BlackRock Latin Am Portfolio Update

 
TIDMBRLA 
 
BLACKROCK LATIN AMERICAN INVESTMENT TRUST PLC (LEI: UK9OG5Q0CYUDFGRX4151) 
All information is at 31 October 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^             -3.7       2.4      1.5     14.6      10.3      92.6 
 
Share price                  -1.5       6.8      7.0     18.0      12.7      87.3 
 
MSCI EM Latin America        -2.6       1.7      1.6     16.3       8.1     109.0 
 
US Dollars: 
 
Net asset value^             -4.7       3.1     10.4     -4.9      -8.9      47.7 
 
Share price                  -2.5       7.6     16.4     -2.1      -7.0      43.6 
 
MSCI EM Latin America        -3.6       2.5     10.5     -3.4     -10.9      60.0 
 
^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:                                         517.24p 
 
Net asset value - cum income:                                           519.05p 
 
Share price:                                                            470.00p 
 
Total Assets#:                                                          GBP224.0m 
 
Discount (share price to cum income NAV):                                  9.5% 
 
Average discount* over the month - cum income:                            11.4% 
 
Net gearing at month end**:                                                9.6% 
 
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      % of Equity                 MSCI EM 
                                 Assets      Portfolio *    Latin American Index 
 
Brazil                             64.4             64.5                    57.8 
 
Mexico                             23.7             23.7                    25.3 
 
Argentina                           5.4              5.3                     0.0 
 
Peru                                3.8              3.8                     3.2 
 
Chile                               1.9              1.9                    10.5 
 
Panama                              0.5              0.5                     0.0 
 
Colombia                            0.3              0.3                     3.2 
 
Net current assets (inc.            0.0              0.0                     0.0 
fixed interest) 
 
                                  -----            -----                   ----- 
 
Total                             100.0            100.0                   100.0 
 
                                  -----            -----                   ----- 
 
 
 
Sector                        % of Equity Portfolio              % of Benchmark 
                                                  * 
 
Financials                                     31.7                        30.6 
 
Consumer Staples                               15.5                        16.3 
 
Materials                                      12.5                        15.4 
 
Consumer Discretionary                         12.3                         6.1 
 
Energy                                          9.3                         8.8 
 
Telecommunication Services                      7.1                         6.4 
 
Industrials                                     6.2                         6.1 
 
Utilities                                       2.1                         6.3 
 
Real Estate                                     1.4                         1.5 
 
Information Technology                          1.1                         1.3 
 
Health Care                                     0.8                         1.2 
 
                                              -----                       ----- 
 
Total                                         100.0                       100.0 
 
                                              -----                       ----- 
 
*excluding net current liabilities & fixed interest 
 
Ten Largest Equity Investments (in percentage order) 
 
                                                            % of             % of 
Company                      Country of Risk    Equity Portfolio        Benchmark 
 
Itau Unibanco                Brazil                          7.4              6.5 
 
Banco Bradesco               Brazil                          7.0              6.5 
 
Petrobras                    Brazil                          6.8              5.7 
 
Vale                         Brazil                          5.3              4.7 
 
America Movil                Mexico                          5.2              4.5 
 
AmBev                        Brazil                          5.1              4.7 
 
Femsa                        Mexico                          3.4              2.7 
 
B3                           Brazil                          3.2              2.4 
 
Grupo Financiero Banorte     Mexico                          2.9              2.3 
 
Credicorp                    Peru                            2.8              2.2 
 
Commenting on the markets, Will Landers, representing the Investment Manager 
noted; 
 
For the month of October 2017, the Company's NAV fell by 3.7%* with the share 
price falling by 1.5%*. The Company's benchmark, the MSCI EM Latin America 
Index, fell by 2.6%* (all performance figures are in sterling terms with income 
reinvested and are net of ongoing charges). 
 
The portfolio's off-benchmark allocation to Argentina continues to be a source 
of alpha for the Company, with the market showing support for incremental 
acceleration of President Macri's reform agenda. Banking group, Grupo 
Supervielle, as well as utility, Pampa Energia were among the top performers. 
The portfolio's underweight to Colombia also benefitted the Company in October 
as the market contracted from the Peso depreciating by 3.4%** against the US 
Dollar; overall, activity remains weak despite a recovery in oil. Subsequently, 
our lack of positioning in Bancolombia had a large positive impact to relative 
performance. On the other hand, the portfolio's overweight to the Brazilian 
consumer (including positions in Magazine Luiza and Kroton) weighed on 
performance, as the Real slid by -3.3%** and activity data disappointed. 
Mexican insurer, Gentera was the largest individual detractor as the company 
guided earnings downwards for 2018. The broad portfolio underweight to Chile 
also hurt relative performance amid improving market confidence in October. 
 
During the month, broad positioning remained relatively unchanged, however we 
exited our position in Gentera following a negative third quarter call. On the 
other hand we increased exposure to America Movil amid an improving regulatory 
and competitive environment. We also shifted some exposure in Brazil, topping 
up positions in energy names, Petrobras and Ultrapar, while exiting BRF after 
the surprise announcement of their CEO's departure. We ended the month being 
overweight Brazil 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 materials. 
 
Into the fourth quarter of 2017, our positioning and outlook remain relatively 
unchanged. Despite going through yet another round of political headwinds the 
primary drivers for Brazilian equities should remain the same: a) the continued 
easing cycle by the Central Bank should help bring forward the needed economic 
recovery (the Central Bank cut rates another 75 bps** in October, bringing the 
SELIC (Sistema Especial de Liquidação e Custodia, the Brazilian Central Bank 
interest rate) down to 7.50%; the market has seen 675 basis points of easing so 
far during the current cycle, resulting in the SELIC hitting its second 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. 
Meanwhile, the recent round of NAFTA (North American Free Trade Agreement) 
negotiations illustrated that the process will be long and, and we maintain our 
cautious view on Mexican growth, and therefore our underweight - uncertainties 
regarding next year's presidential cycle add to our conviction on such 
positioning. We continue to underweight 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 October mid-term elections providing support for a continuation of 
President Macri's reform agenda. 
 
*Source: BlackRock as of 31 October 2017 
**Source: JPM as of 31 October 2017 
 
21 November 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

November 21, 2017 11:23 ET (16:23 GMT)