BlackRock Frontiers Investment Trust Selectively taking advantage of pockets of opportunity


BlackRock Frontiers Investment Trust plc (LON:BRFI) have provided the following half yearly financial report for the six months ended 31st March 2020.


The Company’s financial statements are presented in US Dollars. The Company’s shares are listed on the London Stock Exchange and quoted in UK Pounds sterling. The sterling amounts shown below are presented for convenience. The difference in performance measured in US Dollars and UK Pounds sterling reflects the change in the value of the Pound versus the US Dollar over the period.


As at 31 March 
As at 30 September 
US Dollar
Net assets (US$’000)1255,277 400,820 
Net asset value per ordinary share (US cents)105.56 166.54 
Ordinary share price (mid-market)2 (US cents)103.17 162.66 
Net assets (£’000)1,2205,877 325,262 
Net asset value per ordinary share2 (pence)85.13 135.15 
Ordinary share price (mid-market) (pence)83.20 132.00 
======== ======== 

Six months 
31 March 2020 
Year ended 
30 September 

US Dollar
Net asset value per share (with dividends reinvested)4-34.8 -1.5 -4.5 
Benchmark Index (NR)5, 6-27.8 +0.0 -1.9 
MSCI Frontier Markets Index (NR)5, 6-21.7 +5.9 +1.5 
MSCI Emerging Markets Index (NR)6-14.6 -2.0 -4.4 
Ordinary share price (with dividends reinvested)4-34.9 -6.3 -8.4 
Net asset value per share (with dividends reinvested)4-35.2 +4.2 +19.8 
Benchmark Index (NR)5, 6-28.3 +5.8 +22.4 
MSCI Frontier Markets Index (NR)5, 6-22.2 +12.0 +27.6 
MSCI Emerging Markets Index (NR)6-15.1 +3.7 +20.2 
Ordinary share price (with dividends reinvested)4-35.3 -0.9 +14.7 
======== ======== ======== 

1     The change in net assets reflects shares issued in the period, dividends paid and market movements.

2     Based on an exchange rate of US$1.2400 to £1 at 31 March 2020 and US$1.2323 to £1 at 30 September 2019.

3     The Company was incorporated on 15 October 2010 and its shares were admitted to trading on the London Stock Exchange on 17 December 2010.

4     Alternative Performance Measures, see Glossary in the half yearly report and financial statements.

5     With effect from 1 April 2018, the Benchmark Index changed to the MSCI Emerging Markets Index ex Selected Countries + MSCI Frontier Markets Index. Prior to 1 April 2018, the Benchmark Index was the MSCI Frontier Markets Index. The performance returns of the Benchmark Index during the prior year and since inception have been blended to reflect this change.

6     Net return (NR) indices calculate the reinvestment of dividends net of withholding taxes.

Sources: BlackRock and Datastream.


Dear Shareholder,
I am pleased to present the Company’s half-yearly financial report for the six months to 31 March 2020, albeit a difficult period for investors in equity markets generally.


  • Declared interim dividend of 2.75 US cents per share;
  • Yield of 6.7% (based on share price at 26 May 2020, interim dividend for 2020 and final dividend for 2019);
  • NAV total return of -34.8% (in US Dollar terms with dividends reinvested);
  • Share price total return of -34.9% (in US Dollar terms with dividends reinvested); and
  • 1,150,000 new ordinary shares issued via tap issuance.

During the six months to 31 March 2020, the Company saw a NAV total return in US Dollars of -34.8%, while its Benchmark Index returned -27.8%. The Company’s share price total return was -34.9%. By comparison, the Company’s previous Benchmark Index, the MSCI Frontier Markets Index, returned -21.7% and the MSCI Emerging Markets Index returned -14.6%.

It is of course disappointing to report to shareholders that the Company underperformed the Benchmark Index during the period. This relative underperformance can be attributed to a number of factors and your investment managers provide a detailed description of the key contributors and detractors to performance during the period, portfolio activity and their views on the outlook for the second half of the year in their report which follows.

I am pleased to be able to report that subsequent to the period end and as at 26 of May 2020, the net asset value per share of the Company has increased by 12.9% from 105.56 cents per share to 119.20 cents per share and the Company’s share price has increased by 8.8% from 103.17 cents per share to 112.22 cents per share as at 26 May 2020. The Company’s Benchmark Index has increased by 11.2%.

The Company’s revenue return per share for the six months ended 31 March 2020 amounted to 1.77 US cents (2019: 3.19 US cents). The Board recognises that shareholders value the dividends paid by the Company, but is also cognisant that there has been a reduction in dividends received from the companies in the portfolio due to the ongoing COVID-19 outbreak.

