Kd skladi part 2


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Kd skladi part 2

  1. 1. Stock story: NIS (Serbia)Current overweight 5.5%Description: Naftna industrija Srbije is avertically integrated oil and gas companyincorporated in Serbia. 950 Profit taking 900Sector: Energy 850Market Cap: €1.3bn (RSD 145bn) 800 Buy 750 BuyCurrent Price: RSD 890 700Upside: 23% 650Strengths: 600 550 A vertically integrated oil&gas company 500which is highly profitable as oil prices are 30.06.2011 31.07.2011 31.08.2011 30.09.2011 31.10.2011 30.11.2011 31.12.2011 31.01.2012 30.04.2012 31.05.2012 30.06.2012 31.07.2012 31.08.2012 30.09.2012 31.10.2012 30.11.2012 31.12.2012 31.01.2013 29.02.2012 31.03.2012 28.02.2013liberalised and royalty taxes are very low Privatised in 2009 when GazpromNeftbecame a majority shareholder GPN brought industry know-how and started Recommendation: Buyan investment cycle after which operationalefficiency increased significantly One of the lowest valuations among regionalpeers at 2.8 2013 EV/EBITDA 15
  2. 2. Stock story: Fondul Proprietata (Romania)Current overweight 4.9%Description: Fondul Proprietatea is a jointstock company operating as a closed-endinvestment company incorporated in Romania. 0,65Sector: Financials with underlying exposure in 0,6the energy sector. Profit takingMarket Cap: €1.88bn (RON 8.22bn) 0,55Current Price: 0,596 RON 0,5Upside: 21% Buy Buy 0,45Strengths: Buy Trading at an unjustified discount on NAV 0,4 30.06.2011 31.08.2011 31.10.2011 31.12.2011 29.02.2012 30.04.2012 30.06.2012 31.10.2012 31.12.2012 28.02.2013 31.08.2012 Diversified portfolio with main exposure in the energy sector IPO/SPOs: according to privatisation plans stakes in Transgaz, Romagaz and Nuclearelectirca (approx. 15% of the Recommendation: Buyportfolio) could be placed onmarket in 2013 Warsaw listing could increase foreign investor 16 base
  3. 3. KD, the Asset Manager for the region The privatisation process in many Balkan countries has not been finalised. Privatisation, even partial, is making companies more efficient and better managed. KD has deep experience and understanding of the way governments behave in privatisation processes KD investment professionals have an extensive information network which is imperative when dealing in these relationship-based markets KD investment professionals speak the local language and understand the market dynamics One trigger to increase shareholder value in regional companies is to improve corporate governance and transparency. KD actively works to improve the corporate governance of the companies we own and we convey our views about specific corporate governance issues through formal and informal communication with the management of companies in which we invest KD has extensive knowledge of the regulatory environment in each Balkan country KD can access tightly held/concentrated shareholdings KD has been investing in the region for over 15 years 17
  4. 4. Appendix
  5. 5. KD offers local presence & knowledgeKD investment professionals are located throughout the region South Eastern Europe (SEE) Benchmark STOXX Balkan TMI ex GR & TRY Companies 62 Free float adj. market EUR 9.8b cap. Country Field presence KD Asset management Slovenia KD Funds Ljubljana Croatia KD Investments Zagreb Serbia Bosnia ABDS Sarajevo Macedonia KD Fondovi Skopje Romania KD Investments Bucharest Bulgaria
  6. 6. SEE market capitalisation Free Float Av. Free Float Number of Av. Daily Market Cap Market Cap Companies Value Traded in Last (EUR mn) (EUR mn) (#) 6M (000 EUR) Slovenia 2,998.1 249.8 12 74.8 Croatia 2,764.6 102.4 27 36.8 Romania 3,032.4 303.2 10 79.9 Serbia 488.3 61.0 8 38.0 Macedonia 266.8 44.5 6 7.9 Bulgaria 237.8 26.4 9 24.0 Total SEE 9,788.1 131.2 72 45.2Investible universe as reflected by STOXX Balkan TMI (ex GR &TRY) index for SEE. Date: January 2013 Source: Bloomberg, Local Stock Exchanges.
