Herzfeld Caribbean Basin Fund, Inc (CUBA) Surges On Obama's Bold Move

Herzfeld Caribbean Basin Fund, Inc tagged a fresh seven-year high earlier

Karee Venema

Dec 17, 2014 at 11:33 AM

CUBA

Herzfeld Caribbean Basin Fund, Inc (NASDAQ:CUBA) -- which is tied to equities principally traded in the Caribbean Basin country -- has rallied nearly 43% today to linger near $9.71, and earlier hit a fresh seven-year peak of $9.87. Stoking the bullish flames are reports that the U.S. and Cuba will begin diplomatic discussions.

More details should emerge when President Barack Obama and Cuban President Raul Castro -- who spoke by phone earlier today -- take the podiums in their respective countries at 12 p.m. ET to formally announce a prisoner swap. Additionally, Obama is expected to unveil a number of changes to current travel and economic restrictions.

Should the strides taken between the two nations continue to benefit Herzfeld Caribbean Basin Fund, Inc (NASDAQ:CUBA) -- which is now in the black on a year-to-date basis -- a short-covering rally could ensue. Short interest surged 49.4% over the past two reporting periods, and at the fund's average daily pace of trading, it would take more than six sessions to cover all of these bearish bets.

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