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STK EMERGENT, ADMINISTRATOR STK FINANCIAL SAI - STK

NAV as of date 31.12.2018

Release Date: 1/9/2019 6:07:12 PM

IRIS Code: 28571

STK Emergent

Monthly NAV report

December 2018

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

November 2018

December 2018

Unlisted shares

27,667,252

27,667,252

Tradeable shares portfolio

32,504,726

29,161,051

Shares

28,135,781

23,149,275

Cash

3,982,954

5,615,038

Collective undertakings titles

596,354

604,923

Other net assets

-210,363

-208,186

Other liabilities

145,408

134,024

Net assets

60,026,570

56,694,279

NAV per share

98.44

92.98

Tradeable shares portfolio represents 51.4% of the total net assets at the end of December.

Fund holdings are recorded using the reference price of the shares traded on the last day of the month, or the book value for unlisted companies, adjusted for the fair value of these companies΄ assets.

At the end of December, about 76.2% of the trading portfolio is composed of shares belonging to oil & gas companies, 1.4% to basic resources shares, while cash represents 19.1% of the total portfolio. Other net assets category includes the dividends payable by the Fund from previous years.

The WTI oil price fell by 10.3% in December, ending the month at 45.4$/barrel, as a result of oversupply in the United States (which has emerged at the end of 2018 as the world's biggest crude producer, outpacing Saudi Arabia and Russia) and of negative investor sentiment, with doubts that supply cuts planned at a meeting held on December 7 between OPEC and non-OPEC members, will be enough to rebalance markets.

2. Stock portfolio

Although the geopolitical factors are currently negative, leading to one of the most abrupt falls in the price of oil in recent years, the fundamental factors are the long term determinants for the price of oil; the break-even price for the first 10 US shale drillers is $55.6/barrel, close to the minimum level at which most companies have budgeted spending plans for the past year, and for 2019 there are signs of further reductions in capex budgets, resulting in a supply deficit; based on fundamental data, we maintain our bullish medium and long term view.

At the end of December, the Fund’s trading portfolio is valued at about RON 29.16 million, down by 10.29% compared to the value reported at the end of November, reflecting the prices’ evolution of the companies in the portfolio, as well as of the markets.

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

The net asset value per share decreased by 5.55% last month

On December 31, 2018, the STK Emergent net asset value per share stands at RON 92.98, decreasing by 5.55%, compared to the net asset value per share at the end of November.

In December, the BET index of the Bucharest Stock Exchange recorded a fall of 14.79%, caused by the new taxes and fiscal changes imposed by the Government, so that the shares composing the index posted decreases ranging between 2.19%, the M share, and 19.52%, the SNP share (BRD and SNG shares recorded steep declines of 18.92% and respectively 17.99%, dividend adjusted return).

The BET-FI index of the financial sector marked in December a decline of 5.45% in December, with SIF1 decreasing by 13.56%, FP by 6.16%, SIF2 by 5.63%, SIF4 by 2.29%, SIF5 by 1.18%; SIF3 achieved a positive return of 5.39%.

Comparative chart of STK Emergent and the Bucharest Stock Exchange Indices between start-up and December  2018:

From launch to the end of December, the net asset value per share registered a variation of -4.19%, outperforming the BET-FI index which has shrunk by 25.33%, but underperforming the BET index, that recorded a return of -1.05% in the same time frame.

4. Performance of the world stock exchanges in December

December was characterized by falls in financial markets

The developed financial markets recorded an average drop of 7.0%, the political uncertainty in Europe, the US-China trade war and concerns about the global economic growth, continuing to affect stock market developments this month, so the Austrian ATX index declined by 10.7%, the US index S&P500 by 9.2%, the German DAX index by 6.2%, the French index CAC40 by 5.5%, the British index FTSE100 by 3.6%.

At the December 19 meeting, the US Federal Reserve decided on the fourth increase in the monetary policy interest rate in 2018, to between 2.25% and 2.50%.

Britain's Parliamentary vote on the UK’s withdrawal from the European Union was postponed to January 2019, because a vote in December would have most likely led to a rejection of the agreement.

In December, emerging markets also closed with a decline of 3.88% on average; Romanian, Czech and Turkish stock exchanges registered declines of 14.8%, 7.7% and 4.3%, respectively, while Bulgarian, Indian and Polish stock exchanges made slight variations of 0.4%, -0.3% and -0.6%.

 

Index

Country

2016*

2017**

2018***

Dec -18****

ATX

Austria

9.2%

30.6%

-19.7%

-10.7%

 

SOFIX

Bulgaria

27.2%

15.5%

-12.3%

0.4%

 

PX

Czech Republic

-3.6%

17.0%

-8.5%

-7.7%

 

SSEC

China

-12.3%

6.6%

-24.6%

-3.6%

 

CAC40

France

4.9%

9.3%

-11.0%

-5.5%

 

FTSE

UK

14.4%

7.6%

-12.5%

-3.6%

 

DAX

Germany

6.9%

12.5%

-18.3%

-6.2%

 

BSE SENSEX

India

1.9%

27.9%

5.9%

-0.3%

 

WIG 20

Poland

4.8%

26.4%

-7.5%

-0.6%

 

BET

Romania

1.2%

9.4%

-4.8%

-14.8%

 

BET-FI

Romania

-1.9%

33.4%

-12.6%

-5.5%

 

SP 500

USA

9.5%

19.4%

-6.2%

-9.2%

 

BUX

Hungary

33.8%

23.0%

-0.6%

-2.4%

 

MOEX

Russia

26.8%

-5.5%

11.8%

-1.4%

 

ISE 100

Turkey

8.9%

47.6%

-20.9%

-4.3%

 

                     

*return between 12/31/2015-12/30/2016

                ** return between 12/30/2016-12/29/2017

*** return between 12/29/2017-12/31/2018

          ****last month return: 11/30/2018-12/31/2018

 



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