Interim Results

F&C Latin American Inv Trust PLC
10 September 2004

Date:                10 September 2004

Contact:             Rupert Brandt                       Shirley Hatherton
                     F&C Emerging Markets                Lansons Communications
                     020 7628 8000                       020 7294 3615


                    F&C LATIN AMERICAN INVESTMENT TRUST PLC
                         Unaudited Statement of Results
                      for the half-year ended 30 June 2004

HIGHLIGHTS

•         Performance for the half-year was mixed with the NAV slightly
underperforming and the share price marginally outperforming the benchmark.
However between the period end and the close of business on 7 September, there
has been a rise in the NAV of 12.4% and in the share price of 17.0% both of
which are ahead of the benchmark's 9.4% appreciation.  Since the start of the
year, the total return of the NAV, share price and warrant price have been
+10.4%, +15.7% and +27.5% respectively which are all ahead of the benchmark's
+7.8% return.

•         The Company's dividend income has continued to materially increase
over the period and as a result the Board are pleased to declare an interim
dividend of 2.00 cents per share.

•         The Board intends to introduce a formal tender-offer based discount
control mechanism which should complement the Company's existing measures.
There will be an EGM on 20 September to approve this mechanism.

•         The 12 month outlook remains favourable.  The Brazilian and Mexican
stock markets should do well as the current economic recovery continues to
unfold and valuations remain attractive.

SUMMARY OF RESULTS
                                             30 June 2004             31 Dec 2003               % Change
Net assets attributable to equity
shareholders                                    US$213.7m               US$219.9m                  -2.8%

Net assets per share - basic cum
income                                       292.65 cents            298.62 cents                  -2.0%
                                             
Net assets per share - diluted
cum income                                   263.80 cents            269.00 cents                  -1.9%
                                             
Share price                                  220.00 cents            223.00 cents                  -1.3%

Share price total return                                                                           -1.1%

Warrant price                                119.00 cents            122.00 cents                  -2.5%

                                              6 months to             6 months to
                                             30 June 2004            30 June 2003

Dividend per share                             2.00 cents                       -                    N/A

Extracts from the Chairman's Statement

Your Company's undiluted cum income net asset value per share ('NAV') on 30 June
2004 was 292.65 cents, a fall of 1.8% on a total return basis over the half
year. This slightly underperformed our benchmark, the MSCI Emerging Markets
Latin American Gross Index's 1.5% decline over the period. The share price for
the period fell by 1.3% from 223 cents to 220 cents marginally outperforming the
benchmark.  The share price total return fell by 1.1% (including the April
dividend payment). The warrant price fell by 2.5% in US dollar terms over the
same timeframe.

The six month period was very volatile, getting off to a solid start but worries
about faster than expected US interest rate rises and a possible hard landing in
the Chinese economy, combined with a number of relatively minor problems in some
of the regional markets, caused a sharp correction during the middle of the
period. The correction reached its climax in mid-May. The region has picked up
again since then and is now close to its high for the year. The main positives
over the six month period in our relative performance were Mexican stock
selection where our Mexican portfolio rose by 19.2% in US dollars compared to
the Mexican market's 14.7% rise and Brazilian stock selection where our
Brazilian portfolio fell by 9.8% in US dollars compared to the Brazilian
market's 12.3% fall. The main negatives were our Brazilian asset allocation
where we were overweight Brazil during the period and our use of effective
gearing which averaged 12.1% over the period.

Effective gearing started the period at 12.0% of net assets, it was reduced
through asset sales to 10.8% during March and was then increased through asset
purchases in May and June with the level peaking at 18.7% at the end of the
period.

Since the period end and the close of business on 7 September, your Company's
NAV has appreciated by 12.4% in US dollar terms which compared favourably to the
MSCI Emerging Markets Latin American Gross Index's 9.4% US dollar gain. The
share price has appreciated by 17.0% and the warrant price has appreciated by
30.7%. Compared to the start of the year, the total return of our NAV, share
price and warrant price have been +10.4%, +15.7% and +27.5% respectively which
is ahead of the benchmark's +7.8% return.

