRDO note says.AESA radars are at the heart of modern fighter aircraft and are integrated on all cutting edge jets like the Dassault Rafale and Boeing F/A 18 besides the fifth generation F 22 and F 35 fleet. These radars enable jets to detect enemy targets from a standoff distance without getting exposed. They can also track and target multiple threats simultaneously, giving one jet the ability to take down several targets. An AESA radar will also be a defining parameter for the upcoming contest to supply 110 fighter jets to India under a Make in India scheme.Israeli company ELTA is equipping 58 of the Indian Air Force Jaguar jets with AESA radars as part of the upgrade plan. No other Indian Air Force fighter had the AESA radar yet but India is processing a global tender for AESA radars for a new fleet of 83 LCA MK 1A fighters for which also ELTA has been down selected.The integration of an AESA radar was a key parameter for the air force to clear the order for 83 LCA Mk 1A fighters, after years of blocking the indigenous fighter on concerns that it would not be combat worthy.

The Rs 18k cr deal that will help Anil Ambani turn RInfra debt-free

Reliance Group chairman Anil Ambani today said that Reliance Infrastructure expects to become debt free by next year.The company’s board also approved the deal to sell its Mumbai power business to Adani Transmission valued at Rs 18,800 crore.Speaking to the press, Ambani said that defence would become the key business of the group in some years. R-Infra said that it had received approval from all regulatory authorities – Competition Commission of India (CCI), shareholders of the company, Maharashtra Electricity Regulatory Commission, and others for the sale.The successful completion of the deal is expected to help the company reduce the debt to Rs 7,500 crore from Rs 22,000 crore.”Have over Rs 5000 cr of cash inflows from past regulatory assets & a further cushion of arbitration yet to be decided worth Rs 8000 cr. Delhi distribution biz will contribute Rs 16k to our revenues. Rel Infra has 11 different road projects with Rs 12k cr investment,” Anil Ambani said.Last week, the company had defaulted on payment of redemption of non-convertible debentures (NCDs) amounting to Rs 133.38 crore. However, it added that it expects to make good the payments from proceeds of the deal.Anil Ambani also clarified on the allegations levelled against him by Rahul Gandhi on the Rafale deal saying that there is no merit in the charges put forth by him and that they are baseless. He also said that truth alone shall thrive.Commenting on the strength of the infrastructure arm of the group, Anil Ambani said that even after the sale of its Mumbai business the company “has a strong portfolio of attractive businesses with annuity cash flows “.(With PTI inputs)

Reliance Group chairman Anil Ambani today said that Reliance Infrastructure expects to become debt free by next year.The company's board also approved the deal to sell its Mumbai power business to Adani Transmission valued at Rs 18,800 crore.Speaking to the press, Ambani said that defence would become the key business of the group in some years. R-Infra said that it had received approval from all regulatory authorities - Competition Commission of India (CCI), shareholders of the company, Maharashtra Electricity Regulatory Commission, and others for the sale.The successful completion of the deal is expected to help the company reduce the debt to Rs 7,500 crore from Rs 22,000 crore."Have over Rs 5000 cr of cash inflows from past regulatory assets & a further cushion of arbitration yet to be decided worth Rs 8000 cr. Delhi distribution biz will contribute Rs 16k to our revenues. Rel Infra has 11 different road projects with Rs 12k cr investment," Anil Ambani said.Last week, the company had defaulted on payment of redemption of non-convertible debentures (NCDs) amounting to Rs 133.38 crore. However, it added that it expects to make good the payments from proceeds of the deal.Anil Ambani also clarified on the allegations levelled against him by Rahul Gandhi on the Rafale deal saying that there is no merit in the charges put forth by him and that they are baseless. He also said that truth alone shall thrive.Commenting on the strength of the infrastructure arm of the group, Anil Ambani said that even after the sale of its Mumbai business the company "has a strong portfolio of attractive businesses with annuity cash flows ".(With PTI inputs)