Nonetheless, the Board is pleased to declare an interim dividend of 2.75 US cents per share (2019: 3.00 US cents per share) payable on 26 June 2020 to shareholders on the Company’s register on 5 June 2020. The shares will go ex-dividend on 4 June 2020. The final dividend of 4.75 US cents per share for the year ended 30 September 2019 was declared on 6 December 2019 and paid to shareholders on 7 February 2020. Whether the Company will pay a similar final dividend to last year will depend on the state of the revenue account in the second half of the year at which time the Board will have greater visibility of the total revenue received in the financial year. The Board may also consider the use of brought forward revenue reserve to support the full year dividend if deemed appropriate to do so.

The Directors recognise the importance to investors of ensuring that the Company’s share price is as close to its underlying NAV as possible. Accordingly, the Directors monitor the share price closely and will consider the issue of ordinary shares at a premium or repurchase at a discount to help balance demand and supply in the market. For the period under review, the Company’s ordinary shares traded at an average discount to NAV of 0.6%, and were trading at a discount of 2.3% on a cum-income basis at 31 March 2020. The Directors currently have the authority to buy back shares in the market equivalent to 14.99% of the Company’s issued share capital and also to issue new shares equivalent to 10% of the Company’s issued share capital (excluding any shares held in treasury).

In response to demand for its shares the Company issued 1,150,000 new ordinary shares during the period for a gross total consideration of US$1,998,000. The new shares were issued at a premium to the prevailing NAV and were therefore accretive to the Company’s NAV per share. The Board believes that the issue of new shares by the Company, when demand cannot be met in the market, helps to regulate the share price premium to NAV, and that the economies of scale achieved through enlarging the Company are beneficial to shareholders. Since the period end and up to the date of this report, the Company has issued no further new ordinary shares. No shares were bought back in the period under review or up to the date of this report.


When the Company was launched in late 2010, the Board made a commitment that before the Company’s fifth AGM and at five yearly intervals thereafter, it would formulate and submit to shareholders proposals to provide shareholders with an opportunity to realise the value of their ordinary shares at the applicable NAV per ordinary share less applicable costs.

The next such opportunity will take place in early 2021. Accordingly, the Board will formulate proposals in late 2020, which may, as they did in 2016, take the form of a tender offer. Further information will be provided in this year’s annual report which it is anticipated will be published in December 2020. In the interim, I would like to take this opportunity to thank shareholders for their ongoing support of the Company.

The recent outbreak of COVID-19 has negatively impacted global markets and has resulted in widespread quarantine, disruption to supply chains and an unprecedented and almost immediate cessation of economic activity. The health crises and the economic consequences of the outbreak may also exacerbate pre-existing political, social and economic risks in the markets in which this Company invests. Whilst it is impossible at this stage to estimate the full extent or the impact – both human and financial – or indeed the duration of the global economic downturn caused by the COVID-19 pandemic, it is also important to reflect on the scale and speed of the current market downturn relative to prior market falls.

However, unlike open-ended counterparts, closed-end funds are not obliged to sell down portfolio holdings at low valuations to meet liquidity requirements for redemptions. During times of elevated volatility and market stress, the ability of a closed-end fund structure to remain invested for the long-term enables the portfolio managers to adhere to disciplined fundamental analysis from a bottom-up perspective and be ready to respond to dislocations in the market as opportunities present themselves. The extreme volatility seen in markets as a result of the current fears has created inevitable opportunities to purchase some shares at extremely discounted valuations; our portfolio manager’s team remain attuned to the investment opportunities that this may present. The Board has also received regular updates from BlackRock to confirm that the Company’s operations are not affected and that established business continuity plans are effective.

Frontier markets will continue to be driven, to a significant extent, by internal factors and by domestic investor flows and this continues to offer significant diversification benefits in extreme times. Our portfolio management team’s focus on long-term capital growth provides us with confidence that the holdings in the Company’s portfolio are well placed to weather the storm.

The current bearish global sentiment towards the frontier and emerging markets has presented opportunities for our portfolio managers. To date, many of the countries which make up our frontier universe have been less affected by the COVID-19 crisis than their developed market counterparts and therefore your portfolio managers are cautiously optimistic on the outlook. Many of these countries have relatively low levels of foreign debt, higher yields, superior growth prospects, and are trading at a significant discount relative to the developed markets. In addition, our portfolio managers see a distinct value opportunity with the price-to-book ratio of our portfolio trading around its lowest level since launch, at around 1x.

Therefore, your Board believes that the Company’s frontier market universe continues to represent a compelling proposition for the medium to long-term investor. The Board remains confident that, notwithstanding the challenges in near term, your portfolio managers can resume their track record of outperformance, having extensive resources deployed to these inefficient markets and the local market knowledge required to capitalise on the opportunities now available in this dynamic asset class.

28 May 2020


In the six months to 31 March 2020, the Company’s NAV returned -34.8%1 versus its Benchmark Index which returned -27.8%2. Over this time period, the MSCI Emerging Markets Index declined -14.6% and the MSCI Frontier Markets Index was down -21.7% (in US Dollar terms with dividends reinvested).

