Source - PRN
All information is at 31 August 2016 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 3.1% 13.3% 37.1% -0.2% -3.4% 72.4%
Net asset value 4.1% 15.0% 32.1% 2.3% 1.8% 74.9%
MSCI EM Europe 10/40 (NR) 3.2% 13.8% 20.8% -13.2% -16.3% 39.0%
US Dollars:
Share price 1.7% 2.0% 16.7% -15.5% -22.3% 52.5%
Net asset value 2.7% 3.5% 12.7% -13.4% -18.0% 54.7%
MSCI EM Europe 10/40 (NR) 1.8% 2.4% 2.8% -26.5% -32.6% 22.9%
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: 370.05c
Net asset value** – cum income: 376.24c
Net asset value – capital only: 282.53p
Net asset value** – cum income: 287.26p
Share price: 251.00p
Total assets^: £103.6m
Discount (share price to cum income NAV): 12.6%
Net cash at month end: 1.4%
Gearing range as a % of Net assets: 0-20%
Issued Capital – Ordinary Shares^^ 36,073,828
Ongoing charges* 1.3%
* Calculated as at 31 January 2016, in accordance with AIC guidelines.
** Includes year to date net revenue equal to 4.73 pence per share.
^ Total assets include current year revenue.
^^ Excluding 5,400,000 shares held in treasury.
Sector Gross assets (%) Country Gross assets 
Analysis Analysis (%) 
Financials 41.8 Russia 48.2
Energy 23.1 Turkey 22.0
Consumer Staples 8.6 Poland 11.2
Basic Materials 8.0 Greece 7.8
Information Technology 6.1 Ukraine 5.6
Utilities 4.7 Kazakhstan 3.7
Industrials 3.9 Romania 2.0
Consumer Discretionary 2.9 Net current assets      1.4
Health Care 1.4
Net current assets 1.4
       -----  -----
101.9  101.9
=====  =====
Short positions (0.0) (0.0)
Fifteen Largest Investments
(in % order of Total Market Exposure as at 31.08.16)


Region of Risk

Gross assets
Sberbank Russia 10.0
Novatek Russia 6.1
Garanti Bank Turkey 5.9
Halk Bank Turkey 5.2
Lukoil Russia 5.2
Norilsk Nickel Russia 5.0
Gazprom Russia 5.0
Inter RAO Russia 4.7
PZU Poland 4.3
Globaltrans Russia 3.9
PKO Bank Polski Poland 3.9
KazMunaiGas Exploration Production Kazakhstan 3.8
TSKB Turkey 3.6
Mail.Ru Russia 3.5
Coca Cola Icecek Turkey 3.4
Commenting on the markets, Sam Vecht and Christopher Colunga, representing the Investment Manager noted;
Market Commentary
The MSCI Emerging Europe 10/40 Index rose by 1.8% in August in USD terms. The Company outperformed the index and was up by 2.7% in USD terms.

Most of the region’s equity markets saw positive returns in August with the exception of the Czech Republic, which suffered as key stocks surprised negatively on dividends.  While Hungary (+2.8%), Russia (+2.6%) and Poland (+1.8%) were top performers, Greece (+0.3%) and Czech (-10.2%) were the laggards.  

Hungary reported solid 2Q16 GDP expansion of 4.5% quarter on quarter and a strong pick-up in the annual growth rate, both of which helped bolster that market.  In Poland, the market reacted favourably to a revised proposal for the conversion of CHF mortgages which would significantly reduce the cost for banks.  Russia reversed course in August buoyed by strong 2Q earnings and the rise in oil.  Turkey also rebounded from July’s politically driven lows.  President Erdogan’s response to last month’s failed coup attempt has helped his approval rating move to an all-time high.  Turkey is also working on improving relations with Russia, which should have a positive read across for tourism revenue in Turkey.  Greece was flat for the month despite the banks reporting good results for 2Q16.

Focus on: Poland’s CHF mortgage conversion proposal
Poland continues to work towards a solution for the conversion of CHF mortgages.  In August, President Duda announced a revision to his previous proposal which would appear to have very positive implications for the banks.  The revised proposal envisions lowering the costs for banks from PLN 9-15 billion to PLN 3-4 billion.  In return the banks will be encouraged to voluntarily convert the loans from CHF to PLN or face higher capital weights.  This news combined with strong results from PKO Bank led to the stock being a top performer for the Company in August.   PKO Bank is Poland's largest bank. It has one of the strongest deposit franchises in the country, helping it to have a structurally lower cost of funding than its peers. We like the company given its attractive valuation relative to the other Polish banks.
16 September 2016
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.

Related Charts

Blackrock Emerging Europe Ord Usd0.10 (BEEP)

-1.87p (-0.67%)
delayed 18:15PM