Shareholders approved by a substantial majority the resolution that the Company
should continue as an Investment Trust in the bi-annual continuation vote at the
5 May AGM. The share repurchase scheme which we use to help control the discount
was also renewed at the AGM. We repurchased and cancelled 250,000 shares during
the period and a further 682,093 shares in July.

The Board believe that Latin American companies are generally becoming more
shareholder focused. As a result, the dividend flow from our investments is
becoming more significant than it used to be. This enabled the Company to
eliminate its revenue deficit in 2003 and put the Company in a position of
paying a dividend last April. Our dividend receipts have continued to grow
rapidly in the first half of 2004 and the Board have consequently decided to pay
out a interim dividend of 2.00 cents per share on 5 November 2004. The Board
have also decided to modify the apportionment of the management fee and finance
costs between revenue and capital. 75% of these expenses will now be charged to
capital from the start of the 2005 financial year.  Assuming dividend receipts
remain at a similar level, this should significantly increase the Company's
dividend potential in the future which we believe should make the Company a more
attractive investment for our shareholders.  It is the Company's intention to
pay a twice yearly dividend in the future.  The Company expects that the final
dividend will generally be larger than the interim dividend.

As dividends are becoming more relevant in Latin America, the Board believes
that it is consistent that the cum income NAV which includes accumulated income,
is also becoming increasingly relevant. As a result, the Board have decided to
use the fully diluted cum income NAV to calculate the Company's discount on an
ongoing basis. Using this method, the cum income discount started the period at
17.1%* and narrowed considerably in April to reach a low of just below 7% before
widening out to 16.6% at the end of period.

Whilst the discount has narrowed a little over the last 2 years and materially
over the last 5 years, the Board has been concerned that the Company's discount
remains high in absolute terms. Having recently consulted with a number of
shareholders, the Board concluded that it is in the interests of shareholders as
a whole to introduce a formal discount control mechanism to compliment our
existing measures. On 28 April 2004, the Board announced that, subject to
shareholder and warrantholder approval, it would introduce a twice yearly tender
offer. It is considered that formal mechanisms to control the discount will
become increasingly common amongst closed-end funds. The key points for
shareholders and warrantholders are:

•         Trigger mechanism: a tender offer will be made if there is an average
discount of 13.5% or more to the cum income fully diluted net asset value per
share for a period of 60 days ending 30 September and 31 March. The first period
will be the 60 days ending on 30 September 2004.

•         Frequency and size: if the trigger mechanism is met in either of the
calculation periods, there will be a tender offer for 7.5% of the then
outstanding issued share capital on each such occasion.

•         Tender discount: the price at which the shares will be acquired will
be 95% of the fully diluted cum income net asset value per share.

The terms of the discount control mechanism are outlined in more detail in the
circular sent to shareholders on 27 August 2004. An Extraordinary General
Meeting will be held on 20 September 2004 to approve the discount control
mechanism and to seek authority to cancel the share premium account. We are
currently part of the way through the first calculation period. As at 7
September, the average discount during the calculation period is 13.68% which is
slightly above the trigger level.

* The Company's policy for calculating the discount has changed from using ex
income to using cum income fully diluted net asset value per share. The
corresponding year end 2003 discount using this method is 17.1% compared to
16.9% in the year end 2003 report and accounts.

Market review

Brazil

The Brazilian market, which declined by 12.3% in US dollars, performed poorly
over the period relative to the region. The main reasons for this correction
were growing anxiety about the impact of rising US interest rates on the
Brazilian economy and a disappointing start to the year where January and
February produced an unpleasant combination of slightly slower growth and
slightly higher inflation than the market consensus expected. In addition,
President Lula's popularity fell over the period due a political scandal which
ultimately forced Dirceu, who was a key member of Lula's inner circle, to take a
much lower profile role. Tension also rose amongst the coalition members which
resulted in the government suffering three notable defeats in the senate over
the period with some high profile members of the PMDB voting against them. The
most recent surveys, such as the August Sensus survey show that the government
is regaining popularity. The Lula administration's approval rating rose by 8.8%
between June and August to 38% and Lula's personal approval rating rose from 54%
to 58% over the same time period.

