ESTS Blackrock Sub

 
TIDMEST TIDMESTS 
 
THE EASTERN EUROPEAN TRUST PLC 
 
All information is at 31 May 2013 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**                 3.7%   -1.7%  24.5%   1.6%     81.7% 
Net asset value (undiluted)   0.7%   -5.6%  25.5%   3.6%     81.2% 
Net asset value (diluted)     0.9%   -4.5%  23.6%   2.0%     78.4% 
MSCI EM Europe 10/40(TR)      1.1%   -3.1%  29.2%  12.1%     80.0% 
 
US Dollars: 
Net asset value (undiluted)  -1.9%   -5.7%  23.6%   8.1%     85.4% 
Net asset value (diluted)    -1.7%   -4.6%  21.7%   6.4%     82.5% 
MSCI EM Europe 10/40(TR)     -1.5%   -3.2%  27.3%  16.9%     84.2% 
 
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:           294.88p 
Net asset value*** - cum income:          299.66p 
Net asset value - cum income (diluted for 
subscription shares):                     294.92p 
Share price:                              266.50p 
2012 Subscription share price:              3.00p 
Total assets^:                            GBP120.8m 
Discount (share price to cum income NAV):   11.1% 
Gross market exposure^^^:                  108.8% 
Net yield:                                   1.6% 
Ordinary shares in issue^^:            39,177,998 
2012 Subscription shares:               8,468,457 
 
***Includes year to date net revenue equal to 4.78p per share. 
^Total assets include current year revenue. 
^^Excluding 5,800,000 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(%)* 
Financials                  35.9      Russia             63.1 
Energy                      30.0      Turkey             20.1 
Telecommunications          11.1      Poland              8.4 
Consumer Staples             6.7      Hungary             8.2 
Materials                    6.0      Czech Republic      2.7 
Information Technology       5.4      Austria             1.8 
Health Care                  3.7      Turkmenistan        1.6 
Industrials                  3.7      Ukraine             1.3 
Other                        3.1      Kazakhstan          0.6 
Utilities                    2.0 
Consumer Discretionary       0.2 
                          ----------                   -------- 
Total                      107.8       Total            107.8 
                          ----------                   -------- 
Short Positions             -1.0       Short Positions   -1.0 
                          ==========                   ======== 
 
*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                     10.2 
Gazprom                        Russia                      7.7 
Mobile Telesystems             Russia                      4.9 
Powszechna Kasa Oszczednosci   Poland                      3.7 
OTP                            Hungary                     3.6 
Magnit                         Russia                      3.5 
Novatek                        Russia                      3.4 
Mail Ru                        Russia                      3.1 
Surgutneftegaz                 Russia                      3.0 
Mol Hungarian                  Hungary                     2.6 
 
Commenting on the markets, Sam Vecht and David Reid, representing the investment 
Manager noted; 
 
Market performance 
 
In May, the MSCI Emerging Europe Index returned -1.5% (USD terms). This 
reflected the sell-off across the wider Global Emerging Markets universe, which 
has been driven by concern that the tapering of the US Federal Reserve 
quantitative easing (QE) program would see rates increase. Emerging Markets 
which have been beneficiaries of the `carry trade' were directly impacted with 
many bonds, currencies and equities across the developing world posting losses. 
 
Russia underperformed the benchmark in May, impacted by a raft of negative 
macroeconomic news from elsewhere. The slowdown in Chinese industrial 
production, slowing economic activity in the core of the Eurozone and concerns 
over QE impacted sentiment. 
 
Hungary was the strongest performer over the month as GDP surprised on the 
upside, growing by 0.7% in the first quarter of 2013, exiting a technical 
recession for the first time since 2011. Interest rates in Hungary were also 
cut and now stand at 4.5%. This was the tenth consecutive cut in interest rates 
as the central bank takes action to stimulate further economic growth. 
 
Turkey underperformed despite the long-awaited sovereign debt upgrade from 
Moody's to investment grade. The decision to cap interest rates on bank 
overdraft deposit accounts is likely to weigh on earnings in the financial 
sector. 
 
After the month end, Turkish politics came into intense focus as what started 
as a localized protest about the development of one of the few remaining green 
spots of Istanbul morphed into something more. A heavy handed response to the 
initial protest reflected an increasingly authoritarian stance struck by Prime 
Minister Recep Tayyip Erdogan, which only served to amplify the demonstrations, 
which spread to other cities across Turkey 
 
Portfolio performance 
 
In May, the Eastern European Trust returned -1.9%, underperforming the 
benchmark by 0.4% (USD terms). 
 
The strongest individual contributor to performance was an overweight position 
in Russian stock exchange, Moscow Exchange (MICEX). The company, which 
announced its first set of results since the successful IPO, reported stronger 
than expected net profit. 
 
An underweight position in Russian energy name, Lukoil was also positive after 
the company released a disappointing trading update. 
 
Detracting from performance in May was Russian telecom, Vimpelcom, after talks 
to sell non-core operations in North Africa ended without resolution. 
 
Also underperforming in May was Russian energy name TNK-BP after a delay in the 
dividend policy from parent company, Rosneft. 
 
Activity 
 
We initiated a new position in Russian utility provider, Enel OGK-5. The 
company has completed a capital expenditure phase, giving it the ability to 
return cash to shareholders through dividends. 
 
We sold the position in Kazakh miner, ENRC, as the share price rallied 
following news of a potential bid from the Kazakh government and founding 
shareholders. 
 
Market Outlook 
 
Recent market attention has been focussed on events in Turkey. The potential 
for political surprise is always greatest where investors think about it least. 
The political challenges in Turkey have been an area which many recent 
investors have ignored. Although these events will have some short-term impact, 
we believe that Turkey's long-term future is bright as it emerges as a regional 
power-broker and economic hub. 
 
Russia continues to trade at a significant discount to global peers, trading on 
a PE of 5x. Russian companies represent good value and are increasing returns 
on capital through buy-backs and dividend policies. 
 
In central Europe, GDP growth remains subdued but action, particularly in 
Poland, to ease monetary policy and stimulate growth will take effect over the 
next 12-18 months 
 
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. 
 
Despite the attendant risks, valuations are still attractive and many of these 
risks remain reflected (and more) in the price. The long-term outlook for 
Emerging Europe is bright. 
 
17 June 2013 
 
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. 
 

Blackrock Sub (LSE:ESTS)
Historical Stock Chart
From May 2024 to Jun 2024

Blackrock Sub (LSE:ESTS)
Historical Stock Chart
From Jun 2023 to Jun 2024