The
information contained in this release was correct as at
31 October 2023.
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 October
2023 and
unaudited.
Performance
at month end with net income reinvested
|
One
month
%
|
Three
months
%
|
One
year
%
|
Three
years
%
|
Five
years
%
|
Sterling:
|
|
|
|
|
|
Net
asset value^
|
-7.0
|
-13.4
|
-1.6
|
54.0
|
6.4
|
Share
price
|
-8.3
|
-16.3
|
-2.3
|
43.6
|
11.1
|
MSCI
EM Latin America
(Net
Return)^^
|
-4.2
|
-8.5
|
-1.6
|
56.4
|
11.3
|
US
Dollars:
|
|
|
|
|
|
Net
asset value^
|
-7.6
|
-18.3
|
3.7
|
44.5
|
1.1
|
Share
price
|
-8.9
|
-21.0
|
3.0
|
34.8
|
5.6
|
MSCI
EM Latin America
(Net
Return)^^
|
-4.8
|
-13.7
|
3.7
|
46.8
|
5.7
|
^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:
|
419.88p
|
Net
asset value - including income:
|
422.02p
|
Share
price:
|
358.50p
|
Total
assets#:
|
£133.3m
|
Discount (share
price to cum income NAV):
|
15.1%
|
Average discount*
over the month – cum income:
|
14.5%
|
Net
Gearing at month end**:
|
7.5%
|
Gearing range (as
a % of net assets):
|
0-25%
|
Net
yield##:
|
9.2%
|
Ordinary shares
in issue(excluding 2,181,662 shares held in treasury):
|
29,448,641
|
Ongoing
charges***:
|
1.13%
|
#Total assets
include current year revenue.
##The
yield of 9.2% is calculated based on total dividends declared in
the last 12 months as at the date of this announcement as set out
below (totalling 40.06 cents per
share) and using a share price of 435.02 US cents per share
(equivalent to the sterling price of 358.50
pence per share translated in to US cents at the rate
prevailing at 31 October 2023 of
$1.213 dollars to £1.00).
2022
Q4 Interim dividend of 6.29 cents per
share plus a Special Dividend of 13.00
cents per share (paid on 12 January
2023).
2023
Q1 Interim dividend of 6.21 cents per
share (Paid on 16 May
2023)
2023
Q2 Interim dividend of 7.54 cents per
share (Paid on 11 August
2023)
2023
Q3 Interim dividend of 7.02 cents per
share (Payable on 09 November
2023)
*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.
***
The Company’s ongoing charges are calculated as a percentage of
average daily net assets and using the management fee and all other
operating expenses excluding finance costs, direct transaction
costs, custody transaction charges, VAT recovered, taxation and
certain non-recurring items for the year ended 31 December 2022.
Geographic Exposure
|
% of Total Assets
|
% of Equity Portfolio *
|
MSCI EM Latin America Index
|
Brazil
|
59.3
|
59.2
|
62.4
|
Mexico
|
26.9
|
26.9
|
27.9
|
Chile
|
5.7
|
5.7
|
5.5
|
Colombia
|
3.5
|
3.4
|
1.2
|
Argentina
|
3.3
|
3.3
|
0.0
|
Panama
|
1.5
|
1.5
|
0.0
|
Peru
|
0.0
|
0.0
|
3.0
|
Net
current Liabilities (inc. fixed interest)
|
-0.2
|
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 7.2% of the Company’s net
asset value.