The six-month period has seen a marked change in sentiment and risk-preference. Markets were increasingly bullish going into year-end 2019 as liquidity conditions, led by further central bank easing, improved. At the same time, US-China trade tensions abated following the announcement of a Phase 1 deal, resulting in a risk-on environment that helped Emerging Markets maintain strong flow momentum into January 2020. Unfortunately, that exuberance was short lived as coronavirus headlines took hold and fears of the virus spreading outside China shocked markets. In the year to date, governments have struggled to accurately predict the pace and breadth of the virus spread, leading to travel bans and lockdowns across the world. Globally, markets have sold-off, as uncertainty surrounding the length of impact has dragged down growth estimates and it continues to weigh on investor sentiment.

More recently, the lack of co-ordinated action from the Organisation of the Petroleum Exporting Countries (‘OPEC’), combined with very weak global demand, has resulted in Brent Crude trading at $22.70/barrel as of the end of March 2020, putting further pressure on global growth. Whilst much about the nature of the virus remains unknown, the extent of global liquidity provision, coordinated fiscal stimulus and early signs of a Chinese recovery should somewhat temper investor concerns. Frontier markets have entered this crisis in a better situation than before the Global Financial Crisis (‘GFC’) given lower levels of external debt and they are at an earlier point in their economic cycles and hence haven’t seen excessive lending in recent years.

Performance commentary over the period is somewhat of a tale of two epochs, before and after coronavirus. “BC” performance was led by Kazakhstan, particularly Halyk Bank, which performed strongly after reporting better than expected results and Kaz Minerals, a low cost copper producer. We trimmed Halyk Bank and fully exited our position in Kaz Minerals as prices rose during the quarter, which substantially protected performance through the market sell off. In March, we repurchased Kaz Minerals around 40% lower than our December exit price. Uranium producer, Kazatomprom (-5.3%), also performed well throughout the period as its business is relatively insulated from pandemic impact – nuclear power plants are considered baseload plants and have stable fuel demands, albeit with low turnover. Furthermore, since the Company’s revenues are US Dollar based, the recent depreciation in the Kazakhstani Tenge has helped at the margin.

Our position in Equity Group, Kenya was among the more resilient stocks in the universe as news that the government would be lifting interest rate caps was well received by the market. Our holdings in Pakistan have also been relative outperformers as the country has seen a substantial narrowing of its trade deficit over the last year, reducing pressure on its currency. MCB Bank and utility, Hub Power fell only 17% and 9% respectively. Elsewhere, our underweights in Chile (-40%), where demonstrations and social unrest have escalated through year-end putting pressure on both the foreign currency and equity markets, and Colombia (-43%), which fell precipitously following the oil price fall, benefited relative returns over the period.

Stocks in Indonesia performed especially badly during the period, with the market falling 35%. Smaller cap stocks in Indonesia were hit even harder. Retailer Mitra Adiperkasa (MAPI) fell 60.0% and mall operator Pakuwon Jati 59.7% over the time period. MAPI is currently trading at its lowest price to book valuation since 2009, a time when the balance sheet structure of the company was very different and it had significant foreign currency debt outstanding. As of the end of 2019, the company has net cash. Pakuwon Jati is trading at its lowest price to book valuation since the Asian Crisis (1997-99), a time when Net Debt/EBITDA for the company was > 20x. As of the last reported set of results it was at 0.1x. We think that there is significant upside for both positions. Since March month end, MAPI has risen 50% and Pakuon Jati 32%.

Relative performance was also hurt by a significant underweight position in Malaysia. As has historically been the case, Malaysia performed defensively in the market sell off, falling only 17% in the six months to March. We have struggled to find attractive stocks to own in Malaysia over the last few years and even now, Malaysia is one of the few markets across all of emerging and frontier markets which is not screening especially cheap relative to its history. As at the end of March the Malaysian market was still trading at a marginal premium to its historical price to book valuation .

In the UAE, a position in hospital operator NMC Health detracted from returns after the stock declined sharply (-28%) following allegations over its accounting practices. Having reviewed these allegations, we decided to exit the position at a loss in December, a good decision in hindsight as the company has since alleged that the management team funnelled significant cash out of the business, leaving it with very significant debts and the stock has delisted, effectively valuing the equity at zero. Real Estate stocks Emaar Properties (-52%) and Emaar Development (-47%) were also especially hard hit.

Vietnam was also a country where stocks sold off aggressively. Mobile World, the electronics retailer, sold off 55% to end March. Whilst its electronics business has been affected by COVID-19 shut downs, the grocery chain, which the company launched a few years ago, has seen strong growth with revenue up 156% for the first quarter of 2020, reaching 15% of total company revenue. Although the stock has bounced 39% in April, we believe that on 9x consensus earnings for 2020, the company still looks very attractively valued.

The Company continues to have large positions in Indonesia, Philippines, Kazakhstan, Egypt and Pakistan.

