India: Water crisis can impact sovereign rating

India's worsening water shortage, triggered by high consumption amid rapid economic growth and frequent natural disasters, can negatively impact the South Asian nation's sovereign credit strength, Moody's Ratings said on Tuesday.

Millions of Indians face water shortages every summer when water demand rises in farms, offices and homes against a limited supply, but a prolonged heatwave this year has worsened the shortfall, including in Delhi and the southern tech hub of Bengaluru.

"This is detrimental to the credit health of the sovereign, as well as sectors that heavily consume water, such as coal power generators and steel-makers," Moody's Ratings said in a note.

"In the long term, investment in water management can mitigate risks from potential water shortages," it added.

India's average annual water availability per capita is likely to drop to 1,367 cubic meters by 2031 from an already-low 1,486 cubic meters in 2021, according to the Ministry of Water Resources.

A level below 1,700 cubic meters indicates water stress, with 1,000 cubic meters being the threshold for water scarcity, according to the ministry.

"Decreases in water supply can disrupt agricultural production and industrial operations, resulting in inflation in food prices and declines in income for affected businesses and communities, while sparking social unrest," Moody's said.

This, in turn, can exacerbate volatility in India's growth, it warned.

Increases in the frequency of water shortage, severity or durations of extreme climate events stemming from climate change will exacerbate the situation because India heavily relies on monsoon rainfall for water supply, the global agency said.

Industrialisation and urbanisation will intensify competition for water among businesses and residents, it added.

The sustainable finance market in India can provide companies and regional governments with a critical avenue to raise funds, it said. Moody's currently has a Baa3 rating on India with a stable outlook.

 

 

 

Israel: More Strategic Installations Exposed

The military media of Hezbollah has released a new video showing vital Israeli targets known only to the Israeli security system.

This was released as Israeli officials are making threats to launch a full-fledged war on Lebanon although military experts say the Israeli occupation regime does not have the capability or manpower of doing so against a formidable Lebanese force. 

The new video included a segment from a speech by Hezbollah Secretary-General Sayyed Hassan Nasrallah in which he warned the occupation regime that the Lebanese resistance would fight without constraints, rules, or limits if war were imposed on Lebanon. 

He emphasized that those contemplating war against Lebanon would regret it. 

Nasrallah’s words in the new clip were accompanied by translations into English and Hebrew, while the video displayed coordinates, both longitude and latitude for the targets presented without naming them. 

Before the video was aired Hezbollah’s military media published a statement saying: “Stay tuned… for those concerned.”

According to reliable sources cited by regional media, the video was intentionally vague, with no specific targets identified. The sources explained that it was a message understood only by decision-makers and relevant circles in Israel. 

Israeli media covered the new revelation with deep interest, underlining that it included an official threat to the headquarters of the Ministry of Security in Tel Aviv. 

Israeli media reported that the “HaKirya compound” appears in the video, housing the headquarters of the Israeli Ministry of Security, the General Staff of the Army, and several high-ranking military leaders. 

Additionally, the video showed a military satellite base and military bases, as well as others in the Negev and Galilee regions. It also included Ashdod Port, Ben Gurion Airport, oil refineries in Haifa, and Haifa port, according to Israeli media.

Other reports also cited sources as saying the new video shows vital targets in Haifa, Ashdod port, the Hadera power station, Ramat David Military Airport in Afula, Ben Gurion Airport, Nevatim Airbase, the Negev desert, oil refineries on the coast, satellite area in Yehuda and the research center at the Dimona Nuclear Reactor. 

As Israeli officials are threatening full-scale war on Lebanon the Israeli minister for war, Yoav Gallant, traveled to Washington on Sunday to increase the rhetoric.
The ground commander of the Iranian army warned about the possibility of a regional war if Tel Aviv decides to attack Lebanon. 

Sources within the Islamic Resistance in Iraq say tens of thousands of fighters would open a major front from the occupied Syrian Golan Heights if Hezbollah was attacked. 

Yemen’s Ansarullah have declared their intentions to significantly expand the battlefield as well if Israeli leaders make such a “foolish decision”. 

Hezbollah says it has the manpower (estimated by some experts at a quarter of a million) and many precision-guided missiles, drones, and torpedoes to take Israel back to the stone-age. 

