BLACKROCK LATIN AMERICAN INVESTMENT TRUST PLC (LEI:
UK9OG5Q0CYUDFGRX4151)
All information is at 30 September
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^ |
-1.1 |
14.3 |
22.3 |
20.7 |
14.3 |
100.0 |
Share price |
0.3 |
18.1 |
23.8 |
19.5 |
16.0 |
90.2 |
MSCI EM Latin
America |
-2.4 |
11.5 |
22.0 |
20.9 |
10.9 |
114.6 |
US Dollars: |
|
|
|
|
|
|
Net asset value^ |
3.0 |
18.0 |
26.4 |
-0.1 |
-4.9 |
55.0 |
Share price |
4.4 |
22.0 |
27.9 |
-1.1 |
-3.6 |
47.3 |
MSCI EM Latin
America |
1.6 |
15.1 |
26.0 |
0.1 |
-7.9 |
66.0 |
^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: |
537.53p |
Net asset value – cum
income: |
543.54p |
Share price: |
481.50p |
Total Assets#: |
£231.0m |
Discount (share price
to cum income NAV): |
11.4% |
Average discount* over
the month – cum income: |
12.4% |
Net gearing at month
end**: |
7.2% |
Gearing range (as a %
of net assets): |
0-25% |
Net yield##: |
2.4% |
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 |
64.0 |
64.5 |
|
57.6 |
Mexico |
24.1 |
24.2 |
|
26.4 |
Argentina |
5.1 |
5.1 |
|
0.0 |
Peru |
3.5 |
3.6 |
|
3.0 |
Chile |
1.8 |
1.8 |
|
9.6 |
Panama |
0.4 |
0.4 |
|
0.0 |
Colombia |
0.4 |
0.4 |
|
3.4 |
Net current assets
(inc.Fixed interest) |
0.7 |
0.0 |
|
0.0 |
|
----- |
----- |
|
----- |
Total |
100.0 |
100.0 |
|
100.0 |
|
----- |
----- |
|
----- |
Sector |
% of
Equity Portfolio * |
% of
Benchmark |
|
|
|
Financials |
33.3 |
31.4 |
Consumer Staples |
17.1 |
16.6 |
Materials |
12.4 |
14.9 |
Consumer
Discretionary |
12.4 |
6.5 |
Energy |
8.5 |
8.0 |
Telecommunication
Services |
5.7 |
6.3 |
Industrials |
5.6 |
6.1 |
Real Estate |
1.5 |
1.5 |
Utilities |
1.5 |
6.2 |
Information
Technology |
1.1 |
1.3 |
Health Care |
0.9 |
1.2 |
|
----- |
----- |
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 |
7.7 |
6.7 |
Banco Bradesco |
Brazil |
7.1 |
6.6 |
Petrobras |
Brazil |
6.2 |
5.2 |
Vale |
Brazil |
5.3 |
4.6 |
Ambev |
Brazil |
5.1 |
4.8 |
America Movil |
Mexico |
3.7 |
4.5 |
Femsa |
Mexico |
3.5 |
2.8 |
Grupo Financiero
Banorte |
Mexico |
3.3 |
2.6 |
B3 |
Brazil |
3.2 |
2.4 |
Credicorp |
Peru |
2.7 |
2.1 |
Commenting on the markets,
Will Landers, representing the
Investment Manager noted;
For the month of September 2017,
the Company’s NAV fell by 1.1% with the share price rising by 0.3%.
The Company’s benchmark, the MSCI EM Latin America Index, fell by
2.4% (all performance figures are in sterling terms with income
reinvested and are net of ongoing charges).
Our overweight to and selection within Brazil was the primary contributor to
performance over the period on the back of another round of
interest rate cuts in September, with the Central Bank leaving the
door open for further action later in the year, and inflation
surprising to the downside. Petrobras was among the top
contributors rallying alongside the broader Brazilian market, and
further supported by a strong month for oil. Brazilian railway
logistics firm, Rumo, also performed well as shareholders approved
a capital raise plan, which should improve the company’s
positioning in their concession renewal negotiations and ease
financing terms with BNDES (Brazilian Development Bank).
Off-benchmark Argentinean exposure continued to benefit the
portfolio. Financials positioning did particularly well as positive
news surrounding mid-term elections and support for President
Macri’s reform policies has also come through in the polls, helping
the market rebound from June/July weakness. Lender Grupo Supervielle, was the top performing stock
over the period. On the other hand our underweight to Chile marginally weighed on performance.
Specifically, our lack of positioning in materials name, SQM,
detracted as the stock has largely been supported by strong Lithium
price momentum. Exposure to Vale and Bradespar (holding company for
Vale) were among the top detractors as iron ore prices
declined.
During the quarter, we increased exposure to Brazilian domestic
consumption-oriented names deploying some cash towards the Magazine
Luiza follow-on offering, while also bulking up positions in Lojas
Americanas and Lojas Renner. We also increased exposure to our
Grupo Supervielle position in
Argentina, while also
participating in a follow-on offering from Grupo Galicia, further illustrating our
conviction in the growth and increased penetration of the
consumer-focused, Argentine banking sector. We reduced exposure to
Mexico. We sold down our position
in the Mexican airline, Volaris, as pricing pressure in
Mexico City intensifies as the
Aeromexico/Delta joint venture has been seen to be ramping up
capacity more than expected. We also sold down our Grupo Bimbo
position, using the proceeds to buy Gruma on the back of better
growth and value dynamics. The portfolio ended the month being
overweight Brazil and Peru while being underweight Chile, Colombia, and Mexico. We also maintain an off-benchmark
allocation to Argentina. At the
sector level, we are overweight the domestic consumer, while being
underweight utilities and materials.
As we enter the fourth quarter of the year, our positioning and
outlook remain relatively unchanged. We continue to be overweight
Brazil, and off-benchmark
Argentina, while being underweight
Chile, Colombia and Mexico. Despite going through yet another
round of political headwinds 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 (the Central Bank cut rates another 100 basis
points in September to 8.25% - 600 basis points of easing so far
during the current cycle); and b) continued progress on the reform
agenda, especially pension reform, which should help to bring
stability to government accounts in the medium term. However, with
a second accusation brought against President Temer, the timeframe
for further action on social reforms will likely move to after the
2018 elections. Meanwhile, the recent round of NAFTA (North
American Free Trade Agreement) negotiations illustrated that the
process will be long and, and we maintain our cautious view on
Mexican growth, and therefore our underweight position -
uncertainties regarding next year’s presidential cycle add to our
conviction on such positioning. We continue to underweight
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 October
mid-term elections expected to give a boost to President Macri’s
reform agenda.
18 October 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.