We added to the Philippines as the macro backdrop looks increasingly positive. The country has relatively strong underlying growth and should benefit from improving credit trends. Furthermore, additional interest rate and reserves requirement cuts should free up liquidity. We specifically bulked up exposure in Bank of Philippines and tobacco name, LT Group. We also initiated positions in resort operator Bloomberry Resorts, and industrial conglomerate GT Capital.

We have increased positions in Pakistan. The current government has agreed a deal with the International Monetary Fund which will see it commit to reducing the fiscal deficit to sustainable levels. In addition, current low oil prices are considerably positive for Pakistan which imports a significant portion of its requirements.

Earlier in the period we exited our last positions in Argentina on our belief that the fiscal adjustment needed in 2020 would be politically hard to achieve and it would be harder than the market was expecting for Argentina to reach a deal with its creditors. The increased budget pressures stemming from COVID-19 will push debt/GDP ratios even higher than these expectations.

We have exited the majority of our exposure in Nigeria, using the strength seen in February to trim stocks. Watching the country’s foreign exchange reserve holdings fall through the second half of 2019, we became increasingly concerned about rising pressure on the Naira, which has recently been exacerbated by falling oil prices.

We reduced positions in a number of oil stocks during the period. We participated in the successful IPO of Saudi Aramco, but exited after strong price performance and we reduced exposure to Colombian national oil company, Ecopetrol following a period of strength.

The Company started the half year with a net exposure of 106% and we slowly increased exposure throughout the calendar year end to reach 112% as at the end of January. We subsequently reduced exposure through February and March, partly through the use of targeted short positions to reach a low net exposure of around 96% mid March. From there, we have then found a number of very attractive stock positions to add into the portfolio. We bought positions in Polish retailer, LPP, and Eastern European airline, Wizz Air, two stocks which we think were excessively sold off and which offered very attractive valuations. Net exposure as of the end of March was 104%.


While it’s impossible to overstate how unprecedented the current situation is, given that one third of the world’s population is currently under lock down, we fully believe that the recent spikes in volatility and bearish global sentiment have created pockets of opportunity, which we are selectively taking advantage of. Broadly, we believe that the world will get Covid-19 under control; with virus cases peaking in Europe, we believe support will be given to markets amid hope that other countries can follow.

We have seen large scale fiscal and monetary responses from governments and central banks across both developed and emerging markets and expect this support to remain in place. Many emerging and frontier countries have gone into this crisis in a much better position than the 2008/9 crisis with lower debt levels, especially foreign currency debt, and with economies at much earlier stages of their economic cycles. This means that they have seen little of the excesses in credit extension that characterized 2007/8. Once we pass through the pain point of tighter financial conditions, we believe that the better growth and yield dynamics across these markets will shine through. In a world that is looking ever more starved of growth, the ability to generate endogenous growth as is found in countries such as Philippines, Peru, Indonesia and Poland should deserve a valuation premium, to the developed world, rather than the current significant discount. We believe that countries which have low levels of debt/GDP, with cheap currencies and are able to show strong levels of growth should attract significant attention from investors. 

Valuations in frontier markets are at very attractive levels. Trading at around 1x trailing price/book value, our portfolio is as cheap as it has been since we launched the trust. Our universe is trading at an almost 40% discount to developed markets on a price/book basis. We are positioned in a number of companies that we believe will demonstrate their resilience and earnings power and we remain confident that these qualities will come to be recognized by the market. In a world searching for scarce growth and yield we believe strongly that following an unrewarding period for many emerging and frontier countries, that has lasted for more than dozen years, prospects might well improve in the post-Covid-19 era of 2020.

BlackRock Investment Management (UK) Limited
28 May 2020

1     Source: BlackRock, as at 31 March 2020.

2     Source: MSCI. With effect from 1 April 2018 the Benchmark Index changed to MSCI Emerging Markets ex Selected Countries + MSCI Frontier Markets Index + MSCI Saudi Arabia Index. Prior to 1 April 2018, the Benchmark Index was MSCI Frontier Markets Index. The performance of the Benchmark Index has been blended to reflect this change.


The Chairman’s Statement and the Investment Manager’s Report give details of the important events which have occurred during the period and their impact on the financial statements.

A detailed explanation of the risks relating to the Company can be divided into various areas as follows:

·        Investment Performance Risk;

·        Income/Dividend Risk;

·        Legal & Regulatory Risk;

·        Counterparty Risk;

·        Operational Risk;

·        Political Risk;

·        Financial Risk; and

·        Market Risk.

