BlackRock World Mining Trust Plc - Portfolio Update

Berater bei ihrer Arbeit. (Symbolbild) © SeanShot / iStock / Getty Images Plus / Getty Images

PR Newswire

London, December 13

BLACKROCK WORLD MINING TRUST plc (LEI - LNFFPBEUZJBOSR6PW155)
All information is at 30 November 2017 and unaudited.

Performance at month end with net income reinvested

		One		Three			One	Three		Five
		Month		Months			Year	Years		Years
Net asset value		-2.5%		-6.9%			13.2%	29.4%		-20.3%
Share price		-2.0%		-3.6%			19.4%	30.9%		-12.8%
Euromoney Global Mining Index		-2.5%		-8.4%			9.4%	26.6%		-8.5%
(Total return)
Sources: BlackRock, Euromoney Global Mining Index, Datastream

At month end

Net asset value including income¹:						409.32p
Net asset value capital only:						403.88p
¹ Includes net revenue of 5.44p
Share price:						371.75p
Discount to NAV²:						9.2%
Total assets:						£822.4m
Net yield³:						4.8%
Net gearing:						15.0%
Ordinary shares in issue:						176,455,242
Ordinary shares held in treasury:						16,556,600
Ongoing charges⁴:						1.10%

² Discount to NAV including income. ³ Based on quarterly interim dividends of 3.00p per share declared on 4 May 2017, 10 August 2017 and 10 November 2017 in respect of the year ending 31 December 2017 and a final dividend of 9.00p per share in respect of the year ended 31 December 2016. ⁴ Calculated as a percentage of average net assets and using expenses, excluding finance costs, for the year ended 31 December 2016.

Sector	% Total				Country Analysis				% Total
	Assets								Assets

Diversified	47.0				Global				63.3
Copper	21.6				Latin America				12.4
Gold	16.8				Australasia				11.1
Industrial Minerals	7.3				Other Africa				6.8
Silver & Diamonds	6.5				Canada				4.0
Zinc	1.4				USA				1.0
Aluminium	0.3				Russia				0.7
Iron Ore	0.1				South Africa				0.7
Net current liabilities	-1.0				India				0.6
	-----				Kazakhstan				0.4
	100.0				Net current liabilities				-1.0
	=====								-----
									100.0
									=====

Ten Largest Investments
Company			% Total Assets
BHP			9.1
Rio Tinto			8.8
First Quantum Minerals			8.5
Glencore			8.3
Vale			7.0
Teck Resources			4.5
Sociedad Minera Cerro Verde			4.0
Newmont Mining			3.2
Lundin Mining			3.0
South32			2.8

Commenting on the markets, Evy Hambro and Olivia Markham, representing the Investment Manager noted:

Performance

The Company’s NAV decreased by 2.5% in November, in line with its benchmark, the Euromoney Global Mining Index, which also declined by 2.5% (performance in GBP terms).

Broader equity markets continued to strengthen in November, as displayed by the MSCI World Index (total return) delivering +2.2%. However, following a period of strong manufacturing data from China in recent months, Chinese manufacturing data was the weakest we have seen in five months, with the Caixin Manufacturing PMI falling to 50.8 in November from a prior level of 51 in October. In addition, there were concerns around credit tightening in China during the month, as China’s financial regulators proposed sweeping rules to curb the risks in the country’s $15 trillion of asset management products. Against this backdrop, we saw a sell-off in mined commodities following the strong performance we saw in the run up to LME week during October. Base metals came under pressure, with nickel, zinc, copper and aluminium decreasing by 9.8%, 4.4%, 1.2% and 5.0% respectively. On the other hand, bulk commodities posted positive performance, with the price of iron ore bucking the negative trend and increasing by 17.1%.

Over the last month a number of the major mining companies hosted capital markets days to provide an outlook on their respective businesses for 2018. Encouragingly, the prevailing theme from the companies is one of capital discipline, with management teams focused on value over volume and creating value for shareholders. After a period of cost and capital deflation, companies are beginning to see some cost inflation with moderate increases to sustaining capital announced.

Strategy and Outlook

Over the past 18 months, we have seen a remarkable turnaround in the financial health of the mining sector. For some time, we have been confident that January 2016 marked the bottom of the mining cycle, as back then, the market was concerned about a ‘hard-landing’ in China, as well as mining companies’ stretched balance sheets. Today, balance sheets are in much better shape and given current commodity prices we are optimistic about a continued recovery in share prices. The mining sector has among the highest free cash flow yield out of any global sector and, given the improvement in balance sheets, we expect lower earnings volatility relative to the previous three years to help drive a re-rating.

Whilst the mining sector has performed strongly, we are only back at 2014 levels and still a very long way below the peak in 2011. Mined commodity prices still look elevated in some cases but, importantly, mining shares are still pricing in commodity prices well below current spot prices.

We recognise that China remains the key risk for investors in the mining sector but believe that the Chinese administration has shown itself willing and able to step in with support to avoid a ‘hard-landing’ type event. Reform measures put in place by the government across a range of industries, including steel, coal and aluminium, to tackle pollution and excess capacity has been more effective than many expected and have improved the profitability across a number of sectors, which we see as a key benefit in the longer-term. China should also benefit from a spillover effect from the wider improvements we have seen in global economic growth in recent months. Concerns mounted in Q2 of this year that tighter credit conditions in the country could lead to a slowdown. However, economic data has continued to defy the sceptics and exceed expectations.

Meanwhile, commodity prices should also be supported by constraints on the supply side resulting from the underinvestment we have seen in the mining sector in recent years, with global mining sector capex down 66% since the peak in 2012. The key question for investors today is whether the mining companies can maintain the same level of capital discipline or will they slip back into bad habits? For now, we feel the pain of the recent down-cycle is still too fresh and rhetoric from management teams gives us optimism that the sector’s focus remains on shareholder returns.

All data points are in US dollar terms unless stated otherwise.

13 December 2017

ENDS

Latest information is available by typing www.brwmplc.co.uk 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.

ARIVA.DE Börsen-Geflüster

Kurse

Blackrock World Mining

6,50 €

+1,56%

Mehr Nachrichten zur Blackrock World Mining Aktie kostenlos abonnieren

E-Mail-Adresse

Benachrichtigungen von ARIVA.DE
(Mit der Bestellung akzeptierst du die Datenschutzhinweise)

Hinweis: ARIVA.DE veröffentlicht in dieser Rubrik Analysen, Kolumnen und Nachrichten aus verschiedenen Quellen. Die ARIVA.DE AG ist nicht verantwortlich für Inhalte, die erkennbar von Dritten in den „News“-Bereich dieser Webseite eingestellt worden sind, und macht sich diese nicht zu Eigen. Diese Inhalte sind insbesondere durch eine entsprechende „von“-Kennzeichnung unterhalb der Artikelüberschrift und/oder durch den Link „Um den vollständigen Artikel zu lesen, klicken Sie bitte hier.“ erkennbar; verantwortlich für diese Inhalte ist allein der genannte Dritte.