Moody’s: Robust growth, stable outlook on sovereign rating

We are expecting a robust growth of around 7.5% for this year and the next and the ongoing cyclical recovery as well, Joy Rankothge, Vice President, Senior Analyst, Credit Strategy and Research, Moody’s, tells ET Now.Edited excerpts:India has low dependence on foreign currency debt and long average debt maturity. Do you see this containing the impact of rising rates and currency depreciation in India? Yes, that is the crux of what we are saying in our report as well because India has a large domestic funding base for the government and the average debt profile is about 10 years. That broadly helps contain both debt affordability rates rising from rising yields as well as implications from currency devaluation because India only has around 4% of its government debt in foreign currency. The external debt to GDP is also higher than China but far lower than other Emerging Markets like Brazil, Russia, Indonesia or for that matter Argentina and South Africa as well. Do you see India being better placed versus emerging market and other Asian peers? We have indicated that we look at all the external vulnerability indicators and how a country or an economy services its near term, one-year debt obligations against foreign exchange reserves. India’s foreign exchange reserves for example compared to 2013 are significantly higher and even though they are off near record, they still remain quite substantial. From that EVI indictor, we assess that India’s external vulnerability risks are quite low and external risks are quite contained. Emerging markets and Asian peers are seeing a bit more pressure than India. Could you give us a sense of the key factors that Moody’s will watch out for in Indian macros and also more importantly, the move on sovereign ratings? From macro GDP standpoint, we released a global macro forecast a few days ago. What we are saying is that in India we are expecting quite a robust growth of around 7.5% for this year and the next and the ongoing cyclical recovery as well. We do not see the headwinds from higher oil prices or rising interest rates having a significant dampening effect on the macro economy. The pre-election spending will likely act as a buffer in the near term to any downside that we might see. From a growth standpoint, we are expecting quite a robust growth. From rating standpoint, as we have published earlier this year in our credit opinion on the sovereign rating, the risks are balanced as we see downside and offside risks being balanced. That is where we have a stable outlook on sovereign rating. What about internal factors like twin deficit, fiscal deficit, current account versus what the peers have been quoting because that seems to be picking up higher thanks to oil prices? Yes, a couple of points there. On the fiscal front, in the short term we are seeing rising pressure, rising risks for meeting government fiscal targets for this year partly because of higher oil prices but also due to certain recent changes like the GST rate cuts implemented in late July.The tax cuts for the small businesses and also the relatively higher elevated MSP formula that was released as well as social pre-election spending, all these factors are adding upward pressure on expenditure. We expect the government to try to limit the slippage as was done in previous years through cut backs in capital expenditure. But the risk is that those cut-backs may not be sufficient. At this point, we see risks in meeting the fiscal targets. But having said that, even if there is slippage at all, the growth momentum remains quite strong. As I mentioned, we are expecting 7.5% growth and nominal growth is quite strong as well. This is an important factor in India’s debt affordability as well as the point we brought up earlier about most of the debt being domestically funded and sourced and being in local currency, again provides for debt affordability. In terms of the current account, because of the oil dynamics as well as strong growth, we see that including rising imports or strong demand for imports, we are projecting current account deficit at around 2.5% or a little bit higher this year. Those pressures will continue to be there because oil prices are expected to remain at these levels, around $70-72 for this year and the next for Brent and start to decline somewhat. The current account deficits will be financed through FDI portfolios as well as foreign exchange reserve management given that India has quite a substantial foreign exchange reserves.

We are expecting a robust growth of around 7.5% for this year and the next and the ongoing cyclical recovery as well, Joy Rankothge, Vice President, Senior Analyst, Credit Strategy and Research, Moody's, tells ET Now.Edited excerpts:India has low dependence on foreign currency debt and long average debt maturity. Do you see this containing the impact of rising rates and currency depreciation in India? Yes, that is the crux of what we are saying in our report as well because India has a large domestic funding base for the government and the average debt profile is about 10 years. That broadly helps contain both debt affordability rates rising from rising yields as well as implications from currency devaluation because India only has around 4% of its government debt in foreign currency. The external debt to GDP is also higher than China but far lower than other Emerging Markets like Brazil, Russia, Indonesia or for that matter Argentina and South Africa as well. Do you see India being better placed versus emerging market and other Asian peers? We have indicated that we look at all the external vulnerability indicators and how a country or an economy services its near term, one-year debt obligations against foreign exchange reserves. India’s foreign exchange reserves for example compared to 2013 are significantly higher and even though they are off near record, they still remain quite substantial. From that EVI indictor, we assess that India’s external vulnerability risks are quite low and external risks are quite contained. Emerging markets and Asian peers are seeing a bit more pressure than India. Could you give us a sense of the key factors that Moody’s will watch out for in Indian macros and also more importantly, the move on sovereign ratings? From macro GDP standpoint, we released a global macro forecast a few days ago. What we are saying is that in India we are expecting quite a robust growth of around 7.5% for this year and the next and the ongoing cyclical recovery as well. We do not see the headwinds from higher oil prices or rising interest rates having a significant dampening effect on the macro economy. The pre-election spending will likely act as a buffer in the near term to any downside that we might see. From a growth standpoint, we are expecting quite a robust growth. From rating standpoint, as we have published earlier this year in our credit opinion on the sovereign rating, the risks are balanced as we see downside and offside risks being balanced. That is where we have a stable outlook on sovereign rating. What about internal factors like twin deficit, fiscal deficit, current account versus what the peers have been quoting because that seems to be picking up higher thanks to oil prices? Yes, a couple of points there. On the fiscal front, in the short term we are seeing rising pressure, rising risks for meeting government fiscal targets for this year partly because of higher oil prices but also due to certain recent changes like the GST rate cuts implemented in late July.The tax cuts for the small businesses and also the relatively higher elevated MSP formula that was released as well as social pre-election spending, all these factors are adding upward pressure on expenditure. We expect the government to try to limit the slippage as was done in previous years through cut backs in capital expenditure. But the risk is that those cut-backs may not be sufficient. At this point, we see risks in meeting the fiscal targets. But having said that, even if there is slippage at all, the growth momentum remains quite strong. As I mentioned, we are expecting 7.5% growth and nominal growth is quite strong as well. This is an important factor in India’s debt affordability as well as the point we brought up earlier about most of the debt being domestically funded and sourced and being in local currency, again provides for debt affordability. In terms of the current account, because of the oil dynamics as well as strong growth, we see that including rising imports or strong demand for imports, we are projecting current account deficit at around 2.5% or a little bit higher this year. Those pressures will continue to be there because oil prices are expected to remain at these levels, around $70-72 for this year and the next for Brent and start to decline somewhat. The current account deficits will be financed through FDI portfolios as well as foreign exchange reserve management given that India has quite a substantial foreign exchange reserves.

