Portfolio Update

MERRILL LYNCH GREATER EUROPE INVESTMENT TRUST plc

All information is at 31 July 2007 and unaudited.

Performance at month end with net income reinvested

                                              One      Three       One         Since launch
                                                                                           
                                            Month     Months      Year            (20Sep04)
                                                                                           
Net asset value                             -3.5%      -0.5%     19.8%                89.7%
                                                                                           
Share price                                 -1.1%      -2.9%     19.0%                79.0%
                                                                                           
FTSE World Europe ex UK                     -3.2%      -2.0%     21.5%                78.2%
                                                                                           

Sources: BlackRock and Datastream.

At month end                                                                      
                                                                                  
Net asset value (capital only):            182.05p                                
                                                                                  
Net asset value (including income):        185.21p Includes net revenue of 3.16p  
                                                                                  
Share price:                               174.50p                                
                                                                                  
Discount to NAV (capital only):               4.1%                                
                                                                                  
Discount to NAV (including income):           5.8%                                
                                                                                  
Gearing:                                     10.4%                                
                                                                                  
Net yield:                                    1.2%                                
                                                                                  
Total assets:                              £240.9m                                
                                                                                  
Ordinary shares in issue:              119,843,969                                
                                                                                  

 

Benchmark                                                                                               
                                                                                                        
Sector Analysis                   Total Assets   Index   Country Analysis                  Total Assets 
                                                                                                        
                                           (%)     (%)                                              (%) 
                                                                                                        
Financials                                27.2    31.9   Germany                                   24.0 
                                                                                                        
Basic Materials                           11.5     6.0   France                                    13.8 
                                                                                                        
Telecommunications                        10.2     5.8   Switzerland                               10.4 
                                                                                                        
Healthcare                                 9.9     6.6   Italy                                      8.2 
                                                                                                        
Consumer Goods                             9.3    13.5   Spain                                      7.5 
                                                                                                        
Industrials                                8.1    12.7   Turkey                                     4.8 
                                                                                                        
Oil & Gas                                  7.1     6.4   Netherlands                                4.5 
                                                                                                        
Utilities                                  7.0     7.4   Greece                                     4.5 
                                                                                                        
Consumer Services                          4.8     5.3   Finland                                    4.4 
                                                                                                        
Other Investments                          3.2       -   Emerging Europe                            3.0 
                                                                                                        
Technology                                 1.8     4.4   Russia                                     2.2 
                                                                                                        
Net current liabilities                   (0.1)      -   Norway                                     2.1 
                                                                                                        
                                                         Israel                                     2.0 
                                                                                                        
                                                         Austria                                    1.9 
                                                                                                        
                                                         Sweden                                     1.8 
                                                                                                        
                                                         Ireland                                    1.7 
                                                                                                        
                                                         Poland                                     1.2 
                                                                                                        
                                                         Cyprus                                     1.0 
                                                                                                        
                                                         Luxembourg                                 0.9 
                                                                                                        
                                                         UK                                         0.2 
                                                                                                        
                                                         Net current liabilities                   (0.1)
                                                                                                        
                                         -----   -----                                            ----- 
                                                                                                        
                                         100.0   100.0                                            100.0 
                                                                                                        
                                         -----   -----                                            ----- 
                                                                                                        

 

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

 

Commenting on the markets, James Macmillan, representing the Investment Manager                    
noted:                                                                                             
                                                                                                   
European equity markets experienced marked volatility in July as global                            
financial markets were dominated by headlines relating to credit concerns,                         
specifically those associated with US sub-prime lending.  The FTSE World Europe                    
ex UK (net) declined 3.2% in GBP terms as 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 sub-prime could spread to other areas of credit.                            
Performance in Emerging Europe was positive, mainly due to sound performance in                    
the first part of the month; the MSCI Emerging Europe returned 3.3%.                               
                                                                                                   
The Company's NAV returned -3.5% during July underperforming the reference                         
index by 0.3%.  The contribution from the Emerging Europe region was beneficial                    
with strong performance especially in Turkey and Poland.  The use of flexible                      
gearing was negative and the Company suffered from being positively geared in a                    
falling market.                                                                                    
                                                                                                   
During the month the best performing holdings were mainly found in Emerging                        
Europe and the Company's holdings in the BlackRock Eurasian Frontiers Hedge                        
Fund, along with Turkish companies Ipek Matbaccilik and Reysas Tasimaclik, made                    
a positive contribution to performance.  Other strong performing stocks                            
included Italian Bank Intesa and German do-it-yourself retailer Praktiker Bau                      
along with selected holdings in more defensively orientated sectors such as                        
telecoms and pharmaceuticals.  The stocks which detracted from performance were                    
mainly found in the more cyclically orientated sectors such as automobiles and                     
capital goods and included steel pipe maker Vallourec, industrial conglomerate                     
Siemens, and car manufacturer Renault.                                                             
                                                                                                   
During the month the Company reduced its exposure to the energy sector by                          
taking profits in Hungarian and Polish refiners PKN and MOL.  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                        
increased during the month to finish at 13.2%, 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 110.4% 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 strong domestic demand, as well as robust global                      
export demand from China and 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).                                                                                         
                                                                                                   
29 August 2007