BlackRock Latin Am Portfolio Update
22 November 2017 - 3:23AM
UK Regulatory
TIDMBRLA
BLACKROCK LATIN AMERICAN INVESTMENT TRUST PLC (LEI: UK9OG5Q0CYUDFGRX4151)
All information is at 31 October 2017 and unaudited.
Performance at month end with net income reinvested
One Three One Three Five ^^Since
month months year years years 31.03.06
% % % % % %
Sterling:
Net asset value^ -3.7 2.4 1.5 14.6 10.3 92.6
Share price -1.5 6.8 7.0 18.0 12.7 87.3
MSCI EM Latin America -2.6 1.7 1.6 16.3 8.1 109.0
US Dollars:
Net asset value^ -4.7 3.1 10.4 -4.9 -8.9 47.7
Share price -2.5 7.6 16.4 -2.1 -7.0 43.6
MSCI EM Latin America -3.6 2.5 10.5 -3.4 -10.9 60.0
^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: 517.24p
Net asset value - cum income: 519.05p
Share price: 470.00p
Total Assets#: GBP224.0m
Discount (share price to cum income NAV): 9.5%
Average discount* over the month - cum income: 11.4%
Net gearing at month end**: 9.6%
Gearing range (as a % of net assets): 0-25%
Net yield##: 2.5%
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 % of Equity MSCI EM
Assets Portfolio * Latin American Index
Brazil 64.4 64.5 57.8
Mexico 23.7 23.7 25.3
Argentina 5.4 5.3 0.0
Peru 3.8 3.8 3.2
Chile 1.9 1.9 10.5
Panama 0.5 0.5 0.0
Colombia 0.3 0.3 3.2
Net current assets (inc. 0.0 0.0 0.0
fixed interest)
----- ----- -----
Total 100.0 100.0 100.0
----- ----- -----
Sector % of Equity Portfolio % of Benchmark
*
Financials 31.7 30.6
Consumer Staples 15.5 16.3
Materials 12.5 15.4
Consumer Discretionary 12.3 6.1
Energy 9.3 8.8
Telecommunication Services 7.1 6.4
Industrials 6.2 6.1
Utilities 2.1 6.3
Real Estate 1.4 1.5
Information Technology 1.1 1.3
Health Care 0.8 1.2
----- -----
Total 100.0 100.0
----- -----
*excluding net current liabilities & fixed interest
Ten Largest Equity Investments (in percentage order)
% of % of
Company Country of Risk Equity Portfolio Benchmark
Itau Unibanco Brazil 7.4 6.5
Banco Bradesco Brazil 7.0 6.5
Petrobras Brazil 6.8 5.7
Vale Brazil 5.3 4.7
America Movil Mexico 5.2 4.5
AmBev Brazil 5.1 4.7
Femsa Mexico 3.4 2.7
B3 Brazil 3.2 2.4
Grupo Financiero Banorte Mexico 2.9 2.3
Credicorp Peru 2.8 2.2
Commenting on the markets, Will Landers, representing the Investment Manager
noted;
For the month of October 2017, the Company's NAV fell by 3.7%* with the share
price falling by 1.5%*. The Company's benchmark, the MSCI EM Latin America
Index, fell by 2.6%* (all performance figures are in sterling terms with income
reinvested and are net of ongoing charges).
The portfolio's off-benchmark allocation to Argentina continues to be a source
of alpha for the Company, with the market showing support for incremental
acceleration of President Macri's reform agenda. Banking group, Grupo
Supervielle, as well as utility, Pampa Energia were among the top performers.
The portfolio's underweight to Colombia also benefitted the Company in October
as the market contracted from the Peso depreciating by 3.4%** against the US
Dollar; overall, activity remains weak despite a recovery in oil. Subsequently,
our lack of positioning in Bancolombia had a large positive impact to relative
performance. On the other hand, the portfolio's overweight to the Brazilian
consumer (including positions in Magazine Luiza and Kroton) weighed on
performance, as the Real slid by -3.3%** and activity data disappointed.
Mexican insurer, Gentera was the largest individual detractor as the company
guided earnings downwards for 2018. The broad portfolio underweight to Chile
also hurt relative performance amid improving market confidence in October.
During the month, broad positioning remained relatively unchanged, however we
exited our position in Gentera following a negative third quarter call. On the
other hand we increased exposure to America Movil amid an improving regulatory
and competitive environment. We also shifted some exposure in Brazil, topping
up positions in energy names, Petrobras and Ultrapar, while exiting BRF after
the surprise announcement of their CEO's departure. We ended the month being
overweight Brazil and Peru while being underweight Chile and Colombia. We also
maintain an off-benchmark allocation to Argentina. At the sector level, we are
overweight the domestic consumer and energy, while being underweight utilities
and materials.
Into the fourth quarter of 2017, our positioning and outlook remain relatively
unchanged. 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 should help bring forward the needed economic
recovery (the Central Bank cut rates another 75 bps** in October, bringing the
SELIC (Sistema Especial de Liquidação e Custodia, the Brazilian Central Bank
interest rate) down to 7.50%; the market has seen 675 basis points of easing so
far during the current cycle, resulting in the SELIC hitting its second lowest
point in history); and b) continued progress on the reform agenda, especially
pension reform (with a focus on minimum retirement age implementation), which
should help to bring stability to government accounts in the medium term.
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 - 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 providing support for a continuation of
President Macri's reform agenda.
*Source: BlackRock as of 31 October 2017
**Source: JPM as of 31 October 2017
21 November 2017S
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.
END
(END) Dow Jones Newswires
November 21, 2017 11:23 ET (16:23 GMT)
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