The appeal of a post-Castro Cuba
Since Fidel Castro fell ill last year and ceded authority to his brother Raul, the prospect of a liberalised, post-communist Cuba has begun to appear on investors’ radar screens.
Since Fidel Castro fell ill last year and ceded authority to his brother Raul, the prospect of a liberalised, post-communist Cuba has begun to appear on investors' radar screens. Non-US firms have been active in Cuba for years there are 258 foreign joint ventures there while an end to the US trade embargo once Fidel's regime crumbles would give regional trade a huge boost. Given GDP per head of just $3,900, the post-embargo market for imported consumer products would be small; "it's the location and natural resources that attract", says Alex Davidson in Forbes. With two million visitors a year, Cuba will appeal to hotel firms and cruise operators, while five billion barrels of oil are thought to be lying offshore.
Two beneficiaries of a post-embargo Cuba would be Royal Caribbean (NYSE:RCL, $34) and Carnival (CCL, £2.10). About half of each cruise operator's revenue stems from the Caribbean, and Thomas Herzfeld of the Herzfeld Caribbean Basin Fund reckons that revenue would double if access to Cuba was granted.
But the best way to benefit from the inevitable end of Castro's 48-year "stranglehold" on Cuba's economy is Canada's Sherritt International (TSX:S, CAD16), says Dale Baker on The Motley Fool. The energy and mining group is already doing business in Cuba, with the focus on oil, gas and nickel. Cuba comprised 40% of revenue in 2006, giving it more exposure than "just about any other established company". Sherritt, which has just notched up record second-quarter profits, boasts established coal and gas interests in Canada and growing global metals exposure as well as its Cuban operations. It is on a p/e of just seven.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Get the latest financial news, insights and expert analysis from our award-winning MoneyWeek team, to help you understand what really matters when it comes to your finances.
MoneyWeek is written by a team of experienced and award-winning journalists, plus expert columnists. As well as daily digital news and features, MoneyWeek also publishes a weekly magazine, covering investing and personal finance. From share tips, pensions, gold to practical investment tips - we provide a round-up to help you make money and keep it.
-
‘Inheritance tax insurance’ enquiries are soaring – but is it worth it?
Premiums for whole of life insurance can run to £5,000 a month to cover a £300,000 inheritance tax bill, with policies costing more the older you take them out.
-
MPs warn over Lifetime ISAs which could leave savers out of pocket
The Treasury Committee has highlighted confusion around the Lifetime ISA withdrawal charge, which risks consumers losing “a significant part of their savings”