BlackRock Greater Europe Investment Trust Regulatory News (BRGE)

20 Feb 2006 16:22

Merrill Lynch Greater Europe IT PLC20 February 2006 MERRILL LYNCH GREATER EUROPE INVESTMENT TRUST plc All information is at 31 January 2006 and unaudited. Performance at month end with net income reinvested One Three One Since launch Month Months Year (20Sep04)Net asset value 4.4% 17.6% 37.7% 53.3%Share price 7.7% 20.1% 43.2% 51.4%FTSE World Europe ex UK 3.1% 13.1% 29.0% 41.8% Sources: Merrill Lynch Investment Managers and Datastream. At month endNet asset value: 151.51p Includes net revenue return of 0.10pShare price: 149.50pDiscount to NAV: 1.3%Gearing: 10.0%Net yield: 1.1%Total assets: £222.0mOrdinary shares in issue: 132,955,096 BenchmarkSector Analysis Total Assets (%) Index (%) Country Analysis Total Assets (%)Financials 36.5 33.5 Germany 21.4Industrials 11.1 10.5 France 17.2Oil & Gas 10.9 6.7 Switzerland 12.2Utilities 8.0 6.7 Italy 9.8Telecoms 7.2 6.5 Netherlands 5.1Healthcare 6.5 8.4 Scandinavia 5.0Consumer Services 6.1 5.4 Russia 4.9Basic Materials 5.7 5.0 Sweden 4.8Consumer Goods 4.4 12.4 Spain 4.4Technology 4.1 4.9 Belgium 4.1Other Investments 2.0 - Israel 4.1Net Current Liabilities (2.5) - Ireland 4.0 Poland 1.8 Greece 1.6 Turkey 0.9 Austria 0.1 Other Countries 1.1 Net Current Liabilities (2.5) ----- ----- ----- 100.0 100.0 100.0 ----- ----- ----- Ten Largest Equity InvestmentsCompany Country of RiskAllianz GermanyBBVA SpainCredit Suisse SwitzerlandFortum FinlandIng Groep NetherlandsNovartis SwitzerlandRWE GermanySiemens GermanyTotal FranceUBS SwitzerlandUnicredito Italiano Italy Commenting on the markets, James Macmillan, representing the Investment Managernoted: European equity markets continued their upward trend in January, reaching freshfour year highs. The FTSE World Europe ex UK and MSCI Emerging Europe returned3.1% and 10.7% in sterling terms, respectively. Investors focused on generallyupbeat data on economic growth in Europe and largely ignored external factorssuch as rising energy prices and another 0.25% increase in the US Federal Fundstarget rate to 4.5%. Indications that the European Central Bank is likely toincrease its official interest rates by 0.25% in March were generally shruggedoff as a non-event. European corporate earnings reported in recent monthscontinued to be slightly ahead of forecasts, albeit with some disappointmentsmainly in consumer related sectors. The Company's NAV returned 4.4% during January outperforming the reference indexby 1.3%. The contribution from the emerging Europe region continued to have apositive effect with strong stock selection in Poland and Russia. The use offlexible gearing was also beneficial and the Company benefited from beingpositively geared in a rising market. During January the Company benefited from strong stock selection across a rangeof sectors which included energy, diversified financials, telecoms, utilitiesand healthcare. Individual stocks to have a positive contribution were exchangeprovider Deutsche Boerse, utility Fortum, oilfield services company Geophysique,medical company Fresenuis and logistics provider Deutsche Post. The stocks which detracted from performance were low cost airline Ryan Air (-7%)falling on lower passenger volume data, and pharmaceutical company AstraZeneca(-4%) due to market concerns that the loss of US patent protection for it's topselling heart drug, Toprol, would negatively impact earnings. During the month the Company increased its exposure to the telecoms andautomobile sector through the purchase of Telefonica and Renault. This wasfunded by selling German steelmaker Salzgitter and Hungarian pharmaceuticalEgis, both which after strong performance reached our target prices. The Company continues to have a bias towards the financials, mainly throughbanks but also diversified financials and insurance. Other key sector weightsinclude utilities and energy. Exposure to Emerging Europe decreased slightlyduring the month to finish at 11.7%. The Company ended the month with a netmarket exposure of 110%. Recent surveys suggest that business confidence is rising strongly inContinental Europe signalling that economic growth is accelerating in 2006.Companies are benefiting from strong overseas demand particularly in the UnitedStates and Asia. However, concerns still remain that the continued high oilprice and a slowdown in global economic growth levels may impact profit margins. Despite some bright spots in the periphery countries such as Greece, Ireland,Norway, Spain and Sweden, domestic demand across much of Continental Europeremains weak as households suffer from high unemployment and weak purchasingpower. The consensus view is that economic growth across much of Europe willnot exceed its potential rate for the foreseeable future. Nevertheless mostobservers expect the European Central Bank to raise interest rates further inthe coming months to counter the threat of higher inflation. Meanwhile theoperating performance of European listed companies remains highly satisfactoryas a result of strenuous cost control and restructuring efforts. We expect 2006to be another year of strong positive returns from European equity markets. Latest information is available by typing www.mlim.co.uk/its on the internet,"MLIMINDEX" on Reuters, "MLIM" on Bloomberg or "8800" on Topic 3 (ICV terminal). 20 February 2006 This information is provided by RNS The company news service from the London Stock Exchange