The good news in Brazil, is that since March, economic growth has materially
accelerated and has consistently beaten market expectations. GDP grew by 2.7% in
the first quarter and by 5.7% in the second quarter of 2004 compared to the same
period last year. The first quarter of 2004 was the first quarter of positive
year-on-year growth in this economic cycle. Employment has started to pick up
with 305,000 jobs created in the formal sector in the first quarter and a
further 358,000 created in the second quarter. Industrial production is rapidly
building momentum with a 6.7% increase in April, a 7.8% increase in May and a
13% increase in June (all compared to the previous year). First quarter auto
production rose by 13.8% compared to the previous year and this indicator
continued to gain momentum in the second quarter, where auto production rose by
15.7% compared to the previous year. Domestic auto sales rose by 6.2% in the
first quarter compared to the previous year and by 16.9% in the second quarter
compared to the previous year. The important point about the economic recovery
is that it is in its early days and not fully priced in to the Brazilian stock
market which is trading at under 7x forward 12 month earnings compared to its 10
year average of 10x forward 12 month earnings. As we appear to be at the
beginning of what promises to be at the very least a higher quality and longer
than average cyclical recovery, one could easily justify the market trading at a
premium to its 10 year average.

The biggest concern that we and many other observers share about Brazil's
outlook is how the economy will cope with a period of rising US interest rates.
The market consensus currently expects the US Fed funds rate to rise from its
current level of 1.5% to end 2004 at 2% or more and to peak at close to 4% in
2005. The 10 year bond yield in the US may well rise from current levels of
close to 4.25% to peak at close to 5.5% whilst short term US interest rates are
increased. Whilst we are far from complacent about the potential for rising US
interest rates to derail the Brazilian economic recovery, we believe that the
combination of the dramatic improvement in Brazil's current account, the sharp
decrease in the fiscal deficit and the recovery in Brazil's domestic economy
which has just got underway with plenty of pent up consumption, will help the
country successfully navigate its way through the above US interest rate
outlook. In the late 1990's, Brazil routinely ran a current account deficit of
between 5-7% of GDP and a nominal fiscal deficit of over 5% of GDP. These twin
deficits were extremely large by global standards and required very substantial
overseas funding. This made Brazil extremely vulnerable to a reduction in
capital flows triggered by rising G7 interest rates in the past. Whilst the
structure of Brazil's debt still makes today's situation far from solid, we
believe that the country's overall position is much better than it used to be
and expect this to the defining factor in the current cycle in Brazil. The
continued strength of Brazil's export sector, which is built on it being one of
the lowest cost producers in the world in a series of commodities resulted in
the country's trade surplus increasing from US$10b in the first half of 2003 to
US$15b in the first half of 2004. We are expecting the strong performance in the
trade surplus to be the driving force in the creation of the second consecutive
annual current account surplus in 2004 and expect a neutral or slightly positive
current account in 2005. On the fiscal side, the combination of the prior
government's fiscal responsibly law and the very conservative fiscal stance by
Lula's new government has resulted in a very material fiscal improvement. The
primary fiscal surplus (which excludes interest payments) was 41% higher than
the IMF's target in the first half of 2004 and came in at US$15b. The
combination of the better than expected primary fiscal surplus and lower
Brazilian interest costs caused Brazil's nominal fiscal deficit to fall from an
annualised level of 4.74% in the first half of 2003 to an annualised level of
1.95% in the first half of 2004. We expect 2004's full year nominal deficit to
be less than 2.5% of GDP and to fall further in 2005. Net debt to GDP has fallen
from 59% at the start of 2004 to 56% at the end of the review period and we
expect to see further improvement during the second half of 2004 and in 2005.

The Board believe that the central bank will be able to continue to lower the
Selic rate from its current level of 16% by year end 2005. If Brazil can
decouple its interest rate cycle from the US's interest rate cycle, it should
send the market a very powerful signal that Brazil's economic fundamentals are
indeed genuinely much stronger than they used to be. This 'stress test' of
rising US rates on local interest rates is complicated by Brazilian inflation
which has been consistently higher than anticipated at the margin in the first
half of 2004. We have increased our 2004 consumer price inflation (IPCA)
forecast from 5-6% to between 7-7.5% (which is still a meaningful deceleration
from 2002's 12.5% and 2003's 9.3% IPCA inflation rates). The higher than
expected trend in domestic inflation limits the central bank's manoeuvring room
in the short term. The recent central bank minutes show that there is a growing
risk that interest rates may even have to go up briefly in the very short term
to stamp out rising inflation expectations before the trend of falling interest
rates is resumed. We believe that IPCA inflation will fall to 5.5% in 2005 which
provides plenty of scope to reduce Brazil's real interest rate next year.

