| CUBA
NEWS The
Miami Herald 5t1f4z Activists visiting Cuba protest embargo,
prison camp Peace activists hope the new U.S. congressional
leadership will mean an easing of the long-enforced sanctions against Cuba. By
Anita Snow, AP. Posted on Mon, Jan. 08, 2007. HAVANA - Peace activists
visiting Cuba to protest the U.S. military prison at Guantnamo Bay expressed
hope Sunday that the new Democratic congressional leadership will help ease long-standing
U.S. trade and travel sanctions against the communist-run island. ''I think
it is about time we end the embargo and open up relations between the Cuban and
American people,'' said Cindy Sheehan, who became an anti-war protester after
her 24-year-old son Casey was killed in Iraq in April 2004. "It hurts both
sides.'' U.S. restrictions bar most Americans from spending money in Cuba,
effectively preventing them from traveling here legally. The restrictions also
bar virtually all trade between the countries, except for some U.S. sales of food
and medicine to the island. Sheehan has drawn attention by camping outside
President Bush's ranch to protest the war and has been arrested during demonstrations.
She drew criticism from some Democrats in late December for ing with other
protesters to shout down a party news conference in Washington. Also in
the delegation to Cuba is Medea Benjamin, who organized the trip through the California
activist groups Global Exchange and Codepink. ''The restrictions have been
around way too long. Change is way overdue,'' Benjamin said, adding that the Cuba
sanctions made the group's trip very difficult. ''We had to jump through
hoops to put together this delegation,'' she said. Benjamin said she and
others in the group of 12 believe they are exempt from the U.S. restrictions because
they are traveling as professional human rights activists who will attend a daylong
international conference in the Cuban city of Guantnamo on Wednesday. They
plan to protest outside the main gate of the U.S. Navy's Guantnamo base
Thursday to call for the closure of its prison for terrorism suspects. Among
the delegation is a former U.S. Army colonel, a constitutional law expert, the
mother of a British citizen held at Guantnamo and a former detainee there. The
U.S. military says the prison now holds about 395 men on suspicion of links to
al Qaeda or the Taliban, including about 85 who have been cleared to be released
or transferred to other countries. The military says it wants to charge 60 to
80 detainees and bring them to trial. Fund banks on Cuba A
Miami-based closed-end fund focusing on companies that may eventually benefit
from trade ties with Cuba produced high returns, as investors bet change is coming
soon to the communist island. By Martha Brannigan,
[emailprotected]. Posted on Fri, Jan. 05, 2007. Miami investment
advisor Thomas J. Herzfeld created his closed-end fund for the day -- near or
distant -- when political change opens Cuba to investment. But it's doing
just fine in the meantime. Shares of the Herzfeld Caribbean Basin Fund,
which trades on the Nasdaq index under the ticker CUBA, rose 124 percent in the
past year, according to the Closed-End Fund Association. That makes the fund the
No. 2 performer among 673 peers. Only the Greater China Fund fared better, with
a 167 percent return, according to the trade group. The small fund, which
has assets of about $14 million, scouts for companies with ties to Florida and
the Caribbean that will do well without a change in Cuba but will likely get a
boost once the embargo ends. ''We have no interest in violating the embargo,''
says Herzfeld, chairman of the fund, which he launched in 1994. "We needed
to develop a strategy in the period in between when we raised the money and when
the embargo is lifted.'' The fund will enter its second phase when the embargo
ends, which Herzfeld thinks may be soon. ''I don't think Castro will live very
long, and I don't think the embargo will survive him,'' says Herzfeld, an expert
on closed-end funds whose main business, Herzfeld Investment Advisors, manages
$100 million in assets in closed-end funds for institutional investors. Those
portfolios rose 19.6 percent last year. Herzfeld says he's in talks with
South Florida investors, mostly Cuban Americans, about t ventures the fund
could pursue when the island opens up. The big rise in the share price last
year -- amid widespread speculation Fidel Castro won't live long -- reflects investors'
enthusiasm in grabbing a piece of the action if Cuba opens up. A closed-end
fund invests in a basket of securities -- just like the more common open-end mutual
funds -- but has a fixed number of shares. As a result -- based on demand -- a
closed-end fund can trade above or below its net asset value, or NAV, the net
value of the investments in the fund divided by the shares. MORE FOR THE
MONEY For much of 2006, shares of the fund were trading at a discount to
NAV -- meaning investors buying shares were getting a basket of stocks worth more
than they were paying. But since last fall -- with rising speculation that Castro
is close to death -- the fund has been trading at a to its NAV. So
while its share price soared 124 percent last year, its return on NAV was a more
modest 15.3 percent. On Jan. 3, the fund closed at 92 percent above its
NAV, according to CEFA, the second highest of any closed-end fund it tracks. Meanwhile,
the fund's chairman, Herzfeld, has reduced his stake in the fund several times
in recent months, paring his holdings to 13,424 shares as of Dec. 28 from 63,375
in May. Herzfeld says his sales were driven by estate and financial planning.
''I was the first shareholder when I was in my 40s, and now I'm 62,'' he said. Some
closed fund experts say the big makes the fund expensive -- and potentially
risky. ''I would much rather invest directly in the companies that I believe
would benefit from the eventual removal of Fidel Castro,'' says Jon White, the
chief investment officer at Beacon Hill Financial, an Orlando-based money management
firm. "This would include resort companies, hotels, cruise ships and other
service industries with an emphasis on those based in the Miami area.'' NICHE
APPEAL Still, investors are willing to pay up for the fund's peculiar niche. ''The
high would be a concern, but the price is because there is no good alternative
for one-touch investing in Cuba,'' says Herb Blank, a closed-fund expert who is
director of institutional services for Amba Research in New York, which provides
investment research to institutions. The fund's investments are mostly well-known
names to Floridians. Last year, its biggest holding was Florida East Coast Industries,
whose shares rose about 41 percent. Herzfeld says the Jacksonville-based company,
which operates Florida East Coast Railway and has real estate holdings, is poised
to gain when Cuba opens because of all the goods to be transported. The rail gauge
in the United States and Cuba match, he adds, "so it's very easy to operate
a rail barge.'' Shares of Consolidated Water, a Cayman Islands-based operator
of seawater desalinization plants that the fund has invested in, climbed 26 percent
last year. Other big holdings in the fund are Miami-based cruise operators
Carnival Corp. and Royal Caribbean Cruises, which he thinks will hit the jackpot
when they can sail to Cuba. However, the cruise operators' stocks got hammered
by high fuel prices and weak prices for Caribbean cruises in 2006. If Cuba opens
up, Herzfeld has plans to launch another fund, called the Cuba Fund, which would
focus on direct investments in Cuba. He's regularly been updating a registration
statement with the Securities and Exchange Commission since 1994 to be ready to
move when the time comes. He declined to discuss the future fund, saying there
is no prospectus out, but notes: "That will be a much larger fund.'' | 
