18th Jul 2017 14:01
BlackRock Emerging Europe Plc - Portfolio UpdateBlackRock Emerging Europe Plc - Portfolio Update
PR Newswire
London, July 18
| BLACKROCK EMERGING EUROPE PLC (LEI - 549300OGTQA24Y3KMI14) |
| All information is at 30 June 2017 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 | -3.6% | 1.4% | 38.7% | 22.0% | 40.6% | 121.4% | |
| Net asset value | -1.7% | -0.2% | 31.1% | 21.5% | 35.5% | 113.3% | |
| MSCI EM Europe | -1.0% | -1.3% | 22.5% | 3.2% | 7.1% | 61.9% | |
| 10/40(NR) | |||||||
| US Dollars: | |||||||
| Share price | -3.0% | 5.3% | 34.7% | -7.3% | 16.5% | 94.1% | |
| Net asset value | -1.1% | 3.6% | 27.4% | -7.7% | 12.3% | 87.0% | |
| MSCI EM Europe | -0.4% | 2.5% | 19.0% | -21.6% | -11.3% | 41.9% | |
| 10/40(NR) | |||||||
| Sources: BlackRock, Standard & Poor’s Micropal | |||||||
| *BlackRock took over the investment management of the Company with effect from 1 May 2009 | |||||||
| At month end | |||||||
| US Dollar: | |||||||
| Net asset value – capital only: | 438.77c | ||||||
| Net asset value* – cum income: | 447.44c | ||||||
| Sterling: | |||||||
| Net asset value – capital only: | 337.81p | ||||||
| Net asset value* – cum income: | 344.49p | ||||||
| Share price: | 316.63p | ||||||
| Total assets^: | £123.7m | ||||||
| Discount (share price to cum income NAV): | 8.1% | ||||||
| Net gearing at month end: | 6.9% | ||||||
| Net yield^^^^: | 1.8% | ||||||
| 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 6.68 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 (%) | |||||||||||
| Energy | 31.3 | Russia | 55.3 | |||||||||||
| Financials | 29.3 | Turkey | 17.7 | |||||||||||
| Consumer Staples | 8.4 | Poland | 11.1 | |||||||||||
| Industrials | 6.8 | Greece | 8.8 | |||||||||||
| Telecommunication Services | 6.4 | Ukraine | 4.6 | |||||||||||
| Materials | 5.0 | Czech Republic | 3.3 | |||||||||||
| Information Technology | 4.5 | Net current liabilities | (0.5) | |||||||||||
| Health Care | 2.9 | |||||||||||||
| Real Estate | 2.6 | |||||||||||||
| Consumer Discretionary | 2.3 | |||||||||||||
| Utilities | 1.3 | |||||||||||||
| Net current liabilities | (0.5) | |||||||||||||
| ----- | ----- | |||||||||||||
| 100.3 | 100.3 | |||||||||||||
| ===== | ===== | |||||||||||||
| Short positions | (1.8) | (1.8) | ||||||||||||
| Fifteen Largest Investments | ||||||||||||||
| (in % order of Gross Assets as at 30.06.17) | ||||||||||||||
| Company | Region of Risk | Gross assets | ||||||||||||
| (%) | ||||||||||||||
| Gazprom | Russia | 9.8 | ||||||||||||
| Sberbank | Russia | 8.8 | ||||||||||||
| Novatek | Russia | 7.5 | ||||||||||||
| Lukoil | Russia | 5.0 | ||||||||||||
| Rosneft | Russia | 4.3 | ||||||||||||
| PKO Bank Polski | Poland | 3.9 | ||||||||||||
| Lenta | Russia | 3.8 | ||||||||||||
| National Bank of Greece | Greece | 3.7 | ||||||||||||
| Turk Hava Yollari | Turkey | 3.5 | ||||||||||||
| Moneta Money Bank | Czech Republic | 3.3 | ||||||||||||
| Globaltrans | Russia | 3.3 | ||||||||||||
| MD Medical Group | Russia | 2.9 | ||||||||||||
| Tupras | Turkey | 2.8 | ||||||||||||
| TSKB | Turkey | 2.8 | ||||||||||||
| Alpha Bank | Greece | 2.8 | ||||||||||||
| Commenting on the markets, Sam Vecht and Christopher Colunga, representing the Investment Manager noted; | ||||||||||||||
| Market Commentary | ||||||||||||||
| The MSCI Emerging Europe 10/40 Index returned -0.4% in June in US dollar (USD) terms. The Company underperformed the index and fell by 1.1% in USD terms. | ||||||||||||||
| Greece (+5.6%) was the best performing market in the region following the completion of the country’s second bailout review. This resulted in Euro-zone creditors agreeing to release €8.5bn in new loans and Moody’s upgrading Greece’s credit rating to Caa2 with a positive outlook. Greece’s next focus will be on agreeing a debt sustainability program with its creditors and attempting to issue debt in the international markets for the first time since 2014. | ||||||||||||||
| Turkey (+4.1%) rose over the month as first quarter 2017 gross domestic product growth surprised to the upside and beat consensus expectations. In Central Europe, Hungary (+3.4%) and Poland (+1.9%) outperformed the region while Czech Republic (-0.8%) lagged. The region benefitted from a stronger Euro vs. USD (+1.6%). CE3 currencies (Czech Koruna, Polish Zloty and Hungarian Forint) performance was mixed against the Euro: the Koruna (+0.9%) strengthened while the Zloty (-1.2%) and the Forint (-0.2%) weakened, but all rose against the US dollar. | ||||||||||||||
| Russia (-3.6%) declined over the month with the rouble weakening as the oil price continued to drop. Brent crude lost 3.7% and fell to US$48.23 per barrel at month-end, after trading as low as US$44 per barrel during the month, the lowest since just before the November 2016 OPEC (Organisation of the Petroleum Exporting Countries) cut. The Central Bank of Russia continued its easing policy and cut the key policy rate by 25 basis points to 9.0% in line with consensus expectations. The Russian economy continued to recover with both consumer and investment-related industries doing well. Retail sales beat consensus expectations and real wages accelerated in both the private and public sectors. | ||||||||||||||
| Focus on: Turkish Airlines (Türk Hava Yollar?) | ||||||||||||||
| Turkish Airlines is the national carrier of Turkey with its headquarters in Istanbul. Leveraging its geographic location as a transit hub between Europe, Asia and Africa, Turkish Air has managed to grow its fleet of aircraft to over 300 and is one of the largest airlines in the world as measured by destinations served - reaching over 100 countries globally. | ||||||||||||||
| 2016 was a difficult year for the airline which saw it witness a decline in its profits and a loss of passengers due to concerns about terrorist attacks in the country followed by the failed coup in July 2016. This, coupled with a diplomatic spat with Russia, meant that Turkey saw its lowest number of tourists in years. By the end of 2016 year the stock was looking very downtrodden. | ||||||||||||||
| We initiated our position in Turkish Airlines at the beginning of 2017 on the view that traffic would improve, driving margins higher. Russia and Turkey had recently normalised relations, ensuring Russian tourists should start to return. The security situation within Turkey began to cool back down, and normalisation in the oil market helped airline ticket pricing to stabilise. The investment thesis began to play out relatively quickly. The company posted strong results on the back of improving air traffic data and operational improvements which resulted in subsequent earnings per share revisions. The stock has had a strong performance and is up by 70% year to date (in USD terms) in 2017. | ||||||||||||||
| 18 July 2017 | ||||||||||||||
| 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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