Monthly Report

Deutsche Latin American Cos Tst PLC
14 February 2002

DEUTSCHE LATIN AMERICAN COMPANIES TRUST PLC



                      REPORT FOR THE MONTH OF JANUARY 2002


SUMMARY

Latin American markets staged further gains in January in a month dominated by
the Argentine devaluation and its aftermath. The MSCI Latin American index rose
by 2.6% in sterling terms, led by Mexico, in anticipation of its debt being
upgraded to investment grade status by Standard and Poor's. The smaller markets
also performed well, led by double digit gains in Colombia and Peru. However,
the long anticipated devaluation in Argentina brought about a 20.2% fall in that
market in sterling terms, and contributed to significant market weakness in
Brazil. Within emerging markets, Latin America's January rise was less than that
recorded in Asia; the wider MSCI Emerging Markets Free index rose by 6.3% over
the month. Nevertheless, Latin America outperformed developed markets: MSCI
World fell by 0.2% in sterling terms, largely ignoring tentative signs of
economic recovery.

Our performance was good in January; our NAV rose by 4.3%, well ahead of the
index. We benefited from our zero weight in the collapsing Argentine market, as
well as from our overweight position in Mexico. In particular, we benefited from
a strong rise in shares of industrial conglomerate Gissa, as well as our
overweights in BBVA Bancomer and Coca Cola Femsa, both of which did well in
January. Our share price rose by 3.9% over the month, just behind the NAV, so
that the discount widened slightly.

We remain positive on the outlook for regional equities in 2002. Although
Argentina faces the immense social, political and economic challenges of life
after convertibility, these difficulties should have a limited impact on the
rest of the region. Lower oil prices and a more competitive currency in Brazil
should help the trade balance, while interest rates are likely to be cut ahead
of the upcoming Presidential elections. A worldwide cyclical recovery should
benefit the whole region, while low global interest rates, higher investor risk
appetite and attractive valuations are all factors in Latin America's favour.



MEXICO

The Mexican market was strong in January, shrugging off weaker U.S. markets and
supported by ongoing peso stability. Mid-month, the news came out that rating
agency Fitch had granted Mexico's debt investment grade status, preparing the
ground for an upgrade by Standard & Poor's which finally came through in early
February. Interestingly, S&P cited Mexico's growing economic convergence with
the US, improved debt ratios, greater liquidity and a better fiscal/monetary
policy mix as factors in its favour, while listing its weaknesses as a large
consolidated public sector fiscal deficit, a narrow tax base which limits
government spending, and the weak outlook for important structural reforms such
as liberalisation of the electricity and oil sectors. In our opinion the key
points to watch for the market short term are any uptick in industrial
production, which was still negative in November and December, and the behaviour
of inflation. December CPI was only 0.1% month on month, bringing annual
inflation to only 4.4% for 2001, the lowest since 1968. However, the impact of
the 2002 budget, including the readjustment of administered prices and the
effects of the tax reform, produced a sharp increase to 0.9% in January. As a
result, the Central Bank tightened monetary policy last week. We believe that
Mexico has the soundest fundamentals of any country in the region and should
benefit from an eventual US recovery, as soon as interest rate cuts and fiscal
stimulus take effect. We remain overweight Mexico, although we think much of the
good news has been priced into the market and have trimmed some of our largest
positions there after good performance.



BRAZIL

Brazil declined by 4.2% in sterling terms, as the market gave up some of its
strong fourth quarter gains. In particular, the Real showed some weakness on
Argentine contagion, and IPCA inflation numbers were poor for both December and
January. The January figure brings 12 month inflation to 7.6%, well above the
government's 2001 year end target of 4-6%, let alone the 3.5% 2002 target. As a
result, interest rates were kept on hold once again. Industrial production fell
by 6% year on year in December, showing the effect of these high rates on
growth, although certain manufacturers are reporting more encouraging signs.
Also upsetting the market were major announcements affecting the electricity
sector which on the whole were interpreted negatively by the market (as meaning
possible price controls, state intervention, and slow privatisation), although
since then the presentation of the measures has revealed more positive aspects
to the plan. In politics, we continued to see interest in early polls which
heightened speculation over the role that Roseana Sarney will play in the
presidential race. However, a recent rise in President Cardoso's popularity and
the likely ending of electricity rationing augur better for the success of the
government candidate. We believe that politics aside, the major risks to the
Brazilian market will continue to be the weak situation in Argentina and
disappointing inflation numbers. However, we believe that inflation will ease,
allowing interest rates to fall early in the year; valuations are relatively
attractive after the recent falls and therefore the market should present good
upside. We are neutral Brazil with a bias to add once we feel that the market
has consolidated.



