| BLACKROCK GREATER
EUROPE INVESTMENT TRUST plc |
|
| All information is at
29 FEBRUARY 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) |
-1.2% |
-1.8% |
1.5% |
16.7% |
212.6% |
|
| Net asset value*
(diluted) |
-1.1% |
-1.5% |
1.5% |
16.3% |
211.7% |
|
| Share price |
0.9% |
1.0% |
6.4% |
18.4% |
209.6% |
|
| FTSE World Europe ex
UK |
-0.2% |
-3.2% |
-5.2% |
15.1% |
136.7% |
|
| Sources: BlackRock
and Datastream |
|
|
|
| At month
end |
|
| Net asset value (capital
only): |
251.81p |
|
| Net asset value
(including income): |
252.67p |
|
| Net asset value (capital
only)*: |
251.04p |
|
| Net asset value
(including income)*: |
251.72p |
|
| Share price: |
248.50p |
|
| Discount to NAV
(including income): |
1.7% |
|
| Discount to NAV
(including income)*: |
1.3% |
|
| Subscription share
price: |
6.00p |
|
| Net cash: |
3.0% |
|
| Net yield**: |
2.0% |
|
| Total assets (including
income): |
£260.5m |
|
| Ordinary shares in
issue***: |
103,086,916 |
|
| 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 and an interim
dividend of 1.65p per share for the year ended 31 August 2015.
*** Excluding 6,725,825 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 |
27.4 |
|
France |
17.6 |
| Industrials |
18.6 |
|
Switzerland |
15.5 |
| Health Care |
17.0 |
|
Germany |
10.8 |
| Consumer Goods |
12.9 |
|
Denmark |
8.8 |
| Consumer Services |
8.7 |
|
Netherlands |
8.8 |
| Technology |
8.2 |
|
Ireland |
8.3 |
| Telecommunications |
4.2 |
|
Italy |
7.3 |
| Net current assets |
3.0 |
|
Sweden |
5.2 |
|
----- |
|
Finland |
4.7 |
|
100.0 |
|
Belgium |
2.7 |
|
===== |
|
Turkey |
2.4 |
|
|
|
Russia |
1.7 |
|
|
|
Poland |
1.7 |
|
|
|
Spain |
1.5 |
|
|
|
Net current assets |
3.0 |
|
|
|
|
----- |
|
|
|
|
100.0 |
|
|
|
|
===== |
| Ten Largest Equity
Investments |
|
|
|
%
of |
|
| Company |
Country |
Total
Assets |
|
|
|
|
|
| Novo Nordisk |
Denmark |
5.0 |
|
| Novartis |
Switzerland |
4.4 |
|
| Ryanair |
Ireland |
3.0 |
|
| Adidas |
Germany |
2.9 |
|
| Heineken |
Netherlands |
2.8 |
|
| Vinci |
France |
2.8 |
|
| RELX |
Netherlands |
2.8 |
|
| Deutsche Telekom |
Germany |
2.7 |
|
| Unibail-Rodamco |
France |
2.7 |
|
| Sampo Oyj |
Finland |
2.5 |
|
|
|
|
|
| Commenting on the
markets, Vincent Devlin, representing the Investment Manager
noted: |
|
| During the month, the
Company’s NAV fell 1.2% and the share price rose 0.9%. For
reference, the FTSE World Europe ex UK Index was down 0.2% during
the period. |
|
| European equity markets
fell 0.2% in February (GBP terms, FTSE World Europe ex UK),
continuing the market sell-off and taking the year-to-date return
to -3.6%. Returns in Sterling terms have been muted given the
depreciation of Sterling versus the Euro since the beginning of the
year. Markets proved exceptionally volatile, with significant
dispersions between sectors and countries within the region: while
banks fell 5% in the month, basic resources companies gained by
more than 17%. Following January’s growth concerns, initially
emanating from China, markets became increasingly worried about the
potential for a global recession and, closer to home, the
possibility of another Eurozone banking crisis. This led to a
significant market fall in the first two weeks of February (by more
than 10% in the month). Political risk also influenced markets,
with the prospect of a ‘Brexit’ causing Sterling to weaken further.
Consensus data suggests that European company earnings expectations
for 2016 were downgraded by around 1% overall during the month. We
witnessed a more positive outcome towards the end of February as
the oil price stabilised, credit data from China improved and
investors looked towards the prospect of further central bank
easing in March. |
|
| Both stock selection
and sector allocation proved negative in a volatile market
environment. At the sector level, the underweight allocation to
basic materials and oil & gas proved the largest detractors, as
the sectors felt some relief over the month. The underweight
allocation to utilities, however, aided returns. |
|
| Some of the greatest
detractors to performance fell within the financials sector, which
was one of the largest fallers over the month as fears of Eurozone
banking stability rose. Italian asset manager Anima and Bank of
Ireland were the worst affected holdings in this respect. The
latter also underperformed given political uncertainty in Ireland
leading up to elections. Despite the volatility in the European
financial sector, Russian markets proved more resilient, with a
holding in Sberbank of Russia contributing positively to
performance. |
|
| A holding in Nokia also
detracted after the stock fell sharply; the market proved
disappointed with the Samsung arbitration royalty rate awarded,
which was viewed as a sign that rights holders will struggle to
extract more royalty revenue from smartphone makers as global
demand for handsets slows. |
|
| Ryanair was the largest
positive contributor to returns, performing strongly post results.
Full year guidance was reiterated, supported by better volumes and
costs, whilst fare declines are set to accelerate during the
remainder of the year. The group announced a EUR800m share buyback
which was taken positively by the market. |
|
| At the end of the
period, the Company had higher weightings when compared with the
reference index to financials, technology, consumer services,
industrials and health care. The Company had lower exposure to
consumer goods, basic materials, oil & gas, utilities and
telecoms. |
|
| Outlook |
|
| Given the complexity of
issues in the market, there is a high degree of uncertainty at
present, which is expressed through the highly volatile conditions.
Equity markets act as a weighing machine and the recent volatility
demonstrates the ever-changing risk premia for stocks as the
environment develops. This type of environment can create
opportunities but one must act with caution as we do not as yet
have visibility on many of the key issues. |
|
| Economically, the
market is increasingly worried about the growing risks of
recession, a fear that is largely centred on the US and China, and
which we see as overly pessimistic. As far as Europe is concerned,
we have not seen a significant shift in data year-to-date and
Europe remains relatively robust, with pockets of strength in
consumer-related segments of the economy in particular. Supportive
European Central Bank policy remains, leading to positive money
supply growth in the economy. However, Europe is not immune to
global growth concerns and a freezing of credit and liquidity can
override any short term strength. Within this context, we retain a
keen eye on valuation; quality is not cheap in European equities
and we will maintain our discipline. We are sticking to companies
that offer higher earnings visibility and attractive stock-specific
drivers and looking to avoid value traps in highly cyclical
businesses at a time of uncertainty. |
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| 14 March 2016 |
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| 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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