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BlackRock Commodities Income Investment Trust Plc - Portfolio Update

Mon, 18th Jun 2018 12:44

All information is at and unaudited.
Performance at month end with net income reinvested
One Three Six One Three Five
Month Months Months Year Years Years
Net asset value 6.9% 15.3% 17.7% 25.7% 26.8% 5.5%
Share price 2.0% 6.0% 11.2% 18.0% 12.9% -4.1%
Sources: Datastream, BlackRock
At month end
Net asset value – capital only: 87.07p
Net asset value cum income*: 88.28p
Share price: 81.20p
Discount to NAV (cum income): 8.0%
Net yield: 4.9%
Gearing - cum income: 4.7%
Total assets^: £108.6m
Ordinary shares in issue: 118,147,000
Gearing range (as a % of net assets): 0-20%
Ongoing charges**: 1.4%
* Includes net revenue of 1.21p. ^ Includes current year revenue. ** Calculated as a percentage of average net assets and using expenses, excluding any interest costs and excluding taxation for the year ended 30 November 2017.
Diversified Mining 30.1 Global 63.3
Integrated Oil 26.6 Canada 14.1
Exploration & Production 14.8 USA 10.3
Copper 9.1 Latin America 5.4
Gold 8.9 Australia 3.1
Industrial Minerals 3.8 Africa 2.2
Diamonds 2.1 Europe 1.1
Silver 1.7 Mali 1.0
Steel 1.4 Net current liabilities (0.5)
Distribution 1.0 -----
Oil Services 1.0 100.0
Net current liabilities (0.5) =====
----- 100.0 -----
Rio Tinto Global 8.7
BHP Global 8.3
Royal Dutch Shell ‘B’ Global 6.6
First Quantum Minerals* Global 6.1
Glencore Global 5.8
Chevron Global 4.9
BP Global 4.3
Exxon Mobil Global 3.6
Marathon Oil Global 3.2
Vale – ADS Latin America 3.1
*The holding in First Quantum Minerals includes both an equity holding and a holding in several bonds. Commenting on the markets, Olivia Markham and Tom Holl, representing the Investment Manager noted:
The Company’s NAV increased by +6.9% during the month of May (in GBP terms). The mining sector performed strongly during the first half of May. The rally was driven by continued healthy reductions in China’s steel inventories and strong manufacturing activity in the country, with the official China Manufacturing Purchasing Managers’ Index (PMI) hitting 51.9, the highest level since September 2017. In the second half of the month, however, the macroeconomic environment became less supportive, and the negative impacts of rising US yields and a strengthening US Dollar became more prevalent. In addition, the financing environment became tighter for property companies in China. Turning to commodities, base metals weathered these headwinds well and performed well during the month, with nickel rising by +11.5% and copper and aluminium gaining +1.1% and +1.5%, respectively. Precious metals, on the other hand, were weaker, with gold falling -0.9% in May. Elsewhere, Bank of America Merrill Lynch (BAML) held its 35th Annual Global Mining, Metals & Steel Conference during the month. The general tone of the conference highlighted that mining companies remained disciplined, targeting further debt and cost reductions. We are encouraged by the continued focus on capital discipline and value over volume, which sees a number of companies, in particular the large cap diversified companies well positioned to continue to generate attractive levels of free cash flow at current commodity prices. The energy sector also faced volatility in May, beginning the period with strong performance and weakening during the final week of the month. Oil prices were supported by President Trump’s announcement that the US would pull out of the Iran deal. Analysis shows that this could remove up to 500k bbl/day of supply from the market; for reference, Iran currently exports 2.6 million bbl/day. Geopolitics continued to make headlines during the month as President Nicolas Maduro won another six-year term as millions of Venezuelans boycotted the widely derided election. This news ultimately increases the threat of further isolation and sanctions on the nation’s all-important oil industry and reduces the likelihood that Venezuelan supply will return to the market in the medium term. The weakness in the energy sector towards the end of the month, in part, followed comments from the Saudi Energy Minister, Khalid Al-Falih who highlighted the potential for OPEC and its non-OPEC partners to add supply back to the market in the second half of 2018. As a result, the Brent 1st-6th month price structure – a key indicator of near term physical balances in global crude markets - softened to US$1.1/barrel from a recent high of $3.0/bbl. However, we believe that a reasonable proportion of this weakening can be explained by the unwinding of record money manager net long positions (~615k) since the end of April. Spot oil prices diverged during the month, with WTI and Brent returning -2.3% and +0.1% respectively, to finish the month at $67/bbl and $77/bbl. All data points in US dollar terms unless otherwise specified. Commodity price moves sourced from Thomson Reuters Datastream.
18 June 2018
ENDS
Latest information is available by typing www.blackrock.co.uk/brci 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.

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