Portfolio Update
June 18 2012 - 11:41AM
UK Regulatory
TIDMBRGE TIDMBRGS
BLACKROCK GREATER EUROPE INVESTMENT TRUST plc
All information is at 31 May 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) -8.2% -8.6% -21.6% 34.3% 96.0%
Net asset value* (Diluted) -8.0% -8.4% -19.2% 34.4% 96.0%
Share price -8.9% -12.4% -20.1% 40.1% 86.4%
FTSE World Europe ex UK -7.7% -13.1% -24.2% 7.7% 50.8%
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): 165.30p
Net asset value (including income): 169.85p
Net asset value (capital only)**: 165.30p
Net asset value (including income)**: 169.85p
Share price: 160.75p
Discount to NAV (including income): 5.4%
Discount to NAV (including income)**: 5.4%
Subscription share price: 4.00p
Gearing: 0.01%
Net yield: 2.2%
Total assets (including income): GBP206.9m
Ordinary shares in issue: 121,802,604
Subscription shares in issue: 23,500,217
** Diluted for subscription shares.
*** Excluding 2,734,952 shares held in treasury.
Benchmark
Sector Analysis Total Assets (%) Index (%) Country Analysis Total Assets (%)
Consumer Goods 17.7 20.3 Switzerland 20.5
Industrials 13.6 14.4 France 16.1
Basic Materials 13.4 8.4 Germany 13.4
Oil & Gas 13.3 7.0 Russia 6.7
Financials 12.0 18.7 Denmark 5.7
Health Care 10.6 12.7 Italy 5.4
Consumer Services 8.2 5.1 Netherlands 5.3
Telecommunications 4.2 4.9 Spain 5.2
Technology 3.3 3.6 Sweden 5.1
Utilities 1.1 4.9 Finland 2.9
Net current assets 2.6 - Ireland 2.2
----- ----- Belgium 2.0
100.0 100.0 Luxembourg 1.8
===== ===== Portugal 1.5
Other 3.6
Net current assets 2.6
-----
100.0
=====
Ten Largest Equity Investments (in alphabetical order)
Company Country of Risk
BASF Germany
Eni Italy
LVMH Moet Hennessy Louis Vuitton France
Novo Nordisk Denmark
Pernod Ricard France
Roche Switzerland
SAP Germany
Swiss Re Switzerland
Syngenta Switzerland
Zurich Insurance Switzerland
Commenting on the markets, Vincent Devlin, representing the Investment Manager
noted:
During the month, the Company's NAV fell by 8.2% and the share price decreased
by 8.9%. For reference, the FTSE World Europe ex UK Index fell 7.7% during the
same period.
The month of May was marked by growing political uncertainty around the
Eurozone's future, which was the biggest factor weighing negatively on equity
markets. The risk of Greece's potential exit from the Eurozone, combined with
concerns about the recapitalisation of Spanish financial institutions, added to
the ongoing concerns of a weakening economic momentum across the US, Europe and
China, in particular. In that context, and with markets dropping significantly
in May, defensive areas of the market fared better than cyclicals and
financials.
The Company's negative performance can be primarily attributed to stock
selection within the oil & gas, health care and technology sectors. Within oil
& gas, positions in CGG Veritas, Saipem and Technip detracted from returns as
investor sentiment towards cyclicals deteriorated, although this was somewhat
offset by a successful position in KazMunaiGas. Health care proved the
strongest performing sector in the market during the month and the decision to
not own 'defensive' megacap names Sanofi and Novartis contributed to the
negative returns on a relative basis. Within the technology sector, a position
in Infineon Technologies suffered from the rotation away from companies with
exposure to global growth trends.
Offsetting that, many of the most successful individual stock positions proved
to be in general, high quality businesses with a higher degree of exposure to
emerging markets consumers. These included spirit producer Pernod Ricard and
brewer Anheuser-Bush InBev. The Company's holdings in defensive industrials
Kone and Vopak also continued to perform in the 'risk off' environment.
Portfolio positioning generally proved more successful at a sector level than
at a stock level, however, with the decision to implement less exposure to
financials and utilities proving successful.
At the end of the month, the Company had higher weights (when compared with the
FTSE World Europe ex UK Index) in oil & gas, basic materials and consumer
services and lower weights in financials, utilities, consumer goods,
health care, industrials, telecoms and technology.
Outlook
Market sentiment continues to be dominated by the sovereign debt crisis in the
Eurozone, with growing uncertainty around political decisions that need to be
taken to solve the crisis. The upcoming political events in Europe in June/
July will be important in determining the shape and form of the Eurozone in the
years to come, which will in turn determine the direction equity markets might
take. Market conditions are likely to remain volatile over this period. The
ongoing political uncertainty is likely to weigh on business and consumer
sentiment, which will further contribute to the deteriorating European economic
momentum. The global economic conditions are also weakening, driven by a loss
of momentum in the US and China in particular. In this uncertain economic and
political context, it is worth highlighting that European equity valuations are
very low and provide an attractive upside potential for investors with a long
term time horizon. A successful resolution to the Eurozone crisis and a
lifting of the political uncertainty could lead to the unlocking of that
valuation discount.
18 June 2012
ENDS
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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