Our positions in the Brazilian portfolio relative to the index continue to be
focused in the sectors most exposed to the domestic economy including the
consumer, banking and utility sectors. We are underweight most of the large cap
exporters. We have plenty of relatively unusual mid cap names in the portfolio
which we believe offer both the most compelling value in the market and will
benefit most from the macro picture which we see unfolding over the second half
of 2004 and in 2005.

Mexico

The Mexican economy is in the early days of a cyclical recovery. Sentiment in
the stock market was sceptical about the Mexican economy's outlook at the end of
2003 where the street consensus believed that Mexico would only grow its GDP by
up to 2-3% in 2004. However stronger than expected economic growth at close to
4% so far this year has allowed the Mexican stock market to be one of the best
performing stock markets in the world in the first half of 2004. We expected
Mexico to perform well and were overweight relative to the benchmark going into
the year. We have significant overweight positions in the construction, banking
and low income housing parts of the domestic economy which all have a
combination of secular and cyclical drivers and have been amongst the first
areas in the economy to experience a meaningful acceleration in the current
cycle. We have recently added to the consumption part of the Mexican market
which we believe has plenty of scope to perform well over the next 12 months.

The Mexican economy grew by 1.3% in 2003. A cyclical recovery in manufactured
exports and industrial production in 2004 has helped cause economic growth to
materially accelerate. Manufactured exports fell by 0.4% in 2003 but have
bounced back this year growing by 11.2% in the first quarter of 2004 and by
15.1% in the second quarter of 2004 compared to the previous year. In the first
half of 2004 GDP grew by 3.8% compared to the previous year. We currently expect
full year 2004 GDP to grow by 4% or more followed by another year of at least 3%
growth in 2005. The labour market is slowly but surely recovering in Mexico
which should result in a firming in consumption as this cycle progresses. Over
125,000 jobs were lost in the cyclical Maquiladora industry in 2002, this slowed
to under 10,000 jobs lost in 2003. Over 60,000 Maquiladora jobs have been
created in the first half of 2004. We hope to see at least 100,000 new jobs
created in this area of the economy in the year as a whole.

The political environment continues to be stuck in a quagmire and is relatively
noisy but not debilitating so far. Fox was unable to pass any significant
reforms over the period which we believe caps the upside in the stock market
over this cycle. We are watching political developments very closely and always
have the 2006 presidential elections in the back of our mind. 2003's fiscal
deficit was only 0.67% of GDP. We expect another strong headline fiscal result
in 2004 which may even surpass last year's result.  However in light of the
government's failure to pass the fiscal reform in 2003, the high oil price has
been a key driver behind 2004's strong fiscal performance and a sharp fall in
the oil price may cause problems in the fiscal accounts in the future. Whilst 4%
is a solid growth rate and better than what the market expected at the end of
last year, it still isn't that impressive compared to what Mexico could achieve
if the political environment was more functional. If a robust reform agenda had
been passed, Mexico could easily be growing at 5-6% in 2004.

We traded our position in Mexico actively through the period. We reduced our
position after the strong rally in the early part of the period where the
Mexican market had gained over 20% in US dollar terms and increased our position
again after the recent correction. Whilst we believe that the upside in Mexico
is currently lower than that available in the Brazilian market, we do however
expect both markets to perform well in absolute terms over the next 12 months
and at slightly different times in this global cycle which makes them both good
diversifiers and produces some potentially rewarding trading opportunities
between the two markets from time to time.

