ESTS Blackrock Sub

 
TIDMEST TIDMESTS 
 
THE EASTERN EUROPEAN TRUST PLC 
 
All information is at 30 NOVEMBER 2010 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**            -4.1%      11.2%   36.5%    -17.4%      100.6% 
Net asset value**        -1.2%      10.7%   31.3%    -21.2%       95.9% 
MSCI EM Europe 10/40(TR) -2.5%       8.5%   20.1%     -5.5%       74.1% 
 
US Dollars: 
Net asset value          -3.8%      12.2%   24.6%     -40.3%     105.9% 
MSCI EM Europe 10/40(TR) -5.0%      10.0%   14.0%     -28.4%      82.9% 
 
Sources: BlackRock and Standard & Poor's Micropal 
 
* BlackRock took over the investment management of the Company with effect from 
1 May 2009. 
** Net asset value and share price performance includes the subscription share 
reinvestment, assuming the subscription share entitlement was sold and the 
proceeds reinvested on the first day of trading. 
 
At month end 
Net asset value - capital only:                322.36p 
Net asset value*** - cum income:               324.04p 
Share price:                                   294.50p 
Subscription share price:                       19.25p 
Total assets^:                                 GBP167.2m 
Discount (share price to capital only NAV):       8.6% 
Gearing:                                          3.8% 
Net yield:                                         n/a 
Ordinary shares in issue^^:                 49,626,886 
Subscription shares:                         9,201,084 
 
***Includes year to date net revenue equal to 1.68p per share. 
^Total assets include current year revenue. 
^^Excluding 4,664,367 shares held in treasury. 
 
Benchmark 
Sector Analysis           Total Assets (%)   Index (%)   Country Analysis   Total Assets (%) 
Financials                           35.5        32.4    Russia                        59.0 
Energy                               23.6        31.7    Turkey                        15.9 
Materials                            14.0        12.3    Poland                        12.1 
Telecommunications                    7.5         8.5    Czech Republic                 4.6 
Consumer Staples                      7.2         4.4    Hungary                        3.1 
Utilities                             4.9         6.8    Austria                        1.7 
Industrials                           3.9         2.0    Kazakhstan                     1.4 
Consumer Discretionary                3.4         0.8    Germany                        1.2 
Health Care                           1.0         0.8    Ukraine                        1.0 
Technology                              -         0.3    Sweden                         1.0 
 
Net current liabilities              (1.0)        0.0    Net current liabilities       (1.0) 
                                    -----       -----                                 ----- 
                                    100.0       100.0                                 100.0 
                                    =====       =====                                 ===== 
 
Ten Largest Equity Investments(in alphabetical order) 
 
Company                    Country of Risk 
Bank Pekao                 Poland 
Gazprom                    Russia 
MMC Norilsk Nickel         Russia 
Lukoil                     Russia 
Novatek                    Russia 
Rosneft                    Russia 
Sberbank                   Russia 
Surgutneftegaz             Russia 
Turkiye Garanti            Turkey 
Vimpel Communications      Russia 
 
Commenting on the markets, Sam Vecht, representing the investment 
Manager noted; 
 
Market 
The MSCI Emerging Europe 10/40 Index returned -2.5 % in November. The region's 
markets fell on fears that the financial crises in Ireland and Portugal could 
spread beyond the borders of the Eurozone. Hungary was the worst performer over 
the month. Investors reacted to the effective nationalisation of the domestic 
pension industry, fearing that contributions will be diverted from the equity 
market to finance government spending. The telecommunications sector performed 
poorly as did consumer stocks. The materials sector performed well as commodity 
prices rose following the commencement of a quantitative easing programme in 
the United States. 
 
Performance 
The Company's NAV fell by 1.2%, outperforming the index by 1.3%. Both country 
allocation and stock selection contributed to performance. The overweight 
position in Russia, which outperformed in November, was a positive contributor 
as was the underweight position in the underperforming central European 
markets, Poland and Hungary. Stocks contributing to performance this month 
included Turkish fertiliser company, Gubre Fabrikalari after the company 
announced better than expected earnings. Also contributing to performance was 
Russian mobile telecommunications firm, Vimpelcom. Despite concerns surrounding 
the risks associated with the acquisition of assets from Weather Investments, 
expectations of strong earnings results drove stock price performance. Also 
contributing to performance was Russian railway company, TransContainer, which 
performed well after an initial public offering ("IPO"), the first of a 
multi-year privatisation programme of 900 Russian state-owned enterprises. 
Detracting from performance were underweight positions in Russian energy 
company, Lukoil, and Russian gold miner, Polyus Gold, which performed well as 
commodity prices benefitted from the US quantitative easing programme. 
 
Activity 
In November the Company added to positions in Russia by participating in the 
IPOs of railway company, TransContainer, and infrastructure company, 
Mostotrest, reflecting our positive views of the companies' earnings growth 
potential at attractive valuations. We also added to the position in Russian 
financial, Sberbank, which we believe to be an undervalued beneficiary of the 
Russian economic recovery and will also be aided by the announcement that 
management has set a date for a depositary receipt programme. The team took 
some profits in Turkish stocks after strong recent performance, including 
industrial company, Gubre Fabrikalari, telecommunication firm, Turkcell and 
financial, Turkiye Halk Bankasi. Finally we sold the position in Russian 
internet company, mail.ru, after the stock rose by nearly 30% following an IPO. 
 
Outlook 
Emerging European equities remain very attractive on low valuations compared to 
other markets. Corporate earnings growth is strong and there have been further 
upgrades to forecasts for both 2010 and 2011. 
 
Portfolio positions in energy remain the largest underweighting, while the 
portfolio is overweight the materials sector. The increase in materials 
reflects our positive view of the economic outlook which is further supported 
by additional US quantitative easing; we believe that companies in the 
materials sector are well-placed to take advantage of the weaker dollar and 
rising commodity prices. Stock specific factors lead us to be more cautious on 
energy companies. In Hungary, we are concerned about the impact of changes to 
the pension fund industry while in Russia, we believe the winning of the FIFA 
2018 World Cup bid to be positive for the market. In terms of country 
allocations, we have increased the weighting in Russia, while the portfolio 
remains underweight Poland where we are concerned about the impact of the 
funding requirements of government privatisations on the market. 
 
Latest information is available by typing www.blackrock.co.uk/its on the 
internet, "BLRKINDEX" on Reuters, "BLRK" on Bloomberg or "8800" on Topic 3 (ICV 
terminal). 
 
16 December 2010 
 
 
 
END 
 

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