Sometimes global politics works in favor of companies, sometimes it works against and all companies have to adjust or learn to live with the tea leaves and hopefully not leave money on the table. An example is President Trump and the Panama Canal.

The history of the Canal was it was necessary because going around the tip of Chile is very dangerous and long, a short cut was needed for global shipping. In the early 1900’s, the French government tried but failed. The US using many engineering innovations built the canal and then decided to keep the lands within the canal as a “US lands”. It was not until December 31, 1999, the US officially gave the lands back to Panama.

In an article by Didi Tang and Alex Veiga of the Associated Press, the Hong Kong conglomerate has agreed to sell its stake in a subsidiary that operates ports near the Panama Canal. The consortium includes BlackRock Inc., BlackRock’s subsidiary Global Infrastructure Partners and Terminal Investment Ltd. BlackRock is the world’s largest asset manager having $11.6 trillion assets under administration.

CK Hutchison Holding said it will sell all shares in Hutchison Port Holdings to the group for $23 billions including $5 billion in debt. The consortium will have control over 43 ports in 23 countries including Panama, Mexico, Netherlands, Egypt, Australia, Pakistan and elsewhere.

The transaction does not include the ports in China and Hong Kong.

70% of the sea traffic that crosses the Panama Canal goes to and from US ports.

Frank Sixt, co-managing director of CK Hutchison said the transaction was the result of a rapid, discrete but competitive process which numerous bids and expression of interests were received. It was purely commercial in nature and unrelated to political events.

Given that CK Hutchison recently received a 25 year extension to run the ports, you can judge whether you believe the above statement or not.

Linking to dividend paying stocks, global politics plays a role in business, Whether the government wants companies to be involved or not involved in companies in the world. Business plans are adjusted for action or delay. It is the nature of the beast.

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