18 Oct 2017 12:52
BlackRock Emerging Europe Plc - Portfolio UpdateBlackRock Emerging Europe Plc - Portfolio Update
PR Newswire
London, October 17
| BLACKROCK EMERGING EUROPE PLC (LEI - 549300OGTQA24Y3KMI14) |
| All information is at 30 September 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 | 0.9% | 8.1% | 32.2% | 51.1% | 39.0% | 139.3% | ||||||||||||||||||||
| Net asset value | -4.3% | 5.5% | 24.3% | 43.3% | 33.1% | 124.9% | ||||||||||||||||||||
| MSCI EM Europe | -5.3% | 6.7% | 21.4% | 18.9% | 7.1% | 72.7% | ||||||||||||||||||||
| 10/40(NR) | ||||||||||||||||||||||||||
| US Dollars: | ||||||||||||||||||||||||||
| Share price | 5.0% | 11.6% | 36.5% | 25.0% | 15.5% | 116.7% | ||||||||||||||||||||
| Net asset value | -0.3% | 8.9% | 28.3% | 18.6% | 10.6% | 103.7% | ||||||||||||||||||||
| MSCI EM Europe | -1.4% | 10.2% | 25.4% | -1.6% | -11.03% | 56.4% | ||||||||||||||||||||
| 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: | 473.29c | |||||||||||||||||||||||||
| Net asset value* – cum income: | 487.36c | |||||||||||||||||||||||||
| Sterling: | ||||||||||||||||||||||||||
| Net asset value – capital only: | 352.79p | |||||||||||||||||||||||||
| Net asset value* – cum income: | 363.27p | |||||||||||||||||||||||||
| Share price: | 342.25p | |||||||||||||||||||||||||
| Total assets^: | £130.5m | |||||||||||||||||||||||||
| Discount (share price to cum income NAV): | 5.8% | |||||||||||||||||||||||||
| Net cash at month end: | 5.6% | |||||||||||||||||||||||||
| 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 10.48 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 | 32.5 | Russia | 54.7 | |||||||||||||||||||||||
| Financials | 28.3 | Turkey | 16.1 | |||||||||||||||||||||||
| Telecommunication Services | 8.6 | Poland | 12.3 | |||||||||||||||||||||||
| Consumer Staples | 7.8 | Greece | 6.7 | |||||||||||||||||||||||
| Materials | 4.9 | Ukraine | 4.1 | |||||||||||||||||||||||
| Information Technology | 4.4 | Romania | 1.0 | |||||||||||||||||||||||
| Industrials | 3.4 | Net current assets | 5.3 | |||||||||||||||||||||||
| Health Care | 2.6 | |||||||||||||||||||||||||
| Real Estate | 2.4 | |||||||||||||||||||||||||
| Net current assets | 5.3 | |||||||||||||||||||||||||
| ----- | ----- | |||||||||||||||||||||||||
| 100.2 | 100.2 | |||||||||||||||||||||||||
| ===== | ===== | |||||||||||||||||||||||||
| Short positions | (1.9) | (1.9) | ||||||||||||||||||||||||
| Fifteen Largest Investments | ||||||||||||||||||||||||||
| (in % order of Gross Assets as at 30.09.17) | ||||||||||||||||||||||||||
| Company | Region of Risk | Gross assets | ||||||||||||||||||||||||
| (%) | ||||||||||||||||||||||||||
| Gazprom | Russia | 10.0 | ||||||||||||||||||||||||
| Sberbank | Russia | 8.5 | ||||||||||||||||||||||||
| Novatek | Russia | 7.4 | ||||||||||||||||||||||||
| Lukoil | Russia | 5.3 | ||||||||||||||||||||||||
| PKO Bank Polski | Poland | 5.0 | ||||||||||||||||||||||||
| Rosneft Oil Company | Russia | 4.3 | ||||||||||||||||||||||||
| Lenta | Russia | 3.9 | ||||||||||||||||||||||||
| Mobile Telesystems | Russia | 3.8 | ||||||||||||||||||||||||
| Alpha Bank | Greece | 3.5 | ||||||||||||||||||||||||
| National Bank of Greece | Greece | 3.2 | ||||||||||||||||||||||||
| PZU | Poland | 3.0 | ||||||||||||||||||||||||
| Norilsk Nickel | Russia | 2.8 | ||||||||||||||||||||||||
| Mail.Ru | Russia | 2.7 | ||||||||||||||||||||||||
| TSKB | Turkey | 2.6 | ||||||||||||||||||||||||
| MD Medical Group | Russia | 2.6 | ||||||||||||||||||||||||
| Commenting on the markets, Sam Vecht and Christopher Colunga, representing the Investment Manager noted; | ||||||||||||||||||||||||||
| The MSCI Emerging Europe 10/40 Index returned -1.4% in September in US Dollar terms*. The Company outperformed the index and returned -0.3% in US Dollar terms*. | ||||||||||||||||||||||||||
| Russia (+4.5%)* continued to lead the region for the second month in a row as the RUB strengthened 0.8%** and the Brent oil price reached towards 59 USD/barrel** during the month on the back of increasing geopolitical tensions in Middle East after Turkey threatened to shut down Kurdish oil shipments through its territory. The Fitch rating agency reaffirmed Russia's investment rating at BBB- and changed the outlook to positive from stable. Furthermore, the economy continued to recover and inflation fell to 3% year-over-year in September hitting its lowest level in a decade, allowing the Central Bank of Russia to cut its key rate by 50bps to 8.5% and maintain a dovish outlook**. Retail sales surprised to the upside (1.9% year-over-year vs consensus 1.1%) and August Industrial Production growth at 1.5% year-over-year came in-line with consensus expectations**. | ||||||||||||||||||||||||||