CHILE

The Chilean market weakened by 2.2% in sterling terms during January; Argentine
contagion affected the peso so that it sold off from its year end level of P660
to around P680 by the month end. Shares of Argentine-exposed Chilean companies
such as utility Enersis and Coke bottler Andina also declined sharply. The
Central Bank cut rates by 50bp to 3%, as inflation remained benign and growth
fragile, despite some seasonal recovery in employment; annual inflation was only
2.6% in December, below the government's 3% forecast, indicating weak internal
demand. Activity data also came in weaker than expected in both November and
December; December industrial production fell by 2% year on year, with the
decline led by durable goods. However, more encouragingly, FDI reached US$5.5bn
in 2001, almost 50% more than the previous year. The easing cycle in Chile is
already well established which should allow some recovery in domestic
consumption this year, and stronger copper prices should provide a boost to the
export sector. We do not believe that the Argentine crisis should cause any
lasting damage to Chile and retain a small overweight.



ARGENTINA

The Argentine market led the region down in January; it fell by 20.1% in
sterling terms following the devaluation of the peso. Stocks had moved up
strongly in local terms towards the end of the year as investors sought a hedge
against devaluation. Early in January, the new Duhalde administration moved to a
two-tier exchange rate and kept banking controls in place. After a series of new
policy announcements and bank holidays, the peso has now been fully floated but
the lack of liquidity in the system, combined with some intervention by the
Central Bank, means that the current market rate of P2 to the US dollar is
unrepresentative. We believe that the currency is likely to weaken further when
all banking restrictions are loosened; in particular, our concerns centre around
inflation and the 2002 budget, as well as domestic politics. The impact of the
devaluation already began to pressure consumer prices in January, although with
unemployment of over 20%, wage increases should be relatively contained. Tax
collection will have been significantly depressed due to the collapse of
consumption in recent months, leading to a re-examination of the assumptions
contained in the budget. The Finance Minister is currently talking to the IMF
about possible new support, but any conditions are likely to be much tighter
than in the past. Under the current exchange rate, most Argentine companies
would have negative equity if they honoured their borrowings. We retain our zero
weighting in Argentina, where significant challenges remain.



ANDEAN MARKETS

Among the smaller markets, Colombia and Peru were strong in January, both rising
by around 12% in sterling terms. Colombia rallied as the Central Bank cut rates
again in the face of weakening economic activity and a breakdown in peace talks
was avoided. We expect the next few months to be marked by a buildup of news
about this summer's presidential election. The peace process will continue to be
a key issue for Colombians; we have already seen a substantial rise in popular
support for the more hardline policies espoused by candidate Alvaro Uribe. Peru
rallied sharply on hopes of an economic recovery, as GDP rose by 4.1% in
December, and a successful US$930m Eurobond issue allowed the government to swap
some of its old Brady debt. Venezuela rose by 4.4%, as political concerns
continued: President Chavez faced popular demonstrations and reserve losses
continued at the Central Bank, so that the bolivar remained under pressure. The
recent Carnival weekend brought the unexpected announcement that the government
was to float the bolivar, which is generally estimated to be around 30%
overvalued. This will provide an immediate boost to fiscal revenues, but if
inflation is not kept under control, purchasing power of Chavez's key
supporters, the poor, could be eroded. We are underweight the region, with a
small position in Venezuelan telecoms provider CANTV which has a strong free
cash flow yield and trades at extremely cheap valuations.




NET ASSET VALUE
                                                                                                 Fully diluted
                                                          31/01/02        31/12/01         31/01/02         31/12/01

                                                            84.1p           80.6p           87.4p            84.7p



MID-MARKET SHARE PRICE                                                           31/01/02               31/12/01

Ordinary Shares                                                                   67.25p                 64.75p

Warrants                                                                          13.75p                 12.75p



NAV based on total assets less current liabilities of £40.1 million (£38.5 million).

