• The net asset value per share on 31 March 2008 amounted to EUR 10.20
(corresponding to SEK 95.68) which is a decrease of 6.2% compared to the net
asset value per share on 31 December 2007 which was EUR 10.87 (corresponding to
SEK 102.61)
• Net loss for the period amounted to EUR -20.8m (corresponding to SEK -195m),
and earnings per share of EUR -0,526 (corresponding to SEK -4,93)
• Net loss for the period includes EUR -23.6m (corresponding to SEK -221m) in
unrealized change in value of investments
• On 2 January 2008, East Capital Explorer received the fund units in East
Capital Bering Ukraine Fund and the East Capital Bering Central Asia Fund
• A EUR 10m (corresponding to SEK 94m) investment in recently launched East
Capital Bering New Europe Fund was announced after the end of the quarter
COMMENT ON MAJOR EVENTS DURING THE PERIOD
The degree of volatility on the world's financial markets increased during the
first quarter 2008. While having remained relatively resilient when the
financial turbulence started on Western markets during the summer 2007, also
the markets in Eastern Europe were affected during the quarter. The decline of
financial markets in our investment region during the period has had a negative
effect on the development of our fund investments. As a large part of our
portfolio is linked to the USD, the continued weakening of the USD to EUR of
approximately 7% during the quarter has also had a negative impact on our fund
investments. Judging relative performance, however, almost all of our fund
investments outperformed their respective benchmark indices during the period.
On 2 January 2008 we received the fund units in the East Capital Bering Ukraine
Fund and the East Capital Bering Central Asia Fund. We have now invested in all
existing East Capital Bering Funds as well as the East Capital Power Utilities
Fund, providing our shareholders with easy access to funds which otherwise have
high minimum investments and long investment periods. Moreover, these funds are
currently closed to new investors which means that East Capital Explorer offers
an exclusive way in to these fund strategies.
Per 31 March 2008, approximately 8% of the portfolio comprised unlisted
holdings, 33% comprised listed companies, a majority of which are inaccessible
to most investors due to very limited trading liquidity on the local stock
exchanges. The cash portion of the portfolio, including any cash in the
underlying funds, amounted to 59% at the end of the quarter. This means that
East Capital Explorer, even before being fully invested, has a portfolio that
is hard to replicate with exposure to approximately 400 underlying holdings in
attractive sectors in Eastern Europe. After the end of the quarter, we
announced a EUR 10m investment in the recently launched East Capital Bering New
Europe Fund.
The recent development of the Eastern European markets has not changed our long
term view of the region. We maintain that most economies in the region are
fundamentally in a strong shape and that the buoyant growth driven by strong
domestic demand will continue to mean attractive investment opportunities in
our favorite sectors. Russia's economy is the strongest
ever with a comfortable budget surplus and growing reserves. The outcome of the
Presidential elections in Russia ensures political stability and the
continuation of necessary reforms. Despite the market turbulence, we have seen
the complicated reform process in the power utilities sector, including the
breakup of RAO EES, continue which is reassuring for investors in
this sector.
In our view, the current correction of the markets will provide our investment
manager with further investment opportunities. Our intention to be fully
invested by May 2009 remains valid and we feel confident that our investment
strategy will provide our shareholders with long term attractive returns.
The full interim report is available in the attached PDF-file and on the
website www.eastcapitalexplorer.com.
TELEPHONE CONFERENCE
The report will be presented and commented at a telephone conference with Gert
Tiivas, CEO and Pia Tell Svensson, CFO.
Date: Wednesday 14 May 2008
Time: 15.00 CET
Telephone details: +46 (0)8 505 598 53 (Sweden) or +44 (0)203 043 24 36 (UK).
Please dial-in a few minutes before the conference starts.
The telephone conference will be webcasted simultaneously on
www.eastcapitalexplorer.com. The webcast will also be available on the website
after the telephone conference.
Contact information:
Gert Tiivas, CEO East Capital Explorer +46 8 505 977 30
Louise Hedberg, Head of Communications/IR East Capital Explorer +46 8 505 977 20
Financial reporting calendar - East Capital Explorer:
• Monthly Net Asset Value report on the fifth working day after the end of each
month
• Interim report 1 January - 30 June 2008 on 21 August 2008
• Interim report 1 January - 30 September 2008 on 13 November 2008
About East Capital Explorer │ East Capital Explorer AB is a Swedish company,
created with the specific aim of bringing unique investment opportunities in
Eastern Europe to a broader investor base. The company invests mainly in East
Capital's private equity and semi-public equity funds that provide exposure to
companies not otherwise accessible via the local stock exchanges in Eastern
Europe. East Capital Explorer targets fast growing sectors such as the power
utilities, financial, retail and consumer goods and real estate sectors. East
Capital Explorer has appointed East Capital to manage its investment
activities. Since 9 November 2007, East Capital Explorer is listed on the OMX
Nordic Exchange Stockholm, Mid Cap.
This information is disclosed in accordance with the Securities Markets Act,
the Financial Instruments Trading Act or demands made in the exchange rules.
