Portfolio Update

MERRILL LYNCH GREATER EUROPE INVESTMENT TRUST plc

All information is at 31 August 2007 and unaudited.

Performance at month end with net income reinvested

                                              One      Three       One         Since launch
                                                                                           
                                            Month     Months      Year            (20Sep04)
                                                                                           
Net asset value                             -0.2%      -4.4%     18.4%                89.3%
                                                                                           
Share price                                  2.6%      -1.8%     20.0%                83.6%
                                                                                           
FTSE World Europe ex UK                     -0.5%      -5.5%     18.8%                77.2%
                                                                                           

Sources: BlackRock and Datastream.

At month end                                                                      
                                                                                  
Net asset value (capital only):            181.58p                                
                                                                                  
Net asset value (including income):        184.81p Includes net revenue of 3.23p  
                                                                                  
Share price:                               179.00p                                
                                                                                  
Discount to NAV (capital only):               1.4%                                
                                                                                  
Gearing:                                      9.0%                                
                                                                                  
Net yield:                                    1.1%                                
                                                                                  
Total assets:                              £237.3m                                
                                                                                  
Ordinary shares in issue:              119,843,969                                
                                                                                  

 

Benchmark                                                                                               
                                                                                                        
Sector Analysis                   Total Assets   Index   Country Analysis                  Total Assets 
                                                                                                        
                                           (%)     (%)                                              (%) 
                                                                                                        
Financials                                27.9    31.1   Germany                                   24.7 
                                                                                                        
Basic Materials                           11.3     6.1   France                                    13.7 
                                                                                                        
Healthcare                                10.2     6.5   Switzerland                               11.0 
                                                                                                        
Telecommunications                        10.0     6.1   Italy                                      8.3 
                                                                                                        
Consumer Goods                             9.1    13.8   Spain                                      7.6 
                                                                                                        
Industrials                                7.8    12.5   Finland                                    4.9 
                                                                                                        
Oil & Gas                                  7.4     6.3   Netherlands                                4.5 
                                                                                                        
Utilities                                  7.4     7.7   Russia                                     4.2 
                                                                                                        
Consumer Services                          3.9     5.2   Greece                                     3.5 
                                                                                                        
Other Investments                          3.3       -   Emerging Europe                            3.1 
                                                                                                        
Technology                                 1.8     4.7   Turkey                                     3.0 
                                                                                                        
Net current liabilities                   (0.1)      -   Norway                                     2.1 
                                                                                                        
                                                         Austria                                    2.0 
                                                                                                        
                                                         Israel                                     1.9 
                                                                                                        
                                                         Sweden                                     1.8 
                                                                                                        
                                                         Ireland                                    1.6 
                                                                                                        
                                                         Cyprus                                     1.0 
                                                                                                        
                                                         Luxembourg                                 1.0 
                                                                                                        
                                                         UK                                         0.2 
                                                                                                        
                                                         Net current liabilities                   (0.1)
                                                                                                        
                                         -----   -----                                            ----- 
                                                                                                        
                                         100.0   100.0                                            100.0 
                                                                                                        
                                         -----   -----                                            ----- 
                                                                                                        

 

Ten Largest Equity Investments                                           
                                                                         
Company                                              Country of Risk     
                                                                         
Allianz                                              Germany             
                                                                         
Bayer                                                Germany             
                                                                         
BlackRock Eurasian Frontiers Hedge Fund              Emerging Europe     
                                                                         
DaimlerChrysler                                      Germany             
                                                                         
Intesa Sanpaolo                                      Italy               
                                                                         
Nokia                                                Finland             
                                                                         
Novartis                                             Switzerland         
                                                                         
Roche                                                Switzerland         
                                                                         
Siemens                                              Germany             
                                                                         
Telefonica                                           Spain               
                                                                         

 

Commenting on the markets, James Macmillan, representing the Investment Manager                    
noted:                                                                                             
                                                                                                   
European equity markets continued to experience volatility in August as global                     
financial markets were again dominated by headlines relating to credit concerns                    
as a result of the US sub-prime lending crisis.  Investors were unnerved by a                      
widening of credit spreads resulting in a rapid re-pricing of risk across the                      
market and fears that problems in credit markets may slow down the high level                      
of M&A activity that has been a driver of stock market performance in Europe.                      
Having been down more than 4% at one stage, markets rallied later in the month                     
with the FTSE World Europe ex UK Index (net dividends reinvested) finishing                        
-0.5% down in Sterling terms.  Emerging Europe's stock markets also sold off                       
with the MSCI Emerging Europe declining -3.76%.                                                    
                                                                                                   
The Company's NAV returned -0.2% during August outperforming the reference                         
index by 0.3 percentage points.  The contribution from the Emerging Europe                         
region was negative with poor performance especially in Turkey and Russia.  The                    
Company also suffered somewhat from being positively geared in a falling                           
market.                                                                                            
                                                                                                   
The Company benefited from its investments in German pharmaceuticals group                         
Bayer (+11%), Greek telecoms operator OTE (+8%), Finnish handset manufacturer                      
Nokia (+15%) and Luxembourg based steel maker ArcelorMittal (+6%).  The stocks                     
which detracted from performance included investments in Turkish media and gold                    
mining group Ipek (down 13%) and Dutch based property group Eurocastle (-14%).                     
                                                                                                   
During the month the Company increased its exposure to the energy sector by                        
establishing new holdings in Russian oil and gas groups Transneft and Gazprom.                     
The Company exited positions in Turkish conglomerate Dogan Holdings and Polish                     
media group Agora, and reduced exposure to Greek telecoms operator OTE.  There                     
were no other significant transactions.                                                            
                                                                                                   
The Company continues to have a bias towards financials through banks, along                       
with pharmaceuticals, materials and utilities.  Exposure to Emerging Europe                        
decreased during the month to finish at 12.2%, with the largest country                            
exposures being Turkey and Russia, along with the BlackRock Eurasian Frontiers                     
Hedge Fund which provides diversified exposure to the region.  During the month                    
the Company decreased its net market exposure to 9.0% in response to increased                     
market volatility.                                                                                 
                                                                                                   
We remain positive on the prospects for European and Emerging European                             
equities.  Despite increased market volatility and recent problems emerging in                     
US credit we expect global economic growth to remain at long term trend levels                     
and the US to experience a slowdown rather than a hard landing.  The second                        
quarter results season has continued to show corporate strength, with earnings                     
growth and profits driven by stronger domestic demand, as well as robust global                    
export demand from China and other emerging markets.  We believe a combination                     
of strong earnings growth and attractive valuations should allow the market to                     
make progress against what may be a more challenging international backdrop.                       
                                                                                                   
Latest 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).                                                                                         
                                                                                                   
28 September 2007