|
|
One |
Three |
One |
Three |
Five |
*Since |
|
|
|
Month |
Months |
Year |
Years |
Years |
30.04.09 |
|
|
Sterling: |
|
|
|
|
|
|
|
|
Share price |
-2.1 |
-12.0 |
2.8 |
48.2 |
30.0 |
136.1 |
|
|
Net asset value |
-3.6 |
-12.2 |
1.5 |
38.4 |
21.5 |
120.1 |
|
|
MSCI EM Europe |
-2.0 |
-10.3 |
3.1 |
25.4 |
-4.3 |
68.7 |
|
|
10/40(NR) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
US Dollars: |
|
|
|
|
|
|
|
|
Share price |
-5.5 |
-15.0 |
5.9 |
29.2 |
14.1 |
112.0 |
|
|
Net asset value |
-6.8 |
-15.2 |
4.6 |
20.6 |
6.6 |
97.7 |
|
|
MSCI EM Europe |
-5.4 |
-13.4 |
6.3 |
9.3 |
-16.0 |
51.5 |
|
|
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: |
457.44c |
|
|
Net asset value* – cum income: |
458.57c |
|
|
Sterling: |
|
|
|
Net asset value – capital only: |
343.76p |
|
|
Net asset value* – cum income: |
344.62p |
|
|
Share price: |
327.00p |
|
|
Total assets^: |
£123.8m |
|
|
Discount (share price to cum income NAV): |
5.1% |
|
|
Net gearing at month end: |
9.1% |
|
|
Net yield^^^^: |
3.2% |
|
|
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 0.86 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 |
36.7 |
|
Russia |
54.4 |
|
| Energy |
29.1 |
|
Turkey |
17.2 |
|
| Consumer Staples |
16.5 |
|
Poland |
15.6 |
|
| Telecommunication Services |
10.2 |
|
Greece |
5.9 |
|
| Health Care |
3.6 |
|
Hungary |
3.6 |
|
| Information Technology |
2.7 |
|
Ukraine |
3.3 |
|
| Consumer Discretionary |
2.1 |
|
Pan-Emerging Europe |
2.3 |
|
| Materials |
1.4 |
|
Net Current Liabilities |
(2.4) |
|
| Net Current Liabilities |
(2.4) |
|
|
----- |
|
|
----- |
|
|
99.9 |
|
|
99.9 |
|
|
===== |
|
|
===== |
|
|
|
|
| Short position |
(3.3) |
|
|
(3.3) |
|
|
|
|
|
|
|
Fifteen Largest Investments |
|
|
|
|
|
|
(in % order of Gross Assets as at 31.05.18) |
|
|
|
|
|
|
|
|
|
|
| Company |
Region of Risk |
Gross assets |
|
|
|
(%) |
|
| Sberbank |
Russia |
11.1 |
|
| Lukoil |
Russia |
10.6 |
|
| Gazprom |
Russia |
8.2 |
|
| Novatek |
Russia |
5.6 |
|
| PKO Bank Polski |
Poland |
5.4 |
|
| Rosneft Oil Company |
Russia |
4.7 |
|
| Lenta |
Russia |
4.3 |
|
| Alior Bank |
Poland |
4.1 |
|
| Mobile Telesystems |
Russia |
3.6 |
|
| Gedeon Richter |
Hungary |
3.6 |
|
| MHP |
Ukraine |
3.3 |
|
| PZU |
Poland |
3.1 |
|
| National Bank of Greece |
Greece |
3.0 |
|
| Bank Pekao |
Poland |
3.0 |
|
| Migros Ticaret |
Turkey |
3.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commenting on the markets, Sam Vecht and Christopher Colunga, representing the Investment Manager noted; |
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|
|
Market Commentary |
|
|
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|
|
|
|
Market & Portfolio Performance
The MSCI Emerging Europe 10/40 Index fell by 5.4% in May 2018 (in US Dollar terms), selling off on global ‘risk-off’ sentiment. The Company underperformed the index over the period, returning -6.8% in US Dollar terms.
Markets in Greece were sharply down by 19% as a result of increased political risk emerging in peripheral Europe. Turkey also fell by 13.5% with the Turkish Lira weakening by 10% to 4.53/US$, prompting an emergency rate hike of 300bps. Higher rates are likely to have an adverse impact on economic growth, bank balance sheets, and domestic earnings. On the other hand, Russia outperformed driven by improving economic data, positive earnings revisions, higher oil prices, and a stronger Ruble.
Underperformance in the portfolio is predominantly attributable to our stock selection in Russia which detracted while our underweight in Hungary helped to offset some of the losses.
At a stock level, the long exposures to Greek banks were the main detractors to performance this month. Our overweight position in National Bank of Greece detracted on the back of the political uncertainty in Italy, which extended throughout Europe with all countries suffering from the ‘risk-off’ sentiment. The overweight in the Turkish holding Turkcell also detracted from returns as the stock declined in line with the rest of Turkish market. The decline of Turkish equities was exacerbated by currency losses as investors grew increasingly concerned about the macroeconomic vulnerabilities amidst a deepening political turmoil. On the other hand, Russian energy producer Novatek contributed to positive returns, rallying strongly following Total’s announcement of a significant investment into Novatek’s Arctic LNG2 project.
During the month, we added to our high conviction name in Russia Mail.Ru, on weakness as the stock declined post a change in the shareholder structure, which we believe it will not impact the company’s fundamentals and earnings potential). We initiated a position in SOK, a grocery store chain in Turkey, as we have a positive view of company’s strong free cash flow generation, good management and attractive valuation vs peers. We sold out of Norilsk Nickel, a Russian nickel and palladium mining and smelting company following a strong rally from its April lows. |
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15 June 2018 |
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|
ENDS |
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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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