BLACKROCK LATIN AMERICAN INVESTMENT TRUST PLC (LEI:
UK9OG5Q0CYUDFGRX4151)
All information is at 31 July
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^ |
7.5 |
4.6 |
18.2 |
11.0 |
8.9 |
88.2 |
Share price |
8.9 |
5.8 |
20.0 |
7.2 |
4.3 |
75.4 |
MSCI EM Latin
America |
6.7 |
4.5 |
19.3 |
12.8 |
6.4 |
105.4 |
US Dollars: |
|
|
|
|
|
|
Net asset value^ |
9.1 |
6.6 |
17.3 |
-13.3 |
-8.2 |
43.2 |
Share price |
10.5 |
7.8 |
19.1 |
-16.3 |
-12.2 |
33.4 |
MSCI EM Latin
America |
8.3 |
6.5 |
18.4 |
-11.9 |
-10.5 |
56.1 |
^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: |
505.78p |
Net asset value – cum
income: |
511.21p |
Share price: |
444.00p |
Total Assets#: |
£211.2m |
Discount (share price
to cum income NAV): |
13.1% |
Average discount* over
the month – cum income: |
14.2% |
Net gearing at month
end**: |
5.9% |
Gearing range (as a %
of net assets): |
0-25% |
Net yield##: |
2.7% |
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 |
63.9 |
63.3 |
|
55.2 |
Mexico |
27.8 |
27.5 |
|
28.9 |
Argentina |
3.6 |
3.6 |
|
0.0 |
Peru |
3.2 |
3.2 |
|
2.9 |
Chile |
1.5 |
1.5 |
|
9.5 |
Panama |
0.5 |
0.5 |
|
0.0 |
Colombia |
0.4 |
0.4 |
|
3.5 |
Net current
liabilities (inc. fixed interest) |
-0.9 |
0.0 |
|
0.0 |
|
----- |
----- |
|
----- |
Total |
100.0 |
100.0 |
|
100.0 |
|
----- |
----- |
|
----- |
Sector |
% of
Equity Portfolio * |
% of
Benchmark |
Financials |
31.5 |
29.9 |
Consumer Staples |
20.0 |
17.0 |
Materials |
14.4 |
15.3 |
Energy |
9.5 |
7.7 |
Consumer
Discretionary |
8.4 |
6.3 |
Industrials |
6.2 |
6.5 |
Telecommunication
Services |
5.4 |
6.6 |
Real Estate |
1.6 |
1.7 |
Utilities |
1.3 |
6.3 |
Information
Technology |
1.0 |
1.6 |
Health Care |
0.7 |
1.1 |
|
----- |
----- |
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 |
7.3 |
6.2 |
Petrobras |
Brazil |
7.0 |
4.8 |
Banco Bradesco |
Brazil |
6.8 |
6.2 |
Vale |
Brazil |
5.8 |
5.0 |
Ambev |
Brazil |
4.9 |
4.6 |
Femsa |
Mexico |
4.1 |
3.2 |
BM&F Bovespa |
Brazil |
3.5 |
2.2 |
America Movil |
Mexico |
3.5 |
4.7 |
Grupo Financiero
Banorte |
Mexico |
3.4 |
2.7 |
Groupo Mexico |
Mexico |
2.8 |
2.0 |
Commenting on the markets,
Will Landers, representing the
Investment Manager noted;
For the month of July 2017, the
Company’s NAV rose by 7.5% and the share price rose by 8.9%. The
Company’s benchmark, the MSCI EM Latin America Index, rose by 6.7%
(all performance figures are in sterling terms with income
reinvested and are net of ongoing charges).
Our higher than index weighting and stock selection in
Brazil were the top contributors
in July, as the Brazilian Real (BRL) gained almost 6% against the
US Dollar (USD), while higher commodity prices and the central
bank’s willingness to continue cutting rates at an accelerated pace
supported the market. Petrobras and Bradespar, a holding company
for Vale, were among the month’s top performers as both oil and
iron ore made strong gains in July, the latter of which was driven
by strong manufacturing and economic data from China. Rail operator, Rumo, was the largest
individual contributor in July, gaining on news surrounding
positive negotiations towards the extension of their rail
concessions, as well the government announcing the public hearing
and auction dates for the North-South railway. Lower than index
weightings in Colombia and
Mexico also benefitted the
portfolio, as both markets underperformed the broader region. On
the other hand, our off-benchmark allocation to Argentina weighed on performance, with utility
Pampa Energia among the largest detractors. Mexican consumer
staple, Arca Continental, was July’s worst performing stock, which
missed on net income partially due to foreign exchange (FX) charges
related to their US acquisition.
During the month broad positioning remained relatively
unchanged, though we did shift our Brazilian financials
positioning, reducing exposure to Itau and BM&F Bovespa,
redeploying those funds to Bradesco on better upside expectations.
On the other hand, we sold down our position in Mexican airline,
Volaris, as pricing pressure in Mexico
City intensifies as the Aeromexico/Delta JV has been seen to
be ramping up capacity more than expected. We also took profits in
Raia Drogasil after strong performance and participated in the IPO
of Brazilian insurance firm, IRB. The Company ended the month with
an above index weighting in Brazil
and Peru while having a below
index weighting in Chile,
Colombia, and Mexico. We also maintain an off-benchmark
allocation to Argentina. At the
sector level, we are overweight energy and select consumer staples,
while being underweight utilities and telecom.
As we enter the third quarter, our positioning and outlook
remain relatively unchanged. Concerns regarding another
potential overhang in Brazil’s presidency have abated with the
recent 263-227 vote in which the lower house rejected the
corruption charges brought against President Temer, allowing the
administration to pivot back towards their economic agenda.
With increased stability from the political front, the primary
drivers for Brazilian equities should remain the same: a) the
continued easing cycle by the Central Bank which should help to
bring forward the needed economic recovery; and b) progress on the
reform agenda, especially pension reform, which should help to
bring stability to government accounts in the medium term.
Once the latter passes, we believe 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 (Institutional
Revolutionary Party) win in the gubernatorial election (Mexico’s
national governor elections) 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 hold a below
index weighting 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 region for the strategy as fundamentals
persist, with the recent correction providing a positive entry
point for longer-term investments.
16 August 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.