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BlackRock Commodities Income Investment Trust Plc - Correction : Portfolio Update

By PR Newswire

PR Newswire

London, May 22

Please note realignment for the Ten Largest Investments.


BLACKROCK COMMODITIES INCOME INVESTMENT TRUST plc (LEI:54930040ALEAVPMMDC31)
All information is at 30 April 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 9.6% 2.7% 8.3% 14.3% 12.8% 2.1%
Share price 10.6% 0.4% 10.1% 13.3% 9.0% -4.8%
Sources: Datastream, BlackRock
At month end
Net asset value – capital only: 81.76p
Net asset value cum income*: 82.56p
Share price: 79.60p
Discount to NAV (cum income): 3.6%
Net yield: 5.0%
Gearing - cum income: 4.1%
Total assets^: £102.2m
Ordinary shares in issue: 118,966,000
Gearing range (as a % of net assets): 0-20%
Ongoing charges**: 1.4%
* Includes net revenue of 0.80p.
^ 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 29.6 Global 63.0
Integrated Oil 26.8 Canada 12.3
Exploration & Production 14.5 USA 11.6
Copper 9.3 Latin America 5.6
Gold 8.8 Australia 3.3
Industrial Minerals 3.3 Africa 2.0
Diamonds 2.1 Mali 1.1
Silver 1.8 Europe 1.1
Steel 1.5 Net current liabilities (0.0)
Oil Services 1.2 -----
Distribution 1.1 100.0
Net current liabilities (0.0) =====

-----
100.0
-----
Ten Largest Investments
Company
Region of Risk % Total Assets
Rio Tinto Global 8.6
BHP Global 7.9
Royal Dutch Shell ‘B’ Global 6.8
First Quantum Minerals Global 6.2
Glencore Global 5.8
Chevron Global 4.6
BP Global 4.3
Exxon Mobil Global 3.5
Vale – ADS Latin America 3.2
ConocoPhillips USA 2.9

Commenting on the markets, Olivia Markham and Tom Holl, representing the Investment Manager noted:
The Company’s NAV increased by 9.6% during the month of April (in GBP terms).

The mining sector outperformed broader equity markets during April, with the Euromoney Global Mining Index (total return) returning +4.6% versus the MSCI World Index up by +2.8%. Outperformance was driven by evidence of strengthening economic activity in China and healthy reductions in China’s steel inventories. Steel inventory draws usually occur earlier in the year, but this year they were delayed by the first session of the 13th National People’s Congress in China held in March. Meanwhile environmental concerns remain a key focus for China, with premiums for high quality products most notably iron ore remaining at elevated levels. (in GBP terms)

Turning to the mined commodities, base metals performed strongly during the month. The aluminium price finished up by +13.6% after US sanctions were issued against Russian aluminium giant Rusal. However, zinc fell by -4.8% during the month amid concerns of new supply coming to the market in the near term. Bulk commodities performed well, with iron ore (62% Fe) up by +3.1%, supported by the aforementioned steel inventory draws in China. Precious metals were weak, however, with gold falling by -0.8% during the month, as headwinds included the US 10-yr yield reaching 3% and the US dollar strengthening towards the end of April. This outweighed tailwinds provided by the heightened geopolitical risks during the period.

The energy sector also outperformed broader equity markets during the month, with the MSCI World Energy Index (total return) returning +11.4% (in GBP terms).  We previously highlighted that energy equities had materially lagged the move up in the oil price last year, and the rebound in April appeared to be the beginning of the much-anticipated catch-up trade. That said, the oil price continued higher during the month, with Brent and WTI increasing by +10.0% and +5.6% respectively, to finish the month at $73/bbl and $68/bbl. Whilst geopolitical risk was additive to oil price performance during the month, with rising risks of Iran sanctions, which have since been confirmed, we believe the oil price persistence is being driven by supportive supply/demand fundamentals.  This has been illustrated by seven consecutive months of inventory draws; the International Energy Agency reported that “OECD stocks were just 30 million barrels above the five-year average”, having peaked at over 400 million barrels in 2017, suggesting an increasingly tight market.

The quarterly reporting season for energy companies got underway in April, with many companies beating analyst expectations and reporting higher than expected free-cash flows. Amidst this, we began to see an increase in merger & acquisition activity (M&A) across the energy space; early in the month the Norwegian exploration & production company, DNO ASA, acquired a 15% stake in Faroe Petroleum. This was followed by Subsea 7, an off-shore oil services company, announcing a bid for its off-shore peer, McDermott. McDermott is currently in the process of merging with Chicago Bridge & Iron and rejected the offer.


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

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