| In the Central and Eastern European region, the Czech Republic (+1.7%) was the only country to end the month in positive territory, while Hungary (-5.3%) and Poland (-3.8%) lagged*. This was in line with their respective currencies as Hungarian Forint (-1.8%) and Polish Zloty (-1.5%) weakened while the Czech Koruna (+0.5%) strengthened in September. The 2nd quarter GDP growth in the Czech Republic was revised even higher to 10.3% quarter-on-quarter (+4.7% year-on-year) from the initial estimate of 9.5%*. | ||||||||||||||||||||||||||
| For the first time in the last 10 months, Turkey (-9.5%) fell on a monthly basis*. The economy has been normalizing from the elevated credit fuelled growth rates of the first half of the year. However, the challenging political backdrop combined with an increasing current account deficit, persistently high inflation and the spectre of tighter global liquidity put pressure on the currency. | ||||||||||||||||||||||||||
| Greece (-14.0%) was a laggard over the period*. The market experienced a strong rally over the summer as progress was made on the second review of the country’s third bailout. However, the Greek market gave up some of its gains in September due to IMF statements calling for a €10bn recapitalization and Asset Quality Review for the Greek Banks. Though these requests were later withdrawn, the markets remained spooked. The situation was not helped by Germany’s election outcome, which meant that Angela Merkel would have to build a three-way coalition in order to form a government, even though she convincingly scored a fourth term in office. This led to some uncertainties around the Eurozone reforms and the speed at which the third review would be completed. On the economic front, GDP for the second quarter of 2017 grew at +0.8% year-over-year. July Industrial Production at +1.7% came in marginally higher than June (+1.6%) – the 10th consecutive month of expansion. August Purchasing Managers Index (PMI) rose to 52.2, which marks the highest reading since August 2008**. | ||||||||||||||||||||||||||
| Focus on: Novatek | ||||||||||||||||||||||||||
| Novatek is Russia's largest independent natural gas producer. The company is engaged in exploration, production and processing of natural gas and liquid hydrocarbon. The principal operating areas are concentrated in the Yamal-Nenets Autonomous Region (YNAO) in Western Siberia – the largest gas producing region in Russia accounting for 80% of Russia’s natural gas production and approximately 16% of global gas production. | ||||||||||||||||||||||||||
| The company has been investing in its $27bn Yamal LNG project, which is an integrated project for natural gas production, liquefaction and marketing. It is a large onshore conventional reserve base with high concentration of reserves and low F&D (Finding and Development) and Lifting costs and high efficiency factor of gas liquefaction process due to sub-zero temperatures. The planned LNG plant will ultimately have three trains with total capacity of c. 16.5 million tonnes of liquefied natural gas per year. The first of these three trains is expected to deliver first gas in November 2017, with the second and third train following in 2018 and 2019. | ||||||||||||||||||||||||||
| Over the summer the stock exhibited some weakness when the oil price touched US$44/bbl. We added to our position in the stock as we believe the company is set to enter a new phase of growth through the Yamal LNG project. Recently we have seen a strong upwards move in the share price as the launch date draws nearer, and we believe with the increase in free cash flow the project brings, we could see a further lift to returns. | ||||||||||||||||||||||||||
| *Source: BlackRock, data as at end September 2017. **Source: Bloomberg, BlackRock, data as at end September 2017. | ||||||||||||||||||||||||||
| 18 October 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. | ||||||||||||||||||||||||||