24 Aug 2018 09:51
BlackRock Emerging Europe Plc - Portfolio UpdateBlackRock Emerging Europe Plc - Portfolio Update
PR Newswire
London, August 22
| BLACKROCK EMERGING EUROPE PLC (LEI - 549300OGTQA24Y3KMI14) |
| All information is at 31 July 2018 and unaudited. |
PLEASE NOTE THAT THE BOARD OF BLACKROCK EMERGING EUROPE PLC ANNOUNCED ON 17 AUGUSTTHAT IT INTENDS TO PUT FORWARD PROPOSALS TO PUT THE COMPANY INTO LIQUIDATION.VOLUNTARYSHAREHOLDERS WILL BE GIVEN THE OPTION OF ELECTING TO RECEIVE CASH AT NET ASSET VALUELESS COSTS AND/OR ROLLING THEIR INVETMENT INTO NEW C SHARES TO BE ISSUED BY BLACKROCKFRONTIERS INVESTMENT TRUST PLC. A COPY OF THE ANNOUCEMENT CAN BE FOUND AThttps://www.blackrock.com/uk/individual/literature/shareholder-letters/blackrock-emerging-europe-plc-en-gb-shareholder-letters.pdf.
THE COMPANY'S PORTFOLIO WILL REMAIN FULLY INVESTED ACCORDING TO ITS INVESTMENT POLICY UNTIL THE ABOVEPROPOSALS HAVE BEEN APPROVED BY SHAREHOLDERS AT THE RELEVANT GENERAL MEETING (EXPECTED TO BE HELD INNOVEMBER 2018).
Perfomance at month end with net income reinvested
| One | Three | One | Three | Five | *Since | ||||||||||||
| Month | Months | Year | Years | Years | 30.04.09 | ||||||||||||
| Sterling²: | |||||||||||||||||
| Share price | 4.8 | 2.1 | 8.6 | 72.3 | 33.6 | 146.2 | |||||||||||
| Net asset value | 3.7 | -0.6 | 4.8 | 62.6 | 27.6 | 126.9 | |||||||||||
| MSCI EM Europe 10/40(NR) | 4.5 | 2.5 | 5.4 | 43.9 | 5.3 | 76.4 | |||||||||||
| US Dollars²: | |||||||||||||||||
| Share price | 4.1 | -2.8 | 8.2 | 44.8 | 15.5 | 118.0 | |||||||||||
| Net asset value | 3.1 | -5.4 | 4.2 | 36.6 | 10.4 | 100.9 | |||||||||||
| MSCI EM Europe 10/40(NR) | 3.8 | -2.4 | 4.9 | 21.0 | -8.9 | 56.2 | |||||||||||
| Sources: BlackRock, Standard & Poor’s Micropal | |||||||||||||||||
| 1 BlackRock took over the investment management of the Company with effect from 1 May 2009 | |||||||||||||||||
| 2 Further to the announcement made on 17 August 2018 that the Company intends to put forward proposals which will result in the liquidation of the Company’s assets, the performance data in the table above and the NAV data in the table below incorporates the impact of accruals in respect of expected costs associated with the liquidation. Please note that these liquidation accruals do not include any costs of trading associated with liquidating the portfolio. | |||||||||||||||||
| At month end | |||||||||||||||||
| US Dollar: | |||||||||||||||||
| Net asset value – capital only: | 456.36c | ||||||||||||||||
| Net asset value* – cum income: | 465.88c | ||||||||||||||||
| Sterling: | |||||||||||||||||
| Net asset value – capital only: | 347.88p | ||||||||||||||||
| Net asset value* – cum income: | 355.14p | ||||||||||||||||
| Share price: | 341.00p | ||||||||||||||||
| Total assets^: | £127.6m | ||||||||||||||||
| Discount (share price to cum income NAV): | 4.0% | ||||||||||||||||
| Net Cash at month end: | 3.9% | ||||||||||||||||
| Net yield^^^^: | 3.3% | ||||||||||||||||
| Gearing range as a % of Net assets: | 0-20% | ||||||||||||||||
| Issued Capital – Ordinary Shares^^ | 35,916,028 | ||||||||||||||||
| Ongoing charges^^^ | 1.1% | ||||||||||||||||
| * Includes year to date net revenue equal to 7.26 pence per share. | |||||||||||||||||
| ^ Total assets include current year revenue. | |||||||||||||||||
| ^^ Excluding 5,000,000 shares held in treasury. | |||||||||||||||||
| ^^^ Calculated as at 31 January 2018, 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 15.00 cents per share, (announced on 23 March 2018, ex-dividend on 17 May 2018) | |||||||||||||||||
| Sector Analysis | Gross assets (%) | Country Analysis | Gross assets (%) | ||||||||||||||
| Financials | 42.1 | Russia | 56.0 | ||||||||||||||
| Energy | 31.5 | Poland | 19.0 | ||||||||||||||
| Consumer Staples | 9.2 | Greece | 6.6 | ||||||||||||||
| Telecommunication Services | 4.9 | Turkey | 4.5 | ||||||||||||||
| Health Care | 3.6 | Hungary | 3.6 | ||||||||||||||
