While many Cuban-Americans were celebrating in Miami and throughout the rest of the country this weekend following Fidel Castro’s death, Herzfeld Caribbean Basin Fund Inc. (NASDAQ: CUBA) investors today have another reason to cheer the leader’s passing.
Herzfeld Caribbean Basin Fund Inc., a fund which invests in interests related to the Caribbean Basin, including Cuba, has seen a surge in activity early this morning as shares shot up well over 10% in pre-market trading. In the first half hour of trading this morning, following the opening bell, the stock gave back some of its gains, but as of publishing this article, shares are surging once more. Shares of CUBA are up $0.72 or 11.36% on the day on volume of over 1 million shares. This is close to 35 times the typical trading volume one would see in this stock the average day, and is the highest volume we have seen since May of this year.
Earlier this year the fund saw significant inflows of investment capital after the thawing of Cuban-American relations. Since then, the price had leveled off and even dropped slightly following the 2016 election results here in the US. Donald Trump is more likely than not to revert some of those changes we saw made by the Obama administration earlier in the year. With that said, with Fidel Castro now gone, investors are betting that his influence on policy within Cuba will begin to fade, and hope that investment in Cuba will skyrocket over the next 12-24 months as further reforms are possible.
There is no doubt that this fund has substantial risk to it as a Trump administration and their possible views towards Cuba are not completely clear, however, there is hope that with Fidel Castro now deceased, tensions among Cuba and the rest of the world will slowly fade.