BlackRock Greater Europe Investment Trust Regulatory News (BRGE)

21 Sep 2005 15:22

Merrill Lynch Greater Europe IT PLC21 September 2005 MERRILL LYNCH GREATER EUROPE INVESTMENT TRUST plc All information is at 31 August 2005 and unaudited. Performance at month end with net income reinvested One Three Since launch Month Months (20Sep04)Net asset value -0.6% 11.8% 29.2%Share price -0.4% 12.1% 23.0%FTSE World Europe ex UK -1.5% 8.4% 24.0% Sources: Merrill Lynch Investment Managers and Datastream. At month endNet asset value: 129.26p Includes net revenue of 2.04pShare price: 123.00pDiscount to NAV: 4.8%Gearing: 4.7%Net yield: N/ATotal assets: £187.0mOrdinary shares in issue: 140,414,347 BenchmarkSector Analysis Total Assets (%) Index (%) Country Analysis Total Assets (%)Financials 32.9 30.9 France 25.1Cyclical Services 11.3 6.4 Germany 16.1Basic Industries 10.8 7.3 Switzerland 11.4Resources 9.9 7.5 Scandinavia 8.7Non Cyclical Consumer Goods 8.1 16.0 Italy 8.6Utilities 7.6 6.8 Netherlands 5.2Telecoms 6.2 8.0 Spain 5.1Non Cyclical Services 5.7 1.3 Russia 4.6Cyclical Consumer Goods 4.1 5.0 Ireland 3.5Capital Goods 1.0 5.9 Belgium 3.5Technology 0.4 4.9 Poland 2.8Other Investments 2.7 - Greece 1.8Net Current Liabilities (0.7) - Israel 1.8 Sweden 1.2 Turkey 1.0 Other Countries 0.3 Net Current Liabilities (0.7) ----- ----- ----- 100.0 100.0 100.0 ----- ----- ----- Ten Largest Equity InvestmentsCompany Country of RiskAXA FranceBBVA SpainCapitalia ItalyFortum FinlandFrance Telecom FranceNew Century Holdings Eagle LP Russian FederationNovartis SwitzerlandRepsol SpainTotal FranceUBS Switzerland Commenting on the markets, James Macmillan, representing the Investment Managernoted: After reaching a 3-year high earlier in the summer European equity marketssuffered a bout of profit taking in August, however Emerging European marketscontinued to perform well. The FTSE World Europe ex UK and MSCI Emerging Europereturned -1.5% and +7.5% in sterling terms respectively. Investor sentiment wasshaken by yet another record high in the oil price ($70 per barrel) in the wakeof the devastation caused by the hurricanes in the US. Concerns about aweakening in economic growth led to a dramatic change in US interest rateexpectations with most market participants no longer expecting further rapidrate increases by the Federal Reserve. The Company's NAV returned -0.6% during August outperforming the referencebenchmark index by 0.9%. During the month both stock selection and sectorallocation were positive. In terms of sector allocation the Company benefitedfrom its limited exposure to the poorly performing technology hardware sectorand a high weighting in the energy sector, which continued to outperform. Thecontribution from Emerging Europe was positive during August with strongperformance from Russia and Israel. During the period the best performing stocks were Norwegian oil producer Statoil(+9%), German steel maker Salzgitter (+14%), Russian telecom Sistema (+12%) andIsraeli Bank Hapoalim (+9%). Stock positions that detracted from performancewere Irish construction company Grafton Group (-10%), and within the bankingsector Capitalia (-6%) and Emporiki (-6%). During the month the Company established new positions in construction groupVinci and diversified telecom company Bouygues. These purchases were mainlyfunded through the sale of pharmaceutical company Sanofi-Aventis, cementproducer Lafarge, and Danske Bank. The Company continues to have a bias towards the financials, mainly throughbanks. Other key sector weights include utilities, energy and telecoms.Exposure to Emerging Europe increased slightly during the month to finish at10.2%. The Company ended the month with a net market exposure of 104.7%. Recent surveys suggest that business confidence is starting to rise inContinental Europe signalling that economic growth may pick up after theslowdown in the first half of the year. However, concerns still remain that thecontinued high oil price and a slowdown in global economic growth levels willimpact profit margins. Despite the challenging macro economic backdrop thecorporate sector is in good shape after years of restructuring (ongoing) andcompanies are becoming increasingly focused on cost cutting and corporateefficiency. In a low bond yield environment financing conditions are favourableenabling many companies to releverage their balance sheets by paying outincreased dividends and/or buying back their own shares. The second quarterresults season has got off to a strong start with many companies announcingresults ahead of expectations. In the absence of an external shock Europeanequities should remain on an upward trajectory. Latest information is available by typing www.mlim.co.uk/its on the internet,"MLIMINDEX" on Reuters, "MLIM" on Bloomberg or "8800" on Topic 3 (ICV terminal). 21 September 2005 This information is provided by RNS The company news service from the London Stock Exchange