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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Blackrock Sub | LSE:ESTS | London | Ordinary Share | GB00B86T8K22 | SUB SHS USD0.01 |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 0.255 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
THE EASTERN EUROPEAN TRUST PLC
All information is at 30 NOVEMBER 2012 and unaudited.
Performance at month end with net income reinvested
One Three One Three *Since Month Months Year Years 30.04.09 Sterling: Share price** -3.4% 2.0% -1.1% 11.9% 64.4% Net asset value (undiluted) 0.1% 2.4% 2.4% 13.2% 68.9% Net asset value (diluted) 0.1% 2.0% 1.8% 12.6% 67.9% MSCI EM Europe 10/40(TR) 1.3% 4.7% 6.2% 15.1% 66.8% US Dollars: Net asset value (undiluted) -0.4% 3.3% 4.4% 10.6% 82.7% Net asset value (diluted) -0.5% 2.9% 3.8% 9.9% 81.6% MSCI EM Europe 10/40(TR) 0.7% 5.7% 8.2% 12.4% 80.4%
Sources: BlackRock and 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: 277.86p Net asset value*** - cum income: 283.15p Net asset value - cum income (diluted for subscription shares): 281.45p Share price: 245.00p 2012 Subscription share price: 3.00p Total assets^: £124.7m Discount (share price to cum income NAV): 13.5% Gross market exposure^^^: 114.00% Net yield: n/a Ordinary shares in issue^^: 42,441,591 2012 Subscription shares: 8,537,982 ***Includes year to date net revenue equal to 5.29p per share. ^Total assets include current year revenue. ^^Excluding 6,000,000 shares held in treasury. ^^^ Long positions plus short positions as a percentage of net asset value. Benchmark Sector Analysis Net Assets(%)* Country Analysis Net Assets(%)* Energy 34.7 Russia 65.5 Financials 32.6 Turkey 18.1 Materials 9.6 Hungary 7.4 Telecommunications 9.5 Czech Republic 6.2 Consumer Staples 6.1 Poland 5.6 Health Care 4.1 Kazakhstan 2.3 Information Technology 3.9 Turkmenistan 1.5 Industrials 3.6 Austria 1.4 Other 3.1 Ukraine 1.2 Utilities 1.6 Consumer Discretionary 0.4 -------- -------- Total 109.2 Total 109.2 -------- -------- Short Positions -4.8 Short Positions -4.8 ======== ========
*reflects gross market exposure from contracts for difference (CFDs)
Ten Largest Equity Investments(in % order of Total Market value)
Total Market Company Country of Risk Value % Sberbank Russia 9.9 Gazprom Russia 8.7 Turkiye Garanti Bankasi Turkey 6.7 Lukoil Russia 5.5 Komercni Czech Republic 3.9 Mail Ru Russia 3.7 Surgutneftegaz Russia 3.3 Mobile Telesystems Russia 3.0 OTP Hungary 2.9 Turkcell Iletism Hizmet Turkey 2.6
Commenting on the markets, Sam Vecht, representing the investment Manager noted;
Markets
In November the MSCI Emerging Europe 10/40 index returned 0.7% in US$ terms. Politics in the US and China dominated the headlines. A smooth leadership transition in China and economic results that showed some signs of stabilization were taken as positive. In the US, post the Presidential election, the debate surrounding the fiscal cliff has weighed on equity markets.
Russia finished the month broadly flat, which obscures a month in which the equity market was volatile in response to speculation surrounding a number of individual stocks including how the rise of state energy giant Rosneft may impact the prospects of private gas producer Novatek.
Poland was the strongest performer over the month. The Polish market has risen over 20% year-to-date (in USD terms) despite a deteriorating outlook for the economy. Investors have overlooked the negative earnings environment and forecasts of return on equity to be less than 10% in 2013, the lowest across Emerging Europe and the broader Emerging Market universe.
