BLACKROCK COMMODITIES INCOME INVESTMENT TRUST plc
All information is at 31 July 2016 and unaudited.
Performance at month end with net income reinvested
|
One
month
% |
Three
months
% |
Six
months
% |
One
year
% |
Three
years
% |
Five
years
% |
| Net asset value |
4.4 |
13.9 |
49.5 |
21.1 |
-16.7 |
-30.5 |
| Share price |
6.5 |
6.9 |
39.8 |
9.4 |
-23.2 |
-36.3 |
Sources: Datastream, BlackRock
| At month end |
|
| Net asset value – capital only: |
74.41p |
| Net asset value cum income*: |
74.25p |
| Share price: |
69.25p |
| Discount to NAV (cum income): |
6.7% |
| Net yield: |
8.7% |
| Gearing - cum income: |
3.8% |
| Total assets^^: |
£93.5m |
| Ordinary shares in issue: |
117,968,000 |
| Gearing range (as a % of net assets): |
0-20% |
| Ongoing charges**: |
1.4% |
* Includes net revenue of -0.16p.
^^ 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 2015.
| Sector Analysis |
% Total Assets |
|
Country Analysis |
% Total Assets |
|
|
|
|
|
| Integrated Oil |
20.2 |
|
Global |
52.5 |
| Diversified Mining |
19.7 |
|
USA |
19.0 |
| Gold |
18.1 |
|
Canada |
9.3 |
| Exploration & Production |
15.8 |
|
Latin America |
5.2 |
| Copper |
9.5 |
|
Australia |
4.3 |
| Silver |
3.6 |
|
Africa |
3.4 |
| Distribution |
2.9 |
|
Europe |
1.5 |
| Oil Services |
1.9 |
|
Sweden |
1.2 |
| Diamonds |
1.7 |
|
Asia |
0.9 |
| Zinc |
1.2 |
|
Net current assets |
2.7 |
| Fertilizers |
1.1 |
|
|
----- |
| Refining & Marketing |
0.9 |
|
|
100.0 |
| Nickel |
0.8 |
|
|
===== |
| Steel |
-0.1 |
|
|
|
| Net current assets |
2.7 |
|
|
|
|
----- |
|
|
|
|
100.0 |
|
|
|
|
===== |
|
|
|
Ten Largest Equity Investments (in % of Total Assets order)
| Company |
Region of Risk |
% Total Assets |
|
|
|
| First Quantum Minerals |
Global |
8.3 |
| Royal Dutch Shell ‘B’ |
Global |
6.4 |
| Rio Tinto |
Global |
6.3 |
| BHP Billiton |
Global |
5.1 |
| Barrick Gold |
Global |
4.1 |
| Exxon Mobil |
Global |
3.9 |
| Newcrest Mining |
Australia |
3.8 |
| Glencore |
Global |
3.4 |
| BP |
Global |
3.3 |
| Enbridge Income Fund Trust |
Canada |
2.9 |
Commenting on the markets, Olivia Markham and Tom Holl, representing the Investment Manager noted:
Global equity markets rebounded over the month as the immediate shock from the Brexit vote dissipated. The MSCI World Index rose by 4.2%, in line with the S&P 500 Index which rose by 3.6%, the Company outperformed both of the indices on both a net asset value (NAV) and share price basis (with income reinvested).
China, the largest consumer of mined commodities, printed its second quarter GDP at 6.7% which was in line with market expectations and recent PMI data shows some stability in manufacturing amid diminishing deflationary pressures. While there was some noise around property and the government’s focus on cooling down measures, the market appeared to be cautiously optimistic on the data during the month. Elsewhere, stronger US data alleviated recession fears but has not changed the technical backdrop of US rates as the global hunt for yield, ageing demographics and political uncertainty remains in the fore. This continues to provide an anchor, keeping long term interest rates low; however the market is pricing in higher probabilities of a September or December interest rate hike by the US Government versus a few months ago.
This provided a constructive environment for the mined commodities with copper, zinc and nickel finishing the month up by 1.6%, 4.5% and 6.7% respectively. The bulk commodities also trended higher as thermal coal, coking coal and iron ore rose by 16.5%, 10.3% and 9.1% respectively. The commodity price strength we have seen year to date will likely lead to analyst earnings upgrades over the coming months.
Oil prices, however, tumbled as a result of a combination of factors, with Brent Crude and WTI down by -14.1% and -13.9% respectively. Saudi Arabia continued to focus on maintaining market share by lowering prices for Asian consumers, the US oil rig count rose for the fifth week in a row to 374 and US crude stockpiles increased by 1.7 million (compared to an expected decline of 2 million), subsequently causing oil to enter a bear market at the end of the month on worries that the supply glut will continue. Additionally on the supply side, Libya may resume oil shipments as a deal was struck to settle payments to local guards, and some progress has been seen regarding the supply disruptions in Nigeria.
On the demand side, weak refining margins raised concerns of an extended maintenance period in the coming months, which would reduce demand for crude oil. None of this is positive news for the oil price and expectations of a weaker dollar - after the probability of a rate hike this year diminished as US GDP data came out well below expectations - was not nearly enough to offset this flood of events. Whilst this is negative in the near term, the medium term expectations for a market rebalancing remains intact as prices remain too low to incentivise the investment that is needed over the medium-term. We are using these pullbacks to add sensitivity to the oil price.
The copper miners have displayed leverage to the strengthening commodity price during July and our overweight exposure contributed to positive relative performance. We continue to hold a constructive view on the medium term fundamentals for the copper market and expect rebalancing between supply and demand over the coming years. The equities have also benefitting from lessening concerns on balance sheets as many companies have been able to refinance credit facilities and sell assets.
All data points are in US dollar terms.
17 August 2016
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.
