Over the year ended 30 September 2016, Baring Emerging Europe’s Net Asset Value per share on a total return basis rose by 41%, which compares with a rise of 27% in the benchmark, the MSCI Emerging Europe 10/40 Index. Part of this was attributable to the decline in sterling; in Dollar terms the increase in Net Asset Value was around 16%. They are paying an unchanged dividend of 23p.
During the year, the discount averaged 14.4% and has traded in a range between 18.8% and 7.9%. They repurchased and cancelled 1,364,512 shares, for a net consideration of just under GBP7.5 million. This has added about 6 pence per share to NAV, accounting for just under 1% of the total return to shareholders. Board has agreed that a tender offer along with certain other proposals to add greater flexibility to their current discount control process will be proposed to shareholders. In the past they have indicated that such a tender offer may be for up to 15 per cent. of the issued share capital, priced at 95% of NAV. The Board is reviewing this scale and pricing and will announce its proposals to shareholders in due course.
Matthias Siller’s management report says that, while their exposure to different markets helped to control risk, it was good stock selection that contributed the lion’s share of the 14% outperformance over the course of the year, most of it stemming from holdings in Russian equities. The two largest holdings (both significant overweight positions relative to the benchmark) Sberbank (the largest bank in Russia) and Lukoil (a leading Russian energy producer) generated more than 100% and 50% USD total return, respectively.
BEE : Baring Emerging Europe planning tender