Cuba fund makes record leap after Castro resigns

[Mika]

Cuba fund makes record leap after Castro resigns
http://www.caribbean360.com/News/Business/Stories/2008/02/21/NEWS0000005490.html

MIAMI, USA, February 21, 2008 - The Miami-based fund that invests in companies which stand to benefit from the end of the United States embargo on Cuba has seen its biggest-ever surge following Tuesday's announcement by 81-year-old Cuban leader, Fidel Castro that he was resigning as the country's president and commander-in-chief.

The Herzfeld Caribbean Basin Fund, which aims to profit from the resumption of US trade with Cuba, jumped 17 per cent (by US$1.26) to US$8.70. Earlier, the fund surged 28 percent, the highest ever one-day jump and a record 1.44 million shares changed hands. It was reminiscent of the 20 per cent increase in January last year when it was revealed that Castro was in serious condition following three intestinal surgeries.

Among businesses which the fund has shares in are Carnival Corporation, the largest cruise-ship operator; Consolidated Water Company, a Cayman Islands-based operator of drinking-water plants; as well as shipping and cargo transportation companies in the United States.

Thomas J. Herzfeld who created the fund in 1994 said Castro's decision to step down was "a clear step towards the possibility of the U.S. resuming trade with Cuba."

"I think eventually Cuba will return to being the hub, both commercially and otherwise of the Caribbean. The timing is uncertain, but I believe trade will be resumed with Cuba. In the next year or two, I think that it will occur," he said, adding that any boom in that island nation would proliferate throughout the region and see investors reaping the benefits.

Some others are not as optimistic there will be any immediate major change if Castro's likely successor - his 76-year-old brother, Raul who was de facto leader while his older sibling battled sickness - takes over.

Director of the University of Miami's Cuba Business Roundtable and associate at university's Centre for Cuban and Cuban American Studies, Dr Jose Azel said while it may signal "some changes in stylistics...the kinds of change that would lead in a change in US foreign policy, we don't see happening at all."

He has however advised businesses to keep a close eye on developments to get a jump start if Cuba opens up. Dr Azel further advised Cuban-Americans in Miami to break into the market once the embargo is lifted.

"I think Cuban-American expatriates can act as champions for many corporations to start thinking about undertaking direct investment in Cuba," he said.

Meantime, share prices of companies and investment funds in Canada which have interests in Cuba also increased following Castro's resignation.

The disaster capitalist vultures are circling.



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[Billy Burnett]

1. Dr Jose Azel is out to lunch.

He has however advised businesses to keep a close eye on developments to get a jump start if Cuba opens up.

A jump start? :rofl:

The rest of the world got a "jump start" 45+ years ago. The US has isolated itself.

[Vogon_Glory]

2. Fund Share Price Still Below What It Was Last Year

The fund share price is still below what it was last year. I remember when the Herzfelf Caribbean Basin Fund traded for about $12.50 a share.

I am convinced that because of the hard-liners in and out of Congress, even if Cuba opens up more of its economy to outside investment, US investors will profit least from it. Even if McCain and Clinton had celestial visions of the Virgen de Caridad and subsequent changes of heart, I expect that most of those economic restrictions are going to remain in place for a while yet.