WhatsApp to train users on dangers of fake news

After being asked by the central government to take steps to stop the spread of disinformation on its platform, WhatsApp on Wednesday roped in New Delhi-based non-profit Digital Empowerment Foundation (DEF) to create awareness among its users about the…

After being asked by the central government to take steps to stop the spread of disinformation on its platform, WhatsApp on Wednesday roped in New Delhi-based non-profit Digital Empowerment Foundation (DEF) to create awareness among its users about the need to verify information."Our goal is to help keep people safe by creating greater awareness about fake news and empowering users to help limit its spread," Ben Supple, Public Policy Manager at WhatsApp, said in a statement.In a meeting with WhatsApp CEO Chris Daniels on August 21, Union IT Minister Ravi Shankar Prasad instructed the Facebook-owned platform to comply with the law of the land and take "suitable" steps to prevent its misuse.The meeting took place after several lynching incidents were linked to the spread of misinformation on the instant messaging platform which has over 200 million monthly active users in India.As part of the new partnership with WhatsApp, DEF has committed to holding 40 training sessions for community leaders in 10 states across the country where there have been worrisome cases of violence and where there will be state polls before the end of the year.DEF said it would help educate government officials, administration representatives, civil society organisations and students to spread the word about this challenge.The training is expected to enable WhatsApp users to differentiate between opinions and facts, and to inculcate a habit of verifying information through simple checks before forwarding it to their friends and family.In addition, DEF said it would incorporate this new training as part of their network of over 30,000 grassroots community members in seven states."We at WhatsApp and DEF hope these training workshops will help build an empathetic and conscious community of WhatsApp users who learn to respond rather than react to every message they receive," said Osama Manzar, Founder-Director of DEF.WhatsApp has already taken several technological measures to curb the problem of disinformation, including the introduction of the "forwarded" tag and limiting forwarding to five chats at once."In addition to the steps we are taking within WhatsApp, we believe impacting lives through the power of education is critical to helping achieve the vision of a 'Digital India'," Supple added.

Is the job offer you got online real?

Hiring portals are becoming the new target of scamsters as fraudsters are increasingly targeting candidates looking for vacancies at the job portals. So, if you get a job call or email from a job portal, you should take extra care to verify with the job provider before celebrating your new job.Recently, a number of fake job cases have been reported across the country in which job seekers were asked to deposit money in lieu of jobs in reputed multi-national companies with decent salaries.In most cases, job seekers get a call or email saying that “Your résumé has been shortlisted for an interview” for a reputed multinational company. After few questions, the fraudsters ask candidate to pay a registration fee to fast forward CV or final selection. These scamsters get contact numbers and email ids of job seekers from popular job portals then target people according to the preferences of the victims. Consumer complaint websites are full of stories about unemployed people being exploited by dodgy job websites. To stop these scams, job portals have also started putting disclaimer on their websites.

Hiring portals are becoming the new target of scamsters as fraudsters are increasingly targeting candidates looking for vacancies at the job portals. So, if you get a job call or email from a job portal, you should take extra care to verify with the job provider before celebrating your new job.Recently, a number of fake job cases have been reported across the country in which job seekers were asked to deposit money in lieu of jobs in reputed multi-national companies with decent salaries.In most cases, job seekers get a call or email saying that “Your résumé has been shortlisted for an interview” for a reputed multinational company. After few questions, the fraudsters ask candidate to pay a registration fee to fast forward CV or final selection. These scamsters get contact numbers and email ids of job seekers from popular job portals then target people according to the preferences of the victims. Consumer complaint websites are full of stories about unemployed people being exploited by dodgy job websites. To stop these scams, job portals have also started putting disclaimer on their websites.