Chile

The Chilean economy is experiencing a solid acceleration from 3.3% growth in
2003 to close to 5% growth in 2004. The IMACEC monthly GDP indicator grew by
3.1% in January, by 4.2% in February, by 6.3% in March, by 5.0% in April, by
4.8% in May and by 5% in June compared to the previous year. The export side of
the economy performed very well during the period. Exports in the first half of
2004 grew by 44% compared to the same period last year and this produced a
US$4.95b trade surplus in the period. Chile is currently on track to deliver a
trade surplus of 8-10% of GDP and a current account surplus of 3% of GDP in
2004. The domestic segment of the economy remained relatively lacklustre in the
period which was the only real disappointment. The main problem with the
domestic economy is that the job creation, which was accelerating towards the
end of 2003, seems to have eased off somewhat in the first half of 2004. Formal
employment rose by 3% in 2003 but only grew by 0.8% in the first half of 2004.
This is partly a seasonal issue but also partly an indication that domestic
demand and corporate confidence remains relatively subdued in Chile. The stock
market was capped in the period by a relatively large amount of issuance by
Chilean corporates which more than absorbed the net monthly inflows into the
domestic pension fund system. We believe that the wave of issuance should run
its course in the second half of 2004 and expect this to mark a positive turning
point in the market.

The rest of the region

Elsewhere in the region, we have relatively small positions in Colombia and
Venezuela. In Colombia, we are seeing a stronger than expected economic recovery
after several weak years and we believe that this economy can grow at 3-4% in
both 2004 and 2005 which should underpin the market. There is also an increasing
chance that the constitution will be changed which will allow Uribe to be
re-elected president. Liquidity is still a major issue in Colombia which has
resulted in us limiting the size of our position here.

In Venezuela, we see a very sharp economic recovery appearing in 2004 which is
somewhat reminiscent of the Argentine recovery last year. Whilst we don't
currently believe that Venezuela is at a major long term turning point, we see
plenty of scope for a trading rally in 2004. We have a relatively small position
here because liquidity is limited and risks remain high.

We also have a relatively small position in the Peruvian mining industry which
is amongst the most competitive mining industries in the world. We currently
have no exposure to domestic Peru.

We remain zero weighted in Argentina and unfortunately expect the recent
recovery to give way to a sharp slowdown at some stage over the next 12 months.
We made a considerable amount of money in this market in the first half of 2003
and are not averse to investing in it at the right time. The problem Argentina
has is that its balance sheet is simply too weak, even after the proposed
restructuring, to accommodate the level of medium term GDP growth that Argentina
is likely to achieve. The government seems to be doing everything that they can
to make the eventual problems as bad as possible by passing a series of populist
anti-market and anti-business measures. We believe that these problems are not
priced into the market which continues to be characterised by a relatively
euphoric sentiment.

We continue to have a positive outlook for the Latin American market over the
next twelve months on the back of the regional economic acceleration which is
still in its very early days and should be the source of positive surprises and
constructive newsflow.  Latin American equity markets continue to trade at
relatively modest levels. Our overweight position is focused in Brazil which we
believe currently offers exceptionally good value with plenty of domestic
catalysts. On an ungeared basis we also have a moderate overweight in Mexico, a
small overweight position in Venezuela and Colombia, a moderate underweight
position in Chile and Peru and zero weight positions in the rest of the region.
Possible risk factors to our positive scenario include an inflation and interest
rate shock in the US economy, a hard landing in the Chinese economy, a setback
in the reform program in Brazil and a material rise in global risk aversion.

Peter Burnell September 2004

Statement of Total Return (incorporating the Revenue Account*)

                                        6 months to 30 June 2004               6 months to 30 June 2003

                                    Revenue      Capital       Total     Revenue       Capital           Total
                                   US$'000s     US$'000s    US$'000s    US$'000s      US$'000s        US$'000s
(Losses)/gains on
Investments                               -      (5,673)     (5,673)           -        33,166          33,166

Exchange gains /(losses) on              17        (928)       (911)           -         (152)           (152)
currency balances

Income                                5,497            -       5,497       3,439             -           3,439

Management fee                      (1,732)            -     (1,732)     (1,168)             -         (1,168)

Other expenses                        (561)         (15)       (576)       (382)          (12)           (394)

Net return before finance costs
and taxation                          3,221      (6,616)     (3,395)       1,889        33,002          34,891

Interest payable and similar
charges                               (374)            -       (374)       (367)             -           (367)
                                      
Return on ordinary activities
before taxation                       2,847      (6,616)     (3,769)       1,522        33,002          34,524
                                      
