BlackRock Latin Am Portfolio Update

 
TIDMBRLA 
 
BLACKROCK LATIN AMERICAN INVESTMENT TRUST PLC (LEI: UK9OG5Q0CYUDFGRX4151) 
All information is at 31 May 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^             -3.1      -5.7     39.5      7.1       4.0      74.2 
 
Share price                  -1.1      -4.1     33.6      2.7       0.4      64.0 
 
MSCI EM Latin America        -2.1      -5.3     44.1     10.5       3.1      92.4 
 
US Dollars: 
 
Net asset value^             -3.3      -2.1     23.6    -17.5     -12.6      29.9 
 
Share price                  -1.3      -0.4     18.4    -21.0     -15.7      22.2 
 
MSCI EM Latin America        -2.3      -1.7     27.8    -15.0     -13.6      43.2 
 
^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:                                         468.50p 
 
Net asset value - cum income:                                           473.41p 
 
Share price:                                                            415.25p 
 
Total Assets#:                                                          GBP193.4m 
 
Discount (share price to cum income NAV):                                 12.3% 
 
Average discount* over the month - cum income:                            12.8% 
 
Net gearing at month end**:                                                3.7% 
 
Gearing range (as a % of net assets):                                     0-25% 
 
Net yield##:                                                               2.9% 
 
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 Latin 
                                 Assets      Portfolio *          American Index 
 
Brazil                             62.2             62.7                    55.5 
 
Mexico                             26.1             26.3                    28.6 
 
Argentina                           4.8              4.9                     0.0 
 
Peru                                4.2              4.2                     2.9 
 
Chile                               1.4              1.4                     9.5 
 
Colombia                            0.5              0.5                     3.5 
 
Net current assets                  0.8              0.0                     0.0 
(inc.Fixed interest) 
 
                                  -----            -----                   ----- 
 
Total                             100.0            100.0                   100.0 
 
                                  -----            -----                   ----- 
 
 
 
Sector                        % of Equity Portfolio              % of Benchmark 
                                                  * 
 
Financials                                     30.1                        29.5 
 
Consumer Staples                               21.1                        18.1 
 
Materials                                      14.5                        14.8 
 
Energy                                         10.3                         8.0 
 
Industrials                                     6.5                         6.7 
 
Telecommunication Services                      5.7                         6.6 
 
Consumer Discretionary                          5.7                         6.0 
 
Utilities                                       3.3                         6.2 
 
Real Estate                                     1.6                         1.5 
 
Information Technology                          1.2                         1.5 
 
Health Care                                     0.0                         1.1 
 
                                              -----                       ----- 
 
Total                                         100.0                       100.0 
 
                                              -----                       ----- 
 
*excluding net current liabilities & fixed interest 
 
Ten Largest Equity Investments (in percentage order) 
 
                           Country of Risk                % of             % of 
Company                                       Equity Portfolio        Benchmark 
 
Itau Unibanco              Brazil                          7.9              6.2 
 
Petrobras                  Brazil                          6.5              5.0 
 
Banco Bradesco             Brazil                          5.8              5.9 
 
Vale                       Brazil                          5.7              4.6 
 
Femsa                      Mexico                          4.3              3.0 
 
AmBev                      Brazil                          4.1              4.8 
 
BM&F Bovespa               Brazil                          3.9              2.1 
 
America Movil              Mexico                          3.6              4.7 
 
Grupo Financiero Banorte   Mexico                          3.1              2.5 
 
Kroton Educacional         Brazil                          2.9              1.1 
 
Commenting on the markets, Will Landers, representing the Investment Manager 
noted; 
 
For the month of May 2017, the Company's NAV fell by 3.1%, and the share price 
fell by 1.1%. The Company's benchmark, the MSCI EM Latin America Index, fell by 
2.1% (all performance figures are in sterling terms). 
 
Our off-benchmark allocation to Argentina remained a top contributor for the 
period as investors expected MSCI to reclassify the country as an emerging 
market. However, on 20 June 2017, MSCI announced the postponement of their 
decision, citing the need to monitor the persistence of recently implemented 
market accessibility improvements. Whilst this result may be a disappointment 
to some market participants, we would remind investors of the substantial 
positive macro-economic changes that Argentina has witnessed over recent years. 
We believe it is still a compelling investment destination for long-term 
investors and have been looking to selectively add exposure on weakness.  Pampa 
Energia and internet name, Mercadolibre, were among the top performers for the 
month. Our overweight to Peru also contributed positively, despite the marginal 
currency depreciation last month on the back of stronger than expected trade 
surplus numbers and a March GDP growth print that was ahead of expectations. On 
the other hand, our heavy overweight to Brazil earlier in the month detracted 
as the market corrected sharply on news of another political scandal, putting 
President Temer and his reform agenda in question. As a result Petrobras and 
Bradesco were among the largest individual detractors in May. An underweight to 
Mexican telecom, America Movil, also weighed on performance as the stock gained 
on easing competitive and regulatory pressures. 
 
During the month, we trimmed our Brazilian overweight following headlines 
implicating President Temer in corruption wrongdoing, specifically reducing 
exposure to Petrobras and Bradesco. We also reduced our underweight to America 
Movil. The Company ended the period overweight Brazil and Peru, while being 
underweight Chile, Mexico and Colombia. We also maintain off-benchmark 
positions in Argentina. 
 
We entered the second quarter of the year maintaining overweight positions in 
Brazil, Peru and off-benchmark Argentina, while maintaining underweight 
positions in Chile, Colombia and Mexico.  In the near term, negative sentiment 
concerning another potential presidential scandal has reversed the green shoots 
seen over the last couple of months and has put President Temer's term and 
reform agenda into question. Should we see continuity of government, the 
primary drivers for Brazilian equities should remain the same: a) the continued 
easing cycle (albeit at a slower pace) by the Central Bank which should help to 
bring forward the needed economic recovery; and b) progress on the reform 
agenda, especially pension reform, which should help to bring stability to 
government accounts in the medium term.  Once the latter passes, we believe 
this will open the door for the Central Bank to bring the easing cycle further 
forward and potentially bring rates lower than market expectations.  Meanwhile, 
despite a more conciliatory tone from the US government on the trade front, we 
maintain our cautious view on Mexican growth, and therefore our underweight 
(despite a PRI win in the gubernatorial election in the state of Mexico in 
early June, results were not conclusive as to the likelihood of a MORENA 
victory in next year's presidential elections). Despite slower than expected 
progress on the infrastructure front, we continue to favour Peru among its 
Andean neighbours, and see improving economic activity in Argentina as a 
positive for that country's stock market. 
 
22 June 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

June 22, 2017 11:01 ET (15:01 GMT)