Jaitley has 15 questions for Cong on Rafale

Countering Congress and Rahul Gandhi’s charges against Narendra Modi government on Rafale deal, Finance Minister Arun Jaitley today posed 15 questions to ‘expose Congress party’s falsehood’. Targeting Rahul Gandhi, Jaitley said it is expected from national political parties and its responsible leaders to keep themselves informed of the basic facts before they enter a public discourse on defence transactions.”I am asking these questions as his misadventure is impairing national interest and I hope Rahul Gandhi and the Congress Party would respond immediately,” Arun Jaitley said in a blog on Facebook.He said the Congress Party and its leader Rahul Gandhi are guilty on three counts: Firstly, the UPA delayed the deal by over a decade comprising national security.

#WATCH FM Jaitley says, “If you can go to extent of misquoting President Macron, &saying he warned me there is no s… https://t.co/ru8btKC1Rv— ANI (@ANI) 1535528674000

“Secondly, every fact raised by Rahul Gandhi and the Congress are completely false and thirdly the party just wants to further delay the defence procurement so that India’s defence preparedness suffers,” he added. Hitting out at Rahul Gandhi, Jaitley said Gandhi revised his figures several times: “Gandhi quoted a price of Rs 700 crore per aircraft in Delhi and Karnataka in April and May this year. In Parliament, he reduced it to Rs 520 crore per aircraft, in Raipur he increased it to Rs 540 crore.”He said that the Congress Party’s false campaign on Rafale aircraft deal based on peddled untruth has been casting a cloud on the Inter-Governmental agreement and seriously compromising national security.Here is the complete post written by Arun Jaitley on his facebook account:Why these questions?Considering the security environment around India, the highest standards of defence preparedness are required. After the Kargil experience, the Armed Forces and the Raksha Mantralaya were of the opinion that combat ability of the Indian Air Force to strike at targets needs to be radically improved. This need was first recorded by the Raksha Mantralaya in the year 2001.Considerations of the national security demanded that the IAF has the best available aircraft with the appropriate weaponry loaded on it. In principle approval for acceptance of necessity of procurement of 126 replacement aircrafts was recorded by the Raksha Mantri way back on 1st June, 2001. After the UPA Government came into power, the Defence Acquisition Council (DAC) approved the Acceptance of Necessity (AoN) for procurement of 126 medium multi-role combat aircrafts. An aircraft without weaponry is of little use in a war. It is only a flying instrument. It adds to the combat strength of the forces only when it is loaded with the requisite weaponry, which enables it to strike targets. The UPA Government issued a request for proposal on 28th August, 2007 and found two vendors, viz., M/s Dassault Aviation and M/s EADS to be compliant to the RFP requirements. It took the UPA five more years to commence the negotiations and in January, 2012 the Contract Negotiation Committee (CNC) determined Dassault Aviation to be L1.For reasons best known to the UPA Government, on 27th June, 2012, the deal was directed to be re-examined, which effectively meant that the entire eleven-year exercise was abandoned and the process was to be undertaken afresh. India’s squadron strength was depleting because of age. This slow and casual approach of the UPA Government seriously compromised national security requirements.The NDA approachOn 10th April, 2015, the Government of India and the French Government issued a joint statement where India decided to procure 36 Rafale aircrafts from the French Government on terms better than the ones conveyed by Dassault in the L1 bid of 2007. The same was approved by the DAC on 13th May, 2015 and finally the agreement, after a detailed procedure, was signed on 23rd September, 2016.The false campaignA false campaign based on untruth has been launched by the Congress Party casting a cloud on the Inter-Governmental agreement. The principal arguments of this campaign are the following:(i) The NDA Government paid higher price than what the UPA would have paid if the deal would have completed on the basis of the 2007 offer of Dassault.(ii) Proper procedures such as negotiations by the Contract Negotiation Committee and approval of the Cabinet Committee on Security (CCS) were not obtained.(iii) A private industrialist in India was favoured and the interest of public sector undertaking was compromised.Each one of the above issues raised is based on complete falsehood. It is expected from national political parties and its responsible leaders to keep themselves informed of the basic facts before they enter a public discourse on defence transactions. The Congress Party and its leader, Shri Rahul Gandhi, are guilty on three counts:(i) The UPA delayed the deal by over a decade and seriously compromised national security.