Information  X 
Enter a valid email address

BlackRock New Engy (BRNE)

  Print   

Thursday 17 March, 2011

BlackRock New Engy

Portfolio Update


BLACKROCK NEW ENERGY INVESTMENT TRUST plc
All information is at 28 February 2011 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*    -0.9%     3.9%     5.8%    -3.2%    -10.1%         -49.8%           
(Undiluted)                                                                   
Net asset value*    -0.9%     3.9%     5.8%    -2.6%    -10.1%         -49.8%
(Diluted)                                                                     
Share price         -3.2%     3.4%     4.1%   -12.1%    -29.4%         -60.4%           
Source: BlackRock

* Net asset value and share price performance include the subscription share
reinvestment, assuming the subscription share entitlement per share was sold
and the proceeds reinvested on the first day of trading.

At month end                                                                   
Net asset value (undiluted):                           46.55p                  
Net asset value (diluted):                             46.55p                  
Share price:                                           38.25p                  
Discount to NAV**:                                    -17.83%                 
Subscription Share price:                               3.13p                   
Net yield:                                                n/a                     
Total assets including current year revenue:        £114.854m               
Gearing:                                                  Nil                     
Ordinary shares in issue:                         246,730,727             
Subscription shares in issue:                      45,769,084              
                                                                               
** Discount to NAV based on fully diluted NAV.                                 

Benchmark                                                                      
Sector Analysis                % of Total  Country Analysis     % of Total
                                   Assets                           Assets
                                                                               
Renewable Energy                     38.6  USA                        43.1
Enabling Energy Technology           29.9  Denmark                     8.0
Alternative Fuels                    17.6  Spain                       6.7
Materials Technology                  8.0  Germany                     6.4
Auto & On-site Generation             1.2  China                       6.2
Electronic & Electrical Equipment     0.8  Canada                      4.5
Aerospace & Defence                   0.5  United Kingdom              4.4
Energy Storage                        0.3  France                      4.1
Net current assets                    3.1  South Africa                3.0
                                    -----  Belgium                     2.9
                                    100.0  Brazil                      2.2
                                    =====  Portugal                    1.7
                                           Switzerland                 1.0
                                           Ireland                     1.0
                                           Luxembourg                  0.8
                                           Russia                      0.5
                                           Austria                     0.4
                                           Net current assets          3.1
                                                                     -----
                                                                     100.0
                                                                     =====

Ten Largest Investments (in alphabetical order)                                 
                                                                               
Company                          Country of Risk                      
American Superconductor          USA                                 
Archer Daniels Midland           USA                                 
Iberdrola Renovables             Spain                               
Itron                            USA                                 
ITC Holdings                     USA                                 
Johnson Controls                 USA                                 
Johnson Matthey                  United Kingdom                      
Novozymes                        Denmark                             
Quantas Services                 USA                                 
Vestas Wind Systems              Denmark                             


Robin Batchelor and Poppy Allonby, representing the Investment Manager, noted:

The NAV of the Company declined by 0.9% over February. For reference global
equity markets (represented by the MSCI World Index (capital only)) gained 1.8%
over the month.

Equity markets began the month strongly as positive momentum from January and
upbeat macro data resulted in a further improvement in investor sentiment.
Social unrest in Egypt caused the fall of President Mubarak in mid February and
introduced some volatility in broader equity markets. These issues spilled over
into other Middle East and North African (MENA) countries with, amongst others,
sections of Libyan society calling for their leader Colonel Gaddafi to step
down. As events unfolded and crude supplies became disrupted, the oil price
rose through $100 per barrel (Brent). It is unclear at this stage how events in
the region will ultimately be resolved. Whilst OPEC has enough spare capacity
to cope with the level of supply disruption witnessed to date, a further
significant supply outage could drive the oil price to levels that would
threaten a still fragile global economic recovery.

Barring a significant negative economic reaction to higher oil prices, the
movement of oil back above the psychologically important $100/bbl level creates
a more positive backdrop for New Energy. It is a timely reminder for
politicians and others of the importance of energy security, which is a key
long-term sector driver for increasing renewable energy and energy efficiency
adoption.

The near-term impact, whilst also positive, is less significant - particularly
in the US market. Oil is predominantly used as a transportation fuel and thus
only directly competes with the alternative fuels sub-sector of our universe.
The price of fossil fuels used in power generation, such as coal and natural
gas, is of more relevance for the competitiveness of renewable energy and
energy efficiency technologies. In Europe, electricity prices tend to rise if
the oil price rises as gas contracts typically have oil-linked pricing
mechanisms, however there is no such linkage in the US. As a result, European
power prices have moved up in recent weeks as a direct result of the MENA
disruption, while US electricity prices have remained more subdued. This move
in electricity prices, if sustained, would improve the economics of renewable
and energy efficiency investments.

Performance
The areas of our universe directly competing with oil performed well over the
month. These include biofuels and gas/coal to liquids where companies such as
Archer Daniels Midland and Sasol performed positively on the back of the rise
in the oil price. Energy efficiency companies also performed well over the
month, as the benefits of such investment increase during periods of higher
energy prices. Schneider and Johnson Controls, for instance, both rose during
the period.

On a more negative note, Ormat Technologies, the geothermal power producer,
under performed during the month after publishing guidance below market
expectations. The company's performance continues to be hurt by operational
difficulties at a key project.

Enernoc was also a drag on the Company's performance over the period. The
company's growth outlook was called into question on the back of proposed
regulatory changes in its main market.

An upturn in investment in the world's power grids, particularly in the US, is
a theme which we have written about in previous monthly reviews and one where
we maintain exposure. Companies present in this area, such as ITC Holdings and
General Cable, continued to contribute positively to performance during the
month of February on the back of upbeat results announcements.

Portfolio Activity
Given some uncertainty as to the ultimate impact of the MENA crisis on global
economic growth, we have reduced our exposure to those companies most at risk
in such an environment of oil-led demand destruction. We took profits in
Umicore during the period following strong performance during recent months.
The operational performance of this company is partly driven by automotive
demand: a potential casualty of sustained higher oil prices.

Outlook
Energy efficiency themes continue to garner increasing levels of support from
governments globally and should benefit further from the rising oil price. We
have significant exposure to this area through our investments in companies
such as Johnson Controls and Schneider Electric. We have also witnessed a
pick-up in global power grid investment levels. Such investment is necessary to
meet growing power demand in emerging markets and to allow for greater
absorption of often decentralised renewable energy capacity into developed
market grid networks. Again, we have positioned the Company to have notable
exposure to this theme.

While constructive long-term, we remain cautious on wind near-term given soft
end-market conditions and ongoing pricing pressure. The Company's exposure to
solar is similarly measured given the industry's reliance on high-cost
subsidies and limited technological barriers to entry.

17 March 2011

ENDS

Latest information is available by typing www.blackrock.co.uk/its 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.


            

a d v e r t i s e m e n t