The Board reported on the principal risks and uncertainties faced by the Company in the Annual Report and Financial Statements for the year ended 30 September 2019. A detailed explanation can be found in the Strategic Report on pages 36 to 38 and in note 18 on pages 91 to 105 of the Annual Report and Financial Statements which are available on the website maintained by BlackRock at:

An outbreak of an infectious respiratory illness caused by a novel coronavirus known as COVID-19 was first detected in China in December 2019 and has developed into a global pandemic. This coronavirus has resulted in travel restrictions, closed international borders, enhanced health screenings at ports of entry and elsewhere, disruption of and delays in healthcare service preparation and delivery, prolonged quarantines, cancellations, supply chain disruptions, and lower consumer demand, as well as general concern and uncertainty. The response to the COVID-19 pandemic has adversely affected the economies of many nations across the entire global economy, individual issuers and capital markets, and could continue with extents that cannot necessarily be foreseen. In addition, the impact of infectious illnesses in emerging market countries may be greater due to generally less established healthcare systems. Public health crises caused by the COVID-19 outbreak may exacerbate other pre-existing political, social and economic risks in certain countries or globally. The duration of the COVID-19 outbreak and its effects cannot be determined with certainty.

In the view of the Board, other than those noted above, there have not been any material changes to the fundamental nature of these risks since the previous report and these principal risks and uncertainties, as summarised, are equally applicable to the remaining six months of the financial year as they were to the six months under review.

The Board is mindful of the uncertainty surrounding the potential duration of the COVID-19 pandemic and its impact on the global economy, the Company’s assets and the potential for the level of revenue derived from the portfolio to reduce versus the prior year. The Directors, having considered the nature and liquidity of the portfolio, the Company’s investment objective and the Company’s projected income and expenditure, are satisfied that the Company has adequate resources to continue in operational existence for the foreseeable future and is financially sound. The Board believes that the Company and its key third party service providers have in place appropriate business continuity plans and will be able to maintain service levels through the COVID-19 pandemic.

When the Company was launched in late 2010, the Board made a commitment that before the Company’s fifth AGM and at five yearly intervals thereafter, it would formulate and submit to shareholders proposals to provide them with an opportunity to realise the value of their ordinary shares at the applicable NAV per ordinary share less applicable costs. The next opportunity at which such proposals will be put to shareholders is in early 2021. The Board has reviewed the potential impact that such an offer may have on the Company’s going concern assessment, and in particular has considered feedback received from the Company’s corporate broker regarding shareholder demand for the Company’s shares and investor appetite for the Company’s investment strategy. The corporate broker remains in regular communication with shareholders and, based on shareholder views at the time of publication of this report, there is no indication that demand to exit will be at a level which would jeopardise the ongoing viability of the Company.

The Board has reviewed the potential impact that such an offer may have on the Company’s going concern assessment, and in particular has considered feedback received from the Company’s broker, Winterflood Securities, regarding shareholder demand for the Company’s shares and investor appetite for the Company’s investment strategy. Winterflood remains in regular communication with shareholders and, based on shareholder views at the time of publication of this report, does not anticipate that demand to exit will be at a level which would jeopardises the ongoing viability of the Company.

Based on the above, the Board is satisfied that it is appropriate to continue to adopt the going concern basis in preparing the financial statements. The Company has a portfolio of investments which are considered to be readily realisable and is able to meet all of its liabilities from its assets and income generated from these assets. Ongoing charges (excluding performance fees, finance costs, direct transaction costs, custody transaction charges, non-recurring charges and taxation) were approximately 1.39% of average net assets for the year ended 30 September 2019.

BlackRock Fund Managers Limited (’BFM’) is the Company’s AIFM. BFM has (with the Company’s consent) delegated certain portfolio and risk management services, and other ancillary services to BlackRock Investment Management (UK) Limited (’BIM (UK)’). Both BFM and BIM (UK) are regarded as related parties under the Listing Rules. Details of the management and performance fees payable are set out in note 4 and note 14. The related party transactions with the Directors are set out in note 13.

The Disclosure Guidance and Transparency Rules (’DTR’) of the UK Listing Authority require the Directors to confirm their responsibilities in relation to the preparation and publication of the Interim Management Report and Financial Statements.

The Directors confirm to the best of their knowledge that:

·        the condensed set of financial statements contained within the half yearly financial report has been prepared in accordance with the International Accounting Standard 34 – Interim Financial Reporting; and

·        the interim management report, together with the Chairman’s Statement and Investment Manager’s Report, includes a fair review of the information required by 4.2.7R and 4.2.8R of the Financial Conduct Authority (’FCA’) Disclosure Guidance and Transparency Rules.

The half yearly financial report has been reviewed by the Company’s Auditors.

The half yearly financial report was approved by the Board on 28 May 2020 and the above responsibility statement was signed on its behalf by the Chairman.

For and on behalf of the Board
28 May 2020


United International Transport (Saudi Arabia, Industrials, 3.6% (2019: 2.2%))3 is a Saudi Arabian franchisee of the rental car company Budget International. United International Transport operates 101 rental offices with a fleet of over 24,000 cars.

LT Group (Philippines, Industrials, 3.4% (2019: 2.9%)) is a diversified investment company that is involved in beverages, tobacco, property development and banking businesses in the Philippines, including Philippines National Bank.