                                                                                              Market exposure
                                                                                       31/01/02               31/12/01
                                                                                          %                      %
EQUITIES

Brazil                                                                                       29.2                   30.5

Chile                                                                                         9.5                   10.3

Mexico                                                                                       41.0                   38.7

TOTAL PORTFOLIO                                                                              79.7                   79.5

Net Current Assets                                                                           20.3                   20.5
                                                                                         --------               --------
TOTAL                                                                                       100.0                  100.0
                                                                                         --------               --------
Based on total assets of £50.8 million (£48.8 million).

GEARING


Gearing at                                                                             31/01/02               31/12/01

                                                                                            26.4%                  26.8%
                                                                                             ====                   ====



LARGEST HOLDINGS (market value £36.3 million equal to 89.6% of total portfolio)

                                                     Country                                 £000's           % of
                                                                                                              portfolio

Telmex                                                                                        6,059                 14.9
                                                      Mexico
Petrobras                                                                                     3,461                  8.5
                                                      Brazil
Wal-Mart de Mexico                                                                            2,266                  5.6
                                                      Mexico
G.F BBVA-Bancomer                                                                             2,053                  5.1
                                                      Mexico
Banco Itau                                                                                    1,899                  4.7
                                                      Brazil
Ambev                                                                                         1,685                  4.1
                                                      Brazil
America Movil                                                                                 1,597                  3.9
                                                      Brazil
Grupo Televisa                                                                                1,492                  3.7
                                                      Mexico
Grupo Modelo                                                                                  1,492                  3.7
                                                      Mexico
Vale do Rio Doce                                                                              1,433                  3.5
                                                      Brazil
Cemex                                                                                         1,346                  3.3
                                                      Mexico
Coca-Cola Femsa                                                                               1,168                  2.9
                                                      Mexico
Eletrobras                                                                                    1,098                  2.7
                                                      Brazil
Telecom de Chile                                                                              1,044                  2.6
                                                      Chile
Tele Norte Leste                                                                                959                  2.4
                                                      Brazil
Consorcio Ara                                                                                   927                  2.3
                                                      Mexico
Itausa Inv                                                                                      850                  2.1
                                                      Brazil
Kimberly-Clark de Mexico                                                                        791                  2.0
                                                      Mexico
Pao de Acucar                                                                                   777                  1.9
                                                      Brazil
Femsa                                                                                           763                  1.9
                                                      Mexico
D & S                                                                                           716                  1.8
                                                      Chile
Enersis                                                                                         655                  1.6
                                                      Chile
Copel                                                                                           631                  1.5
                                                      Brazil
Gerdau                                                                                          606                  1.5
                                                      Brazil
Brasil Telecom                                                                                  577                  1.4
                                                      Brazil

FINANCIAL CALENDAR

Year End                                                        28 February 2002



For further information, contact Rosie Bichard at Deutsche Investment Trust
Managers Limited on 020-7545-6000.

For additional copies, changes of address or details of our Private Investors'
Plan, low cost ISA and Dividend Reinvestment Scheme (a recently established
scheme through which shareholders, who hold their shares on the Company's main
register, can use their dividends to purchase further shares) contact Mark Pope
on 020-7545-0520, e-mail address: [e-mail]. Further details of Deutsche
Latin American Companies Trust including the latest annual, interim and monthly
reports can be found on the Deutsche Asset Management website located at
www.deam-uk.com/uk/invest/.

Issued by Deutsche Latin American Companies Trust PLC and approved by Deutsche
Investment Trust Managers Limited, regulated by the Financial Services Authority
and manager of Deutsche Latin American Companies Trust PLC. Investors should be
aware that past performance is not necessarily a guide to future returns, values
can fall as well as rise and investors may not get back the amount they
invested. Fluctuations in exchange rates may also affect the value of your
investment. Investment in Deutsche Latin American Companies Trust PLC presents
those risks associated with emerging markets which may at times be illiquid and/
or volatile.



                      This information is provided by RNS
            The company news service from the London Stock Exchange