(ii) Every fact that Shri Rahul Gandhi and the Congress Party has spoken on pricing and procedure are completely false. (iii) Its effort of raising these issues is to further delay a defence procurement so that India’s defence preparedness further suffers.The questionsI have, therefore, decided to ask the following questions to the Congress Party and its President. Needless to say that if replies are received in the public space or even if there is an issue diversion and no reply is received, I would be constrained to come out with further specific facts which establish truth as a victim of Shri Rahul Gandhi and his party merely peddling his falsehoods. Needless to say that I am constrained by the secrecy clause, which exists in the Contract and whatever I ask or respond to would be constrained by that limitation. My question to Shri Rahul Gandhi and his Party are as follows:On Delay(1) The UPA was a Government which suffered from a decision- making paralysis. Do you agree that the delay of over one decade was only on account of the incompetence and indecisiveness of the UPA Government?(2) Did this delay seriously compromise national security? Is not the medium multi-role combat aircraft required by our forces to identify and strike at targets particularly when two of our neighbours have already enhanced their strength in this area?(3) Was this delay and eventual abatement of the purchase by the UPA based on collateral considerations as had been witnessed in earlier transactions such as the purchase of the 155 mm Bofors gun?Unsure of facts(4) How is it that Shri Rahul Gandhi quoted a price of Rs.700 crores per aircraft in Delhi and Karnataka in April and May this year? In Parliament, he reduced it to Rs.520 crore per aircraft, in Raipur he increased it to Rs.540 crores; in Jaipur he used the two figures – Rs.520 crores and Rs.540 crores in the same speech. In Hyderabad, he invented a new price of Rs.526 crores. Truth has only one version, falsehood has many. Are these allegations being made without any familiarity with the facts of the Rafale purchase?(5) Is Mr. Gandhi or the Congress Party aware of price comparison? Is Mr. Gandhi aware of the aircraft price, which was quoted in 2007 in the L1 bid? Is he aware that there was an escalation clause, which by 2015 when the NDA struck the price deal, would have further escalated the price? Would not the escalation clause have continued to escalate the price till each of the aircraft was supplied? Have the significant exchange rate variations between Rupee and Euro during the same period been considered?(6) Is he aware of the fact that if the basic aircraft price on which UPA was to purchase the aircraft along with the escalation clause is compared at the price with the better terms on which the NDA Government signed the deal. The basic aircraft price itself is 9% cheaper under the NDA than it was under the UPA?(7) Can Shri Rahul Gandhi deny that when the add-ons such as India-specific adaptations, weaponry, etc. are installed on the basic aircraft, the UPA price, which was mentioned in the 2007 L1 offer, would be at least 20% costlier than the more favourable price negotiated by the NDA?(8) Can Shri Rahul Gandhi and the Congress Party deny if the total contract cost, that is, basic aircraft plus add-ons, including weaponry, etc., Indian adaptations plus future supplies and maintenance are all added, the NDA terms become far more favourable than the 2007 L1 offer?Role of private industries(9) Can Shri Rahul Gandhi and the Congress deny that the Government of India has no contract whatsoever with any private industry in relation with the Rafale aircraft supplies? In fact, 36 of the Rafale aircraft with their Indian adaptations are going to be sent to India and there is no manufacturing of these 36 aircrafts in India.(10) Any Original Equipment Manufacturer (OEM) under the offset policy of the UPA can select any number of Indian partners, both from the private sector and the public sector, for offset supplies? This has nothing to do with the Government of India and, therefore, any private industry having benefitted from the Government of India is a complete lie. Can Shri Gandhi and his Party deny this?On procedure(11) Are Shri Gandhi and his Party aware of the fact that there are two ways of acquiring a defence equipment, i.e., either by competitive bidding or by an Inter-Governmental Agreement?(12) Can Mr. Gandhi and his Party deny that the UPA Government in 2007 itself had shortlisted the Rafale as technically- acceptable and L1 in price competition? (13) Can Shri Gandhi and his Party deny that considering the urgency of the defence requirement, the Government of India and the French Government agreed to execute the supply of 36 Rafale aircrafts at terms better than the 2007 offer of the UPA?(14) Can it be denied that both the Price Negotiation Committee and the Contract Negotiation Committee negotiated for 14 months before concluding the deal?(15) Can it be denied that before the deal was executed, the Cabinet Committee on Security approved the transaction?I am asking the above questions and I hope Shri Rahul Gandhi and the Congress Party would respond immediately.

