The information contained in this release was correct as at 31
July 2022. Information on the Company’s up to date net asset
values can be found on the London Stock Exchange Website at
https://www.londonstockexchange.com/exchange/news/market-news/market-news-home.html.
BLACKROCK LATIN AMERICAN INVESTMENT TRUST PLC (LEI -
UK9OG5Q0CYUDFGRX4151)
All information is at 31 July
2022 and unaudited.
Performance at month end with net income reinvested
|
One
month
% |
Three
months
% |
One
year
% |
Three
years
% |
Five
years
% |
Sterling: |
|
|
|
|
|
Net asset value^ |
4.3 |
-6.4 |
-1.9 |
-22.5 |
-4.4 |
Share price |
1.4 |
-11.2 |
-0.5 |
-21.9 |
3.1 |
MSCI EM Latin America
(Net Return)^^ |
4.1 |
-3.4 |
4.2 |
-13.9 |
1.3 |
US Dollars: |
|
|
|
|
|
Net asset value^ |
4.6 |
-9.3 |
-14.2 |
-23.0 |
-11.9 |
Share price |
1.7 |
-13.9 |
-12.9 |
-22.4 |
-4.9 |
MSCI EM Latin America
(Net Return)^^ |
4.3 |
-6.4 |
-8.8 |
-14.5 |
-6.5 |
^cum income
^^The Company’s performance benchmark (the MSCI EM Latin America
Index) may be calculated on either a Gross or a Net return basis.
Net return (NR) indices calculate the reinvestment of dividends net
of withholding taxes using the tax rates applicable to non-resident
institutional investors, and hence give a lower total return than
indices where calculations are on a Gross basis (which assumes that
no withholding tax is suffered). As the Company is subject to
withholding tax rates for the majority of countries in which it
invests, the NR basis is felt to be the most accurate, appropriate,
consistent and fair comparison for the Company.
Sources: BlackRock, Standard & Poor’s Micropal
At month end
Net asset value - capital only: |
379.93p |
Net asset value - including
income: |
389.37p |
Share price: |
355.00p |
Total assets#: |
£124.6m |
Discount (share price to cum income
NAV): |
8.8% |
Average discount* over the month –
cum income: |
7.6% |
Net gearing at month end**: |
9.8% |
Gearing range (as a % of net
assets): |
0-25% |
Net yield##: |
6.1% |
Ordinary shares in issue(excluding
2,181,662 shares held in treasury): |
29,448,641 |
Ongoing charges***: |
1.1% |
#Total assets include current year revenue.
##The yield of 6.1% is calculated based on total dividends declared
in the last 12 months as at the date of this announcement as set
out below (totalling 26.27 cents per
share) and using a share price of 432.00 US cents per share
(equivalent to the sterling price of 355.00
pence per share translated in to US cents at the rate
prevailing at 31 July 2022 of
$1.2168 dollars to £1.00).
2021 Q3 interim dividend of 6.56
cents per share (paid on 8 November
2021).
2021 Q4 Final dividend of 6.21 cents
per share (paid on 08 February
2022).
2022 Q1 Interim dividend of 7.76
cents per share (paid on 16 May
2022).
2022 Q2 Interim dividend of 5.74
cents per share (payable on 12 August
2022).
*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.
*** Calculated as a percentage of average net assets and using
expenses, excluding interest costs for the year ended 31 December 2021.
Geographic
Exposure |
% of
Total Assets |
% of Equity
Portfolio * |
MSCI EM Latin
America Index |
Brazil |
63.2 |
62.5 |
62.7 |
Mexico |
25.4 |
25.2 |
25.7 |
Argentina |
4.0 |
4.0 |
0.0 |
Chile |
3.6 |
3.6 |
6.9 |
Peru |
2.7 |
2.6 |
2.8 |
Panama |
2.1 |
2.1 |
0.0 |
Colombia |
0.0 |
0.0 |
1.9 |
Net current liabilities (inc. fixed
interest) |
-1.0 |
0.0 |
0.0 |
|
----- |
----- |
----- |
Total |
100.0 |
100.0 |
100.0 |
|
===== |
===== |
===== |
^Total assets for the purposes of these calculations exclude
bank overdrafts, and the net current assets figure shown in the
table above therefore excludes bank overdrafts equivalent to 8.8%
of the Company’s net asset value.
