BLACKROCK LATIN AMERICAN INVESTMENT TRUST PLC (LEI:
UK9OG5Q0CYUDFGRX4151)
All information is at 30 June
2017 and unaudited.
Performance at month end with net income
reinvested
|
One
month
% |
Three
months
% |
One
year
% |
Three
years
% |
Five
years
% |
^^Since
31.03.06
% |
Sterling: |
|
|
|
|
|
|
Net asset value^ |
0.5 |
-5.7 |
16.7 |
5.2 |
3.1 |
75.1 |
Share price |
-1.8 |
-6.0 |
16.8 |
1.3 |
-0.6 |
61.0 |
MSCI EM Latin
America |
0.1 |
-5.3 |
18.8 |
8.2 |
1.2 |
92.5 |
US Dollars: |
|
|
|
|
|
|
Net asset value^ |
1.1 |
-2.0 |
13.4 |
-20.1 |
-14.5 |
31.3 |
Share price |
-1.2 |
-2.4 |
13.4 |
-23.1 |
-17.6 |
20.7 |
MSCI EM Latin
America |
0.7 |
-1.6 |
15.4 |
-17.8 |
-16.2 |
44.2 |
^cum income
^^Date which BlackRock took over the investment management of the
Company.
Sources: BlackRock, Standard & Poor’s Micropal
At month
end |
|
Net asset value –
capital only: |
470.18p |
Net asset value – cum
income: |
475.71p |
Share price: |
407.75p |
Total Assets#: |
£197.0m |
Discount (share price
to cum income NAV): |
14.3% |
Average discount* over
the month – cum income: |
13.1% |
Net gearing at month
end**: |
4.8% |
Gearing range (as a %
of net assets): |
0-25% |
Net yield##: |
2.9% |
Ordinary shares in
issue***: |
39,369,620 |
Ongoing
charges****: |
1.2% |
#Total assets include current year revenue.
## calculated using total dividends declared in the last 12 months
as at the date of this announcement as a percentage of month end
share price.
*The discount is calculated using the cum income NAV (expressed in
sterling terms).
**Net cash/net gearing is calculated using debt at par, less cash
and cash equivalents and fixed interest investments as a percentage
of net assets.
***Excluding 2,071,662 shares held in treasury.
**** Calculated as a percentage of average net assets and using
expenses, excluding performance fees and interest costs for the
year ended 31 December 2016.
Geographic Exposure
|
% of
Total Assets |
% of
Equity
Portfolio * |
|
MSCI
EM Latin
American Index |
|
|
|
|
|
Brazil |
62.3 |
62.6 |
|
54.0 |
Mexico |
27.9 |
28.0 |
|
30.0 |
Peru |
3.8 |
3.8 |
|
3.0 |
Argentina |
3.1 |
3.1 |
|
0.0 |
Chile |
1.6 |
1.6 |
|
9.3 |
Panama |
0.5 |
0.5 |
|
0.0 |
Colombia |
0.4 |
0.4 |
|
3.7 |
Net current assets
(inc.Fixed interest) |
0.4 |
0.0 |
|
0.0 |
|
----- |
----- |
|
----- |
Total |
100.0 |
100.0 |
|
100.0 |
|
----- |
----- |
|
----- |
Sector |
% of
Equity Portfolio * |
% of
Benchmark |
|
|
|
Financials |
30.0 |
30.0 |
Consumer Staples |
20.4 |
17.6 |
Materials |
15.1 |
15.0 |
Energy |
9.6 |
7.6 |
Consumer
Discretionary |
8.3 |
6.0 |
Industrials |
6.6 |
6.7 |
Telecommunication
Services |
5.4 |
6.5 |
Utilities |
2.1 |
6.3 |
Real Estate |
1.5 |
1.7 |
Information
Technology |
1.0 |
1.6 |
Health Care |
0.0 |
1.0 |
|
----- |
----- |
Total |
100.0 |
100.0 |
|
----- |
----- |
*excluding net current liabilities & fixed
interest
Ten Largest Equity Investments (in percentage order)
Company |
Country of
Risk |
%
of
Equity Portfolio |
%
of
Benchmark |
|
|
|
|
Itau Unibanco |
Brazil |
7.8 |
6.2 |
Petrobras |
Brazil |
6.9 |
4.6 |
Vale |
Brazil |
6.0 |
4.7 |
Banco Bradesco |
Brazil |
5.6 |
5.9 |
Femsa |
Mexico |
4.4 |
3.3 |
BM&F Bovespa |
Brazil |
4.0 |
2.1 |
AmBev |
Brazil |
3.9 |
4.5 |
Grupo Financiero
Banorte |
Mexico |
3.6 |
2.8 |
America Movil |
Mexico |
3.4 |
4.7 |
Cemex |
Colombia |
2.9 |
2.4 |
Commenting on the markets, Will
Landers, representing the Investment Manager
noted;
For the month of June 2017, the
Company’s NAV rose by 0.5% with the share price falling by 1.8%.
