News Column

BLACKROCK EMERGING EUROPE PLC - Portfolio Update

June 17, 2014

BLACKROCK EMERGING EUROPE PLC All information is at 31 May 2014 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 10.7% 6.6% -1.6% -17.1% 56.5% 78.6% Net asset value (undiluted) 13.3% 9.8% -2.9% -17.6% 55.0% 75.9% Net asset value (diluted) 13.3% 9.8% -1.3% -15.8% 55.0% 76.0% MSCI EM Europe 10/40(NR) 8.8% 5.9% -10.9% -17.3% 38.4% 57.0% US Dollars: Share price 10.0% 6.7% 8.8% -15.5% 62.9% 102.3% Net asset value (undiluted) 12.5% 9.9% 7.5% -16.0% 61.3% 99.2% Net asset value (diluted) 12.5% 9.9% 9.2% -14.1% 61.3% 99.3% MSCI EM Europe 10/40(NR) 8.1% 6.0% -1.4% -15.7% 44.0% 77.7% Sources: BlackRock, Standard & Poor's Micropal *BlackRock took over the investment management of the Company with effect from 1 May 2009 Annual Performance to the Last Quarter End (Sterling) 31/3/13 31/3/12 31/3/11 31/3/10 31/3/09 31/3/14 31/3/13 31/3/12 31/3/11 31/3/10 NAV Performance -11.8% 4.0% -22.3% 21.9% 136.3% Share Price Performance -10.5% -0.7% -18.3% 18.3% 136.6% At month end Net asset value - capital only: 287.10p Net asset value*** - cum income: 288.90p Share price: 260.00p Total assets^: 106.1m Discount (share price to cum income NAV): 10.0% Gross market exposure^^^: 107.3% Gearing at month end: 1.6% Gearing range as a % of Net assets: 0-20% Net Yield: 0.8%* Issued Capital - Ordinary Shares^^ 36,242,928 *Based on a dividend of 3.50 cents (2.08407 pence) per share for the year ended 31 January 2014 ***Includes year to date net revenue equal to 1.8p 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 % Net Country % Net Analysis Assets Analysis Assets Financials 41.8 Russia 50.1 Energy 30.2 Turkey 21.5 Consumer Staples 12.8 Poland 11.0 Industrials 7.5 Turkmenistan 6.8 Information Technology 5.5 Hungary 6.5 Telecommunications 3.0 Romania 4.4 Materials 1.8 Ukraine 3.5 Consumer Discretionary 1.6 Lithuania 1.6 Health Care 1.2 ----- ----- 105.4 105.4 ===== ===== Short positions (1.9) (1.9) Fifteen Largest Investments (in % order of Total Market Value as at 31.05.14) Total Market Company Region of Risk Value % Sberbank Russia 10.0 Dragon Oil Turkmenistan 6.6 Halk Bank Turkey 6.4 Novatek Russia 6.4 Gazprom Russia 5.8 TSKB Turkey 5.0 Surgutneftegas Russia 4.7 Magnit Russia 4.7 Moscow Exchange Russia 4.4 Jeronimo Martins Poland 4.4 BRD Groupe Soc Gen - CFD Romania 4.2 Garanti Bank Turkey 4.1 MHP Ukraine 3.4 Mail.Ru Russia 3.4 OTP Bank Hungary 3.1 Commenting on the markets, Sam Vecht and David Reid, representing the Investment Manager noted; Market overview Emerging European markets bounced back strongly in May led by Russia which had its best one month performance since October 2011. The political tension between Russia, Ukraine and the international community abated somewhat over the month. The prospect of a full scale invasion of Ukraine by the Russian Army, the fear of which caused the market to drop by 15% at the beginning of March, appears to be falling with each passing day. The Ukrainian presidential elections were held on the 25th May with Petro Poroshenko sweeping to victory. Poroshenko has held tentative talks with Vladimir Putin aimed at bringing the crisis to a peaceful conclusion. Events in Ukraine have obscured the positive news emanating from Putin's trip to China. The Russian president has finally signed energy contracts with Chinese counterparties after over a decade of negotiation. Although full details of the energy deal have yet to be released it is expected that the gross benefit to Russia will be in the region of $400bn over the life of the long-term contract. Focus on: Turkey Sinai Kalkinma Bank (TSKB) TSKB is a Turkish financial that we added to after the larger banks in the sector rallied. We believe that the valuation, which had lagged its peers, remains cheap especially when the strong funding franchise and high return on equity is taken into account. We recently met with management and were encouraged by the banks' medium term strategy to accelerate growth. Asset quality appears strong; the key insight is that the bank's high-margin, stable revenue from lending to infrastructure projects combines with their long funding maturities to make TSKB much more flexible on restructuring to cope with any issues than other Turkish banks. Activity We opened a new position in Turkish conglomerate, Dogan Holdings during May, when it was announced that it would merge with its subsidiary Dogan Media. We have been talking to the company about the potential for a merger for many years as we believed that the action would eliminate costs as well as closing a deep holding company discount. The position was added when the deal was announced and this has benefitted the company as the stock revalued sharply in subsequent trading sessions. 17 June 2014 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.




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Source: PR Newswire (UK Disclosure)


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