The latest video clip was released days after Lebanon’s Hezbollah released more than 9 minutes of footage from a drone that flew undetected to Haifa and safely returned to Lebanon. 

Footage in that video showed aerial reconnaissance from Kiryat Shmona to the cities of Karmiel, Nahariya, Safed, and Afula, reaching as far as Haifa and sensitive sites across the city. 

The scenes have caused significant concern among the Israeli security apparatus, with officials and media acknowledging Hezbollah’s substantial and effective intelligence capabilities, and Tel Aviv’s inability to handle the threat posed by the resistance movement’s drones.

On the same day that the new video was released, Hezbollah released details of the latest operations it waged against the Israeli military over the past 24 hours in solidarity with Gaza. 

A statement underlined that in support of the resilient Palestinian people in Gaza and bolster their honorable resistance, the Islamic Resistance (Hezbollah) conducted a number of operations against Israeli army positions and deployments along the Lebanese-Palestinian borders. 

According to the statement, the operations included: 

Targeting a building used by Israeli soldiers in the Menara settlement with appropriate weapons, resulting in direct hits, in response to Israeli attacks on steadfast southern villages and safe houses, especially in the town of Mays al-Jabal. 

Targeting buildings used by Israeli soldiers in the Metula settlement with appropriate weapons, resulting in direct hits that caused fires. 

Targeting the Zabdine site in the occupied Lebanese Sheba’a farms with rocket weapons, resulting in a direct hit. 

Targeting the Rmeitha site in the occupied Kafrchouba hills of Lebanon with rocket weapons, resulting in a direct hit. 

Targeting buildings used by enemy soldiers in the Metula colony with appropriate weapons, resulting in direct hits. 
 

 

Suez Canal revenue drops by almost half

The revenue of Egypt's Suez Canal has declined by almost half this year following attacks on shipping in the Red Sea by the Houthi which have seen many vessels divert via the Cape of Good Hope.

According to Egypt’s Al-Mal News, data released this week for last month shows that revenues of the Suez Canal dropped by 64.3% to approximately US$337.8 million, as compared to US$648 million recorded in May 2023.

The number of vessels transiting the canal in May also dropped to 1,111, which is lower than 2,396 ships that crossed during a similar period last year.

As a result of reduced ship traffic, the cargo volume passing through the Suez Canal dropped by 68.5% last month to about 44.9 million tons. In May 2023, the total cargo tonnage was 142.9 million tons.

The Suez Canal Authority (SCA) Chief Osama Rabie said in media statements last week that the canal's income decreased to US$428 million in January compared to US$804 million in the same period in the previous year.

According to the head of the SCA, Osama Rabie, the traffic of ships in the waterway witnessed a 30% decline compared to the same period of 2023.

During the fiscal year 2022/2023, the returns from the Suez Canal hit a record-breaking $9.4 billion.

The SCA has extended fee discounts for a range of vessels on selected long-distance trades. Initially, SCA had introduced the fee reductions back in January, with some discounts as high as 75% for product tankers and crude carriers on voyages between Americas and Asia.

The new extension of discount rates will be valid until end of the year, covering 12 categories of ships including bulk carriers, container ships and LNG carriers.

Pakistan: Current Account turns negative

Pakistan’s current account (CA) posted the first deficit in four months in May 2024, of US$270 million against a surplus of US$499 million a month ago.

CA deficit during 11MFY24 grew to US$464 million against a deficit of US$3.8 billion in the corresponding period last year.

A large primary income deficit of US$1.4 billion was the key reason behind the negative figure, without which CA balance would have been comfortably positive, despite a wider good trade deficit.

The primary deficit ballooned to US$1.4 billion (highest ever level) due to US$1.5 billion worth of payments. These payments included interest on foreign debt and backlog of dividends of multinational companies. As per the central bank, the latter has been nearly completely settled; hence the primary income deficit should moderate to around US$500 million in the coming months.

Goods trade deficit was reported at US$2.0 billion in May, higher than US$1.8 billion in April and doubling YoY. 

Imports of US$5.0 billion were at the highest level in FY24 to date, up 13%MoM and 35%YoY.

The sequential growth in imports was led by seasonally higher petroleum imports (up 8%MoM) and 12% higher machinery imports. Iron & Steel imports (scrap and other raw materials) rose 40%YoY.

