Monthly Report

Deutsche Latin American Cos Tst PLC
19 November 2002

 
                   Deutsche Latin American Companies Trust

                      REPORT FOR THE MONTH OF OCTOBER 2002



SUMMARY

The Latin American region posted good gains in October, on the back of
supportive global markets, with the MSCI Latin American equity index gaining
14.3% in sterling. This was fuelled by the discounted Lula victory in Brazil and
his initial positive comments. Currencies generally stabilised or strengthened
across the board. The MSCI returns were driven primarily by a 29.0% surge in the
Brazilian market. The Trust gained 14.8%, slightly outperforming the index due
to its overweight position in Brazil while stock selection was generally
neutral. The Argentine index was up 9.0% in sterling terms for the month,
followed by Mexico +7.1%, and Chile +6.2%. For the calendar year to date the
Trust is down 28.9% versus the index of -33.5%.

BRAZIL

Brazil recovered strongly from the prior month, after the market became
comfortable with the likely Lula victory. Lula won the second round election on
27 October in a landslide victory of over 60%. While Lula was victorious in 26
of the 27 states, the PT party won in only three relatively small states in the
gubernatorial elections, and they have but a 20% representation in congress.
This highlights Lula's need to build a consensus with the other leading
political parties, which was highlighted in his initial remarks of a need for a
sound 2003 budget and possibility of an independent central bank. The currency
strengthened back to its previous levels of 3.6 to the US dollar. While much of
the Brazilian market rally was due to relief that Lula's political statements
have been extremely market-friendly, also contributing was the US market rally
in October, and finally, some improvement in the economic forecasts as the trade
surplus continues to post strong results. The Central Bank increased interest
rates by 3% to 21% in the middle of October. The Bank also announced measures to
shore up the Real, increasing the reserve requirements on time, demand and
savings deposits. Higher tax collections contributed to an increase in the
primary surplus, and the announcement of September's highest ever trade surplus
(US$2.5 Billion) spurred the market.

Key to November's performance will be further detail on Lula's planned policy
and future appointments in his new administration, which will take office in
January. Of concern is the tendency toward higher inflation, with the annualised
rate now coming in close to 10%, far exceeding the cap of the targeted range
(6.5%) for 2003. Company results for the third quarter reported positive news
for those with dollar revenues, such as the exporters, or consumer companies
such as Ambev with large dollar deposits offshore, but generally lackluster
results from operations as the economic slowdown, high interest rates, rising
inflation and a weaker exchange rate are being felt across the board.

MEXICO

The Mexican market posted a 7% gain for the month, underperforming US markets,
as the Peso was flat for the month. Economic expectations remain fairly subdued
as the Central Bank cut the GDP growth forecast for 2002 to 1.3% (from 1.8%).
Industrial production has been coming in slightly lower than expected, primarily
from a weak manufacturing sector (in particular the maquilas) and the trade
deficit better than expected, driven by higher oil exports. Unemployment rose to
3% in September, and given the sluggish state of the economy shows no sign of
dissipating any time soon. On a positive note, the real wage gains for the past
few years, coupled with historically low interest rates and low levels of
indebtedness, helps bolster the consumer and his purchasing power.

Political noise resumed in October with Fox sparring with the regions over
revenue transfers from the central government. Inflation headlines are fairly
benign, with yearly figures of 4.95% meeting expectations. Prospects for any
meaningful structural reform appear stymied by political jockeying ahead of the
mid term elections next summer. While the PRI has recently intimated some
support for a reform of the electricity sector, we do not expect Fox to garner
sufficient political support ahead of the elections. We are more optimistic,
however of a smoother budget approval process for 2003, unlike the last minute
standoff last year.

The Trust remains overweight Mexico, at 51.3% versus the index of 49%, due to
the manager's continued conviction that Mexican companies appear healthier and
their better prospects for a recovery sooner than their Brazilian peers.

CHILE

The Chilean market lagged the index, it however posted a stronger showing than
recent months. The currency strengthened by 3%, on the announcement of a Central
Bank intervention and moderating terms of trade. The Central Bank announced
measures to defend the peso, by issuing dollar bonds over the next few months.
September reported a monthly trade surplus, driven by an impressive surge in
exports, as copper gained in strength. Prospects for a resumption in economic
growth, however, remain subdued, and the consumer continues to show little
interest in spending.

