Market Snapshot
  • U.S.
  • Europe
  • Asia
Ticker Volume Price Price Delta
DJIA 16,424.85 162.29 1.00%
S&P 500 1,862.31 19.33 1.05%
NASDAQ 4,086.22 52.06 1.29%
Ticker Volume Price Price Delta
STOXX 50 3,139.26 47.74 1.54%
FTSE 100 6,584.17 42.56 0.65%
DAX 9,317.82 144.11 1.57%
Ticker Volume Price Price Delta
NIKKEI 14,470.97 53.29 0.37%
TOPIX 1,172.11 5.56 0.48%
HANG SENG 22,696.01 24.75 0.11%



All information is at 28 February 2013 and unaudited.

Performance at month end with net income reinvested

One Three Six One Since

month months months year launch* Sterling: Share price 5.2% 23.9% 30.1% 28.5% 4.4% Net asset value 5.6% 19.2% 24.1% 24.4% 8.0% MSCI Frontiers Index (NR) 4.4% 15.8% 20.7% 19.4% -0.7% MSCI EM Markets (NR) 3.1% 10.9% 17.3% 5.5% 2.8% US Dollars: Net asset value 1.1% 12.9% 18.6% 18.2% 5.2% MSCI Frontiers Index (NR) 0.0% 9.7% 15.3% 13.5% -3.3% MSCI EM Markets (NR) -1.3% 5.0% 12.1% 0.3% 0.0%

Sources: BlackRock and Standard & Poor's Micropal * 17 December 2010.

At month end US Dollar: Net asset value - capital only: 151.91c Net asset value - cum income: 152.80c Sterling: Net asset value - capital only: 100.08p Net asset value - cum income: 100.66p Share price: 99.13p Total assets (including income): £95.4m Discount to cum income NAV: 1.5% Gearing: nil Gearing range: 0-20% Net yield: 2.5% Ordinary shares in issue: 94,766,267

Benchmark Sector Analysis Gross assets(%)* Country Analysis Gross assets(%)*

Financials 32.2 Nigeria 15.1 Consumer Staples 16.0 Qatar 13.4 Telecommunication 14.8 United Arab Emirates 12.6 Energy 9.8 Kazakhstan 9.4 Industrials 9.5 Saudi Arabia 9.3 Healthcare 6.5 Vietnam 6.0 Consumer Discretionary 6.0 Bangladesh 4.6 Materials 5.0 Ukraine 4.1 Utilities 2.6 Iraq 3.8 Technology 1.7 Croatia 2.7

----- Cambodia 2.7 Total 104.1 Algeria 2.6

----- Sri Lanka 2.6 Short positions -1.2 Argentina 2.5

                       =====               Pan Africa                  2.5
                                           Panama                      2.4
                                           Kenya                       2.1
                                           Kuwait                      2.0
                                           Romania                     1.3
                                           Cameroon                    1.1
                                           Lebanon                     0.9
                                           Slovenia                    0.4
                                           Short positions            -1.2

*reflects gross market exposure from contracts for difference (CFDs)

Market Exposure

31.03 30.04 31.05 30.06 31.07 31.08 30.09 31.10 30.11 31.12 31.01 28.02

2012 2012 2012 2012 2012 2012 2012 2012 2012 2012 2013 2013

           %      %     %     %      %     %      %      %      %      %      % 

Long 98.3 100.8 99.2 97.2 101.9 96.5 99.1 101.0 102.0 103.4 105.1 104.1 Short 3.0 2.1 0.0 2.6 2.6 2.5 2.6 4.2 4.9 5.2 3.5

1.2 Gross 101.3 102.9 99.2 99.8 104.5 99.0 101.7 105.2 106.9 108.6 108.6 105.3 Net 95.3 98.7 99.2 94.6 99.3 94.0 96.5 96.8 97.1 98.2 101.6 102.9

Ten Largest Equity Investments

Company Country of Risk % of gross assets

Zenith Bank Nigeria 4.4% Kazmunaigas Exploration Kazakhstan 4.2% Halyk Savings Bank Kazakhstan 3.9% FBN Holdings Nigeria 3.3% Qatar Telecom Qatar 3.3% First Gulf Bank United Arab Emirates 3.1% MHP Ukraine 3.1% Kinh Do Vietnam 2.8% Air Arabia United Arab Emirates 2.7% Commercial Bank of Qatar Qatar 2.7%


Commenting on the markets, Sam Vecht, representing the Investment Manager

Market performance

In February, the MSCI Frontier Markets Index rose 4.4% (GBP) continuing its
outperformance of MSCI Emerging Markets which rose only 3.1% (GBP).  Global
investors continued to move money into riskier asset classes as sentiment
towards global growth improved. 

