Cuba Fund Surges on Wager Castro’s Death Opens Way for Détente

One of the few instruments through which U.S. investors can bet on an opening of the Cuban economy surged amid speculation that Fidel Castro’s death may open the way for improved relations between the U.S. and communist country.
The Herzfeld Caribbean Basin Fund, which holds stock in airlines, cruise lines, builders and other companies that could gain if the U.S. lifts trade restrictions on Cuba, jumped 12 percent to $7.15 in early trading as of 9:10 a.m. in New York.
Investors hoping for a rapprochement in U.S.-Cuba relations had been discouraged by statements from Donald Trump, who said as president he would reverse the improved U.S. relations with Cuba forged by President Barack Obama over the past two years unless the Caribbean nation met his demands for more political and religious freedoms. With Castro’s death, stock buyers now seem to be betting that there’s room for Trump to take a friendlier stance toward Cuba, according to Stuart Culverhouse, an analyst at Exotix Ltd. in London, a research firm and investment bank that specializes in so-called frontier markets.
“There are growing interests to maintain the relations even among Republicans,” Culverhouse said. “The Trump team have been saying during the weekend that they want a better deal with Cuba.”
Obama pledged in 2014 to end a diplomatic embargo with Cuba after more than 50 years and formally resumed diplomatic relations in July 2015. He visited the island in March.
Trump’s latest comments on Cuba didn’t show a thaw in relations was imminent.
“If Cuba is unwilling to make a better deal for the Cuban people, the Cuban/American people and the U.S. as a whole, I will terminate deal,”
Source: Bloomberg