Countering Congress and Rahul Gandhi's charges against Narendra Modi government on Rafale deal, Finance Minister Arun Jaitley today posed 15 questions to 'expose Congress party’s falsehood'. Targeting Rahul Gandhi, Jaitley said it is expected from national political parties and its responsible leaders to keep themselves informed of the basic facts before they enter a public discourse on defence transactions."I am asking these questions as his misadventure is impairing national interest and I hope Rahul Gandhi and the Congress Party would respond immediately," Arun Jaitley said in a blog on Facebook.He said the Congress Party and its leader Rahul Gandhi are guilty on three counts: Firstly, the UPA delayed the deal by over a decade comprising national security. #WATCH FM Jaitley says, "If you can go to extent of misquoting President Macron, &saying he warned me there is no s… https://t.co/ru8btKC1Rv— ANI (@ANI) 1535528674000 "Secondly, every fact raised by Rahul Gandhi and the Congress are completely false and thirdly the party just wants to further delay the defence procurement so that India’s defence preparedness suffers," he added. Hitting out at Rahul Gandhi, Jaitley said Gandhi revised his figures several times: "Gandhi quoted a price of Rs 700 crore per aircraft in Delhi and Karnataka in April and May this year. In Parliament, he reduced it to Rs 520 crore per aircraft, in Raipur he increased it to Rs 540 crore."He said that the Congress Party’s false campaign on Rafale aircraft deal based on peddled untruth has been casting a cloud on the Inter-Governmental agreement and seriously compromising national security.Here is the complete post written by Arun Jaitley on his facebook account:Why these questions?Considering the security environment around India, the highest standards of defence preparedness are required. After the Kargil experience, the Armed Forces and the Raksha Mantralaya were of the opinion that combat ability of the Indian Air Force to strike at targets needs to be radically improved. This need was first recorded by the Raksha Mantralaya in the year 2001.Considerations of the national security demanded that the IAF has the best available aircraft with the appropriate weaponry loaded on it. In principle approval for acceptance of necessity of procurement of 126 replacement aircrafts was recorded by the Raksha Mantri way back on 1st June, 2001. After the UPA Government came into power, the Defence Acquisition Council (DAC) approved the Acceptance of Necessity (AoN) for procurement of 126 medium multi-role combat aircrafts. An aircraft without weaponry is of little use in a war. It is only a flying instrument. It adds to the combat strength of the forces only when it is loaded with the requisite weaponry, which enables it to strike targets. The UPA Government issued a request for proposal on 28th August, 2007 and found two vendors, viz., M/s Dassault Aviation and M/s EADS to be compliant to the RFP requirements. It took the UPA five more years to commence the negotiations and in January, 2012 the Contract Negotiation Committee (CNC) determined Dassault Aviation to be L1.For reasons best known to the UPA Government, on 27th June, 2012, the deal was directed to be re-examined, which effectively meant that the entire eleven-year exercise was abandoned and the process was to be undertaken afresh. India’s squadron strength was depleting because of age. This slow and casual approach of the UPA Government seriously compromised national security requirements.The NDA approachOn 10th April, 2015, the Government of India and the French Government issued a joint statement where India decided to procure 36 Rafale aircrafts from the French Government on terms better than the ones conveyed by Dassault in the L1 bid of 2007. The same was approved by the DAC on 13th May, 2015 and finally the agreement, after a detailed procedure, was signed on 23rd September, 2016.The false campaignA false campaign based on untruth has been launched by the Congress Party casting a cloud on the Inter-Governmental agreement. The principal arguments of this campaign are the following:(i) The NDA Government paid higher price than what the UPA would have paid if the deal would have completed on the basis of the 2007 offer of Dassault.(ii) Proper procedures such as negotiations by the Contract Negotiation Committee and approval of the Cabinet Committee on Security (CCS) were not obtained.(iii) A private industrialist in India was favoured and the interest of public sector undertaking was compromised.Each one of the above issues raised is based on complete falsehood. It is expected from national political parties and its responsible leaders to keep themselves informed of the basic facts before they enter a public discourse on defence transactions. The Congress Party and its leader, Shri Rahul Gandhi, are guilty on three counts:(i) The UPA delayed the deal by over a decade and seriously compromised national security.