BLACKROCK EMERGING EUROPE PLC - Portfolio Update
October 21 2014 - 6:06AM
PR Newswire (US)
BLACKROCK EMERGING EUROPE PLC
All information is at 30 September 2014 and unaudited.
Performance at month end with net income reinvested
One Three One Three Five *Since
Month Months Year Years Years 30.04.09
Sterling:
Share price -1.8% -12.7% -13.2% 4.2% 7.5% 58.4%
Net asset value -2.3% -10.6% -12.4% 5.9% 7.9% 56.9%
MSCI EM Europe 10/40(NR) -3.7% -7.5% -13.3% 2.5% 3.8% 45.2%
US Dollars:
Share price -4.1% -17.2% -13.2% 8.5% 9.1% 73.4%
Net asset value -4.6% -15.2% -12.3% 10.2% 9.5% 71.8%
MSCI EM Europe -5.9% -12.3% -13.2% 6.7% 5.2% 58.9%
10/40(NR)
Sources: BlackRock, Standard & Poor's Micropal
*BlackRock took over the investment management of the Company with effect from
1 May 2009
Annual Performance to the Last Quarter End (Sterling)
30/9/13 30/9/12 30/9/11 30/9/10 30/9/09
30/9/14 30/9/13 30/9/12 30/9/11 30/9/10
NAV Performance -12.45% 6.05% 14.02% -20.83% 28.79%
Share Price Performance -13.24% 6.07% 13.25% -20.11% 29.16%
At month end
Net asset value - capital only: 253.41p
Net asset value*** - cum income: 257.75p
Share price: 230.63p
Total assets^: £99.5m
Discount (share price to cum income NAV): 10.5%
Gross market exposure^^^: 104.5%
Gearing at month end: 0.0%
Gearing range as a % of Net assets: 0-20%
Net Yield: 0.9%*
Issued Capital - Ordinary Shares^^ 36,242,928
Ongoing charges** 1.3%
*Based on a dividend of 3.50 cents (2.08407 pence) per share for the year ended
31 January 2014.
** calculated in accordance with AIC guidelines.
***Includes year to date net revenue equal to 4.34 pence per share.
^Total assets include current year revenue.
^^ Excluding 5,400,000 shares held in treasury.
^^^ Long positions plus short positions as a percentage of net asset value.
Sector % Net Country % Net
Analysis Assets Analysis Assets
Financials 36.6 Russia 47.9
Energy 33.7 Turkey 20.4
Consumer Staples 10.5 Poland 10.2
Materials 5.8 Turkmenistan 7.5
Information Technology 4.5 Hungary 6.4
Telecommunications 4.1 Romania 4.1
Industrials 3.9 Ukraine 3.8
Consumer Discretionary 1.8 Lithuania 1.8
Health Care 1.2 -----
----- 102.1
102.1 =====
=====
Short positions (2.4) (2.4)
Fifteen Largest Investments
(in % order of Total Market Value as at 30.09.14)
Total Market
Company Region of Risk Value %
Dragon Oil Turkmenistan 7.5
Sberbank Russia 7.5
Novatek Russia 6.9
Garanti Bank Turkey 6.0
Turkiye Sinai Kalkinma Turkey 5.3
Lukoil Russia 4.9
PKO Bank Polski Poland 4.9
BRD Groupe Société Generale - CFD Romania 4.1
Gazprom Russia 4.1
Turkcell Turkey 4.1
Surgutneftegas Russia 4.0
MHP Ukraine 3.8
Uralkali Russia 3.7
OTP Bank Hungary 3.2
Jeronimo Martins Poland 3.2
Commenting on the markets, Sam Vecht and David Reid, representing the
Investment Manager noted;
Market overview
The MSCI Emerging Europe 10/40 Market Index returned -5.9% in USD terms during
September.
The weakest market was Turkey. The Istanbul bourse sold off as part of a
broader Emerging Market decline in response to strong data in the US. This
increased the prospects of a US rate hike and strengthened the US Dollar, which
has implications for countries that have a current account deficit such as
Turkey.
Russia outperformed the index during September. The beginning of the month saw a
moderate tightening of EU sanctions as their scope was broadened. This had no impact
on the Company’s ability to own or trade equities of listed companies. Towards the
end of the month the situation on the ground in Ukraine appeared to be easing. The
ceasefire has been holding, with minor violations and on September 23rd NATO’s
spokesperson said that “there has been a significant pullback of Russian conventional
forces” from Ukraine.
The worst performing stocks over the period were Russian conglomerate Sistema
and its oil producing subsidiary Bashneft. The stocks fell precipitously after
Chairman, Vladimir Yevtushenkov, was detained under house arrest pending an
investigation into the privatization process of Bashneft. The Company does not
own shares in either company.
Focus on: Lukoil
Lukoil was formed in 1991 following the merger of three state-run companies in
western Siberia. The three companies were called Langepasneftegaz,
Urayneftegaz, and Kogalymneftegaz and this heritage is preserved in the
company's current name.
Today, the company is the largest privately-owned company by proved oil
reserves. The stock is a relatively new entry to the largest 15 stocks held by
the Company. We had previously avoided exposure due to Lukoil's extensive
capital expenditure programme. This capital expenditure cycle is coming to an
end and there has been a shift in management attitudes towards greater
investment discipline. We believe that this new focus will allow the company to
generate free cash flow which will enable it to pay a 6% dividend yield. Being
an exporter, the company is also a beneficiary of the weakening Rouble.
Activity
We added to the position in Turkish telecom Turkcell. The company's shares have
pulled back further than the Turkish market since the summer, despite the
company's defensive profile and progress in the shareholder legal dispute which
has been holding back dividend payments.
21 October 2014
ENDS
Latest information is available by typing www.blackrock.co.uk/beep 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.
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