23rd Feb 2018 14:23
BlackRock Emerging Europe Plc - Portfolio UpdateBlackRock Emerging Europe Plc - Portfolio Update
PR Newswire
London, February 23
| BLACKROCK EMERGING EUROPE PLC (LEI - 549300OGTQA24Y3KMI14) |
| All information is at 31 January 2018 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 | 9.4 | 10.5 | 30.9 | 96.7 | 45.4 | 170.3 | ||||||||||||
| Net asset value | 6.6 | 9.8 | 19.9 | 77.7 | 31.8 | 150.1 | ||||||||||||
| MSCI EM Europe | 4.5 | 7.8 | 14.9 | 55.1 | 2.7 | 87.9 | ||||||||||||
| 10/40(NR) | ||||||||||||||||||
| US Dollars: | ||||||||||||||||||
| Share price | 15.0 | 18.3 | 48.0 | 86.2 | 30.4 | 159.4 | ||||||||||||
| Net asset value | 12.1 | 17.5 | 35.4 | 68.2 | 18.3 | 140.1 | ||||||||||||
| MSCI EM Europe | 9.9 | 15.4 | 29.8 | 46.9 | -7.86 | 80.3 | ||||||||||||
| 10/40(NR) | ||||||||||||||||||
| Sources: BlackRock, Standard & Poor’s Micropal | ||||||||||||||||||
| *BlackRock took over the investment management of the Company with effect from 1 May 2009 | ||||||||||||||||||
| At month end | ||||||||||||||||||
| US Dollar: | ||||||||||||||||||
| Net asset value – capital only: | 558.53c | |||||||||||||||||
| Net asset value* – cum income: | 574.48c | |||||||||||||||||
| Sterling: | ||||||||||||||||||
| Net asset value – capital only: | 392.76p | |||||||||||||||||
| Net asset value* – cum income: | 403.97p | |||||||||||||||||
| Share price: | 386.50p | |||||||||||||||||
| Total assets^: | £145.1m | |||||||||||||||||
| Discount (share price to cum income NAV): | 4.3% | |||||||||||||||||
| Net gearing at month end: | 3.3% | |||||||||||||||||
| Net yield^^^^: | 1.5% | |||||||||||||||||
| Gearing range as a % of Net assets: | 0-20% | |||||||||||||||||
| Issued Capital – ordinary shares^^ | 35,916,028 | |||||||||||||||||
| Ongoing charges^^^ | 1.2% | |||||||||||||||||
| * Includes year to date net revenue equal to 11.21 pence per share. | ||||||||||||||||||
| ^ Total assets include current year revenue. | ||||||||||||||||||
| ^^ Excluding 5,000,000 shares held in treasury. | ||||||||||||||||||
| ^^^ Calculated as at 31 January 2017, in accordance with AIC guidelines. | ||||||||||||||||||
| ^^^^ Yield calculations are based on dividends announced in the last 12 months as at the date of release of this announcement, and comprise of the final dividend of 7.50 cents per share, (announced on 28 March 2017, ex-dividend on 18 May 2017) | ||||||||||||||||||
| Sector Analysis | Gross assets (%) | Country Analysis | Gross assets (%) | |||||||||||||||
| Financials | 37.5 | Russia | 55.8 | |||||||||||||||
| Energy | 28.5 | Poland | 17.8 | |||||||||||||||
| Consumer Staples | 10.1 | Turkey | 7.5 | |||||||||||||||
| Telecommunication Services | 7.4 | Greece | 6.7 | |||||||||||||||
| Health Care | 5.6 | Hungary | 3.6 | |||||||||||||||
| Materials | 4.2 | Ukraine | 3.6 | |||||||||||||||
| Information Technology | 3.0 | Pan-Emerging Europe | 2.9 | |||||||||||||||
| Industrials | 1.2 | |||||||||||||||||
| Consumer Discretionary | 0.4 | |||||||||||||||||
| Net current assets | 2.1 | Net current assets | 2.1 | |||||||||||||||
| ----- | ----- | |||||||||||||||||
| 100.0 | 100.0 | |||||||||||||||||
| ===== | ===== | |||||||||||||||||
| Short position | (1.6) | (1.6) | ||||||||||||||||
| Fifteen Largest Investments | ||||||||||||||||||
| (in % order of Gross Assets as at 31.01.18) | ||||||||||||||||||
| Company | Region of Risk | Gross assets | ||||||||||||||||
