BLACKROCK NEW ENERGY INVESTMENT TRUST plc
All information is at 30 June 2008 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 -5.9% 7.5% -6.5% 9.2% 259.6% -25.9%
Share price -2.3% 15.8% 6.4% 13.6% 368.8% -25.0%
Source: BlackRock
At month end
Net asset value: 70.92p
Share price: 75.00p
Premium to NAV: 5.8%
Net yield: n/a
Total assets: £172.9m*
Gearing: 0.0%
Ordinary shares in issue: 243,750,000
* Total assets include current year revenue.
Benchmark
Sector Analysis % of Total Country Analysis % of Total
Assets Assets
Renewable Energy 54.7 USA 33.7
Enabling Energy Technology 17.8 Spain 15.4
Alternative Fuels 13.1 Denmark 11.8
Materials Technology 5.4 United Kingdom 7.4
Auto & On-Site Generation 1.7 Germany 7.5
Energy Storage 1.2 Canada 5.8
Net current assets 6.1 South Africa 3.1
----- Belgium 2.4
100.0 France 2.0
===== India 1.9
Norway 1.3
China 1.0
Ireland 0.6
Net current assets 6.1
-----
100.0
=====
Ten Largest Investments
Company Country of Risk
American Superconductor USA
Climate Exchange United Kingdom
Clipper Windpower United Kingdom
FPL Group USA
Gamesa Corp Technologica Spain
Iberdrola Renovables Spain
Itron USA
Potash Canada
Sasol South Africa
Vestas Wind Systems Denmark
Robin Batchelor and Poppy Allonby, representing the Investment Manager, noted:
Portfolio Performance
Against a backdrop of weak equity markets, the Company's NAV declined by 5.9%
during June, whilst the share price declined by 2.3%. This was strongly ahead
of broader global equity markets which declined by 8.7% over the same period
(MSCI World). The sector particularly benefitted from continued strength in the
oil price, strong performance from the wind turbine sector and investors
focusing on the sector in their search for growth.
Growth in energy demand from the emerging markets continues to outpace demand
destruction in the credit crunch-stricken developed world, keeping supply and
demand tight in a range of traditional energy commodities. The oil price
dominated the headlines, gaining 9.9% over the month and reaching $140/bbl
(West Texas Intermediate), but the rise was not limited to oil. The price of
coal rose 27.8% (Big Sandy Barge) and natural gas was up 15.1% (Henry Hub). At
month-end, the futures market was pricing oil above $135 for the next eight
years, compelling governments and investors to consider alternative sources of
energy.
We continue to see increasing governmental support for the new energy sector
globally and it was interesting to note that the German Wind Energy Association
estimated that 45,000MW of extra wind capacity will need to be installed by
2020 if the government is to meet its mandate of generating 27% of electricity
from renewable sources. This would require 3,500 MW to be added every year,
over double the 1,667 MW installed in 2007. This is indicative of the growth
potential in the wind energy sector and one of the reasons it is one of our
largest areas of investment in the portfolio.
The Company's holding in American Superconductor performed well over the month
on broker upgrades and a series of wind component orders (including one worth
$450mn from China). The company, in association with the US Department of
Energy, also announced the commissioning of the world's first high temperature
superconductor (HTS) power transmission cable system in a commercial power grid
during the month.
One of the largest contributors to performance over the month was Potash Corp.
This stock, a Potash fertiliser producer, continues to be driven by strong
growth in the agricultural sector, which is benefiting from increasing demand
for biofuels. In particular, the stock benefited from the increased pricing
level of potash to $1,000/ton on sales to Asian markets.
On the negative side, our holding in Medis Technologies was disappointing
during June. This company, which produces fuel cells, saw its stock drop
sharply after it announced that it was offering $29mn worth of securities. The
company intends to use the proceeds from this deal as working capital and for
corporate purposes. We are of the view that this company is still moving into
the "commercial" stage of its development and whilst these hiccups are
unwelcome, it does not materially alter our investment rationale for the stock.
Portfolio Activity
We have continued to shift away from the solar sector and have been moving this
cash into the wind sector. This move has been ongoing over the last 6 months as
we believe that the solar sector remains at risk of over-capacity (particularly
in cell and module manufacturing). Through this period of volatility, we have
also been focusing on the high quality companies in the sector which typically
exhibit slightly more stability.
Outlook
The outlook for political support for new energy continues to strengthen in the
US. John McCain recently pledged his support for a carbon dioxide cap-and-trade
system in the US as well as a goal of reducing emissions by 60% by 2050. The US
has been accused of dragging its heels on climate change in the past. We could
now see a step change in policy from the next US administration, Democrat or
Republican. With the US being such a large potential market, such a change
would likely prove to be an important catalyst for the new energy sector.
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).
24 July 2008
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