Taxation on ordinary activities       (375)            -       (375)       (224)             -           (224)
                                      
Return on ordinary activities
after taxation                        2,472      (6,616)     (4,144)       1,298        33,002          34,300

Dividend on ordinary shares         (1,457)            -     (1,457)           -             -               -

Amount transferred
to/(from) reserves                    1,015      (6,616)     (5,601)       1,298        33,002          34,300

Return per ordinary share
(basic) - cents                        3.35       (8.97)      (5.62)        1.76         44.74           46.50

Return per ordinary share
(diluted) - cents                      3.05                                 1.69
                                       





The revenue column of this statement is the profit and loss account of the
Company.

All revenue and capital items in the above statement derive from continuing
operations.


Balance Sheet

                                                                   30 June      30 June       31 Dec
                                                                      2004         2003         2003

                                                                  US$'000s     US$'000s     US$'000s

Fixed assets
Listed investments                                                  255,474      164,118      246,626

Current assets
Debtors                                                               1,646        1,953        2,305
Taxation recoverable                                                      -          109          109
Short-term deposits                                                       -        7,013            -
Cash at bank                                                          5,996        1,717        3,185
                                                                      7,642       10,792        5,599

Current liabilities
Creditors: amounts falling due within one year
US dollar bank loans                                               (37,250)            -     (22,250)
Other                                                               (4,856)      (1,517)      (2,839)
                                                                   (42,106)      (1,517)     (25,089)

Net current (liabilities)/assets                                   (34,464)        9,275     (19,490)

Total assets less current liabilities                               221,010      173,393      227,136

Creditors: amounts falling due after more than one year
US dollar bank loans                                                (7,250)     (22,250)      (7,250)

Net assets                                                          213,760      151,143      219,886

Capital and Reserves
Called up share capital:
    including non-equity share capital                                7,377        7,400        7,400
Share premium                                                        61,562       61,544       61,544
Capital redemption reserve                                              338          313          313
Warrant reserve                                                       4,349        4,356        4,356
Non-distributable reserve                                                 7            -            -
Capital reserves                                                    139,112       77,945      146,273
Revenue reserve                                                       1,015        (415)            -
Total shareholders' funds                                           213,760      151,143      219,886

Equity shareholders                                                 213,736      151,119      219,862
Non-equity shareholders                                                  24           24           24
Total shareholders' funds                                           213,760      151,143      219,886

Net asset value per ordinary share
Basic - cents                                                        290.66       204.87       298.06
Diluted - cents                                                      262.11       189.19       268.44



Cash Flow Statement
                                                                             6 months to            6 months to
                                                                            30 June 2004           30 June 2003
                                                                                US$'000s               US$'000s

Net cash inflow from operating activities                                          3,584                  1,983
Interest paid                                                                      (563)                  (361)
Total taxation paid                                                                (425)                  (224)
Equity dividends paid                                                              (413)                      -
Net cash outflow from purchases and sales of investments                        (13,437)                (1,751)
                                                                                
Net cash outflow before use of liquid resources and
financing                                                                       (11,254)                  (353)
                                                                                
Decrease in short-term deposits                                                        -                  5,998
Net cash inflow/(outflow) from financing                                          15,014                (7,250)
Increase/(decrease) in cash during the period                                      3,760                (1,605)

Notes

The Directors have declared an interim dividend of 2.00 cents per share payable
on 5 November 2004 to shareholders registered on 8 October 2004.  The
ex-dividend date will be 6 October 2004.

The interim financial statements have been prepared on the basis of the
accounting policies set out in the Company's financial statements at 31 December
2003. The above financial information comprises non-statutory accounts within
the meaning of section 240 of the Companies Act 1985. The financial information
for the year ended 31 December 2003 has been extracted from published accounts
for the year ended 31 December 2003 that have been delivered to the Registrar of
Companies and on which the report of the auditors was unqualified.

The Interim Report will be posted to shareholders in late September 2004. Copies
may be obtained during normal business hours from the Company's Registered
Office, Exchange House, Primrose Street, London EC2A 2NY.

By order of the Board

F&C Emerging Markets Limited, Secretary

9 September 2004


                      This information is provided by RNS
            The company news service from the London Stock Exchange