Sector |
% of Equity
Portfolio* |
% of
Benchmark* |
Financials |
27.2 |
23.3 |
Materials |
19.2 |
21.7 |
Consumer Staples |
12.9 |
14.8 |
Energy |
10.8 |
13.7 |
Industrials |
8.4 |
7.6 |
Real Estate |
6.3 |
0.6 |
Communication Services |
4.9 |
7.2 |
Health Care |
4.4 |
2.1 |
Consumer Discretionary |
2.6 |
2.5 |
Information Technology |
2.5 |
0.4 |
Utilities |
0.8 |
6.1 |
|
----- |
----- |
Total |
100.0 |
100.0 |
|
===== |
===== |
*excluding net current assets & fixed interest
Company |
Country of Risk |
% of
Equity Portfolio |
% of
Benchmark |
|
|
|
|
Petrobrás – ADR: |
Brazil |
|
|
Equity |
|
5.2 |
5.0 |
Preference Shares |
|
4.1 |
5.9 |
Vale – ADS |
Brazil |
7.8 |
10.1 |
Banco Bradesco – ADR |
Brazil |
6.1 |
4.2 |
Itaú Unibanco – ADR |
Brazil |
5.8 |
4.1 |
Grupo Financiero Banorte |
Mexico |
4.4 |
2.8 |
AmBev – ADR |
Brazil |
4.2 |
2.5 |
FEMSA - ADR |
Mexico |
3.9 |
2.3 |
B3 |
Brazil |
3.9 |
2.4 |
Suzano Papel e Celulose |
Brazil |
3.0 |
1.3 |
Hapvida Participacoes |
Brazil |
2.9 |
1.0 |
Commenting on the markets,
Ed Kuczma and Sam Vecht, representing the Investment Manager
noted;
For the month of July 2022, the
Company’s NAV returned 4.3% with the share price increasing by
1.4%. The Company’s benchmark, the MSCI EM Latin America Index,
returned 4.1% on a net basis (all performance figures are in
Sterling terms with dividends reinvested).
Latin American (LatAm) equities posted a positive performance
over the month with Chile and
Brazil leading the rise.
Allocation in Brazil
contributed the most to relative performance over the period while
security selection in Chile was
the largest detractor. Our underweight position in Brazilian mining
company, Vale, was a top contributor to the portfolio following a
slow down in the Chinese property market which has reduced
demand for steel and as a result of that, iron ore. An underweight
position in Mexican Telecommunications company, America Movil, also benefitted the portfolio
during the month and our position reflects our view that the shares
are trading expensively relative to historical valuations. On the
other hand, a lack of holding in Chilean chemical company, Sociedad
Quimica y Minera de Chile,
detracted most from relative performance as the company’s main
product, lithium, benefitted from a rising price environment given
strong expected demand from electronic vehicle producers. The
portfolio’s overweight position in Mexican beverages and retail
company, Fomento Economico, also detracted from returns as the
stock underperformed following negative investor sentiment around
the company’s acquisition of Swiss kiosk operator, Valora.
Over the month we added to Mexican beverages and retail company,
Fomento Economico, as we believe the operating environment (and
hence the earnings outlook for the convenience business) will
maintain a robust pace of growth. We d have been increasing
exposure as we believe valuations are attractive. We initiated a
position in Brazilian shopping centre, Iguatemi, as we are bullish
on premium focused mall exposure and see improving fundamentals in
rental rates and occupancy. We reduced our exposure to Mexican real
estate investment trust company, Fibra Uno, as we believe office
and retail segments continue to weigh on company results in a
stagflation environment. We sold our holding in Chilean retail
platform, Falabella, as we expect suboptimal returns following a
large investment in omnichannel. The portfolio ended the period
being overweight to Brazil and
Argentina, whilst being
underweight to Chile and
Colombia. At the sector level, we
are overweight financials and real estate, and underweight
communication services and utilities.
The fundamentals around Latin American equities have steadily
improved from a challenging 2021 as investors learn to live with
the region’s political risk and focus instead on soaring local
interest rates and commodity prices. Latam currency remains
relatively cheap at current levels as the combination of rising
interest rates and low valuations has been attracting investors to
increase regional exposure. Latin American central banks were the
first to raise rates last year and policy makers in the region have
both surprised markets with steep hikes this year. For example,
Brazilian policy makers have increased borrowing costs to the
highest levels in almost five years. As a result, Latin America has been proactive in hiking
rates and is considered to be ahead of the curve from a monetary
policy standpoint relative to developed markets. From a positioning
standpoint, we have been favouring domestic stocks that are
more sensitive to interest rates in Brazil, on the view that the nation’s next
president is likely to implement relatively orthodox macro policies
and the Brazilian Central Bank should start an easing cycle in
2023. Although there are some uncertainties ahead of the October
Brazilian Presidential election, global investors seem to be ready
to put money to work in local Latin American equity markets as
other emerging-market nations such as China, Russia
and India grapple with their own
issues. We would argue that for many reasons LatAm would seem
well-positioned ahead of rising geopolitical tensions as the region
provides: i) geographic and economic insulation from the
recent conflict; ii) long and wide commodities exposure; iii) cheap
currencies; iv) attractive valuation entry points; and v) proactive
monetary policy stances.
18 August 2022
1Source: BlackRock, as of 31
July 2022.
ENDS
Latest information is available by typing
www.blackrock.com/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.