BLACKROCK NEW ENERGY INVESTMENT TRUST plc
All information is at 30 September 2013 and unaudited.
Performance at month end with net income reinvested
One Three Six One Five Since launch
Month Months Months Year Years (23 Oct 00)
Net asset value
(Undiluted) 2.5% 4.9% 6.4% 24.0% -18.3% -53.0%
Share price 2.5% 7.3% 4.5% 31.2% -25.0% -59.1%
Source: BlackRock
At month end
Net asset value - capital only (undiluted): 44.23p
Net asset value - cum income (undiluted): 44.60p
Net asset value - capital only (diluted): 44.23p
Net asset value - cum income (diluted): 44.60p
Share price: 40.50p
Discount to cum income NAV*: 9.2%
Subscription share price: 0.25p
Net yield*** 0.37%
Total assets including current year revenue: £104.79m
Gearing: Nil
Ordinary shares in issue**: 234,985,619
Subscription shares in issue: 45,614,192
* Discount to NAV based on cum income undiluted NAV.
** Excludes 11,900,000 shares held in treasury.
*** Based on a final dividend of 0.15p per share in respect of the year ended
31 October 2012.
Benchmark
Sector Analysis Total Assets (%) Country Analysis Total Assets (%)
Enabling Energy & Infrastructure 27.4 USA 30.2
Energy Efficiency 23.0 Denmark 8.6
Renewable Energy Developers 20.5 China 8.2
Alternative Fuels 12.8 United Kingdom 8.0
Renewable Energy Technology 11.1 France 6.8
Net current assets 5.2 Canada 6.0
----- Germany 5.4
100.0 Portugal 3.8
===== Switzerland 3.4
Finland 2.7
Ireland 2.2
South Africa 2.2
Italy 2.0
Belgium 1.8
Australia 1.6
Brazil 1.1
Japan 0.8
Net current assets 5.2
-----
100.0
=====
Ten Largest Investments (in alphabetical order)
Company Country of Risk
ABB Reg Switzerland
EDP Renovaveis Portugal
ITC Holdings USA
Johnson Controls USA
Johnson Matthey United Kingdom
NextEra Energy USA
Novozymes Denmark
Schneider Electric France
Trina Solar China
Vestas Wind Systems Denmark
Robin Batchelor and Poppy Allonby, representing the Investment Manager, noted:
The NAV of the Company increased by 2.5% in September.
For reference, the MSCI World Index returned 0.1% and the WilderHill New Energy
Global Innovations, an index that is representative of the sector, returned
5.7% (DataStream, in sterling terms).
September saw an improvement in risk appetite. The decision from the US Federal
Reserve to delay the tapering of its quantitative easing programme came as a
positive surprise for equity markets, while the re-election of Angela Merkel in
Germany provided greater clarity for Europe, driving the outperformance of
European equities. On the macroeconomic front, Chinese leading indicators
surprised on the upside with industrial production, investment growth,
electricity production and PMIs all showing improvements.
The Intergovernmental Panel on Climate Change (IPCC) released their new report
over the month stating with 'extreme confidence' that human influence has been
the prevailing factor in the global warming experienced since the mid-50's.
While this information does not have significant direct impact on the sector,
any reminder of the challenges of industrial activity and traditional energy
production refocuses people's attention on the new energy industry.
In September, the US Solar Energy Industries Association (SEIA) made a proposal
for a settlement between the U.S. and Chinese solar industries. Although it
appears we are still far from a resolution to the on-going trade war between
the two countries, signs that the US is making efforts to solve the current
conflict was beneficial to the solar sub-sector.
Performance
Encouraging evolutions in the solar market, as well as continued support from
the Chinese government of companies in the solar industry, helped our solar
holdings with exposure to China such as Trina Solar and Yingli Green Energy.
Vestas Wind Systems announced a tie-up with Mitsubishi in their offshore wind
operations. The announcement was well received by investors as it effectively
reduces significantly Vestas' operational risk and capex for its activities in
the offshore space.
On the negative side, UK utility stocks had a challenging period after the
British opposition party pledged to freeze gas and electricity prices if
elected in an attempt to curb rising consumer bills.
Portfolio Activity
Over the month, we took profits in a number of renewable energy developers
while increasing our position in an engineering and construction company.
Outlook
The Company has been positioned to benefit from areas of the New Energy sector
that are experiencing strong near-term growth.
The pain that the Renewable Energy Technology sub-sector has suffered is
showing little sign of imminent relief despite some recent positive newsflow.
The price of a solar module has fallen by approximately 70% from the start of
2009 rendering many producers loss making, and, despite demand growth, the
industry remains over-supplied. We continue to believe that consolidation is
required to create a sustainable industry. We remain cautious on investment in
the space and continue to prefer opportunities among the Renewable Energy
developers.
At the other end of the spectrum, and with some positive momentum due to a more
optimistic industrial outlook, lie the Enabling Energy and Infrastructure
companies and certain Energy Efficiency players who are enjoying bumper growth.
The natural gas revolution and power grid expansion in the US has sparked an
investment up-cycle in energy infrastructure spending which continues to gather
momentum. Energy Efficiency has also benefitted from corporate and government
cost saving - legislation to incentivize the adoption of energy efficiency
technology is a more appealing option to a cash strapped government than a
renewable energy subsidy.
We believe that sector valuations are generally attractive, both relative to
history and to broader equity markets, and there is scope for the positive
sector fundamentals to be supported by continued M&A.
At a General Meeting of the Company held on 25 July 2012 shareholders approved
the removal of the requirement for an annual continuation vote and replaced it
with the obligation for the Board to put forward proposals that shareholders be
given the opportunity to elect to receive an amount per share in cash of NAV
less applicable costs, shortly after the AGM in 2014.
11 October 2013
ENDS
Latest information is available by typing www.brneplc.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.