Hungary and the Czech Republic underperformed in November. In Hungary, Prime Minister, Viktor Orban announced further austerity measures. The government announced that a temporary banking levy would become permanent and also raised taxes on energy utilities.
The largest Czech constituent of the benchmark, utility Cez, released poor results for the third quarter that missed analyst expectations by 12% and weighed heavily on the market.
Performance & Activity
In November the Eastern European Trust returned -0.4% in US$ terms, underperforming the benchmark by 1.1%.
The largest detractor from performance over the month was the underweight position in Poland. Despite the problems besetting the Polish economy, the stock market has performed well as many investors searching for perceived defensive stocks have crowded in the large cap constituents of the WIG despite a declining earnings outlook. The Trust remains underweight Polish stocks.
In November stock selection in Turkey partially offset underperformance. As expected, ratings agency, Fitch upgraded Turkish sovereign debt to investment grade which helped sentiment. Gold producer, Koza was a notable outperformer.
We initiated a new position in Russian aluminum producer, Rusal. A long-running dispute between Rusal and Interros, both major shareholders in mining company, Norilsk Nickel, could be nearing an end. The resolution of the dispute has the potential to raise the dividend payout ratio of Norilsk Nickel, which would strengthen the balance sheet of Rusal.
The team also bought a stake in Austrian bank Raiffeisen. Recent developments in the Eurozone to stabilize the banking sector has led to a normalization of financial risk and the bank, which has extensive operations throughout Eastern Europe, will be a beneficiary of improving sentiment. This was funded by the reduction in Hungarian Bank, OTP, a company which is also exposed to improving financial conditions across Europe but is dampened by the new permanency of the Hungarian banking tax.
The team reduced the holding in Russian energy company, Lukoil. The stock has performed well, in relative terms, as investors recognized the recovery in production at existing facilities due to improved drilling techniques.
Outlook
Russian and Eastern European markets have significant long-term structural advantages. They benefit from flexible and dynamic economies with undervalued currencies and educated and skilled workforces, allowing the countries of the region to remain competitive in a globalized market. That said, the region has not been immune from sentiment stemming from the problems which have beset the Eurozone. Recent action from the ECB has reduced systemic financial risk and that has been positive for all risk assets.
In Russia, the announcement that state-owned companies will return a target 25% of profits to shareholders through dividends is positive. Private companies have also followed suit, bringing dividend yields in Russia up to global emerging market averages of c.4% for the first time. In addition, recently announced buybacks from companies across Russia & CIS have totalled $10bn, demonstrating that companies see value in their own capital.
Elsewhere, macroeconomic conditions in Turkey have improved and Hungary inches ever closer to a deal with the IMF for a stand-by agreement which will underpin the country's fiscal position. However, the key driver of markets over recent months is the fact that Emerging European stocks were exceptionally cheap, universally disliked and widely misunderstood. As such, minor changes in sentiment were able to have a meaningful impact on prices.
Although we still see upside for the region, we remain mindful of the risks which could potentially emanate from three places; US, Europe or China.
The fortunes of global markets are still tied to varying degrees to the fate of the US recovery which, although bumpy, is underway as reflected in a housing market which is slowly returning to health. A fragile recovery, by definition, could be blown off course and that is a risk for all markets, not just those of Emerging Europe.
A slowdown in China will affect the demand for commodities, the prices of which impact sentiment surrounding Russia, although this will be positive for Turkey and central Europe, commodity importers.
While recent measures to stabilise the Eurozone have been positive, any deterioration in the crisis will have implications for emerging Europe despite their clear contrast to the economies of peripheral Europe. It is important to remember that the economies of emerging European markets typically have lower government budget deficits and lower debt burdens.
Despite the attendant risks, valuations are still attractive and much of these risks remain reflected (and more) in the price. The long-term outlook for Emerging Europe is bright.
18 December 2012 ENDS
Latest information is available by typing www.estplc.co.uk 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.
Copyright r 18 PR Newswire
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