BlackRock Grtr Eur Portfolio Update

 
TIDMBRGE 
 
BLACKROCK GREATER EUROPE INVESTMENT TRUST plc (LEI - 5493003R8FJ6I76ZUW55) 
All information is at 31 October 2017 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)            1.8%      5.8%     19.9%     57.8%        346.0% 
 
Net asset value* (diluted)             1.8%      5.8%     19.9%     57.9%        346.4% 
 
Share price                            3.9%      8.4%     21.1%     61.3%        335.8% 
 
FTSE World Europe ex UK                1.5%      3.3%     19.9%     51.0%        248.2% 
 
* Diluted for treasury shares and subscription shares. 
Sources: BlackRock and Datastream 
 
 
At month end 
 
Net asset value (capital only):                                                 347.49p 
 
Net asset value (including income):                                             351.80p 
 
Net asset value (capital only)1:                                                347.49p 
 
Net asset value (including income)1:                                            351.80p 
 
Share price:                                                                    341.00p 
 
Discount to NAV (including income):                                                3.1% 
 
Discount to NAV (including income)1:                                               3.1% 
 
Net gearing:                                                                       2.8% 
 
Net yield2:                                                                        1.6% 
 
Total assets (including income):                                                GBP335.2m 
 
Ordinary shares in issue3:                                                   95,295,953 
 
Ongoing charges4:                                                                 1.10% 
 
1  Diluted for treasury shares. 
2  Based on a final dividend of 3.70p per share and an interim dividend of 
1.75p per share for the year ended 31 August 2017. 
3  Excluding 15,032,985 shares held in treasury. 
4  Calculated as a percentage of average net assets and using expenses, 
excluding interest costs, after relief for taxation, for the year ended 
31 August 2017. 
 
 
Sector Analysis                 Total     Country Analysis                 Total 
                               Assets                                     Assets 
                                  (%)                                        (%) 
 
Industrials                      29.3     France                            17.0 
 
Health Care                      17.5     Switzerland                       16.0 
 
Consumer Goods                   16.0     Germany                           14.0 
 
Consumer Services                13.4     Netherlands                       13.0 
 
Technology                        9.4     Denmark                           12.1 
 
Financials                        7.9     Sweden                             8.7 
 
Oil & Gas                         4.2     Belgium                            5.7 
 
Basic Materials                   3.5     Russia                             4.2 
 
Net current liabilities         (1.2)     Spain                              3.6 
 
                                -----     Finland                            2.6 
 
                                100.0     Israel                             1.7 
 
                                =====     Greece                             1.6 
 
                                          Ukraine                            1.0 
 
                                          Net current                       (1.2) 
                                          liabilities 
 
                                                                           ----- 
 
                                                                           100.0 
 
                                                                           ===== 
 
 
 
Ten Largest Equity Investments 
 
Company                                           Country                          % of 
                                                                           Total Assets 
 
SAP                                               Germany                           4.7 
 
Unilever                                          Netherlands                       4.7 
 
Lonza Group                                       Switzerland                       4.2 
 
Fresenius Medical Care                            Germany                           3.9 
 
Compagnie Financière Richemont                    Switzerland                       3.8 
 
ASML                                              Netherlands                       3.7 
 
Danske Bank                                       Denmark                           3.7 
 
RELX                                              Netherlands                       3.6 
 
Industria De Dise                                 Spain                             3.6 
 
DSV                                               Denmark                           3.5 
 
 
Commenting on the markets, Stefan Gries, representing the Investment Manager 
noted: 
 
During the month, the Company's NAV rose by 1.8% and the share price increased 
by 3.9%. For reference, the FTSE World Europe ex UK Index returned 1.5% during 
the period. 
 
Over October, resources including oil & gas and basic materials saw strong 
returns. Several defensive sectors, which are less geared to the economic 
cycle, such as health care and telecoms lagged the market. 
 
The European Central Bank ('ECB') announced an extension to its Quantitative 
Easing ('QE') programme to September 2018, although purchases will be cut from 
EUR60bn a month to EUR30bn from January 2018. ECB president Mario Draghi stressed 
that the move was not a 'taper' but merely a 'downsize' as a degree of monetary 
stimulus remained necessary while inflation is below the ECB's target of close 
to 2%. 
 
Political risk heightened given that Catalonia declared independence from 
Spain, the Italian regions of Lombardy and Veneto voted on greater regional 
independence and the Austrian far-right Freedom Party started talks to form a 
coalition government. 
 
However, the economic picture remains robust with the European Commission's 
monthly eurozone economic sentiment survey rising in October for the fifth 
consecutive month to reach its highest level since the start of 2001, showing 
almost no impact from the Catalan crisis. 
 
The Company outperformed the reference index over the month. Sector allocation 
was the primary driver of returns; stock selection was marginally negative. 
 
On a sector basis the stronger performance came from the lower allocation to 
the financials sector, and in particular banks. The sector underperformed 
following the ECB's announcement to cut the amount of QE purchases whilst 
extending the time frame upon which they will make such purchases. The latter 
proved more dovish than the market expected, leading to share price pressure on 
the sector. 
 
The higher allocation to technology was also beneficial to returns, whilst the 
greater allocation to health care detracted as the sector suffered poor results 
releases for the third quarter. 
 
Over the period the poorest performing position was Israeli listed Teva 
Pharmaceuticals. A competitor of the company, Mylan, received earlier than 
expected approval for their generic version of Copaxone 20 and 40mg, in direct 
competition with Teva's largest drug. 
 
Luxury businesses Remy Cointreau and Kering both contributed positively to 
performance. Remy reported a 6.2% year-on-year sales growth for the third 
quarter beating market expectations. Kering was the Company's top contributing 
stock over the month after third quarter results showed a continuation of very 
strong operating trends. The Gucci brand recorded organic sales growth of 49%, 
significantly above consensus expectations and the company are now guiding to 
full year margins of 33%. 
 
Whilst the overweight allocation to health care detracted overall, a position 
in Straumann rallied as it reported 16% organic sales growth year-on-year for 
the third quarter, raising its full year guidance from low teens to 13-15%. 
 
Stock selection within industrials proved disappointing over October. Finnish 
shipbuilding company, Wartsila, saw share price pressure as Q3 results 
underwhelmed. We remain confident in holding the stock as it continues to enjoy 
strong order intake momentum. 
 
Outlook 
 
The increasing breadth of the global economic expansion continues to provide a 
positive backdrop for European corporate earnings. The pick-up in sales growth 
has led to a clear recovery in profits feeding into a rebound in capex 
spending. With inflation remaining well below target we expect ECB policy to 
remain accommodative. Long term, with structural and demographic drivers 
keeping a lid on inflation in the euro area, we believe we can enjoy a 
sustained period of growth without the need for substantial increases in 
interest rates. In terms of valuation, European equities are relatively 
inexpensive when compared with fixed income and especially in terms of dividend 
yield. 
 
Improving demand growth, a low cost of capital and broad-based resilience in 
economic sentiment, underpin a positive stance for European equity markets. 
 
14 November 2017 
 
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. 
 
 
 
END 
 

(END) Dow Jones Newswires

November 14, 2017 09:02 ET (14:02 GMT)