| BLACKROCK GREATER
EUROPE INVESTMENT TRUST plc |
|
| All information is at
30 APRIL 2016 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) |
-1.1% |
1.7% |
-0.1% |
20.6% |
221.9% |
|
| Net asset value*
(diluted) |
-0.8% |
1.6% |
0.2% |
19.8% |
220.0% |
|
| Share price |
-0.3% |
0.0% |
-1.6% |
20.4% |
206.7% |
|
| FTSE World Europe ex
UK |
0.3% |
4.1% |
-3.9% |
18.0% |
146.9% |
|
| Sources: BlackRock
and Datastream |
|
|
|
| At month
end |
|
| Net asset value (capital
only): |
257.08p |
|
| Net asset value
(including income): |
258.57p |
|
| Net asset value (capital
only)*: |
255.57p |
|
| Net asset value
(including income)*: |
256.80p |
|
| Share price: |
244.50p |
|
| Discount to NAV
(including income): |
5.4% |
|
| Discount to NAV
(including income)*: |
4.8% |
|
| Subscription share
price: |
0.26p |
|
| Net gearing: |
0.8% |
|
| Net yield**: |
2.0% |
|
| Total assets (including
income): |
£265.7m |
|
| Ordinary shares in
issue***: |
102,586,916 |
|
| Subscription
shares: |
20,530,998 |
|
| Ongoing
charges****: |
0.89% |
|
|
|
|
* Diluted
for subscription shares and treasury shares.
** Based on a final dividend of 3.35p per share for the year ended
31 August 2015 and an interim dividend of 1.65p per share for the
year ending 31 August 2016.
*** Excluding 7,225,825 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 |
26.4 |
|
France |
17.2 |
| Industrials |
21.5 |
|
Switzerland |
11.8 |
| Consumer Goods |
15.3 |
|
Germany |
10.9 |
| Health Care |
13.0 |
|
Denmark |
10.4 |
| Technology |
10.3 |
|
Ireland |
9.7 |
| Consumer Services |
9.4 |
|
Netherlands |
8.9 |
| Telecommunications |
4.1 |
|
Italy |
7.8 |
| Basic Materials |
0.6 |
|
Finland |
5.8 |
| Net current liabilities |
(0.6) |
|
Sweden |
5.3 |
|
----- |
|
Russia |
3.0 |
|
100.0 |
|
Turkey |
2.6 |
|
===== |
|
Belgium |
2.6 |
|
|
|
Poland |
1.7 |
|
|
|
Spain |
1.6 |
|
|
|
Ukraine |
0.7 |
|
|
|
Luxembourg |
0.6 |
|
|
|
Net current
liabilities |
(0.6) |
|
|
|
|
----- |
|
|
|
|
100.0 |
|
|
|
|
===== |
| Ten Largest Equity
Investments |
|
|
|
%
of |
|
| Company |
Country |
Total
Assets |
|
| Novo Nordisk |
Denmark |
5.1 |
|
| Adidas |
Germany |
3.3 |
|
| Heineken |
Netherlands |
3.0 |
|
| Vinci |
France |
2.8 |
|
| Ryanair |
Ireland |
2.7 |
|
| Unibail-Rodamco |
France |
2.7 |
|
| Deutsche Telekom |
Germany |
2.6 |
|
| RELX |
Netherlands |
2.6 |
|
| Capgemini |
France |
2.6 |
|
| Zurich Insurance
Group |
Switzerland |
2.6 |
|
| Commenting on the
markets, Vincent Devlin, representing the Investment Manager
noted: |
|
| During the
month, the Company’s NAV fell by -1.1% and the share price declined
by -0.3%. For reference, the FTSE World Europe ex UK Index was up
by 0.3% during the period. |
|
| After a volatile Q1,
April saw a marked change in expectations for emerging markets,
especially the strength of the Chinese economy. Europe ex UK
markets were marginally positive in April (FTSE World Europe ex UK
returned 0.26% in GBP terms). In particular, emerging
market-exposed sectors (oil & gas, basic materials) performed
well over the last rotation benefiting from a weakening US Dollar,
a rebound in commodity prices and a recovering Chinese economy
following a significant level of stimulus. So far, we have seen a
mixed start to the earnings season, leading to further cuts in 2016
earnings estimates at the market level. With only a few weeks to go
until the ‘Brexit’ referendum in June, political uncertainties over
the direction of the European project also remain in focus. |
|
| Unfavourable outcomes
in both sector allocation and stock selection impacted returns over
the month. The rotation seen in the market year to date has been
further exacerbated recently as it appears that China has
accelerated its liquidity injection into the economy which is
supporting the property market and boosting commodity demand. In
this context, the lower weighting to basic materials and oil &
gas detracted from performance. However, the higher weighting to
financials proved positive for performance, particularly holdings
within Emerging Europe. |
|
| On a stock specific
basis, the largest detractors came from the financial sector. In
part, this was driven by not holding banks with Emerging Market
revenue exposure, such as Banco Santander, which rallied with other
Emerging Market exposed names during the month. |
|
| Ryanair was the single
largest detractor over the month, with the effect of the attacks in
Brussels and air traffic control strikes cited as headwinds to
quarterly earnings. |
|
| Positively, a holding
in Adidas was beneficial for performance. The stock rallied on the
pre-release of Q1 results, which were 10% ahead of consensus
expectations for revenue and 25% ahead for earnings, leading to
upgraded guidance. Russian internet search engine company Yandex,
also rallied on the back of strong quarterly earnings and guidance
for full year 2016 revenue growth of 15 to 19 per cent. |
|
| At the end of the
period, the Company had higher weightings when compared with the
reference index to technology, industrials, financials and consumer
services. The Company had lower exposure to basic materials,
consumer goods, oil & gas, utilities and health care. |
|
| Outlook |
| We recognise that the
macroeconomic environment in 2016 across the various global regions
remains uncertain. However, recently, we have seen some reassuring
US industrial data and a stabilisation of Chinese economic data,
suggesting that fiscal stimulus is feeding through. In our view, it
is the combination of the more supportive macroeconomic backdrop,
together with the sharply reduced expectations for European
earnings, which offers some hope that earnings for Q1 2016 might
surprise on the upside. We believe that we need to see
earnings growth coming through in order to drive meaningful upside
for European equities and ultimately encouraging investors to
reassess the relative prospects for this asset class.
However, we think investors will remain cautious towards European
equities until the British referendum is behind us, as this is the
most prominent risk event not only for the UK, but also for the
broader European Union. |
|
| Within this context, we
retain a keen eye on valuation and we continue to focus on stock
selection against a volatile market. We are sticking to companies
that offer attractive earnings momentum and stock-specific drivers
and looking to avoid value traps in highly cyclical businesses
without momentum. |
|
| 17 May 2016 |
|
| ENDS |
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| 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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