BlackRock Latin Am Portfolio Update

 
TIDMBRLA 
 
BLACKROCK LATIN AMERICAN INVESTMENT TRUST PLC (LEI: UK9OG5Q0CYUDFGRX4151) 
All information is at 31 July 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^              7.5       4.6     18.2     11.0       8.9      88.2 
 
Share price                   8.9       5.8     20.0      7.2       4.3      75.4 
 
MSCI EM Latin America         6.7       4.5     19.3     12.8       6.4     105.4 
 
US Dollars: 
 
Net asset value^              9.1       6.6     17.3    -13.3      -8.2      43.2 
 
Share price                  10.5       7.8     19.1    -16.3     -12.2      33.4 
 
MSCI EM Latin America         8.3       6.5     18.4    -11.9     -10.5      56.1 
 
^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:                                         505.78p 
 
Net asset value - cum income:                                           511.21p 
 
Share price:                                                            444.00p 
 
Total Assets#:                                                          GBP211.2m 
 
Discount (share price to cum income NAV):                                 13.1% 
 
Average discount* over the month - cum income:                            14.2% 
 
Net gearing at month end**:                                                5.9% 
 
Gearing range (as a % of net assets):                                     0-25% 
 
Net yield##:                                                               2.7% 
 
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                             63.9             63.3                    55.2 
 
Mexico                             27.8             27.5                    28.9 
 
Argentina                           3.6              3.6                     0.0 
 
Peru                                3.2              3.2                     2.9 
 
Chile                               1.5              1.5                     9.5 
 
Panama                              0.5              0.5                     0.0 
 
Colombia                            0.4              0.4                     3.5 
 
Net current liabilities            -0.9              0.0                     0.0 
(inc. fixed interest) 
 
                                  -----            -----                   ----- 
 
Total                             100.0            100.0                   100.0 
 
                                  -----            -----                   ----- 
 
 
 
Sector                        % of Equity Portfolio              % of Benchmark 
                                                  * 
 
Financials                                     31.5                        29.9 
 
Consumer Staples                               20.0                        17.0 
 
Materials                                      14.4                        15.3 
 
Energy                                          9.5                         7.7 
 
Consumer Discretionary                          8.4                         6.3 
 
Industrials                                     6.2                         6.5 
 
Telecommunication Services                      5.4                         6.6 
 
Real Estate                                     1.6                         1.7 
 
Utilities                                       1.3                         6.3 
 
Information Technology                          1.0                         1.6 
 
Health Care                                     0.7                         1.1 
 
                                              -----                       ----- 
 
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                          7.3              6.2 
 
Petrobras                  Brazil                          7.0              4.8 
 
Banco Bradesco             Brazil                          6.8              6.2 
 
Vale                       Brazil                          5.8              5.0 
 
Ambev                      Brazil                          4.9              4.6 
 
Femsa                      Mexico                          4.1              3.2 
 
BM&F Bovespa               Brazil                          3.5              2.2 
 
America Movil              Mexico                          3.5              4.7 
 
Grupo Financiero Banorte   Mexico                          3.4              2.7 
 
Groupo Mexico              Mexico                          2.8              2.0 
 
Commenting on the markets, Will Landers, representing the Investment Manager 
noted; 
 
For the month of July 2017, the Company's NAV rose by 7.5% and the share price 
rose by 8.9%. The Company's benchmark, the MSCI EM Latin America Index, rose by 
6.7% (all performance figures are in sterling terms with income reinvested and 
are net of ongoing charges). 
 
Our higher than index weighting and stock selection in Brazil were the top 
contributors in July, as the Brazilian Real (BRL) gained almost 6% against the 
US Dollar (USD), while higher commodity prices and the central bank's 
willingness to continue cutting rates at an accelerated pace supported the 
market. Petrobras and Bradespar, a holding company for Vale, were among the 
month's top performers as both oil and iron ore made strong gains in July, the 
latter of which was driven by strong manufacturing and economic data from 
China. Rail operator, Rumo, was the largest individual contributor in July, 
gaining on news surrounding positive negotiations towards the extension of 
their rail concessions, as well the government announcing the public hearing 
and auction dates for the North-South railway. Lower than index weightings in 
Colombia and Mexico also benefitted the portfolio, as both markets 
underperformed the broader region. On the other hand, our off-benchmark 
allocation to Argentina weighed on performance, with utility Pampa Energia 
among the largest detractors. Mexican consumer staple, Arca Continental, was 
July's worst performing stock, which missed on net income partially due to 
foreign exchange (FX) charges related to their US acquisition. 
 
During the month broad positioning remained relatively unchanged, though we did 
shift our Brazilian financials positioning, reducing exposure to Itau and BM&F 
Bovespa, redeploying those funds to Bradesco on better upside expectations. On 
the other hand, we sold down our position in Mexican airline, Volaris, as 
pricing pressure in Mexico City intensifies as the Aeromexico/Delta JV has been 
seen to be ramping up capacity more than expected. We also took profits in Raia 
Drogasil after strong performance and participated in the IPO of Brazilian 
insurance firm, IRB. The Company ended the month with an above index weighting 
in Brazil and Peru while having a below index weighting in Chile, Colombia, and 
Mexico. We also maintain an off-benchmark allocation to Argentina. At the 
sector level, we are overweight energy and select consumer staples, while being 
underweight utilities and telecom. 
 
As we enter the third quarter, our positioning and outlook remain relatively 
unchanged.  Concerns regarding another potential overhang in Brazil's 
presidency have abated with the recent 263-227 vote in which the lower house 
rejected the corruption charges brought against President Temer, allowing the 
administration to pivot back towards their economic agenda.  With increased 
stability from the political front, the primary drivers for Brazilian equities 
should remain the same: a) the continued easing cycle 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 (Institutional Revolutionary 
Party) win in the gubernatorial election (Mexico's national governor elections) 
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 hold a below index weighting 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 region for the 
strategy as fundamentals persist, with the recent correction providing a 
positive entry point for longer-term investments. 
 
16 August 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

August 16, 2017 09:22 ET (13:22 GMT)