Eastern Tobacco (Egypt, Consumer Staples, 3.3% (2019: 2.9%)) is an Egypt-based company, which is engaged in manufacturing tobacco products. The company’s product portfolio includes cigarettes, cigars, pipe tobacco and molasses tobacco as well as other related products such as filter rods and homogenized tobacco.

Bank Mandiri (Indonesia, Financials, 3.3% (2019: 2.3%)) is one of Indonesia’s largest banks by assets, loans and deposits, providing a number of services to both individual and corporate clients.

Bank of the Philippine Islands (Philippines, Financials, 3.1% (2019: 2.5%)) is a leading bank in the Philippines and in the Southeast Asian region. BPI is a universal bank and together with its subsidiaries and affiliates, it offers a wide range of financial products and solutions that serve both retail and corporate clients. The bank has a network of over 800 branches in the Philippines, Hong Kong and Europe and close to 3,000 ATMs and CDMs (cash deposit machines).

Almarai (Saudi Arabia, Consumer Staples, 3.1% (2019: N/A))3 is a food and beverage manufacturer and distributor and considered the world’s largest vertically integrated dairy company. Almarai is active in five categories across the Middle East and North Africa – dairy, juice, baked goods, poultry and infant nutrition.

Astra International (Indonesia, Consumer Discretionary, 2.9% (2019: 3.5%))2 is an Indonesian conglomerate. It owns Southeast Asia’s largest independent automotive group and is the leading provider of a full range of automobile and motor-cycle products. The company also has interests in financial services, heavy equipment, mining, construction and energy, agribusiness, infrastructure and logistics, information technology and property. It is also an active participant in the development of Indonesia’s strategic infrastructure, including toll roads, energy, transportation and logistics and sea ports.

Orascom Construction (Egypt, Industrials, 2.9% (2019: 2.6%)) is an engineering, procurement and construction contractor based in Egypt. The company was Egypt’s first multinational corporation and is now one of the region’s largest corporations focused on infrastructure, industrial and high-end commercial projects in the Middle East, North Africa, the United States and the Pacific Rim for public and private clients.

MCB Bank (Pakistan, Financials, 2.9% (2019: 2.0%))3 is one of Pakistan’s largest banks, serving over 8 million client accounts and operating over 1,400 branches domestically and abroad.

PTT Exploration & Production (Thailand, Energy, 2.8% (2019: N/A)) is one of Thailand’s national petroleum exploration and production companies. The firm is a subsidiary of the state-owned PTT Public Company Ltd. with projects across South East Asia, the Americas and Africa.

1     All percentages reflect the gross market exposure of the holding as a percentage of net assets. Percentages in brackets represent the value of the holding as at 30 September 2019. Together, the ten largest investments represent 31.3% of net assets (30 September 2019: 29.1%).

2     Includes exposure gained via contracts for difference and equity holdings.

3     Includes exposure gained solely via contracts for difference.



Relative to the Benchmark Index (%)1                   Absolute weights (Gross Market Exposure as a % of Net Assets)1
Vietnam8.3Saudi Arabia11.7
Ukraine2.4United Arab Emirates4.5
United Arab Emirates1Romania3.5
Saudi Arabia0.7Greece3
Sri Lanka-0.1Chile2.7
Czech Republic-0.7
Other countries in the benchmark-12.3


Sources: BlackRock and Datastream.

1     Includes exposure gained through equity positions and long and short CFD positions.


Relative to the Benchmark Index (%)¹Absolute weights (Gross Market Exposure as a % of Net Assets)¹
Consumer Discretionary10.1Financials25.2
Consumer Staples8.6Consumer Staples17.5
Industrials7.2Consumer Discretionary13.5
Real Estate6.9Industrials13.5
Information Technology1.5Real Estate11.3
Health Care-0.7Communication Services5.9
Materials-1.2Health Care2.2
Utilities-4.4Information Technology1.9
Communication Services-5Utilities1.5

Sources: BlackRock and Datastream.

