UPDATE 1-Some big stock market winners emerge from Obama move on Cuba

Wed Dec 17, 2014 5:55pm EST
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(Updates with closing prices, analyst's quote and links)

By Dan Burns and David Randall

NEW YORK Dec 17 (Reuters) - A tiny mutual fund based in Miami, a clutch of cruise line operators and a Canadian natural resources company rank among the early winners in the Obama administration's surprise move on Wednesday to thaw relations with Cuba.

After more than five decades of frosty relations and U.S.-imposed economic embargoes, President Barack Obama unveiled plans to relax some aspects of commerce and transportation between the two countries. An outright end to the longstanding trade embargo, however, is not in the cards for now.

While the Cuban economy is small, with gross domestic product of roughly $70 billion, according to the World Bank, comparable to that of Hawaii, investors nevertheless scrambled to capitalize on the new dynamic between Washington and Havana.

In particular, they quickly zeroed in on one fund: the Herzfeld Caribbean Basin Fund.

Shares of the $34 million closed-end fund, which trades on Nasdaq under the ticker "CUBA," soared by as much as 47 percent to a seven-year high after reports of the breakthrough early on Wednesday. By the close of trading it had gained 28.9 percent on the day.

Its holdings include around 60 securities that fund manager Thomas Herzfeld believes would benefit from an eventual end to the U.S. economic embargo against Cuba.

Volume topped 24 million shares, by far a record amount of trading for the fund and the day's total by early afternoon was the equivalent of nearly 50 percent of the cumulative volume the fund has experienced since its listing in 1994.   Continued...