Ukraine was the strongest performer in February, with the MSCI Ukraine Index
rising 23%, as companies in the agricultural sector reported strong results.
The sector was also boosted by the decision of the European Union to allow
poultry imports from the Ukraine, which will allow companies to grow and
further diversify their exports. 

The Kenyan Market rose 9% in the run up to March elections as fears of a repeat
of the 2007 election violence subsided.  In the event, Uhurru Kenyatta was
declared President having secured 50.07% of the vote, just above the 50%
requirement to avoid a runoff election, in what international observers
declared to be free and fair elections. 

Argentina was the worst performing Frontier Market, falling 16% in February as
investors became increasingly concerned about the possibly of a sovereign
default on all foreign debts. In the latest development in a saga which began
in 2001, the court case between the government and hold out creditors as
represented by Elliot Capital is currently progressing through the Second
Circuit Court of Appeals in New York with little sign of reconciliation between
the two parties.

Portfolio performance.

The Company returned 5.6% (GBP terms), outperforming the MSCI Frontier Markets
by 1.2%.

The largest individual contributor to performance in February was Ukrainian
poultry producer, MHP. The company announced a trading update which exceeded
market expectations at the sales, margin and net income level. Investors were
further cheered by the announcement that the company would pay its first

Abu Dhabi based financial, First Gulf Bank, also performed well as the company
announced strong results and a higher than expected dividend.  The company is
also expected to repay an outstanding subordinated loan from the Ministry of
Finance this year which will boost returns and allow the company to pay a
higher dividend next year. 

United Arab Emirates hospital operator, NMC Health, saw its share price rise
strongly after the company announced increased profits for 2012 and plans to
expand capacity. The company's development projects (including Mussafah Day
Patient Centre, Brightpoint Womens Hospital, Khalifa City Specialty Hospital
and the DIP General Hospital) are progressing on schedule and on budget. 
Following the price appreciation, NMC has now returned to the FTSE 250 index. 

The largest detractor in February was Kazakh financial, Halyk Bank, which fell
on concerns that the government will force the sale of its pension fund assets
giving compensation in BTA shares which will reduce transparency in the stock
and impact the future profitability of the company.


At the end of January, the Company held 55 long positions and 3 short positions
across 25 countries.

In February, the Company added to positions in Qatar through Qatar Telecom and
Qatar National Gas Transport. Qatar Telecom is the majority shareholder in
recent Iraqi IPO, Asia Cell, which has performed strongly since its debut on
the Baghdad exchange.  The Company initiated a position in Doha based exporter
of gas, Qatar National Gas Transport, as valuations looked attractive and we
expected the company to report strong results. Since the month end, the company
has reported as expected and duly announced that the dividend would be
increased, representing a yield in excess of 6%.

The Company sold its position in Panamanian airline, Copa.  Following slightly
weaker than expected full year results which showed a decline in margins on the
back of increased cost pressures in Panama, we decided to take profits in a
stock which we have held since the launch of the Company, during which time the
stock price rose 76%.  The Company also sold its position in Nigerian
financial, United Bank for Africa. Since the position was initiated, the share
price has more than trebled. We now feel that the valuation is full and have
taken profits.

Market Outlook

Although Frontier Market returns were more muted in February than January, we
continued to see investors shifting their asset allocation towards riskier
investments.  Global equity markets continue to rise as expectations of an
economic recovery increase.  Whilst we are generally in agreement with this
trend, we are cognizant that risks do remain, especially within Frontier
Markets.  However, we continue to hold stocks where we believe the valuation is
attractive and the risks are sufficiently priced and on that basis continue to
be positive on the prospects for the Company. 

Frontier Markets stand out for their low valuations and high dividend yields.
Positive structural reforms, high growth and well-capitalised, liquid banking
systems leave several Frontier economies well placed in the current global
environment. Frontier stocks, particularly in the domestic or consumer sectors
are valued at a fraction of their emerging peers despite higher growth rates
and higher margins.

21 March 2013


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.


-0- Mar/21/2013 13:55 GMT

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