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BlackRock Emerging Europe (BEEP)


Monday 23 July, 2018

BlackRock Emerging Europe

Portfolio Update

All information is at 30 June 2018 and unaudited.
Performance at month end with net income reinvested


One Three One Three Five *Since
Month Months Year Years Years 30.04.09
Share price -0.5 -4.1 6.1 63.2 39.1 135.0
Net asset value -0.7 -5.9 2.5 51.3 28.6 118.7
MSCI EM Europe 0.1 -4.3 4.3 32.7 2.7 68.8
US Dollars:
Share price -1.2 -9.8 7.9 37.0 21.0 109.4
Net asset value -1.4 -11.5 4.2 27.0 11.9 94.9
MSCI EM Europe -0.7 -9.9 6.0 11.4 -10.6 50.4
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: 447.83c
Net asset value* – cum income: 452.03c
Net asset value – capital only: 339.18p
Net asset value* – cum income: 342.37p
Share price: 325.50p
Total assets^: £123.0m
Discount (share price to cum income NAV): 4.9%
Net gearing at month end: 0.1%
Net yield^^^^: 3.4%
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 3.19 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)
Gross assets (%) Country

Financials 38.6 Russia 57.8
Energy 30.7 Poland 17.1
Consumer Staples 12.2 Turkey 7.6
Telecommunication Services 7.6 Greece 6.6
Health Care 3.7 Hungary 3.7
Information Technology 2.7 Ukraine 3.5
Consumer Discretionary 2.2 Pan-Emerging Europe 2.7
Materials 1.3 Net Current Assets 1.0
Net Current Assets 1.0 -----
----- 100.0
100.0 =====

Fifteen Largest Investments
(in % order of Gross Assets as at 30.06.18)
Company Region of Risk Gross assets
Sberbank Russia 12.2
Lukoil Russia 12.0
Gazprom Russia 7.8
PKO Bank Polski Poland 5.8
Novatek Russia 5.6
Rosneft Oil Company Russia 5.3
Lenta Russia 4.6
Alior Bank Poland 4.3
Gedeon Richter Hungary 3.7
Mobile Telesystems Russia 3.7
PZU Poland 3.6
MHP Ukraine 3.5
Migros Ticaret Turkey 3.4
Alpha Bank Greece 3.3
Bank Pekao Poland 3.3
Commenting on the markets, Sam Vecht and Christopher Colunga, representing the Investment Manager noted:
Market Commentary
Market & Portfolio Performance

The MSCI Emerging Europe 10/40 Index declined by 0.7% in June (in US Dollar terms), outperforming the broader Emerging Market Index which declined by 4.1% (in US Dollar terms).

Greece (+4.2%) was the region’s top performer over the month as the country reached a successful agreement with its creditors to complete the Third Bailout Program. Russia (-0.4%) outperformed the region driven by improving economic data, positive earnings revisions and oil price strength. Turkey (-4.6%) was one of the worst performers in June as a challenging economic and political environment led to further depreciation of the Lira, resulting in the currency selling off almost -14% in the second quarter of 2018.

The Company’s NAV fell by 1.4% (in US Dollar terms with dividends reinvested), underperforming the index by 0.7%. Underperformance was predominantly attributed to stock selection in Hungary and our exposure in Turkey. This was partially offset by the portfolio overweight in Russia and our positioning within Poland. At a stock level, oil sensitive Russian names, such as Lukoil and Rosneft, performed well as oil prices railed amid bullish inventory statistics and increased speculation over Iran sanctions. Sberbank was the period’s top performer. An overweight to Greece also benefitted the portfolio on the back of stronger growth prospects and rising confidence ahead of the debt-relief deal. Alpha Bank and Greek betting company OPAP were among the best performers. On the other hand, Turkish names, TSKB, Turkcell, and Sok Marketler Ticaret were all among the worst performers.

At the end of June the fund is underweight Turkey, materials, refining and utilities. It is overweight Russia, financials, IT and health care.
23 June 2018
Latest information is available by typing 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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