BLACKROCK COMMODITIES INCOME INVESTMENT TRUST PLC: Portfolio Update
BLACKROCK COMMODITIES INCOME INVESTMENT TRUST PLC: Portfolio Update BLACKROCK COMMODITIES INCOME INVESTMENT TRUST plc
All information is at 30 June 2013 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 -8.2% -11.4% -9.0% -3.4% 6.8% -22.9% Share price -10.2% -12.8% -9.4% -6.6% 3.1% -19.6%
Sources: Datastream, BlackRock
At month end Net asset value - capital only: 104.34p Net asset value - cum income**: 104.87p Share price: 104.00p Discount to NAV (cum income): 0.8% Net yield: 5.8% Gearing - cum income: 7.8% Total assets^^: £106.6m Ordinary shares in issue: 94,258,000 Gearing range (as a % of net assets): 0-20%
**Includes net revenue of 0.53p. ^^includes current year revenue.
Sector % Total Country % Total Analysis Cap Assets Analysis Cap Assets Integrated Oil 32.4 Global 34.0 Exploration & Production 17.8 Canada 21.1 Diversified 16.8 USA 20.8 Copper 6.9 Latin America 10.1 Gold 6.7 Europe 8.1 Oil Services 5.7 Asia 3.9 Oil Sands 3.1 Australia 1.2 Distribution 2.1 South Africa 0.9 Fertilizer 2.0 Russia 0.9 Aluminium 1.7 China 0.8 Iron Ore 1.7 Africa 0.3 Nickel 1.7 Current liabilities (2.1) Silver 0.9 ----- Coal 0.8 100.0 Tin 0.7 ===== Zinc 0.6 Platinum 0.5 Current liabilities (2.1)
----- 100.0 ===== Ten Largest Equity Investments(in alphabetical order) Company Region of Risk Anadarko Petroleum USA Antofagasta Latin America BHP Billiton Global BP Global Chevron Global Eni Europe ExxonMobil Global Occidental USA Rio Tinto Global Total Global Commenting on the markets, Richard Davis, representing the Investment Manager noted: Federal Reserve Chairman Bernanke took the wind out the equity market's sails when he outlined a schedule for the reduction and subsequent withdrawal of monetary stimulus. In commodity markets, gold was a notable victim of this news, falling by 12.7% over the course of the month. It is important to highlight that any `tapering' of stimulus by the Federal Reserve will be contingent on strong, improving economic data and any withdrawal is not anticipated until unemployment in the US reaches 7.0% (it currently stands at 7.6%). Nonetheless, equity markets weakened and a spike in interbank lending rates in China did nothing to aid the mining sector's cause. The rise in SHIBOR and the absence of swift intervention by the PBOC raised the spectre of a credit event in the commodity hungry country, therefore, it was a weak month for most mining commodities. Among the base metals, copper declined by 7.6%, aluminium by 7.9% and tin by 5.9%. Iron ore bucked the trend and finished the month up by 4.0%, at US$117/t (source: CLSA, 63.5% Fe). Inventories of iron ore held at Chinese steel mills and ports are comparatively low, suggesting the destocking seen over recent months could have reached an end. Iron ore equities are, however, pricing in further weakness on the expectation of seasonal demand softness and the possibility of new supply growth filtering into the market over the course of the rest of the year. With commodity prices eating into cost curves in many cases and investors calling for capital discipline from the mining industry, cost-cutting is high on management teams' agendas. Most mining companies are starting with `easy wins', such as reducing headcount and exploration spending. For example, BHP Billiton has cut headcount at the BMA coking coal operations by 35.0% since July 2012 and Rio Tinto plans to reduce personnel at its London headquarters by more than half. While these costs can be removed quickly and will have an immediate impact on all-in profitability, in our view companies should also think longer term and re-evaluate mine plans in order to optimise profitability. Currency plays an important role in mining company margins, revenues are typically received in US dollars but costs are largely paid in local currencies. The weakening of certain commodity producer currencies against the US dollar year to date has provided some relief against declining commodity prices. Against the US dollar, the Australian dollar has fallen by 11.8% year to date and the South African rand by 17.0%. Mining equities fell by 14.0% in June (in Sterling terms). Despite macro concerns, oil prices remained resilient with West Texas Intermediate (WTI) and Brent crude rising by 4.8% to US$96.4/Bbl and by 2.0% to US$102.5/Bbl respectively. The differential between US oil prices (WTI) and international oil prices (Brent) peaked in September 2011 at US$30/Bbl, as a build in inventories at Cushing, Oklahoma weighed on US prices. The key driver in reducing the discount at which WTI has traded has been the construction of several pipelines which facilitate the delivery of crude directly to refineries on the Gulf coast rather than to Cushing. As at the end of June the differential had narrowed to US$6/Bbl. Energy equities closed the month down by 3.6% (in Sterling terms). All data sourced from Datastream and quoted in US Dollars unless otherwise stated. 15 July 2013 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. -0- Jul/15/2013 14:26 GMT