BLACKROCK COMMODITIES INCOME INVESTMENT TRUST plc
All information is at 30 September 2016 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 6.0% 8.9% 33.6% 44.8% -10.7% -9.0%
Share price 6.1% 18.3% 27.1% 44.9% -10.7% -8.2%
Sources: Datastream, BlackRock
At month end
Net asset value - capital only: 76.79p
Net asset value cum income*: 76.37p
Share price: 75.88p
Discount to NAV (cum income): 0.6%
Net yield: 7.2%
Gearing - cum income: 5.9%
Total assets^^: £99.0m
Ordinary shares in issue***: 117,968,000
Gearing range (as a % of net assets): 0-20%
Ongoing charges**: 1.4%
* Includes net revenue of -0.42p.
^^ 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 21.7 Global 50.7
Exploration & Production 19.7 USA 21.5
Diversified Mining 19.6 Canada 9.2
Gold 12.9 Latin America 4.7
Copper 7.7 Australia 3.4
Silver 3.1 Africa 3.1
Distribution 2.9 Europe 1.9
Fertilizers 2.5 Sweden 1.2
Oil Services 1.9 Asia 0.6
Diamonds 1.7 Net current assets 3.7
Zinc 1.2 -----
Steel 1.2 100.0
Refining & Marketing 0.2 =====
Net Current assets 3.7
-----
100.0
=====
Ten Largest Investments (in %
of Total Assets order)
Company Region of Risk % Total Assets
First Quantum Minerals Global 6.9
Royal Dutch Shell 'B' Global 6.4
BHP Billiton Global 6.2
Rio Tinto Global 5.7
Exxon Mobil Global 4.7
BP Global 3.4
Newcrest Mining Australia 3.0
Enbridge Income Fund Trust Canada 2.9
Glencore Global 2.9
Anadarko Petroleum USA 2.7
Commenting on the markets, Olivia Markham and Tom Holl, representing the
Investment Manager noted:
The Company's NAV rose +6.0% during the month, bringing the year to date
performance to +48.9% (all calculations in US Dollar terms with income
reinvested).
The mining sector performed strongly in September on the back of
better-than-expected economic data emerging from China including new bank loans
rising to Rmb949bn, up +17.1% year-on-year, and the country's steel production
remaining robust at 68.6 million tonnes, reflecting a +2.5% increase
year-on-year. Most mined commodities were up over the month with gold, copper
and nickel prices gaining +1.0%, +5.3% and +8.5% respectively. The nickel price
was supported by news that the Philippine government had suspended half of the
country's mining operations for failing to meet social and environmental
standards. For reference, last year the country produced over 20% of the
world's mined nickel output. However, it was coking coal which was the star
performer, rising an extraordinary +54.4% over the month as China's coal
industry reform programme, which has constrained domestic output to the
equivalent of 276 days of production, forced Chinese steel producers to turn to
the import market.
The energy sector was buoyed by Brent and WTI oil prices rising +4.4% and +7.7%
respectively on the back of an announcement from OPEC that it was planning a
co-ordinated output cut. OPEC announced plans to reduce output to between 32.5
mbpd and 33 mbpd by year-end which would represent a reduction of between
240,000 bpd and 740,000 bpd from August's production level and marks the first
concrete steps by OPEC towards cutting output since 2008. The initial market
reaction has been one of scepticism and despite moving higher on the
announcement, Brent is only back to the level it was at in mid-August. Risks
remain around the execution of the agreement and there are questions over its
effectiveness if Iran, Libya and Nigeria are able to increase production
levels. Sceptics also point to historical examples of OPEC announcing
production targets and subsequently producing above these quotas. We understand
the market's scepticism and still need to see the deal ratified (and adhered
to). That said, we see this as a meaningful shift in OPEC's strategy away from
market share at any price back towards market management. The fact that Saudi
Arabia drove the deal is key. We have been of the view that the rebalancing
process is already underway and expected the market to be back in balance by
2017 even without an OPEC cut. Such action by OPEC would, though, accelerate
this process and remove the negative tail risk of further meaningful OPEC
production growth.
All data points are in US dollar terms.
21 October 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.