20 Dec 2017 13:05
BlackRock Emerging Europe Plc - Portfolio UpdateBlackRock Emerging Europe Plc - Portfolio Update
PR Newswire
London, December 19
| BLACKROCK EMERGING EUROPE PLC (LEI - 549300OGTQA24Y3KMI14) |
| All information is at 30 November 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 | -0.5 | 2.6 | 27.4 | 61.5 | 48.1 | 143.4 | |||||||
| Net asset value | -1.2 | -4.1 | 17.6 | 44.2 | 33.3 | 125.2 | |||||||
| MSCI EM Europe | -2.2 | -6.5 | 15.1 | 19.6 | 4.1 | 70.5 | |||||||
| 10/40(NR) | |||||||||||||
| US Dollars: | |||||||||||||
| Share price | 1.5 | 7.8 | 38.0 | 39.5 | 25.1 | 122.4 | |||||||
| Net asset value | 0.7 | 0.7 | 27.4 | 24.6 | 12.6 | 105.8 | |||||||
| MSCI EM Europe | -0.3 | -1.8 | 24.8 | 3.4 | -12.1 | 55.7 | |||||||
| 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: | 477.42c | ||||||||||||
| Net asset value* – cum income: | 492.38c | ||||||||||||
| Sterling: | |||||||||||||
| Net asset value – capital only: | 352.67p | ||||||||||||
| Net asset value* – cum income: | 363.72p | ||||||||||||
| Share price: | 348.13p | ||||||||||||
| Total assets^: | £130.6m | ||||||||||||
| Discount (share price to cum income NAV): | 4.3% | ||||||||||||
| Net cash at month end: | 1.9% | ||||||||||||
| Net yield^^^^: | 1.7% | ||||||||||||
| 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 11.05 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 | 36.9 | Russia | 55.3 | ||||||||||
| Energy | 30.7 | Poland | 21.1 | ||||||||||
| Telecommunication Services | 9.8 | Turkey | 7.8 | ||||||||||
| Consumer Staples | 7.4 | Greece | 6.5 | ||||||||||
| Materials | 4.1 | Ukraine | 3.6 | ||||||||||
| Information Technology | 3.1 | Pan-Emerging Europe | 2.9 | ||||||||||
| Real Estate | 2.7 | Romania | 1.0 | ||||||||||
| Health Care | 2.3 | Net current assets | 1.8 | ||||||||||
| Industrials | 1.2 | ||||||||||||
| Net current assets | 1.8 | ||||||||||||
| ----- | ----- | ||||||||||||
| 100.0 | 100.0 | ||||||||||||
| ===== | ===== | ||||||||||||
| Short positions | (1.8) | (1.8) | |||||||||||
| Fifteen Largest Investments | |||||||||||||
| (in % order of Gross Assets as at 30.11.17) | |||||||||||||
| Company | Region of Risk | Gross assets | |||||||||||
| (%) | |||||||||||||
| Gazprom | Russia | 8.7 | |||||||||||
| Sberbank | Russia | 8.6 | |||||||||||
| Lukoil | Russia | 8.6 | |||||||||||
| PKO Bank Polski | Poland | 7.2 | |||||||||||
| Bank Pekao | Poland | 5.3 | |||||||||||
| Novatek | Russia | 4.8 | |||||||||||
| Lenta | Russia | 4.2 | |||||||||||
| PZU | Poland | 4.2 | |||||||||||
| Mobile Telesystems | Russia | 3.8 | |||||||||||
| Rosneft Oil Company | Russia | 3.8 | |||||||||||
| Alpha Bank | Greece | 3.6 | |||||||||||
| MHP | Ukraine | 2.9 | |||||||||||
| National Bank of Greece | Greece | 2.9 | |||||||||||
| Erste Group Bank | Pan-Emerging Europe | 2.9 | |||||||||||
| Norilsk Nickel | Russia | 2.7 | |||||||||||
| Commenting on the markets, Sam Vecht and Christopher Colunga, representing the Investment Manager noted: | |||||||||||||
| Market Commentary | |||||||||||||
| The MSCI Emerging Europe 10/40 Index continued to be relatively flat in November, declining by 0.3%* (in USD terms), with most countries in the benchmark, except for Russia and the Czech Republic, ending the month in a negative territory (in USD terms). The Company outperformed the index over the period, returning +0.7%* (in USD terms). | |||||||||||||
| Russia (+2.8%)** rose as the extension of production cuts by OPEC/NOPEC drove Brent up by 3% to US$64/bbl (as at month-end) – its highest level since June 2015.*** Inflation hit an all-time-low with October Consumer Price Index (CPI)at 2.7% over a year ago vs. consensus expectations of 2.8%***. | |||||||||||||
| Turkey (-7.9%)** fell with in line with the Lira (-3%)*** weakening to 3.92*** vs the USD, its lowest monthly close ever. The two-year government bond yield ended at 13.73, the highest since the Global Financial Crisis. Inflation continued to rise with the October CPI at 11.9%, higher than consensus expectations of 11.5%.*** The current account deficit worsened and was higher than expected. The November PMI (Purchasing Managers' Index) at 52.9 has dropped from the August high of 55.3.*** Furthermore, politics and the threat of capital controls continue to hang over the market. | |||||||||||||
| Greece (-0.5%)** was down in November ahead of the Third Review and with the EU regulator continuing to review the country’s non-performing exposures. | |||||||||||||
| In Central Europe, the Czech Republic (+2.1%) rose, while Hungary (-2.7%)** and Poland (-1.1%)** declined in November. In the Czech Republic, the Gross Domestic Product (GDP) continued to grow with 5.0% in the third quarter vs 4.7% in the second quarter. In Hungary, unemployment reached a record low of 4.2%.*** In Poland, the third quarter GDP (4.5% over the quarter) continued to expand; however, core inflation surprised to the downside in October (0.8% in October vs 1.0% in September over a year ago).*** | |||||||||||||
| Focus on: Gazprom Gazprom is Russia’s largest gas producer and transporter, with a pipeline export monopoly. The company has the world’s largest natural gas reserves with a 17% share in the global and 72% share in Russian gas reserves, 11% share of the global and 66% of the national gas output****. The Company is actively implementing large-scale gas development projects in the Yamal Peninsula, the Arctic shelf, Eastern Siberia and the Russian Far East. Furthermore, it is the only producer and exporter of liquefied natural gas (LNG) in Russia and has been expanding its LNG sales through the Sakhalin II project by strengthening its position in the fast-growing LNG market globally. | |||||||||||||
| The stock has been out of favour with many investors for a long time. However, with both volumes and prices surprising positively, we think that the risks to Gazprom are more than priced in to the valuation. Gazprom exports to the European market look likely to exceed 190bcm vs the c160bcm initially estimated and, with oil prices north of $60 vs forecasts of c$50, the operating cash flow generated by Gazprom continues to exceed initial expectations. With a 6% dividend yield, we think the shares look well supported and have the potential to continue to surprise the market. | |||||||||||||
| *Source: BlackRock, data as at end November 2017. **Source: BlackRock, MSCI, data as at end November 2017. ***Source: Bloomberg, JPM, data as at end November 2017. **** Source: Gazprom, data as at end November 2017. | |||||||||||||
| 20 December 2017 | |||||||||||||