1     Includes exposure gained through equity positions and long and short CFD positions.



country of 


value and 
as a % of 
net assets3 
Equity portfolio
PTT Exploration & ProductionThailand Energy 7,086 2.8 
Thai BeverageThailand Consumer Staples 5,553 2.2 
Total Access CommunicationThailand Communication Services 4,702 1.8 
Land & Houses Public CompanyThailand Real Estate 4,060 1.6 
Aeon Thana SinsapThailand Financials 3,116 1.2 
Charoen Pokphand FoodThailand Consumer Staples 2,367 0.9 
————– ————– 
26,884 10.5 
————– ————– 
Eastern TobaccoEgypt Consumer Staples 8,541 3.3 
Orascom ConstructionEgypt Industrials 7,433 2.9 
Medinet NasrEgypt Real Estate 3,890 1.5 
EFG Hermes HoldingsEgypt Financials 3,770 1.5 
Integrated DiagnosticsEgypt Health Care 2,562 1.0 
————– ————– 
26,196 10.2 
————– ————–  
Bank MandiriIndonesia Financials 8,320 3.3 
Unilever IndonesiaIndonesia Consumer Staples 4,564 1.8 
Astra InternationalIndonesia Consumer Discretionary 3,582 1.4 
Indo TambangrayaIndonesia Energy 3,401 1.3 
Mitra AdiperkasaIndonesia Consumer Discretionary 3,293 1.3 
PT Pakuwon JatiIndonesia Real Estate 2,700 1.1 
————– ————– 
25,860 10.2
————– ————– 
LT GroupPhilippines Industrials 8,665 3.4 
Bank of the Philippine IslandsPhilippines Financials 8,000 3.1 
Bloomberry ResortsPhilippines Consumer Discretionary 5,478 2.2 
GT Capital HoldingPhilippines Industrials 3,386 1.3 
————– ————– 
25,529 10.0 
————– ————– 
KazatompromKazakhstan Energy 6,294 2.5 
Halyk Savings BankKazakhstan Financials 4,921 1.9 
KAZ MineralsKazakhstan Materials 3,220 1.2 
————– ————– 
14,435 5.6 
————– ————– 
Emaar DevelopmentUnited Arab Emirates Real Estate 5,641 2.2 
Emaar PropertiesUnited Arab Emirates Real Estate 4,078 1.6 
Air ArabiaUnited Arab Emirates Industrials 1,666 0.7 
————– ————– 
11,385 4.5 
————– ————–  
British American Tobacco MalaysiaMalaysia Consumer Staples 4,740 1.8 
GentingMalaysia Consumer Discretionary 3,890 1.5 
RHB BankMalaysia Financials 2,044 0.8 
Sapura EnergyMalaysia Energy 665 0.3 
————– ————–  
11,339 4.4 
————– ————–  
Banca TransilvaniaRomania Financials 5,519 2.2 
Erste Group BankRomania Financials 3,328 1.3 
————– ————–  
8,847 3.5 
————– ————– 
Empresas CMPCChile Materials 6,493 2.5 
Banco Santander ChileChile Financials 544 0.2 
————– ————–  
7,037 2.7 
————– ————–  
Koza AltinTurkey Materials 4,662 1.8 
TuprasTurkey Energy 2,218 0.9 
————– ————– 
6,880 2.7 
————– ————–  
MHPUkraine Consumer Staples 6,082 2.4 
————– ————– 
6,082 2.4 
————– ————– 
Hellenic Telecom OrganisationGreece Communication Services 3,540 1.4 
National Bank of GreeceGreece Financials 2,220 0.9 
————– ————– 
5,760 2.3 
————– ————– 
Vivo EnergyPan-Africa Consumer Discretionary 4,567 1.8 
————– ————– 
4,567 1.8 
————– ————– 
Bank PekaoPoland Financials 4,134 1.6 
————– ————– 
4,134 1.6 
————– ————– 
Wizz Air HoldingsHungary Industrials 4,064 1.6 
————– ————– 
4,064 1.6 
————– ————– 
Equity GroupKenya Financials 3,606 1.4 
————– ————– 
3,606 1.4 
————– ————– 
Hub PowerPakistan Utilities 3,2711.3 
————– ————– 
————– ————– 
EcopetrolColombia Energy 784 0.3 
Ecopetrol ADRColombia Energy 481 0.2 
————– ————– 
1,265 0.5 
————– ————– 
United Bank for AfricaNigeria Financials 432 0.2 
————– ————– 
432 0.2 
————– ————– 
Equity investments197,573 77.4 
————– ————– 
BlackRock’s Institutional Cash Series plc – US Dollar Liquid Environmentally Aware Fund (Cash Fund)56,011 21.9 
————– ————– 
Total equity investments (including Cash Fund)253,584 99.3 
————– ————– 
Total investments excluding CFDs253,584 99.3 
 =========  ========= 


