BlackRock New Engy Portfolio Update
14 December 2013 - 1:12AM
UK Regulatory
TIDMBRNE TIDMBRNS
BLACKROCK NEW ENERGY INVESTMENT TRUST plc
All information is at 30 November 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 -1.3% 4.6% 3.9% 26.8% 13.8% -52.0%
Share price -2.2% 10.8% 10.8% 37.9% 31.8% -55.9%
Source: BlackRock
At month end
Net asset value - capital only: 45.25p
Net asset value - cum income: 45.54p
Share price: 43.75p
Discount to cum income NAV*: 3.93%
Subscription share price: 0.25p
Net yield** 0.34%
Total assets including current year revenue: GBP107.1m
Gearing: Nil
Ordinary shares in issue***: 234,988,568
Subscription shares in issue***: 45,611,243
* Discount to NAV based on cum income undiluted NAV.
** Based on a final dividend of 0.15p per share in respect of the year ended
31 October 2012.
*** 2,949 subscription shares exercised
Benchmark
Sector Analysis Total Assets (%) Country Analysis Total Assets (%)
Enabling Energy & Infrastructure 27.5 USA 32.0
Energy Efficiency 25.8 Denmark 8.9
Renewable Energy Developers 20.0 China 7.8
Alternative Fuels 11.5 United Kingdom 7.4
Renewable Energy Technology 10.5 France 6.9
Net current assets 4.7 Germany 5.7
----- Canada 5.2
100.0 Portugal 3.8
===== Switzerland 3.8
Ireland 2.4
Italy 2.3
South Africa 2.2
Finland 2.1
Belgium 1.6
Australia 1.4
Brazil 1.1
Japan 0.7
Net current assets 4.7
-----
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
Regal Beloit USA
Schneider Electric France
Vestas Wind Systems Denmark
Robin Batchelor and Poppy Allonby, representing the Investment Manager, noted:
The NAV fell by 1.3% in November.
For reference, the MSCI World Index fell by 0.2% and the WilderHill New Energy
Global Innovations, an index that is representative of the sector, fell by 1.8%
(Datastream, in sterling terms).
Withdrawal of monetary stimulus remains an issue at the forefront of investors'
minds. In mid-November, Janet Yellen indicated that the US central bank would
continue with loose monetary policy until the US economy was in a stronger
position, stating that the Federal Reserve had "more work to do". These
comments came at a time when investors were preparing for imminent withdrawal
of stimulus.
Iran and six world powers came away from the negotiating table with an
agreement on the 'first steps' towards a comprehensive resolution over Iran's
nuclear programme. Despite being a major political step, this progress had a
relatively minor impact on oil markets. Brent crude sold off on the news, but
it has since recovered finishing at $111/bbl, 3.2% up over November.
November also saw the UN Climate Change Conference held in Warsaw. This
conference was aimed at keeping governments on track towards a 2015 universal
climate agreement. Governments are now beginning work on a draft text of the
universal agreement, scheduled to be on the table at the 2014 UN Climate Change
Conference in Peru.
Performance
A position in Johnson Controls was among the largest contributors to
performance as the firm progressed with its strategic review and continued
looking at divesting some of its non-core assets, which was well received by
investors.
Johnson Matthey also buoyed performance as the firm benefitted from continued
improvement in the European automotive markets. According to the ACEA, EU new
passenger car registrations were 4.7% higher in October 2013 than in October
last year. This was the largest year on year increase since 2009.
A position in electricity transmission company ITC Holdings detracted from
performance as the stock reacted unfavourably to an official complaint filed
against them.
Portfolio Activity
We reduced our exposure to the UK power market, owing to increased uncertainty
and political risk surrounding the sector. Further to this, we sold out of a
provider of natural gas fuel and we also sold out of an energy efficiency
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 sector 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
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.
13 December 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.
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