The
information contained in this release was correct as at
30 November 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
30 November
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^
|
11.8
|
4.8
|
14.9
|
41.7
|
20.8
|
Share
price
|
11.0
|
0.5
|
16.2
|
32.7
|
26.5
|
MSCI
EM Latin America
(Net
Return)^^
|
9.3
|
6.2
|
10.6
|
44.8
|
24.2
|
US
Dollars:
|
|
|
|
|
|
Net
asset value^
|
16.6
|
4.7
|
22.2
|
34.4
|
20.0
|
Share
price
|
15.8
|
0.4
|
23.6
|
25.9
|
25.6
|
MSCI
EM Latin America
(Net
Return)^^
|
14.0
|
6.1
|
17.6
|
37.3
|
23.2
|
^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:
|
465.42p
|
Net
asset value - including income:
|
471.67p
|
Share
price:
|
398.00p
|
Total
assets#:
|
£143.9m
|
Discount (share
price to cum income NAV):
|
15.6%
|
Average discount*
over the month – cum income:
|
15.8%
|
Net
Gearing at month end**:
|
2.1%
|
Gearing range (as
a % of net assets):
|
0-25%
|
Net
yield##:
|
8.0%
|
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 8.0% 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 503.85 US cents per share
(equivalent to the sterling price of 398.00
pence per share translated in to US cents at the rate
prevailing at 30 November 2023 of
$1.266 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 (Paid 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
|
59.1
|
59.9
|
62.5
|
Mexico
|
26.7
|
27.1
|
28.3
|
Chile
|
5.4
|
5.5
|
5.4
|
Argentina
|
3.3
|
3.3
|
0.0
|
Colombia
|
2.6
|
2.6
|
1.1
|
Panama
|
1.5
|
1.6
|
0.0
|
Peru
|
0.0
|
0.0
|
2.7
|
Net
current Assets (inc. fixed interest)
|
1.4
|
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 3.6% of the Company’s net
asset value.
Sector
|
% of Equity Portfolio*
|
% of Benchmark*
|
Financials
|
23.8
|
26.0
|
Consumer
Staples
|
17.6
|
16.9
|
Materials
|
16.2
|
18.0
|
Industrials
|
11.7
|
9.7
|
Energy
|
10.4
|
13.3
|
Consumer
Discretionary
|
9.8
|
2.0
|
Health
Care
|
4.0
|
1.7
|
Real
Estate
|
2.6
|
0.7
|
Communication
Services
|
2.0
|
4.5
|
Information
Technology
|
1.9
|
0.5
|
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
|
9.7
|
8.3
|
Petrobrás –
ADR:
|
Brazil
|
|
|
Equity
|
|
5.5
|
4.6
|
Preference
Shares
|
|
3.2
|
5.6
|
Banco
Bradesco – ADR:
|
Brazil
|
|
|
Equity
|
|
4.6
|
0.8
|
Preference
Shares
|
|
1.7
|
2.9
|
B3
|
Brazil
|
5.2
|
2.6
|
FEMSA
- ADR
|
Mexico
|
5.0
|
4.0
|
Walmart de México
y Centroamérica
|
Mexico
|
4.8
|
3.3
|
AmBev
– ADR
|
Brazil
|
4.4
|
2.1
|
Grupo
Financiero Banorte
|
Mexico
|
4.0
|
3.9
|
Grupo
Aeroportuario del Pacifico – ADS
|
Mexico
|
3.7
|
1.0
|
Itaú
Unibanco – ADR
|
Brazil
|
3.7
|
5.1
|
|
Commenting
on the markets, Sam Vecht and
Christoph Brinkmann, representing
the Investment Manager noted;
The
Company’s NAV was 11.8% in November, outperforming the benchmark,
MSCI Emerging Markets Latin America Index, which returned 9.3% on a
net basis over the same period. All performance figures are in
sterling terms with dividends reinvested.
