January 18, 2019 - 11:08 AM EST
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BlackRock Commodities Income Investment Trust Plc - Portfolio Update
BLACKROCK COMMODITIES INCOME INVESTMENT TRUST plc (LEI:54930040ALEAVPMMDC31)
All information is at 31 December 2018 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 -2.9% -14.1% -14.8% -7.2% 58.7% -5.7%
Share price 1.7% -10.2% -13.3% -2.2% 54.2% -11.6%
Sources: Datastream, BlackRock
At month end
Net asset value – capital only: 71.97p
Net asset value cum income*: 72.68p
Share price: 70.80p
Discount to NAV (cum income): 2.6%
Net yield: 5.6%
Gearing - cum income: 9.6%
Total assets^: £90.7m
Ordinary shares in issue: 116,126,515
Gearing range (as a % of net assets): 0-20%
Ongoing charges**: 1.4%
* Includes net revenue of 0.71p.
^ 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.
Sector Analysis % Total Assets Country Analysis % Total Assets 
Diversified Mining 31.3 Global 61.4
Integrated Oil 28.4 Canada 13.0
Copper 10.5 USA 12.1
Exploration & Production 8.4 Australia 6.3
Gold 7.9 Latin America 5.7
Industrial Minerals 5.3 Africa 2.0
Silver 3.0 Asia 1.5
Diamonds 2.6 Net current liabilities -2.0
Electricity 2.0 -----
Distribution 1.1 100.0
Aluminium 0.8 =====
Steel 0.7
Net Current Liabilities -2.0
-----
100.0
=====
Ten Largest Investments
Company
Region of Risk % Total Assets
BHP Global 9.7
First Quantum Minerals Global 7.1
Royal Dutch Shell ‘B’ Global 6.9
Rio Tinto Global 6.1
Chevron Global 4.8
Exxon Mobil Global 4.7
Teck Resources Canada 4.6
BP Group Global 4.4
Vale - ADS Latin America 3.7
Glencore Global 3.7

Commenting on the markets, Olivia Markham and Tom Holl, representing the Investment Manager noted:
The Company’s NAV decreased by 2.9% during the month of December (in GBP terms).

December was a tough month for broader equity markets, with the MSCI World Index falling by 7.6% in US dollar terms, its largest monthly fall since September 2011. Broader equity market weakness appeared to be on the back of deteriorating global economic growth expectations as the market began to view a global recession in the next 12-18 months as a more realistic proposition. The US Federal reserve disappointed the market with an increase in interest rates but lowered 2019 guidance from three hikes to two. Chinese economic data came in below expectations, with its Caixin Manufacturing PMI (Purchasing Managers’ Index) at 49.7, indicating contraction. China has, however, begun stimulating its economy by stepping up infrastructure spending. We expect this to help stabilize its economy but do not anticipate the same scale of stimulus that we saw in early 2016.

We saw continued liquidation in the energy futures market during the month, as investors appeared to further de-risk their portfolios.  The price of Brent and WTI (West Texas Intermediate) subsequently fell by 12.1% and 11.1%, to finish the month at $51/bbl and $45/bbl respectively. The energy equities followed suit, underperforming world markets during December.  Elsewhere in the energy sector, following much anticipation, OPEC agreed to remove 1.2mbpd from the oil market.  OPEC itself will take on 800,000 barrels per day of the overall cut, with 400,000 barrels per day being cut by its partners.   The October 2018 production levels will act as the baseline for the agreed cuts, which will subsequently be reviewed in April.  This cut reverses the recent supply increase from OPEC+ and should help to rebalance the market in 2019. 

Given mining is typically cyclical, it was particularly encouraging to see the sector post positive returns over the period. In our view, this reflected the sector’s attractive relative valuation and balance sheet strength. However, mined commodity price performance was mixed. The base metals were weak with copper, zinc and nickel prices off -4.5%, -5.1% and -4.8% respectively. The iron ore (62% fe) price, however, rebounded post a correction in November, rising by 10.0% to $72.6/tonne. This appeared to be driven by restocking by Chinese steel mills ahead of peak steel production in the first quarter of 2019.

All data points in US dollar terms unless otherwise specified. Commodity price moves sourced from Thomson Reuters Datastream.

18 January 2019
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.

Source: PR Newswire (January 18, 2019 - 11:08 AM EST)

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