(ii) Every fact that Shri Rahul Gandhi and the Congress Party has spoken on pricing and procedure are completely false. (iii) Its effort of raising these issues is to further delay a defence procurement so that India’s defence preparedness further suffers.The questionsI have, therefore, decided to ask the following questions to the Congress Party and its President. Needless to say that if replies are received in the public space or even if there is an issue diversion and no reply is received, I would be constrained to come out with further specific facts which establish truth as a victim of Shri Rahul Gandhi and his party merely peddling his falsehoods. Needless to say that I am constrained by the secrecy clause, which exists in the Contract and whatever I ask or respond to would be constrained by that limitation. My question to Shri Rahul Gandhi and his Party are as follows:On Delay(1) The UPA was a Government which suffered from a decision- making paralysis. Do you agree that the delay of over one decade was only on account of the incompetence and indecisiveness of the UPA Government?(2) Did this delay seriously compromise national security? Is not the medium multi-role combat aircraft required by our forces to identify and strike at targets particularly when two of our neighbours have already enhanced their strength in this area?(3) Was this delay and eventual abatement of the purchase by the UPA based on collateral considerations as had been witnessed in earlier transactions such as the purchase of the 155 mm Bofors gun?Unsure of facts(4) How is it that Shri Rahul Gandhi quoted a price of Rs.700 crores per aircraft in Delhi and Karnataka in April and May this year? In Parliament, he reduced it to Rs.520 crore per aircraft, in Raipur he increased it to Rs.540 crores; in Jaipur he used the two figures – Rs.520 crores and Rs.540 crores in the same speech. In Hyderabad, he invented a new price of Rs.526 crores. Truth has only one version, falsehood has many. Are these allegations being made without any familiarity with the facts of the Rafale purchase?(5) Is Mr. Gandhi or the Congress Party aware of price comparison? Is Mr. Gandhi aware of the aircraft price, which was quoted in 2007 in the L1 bid? Is he aware that there was an escalation clause, which by 2015 when the NDA struck the price deal, would have further escalated the price? Would not the escalation clause have continued to escalate the price till each of the aircraft was supplied? Have the significant exchange rate variations between Rupee and Euro during the same period been considered?(6) Is he aware of the fact that if the basic aircraft price on which UPA was to purchase the aircraft along with the escalation clause is compared at the price with the better terms on which the NDA Government signed the deal. The basic aircraft price itself is 9% cheaper under the NDA than it was under the UPA?(7) Can Shri Rahul Gandhi deny that when the add-ons such as India-specific adaptations, weaponry, etc. are installed on the basic aircraft, the UPA price, which was mentioned in the 2007 L1 offer, would be at least 20% costlier than the more favourable price negotiated by the NDA?(8) Can Shri Rahul Gandhi and the Congress Party deny if the total contract cost, that is, basic aircraft plus add-ons, including weaponry, etc., Indian adaptations plus future supplies and maintenance are all added, the NDA terms become far more favourable than the 2007 L1 offer?Role of private industries(9) Can Shri Rahul Gandhi and the Congress deny that the Government of India has no contract whatsoever with any private industry in relation with the Rafale aircraft supplies? In fact, 36 of the Rafale aircraft with their Indian adaptations are going to be sent to India and there is no manufacturing of these 36 aircrafts in India.(10) Any Original Equipment Manufacturer (OEM) under the offset policy of the UPA can select any number of Indian partners, both from the private sector and the public sector, for offset supplies? This has nothing to do with the Government of India and, therefore, any private industry having benefitted from the Government of India is a complete lie. Can Shri Gandhi and his Party deny this?On procedure(11) Are Shri Gandhi and his Party aware of the fact that there are two ways of acquiring a defence equipment, i.e., either by competitive bidding or by an Inter-Governmental Agreement?(12) Can Mr. Gandhi and his Party deny that the UPA Government in 2007 itself had shortlisted the Rafale as technically- acceptable and L1 in price competition? (13) Can Shri Gandhi and his Party deny that considering the urgency of the defence requirement, the Government of India and the French Government agreed to execute the supply of 36 Rafale aircrafts at terms better than the 2007 offer of the UPA?(14) Can it be denied that both the Price Negotiation Committee and the Contract Negotiation Committee negotiated for 14 months before concluding the deal?(15) Can it be denied that before the deal was executed, the Cabinet Committee on Security approved the transaction?I am asking the above questions and I hope Shri Rahul Gandhi and the Congress Party would respond immediately.

