BLACKROCK LATIN AMERICAN INVESTMENT TRUST PLC (LEI:
UK9OG5Q0CYUDFGRX4151)
All information is at 31 December
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^ |
5.6 |
-2.6 |
18.1 |
28.7 |
5.6 |
94.8 |
Share price |
5.2 |
-3.6 |
19.9 |
28.3 |
6.1 |
83.3 |
MSCI EM Latin
America |
4.6 |
-3.0 |
13.4 |
30.2 |
3.7 |
108.0 |
US Dollars: |
|
|
|
|
|
|
Net asset value^ |
5.5 |
-1.8 |
29.3 |
11.7 |
-12.0 |
52.2 |
Share price |
5.1 |
-2.8 |
31.3 |
11.4 |
-11.6 |
43.2 |
MSCI EM Latin
America |
4.5 |
-2.2 |
24.2 |
12.9 |
-13.7 |
62.2 |
^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: |
520.44p |
Net asset value – cum
income: |
525.05p |
Share price: |
460.00p |
Total Assets#: |
£224.2m |
Discount (share price
to cum income NAV): |
12.4% |
Average discount* over
the month – cum income: |
12.8% |
Net gearing at month
end**: |
7.9% |
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 Assets |
% of
Equity
Portfolio * |
|
MSCI
EM Latin
American Index |
|
|
|
|
|
Brazil |
64.1 |
64.4 |
|
57.7 |
Mexico |
24.6 |
24.7 |
|
24.9 |
Argentina |
4.3 |
4.3 |
|
0.0 |
Peru |
3.8 |
3.8 |
|
3.3 |
Chile |
1.9 |
1.9 |
|
10.6 |
Panama |
0.5 |
0.5 |
|
0.0 |
Colombia |
0.3 |
0.4 |
|
3.5 |
Net current assets
(inc. Fixed interest) |
0.5 |
0.0 |
|
0.0 |
|
----- |
----- |
|
----- |
Total |
100.0 |
100.0 |
|
100.0 |
|
----- |
----- |
|
----- |
Sector |
% of
Equity Portfolio * |
% of
Benchmark |
|
|
|
Financials |
30.2 |
29.8 |
Consumer Staples |
15.4 |
17.0 |
Materials |
14.9 |
16.4 |
Consumer
Discretionary |
13.8 |
5.7 |
Energy |
8.8 |
8.6 |
Telecommunication
Services |
6.9 |
6.4 |
Industrials |
5.7 |
6.3 |
Utilities |
2.1 |
5.8 |
Real Estate |
1.3 |
1.5 |
Information
Technology |
0.5 |
1.4 |
Health Care |
0.4 |
1.1 |
|
----- |
----- |
Total |
100.0 |
100.0 |
|
----- |
----- |
*excluding net current assets & fixed interest
Ten Largest Equity Investments (in percentage order)
Company |
Country of
Risk |
%
of
Equity Portfolio |
%
of
Benchmark |
|
|
|
|
Vale |
Brazil |
8.1 |
6.0 |
Itau Unibanco |
Brazil |
7.4 |
6.5 |
Banco Bradesco |
Brazil |
6.7 |
6.3 |
Petrobras |
Brazil |
6.5 |
5.4 |
America Movil |
Mexico |
5.1 |
4.6 |
AmBev |
Brazil |
5.1 |
4.7 |
Femsa |
Mexico |
3.9 |
2.9 |
B3 |
Brazil |
3.0 |
2.2 |
Credicorp |
Peru |
2.7 |
2.2 |
Grupo Financiero
Banorte |
Mexico |
2.6 |
2.1 |
Commenting on the markets,
Will Landers, representing the
Investment Manager noted:
For the month of December 2017,
the Company’s NAV rose by 5.6%* with the share price rising by
5.2%*. The Company’s benchmark, the MSCI EM Latin America Index,
rose by 4.5%* (all performance figures are in sterling terms with
income reinvested and are net of ongoing charges).
Selection in Brazil was the
primary driver of returns in the fourth quarter of 2017 as
confidence indicators continue to improve and inflation surprised
to the downside, resulting in yet another 50 basis points cut to
the SELIC (Sistema Especial de Liquidação e Custodia, the Brazilian
Central Bank interest rate) in December. This has resulted in 675
basis points being trimmed off the headline rate this year with
expectations for at least one more cut in the first quarter of
2018. Vale was the quarter’s top performing stock, supported by
iron ore strength, on the back of global supply discipline, as well
as the conclusion of the company’s share unification. Our
off-benchmark allocation to Argentina continued to benefit the strategy
amid improving investor confidence over the continuation of
President Macri’s pro-reform agenda. Lenders, Supervielle and
Galicia, as well as internet retailer, Mercadolibre, were among the
top contributors moving in line with the market. Our underweight to
Mexico also contributed to
relative performance as the uncertainty over domestic politics
remains an overhang and the Peso continued to weaken into year-end.
On the other hand, our underweight to Chile was the quarter’s largest detractor as
both the currency and market surged in December following the
presidential election run-off, making up for November declines.
From a stock specific perspective, our lack of positioning in
Mexican Insurer, Gentera, Chilean energy name, Empresas Copec, and
Colombia’s Ecopetrol were the top detractors over the period.
During the quarter we shifted our Brazilian positioning,
replacing some of our financials exposure with more domestic
consumption related names. Specifically, we topped up our position
in digitally-oriented retailer Magazine Luiza, while also
initiating positions in CIA Hering and B2W Digital. On the other
hand, we exited our positions in BRF after the surprise departure
of the firm’s CEO, as well as toll road operator, CCR, given the
firm’s lack of success in executing its merger and acquisition
pipeline due to increased competitiveness for distressed Brazilian
infrastructure assets. We have also been selectively adding to our
Mexican positioning. We notably added to our America Movil allocation, amid an improving
regulatory and competitive landscape. Similarly, we initiated a
position in airport operator GAP, benefitting from growth in
Mexican air travel. The Company ended the period being overweight
Brazil, Mexico, 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 industrials.
As we enter 2018, our positioning and outlook remain relatively
unchanged from the last quarter of 2017. Despite going through yet
another round of political headwinds the primary drivers for
Brazilian equities should remain the same: a) persistently low
inflation has allowed the Central Bank to continue it easing cycle,
which has set the foundation for the needed economic recovery (the
Central Bank cut rates another 50 basis points in December,
bringing the SELIC down to 7%; the market has seen 725 basis points
of easing so far during the current cycle, resulting in the SELIC
hitting its 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. We expect the
reform process to be the focus during the first quarter of the
year, shifting to elections as the process starts officially in
April. Meanwhile, the recent round of NAFTA (North American Free
Trade Agreement) negotiations illustrated that the process will be
long, reiterating our cautious view on Mexican growth, and
therefore our underweight - uncertainties regarding the
1 July 2018 presidential election add
to our conviction on such positioning. Should the apparent
selection of Jose Antonio Meade as
the PRI’s (Institutional Revolutionary Party) candidate become a
competitive bid, this would force us to revisit our positioning as
it could bring near term positive momentum to Mexican equities. We
continue to underweight Chile due
to rich valuations and lack of free-float liquidity (President
Piniera’s election seems mostly priced in), and despite slower than
expected progress on the infrastructure front, we continue to
favour Peru among its Andean
neighbours. Argentina remains
another top country 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 December
2017
16 January 2018
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.