| BLACKROCK GREATER
EUROPE INVESTMENT TRUST plc |
|
| All information is at
31 OCTOBER 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) |
3.5% |
-3.6% |
10.0% |
41.0% |
210.9% |
|
| Net asset value*
(diluted) |
3.1% |
-3.0% |
9.6% |
41.2% |
209.9% |
|
| Share price |
4.3% |
-2.1% |
12.0% |
41.0% |
202.7% |
|
| FTSE World Europe ex
UK |
5.0% |
-4.1% |
5.2% |
38.3% |
142.4% |
|
| Sources: BlackRock
and Datastream |
|
|
|
| At month end |
|
| Net asset value (capital
only): |
251.48p |
|
| Net asset value
(including income): |
254.67p |
|
| Net asset value (capital
only)*: |
250.90p |
|
| Net asset value
(including income)*: |
253.58p |
|
| Share price: |
246.25p |
|
| Discount to NAV
(including income): |
3.3% |
|
| Discount to NAV
(including income)*: |
2.9% |
|
| Subscription share
price: |
10.00p |
|
| Net gearing: |
0.5% |
|
| Net yield**: |
2.0% |
|
| Total assets (including
income): |
£266.8m |
|
| Ordinary shares in
issue***: |
104,309,663 |
|
| Subscription
shares: |
20,545,178 |
|
| Ongoing
charges****: |
0.89% |
|
|
|
|
* Diluted
for subscription shares and treasury shares.
** Based on a final dividend of 3.35p for the year ended 31 August
2015 and an interim dividend of 1.65p per share for the year ended
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 2015. |
|
| Sector Analysis |
Total
Assets |
|
Country
Analysis |
Total
Assets |
|
(%) |
|
|
(%) |
|
|
|
|
|
| Financials |
31.3 |
|
France |
19.2 |
| Industrials |
16.2 |
|
Switzerland |
15.3 |
| Health Care |
13.7 |
|
Germany |
14.3 |
| Consumer Goods |
12.1 |
|
Italy |
8.9 |
| Consumer Services |
9.0 |
|
Netherlands |
8.3 |
| Technology |
8.0 |
|
Sweden |
8.0 |
| Telecommunications |
4.0 |
|
Denmark |
7.3 |
| Basic Materials |
3.8 |
|
Ireland |
6.1 |
| Oil & Gas |
2.0 |
|
Finland |
4.8 |
| Net current liabilities |
(0.1) |
|
Belgium |
2.4 |
|
----- |
|
Turkey |
2.3 |
|
100.0 |
|
Spain |
1.7 |
|
===== |
|
Russia |
1.5 |
|
|
|
Net current
liabilities |
(0.1) |
|
|
|
|
----- |
|
|
|
|
100.0 |
|
|
|
|
===== |
|
|
|
|
|
| Ten Largest Equity
Investments |
|
|
|
%
of |
|
| Company |
Country |
Total
Assets |
|
|
|
|
|
| Novartis |
Switzerland |
5.0 |
|
| Novo Nordisk |
Denmark |
4.6 |
|
| AXA |
France |
3.9 |
|
| Bayer |
Germany |
3.8 |
|
| LVMH Moët Hennessy |
France |
3.0 |
|
| Heineken |
Netherlands |
2.8 |
|
| Deutsche Telekom |
Germany |
2.7 |
|
| Unibail-Rodamco |
France |
2.7 |
|
| RELX |
Netherlands |
2.5 |
|
| Ryanair |
Ireland |
2.5 |
|
|
|
|
|
| Commenting on the
markets, Vincent Devlin, representing the Investment Manager
noted: |
|
| During the month, the
Company’s NAV rose by 3.5% and the share price increased by 4.3%.
For reference, the FTSE World Europe ex UK Index was up 5.0% during
the period. |
|
| Following two months of
market falls, European equities rose very strongly in October. This
relief rally was initially caused by the Federal Reserve’s decision
to delay raising rates, which investors interpreted as a signal
that central bank support may relieve some of the weaker data seen
in emerging markets. This was followed up by the European Central
Bank (ECB) hinting at further easing (potentially in December) and
the People’s Bank of China cutting its deposit rate. This rally
also caused a significant rotation within the market with areas
that had performed very poorly (such as commodity, energy and
emerging market-related stocks) leading the rise. Indeed, autos,
oil & gas and basic materials were the top three performing
sectors in October, whereas sectors including health care and
financials significantly underperformed the market. October also
saw the start of third quarter earnings announcements for European
companies, with the results broadly disappointing, especially in
cyclical sectors such as consumer discretionary and
industrials. |
|
| The Company’s
underperformance in October was largely due to stock selection;
however, sector allocation also detracted illustrating the effect
of the market’s positioning-led rotation that took place towards
the beginning of the month. The largest relative losses were
realised from an underweight holding to consumer goods and an
overweight to financials. |
|
| Amongst the top
detractors to performance over the month were KBC Groep and Bank of
Ireland, as domestic focused stocks underperformed their emerging
market counterparts. Equally, the rhetoric coming from the central
banks in both Europe and the US suggesting lower rates for longer,
put increasing pressure on expectations for net interest income
(the spread a bank earns between the deposits it takes and loans it
makes) for the banking sector as a whole. |
|
| We also saw holdings in
Novo Nordisk and Novartis detract as the market became more risk-on
and many defensive names gave up some of their strong returns
realised in the last quarter. In the same vein, not holding Nestlé
contributed to relative performance over the month. |
|
| Despite its defensive
nature, Heineken bucked the downward trend of these names,
delivering strong performance during October. The company released
Q3 results with sales 4% ahead of expectations, largely driven by
strong trade in Europe. The largest contributor to performance was
Russian internet company Yandex which reported an 18% year-on-year
increase in revenues for Q3. |
|
| 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. With the
likelihood of further incremental support from the ECB through
expansion of the current Quantitative Easing programme, domestic
growth should remain underpinned in our view. Recent positive
European economic/sentiment indicators suggest that the European
economy has a degree of resilience in the face of the increased
concerns over a global slowdown, which is encouraging. We believe
that the favourable credit conditions, subdued wage growth and
weaker Euro can help boost economic momentum and in turn European
corporate earnings together, with some additional profit margin
normalisation. We remain of the view that the European equity
universe offers undemanding valuation opportunities but stock
selection remains a focus during this period of increased
volatility and heightened uncertainty around the global economic
growth outlook. |
|
| 11 November 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. |