The Company’s benchmark, the MSCI EM Latin America Index, rose by
0.1% (all performance figures are in sterling terms with income
reinvested and are net of ongoing charges).
Brazilian stock selection was the month’s top contributor to
performance as our holdings outperformed the Brazilian market which
was buffeted by the political scandals surrounding President Temer.
Brazil’s leading financial exchange, BM&F Bovespa, as well as
iron producer, Vale, were among the top contributors; Vale gained
on optimism surrounding new leadership and the recent approval of a
share conversion plan that should boost investor transparency and
give equal votes to all shares. Mexican selection also benefitted
the Company as the broader market advanced, supported by positive
political news with the market friendly PRI (Institutional
Revolutionary Party) winning a narrow victory in the state of Mexico and inflation showing signs of
peaking. However, our relative underweight neutralized much of the
stock specific gains. Our off-benchmark allocation to Argentina was the month’s primary detractor as
MSCI unexpectedly announced the postponement of their decision to
reclassify the country to ‘emerging market’, citing the need to
monitor the persistence of recently implemented market
accessibility improvements. Whilst this result may be a
disappointment to some market participants, we would remind
investors of the substantial positive macro-economic changes that
Argentina has witnessed over
recent years. We believe that it is still a compelling investment
destination for long-term investors and have been looking to
selectively add exposure on weakness. Energy names Petrobras
and YPF were the top individual detractors, also being negatively
impacted by oil weakness.
During the quarter, we were actively trading around news and
sentiment in Brazil. We notably
trimmed our Brazilian overweight following headlines implicating
President Temer in corruption wrongdoing in May, specifically
reducing exposure to Petrobras and Bradesco. We’ve since added back
exposure, initiating positions in domestic retailer Lojas Renner,
and low-income home builder MRV, in part on the expectation that we
will see continuity in the economic team and reform process,
regardless of President Temer’s political status. We also added
exposure across our Mexican positions, though we remain cautious of
the market as the domestic political landscape remains relatively
challenged, and could impact broader investor sentiment as we head
deeper into the 2018 election season.
As we enter the third quarter, our positioning and outlook
remain relatively unchanged. We continue to be overweight
Brazil, Peru and off-benchmark Argentina, while being underweight
Chile, Colombia and Mexico. In the near term,
negative sentiment concerning another potential presidential
scandal has reversed the green shoots seen over the last couple of
months in Brazil and has put
President Temer’s term and reform agenda into question. Despite
weaker market confidence on the General Prosecutor’s decision to
charge President Temer with passive corruption, we expect a
scenario whereby continuity of the economic plan started by
President Temer persists. As such the primary drivers for Brazilian
equities should remain the same: a) the continued easing cycle
(albeit at a slower pace) by the Central Bank which should help to
bring forward the needed economic recovery; and b) progress on the
reform agenda, especially labor reform, with pension reform
potentially being passed in the second half of the year, bringing
stability to government accounts in the medium term. Once the
latter passes, we believe that this will open the door for the
Central Bank to bring the easing cycle further forward and
potentially bring rates lower than market expectations.
Meanwhile, despite a more conciliatory tone from the US government
on the trade front, we maintain our cautious view on Mexican
growth, and therefore our underweight (despite a PRI win in the
gubernatorial election in the state of
Mexico in early June, results were not conclusive as to the
likelihood of a MORENA (National Regeneration Movement) victory in
next year’s presidential elections). We continue to be underweight
in Chile due to rich valuations
and lack of free-float liquidity, and despite slower than expected
progress on the infrastructure front, we continue to favour
Peru among its Andean neighbours.
Argentina remains another top
focus for the strategy as fundamentals persist, with the recent
correction providing a positive entry point for longer-term
investments.
24 July 2017
ENDS
Latest information is available by typing
www.blackrock.co.uk/brla on the internet, "BLRKINDEX" on Reuters,
"BLRK" on Bloomberg or "8800" on Topic 3 (ICV terminal).
Neither the contents of the Manager’s website nor the contents of
any website accessible from hyperlinks on the Manager’s website (or
any other website) is incorporated into, or forms part of, this
announcement.