ESTS Blackrock Sub

 
TIDMEST TIDMESTS 
 
THE EASTERN EUROPEANTRUST PLC 
 
All information is at 31 JANUARY 2011 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**            -1.8%       3.9%   33.9%     -4.2%       117.3% 
Net asset value**         1.0%       8.1%   28.9%     -2.1%       114.3% 
MSCI EM Europe 10/40(TR) -0.5%       4.2%   18.3%     13.6%        85.9% 
 
US Dollars: 
Net asset value           3.3%       8.3%    28.8%    -21.1%      131.6% 
MSCI EM Europe 10/40(TR)  1.8%       4.4%    18.3%     -8.4%      101.0% 
 
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:                    353.31p 
Net asset value*** - cum income:                   354.44p 
Net asset value - capital only^^^:                 345.03p 
Net Asset value - cum income^^^:                   345.98p 
Share price:                                       319.00p 
Subscription share price:                           29.00p 
Total assets^:                                     GBP176.7m 
Discount (share price to capital only NAV):           9.7% 
Discount (share price to diluted capital only NAV^^^) 7.5% 
Gearing:                                               n/a 
Net yield:                                             n/a 
Ordinary shares in issue^^:                     49,856,279 
Subscription shares:                             8,971,691 
 
***Includes year to date net revenue equal to 1.13p per share. 
^Total assets include current year revenue. 
^^Excluding 3,250,177 shares held in treasury. 
^^^ Diluted for subscription shares. 
 
Benchmark 
Sector Analysis        Total Assets (%)      Index (%)     Country Analysis      Total Assets (%) 
 
Energy                            34.4           33.4       Russia                          56.4 
Financials                        32.6           31.1       Poland                          14.4 
Materials                          7.4           11.4       Hungary                          7.9 
Utilities                          6.3            6.5       Turkey                           7.5 
Telecommunications                 4.9           11.4       Czech Republic                   5.8 
Consumer Staples                   4.8            2.0       Kazakhstan                       2.7 
Industrials                        4.2            1.8       Austria                          1.6 
Consumer discretionary             2.8            0.5       Ukraine                          1.5 
Health Care                        0.9            1.5       Sweden                           0.5 
Technology                           -            0.4 
 
Net current assets                 1.7            0.0        Net current assets              1.7 
                                 -----          -----                                      ----- 
                                 100.0          100.0                                      100.0 
                                 =====          =====                                      ===== 
 
Ten Largest Equity Investments(in alphabetical order) 
 
Company                      Country of Risk 
Bank Pekao                   Poland 
Ceske Energeticke Zavody     Czech Republic 
Gazprom                      Russia 
MMC Norilsk Nickel           Russia 
Lukoil                       Russia 
Mol Hungarian                Hungary 
Novatek                      Russia 
OTP Bank                     Hungary 
Rosneft                      Russia 
Sberbank                     Russia 
 
Commenting on the markets, Sam Vecht, representing the investment 
Manager noted; 
 
Markets 
The MSCI Emerging Europe 10/40 Index fell -0.5% in January. The Russian market 
continued to benefit from positive sentiment after progress in the reforms to 
the oil industry tax regime. Central European markets were also strong 
performers, benefitting from German industrial strength; Hungary's trade 
balance in now at its most positive in the last decade while Poland and the 
Czech Republic are also seeing meaningful benefits. Turkey performed poorly due 
to ongoing lax monetary policy and a substantial current account deficit, 
suggesting overheating. 
 
Performance 
The Eastern European Trust PLC NAV rose by 1.0%, outperforming the index by 
1.5%. Positive contributors to performance included Hungarian energy company, 
MOL, which is set to benefit from the resumption of oil exports from Northern 
Iraq where it has significant interests and Turkish media company, Hurriyet, 
which rose on speculation of an impending bid. The portfolio also gained from 
an underweight position in Turkish financial, Akbank, whose shares 
underperformed in January due to concerns related to the impact of Turkish 
monetary policy. Detractors from performance in the month included Russian 
telecoms company, Vimpelcom, which fell on concerns surrounding the company's 
proposed acquisition of assets from Weather Investments. An underweight 
position in Russian energy company, Lukoil, also had a negative impact on 
performance. 
 
Activity 
During January we increased exposure to Hungary and the Czech Republic. We 
increased the holding in Czech utility, Cez, in expectation of higher German 
electricity prices were the company has significant interests, along with a 
potential relaxation of carbon credit requirements. The company also increased 
its exposure to Hungarian financial, OTP Bank, at an attractive valuation and 
improving trading outlook. We added to the position in Russian energy company, 
Rosneft, anticipating that the recently announced alliance with BP and the 
ongoing reform of the oil industry tax regime to be positive for the company. 
 
Profits were taken in Russian materials company, Mechel, following strong 
performance and Russian fertiliser producer, Uralkali, also on the back of 
share price strength. 
 
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. Germany is now recording its 
lowest unemployment rate since 1991, creating significant trade demand in 
Eastern Europe. 
 
We have adjusted positions in January, reducing exposure to materials, which 
constitutes the largest sector underweight. Industrials is the largest sector 
overweight, reflecting our positive view of Russian conglomerates exposed to 
the proposed $170bn infrastructure spending in preparation for the FIFA 2018 
World Cup. We are also positive on the financials sector due to the improving 
economic outlook for central European countries. We remain underweight Poland 
where, in spite of an undervalued currency and improving trade flows, we have 
concerns, in the short-run, on state-led equity offerings and pension reforms. 
The underweight in Turkey has also been maintained due to the ongoing risk of 
policy error. 
 
18 February 2011 
 
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). 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. 
 
 
 
END 
 

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