BLACKROCK GREATER EUROPE INVESTMENT TRUST PLC: Portfolio Update
BLACKROCK GREATER EUROPE INVESTMENT TRUST plc All information is at 31 January 2013 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) 10.5% 17.4% 29.2% 38.9% 158.9% Net asset value (Diluted) 10.5% 18.1% 29.2% 38.9% 159.0% Share price 10.7% 16.9% 26.7% 41.7% 150.9% FTSE World Europe ex UK 9.4% 15.7% 23.6% 23.3% 102.8% Sources: BlackRock and Datastream
At month end Net asset value (capital only): 221.87p Net asset value (including income): 222.45p Net asset value (capital only)**: 221.87p Net asset value (including income)**: 222.45p Share price: 214.50p Discount to NAV (including income): 3.6% Discount to NAV (including income)**: 3.6% Gearing: 0.57% Net yield: 2.0% Total assets (including income): £260.1m Ordinary shares in issue: 116,285,355
** Diluted for treasury shares. *** Excluding 6,052,299 shares held in treasury.
Sector Analysis Total Assets (%) Index (%) Country Analysis Total Assets (%)
Consumer Goods 21.3 19.1 Switzerland 26.5 Industrials 15.1 15.0 Germany 21.1 Financials 13.9 21.5 France 17.4 Health Care 12.6 12.6 Denmark 6.2 Basic Materials 12.6 8.4 Russia 5.7 Oil & Gas 8.9 6.4 Netherlands 4.8 Consumer Services 6.6 5.2 Belgium 4.5 Technology 4.5 3.6 Finland 3.7 Utilities 2.4 4.1 Portugal 2.4 Telecommunications 1.5 4.1 Ireland 2.3 Net current assets 0.6 - Hungary 1.7
----- ----- Sweden 1.4
100.0 100.0 Norway 1.2
===== ===== Other 0.5
Net current assets 0.6
Ten Largest Equity Investments (in alphabetical order)
Company BASF Germany Cie Financière Richemont Switzerland Continental Germany Novo Nordisk Denmark Roche Switzerland Sanofi France 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 10.5% and the share price rose by 10.7%. For reference, the FTSE World Europe ex UK index rose 9.4% during the same period.
January saw a bullish start to the year in European equity markets, helped by a combination of decreased tail risk, relative valuation support and flows back into equities from fixed income. Selected corporate earnings also helped support the buoyant mood in markets, with aggregate earnings announcements beating expectations on average following a period of downgrades.
Successful stock selection drove performance in January. Positions in consumer services and health care proved especially profitable, somewhat offset by relatively unsuccessful positions within the oil & gas sector.
One of the top-performing stocks in the portfolio during January was Ryanair, which benefited from continued yield improvement and news of stronger than expected booking patterns in the second half of 2012. Within industrials, a position in EADS benefited performance as the stock experienced a very strong rally in the first few weeks of the year, and a position in Finnish industrial Kone gained as the company reported positive momentum in its Chinese new equipment business.
Within health care, a position in Novo Nordisk also performed strongly as the company reported strong results and as the management team affirmed a very positive outlook for the business. Semiconductor company ASML also aided performance. It appears that the semiconductor equipment order cycle is bottoming and ASML could report better numbers as the year progresses. In addition, the company gave more clarity on its next generation 2016/7 EUV tool which is the foundation for ASML next significant up cycle. Other strong performers included Russian name Sberbank and Belgian retail franchise KBC.
Stock selection in oil & gas was less successful, as holdings in Technip and CGG Veritas suffered from concerns surrounding the pricing cycle for exploration projects.
At the end of the month, the Company was positioned overweight basic materials, consumer services, health care, technology and consumer goods and underweight telecoms, oil & gas, industrials, financials and utilities. The Company had a cash position of 0.9% of NAV at the end of the month.
Outlook After a trough in activity in the summer of 2012, global leading economic indicators have been improving across the US, Europe and China and the outlook for 2013 looks brighter than for 2012. This background is supportive for equities.
Macro momentum remains supportive, with leading indicators continuing to improve. Earnings growth profile for European companies remains supportive, although the recent FX moves could put pressure on our 9% earnings growth prediction. Investor positioning remains low versus history, even if flows have been coming into the asset class. Valuations of European equities remain undemanding and the market should remain supported in the mid-term. Given the rapid rise in the market, we might see some market consolidation in the near term, but overall we remain positive on the upside potential for Europe.
13 February 2013
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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