Last checked at 18 Dec 2008 15:43
BLACKROCK GREATER EUROPE INVESTMENT TRUST plcAll information is at 30 November 2008 and unaudited.
Performance at month end with net income reinvested
One Three One Since launch Month Months Year (20 Sep 04)Net asset value -0.1% -23.2% -31.3% 35.4%Share price -5.3% -24.8% -34.4% 22.4%FTSE World Europe ex UK -1.7% -27.2% -33.6% 24.6%
Sources: BlackRock and Datastream
At month endNet asset value (capital only): 127.13pNet asset value (including income): 127.41p includes net revenue of 0.28pShare price: 115.00pDiscount to NAV (capital only): 9.5%Discount to NAV (including income): 9.7%Gearing (capital only): NilNet yield: 2.6%Total assets (capital only): ‚£143.20m**Ordinary shares in issue: 112,388,958** excluding 2,728,833 shares held in treasury.** includes current year revenue.
Sector Analysis Total Assets (%) Index (%) Country Analysis Total Assets (%)
Financials 21.0 23.2 France 23.4Health Care 15.5 10.0 Switzerland 22.2Telecommunications 10.6 8.3 Germany 9.8Consumer Services 9.8 5.7 Netherlands 9.2Industrials 8.6 11.6 Spain 8.1Utilities 8.5 9.1 Italy 7.5Oil & Gas 7.8 7.7 Emerging Europe 5.6Consumer Goods 7.3 14.3 Belgium 3.1Basic Materials 1.0 6.3 Greece 2.2Technology 0.4 3.8 Ireland 1.3Other Investments 5.6 Russia 1.3Net current assets 3.9 United Kingdom 1.2 Israel 0.4 Poland 0.4 Turkey 0.4 Net current assets 3.9 ----- ----- ----- 100.0 100.0 100.0 ===== ===== =====
Ten Largest Equity Investments
Company Country of RiskBlackRock Eurasian Frontiers Hedge Fund Emerging EuropeBNP Paribas FranceENI ItalyKoninklijke NetherlandsNestlĩ SwitzerlandNovartis SwitzerlandRoche SwitzerlandSanofi-Aventis FranceTelefonica SpainZurich Financial Services Switzerland
Commenting on the markets, Vincent Devlin, representing the Investment Manager noted:
European equities trended downwards in line with global markets during November. The FTSE World Europe ex UK Index returned -1.7% (Sterling terms). The economic news over the month continued to deteriorate quite dramatically but markets were encouraged by the increasingly proactive stance of the authorities. In Europe, the European Central Bank cut rates by 50bps and the European Commission followed with a fiscal package worth ¢â€š¬200bn, with the purpose of stimulating spending and boosting consumer confidence. Emerging Europe underperformed developed European markets, with the MSCI Emerging Europe Index posting a drop of -10.6% through November in Sterling terms.
During the month the Company's NAV returned -0.1%, outperforming the reference index. The contribution from the Emerging Europe region was negative, with the benefit to the Company from its exposure to the BlackRock Eurasian Frontiers Hedge Fund being offset by negative contributions from Russia and Poland. The main positive contribution to the Company came from Developed Europe, including exposures to companies listed in Spain, Netherlands, Greece and Belgium. Holding cash as markets declined had a positive relative contribution to performance. The Company was not geared as at 30 November 2008.
The best performing stocks were mainly found in the Consumer Goods and Services sector and included gaming company OPAP and media conglomerate Vivendi. Other stocks to have a positive contribution to performance were Telecoms companies Belgacom, KPN and Telefonica as well as industrial engineer, Alstom. In addition, not holding shares in Volkswagen was additive as the car manufacturer underperformed after rising to irrational prices in October. Sector allocation was also positive with underweight positions in Consumer Goods, Financials, especially Banks, along with an overweight stance in Telecoms being positive.
The stocks to detract from performance were mainly found in the Health Care sector with the Company's holdings in Fresenuis and Icon posting declines. Elsewhere, selected Banks which included BNP Paribas, Intesa Sanpaolo and Credit Suisse also detracted.
During the month the Company reduced its exposure to the Health Care and Consumer Staples sectors through the sale of ICON, Bayer and BAT. The proceeds were partially re-invested in the Industrial sector where new positions in TNT, Finmeccanica and MAN were established.
Exposure to Emerging Europe remained flat during the month to finish at 8.1%. The BlackRock Eurasian Frontiers Hedge Fund (5.6%) accounted for the majority of the emerging market weight providing diversified exposure to the region. Net market exposure was reduced during the month to 93%.
The immediate news flow and outlook for earnings remains extremely poor. However, with both Developed and Emerging Europe equity valuations in the market at multi generational lows we feel that once investors' risk appetite returns, there is the scope for a powerful bounce back particularly for those companies where valuations have become overly compressed. At the portfolio level, we currently favour companies with strong franchises, reliable earnings, strong balance sheets (high cash, low debt) and experienced management teams. In our view, these companies have the scope to emerge from the downturn in a much stronger position as true market leaders. On a sector view, the Company currently has a bias to Financials, but still retains an underweight stance relative to the reference index, especially in Banks and Diversified Financials with a small overweight in Insurance. Other key sector weights include Health Care, Telecoms and Consumer Staples. The Company has limited exposure to Information technology and Materials.
Latest information is available by typing www.blackrock.co.uk/its on the internet, "BLRKINDEX" on Reuters, "BLRK" on Bloomberg or "8800" on Topic 3 (ICV terminal).
18 December 2008
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