Blackrock Lat A Regulatory News (BRLA)

BlackRock Latin American Investment Trust Plc - Portfolio Update

PR Newswire

London, September 20

BLACKROCK LATIN AMERICAN INVESTMENT TRUST PLC (LEI: UK9OG5Q0CYUDFGRX4151)All information is at 31 August 2018 and unaudited.Performance at month end with net income reinvested

^cum income^^The Company’s performance benchmark (the MSCI EM Latin America Index) may be calculated on either a Gross or a Net return basis. Net return (NR) indices calculate the reinvestment of dividends net of withholding taxes using the tax rates applicable to non-resident institutional investors, and hence give a lower total return than indices where calculations are on a Gross basis (which assumes that no withholding tax is suffered). As the Company is subject to withholding tax rates for the majority of countries in which it invests, the NR basis is felt to be the most accurate, appropriate, consistent and fair comparison for the Company. Historically the benchmark data for the Company has always been stated on a Gross basis. However, as disclosed in the Company’s Interim Report for the six months ended 30 June 2018, it is the Board’s intention to monitor the Company’s performance with reference to the NR version of the benchmark. For transparency both sets of benchmark data have been provided.

Sources: BlackRock, Standard & Poor’s Micropal

#Total assets include current year revenue.

##Calculated using total dividends declared in the last 12 months as at the date of this announcement (comprising the 2017 interim dividend of 6.00 cents per share, the 2017 final dividend of 7.00 cents per share and the first dividend under the new policy of 7.57 cents per share paid on 23 August 2018) as a percentage of month end share price. As previously announced, the Board of the BlackRock Latin American Investment Trust plc have introduced a new dividend policy whereby the Company will pay regular quarterly dividends equivalent to 1.25% of the Company’s US Dollar cum income NAV on the last working day of December, March, June and September each year, with the dividends being paid in February, May, August and November each year respectively. The first quarterly dividend under this new policy of 7.57 cents was declared on 3 July 2018 and was paid on 23 August 2018. The yield on the Company’s shares projecting future quarterly dividends forward based on four quarters being paid at the same rate as the July dividend, and based on the based on the Company’s share price at 31 August 2018 converted to US dollars at the exchange rate on 31 August 2018, would be 6.0%.

\* 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.

*** Calculated as a percentage of average net assets and using expenses, excluding interest costs for the year ended 31 December 2017.Geographic Exposure

*excluding net current assets & fixed interestTen Largest Equity Investments (in percentage order)

Commenting on the markets, Will Landers, representing the Investment Manager noted;

For the month of August 2018, the Company’s NAV fell by 10.0%* with the share price falling by 12.9%*. The Company’s benchmark, the MSCI EM Latin America Index, fell by 7.5%, on both a gross and net basis** (all performance figures are in sterling terms with dividends reinvested).

Mexican positioning was the month’s top contributor as sentiment remained more neutral, with investor attention diverted towards developments in the NAFTA (North American Free Trade Agreement) trade negotiations with the US. Lender Banorte, and cement manufacturer, GCC, were both additive to relative performance, while multi-brand restaurant operator, Alsea, the month’s top individual performer, ending the period up by 3.3%. Argentine IT and software development firm, Globant, also had a very strong showing after posting strong second quarter results, while also slightly raising guidance for full year 2018 revenues and EPS (earnings per share). However, our broader allocation to Argentina weighed on returns as the continued dollarization of portfolios put further pressure on the currency, resulting in the Peso depreciating by 25.6% against the Dollar over the month. Cement manufacturer, Loma Negra, declined as volumes remained relatively flat amid broad challenges to the economy. Lender, Galicia, was the period’s worst individual performer. Chilean miner, Antofagasta, also detracted from performance following weaker copper prices during August. Holdings in Brazil were the month’s largest detractors in aggregate, as negative sentiment and a 7.3% depreciation of the currency overshadowed strong earnings.

We reduced our exposure to Argentina following the persistent market sell-off, exiting positions in Loma Negra and Pampa Energia. We remain invested in Globant, which benefits from a weakened Peso, as well as Galicia. In Brazil, we exited Ambev, citing concerns over the effect of cost pressures on margins and tougher competition. On the other hand we added exposure across Mexico. We also initiated positions in Brazilian supermarket operator, CBD, and Panamanian airline, Copa; the latter of which we expect to recover from recent margin weakness on the back of strong demand trends and booking patterns through year-end. We ended the month being overweight in Brazil while being underweight in Chile, Peru, Colombia, and Mexico. We also maintain off-benchmark allocations to Argentina and Panama. At the sector level, we are overweight in domestic consumer and real estate, while being underweight in utilities and financials.

Brazil remains our top overweight - while Brazilian risk assets are likely to remain volatile through the October election period, we continue to look to take opportunities of down markets. Our view remains that a government promoting continuity to the current reform process will be elected, and represent a positive for consistent economic growth, and therefore stock market performance. Meanwhile, after a landslide victory for both the presidency and in congress, all eyes remain on how much the incoming Mexican administration will flow through into practice the campaign rhetoric of Andres Manuel Lopes Obrador (ALMO). Our sentiment and positioning here have improved amid positive developments surrounding NAFTA negotiations and we continue to expect a less controversial administration in year one with a more tempered agenda initially, but maintain a cautious view overall. We continue to be underweight in Chile due to rich valuations and lack of free-float liquidity, and have become more cautious on Peru given disappointing growth figures. The Argentine crisis is taking its toll on President Macri’s government as measures have failed to stem the pressure on the currency. Argentina has hiked rates to 60%, asked the IMF (International Monetary Fund) to postpone disbursements as well as announcing a deeper fiscal cut. While this shows the administration’s intention to improve the fiscal outlook and stop the currency’s devaluation, the cost will be an economic recession that will likely cost the government some popularity ahead of next year’s elections.

Sources:*BlackRock as at 31 August 2018** Datastream as at 31 August 2018

21 September 2018

ENDS

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.