| Information Technology | 1.8 | Pan-Emerging Europe | 4.1 | ||||||||||||||
| Consumer Discretionary | 1.6 | Ukraine | 2.3 | ||||||||||||||
| Materials | 1.4 | Net Current Assets | 3.9 | ||||||||||||||
| Net Current Assets | 3.9 | ----- | |||||||||||||||
| ----- | 100.0 | ||||||||||||||||
| 100.0 | ===== | ||||||||||||||||
| ===== | |||||||||||||||||
| Fifteen Largest Investments | |||||||||||||||||
| (in % order of Gross Assets as at 31.07.18) | |||||||||||||||||
| Company | Region of Risk | Gross assets | |||||||||||||||
| (%) | |||||||||||||||||
| Sberbank | Russia | 13.7 | |||||||||||||||
| Lukoil | Russia | 12.3 | |||||||||||||||
| Gazprom | Russia | 7.8 | |||||||||||||||
| PKO Bank Polski | Poland | 6.6 | |||||||||||||||
| Novatek | Russia | 5.9 | |||||||||||||||
| Rosneft Oil Company | Russia | 5.5 | |||||||||||||||
| Alior Bank | Poland | 4.7 | |||||||||||||||
| Lenta | Russia | 4.1 | |||||||||||||||
| PZU | Poland | 3.9 | |||||||||||||||
| Bank Pekao | Poland | 3.8 | |||||||||||||||
| Gedeon Richter | Hungary | 3.6 | |||||||||||||||
| Mobile Telesystems | Russia | 3.6 | |||||||||||||||
| National Bank of Greece | Greece | 3.4 | |||||||||||||||
| Alpha Bank | Greece | 3.2 | |||||||||||||||
| Migros Ticaret | Turkey | 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 rose by 3.8% in July 2018 (in US Dollar terms), breaking its five-month losing streak and beating both MSCI Emerging Markets and MSCI Indices World for the first time since February. Poland rose by 11.4% and outperformed markets in both Czech (+5.9%) and Hungary (+2.5%) in July. Russia was up by 4.7% as the RUB strengthened despite the drop in Brent oil price. Oil fell back after the OPEC deal promised higher production, with Brent crude down to US Dollar 73.1 per barrel. Markets in Greece (-0.2%) were broadly flat in July in anticipation of a successful exit in August from the Third Bailout program. Turkey (-7.2%) was down primarily on the Lira’s performance (-6.3%). Turkey has a vulnerable economy with large reliance on external funding. The persistently high inflation and expanding twin deficits have been pressuring the currency. The central bank's decision not to hike rates, combined with higher interest rates in the US has increased investors’ concerns over the monetary policy of the central bank. The Company’s NAV returned 3.1% in July 2018 (in US Dollar terms), underperforming its benchmark, the MSCI Emerging Europe 10/40 Index, driven primarily by our selection in Russia. Specifically, the off-benchmark position in a Russian hypermarket chain, Lenta, detracted from returns. The stock declined from June highs as the potential M&A activity failed to materialise. On the other hand, the off-benchmark position in Megafon, the second largest mobile phone operator and the third largest telecom operator in Russia, contributed to returns as the stock was up due to the tender offer of its shares at a 20% premium to the market price. The overweight in PKO Bank Polska contributed to returns as the stock rose on the back of growth in Poland trending higher, resulting in higher rates to manage inflation. The large underweight in Turkey continued to benefit performance as persistent inflation continued to put pressure on the Lira. Hence, the underweight in Turkish banks, e.g. Garanti, contributed to relative returns. Conversely, the overweight in Arcelik, a household appliances manufacturer, detracted on relative returns as the stock declined on the back of disappointing second quarter results and negative EPS (Earnings Per Share) revisions driven by foreign exchange losses. The portfolio has an exposure to Turkish listed stocks of 4.5%. At the time of writing this is even lower. At the end of July, the fund is underweight Turkey and refining names within the energy sector. It is overweight Greece and financials. | |||||||||||||||||
| 24 August 2018 | |||||||||||||||||
| 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. | |||||||||||||||||