This is also seasonal and does not point to a sustainable rebound in construction activity (down 3%YoY in 11MFY24). 

Exports were up a healthy 17%YoY, mainly driven by exports of textiles (up 18%YoY, seasonal) and food (up 55%YoY. Rice exports doubled YoY).

Remittances in May were an impressive US$3.2 billion, up 15%MoM and 54%YoY, ahead of the Eid-ul-Adha holidays, likely to normalize to around US$2.5 billion in the coming months, in our view.

SBP’s Forex reserves were reported at US$9.1 billion

SBP’s Forex reserves remained flat around US$9.1 billion by mid-June 2024, equivalent to just about two months’ imports.

The SBP began cutting interest rates in June, by 150bps, taking the policy rate to 20.5%.

Many industries (cement, autos, steel) are operating at very low utilization levels (50-60%); any likely increase in imports could increase trade deficit.

Tough budgetary measures for the real estate and textile industries may extend the spell of weak demand a few more months (keeping the growth in imports moderate).

CAD crossing US$500 million is a key risk and can have negative implications for the exchange rate, inflation and monetary policy,.

 

Israeli ships targeted by resistance groups

The recent joint military operations carried out by regional resistance groups against Israeli ships have demonstrated a growing sense of solidarity and sent a powerful message of unity amid the regime’s genocidal war on Gaza.

Yemen’s Ansarullah movement and the Islamic Resistance in Iraq, which is an umbrella group of anti-terror fighters in the Arab country, have conducted the operations. 

The Islamic Resistance in Iraq confirmed on Sunday that it had hit four ships in the Israeli port of Haifa and one ship in the Mediterranean through joint drone attacks with Ansarullah. The vessel that was hit in the Mediterranean was sailing to Haifa Port.

It said the military operations were launched in solidarity with the people of Gaza and vowed to continue attacks against the enemy's strongholds, which is a reference to Israeli interests. 

The Ansarullah movement also confirmed the joint attacks. 

“The two operations successfully achieved their goals, and the strikes were precise and direct," the spokesman for the Yemeni armed forces said. 

Yahya Saree also said on Saturday that the Yemeni army targeted the US aircraft carrier Eisenhower in the Red Sea with missiles. 

He said the move was in line with efforts to express solidarity with Palestinians in Gaza. Saree noted that the attacks were also a response to American and British strikes against Yemen. 

The Yemeni and Iraqi resistance forces have been hitting Israeli targets since the regime declared war on Gaza on October 07, 2023. 

The Yemeni army has launched several drone and missile attacks against Israeli ships and vessels affiliated to the regime in the Red Sea since November.

The Ansarullah said it would stop the attacks if Israel ended its relentless air and ground attacks on Gaza. 

Nonetheless, the US and the UK chose to escalate the situation after they began strikes against Yemen in early January in response to the targeting of Israeli vessels. 

This prompted the Ansarullah movement to order the army to target American and British warships in the Red Sea over the complicity of London and Washington with the Tel Aviv regime’s crimes against Palestinians. 

The US and UK attacks against Yemen have not only failed to deter the country from targeting Israeli interests, but they have also led to greater unity among the axis of regional resistance. Growing unity among resistance groups was thrust into the spotlight after the Islamic Resistance in Iraq and the Ansarullah movement teamed up to target the Israeli ships. 

More than 260 days have passed since Israel began the onslaught, which has claimed the lives of about 37,600 Palestinians. But the regime has failed to eliminate Hamas which has been its main military goal since the war erupted. 

According to Rear Admiral Daniel Hagari, the Israeli military spokesman, “This business of destroying Hamas, making Hamas disappear — it’s simply throwing sand in the eyes of the public…. Hamas is an idea; Hamas is a party. It’s rooted in the hearts of the people — anyone who thinks we can eliminate Hamas is wrong”. 

Israel has suffered crushing blows at the hands of Hamas fighters in the Gaza battlefield. Israel’s warmongering against Lebanon’s Hezbollah has also brought the regime nothing more than humiliation.  

Both Israel and its Western allies, in particular the United States, have been under the illusion that they are able to eliminate regional resistance groups through military means. 

The US has repeatedly targeted resistance groups in West Asia that are opposed to Israel’s war on Gaza and Washington’s support for the regime. These American strikes have been aimed at deterring the groups from conducting military operations against the US and its protégé, Israel. 