  7. 7. Conversion story in the banking sector 300 250 EMU There is still capacity for the convergence of banking 200Banking Assets to GDP (%) and capital markets with above-average growth in the years ahead 150 Croatia Slovenia Slovakia 100 Hungary Bulgaria BiH Czech Republic Ukraine Poland Russia 50 Macedonia The size of the bubble represents the total banking assets of the Serbia Romania country/region 0 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% Expected CAGR GDP p.c. $ nominal 2012-2017 (%) Source: IMF
  8. 8. Convergence in the consumer sector suffered a setback Slovenia looks to be at the end of convergence 160.0% Austria was a major beneficiary of CEE and SEE convergence 140.0% Slovenia was the first SEE country to adopt the euro and a% of EU personal consumption per capita average 120.0% Austria successful example of convergence Countries where the most notable medium-term 100.0% purchasing power EU 27 convergence effect is expected 80.0% Slovenia 60.0% Croatia Czech Rep. Slovakia 40.0% Poland Countries where the strong Hungary 20.0% long-term effect of purchasing power convergence is Macedonia Bulgaria Romania expected 0.0% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% Nominal growth in personal consumption per capita 2001 - 2011 (% CAGR)
  9. 9. Further development in the region will double theconsumption of energy …There is no convergence story without an energy build up! 9,000 FRANCE 8,000 AUSTRIA Electricity consumption, kWh per capita 7,000 SLOVENIA GERMANY 6,000 RUSSIA CZECH REP 5,000 BULGARIA GB HUNGARY ITALY SERBIA 4,000 CROATIA UKRAINE 3,000 POLAND ROMANIA TURKEY 2,000 1,000 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000 GDP PPP, $ per capita
  10. 10. … where natural gas will most probably play animportant roleAnything else is either already fully utilised, too expensive orenvironmentally questionable 1,800 GB 1,600 ITALY 1,400 HUNGARYGas consumption, m3 per capita 1,200 GERMANY AUSTRIA 1,000 UKRAINE 800 CROATIA CZECH REP ROMANIA 600 FRANCE 400 TURKEY SERBIA BULGARIA SLOVENIA POLAND 200 0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 GDP PPP, $ per capita
  11. 11. Economic convergenceGrowth in the Balkan countries is greater than the average forthe EU-27 and is forecast to continue for the next 5 – 10 yearsReal GDP Growth (%) European Union Hungary Czech Republic Poland Serbia Bosnia & Herz Bulgaria Romania Croatia Slovenia -3,0 -2,0 -1,0 0,0 1,0 2,0 3,0 4,0 2014 (f) 2013(f) 2012 Sources: IMF, Eurostat
  12. 12. The Balkans: A unique journey, millions of people and countless emotions • TTheSo there is a reason to invest
  13. 13. DisclaimerThis presentation is provided for information purposes only and does not constitute financial or investment advice or form part of anoffer, subscription, recommendation or solicitation to buy or sell any financial instrument, nor should it be relied on in connectionwith any contract or commitment. Returns are not guaranteed and investment returns tend to fluctuate. Past performance does notguarantee future results.KD Funds – Management Company LLC (KD Skladi, družba za upravljanje, d. o. o.), Dunajska cesta 63, Ljubljana, Slovenia,manages the KD Umbrella Fund and its subfunds KD Galileo, Mixed Flexible Fund; KD Rastko, Europe Equity Fund; KD Bond –EUR; KD MM, Money Market - EUR; KD First Selection, Fund of Equity Funds; KD Balkan, Equity; KD New Markets, Equity; KDRaw Materials and Energy, Equity; KD Technology, Equity; KD Vitality, Equity; KD India – China, Equity; KD Latin America, Equity;KD Eastern Europe, Equity; and KD Dividend, Equity. Hard copies of the prospectus including the fund rules, the Key InvestorInformation Document (KIID), and the latest published annual and semi-annual reports in the Slovenian language are available toinvestors free of charge at the companys headquarters and subscription offices, and in e-format on the website www.kd-skladi.si.KD Funds is registered in Slovenia.