BLACKROCK EMERGING EUROPE PLC – Correction re. Portfolio Update

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 December 24, 2015 - 7:49 AM EST
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BLACKROCK EMERGING EUROPE PLC - Correction re. Portfolio Update

Correction to portfolio commentary.

BLACKROCK EMERGING EUROPE PLC
All information is at 30 November 2015 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 4.9% 15.7% -3.5% -11.5% -26.4% 45.5%
Net asset value 2.9% 7.6% -8.7% -15.6% -26.3% 42.5%
MSCI EM Europe -1.4% -0.7% -19.8% -30.2% -33.8% 14.3%
10/40(NR)
US Dollars:
Share price 2.2% 13.2% -7.2% -16.8% -28.8% 47.9%
Net asset value 0.3% 5.5% -12.3% -20.7% -28.7% 44.9%
MSCI EM Europe -3.9% -2.8% -22.9% -34.4% -36.0% 16.1%
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
Net asset value – capital only: 232.29p
Net asset value** – cum income: 234.07p
Share price: 211.88p
Total assets^: £84.8m
Discount (share price to cum income NAV): 9.5%
Gross market exposure^^^: 100.0%
Gearing at month end: nil
Gearing range as a % of Net assets: 0-20%
Issued Capital – Ordinary Shares^^ 36,242,928
Ongoing charges* 1.3%
* Calculated as at 31 January 2015, in accordance with AIC guidelines.
** Includes year to date net revenue equal to 1.78 pence per share.
^ Total assets include current year revenue.
^^ Excluding 5,400,000 shares held in treasury.
^^^ Long positions plus short positions as a percentage of net asset value.
Sector % Total  Country % Total 
Analysis Exposure  Analysis Exposure 
Financials 36.1  Russia 49.3 
Energy 24.7  Turkey 22.7 
Consumer Staples 9.4  Poland 7.4 
Information Technology 7.8  Greece           4.0
Industrials          4.7 Kazakhstan 4.0 
Consumer Discretionary 4.1  Romania           3.5 
Telecommunications 3.5  Ukraine 3.0 
Basic Materials 2.4  Lithuania 1.5 
Utilities
Health Care
Net current assets                                                                               		         1.9
 0.8 
        4.6		 Net current assets          4.6
      
-----  ----- 
100.0  100.0 
=====  ===== 
Short positions (0.0) (0.0)
Fifteen Largest Investments
(in % order of Total Market Exposure as at 30.11.15)
Total Market
Company Region of Risk Exposure %
Sberbank Russia 8.0
Halk Bank Turkey 6.7
Lukoil
Gazprom
Novatek		 Russia
Russia
Russia		 6.0 
5.6
5.1
PKO Bank Polski Poland 5.0
Globaltrans Russia 4.7
KazMunaiGas Exploration Production Kazakhstan 4.0
TSKB
Garanti Bank
Yandex		 Turkey
Turkey
Russia		 4.0
3.7
3.6
BRD Groupe Societe Generale - CFD
Coca Cola Icecek		 Romania
Turkey		 3.5
3.5
Petrol Rafinerileri
MHP		 Turkey
Ukraine		 3.1
3.0

Commenting on the markets, Sam Vecht and David Reid, representing the Investment Manager noted;
Market Commentary
The MSCI Emerging Europe 10/40 Index returned -3.9% in November (in US dollar terms).
The region endured a volatile month as the impact of geopolitical tensions in the Middle East spilled over into both Eastern and Western Europe. The contested circumstances surrounding the shooting down of a Russian fighter jet by Turkey captured the headlines during the month. Despite this, Russia was the best performing market in the region which brings relative outperformance vs the MSCI Emerging Europe Index to 30% year to date.
Poland was weak during November. Recent elections saw the opposition Law and Justice party secure a decisive victory. The new Polish government announced that it was restarting the debate over pension funds and proposed to claim a higher share of dividends from listed companies.
Portfolio Commentary
The Trust outperformed the index by 4.2% in November as the momentum factor in markets which had reversed in October, continued this trajectory. Stock selection was the primary driver of outperformance over the month.
The strongest performer was Russian IT name, mail.ru. The decline in the Russian advertising market is moderating and online advertising is the only growth segment which is positive for the sector.
Kazakh oil company, Kazmunaigas also performed well on news that its parent had returned to the negotiating table for renewed takeover talks.
National Bank of Greece detracted from performance due to concerns that the bank would require additional financing. The Greek banking system in general has been under pressure since the events of the summer which culminated in the imposition of capital controls. The European institutions performed stress tests on the nation’s banks under ‘Baseline’ and ‘Adverse’ scenarios. The results of these stress tests has allowed us to differentiate between Greek banks and determine which is in the strongest position relative to its valuation, with our analysis suggesting that Alpha Bank meets this criteria.
We added to the position as we believe that Alpha bank has a stronger balance sheet position, relative to its peers. In the recent sector-wide recapitalisation program, Alpha Bank was required to raise less capital, more of which came from private, rather than state, sources. As a result, the bank will be able to resume its dividend payment policy sooner and we believe that there remains significant upside to the current share price.
24 December 2015
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.

Source: PR Newswire (December 24, 2015 - 7:49 AM EST)

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