However, growing resistance against the US hegemony and Israel’s occupation and savagery has clearly shown that Israelis and their Western masters are just building castles in the air. 

Iran on top in Gas Exporting Countries Forum

Iranian Oil Minister Javad Oji said on Saturday that the Islamic Republic has outpaced Qatar in gas extraction from joint fields by 100 million cubic meters (mcm), reports IRNA.

“We set an unprecedented record in gas production, and Iran has been ranked first among the Gas Exporting Countries Forum (GECF) members in terms of gas production increase; the average growth of the countries was equal to 2.5%, and Iran ranked first with 5% gas production growth,” Oji said.

“In the South Pars joint field, we extract 75 to 100 million cubic meters of gas more than the Qatari side,” he added.

The official noted that the oil ministry has signed deals worth US$20 billion with major holdings to boost the recovery factor of the giant field’s wells.

South Pars gas field, which Iran shares with Qatar in the Persian Gulf, is estimated to contain a significant amount of natural gas, accounting for about 8% of the world’s reserves, and approximately 18 billion barrels of condensate.

The huge offshore field covers an area of 9,700 square kilometers, 3,700 square kilometers of which are in Iran’s territorial waters in the Persian Gulf. The remaining 6,000 square kilometers, called North Dome, are situated in Qatar’s territorial waters.

Last week Oji said that over the first three years of the 13th administration in office, 150 oil industry projects, worth US$34 billion, have become active.

Speaking during the signing ceremony of developing two oil fields on June 16, he commemorated the memory of late President Ebrahim Raisi, noting that developing least developed regions of the country and creating jobs for the people living in those areas was the top priority of the late president.”

The majority of 153 projects that came to fruition were projects that had been ignored before the 13th administration took office, including South Pars gas field phase 11 which its development contract was exchanged for 20 years between the related sides, but when the 13th administration took office it decided to start its development which is now complete and operational, the Minister of Petroleum said.

Oji added, the country managed to acquire good revenues by implementing these kinds of projects in the oil, gas, refining, and petrochemical sectors. 

According to him, while the oil industry’s growth stood at 10% two years ago it reached 20% last year; the highest rate of growth among all sectors of the economy.

The oil industry has 300 projects on the agenda of which 80 projects are new ones, he said adding total value of these projects reaches US$130 billion, some of them are now operational.

Referring to cooperation with Russia, he said a satisfactory basis had been laid for expanding relations with Russia and we will hear good news in this regard in the future.

The 13th administration so far has signed US$5 billion dollars of oil contracts with Russian companies and 250 thousand barrels of oil per day the country produces, comes from the contracts have been already signed with Russian companies, Oji said.

The official also said that the United States can no longer prevent the export and production of Iran's oil.

“With the measures that have been taken in President Raisi's government in the field of the oil industry, I should announce that any government that comes to power in the US cannot prevent the export and production of Iranian oil,” Oji said while speaking at a parliament open session on Wednesday morning.

In his remarks, Oji highlighted the efforts of the 13th Iranian administration in improving the situation of the production and export of oil.

 

Speculation about Trump’s running mate

Former President Donald Trump told reporters Saturday he’s made up his mind about who will be his running mate in November, but he has yet to tell anyone who it is.

Trump told NBC News ahead of a rally in Philadelphia that he’s settled on a vice presidential choice.

“In my mind, yeah,” Trump said when asked if he’s decided.

Asked if his pick knows it’s them, Trump responded, “No, nobody knows.”

The selection process for Trump’s running mate has ramped up in recent weeks as several candidates received vetting materials from the campaign. Trump has said he may announce his choice at the Republican National Convention in Milwaukee next month.

Sources familiar with the process told The Hill the front-runners for the position are North Dakota Gov. Doug Burgum, Sen. J.D. Vance and Sen. Marco Rubio.

Others who received vetting materials and are under consideration include Sen. Tim Scott, Sen. Tom Cotton, Rep. Elise Stefanik, Rep. Byron Donalds  and former Secretary of Housing and Urban Development Ben Carson.

Trump has praised each of those individuals at various times, though he has downplayed the impact his selection might have on the end result in November.

“It’s never really had that much of an effect on an election,” Trump told Fox News earlier this year.