BlackRock Latin Am Portfolio Update

 
TIDMBRLA 
 
BLACKROCK LATIN AMERICAN INVESTMENT TRUST PLC (LEI: UK9OG5Q0CYUDFGRX4151) 
All information is at 30 June 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^              0.5      -5.7     16.7      5.2       3.1      75.1 
 
Share price                  -1.8      -6.0     16.8      1.3      -0.6      61.0 
 
MSCI EM Latin America         0.1      -5.3     18.8      8.2       1.2      92.5 
 
US Dollars: 
 
Net asset value^              1.1      -2.0     13.4    -20.1     -14.5      31.3 
 
Share price                  -1.2      -2.4     13.4    -23.1     -17.6      20.7 
 
MSCI EM Latin America         0.7      -1.6     15.4    -17.8     -16.2      44.2 
 
^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:                                         470.18p 
 
Net asset value - cum income:                                           475.71p 
 
Share price:                                                            407.75p 
 
Total Assets#:                                                          GBP197.0m 
 
Discount (share price to cum income NAV):                                 14.3% 
 
Average discount* over the month - cum income:                            13.1% 
 
Net gearing at month end**:                                                4.8% 
 
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                             62.3             62.6                    54.0 
 
Mexico                             27.9             28.0                    30.0 
 
Peru                                3.8              3.8                     3.0 
 
Argentina                           3.1              3.1                     0.0 
 
Chile                               1.6              1.6                     9.3 
 
Panama                              0.5              0.5                     0.0 
 
Colombia                            0.4              0.4                     3.7 
 
Net current assets                  0.4              0.0                     0.0 
(inc.Fixed interest) 
 
                                  -----            -----                   ----- 
 
Total                             100.0            100.0                   100.0 
 
                                  -----            -----                   ----- 
 
 
 
Sector                        % of Equity Portfolio              % of Benchmark 
                                                  * 
 
Financials                                     30.0                        30.0 
 
Consumer Staples                               20.4                        17.6 
 
Materials                                      15.1                        15.0 
 
Energy                                          9.6                         7.6 
 
Consumer Discretionary                          8.3                         6.0 
 
Industrials                                     6.6                         6.7 
 
Telecommunication Services                      5.4                         6.5 
 
Utilities                                       2.1                         6.3 
 
Real Estate                                     1.5                         1.7 
 
Information Technology                          1.0                         1.6 
 
Health Care                                     0.0                         1.0 
 
                                              -----                       ----- 
 
Total                                         100.0                       100.0 
 
                                              -----                       ----- 
 
*excluding net current liabilities & fixed interest 
 
Ten Largest Equity Investments (in percentage order) 
 
                           Country of                     % of             % of 
Company                    Risk               Equity Portfolio        Benchmark 
 
Itau Unibanco              Brazil                          7.8              6.2 
 
Petrobras                  Brazil                          6.9              4.6 
 
Vale                       Brazil                          6.0              4.7 
 
Banco Bradesco             Brazil                          5.6              5.9 
 
Femsa                      Mexico                          4.4              3.3 
 
BM&F Bovespa               Brazil                          4.0              2.1 
 
AmBev                      Brazil                          3.9              4.5 
 
Grupo Financiero Banorte   Mexico                          3.6              2.8 
 
America Movil              Mexico                          3.4              4.7 
 
Cemex                      Colombia                        2.9              2.4 
 
Commenting on the markets, Will Landers, representing the Investment Manager 
noted; 
 
For the month of June 2017, the Company's NAV rose by 0.5% with the share price 
falling by 1.8%. The Company's benchmark, the MSCI EM Latin America Index, rose 
by 0.1% (all performance figures are in sterling terms with income reinvested 
and are net of ongoing charges). 
 
Brazilian stock selection was the month's top contributor to performance as our 
holdings outperformed the Brazilian market which was buffeted by the political 
scandals surrounding President Temer. Brazil's leading financial exchange, BM&F 
Bovespa, as well as iron producer, Vale, were among the top contributors; Vale 
gained on optimism surrounding new leadership and the recent approval of a 
share conversion plan that should boost investor transparency and give equal 
votes to all shares. Mexican selection also benefitted the Company as the 
broader market advanced, supported by positive political news with the market 
friendly PRI (Institutional Revolutionary Party) winning a narrow victory in 
the state of Mexico and inflation showing signs of peaking. However, our 
relative underweight neutralized much of the stock specific gains. Our 
off-benchmark allocation to Argentina was the month's primary detractor as MSCI 
unexpectedly announced the postponement of their decision to reclassify the 
country to 'emerging market', 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 that it is still a compelling investment 
destination for long-term investors and have been looking to selectively add 
exposure on weakness.  Energy names Petrobras and YPF were the top individual 
detractors, also being negatively impacted by oil weakness. 
 
During the quarter, we were actively trading around news and sentiment in 
Brazil. We notably trimmed our Brazilian overweight following headlines 
implicating President Temer in corruption wrongdoing in May, specifically 
reducing exposure to Petrobras and Bradesco. We've since added back exposure, 
initiating positions in domestic retailer Lojas Renner, and low-income home 
builder MRV, in part on the expectation that we will see continuity in the 
economic team and reform process, regardless of President Temer's political 
status. We also added exposure across our Mexican positions, though we remain 
cautious of the market as the domestic political landscape remains relatively 
challenged, and could impact broader investor sentiment as we head deeper into 
the 2018 election season. 
 
As we enter the third quarter, our positioning and outlook remain relatively 
unchanged. We continue to be overweight Brazil, Peru and off-benchmark 
Argentina, while being underweight 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 in Brazil and has 
put President Temer's term and reform agenda into question. Despite weaker 
market confidence on the General Prosecutor's decision to charge President 
Temer with passive corruption, we expect a scenario whereby continuity of the 
economic plan started by President Temer persists. As such 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 labor reform, with pension reform potentially being passed in the 
second half of the year, bringing stability to government accounts in the 
medium term.  Once the latter passes, we believe that 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 (National Regeneration 
Movement) victory in next year's presidential elections). We continue to be 
underweight in 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 focus for the strategy as fundamentals persist, with the recent correction 
providing a positive entry point for longer-term investments. 
 
24 July 2017 
 
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. 
 
 
 
END 
 

(END) Dow Jones Newswires

July 24, 2017 11:56 ET (15:56 GMT)