| BLACKROCK GREATER
EUROPE INVESTMENT TRUST plc |
|
| All information is at
30 SEPTEMBER 2015 and unaudited. |
|
|
|
| Performance at month
end with net income reinvested |
|
|
One |
Three |
One |
Three |
Launch |
|
|
Month |
Months |
Year |
Years |
(20 Sep
04) |
|
| Net asset value*
(undiluted) |
-2.3% |
-2.4% |
5.8% |
38.6% |
200.4% |
|
| Net asset value*
(diluted) |
-2.1% |
-2.1% |
5.8% |
39.6% |
200.6% |
|
| Share price |
-3.3% |
-3.4% |
7.1% |
39.4% |
190.1% |
|
| FTSE World Europe ex
UK |
-3.2% |
-4.6% |
-1.2% |
34.6% |
130.9% |
|
| Sources: BlackRock
and Datastream |
|
|
|
| At month
end |
|
| Net asset value (capital
only): |
242.43p |
|
| Net asset value
(including income): |
246.01p |
|
| Net asset value (capital
only)*: |
242.43p |
|
| Net asset value
(including income)*: |
246.01p |
|
| Share price: |
236.00p |
|
| Discount to NAV
(including income): |
4.1% |
|
| Discount to NAV
(including income)*: |
4.1% |
|
| Subscription share
price: |
10.25p |
|
| Net gearing: |
0.2% |
|
| Net yield**: |
2.1% |
|
| Total assets (including
income): |
£257.1m |
|
| Ordinary shares in
issue***: |
104,309,663 |
|
| Subscription
shares: |
20,545,178 |
|
| Ongoing
charges****: |
0.94% |
|
|
|
|
* Diluted
for subscription shares and treasury shares.
** Based on a final dividend of 3.20p for the year ended 31 August
2014 and an interim dividend of 1.65p per share for the year ending
31 August 2015.
*** Excluding 5,488,898 shares held in treasury.
**** Calculated as a percentage of average net assets and using
expenses, excluding performance fees and interest costs, after
relief for taxation for the year ended 31 August 2014. |
|
| Sector Analysis |
Total
Assets |
|
Country
Analysis |
Total
Assets |
|
(%) |
|
|
(%) |
|
|
|
|
|
| Financials |
31.7 |
|
France |
20.6 |
| Industrials |
17.6 |
|
Switzerland |
14.9 |
| Health Care |
12.3 |
|
Italy |
11.5 |
| Consumer Services |
9.8 |
|
Germany |
11.1 |
| Consumer Goods |
8.4 |
|
Netherlands |
7.9 |
| Technology |
7.6 |
|
Sweden |
7.8 |
| Telecommunications |
4.0 |
|
Ireland |
6.5 |
| Basic Materials |
3.8 |
|
Denmark |
5.9 |
| Utilities |
2.5 |
|
Finland |
5.4 |
| Oil & Gas |
1.9 |
|
Belgium |
2.9 |
| Net current assets |
0.4 |
|
Turkey |
2.1 |
|
----- |
|
Spain |
1.7 |
|
100.0 |
|
Russia |
1.3 |
|
===== |
|
Net current assets |
0.4 |
|
|
|
|
----- |
|
|
|
|
100.0 |
|
|
|
|
===== |
|
|
|
|
|
| Ten Largest Equity
Investments |
|
|
|
%
of |
|
| Company |
Country |
Total
Assets |
|
|
|
|
|
| Novartis |
Switzerland |
5.3 |
|
| Novo Nordisk |
Denmark |
4.9 |
|
| Bayer |
Germany |
3.8 |
|
| AXA |
France |
3.7 |
|
| LVMH Moët Hennessy |
France |
2.9 |
|
| KBC Groep |
Belgium |
2.8 |
|
| Deutsche Telekom |
Germany |
2.7 |
|
| Ryanair |
Ireland |
2.7 |
|
| Zurich Insurance
Group |
Switzerland |
2.6 |
|
| Heineken |
Netherlands |
2.6 |
|
|
|
|
|
| Commenting on the
markets, Vincent Devlin, representing the Investment Manager
noted: |
|
| During the month, the
Company’s NAV fell by 2.3% and the share price decreased by 3.3%.
For reference, the FTSE World Europe ex UK Index was down 3.2%
during the period. |
|
| European equity markets
fell again in September. The market is down almost 11% since its
peak in April. The market was led down by especially poor
performance in banks, basic resources and autos as a combination of
stock-specific issues (such as the news that Volkswagen had used a
‘cheat’ device on their diesel cars) and concerns over a slowdown
in China dented sentiment. Weakness in basic resources was
exacerbated by China’s manufacturing PMI (Purchasing Manager’s
Index) hitting a three-year low. Monetary policy remained loose in
developed markets, with the Federal Reserve further delaying a
potential rate hike and the European Central Bank continuing its
Quantitative Easing programme. Despite concerns over Chinese
growth, economic data for Europe remained steady as signalled by
both Eurozone manufacturing PMI’s and the German business
confidence indicator. |
|
| Stock selection drove
performance in September, with sector allocation marginally
detracting. On a sector basis, the Company saw the greatest returns
through exposure to the technology and consumer services sectors. A
lower exposure relative to the index in consumer goods detracted
from returns, as investor capital flowed into this ‘defensive’
sector in response to global growth concerns. |
|
| Ryanair contributed
strongly to returns as they raised their net income guidance for
the full year by 25%. In addition, the share price responded
positively to the news that the proceeds from the sale of Aer
Lingus would be distributed to shareholders in the near term.
Avoiding VW, which saw its share price plunge by over 40% in
reaction to the company’s emissions scandal, was also beneficial to
relative performance. |
|
| Luxury names LVMH and
Luxottica also contributed to performance, beginning to bounce back
from a seemingly oversold position in August. Avoiding Banco
Santander continued to benefit the Company. The share price fell as
it experienced downgrades following a cautious tone on targets
delivered at their investor day. |
|
| Not holding Nestlé,
which makes up over 4% of the index, detracted from returns. The
share price increased as investors fled to safety. Zurich Insurance
was also a negative contributor to returns. Confidence in
management was weakened when the decision to walk away from the RSA
deal was announced. Additionally, some concerns surrounding the
non-life business and losses sustained in this area have grown. We
believe, however, that this stock continues to exhibit an
attractive and secure dividend yield and has a strong capital
position. Türkiye Halk Bankasi also detracted as heightened
investor concerns around the implications of a US rate hike and
domestic political uncertainty was reflected in the share
price. |
|
| At the end of the
period the Company had higher weightings when compared with the
reference index to financials, technology, consumer services and
industrials. The Company had lower exposure to consumer goods,
basic materials, oil & gas, health care, utilities and
telecoms. |
|
| Outlook |
|
| Despite the
uncertainties and worries which have dominated the market since the
summer, we remain constructive on European equities. Recent
European leading indicators suggest that the European economy has a
degree of resilience in the face of increased concerns over a
global slowdown. The European Commission's Economic Sentiment
Indicator (ESI), Business Climate, Industrial Confidence and
Services Confidence indicators have all showed signs of progress in
September, defying expectations of a decline. For companies
with more domestic exposure, European equity earnings momentum
remains robust. The European Central Bank’s programme of
Quantitative Easing remains in place and is having a positive
impact on the credit cycle and European GDP growth. Over the long
term, we continue to believe that the corporate earnings and cash
generation of companies are the key drivers of equity returns. |
|
| 14 October 2015 |
|
| 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. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|