Most
Emerging Markets posted positive performance in November, and
Latin America was the standout
region returning +14%. While all markets in the Latin American
index were positive in November, performance was mainly led by
Brazil (+14.2%) and Mexico (+15.5%), followed by Chile (+10.7%) and Colombia (+8.1%). Peru underperformed the others returning
+3.2%. Argentina had a very strong
month, returning +42.4%, following Javier Milei winning in the
runoff vote that took place on the 19th
November 2023. Milei is expected to be more
market friendly and he promises radical reforms, which has been
well received by markets as any change from the status quo is
considered positive.
At
the portfolio level, stock selection in Brazil contributed the largest gains, mainly
recovering the underperformance in previous two months. Returns in
Brazil was mainly due to stock
selection in financials and our overweight position in the consumer
discretionary sector. Additionally, our off-benchmark holdings in
Argentina performed well, and
being underweight in Peru also
helped on a relative basis. On the other hand, stock selection in
Chile and Mexico were the main detractors.
Top
contributors on an issuer level were Pagseguro, GAPB, Globant and
Ez Tec. Many of the names we hold in Brazil are rate sensitive domestic names,
including Pagseguro, a payments acquirer, and Ez Tec, a
homebuilder. The two names rallied strongly in response to the
decline in interest rates both in Brazil as well as globally in response to a
benign inflation picture. Grupo Aeroportuario del Pacífico (GAPB),
a Mexican airport operator, rebounding from steep losses in October
as investors reassessed the potential impact of a change in fee
structure between the government and airport operators. Globant, an
IT services company based in Argentina whose customers are largely US-based
companies rallied alongside the Nasdaq 100.
Main
detractors were Arezzo, SQM, Ambev and not holding any Grupo Carso and Itau weighed on returns. Arezzo,
a Brazilian footwear retailer underperformed the strong rally in
Brazilian consumer names. The company should benefit from lower
rates but has been underperforming due to potential tax changes
that might negatively impact margins in 2024. SQM, a lithium
producer in Chile, has continued
to underperform on the back of declining lithium
prices.
The
Brazilian beverage company, Ambev also underperformed on the back
of potential changes in taxes in Brazil.
We
trimmed a few names in Brazil
following this rally including Vale, the iron ore producer; Assai,
a food retailer and MRV, a homebuilder. We switched part of our
holding in
Pagseguro to
Lojas Renner, a Brazilian retail store operator, where we expect a
positive turn in their credit book. We reduced our holdings in
FEMSA, a Mexican beverage retailer, and Ecopetrol, an oil producer
in Colombia, after both holdings
had strong performances year to date.
The
portfolio’s largest overweight exposure is in Argentina, driven by two off-benchmark
holdings. Our second largest overweight position is in Colombia, where we have stock-specific
positions in the energy and financial sector. On the other hand, we
are underweight in Peru due to its
political and economic uncertainty. We remain optimistic about the
outlook for Brazil and have been
selective in our positioning, with a preference for 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
are especially positive about the outlook for Brazil. We believe that the combination of a
benign outlook for inflation and a relatively prudent fiscal policy
by the government will enable the central bank to decrease interest
rates faster than market participants currently expect.
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.
Mexico remains defensive as both
fiscal and the current accounts are in order. While our view
remains positive, we have taken profits after a strong relative
performance, solely because we see even more upside in other Latin
American markets such as Brazil.
We also note that the Mexican economy will be relatively more
sensitive to a potential slowdown in economic activity in
the United States.
We
continue to closely monitor the political and economic situation in
Argentina, after libertarian
Javier Milei unexpectedly won the presidential elections in
November. Milei is facing a very difficult situation, with
inflation at 160% year-on-year, currency reserves depleted and
multiple economic imbalances. The country needs to go through a
painful adjustment process and we worry about the hardship that
this inflicts on society. We are hopeful that country comes out
stronger after the adjustment process, but we have limited exposure
to the Argentinian economy for now.
1Source:
BlackRock, as of 30 November
2023.
19 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.