| (%) | ||||||||||||||||||
| Sberbank | Russia | 9.3 | ||||||||||||||||
| Lukoil | Russia | 8.9 | ||||||||||||||||
| Gazprom | Russia | 8.6 | ||||||||||||||||
| PKO Bank Polski | Poland | 7.1 | ||||||||||||||||
| Bank Pekao | Poland | 5.1 | ||||||||||||||||
| Novatek | Russia | 4.9 | ||||||||||||||||
| Lenta | Russia | 4.4 | ||||||||||||||||
| Rosneft Oil Company | Russia | 4.1 | ||||||||||||||||
| PZU | Poland | 3.9 | ||||||||||||||||
| Gedeon Richter | Hungary | 3.6 | ||||||||||||||||
| National Bank of Greece | Greece | 3.4 | ||||||||||||||||
| Mobile Telesystems | Russia | 3.4 | ||||||||||||||||
| Alpha Bank | Greece | 3.2 | ||||||||||||||||
| MHP | Ukraine | 3.0 | ||||||||||||||||
| Erste Group Bank | Pan-Emerging Europe | 2.9 | ||||||||||||||||
| Commenting on the markets, Sam Vecht and Christopher Colunga, representing the Investment Manager noted; | ||||||||||||||||||
| Market Commentary | ||||||||||||||||||
| The MSCI Emerging Europe 10/40 Index gained +4.5% (GBP) in January (+9.9%* in USD terms) marking the region’s best start over the last six years, as strong global growth and commodity prices helped support markets. The Company outperformed the index over the period, returning +6.6% in GBP or +12.1%* in USD terms. | ||||||||||||||||||
| Russia was the region’s top performer, rising by 12.1% in US Dollar terms** in January. The equity market finally started to catch up to the higher in oil prices, and was further supported by a weak US Dollar. Central Europe continued its streak of outperformance as currencies strengthened against the US Dollar and growth remains robust. Poland ended the month up +8.8% in US Dollar terms**, while the Czech Republic and Hungary both saw +8% gains in US Dollar terms**. Similarly, Greece rallied +11.8% in US Dollar terms** on faster growth and further supported by a preliminary agreement on the latest review of their bailout memorandum. Turkey lagged the region but still rose +4.9% in US Dollar terms**; the market seems to be holding up well following upgrades to the banks 2018 earnings expectations. | ||||||||||||||||||
| Focus on: Rosneft Rosneft is one of the world’s largest integrated oil companies, with a majority of its operations in Russia. The company’s business lines span across exploration and production, refining, exports and retail distribution. Despite a supportive macro backdrop, including positive monetary and fiscal policy trends and record low inflation, as well as a pick-up in oil prices, the stock has lagged its peer group. | ||||||||||||||||||
| We believe that recent stock price underperformance is overdone given that both earnings and dividends are some of the most highly levered in Russia to oil prices. The company should start to generate high levels of free cash flow in 2018 as several new greenfield sites begin production. These new fields will also benefit from tax breaks, improving the profit Rosneft generates on each barrel. This coupled with the company’s announced 50% dividend pay-out policy, leads us to believe that Rosneft is uniquely positioned to catch up to its peers in early 2018. The stock remains our largest overweight within the Russian energy space. | ||||||||||||||||||
| *Source: BlackRock, data as at end January 2018. | ||||||||||||||||||
| **Source: JPM, data as at end January 2018. | ||||||||||||||||||
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