17th Sep 2019 13:53
(Alliance News) - BlackRock Latin American Investment Trust PLC on Tuesday reported its net assets rose during the first half of 2019, but warned that Latin American stocks have struggled since.
The trust's net assets at June 30 totalled USD287.4 million up 13% from USD255.2 million at the end of December. Per share, net asset value rose at the same rate, to 732.07 cents from 650.15 cents.
The company's share price at market close on June 30 was 659.26 cents, meaning it was trading at a 9.9% discount to its net asset value.
Shares in BlackRock Latin American were 0.6% higher at 470.00 pence apiece in London on Tuesday afternoon.
Net asset value return during the first half was 22%, beating the MSCI Emerging Markets Latin America Index which returned 15%.
The trust made two quarterly payouts in the period, totalling 17.71 cents, up from last year's interim dividend of 7.57 cents. The company paid a first quarter dividend of 8.56 cents, it did not make a first quarter payout in 2018. In respect to the second quarter, it paid a dividend of 9.15 cents up 21% from 7.57 cents the year before.
Despite most Latin American stocks having a positive first half, the trust reported that sentiment has deteriorated since.
BlackRock Latin American said: "The unexpected primary election results in Argentina in August suggest a change of government in October and this has worried investors, creating a currency
crisis and sharp falls in equity prices.
"In Brazil (which comprises over 60% of the Company's benchmark index) the reports of fires for land-clearing in parts of the Amazon rainforest have sparked public outrage and developed into a politicised topic on a global level."
Staying with Brazil, the trust said that progress towards social security reform in the country boosted investor sentiment during the first half, adding that the Brazilian stock market produced a net return of 16%.
Markets in Argentina produced a first half net return of 29%, buoyed by the country's inclusion in the MSCI Emerging Markets index.
In Mexico, stocks rose, albeit less strongly, and produced a return of 6.8%. BlackRock Latin American noted that investors were encouraged by the country's new government "displaying a more austere approach to public spending in order to maintain a prudent fiscal surplus".
Stock markets in Chile had a return of negative 0.9% however, due to macroeconomic conditions and currency weakness.
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