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STK EMERGENT, ADMINISTRATOR STK FINANCIAL SAI - STK

NAV as of date 30.08.2019

Release Date: 9/6/2019 6:03:20 PM

IRIS Code: 6CF9B

STK Emergent  Monthly NAV report

August 2019

Fund profile: closed-end fund listed on the Bucharest Stock Exchange

Fund objectives: invested capital increase, a 25% return per year on the managed assets and a return higher than the BET market index (1.3 x return of the BET index), distributing dividends to investors of the realised profit

Number of units fund in circulation: 609,753

CNVM notice: CSC08FIIR/120004 from 02/07/2008

Depository: BRD- GSG

 

1. Fund assets

RON

July

2019

August

2019

Unlisted shares

28,459,467

28,459,467

Tradeable shares portfolio

30,977,143

29,190,194

Shares

23,819,000

21,678,524

Cash

6,710,314

7,009,325

Collective undertakings titles

653,985

663,344

Other net assets

-206,155

-160,999

Other liabilities

139,381

130,463

Net assets

59,297,230

57,519,198

NAV per share

97.25

94.33

 

Tradeable shares portfolio represents 50.7% of the total net assets at the end of August.

Fund holdings are recorded using the reference price of the shares traded on the last day of the month, and for the unlisted companies a fair value is used from a valuation report made by an ANEVAR certified external valuator.

At the end of August about 69.1% of the trading portfolio is composed of shares belonging to the oil & gas companies, while cash represents 23.9% of the total portfolio. Other net assets category includes the dividends payable by the Fund from previous years and dividends to be received.

The Brent oil price dropped by 8.01% in August, ending the month at $59.06/barrel influenced mainly by concerns about slowing global economic growth, despite positive factors such as: the reduction of US oil stocks, production cuts of OPEC+ member countries, tensions in the Middle East. Following the intensification of US-China trade tensions, crude oil was included, for the first time, among the US goods affected by China's import tariffs.

2. Stock portfolio

Although the variation of oil production is estimated to increase from one year to another, mainly due to US shale production, industry’s capex between 2015-2019 was 50-60% of the 2014 peak. Historically,  there is a correlation between production and capex, and based on this correlation, there are chances that production in the coming years will not be able to keep pace with increasing demand. The estimated Brent oil price as a function of oil demand and supply is $80/barrel; the price at the end of August is 27% below the estimate, being the fifth consecutive year in which the average annual price was below estimates. Over the last 20 years there has been a similar case in 2004, which was followed by a 94% increase in price over the next three years (from $38.46/barrel to $74.72/barrel).

At the end of July, the Fund’s trading portfolio is valued at about RON 29.19 million, down by 5.77% compared to the value reported at the end of July, reflecting the price movements of the companies in the portfolio.

Past fund performance is no guarantee of future results!

 

Read the documents of incorporation before investing in this fund!

3. Changes in the NAV per share

On August 30, 2019, the STK Emergent net asset value per share stands at RON 94.33, up by 1.45% from the start of the year, but down by 3% compared to the value at the end of July.

The BET index of the Bucharest Stock Exchange registered a slight increase of 0.34% in August, ending the month at 9.235.72 points, August being marked by financial reports related to the results for H1/2019; from the BET index, SFG and FP shares posted the highest increases, of 5.4% and 4.6%, while ALR, TEL and TGN shares decreased by 8.1%, 3.8% and 3.4%.

The BET-FI index of the financial sector also increased by 2.25% in August, the five Financial Investment Companies and FP registering returns between -1.1% and 8.2%.

Comparative chart of STK Emergent and the Bucharest Stock Exchange Indices between start-up and August  2019:

From launch to the end of August, the net asset value per share registered a negative variation of 2.80%, outperforming the BET-FI index which has shrunk by 11.64%, but underperforming the BET index, that rose by 23.78% in the same time frame.

4. Performance of the world stock exchanges

August was characterized by falls in financial markets

The developed financial markets decreased in August by an average of 2.41%, the mature capital market indexes recording the following returns: the British index FTSE100 -5.0%, the Austrian index ATX -2.5%, the German index DAX -2.0%, the US index S&P500   -1.8% , the French index CAC40 -0.7%.

In early August, the US president announced additional 10% tariffs on US$300 billion of products imported from China, starting September 1 (later, a part of these tariffs were delayed to be applied from December 15); thus, with the new tariffs, approximately all goods imported by the US from China would be subject to additional tariffs. In response, China retaliated with 5% and 10% tariffs on US$75 billion of US goods, and reinstated some taxes on automotive and auto parts from the US.

Emerging stock exchanges achieved an average decline of 2.18% in August; Poland and Turkey stock exchanges were down 6.2% and 5.3%, while the Romanian stock market registered a slight increase of 0.3% and the Russian stock market stagnated.

Index

Country

2017*

2018**

YTD

2019***

Aug -19****

 

ATX

Austria

30.6%

-19.7%

6.0%

-2.5%

SOFIX

Bulgaria

15.5%

-12.3%

-4.5%

-2.3%

PX

Czech Republic

17.0%

-8.5%

5.1%

-1.8%

SSEC

China

6.6%

-24.6%

15.7%

-1.6%

CAC40

France

9.3%

-11.0%

15.8%

-0.7%

FTSE

UK

7.6%

-12.5%

7.1%

-5.0%

DAX

Germany

12.5%

-18.3%

13.1%

-2.0%

BSE SENSEX

India

27.9%

5.9%

3.5%

-0.4%

WIG 20

Poland

26.4%

-7.5%

-6.2%

-6.2%

BET

Romania

9.4%

-4.8%

25.1%

0.3%

BET-FI

Romania

33.4%

-12.6%

18.3%

2.3%

SP 500

USA

19.4%

-6.2%

16.7%

-1.8%

BUX

Hungary

23.0%

-0.6%

1.7%

-2.4%

MOEX

Russia

-5.5%

11.8%

16.2%

0.0%

ISE 100

Turkey

47.6%

-20.9%

-5.7%

-5.3%

                     

 



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