Every time there is a conflict between 2 countries, whether it is good or bad, there is always another country which suffers because of the conflict. For example, the shortest route between India and Rotterdam, Netherlands in Europe is using the Suez Canal and the average ship takes 19 days, the alternative is to go around Africa which averages 48 days. To use the Suez Canal is to pay a fee to the company which is owned by the government of Egypt and in 2022-23 the fees were $9.4 billion. Ever since the Houthi attacks on ships using drones, even though the US and British Navy are providing protection, fees have dropped in half, because ships are finding a more expensive but safer alternative.

In an article by Eric Reguly of the Globe and Mail, the Suez Canal has been in operation since 1869, and the ships have created cities and jobs in Egypt. The attacks on the ships trying to use the canal, have damaged the economy of Egypt.

The country of Egypt is suffering from high inflation, nearly 1/3 of its population of 110 million live on $4 a day. The country has significant debts and since 2022 its currency has been devalued 4 times.

To the south of Egypt is the country of Sudan where there is an internal struggle for control which means the war has sent about 300,000 to Egypt according to the UNHCR or United Nations refugee agency. Meanwhile to the east of the country, Hamas and Israel are still fighting and thousands of Palestinians have gone to Egypt some paying $5,000 a head to secure a visa.

Traditionally the Pyramids have drawn many tourists to Egypt, but according to S&P Global Ratings Egypt’s tourism revenues are set to fall 10% to 30% shrinking economic growth and foreign exchange reserves.

Egypt has received $50 billion in international assistance from the UAE, the IMF, the European Union and the World Bank.

Linking to dividend paying stocks, for every disturbance in normal patterns there is analysis by a variety of agencies to determine the credit worthiness of countries. The same goes for companies, we expect normal routines, but if something happens out of normal, insurance companies and rating agencies will run numbers to determine potential impacts. There is reason why a credit card used to advertise no surprises, there should be little for your investments. You can determine what would be the impact if something was not normal and then maybe alternatives are better for you.

There are more questions than answers, till the next time – to raising questions.