Sector
|
% of Equity Portfolio*
|
% of Benchmark*
|
Financials
|
22.8
|
25.2
|
Consumer
Staples
|
18.9
|
16.9
|
Materials
|
16.1
|
18.4
|
Energy
|
11.8
|
14.3
|
Industrials
|
11.1
|
9.5
|
Consumer
Discretionary
|
9.1
|
1.8
|
Health
Care
|
3.6
|
1.6
|
Real
Estate
|
2.7
|
0.8
|
Communication
Services
|
2.0
|
4.4
|
Information
Technology
|
1.9
|
0.4
|
Utilites
|
0.0
|
6.7
|
|
-----
|
-----
|
Total
|
100.0
|
100.0
|
|
=====
|
=====
|
|
|
|
*excluding
net
current assets & fixed interest
Company
|
Country of Risk
|
% of
Equity Portfolio
|
% of
Benchmark
|
Vale
– ADS
|
Brazil
|
10.1
|
8.6
|
Petrobrás –
ADR:
|
Brazil
|
|
|
Equity
|
|
5.9
|
5.1
|
Preference
Shares
|
|
3.4
|
6.0
|
FEMSA
- ADR
|
Mexico
|
5.9
|
4.0
|
Banco
Bradesco – ADR:
|
Brazil
|
|
|
Equity
|
|
4.3
|
0.7
|
Preference
Shares
|
|
1.6
|
2.7
|
Walmart de México
y Centroamérica
|
Mexico
|
4.9
|
3.4
|
B3
|
Brazil
|
4.7
|
2.4
|
AmBev
– ADR
|
Brazil
|
4.4
|
2.2
|
Grupo
Financiero Banorte
|
Mexico
|
3.9
|
3.9
|
Itaú
Unibanco – ADR
|
Brazil
|
3.4
|
4.7
|
Grupo
Aeroportuario del Pacifico – ADS
|
Mexico
|
3.0
|
0.8
|
|
Commenting
on the markets, Sam Vecht and
Christoph Brinkmann, representing
the Investment Manager noted;
The
Company’s NAV was down by 7.0% in October, underperforming the
benchmark, MSCI Emerging Markets Latin America Index, which
returned -4.2% on a net basis over the same period. All performance
figures are in sterling terms with dividends reinvested.
During October,
Latin America performed poorly
with all regional markets losing ground.
Chile (-9.1%) fell most but Mexico (-6.2%) and Brazil (-3.7%) also fell.
Brazil’s equity
market was negatively impacted by rising US interest rates which
put pressure on the Brazilian currency.
On
the political front, Argentina had
the first rounds of a general election where the market was
surprised by the victory of Sergio
Massa, the current finance minister. Massa and Javier Milei,
who was expected to take first place, will go to a runoff vote in
late November. In Colombia,
regional elections took place, where the opposition party won in
the main cities.
In
October, our Colombian holdings added value, driven mainly by our
holding in Ecopetrol. Alternatively, Brazil detracted, as our holdings in the
consumer discretionary and financial sectors continued to sell-off.
Hapvida, a health care operator, Vamos, a truck leasing company, EZ
Tec, a real estate developer and MRV, a homebuilder, were amongst
the top five detractors to performance in October. Elsewhere in
Brazil materials company, Vale,
reported good third quarter results following strong iron ore
pricing.
The
main negative contributor to the portfolio performance during the
period from an issuer level was Grupo Aeroportuario del Pacifico
(GAPB), a Mexican airport operator. The entire Mexican airport
sector declined after the announcement of regulatory changes, which
implied lower profit margins for the sector. However, we believe
that the market reaction was overdone and that the impact may be
less severe than initially anticipated. We added to GAPB, to
maintain our position weight post the sell-off.
In
Brazil, we trimmed our position in
Assai, while we added to our holding in EZ Tec. We also added to
Chilean lithium miner, SQM, following some weakness in the share
price. In Mexico we added to Wal
Mart Mexico and FEMSA as we like the defensive quality of these
businesses, while we reduced our position in Banorte following
strong relative performance.
Our
largest overweight exposure is to Argentina, driven by two off-benchmark
holdings. Our second largest overweight position is in Colombia via our stock specific positions in
the energy and financial sector. On the other hand, we are
underweight to Peru, due to its
political and economic uncertainty. We remain positive on the
outlook for Brazil and have been
selective in our positioning with preference to domestic businesses
that will benefit more from further rate cuts.
Outlook
We
remain optimistic about the outlook for Latin America.
Central banks
have been proactive in increasing interest rates to help control
inflation, which has now started to fall across most countries in
the region. As such we have started to see central banks beginning
to lower interest rates, which should support both economic
activity and asset prices. In addition, the whole region is
benefitting from being relatively isolated from global geopolitical
conflicts. We believe that this will lead to an increase in foreign
direct investment.
Brazil is the showcase of this thesis - with
the central bank cutting the policy rate by another 50bps in
October (100bps in total cut in previous two months). The
government’s fiscal framework being more orthodox than market
expectations also helped to reduce uncertainty regarding the fiscal
outlook and was key for confidence. We expect further upside to the
equity market in the next 12-18 months as local capital starts
flowing back into the market.
We
remain positive on the outlook for the Mexican economy as it is a
key beneficiary of the friend-shoring of global supply chains,
though we have reduced our overweight, locking in outperformance
versus our positioning a year ago.
We
also note that the Mexican economy will be relatively more
sensitive to a potential slowdown in economic activity in
the United States.
1Source:
BlackRock, as of 31 October
2023.
4 December 2023
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.