Cuba Mutual Fund Jumps Most in Three Weeks After Report on Castro’s Health
- Submitted by: manso
- 09 / 01 / 2011
By Jonathan J. Levin - Aug 31, 2011 4:59 PM GMT-0400. The Herzfeld Caribbean Basin Fund, a closed-end mutual fund that aims to profit from a resumption of U.S. trade with Cuba, surged the most in three weeks after a newspaper report that former President Fidel Castro’s health had deteriorated.
The $25 million fund jumped 3.7 percent to $6.65 today, the biggest advance since Aug. 11. Fuego Enterprises Inc. (FUGI), which intends to provide communications services in Cuba, led gains among the fund’s holdings, climbing 25 percent to 3 cents in over the counter trading. Popular Inc. (BPOP), Puerto Rico’s largest lender, rose 3.5 percent to $2.08 on the
Nasdaq Stock Market.
Nelson Bocaranda, a columnist with Caracas-based El Universal, wrote yesterday that Castro’s health is “getting complicated,” without saying where it obtained the information. The Cuban revolutionary leader has lost consciousness several times recently and is being treated for an infection, he wrote.
Jorge Avila Hernandez, a spokesman for the Cuban embassy in Mexico City, declined to comment on the speculation. Phone calls to the office of the Permanent Representative of Cuba to the United Nations weren’t answered and it wasn’t possible to leave a message.
Castro, who turned 85 years old this month, began transferring control of the island to his brother Raul in July 2006, when he underwent intestinal surgery, and officially stepped down as president in 2008.
U.S. President John F. Kennedy imposed a trade embargo in Cuba that is still in effect, even after Raul Castro initiated some measures to open the economy after taking power.
Cecilia Gondor, executive vice president at Miami-based Thomas J. Herzfeld Advisors Inc., said the fund usually rallies on speculation about Castro’s deteriorating health.
The fund focuses on “companies in the region that would benefit from a more open Cuban market,” said Mike Taggart, the director of closed-end fund research at Morningstar Investment Services in Chicago.