No Chinese belt, road or bedrooms for Malaysia

Andy MukherjeePerplexed, wounded, indignant or still optimistic. The Chinese developer Country Garden Holdings Co. can put any spin it wants on its Forest City project, a $100 billion Malaysian township whose fate suddenly has been thrown into doubt after Mahathir Mohamad’s pointed refusal to let foreigners buy apartments or live in them long-term.One thing is clear, though: The prime minister is not acting impulsively. The project claims to be a “new global cluster of commerce and culture,” and a “dream paradise for all mankind.” However, in Malaysian political discourse, Forest City is just a gigantic Chinatown of 700,000 residents. Taking on the developer is part of Mahathir’s broader plan to redefine Malaysia’s relationship with Beijing, pulling Kuala Lumpur away from the client-state mindset introduced by his predecessor. Already, the 93-year-old leader has canceled the Chinese-funded East Coast Rail Link, dealing a blow to China Communications Construction Co., which was building the $20 billion belt-and-road route. Najib Razak, ousted in May, claimed the link would bring prosperity to eastern Malaysia. But Mahathir, who spoke bluntly in Beijing this month against “a new version of colonialism,” took a very different view of the railway, which would have connected areas near the Thai border along the South China Sea to busy port cities on Malaysia’s western coast, near the Strait of Malacca. He also shelved a natural-gas pipeline in Sabah, a Malaysian state on the island of Borneo. Mahathir justified the cancellations on the grounds that they were too expensive. However, the abrupt message to Country Garden, which is neither linked to the Chinese state nor would add a dollar to Malaysia’s national debt, shows that sovereignty — and Malaysia’s racial politics — are Mahathir’s real concerns.Two-thirds of the homebuyers in Forest City are from China. Last year, as a trenchant critic of Najib’s policies, Mahathir flagged the risk that anybody living in Malaysia for 12 years would be able to vote. Country Garden should have seen the political risk in marketing the flats to mainland Chinese, who were separately lapping up long-stay visas under Najib’s Malaysia My Second Home program. Najib’s generosity toward the mainland wasn’t the natural state of affairs. In 1965, the country expelled Singapore from the Malaysian federation out of fear that the peninsula’s majority Muslim Malays could lose their political dominance to the island’s ethnic Chinese. If Country Garden misread the political tea leaves, it’s also wrong to bark up the legal tree after Mahahir’s outburst. So what if Malaysia’s national land code permits foreign ownership? Approval of global investors may not matter all that much to a politician who has, in his previous innings, trapped their money at the height of a financial crisis. The new prime minister isn’t as reliant on Beijing as his predecessor. If anything, he has to reward local businessmen and contractors for switching their allegiance from Barisan Nasional, the erstwhile ruling coalition that suffered its first loss of power in six decades.It’s a given then that Malaysia under Mahathir will have little appetite either for One Belt, One Road — or, for that matter, three- and four-bedroom apartments that could create a new political constituency. Forest City could still be salvaged, but as a predominantly local project. If Donald Trump can unilaterally change the rules of game for China and Chinese businesses, so can, in his limited sphere, Mahathir. As far as Country Garden is concerned, he just has.

Andy MukherjeePerplexed, wounded, indignant or still optimistic. The Chinese developer Country Garden Holdings Co. can put any spin it wants on its Forest City project, a $100 billion Malaysian township whose fate suddenly has been thrown into doubt after Mahathir Mohamad’s pointed refusal to let foreigners buy apartments or live in them long-term.One thing is clear, though: The prime minister is not acting impulsively. The project claims to be a “new global cluster of commerce and culture,” and a “dream paradise for all mankind.” However, in Malaysian political discourse, Forest City is just a gigantic Chinatown of 700,000 residents. Taking on the developer is part of Mahathir’s broader plan to redefine Malaysia’s relationship with Beijing, pulling Kuala Lumpur away from the client-state mindset introduced by his predecessor. Already, the 93-year-old leader has canceled the Chinese-funded East Coast Rail Link, dealing a blow to China Communications Construction Co., which was building the $20 billion belt-and-road route. Najib Razak, ousted in May, claimed the link would bring prosperity to eastern Malaysia. But Mahathir, who spoke bluntly in Beijing this month against “a new version of colonialism,” took a very different view of the railway, which would have connected areas near the Thai border along the South China Sea to busy port cities on Malaysia’s western coast, near the Strait of Malacca. He also shelved a natural-gas pipeline in Sabah, a Malaysian state on the island of Borneo. Mahathir justified the cancellations on the grounds that they were too expensive. However, the abrupt message to Country Garden, which is neither linked to the Chinese state nor would add a dollar to Malaysia’s national debt, shows that sovereignty — and Malaysia’s racial politics — are Mahathir’s real concerns.Two-thirds of the homebuyers in Forest City are from China. Last year, as a trenchant critic of Najib’s policies, Mahathir flagged the risk that anybody living in Malaysia for 12 years would be able to vote. Country Garden should have seen the political risk in marketing the flats to mainland Chinese, who were separately lapping up long-stay visas under Najib’s Malaysia My Second Home program. Najib’s generosity toward the mainland wasn’t the natural state of affairs. In 1965, the country expelled Singapore from the Malaysian federation out of fear that the peninsula’s majority Muslim Malays could lose their political dominance to the island’s ethnic Chinese. If Country Garden misread the political tea leaves, it’s also wrong to bark up the legal tree after Mahahir’s outburst. So what if Malaysia’s national land code permits foreign ownership? Approval of global investors may not matter all that much to a politician who has, in his previous innings, trapped their money at the height of a financial crisis. The new prime minister isn’t as reliant on Beijing as his predecessor. If anything, he has to reward local businessmen and contractors for switching their allegiance from Barisan Nasional, the erstwhile ruling coalition that suffered its first loss of power in six decades.It’s a given then that Malaysia under Mahathir will have little appetite either for One Belt, One Road — or, for that matter, three- and four-bedroom apartments that could create a new political constituency. Forest City could still be salvaged, but as a predominantly local project. If Donald Trump can unilaterally change the rules of game for China and Chinese businesses, so can, in his limited sphere, Mahathir. As far as Country Garden is concerned, he just has.