BLACKROCK LATIN AMERICAN INVESTMENT TRUST PLC
All information is at 31 October 2009 and unaudited.
Performance at month end is calculated with income reinvested
One Three One Three *Since Five
Month Months Year Years 31.03.06 Years
Sterling:
Net asset value -1.1% 20.1% 92.4% 66.9% 64.3% 200.9%
Share price 2.9% 25.3% 114.4% 70.8% 68.0% 280.7%
MSCI EM Latin American -1.4% 17.0% 74.6% 77.4% 76.8% 281.3%
US Dollars:
Net asset value 1.9% 19.4% 96.3% 44.2% 56.2% 170.7%
MSCI EM Latin American 1.7% 16.3% 78.1% 53.3% 68.0% 243.0%
American
Sources: BlackRock, Standard & Poor's Micropal
*Date which BlackRock took over the investment management of the Company.
At month end
Net asset value - capital only: 560.01p
Net asset value** - cum income: 565.72p
Net asset value - capital only and with bond at fair value: 541.90p
Net asset value - cum income and with bond at fair value: 547.24p
Net asset value - cum income and with bond converted: 559.71p
Share price: 553.50p
Total assets^: £295.88m
Discount (share price to capital only NAV): 1.2%
Gearing: 16.4%
Net yield: 1.5%
Ordinary shares in issue^^: 43,835,522
**Includes 10 months net revenue equal to 5.71p (after deducting interim
dividend).
^Total assets include current year revenue.
^^Excluding 3,554,231 shares held in treasury.
Convertible Bond
The Company published a circular dated 18 August 2009 which was sent to
shareholders with the Notice of Meeting to be held on 11 September 2009 to
consider the proposals for a Convertible Bond Issue. The proposals were
approved by shareholders and 800 bonds of $100,000 each were issued on 15
September 2009. The bonds are convertible into the ordinary shares of the
Company at any time prior to the tenth business day prior to 15 September 2015
at the following prices:-
$8.98 if converted before 15 September 2012
$9.83 if converted before 1 September 2015
The interest rate payable on the bonds is 3.5% per annum payable semi annually
in March and September of each year.
Geographical Regional Exposure % Total Assets
Brazil 71.6
Mexico 15.2
Peru 2.2
Chile 1.7
Argentina 1.4
Panama 1.0
Net current assets 6.9
-----
Total 100.0
-----
Ten Largest Equity Investments(in alphabetical order)
Company Country of Risk
Ambev Brazil
America Movil Mexico
Banco Bradesco Brazil
Banco Itau Brazil
BM&F Bovespa Brazil
Cyrela Brazil Realty Brazil
Formento Economico Mexico
Grupo Televisa Mexico
Petrobras Brazil
Vale Brazil
Commenting on the markets, Will Landers, representing the investment
Manager noted;
Performance
For the month of October 2009, the Company posted a 1.9% appreciation in its
NAV while the shares appreciated by 6.0% (all in US dollar terms, sterling
equivalent were -1.1% and 2.9%, respectively). These returns are mostly in line
with the 1.7% increase posted by the Company's benchmark
(-1.4% in sterling terms), the MSCI EM Latin America Index. Year-to-date, the
NAV is up 105.1% and the share price 120.8%, well ahead of the 84.5% return for
the benchmark (78.9%, 92.6%, and 63.4%, respectively, in sterling).
Performance during the month was largely in line with the performance from the
benchmark. There was some positive attribution from country selection, with the
overweight in Brazil versus underweight Colombia. The largest drag on
performance came from the impact of the devaluation of the Brazilian real late
in the month at the time of the implementation of the new tax for foreign
investors as discussed below.
Transactions/Gearing
During the month, we increased our weight in Brazilian equities by
approximately 200 bps, increasing our exposure to banks and homebuilders -
these were funded by reducing our exposure to Brazilian government fixed income
(from the portion of the convertible funds that had not been deployed into the
equities market) as well as taking profits in GVT following the announced
offers for the company. Net gearing currently stands at approximately 16.4%,
with approximately 8.5% invested in Brazilian fixed income securities.
Positioning
Following strong performance through the first three quarters of the year,
October saw increased intra-day volatility as markets question how strong the
recovery really is and the impact on stock markets. Latin America has been a
stronger outperformer during the year, and periods of profit taking are to be
expected. We continue to believe that such small corrections represent an
attractive entry point due to strong overall fundamentals. Late in the month,
Brazil instituted a 2% tax on new foreign money entering both the local equity
and debt market. While clearly a negative move, bound to fail in its attempt to
control the appreciation of the Brazilian Real, the move is not enough to
reduce the attractiveness of the Brazilian investment case given the strong
economic recovery already being felt. Brazil remains our clear favoured market
in the region. Mexico, despite the somewhat positive news on the passage of its
budget through Congress, continues to have to deal with sluggish economic
activity and falling remittances. Valuations are close to fair value and we
remain underweight. Chile is starting to show signs of economic recovery, but
valuations remains too high to warrant an increase in position size. Of the
smaller markets, Peru remains the largest position at just over 2.5% of assets.
Latest information is available by typing www.blackrock.co.uk/its on the
internet, "BLRKINDEX" on Reuters, "BLRK" on Bloomberg or "8800" on Topic 3 (ICV
terminal).
19 November 2009
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