Monthly Update

British Empire Sec & Gen Tst PLC
18 January 2007

BRITISH EMPIRE SECURITIES AND GENERAL TRUST PLC



Performance Commentary

This investment management report relates to performance figures as at 31
December 2006.

Over the month NAV was up 4.0%(1).  This compares to an increase in the
benchmark of 3.0%(2), and an increase of 3.3%(1) and 2.6%(1) for the FTSE All
Share and the MSCI World (£) indices respectively.

Financial* year to date, net asset value rose 5.2%(1) compared to a rise of
5.5%(2) for the Datastream index, 3.5%(1) for the MSCI World (£) and 6.2%(1) for
the FTSE All Share.

Over three years NAV is up 98.6%(1) while the FTSE All Share is up 60.8%(1).


Manager's Comment

After four years of strongly rising equity markets, it is reasonable to ask if
there is still much value in stocks.  Private equity buyers appear to believe
there is but their interest crucially relies on the earnings yield of equities
exceeding their costs of debt funding.  Interest rates have remained low because
CPI inflation has remained contained despite sharply rising asset prices. Mervyn
King, the Governor of the Bank of England, has reportedly suggested recently
that this disparity was unsustainable and that either the CPI would play catch
up or asset prices would have to fall.  Central Banks would presumably rather
see asset prices fall than see inflation in goods and services break out.  So
there is justification for some caution in regards to asset prices and we have
held some net cash as a result.



Statistics





                                 Value     % 1 mo    % 1 yr     % 3 yr    % 5 yr

Price (£)(1)                     452.8      3.5        0.3       107.0     157.3

Net Asset Value(1)               452.1      3.1        6.2        93.3     127.6

Net Asset Value Total Return(1)             4.0        7.4        98.6     137.9

Benchmark(2) (£)                            3.0       10.6        60.0      51.4



Annual Returns (%)                2006      2005       2004       2003      2002

Price(1)                           0.3      51.7       36.0       41.6     -12.2

MSCI World(1)                      5.8      23.0        7.2       20.6     -27.4



1 Source: Fundamental Data

2 Datastream Global Growth Investment Trust Index(TR) Source: Thomson Financial





Top 10 Equity Holdings                %

Investor AB                          3.57

Alliance Trust                       3.11

Jardine Strategic                    2.82

Sofina                               2.65

Lundbergforetagen                    2.34

Electra Private Equity               2.32

NTT Urban Development                2.26

Hutchison Whampoa                    2.21

Tokyu Corporation                    2.14

Paris Orleans                        1.95



Capital Structure



Ordinary Shares                                160,080,089

10 3/8% Debenture stock 2011                    £8,514,940

8 1/8% Debenture stock 2023                    £14,875,319

Equities index unsecured loan stock 2013         2,837,000



Gross Assets/Gearing



Gross Assets                                                £756 mil.

Debt                                                       £ 29.8mil.

Actual Gearing (Debt less cash divided by net asset value)     -14.0%





Fund Codes



Bloomberg                                                  Reuters Ticker / ISIN

BTEM                                                               GB0001335081



Geographical Breakdown



Continental Europe      22.2%

Japan                   14.7%

Canada / US              6.1%

Asia Pacific            13.7%

UK                      23.9%

Liquidity               17.3%

EMEA                     2.2%



All figures as at 31 December 2006 unless otherwise stated.  All sources Asset
Value Investors Ltd unless otherwise stated.  British Empire Securities Trust is
managed by Asset Value Investors Ltd.  The price of shares and the income from
them may go down as well as up; they can be affected by exchange rate movements
between currencies and it is possible that investors may not get back the full
amount invested on disposal of the shares.  Past performance is no guarantee of
future performance.  Investments in emerging markets carries a greater degree of
risk, in particular the volatility of the markets and the local custody and
registration arrangements, which may be less developed than in more mature
markets.  There is no guarantee that the market price of shares in Investment
Trusts will fully reflect their underlying Net Asset Value (NAV).  This
Investment Trust should be considered only as part of a balanced portfolio, of
which it should not form a disproportionate part. Under no circumstances should
this information be considered as an offer, or solicitation, to deal in
investments.  Issued by Asset Value Investors Ltd., which is authorised and
regulated by the Financial Services Authority.


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