country of 



as a % of 
net assets3 
US$’000 US$’000 
CFD portfolio
Long positions
United International TransportSaudi Arabia Industrials 9,153 3.6 
AlmaraiSaudi Arabia Consumer Staples 7,868 3.1 
Yanbu National PetrochemicalSaudi Arabia Materials 4,753 1.9 
National Medical CareSaudi Arabia Health Care 3,204 1.2 
————– ————– 
24,978 9.8 
————– ————– 
Vincom RetailVietnam Real Estate 6,791 2.7 
Quang Ngai SugarVietnam Consumer Staples 5,126 2.0 
Mobile WorldVietnam Consumer Discretionary 4,927 1.9 
FPTVietnam Information Technology 4,902 1.9 
Petrovietnam Fertilizer & ChemicalsVietnam Materials 1,819 0.7 
————– ————– 
23,565 9.2 
————– ————– 
MCB BankPakistan Financials 7,337 2.9 
Hub PowerPakistan Utilities 658 0.2 
————– ————– 
7,995 3.1 
————– ————– 
OoredooQatar Communication Services 6,912 2.7 
————– ————– 
6,912 2.7 
————– ————– 
Astra InternationalIndonesia Consumer Discretionary 3,899 1.5 
Mitra AdiperkasaIndonesia Consumer Discretionary 1,154 0.5 
————– ————– 
5,053 2.0 
————– ————– 
LPPPoland Consumer Discretionary 3,487 1.4 
————– ————– 
3,487 1.4 
————– ————– 
National Bank of GreeceGreece Financials 1,779 0.7 
————– ————– 
1,779 0.7 
————– ————– 
Equity GroupKenya Financials 269 0.1 
————– ————– 
269 0.1 
————– ————– 
Sapura EnergyMalaysia Energy 25 0.0 
————– ————– 
25 0.0 
————– ————– 
Kuwait Food (Americana)4Kuwait Consumer Discretionary 0.0 
————– ————– 
————– ————– ————– 
Total long CFD positions(11,429)74,066 29.0 
————– ————– ————– 
Total short CFD positions192 (6,331)(2.5)
————– ————– ————– 
Total CFD portfolio(11,237)67,735 26.5 
 =========  =========  ========= 




as a % of 
net assets3 
Equity investments197,573 197,573 77.4 
Total long CFD positions(11,429)74,066 29.0 
Total short CFD positions192 (6,331)(2.5)
Forward currency positions1,034 16,043 6.3 
————– ————– ————– 
Total gross exposure187,370 281,351 110.2 
————– ————– ————– 
Cash Fund356,011 56,011 21.9 
————– ————– ————– 
Total investments243,381 337,362 132.1 
————– ————– ————– 
Cash and cash equivalents (net of bank overdraft)1,32,003 (91,978)(36.1)
Other net current assets9,912 9,912 4.0 
Non current liabilities(19)(19)0.0 
————– ————– ————– 
Net assets255,277 255,277 100.0 
 =========  =========  ========= 

The Company was geared through the use of long and short CFD positions and gross and net gearing as at 31 March 2020 were 8.9% and 3.9% respectively (31 March 2019: 19.6% and 6.4%; 30 September 2019: 14.1% and 6.0%, respectively). Gross and net gearing are Alternative Performance Measures, see Glossary in the half yearly report and financial statements.

1     Fair value is determined as follows:

  • Listed investments are valued at bid prices where available, otherwise at latest market traded quoted prices.
  • The sum of the fair value column for the CFD contracts totalling US$(11,237,000) represents the net losses on the fair valuation of all the CFD contracts, which is determined based on the difference between the notional transaction price and value of the underlying shares in the contract (in effect the unrealised gains/(losses) on the exposed positions). The cost of purchasing the securities held through long CFD positions directly in the market would have amounted to US$85,495,000 at the time of purchase, and subsequent market movements in prices have resulted in unrealised losses on the long CFD positions of US$11,429,000 resulting in the value of the total market exposure to the underlying securities decreasing to US$74,066,000 as at 31 March 2020. The notional price of selling the securities to which exposure was gained via the short CFD positions would have been US$6,523,000 at the time of entering into the contract, and subsequent market movement in prices have resulted in unrealised gains on the short CFD positions of US$192,000 resulting in the value of the market exposure of these investments decreasing to US$6,331,000 at 31 March 2020. If the short positions had been closed on 31 March 2020 this would have resulted in a gain of US$192,000 for the Company.

2     Market exposure in the case of equity investments is the same as fair value. In the case of CFDs it is the market value of the underlying shares to which the portfolio is exposed via the contract.

3     The gross market exposure column for cash and cash equivalents has been adjusted to assume the Company held investments directly rather than exposure being gained through CFDs.

4     Unquoted investment.


We have been engaged by the Company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 31 March 2020 which comprises the Statement of Comprehensive Income, the Statement of Changes in Equity, the Statement of Financial Position, the Cash Flow Statement and the Notes to the Financial Statements. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

This report is made solely to the Company in accordance with guidance contained in International Standard on Review Engagements 2410 (UK and Ireland) “Review of Interim Financial Information Performed by the Independent Auditor of the Entity” issued by the Auditing Practices Board. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company, for our work, for this report, or for the conclusions we have formed.

The half-yearly financial report is the responsibility of, and has been approved by, the Directors. The Directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure Guidance and Transparency Rules of the United Kingdom’s Financial Conduct Authority.

As disclosed in note 2, the annual financial statements of the Company are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34, “Interim Financial Reporting”, as adopted by the European Union.

Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, “Review of Interim Financial Information Performed by the Independent Auditor of the Entity” issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 31 March 2020 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure Guidance and Transparency Rules of the United Kingdom’s Financial Conduct Authority.

28 May 2020

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