BlackRock Commodities Income Investment Trust Plc - Portfolio Update

BlackRock Commodities Income Investment Trust Plc - Portfolio Update

PR Newswire

London, December 19

BLACKROCK COMMODITIES INCOME INVESTMENT TRUST plc (LEI:54930040ALEAVPMMDC31)

All information is at 30 November 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

-4.5%

-7.8%

-12.0%

3.6%

52.5%

-1.1%

Share price

-3.8%

-8.6%

-10.9%

-0.9%

43.3%

-10.8%

Sources: Datastream, BlackRock

At month end

Net asset value - capital only:

74.43p

Net asset value cum income*:

75.90p

Share price:

70.60p

Discount to NAV (cum income):

7.0%

Net yield:

5.7%

Gearing - cum income:

6.8%

Total assets^:

£94.4m

Ordinary shares in issue:

116,126,515

Gearing range (as a % of net assets):

0-20%

Ongoing charges**:

1.4%

* Includes net revenue of 1.47p. ^ 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

29.8

Global

62.1

Integrated Oil

27.6

Canada

12.8

Exploration & Production

10.7

USA

10.5

Copper

10.6

Australia

6.4

Gold

7.5

Latin America

4.6

Industrial Minerals

4.4

Africa

1.8

Diamonds

2.5

Asia

1.5

Steel

1.9

Net current assets

0.3

Silver

1.7

-----

Distribution

1.2

100.0

Electricity

0.9

=====

Aluminium

0.9

Net Current assets

0.3

----- 100.0 =====

Ten Largest Investments

Company

Region of Risk

% Total Assets

BHP

Global

9.1

First Quantum Minerals

Global

7.3

Royal Dutch Shell 'B'

Global

6.8

Rio Tinto

Global

6.5

Exxon Mobil

Global

5.2

Chevron

Global

4.9

BP Group

Global

4.5

Teck Resources

Canada

4.4

Glencore

Global

3.7

Vale - ADS

Latin America

3.7

Commenting on the markets, Olivia Markham and Tom Holl, representing the Investment Manager noted: The Company's NAV decreased by 4.5% during the month of November (in GBP terms). November was a negative month for the mining and energy sectors as trade war concerns continued to weigh on global economic growth expectations. The US Treasury yield curve inverted during the month, with yields for some shorter-dated treasuries rising above those of some longer-dated ones. Importantly, however, the 10-year yield remained just above that of the 2-year. Inverting of the yield curve has been a reasonable predictor of an impending recession in the future. Market concerns also heightened around a potential faster-than-expected slowdown in China as economic indicators, such as manufacturing PMIs and loans data, continued to soften. Our base case is that China will successfully manage a gradual slowdown and it has been encouraging to see increased infrastructure spending coming through. Amidst this macroeconomic backdrop, mined commodity performance was relatively resilient. We believe this reflects supply and demand in the physical markets for mined commodities still being reasonably healthy. Base metals performed well, with copper, zinc and aluminium up by 3.2%, 4.1% and 1.2% respectively. The precious metals also performed positively, with gold rising by 0.3%, as broader equity market weakness in the first half of the month stoked 'safe-haven' buying. Having held up well so far in 2018, the bulk commodities were weak in November, with the iron ore (62% fe) price falling -13.9% for example. This appeared to reflect destocking by steel companies in response to declining margins and lower-than-expected winter production cuts. Whilst the move in iron ore was a sharp one, it's worth noting that the iron ore (62% fe) price has averaged $70/tonne this year which, for diversified miners with average costs of delivery of iron ore (62% fe) into China below $30/tonne still, indicates very strong margins. Within the energy market, the voracity of the oil price decline in October continued into November, with the price of Brent and West Texas Intermediate ('WTI') falling by 23.1% and 22.3% respectively, to finish the month at $58/bbl and $51/bbl respectively. The dramatic increase in oil market volatility was underlined by three days in which oil prices fell by over 6%, representing an unprecedented three standard deviation move. In terms of oil supply, despite Putin's comment at G20 that "an understanding for a cut" has been reached with Saudi Arabia, the market is awaiting the outcome of the OPEC meeting on 6th December, where a significant cut in output is required to rebalance the market in 2019. Elsewhere in the energy sector, merger & acquisition (M&A) activity continued to occur in November, with the announcement that Encana is acquiring Newfield Exploration in an all stock deal. In other news, voters in Colorado rejected a plan to force oil and gas development further away from residential and environmentally sensitive areas. This positive result is secured until 2020 when another vote will occur, although a long term sustainable solution may be agreed on before then. All data points in US dollar terms unless otherwise specified. Commodity price moves sourced from Thomson Reuters Datastream.

19 December 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.