The Trust's exposure to Chile is now limited to a select few companies, and the
weight has fallen markedly from the prior quarter. We are hopeful that the
weakness in the currency is over and we can again look to the market as more of
a safe haven, for selective exposure.


NET ASSET VALUE
                                                                                                 Fully diluted
                                                              31/10/02        30/09/02         31/10/02         30/09/02

                                                                 57.3p           49.9p            66.3p            60.5p


MID-MARKET SHARE PRICE                                                     31/10/02              30/09/02
Ordinary Shares                                                            45.00p                41.50p
Warrants                                                                   9.00p                 9.00p


NAV based on total assets less current liabilities of £27.4 million (£23.9 million).
                                                                                          Market exposure
                                                                                         31/10/02               30/09/02
                                                                                                %                      %
EQUITIES

Brazil                                                                                       38.3                   37.0

Chile                                                                                         2.8                    3.5

Mexico                                                                                       51.3                   52.2

Peru                                                                                          2.3                    2.5

TOTAL PORTFOLIO                                                                              94.7                   95.2

Net Current Assets                                                                            5.3                    4.8
                                                                                         --------               --------
TOTAL                                                                                       100.0                  100.0
                                                                                         --------               --------
Based on total assets of £30.6 million (£27.0 million).

GEARING

Gearing at                                                                               31/10/02               30/09/02
                                                                                            11.7%                  13.3%
                                                                                             ====                   ====



LARGEST HOLDINGS (market value £28.6 million equal to 98.8% of total portfolio)

                                                                          Country                 £000's      % of

                                                                                                         portfolio
Telmex                                                                    Mexico                   3,568            12.3

Wal-Mart de Mexico                                                        Mexico                   2,653             9.2

Vale do Rio Doce                                                          Brazil                   2,640             9.1

Petrobras                                                                 Brazil                   1,924             6.6

Cemex                                                                     Mexico                   1,582             5.5

Grupo Modelo                                                              Mexico                   1,530             5.3

G.F BBVA-Bancomer                                                         Mexico                   1,515             5.2

Ambev                                                                     Brazil                   1,222             4.2

America Movil                                                             Mexico                   1,108             3.8

Brasil Telecom                                                            Brazil                   1,036             3.6

Coca-Cola Femsa                                                           Mexico                   1,014             3.5

Femsa                                                                     Mexico                     894             3.1

Tele Norte Leste                                                          Brazil                     846             2.9

Grupo Televisa                                                            Mexico                     840             2.9

Banco Itau                                                                Brazil                     829             2.9

Aracruz Celulose                                                          Brazil                     774             2.7

Pao de Acucar                                                             Brazil                     758             2.6

Minas Buenaventura                                                        Peru                       711             2.5

Gerdau                                                                    Brazil                     662             2.3

Embraer                                                                   Brazil                     553             1.9

Bco Bradesco                                                              Brazil                     473             1.6

Kimberly-Clark de Mexico                                                  Mexico                     471             1.6

Bco Santander                                                             Chile                      386             1.3

Telecom de Chile                                                          Chile                      339             1.2

Gissa                                                                     Mexico                     296             1.0



For further information, contact Mark Pope at Deutsche Investment Trust Managers
Limited on 020-7545-0520.

For additional copies, changes of address or details of our Private Investors'
Plan, low cost ISA and Dividend Reinvestment Scheme (a recently established
scheme through which shareholders, who hold their shares on the Company's main
register, can use their dividends to purchase further shares) contact Mark Pope
on 020-7545-0520, e-mail address: [e-mail]. Further details of Deutsche
Latin American Companies Trust including the latest annual, interim and monthly
reports can be found on the Deutsche Asset Management website located at
www.deutsche-its.co.uk.

Issued by Deutsche Latin American Companies Trust PLC and approved by Deutsche
Investment Trust Managers Limited, regulated by the Financial Services Authority
and manager of Deutsche Latin American Companies Trust PLC. Investors should be
aware that past performance is not necessarily a guide to future returns, the
price of shares and the income from them may fall as well as rise and investors
may not get back the amount they invested. Fluctuations in exchange rates may
also affect the value of your investment. Investment in Deutsche Latin American
Companies Trust PLC presents those risks associated with emerging markets which
may at times be illiquid and/or volatile.


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