BLACKROCK GREATER EUROPE INVESTMENT TRUST PLC: Portfolio Update
BLACKROCK GREATER EUROPE INVESTMENT TRUST plc All information is at 30 November 2012 and unaudited.
Performance at month end with net income reinvested
One Three One Three Since launch
Month Months Year Years (20 Sep 04) Net asset value* (Undiluted) 4.9% 8.9% 19.8% 24.9% 134.4% Net asset value* (Diluted) 5.5% 9.2% 19.9% 25.0% 134.5% Share price 2.9% 10.3% 14.9% 24.2% 123.9% FTSE World Europe ex UK 3.8% 7.8% 13.8% 7.0% 81.9% Sources: BlackRock and Datastream
* Net asset value and share price performance includes the subscription share reinvestment, assuming the subscription share entitlement per share was sold and the proceeds reinvested on the first day of trading.
At month end Net asset value (capital only): 198.09p Net asset value (including income): 198.73p Net asset value (capital only)**: 198.09p Net asset value (including income)**: 198.73p Share price: 188.75p Discount to NAV (including income): 5.0% Discount to NAV (including income)**: 5.0% Gearing: 4.5% Net yield: 2.2% Total assets (including income): £251.2m Ordinary shares in issue: 120,947,078
During the month, 1,153,955 ordinary shares were issued for proceeds of £2.1m following the exercise of subscription shares.
** Diluted for treasury shares. *** Excluding 4,760,637 shares held in treasury.
Benchmark Sector Analysis Total Assets (%) Index (%) Country Analysis Total Assets (%)
Consumer Goods 20.9 19.4 Switzerland 24.7 Industrials 16.4 15.1 Germany 22.3 Basic Materials 12.7 8.5 France 14.6 Financials 11.4 20.6 Netherlands 6.4 Health Care 10.4 12.6 Denmark 4.5 Oil & Gas 9.1 6.7 Russia 4.2 Consumer Services 7.4 5.2 Finland 3.5 Technology 5.8 3.5 Ireland 3.1 Utilities 2.2 4.3 Spain 2.4 Telecommunications 1.4 4.1 Portugal 2.2 Net current assets 2.3 - Belgium 2.1
----- ----- Hungary 1.9
100.0 100.0 Italy 1.6
===== ===== Sweden 1.4
Net current assets 2.3
Ten Largest Equity Investments (in alphabetical order)
Company BASF Germany Cie Financière Richemont Switzerland Continental Germany Novo Nordisk Denmark Roche Switzerland Ryanair Ireland Schneider Electric France Swiss Re Switzerland Volkswagen Germany Zurich Insurance Switzerland
Commenting on the markets, Vincent Devlin, representing the Investment Manager noted:
During the month, the Company's NAV rose by 4.9% and the share price rose by 2.9%. For reference, the FTSE World Europe ex UK Index increased by 3.8% during the same period.
European equities enjoyed a positive month in November. The buoyant mood in equity markets was also reflected by the further contraction in sovereign bond yield spreads, with Spanish and Italian 10 year rates tightening to 5.4% and 4.5% respectively.
With China's political leadership handover progressing smoothly and Chinese economic momentum trending up, consumer-related names with exposure to the Asian region have done well in November. However, relative 'safe-haven' sectors lagged the market, along with commodity-related stocks.
Both stock selection and sector allocation aided returns during the month. The Company's sector allocation, with a larger weighting to technology and a lower weighting to utilities, both provided meaningful contributions to returns in November. At a stock level, positions in consumer services and consumer goods performed best during November. Within consumer services, a position in Ryanair performed strongly after the company reported stronger than expected profits for the previous quarter. Particularly encouraging was the company's ability to deliver growth in the average fare charged on a year-on-year basis. Within consumer goods, a position in Swiss luxury goods business Richemont also performed strongly, benefiting both from strong profit growth and improving sentiment surrounding Chinese consumption.
Elsewhere within the portfolio, positions in German auto supplier Continental and French domestic autos name Renault both performed strongly, as did a position in Schneider Electric, a French electrical engineering company which benefited from an improvement in global lead indicators. Less successful positions included seismic services company CGG Veritas, which suffered from a short term delay in its acquisition of Fugro, and Novo-Nordisk which saw some profit taking as news surrounding the approval of their new drug came through.
At the end of the month, the Company had higher weights (when compared with the FTSE World Europe ex UK Index) in basic materials, oil & gas, industrials, consumer services and technology and lower weightings in financials, utilities, telecoms and health care.
Our outlook on European equities remains positive. The ECB's policy actions have created an environment in which structural reform can take place. 2012 may be the worst year for austerity in Europe in our view and from 2013 onwards we may begin to see incremental improvements on a year-on-year basis. For example, it is noteworthy that Italy's fiscal reforms have caused a -3% drag on GDP this year; this is set to fall to a -0.9% drag in 2013. The global economic environment is also supportive for equities next year, assuming that the US does not trip on the fiscal cliff issue and we are beginning to see evidence that China is now moving beyond its soft patch. Valuations in Europe are very cheap relative to the US, corporate bonds and its own history and this remains the case after the rally. Ownership levels are also very low, and further development in the political crisis may bring more assets back into the region.
12 December 2012
Latest information is available by typing www.brgeplc.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.
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