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Company Eastern European Trust PLC
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Portfolio Update

Released 11:21 18-Jan-2013
Number 31119-6291

Portfolio Update

THE EASTERN EUROPEAN TRUST PLC

All information is at 31 DECEMBER 2012 and unaudited.

Performance at month end with net income reinvested

                                 One    Three    One    Three    *Since
                               Month   Months   Year    Years  30.04.09

Sterling:

Share price**                   6.3%     1.6%   11.8%   11.8%     74.8%
Net asset value (undiluted)     4.3%     4.3%   17.2%   11.0%     76.3%
Net asset value (diluted)       3.6%     3.6%   15.7%    9.6%     74.0%
MSCI EM Europe 10/40(TR)        5.0%     6.7%   22.6%   14.4%     75.2%

US Dollars:

Net asset value (undiluted)     5.8%     5.0%   22.6%   11.7%     93.4%
Net asset value (diluted)       5.1%     4.3%   21.1%   10.3%     90.9%
MSCI EM Europe 10/40(TR)        6.5%     7.4%   28.2%   15.2%     92.1%

Sources: BlackRock and Standard & Poor's Micropal

* BlackRock took over the investment management of the Company with effect from
1 May 2009.

At month end

Net asset value - capital only:            290.10p
Net asset value*** - cum income:           295.41p
Net asset value - cum income (diluted for
subscription shares):                      291.65p
Share price:                               260.50p
2012 Subscription share price:               5.00p
Total assets^:                             £128.7m
Discount (share price to cum income NAV):    11.8%
Gross market exposure^^^:                  109.00%
Net yield:                                     n/a
Ordinary shares in issue^^:             42,441,591
2012 Subscription shares:                8,537,982

***Includes year to date net revenue equal to 5.31p per share.

^Total assets include current year revenue.
^^Excluding 6,000,000 shares held in treasury.
^^^ Long positions plus short positions as a percentage of net asset value.

Benchmark

Sector Analysis             Net Assets(%)*     Country Analysis   Net Assets(%)*

Energy                              34.0                 Russia            64.5
Financials                          32.7                 Turkey            16.8
Telecommunications                   9.2                Hungary             6.9
Materials                            7.8         Czech Republic             6.2
Consumer Staples                     6.4                 Poland             6.2    
Industrials                          4.0             Kazakhstan             2.2
Information Technology               3.8           Turkmenistan             1.4
Health Care                          3.7                Austria             1.4
Other                                3.0                Ukraine             1.2
Utilities                            1.7
Consumer Discretionary               0.5
                                --------                               --------
Total                              106.8                  Total           106.8
                                --------                               --------
Short Positions                     -2.2        Short Positions            -2.2
                                ========                               ========

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

Ten Largest Equity Investments(in % order of Total Market value)

Total Market

Company                     Country of Risk         Value %

Sberbank                             Russia           10.0
Gazprom                              Russia            9.0
Turkiye Garanti Bankasi              Turkey            6.0
Lukoil                               Russia            5.6
Komercni                     Czech Republic            3.9
Mail Ru                              Russia            3.7
Mobile Telesystems                   Russia            3.1
Surgutneftegaz                       Russia            2.9
OTP                                 Hungary            2.8
Turkcell Iletism Hizmet              Turkey            2.7

Commenting on the markets, Sam Vecht, representing the investment

Manager noted;

Markets

The MSCI Emerging Europe 10/40 index returned 6.5% (in USD terms) in December,
which capped a strong year for the asset class which finished 2012 28% higher.
Global equity markets also continued to rally as economic data improved in the
US and China, although the US fiscal cliff talks affected sentiment negatively
towards the end of December.

Turkey was the strongest performer over the month, cementing its position as
the outstanding performer in 2012. Over the calendar year, Turkey has returned
65%, driven by improving economic data, an improving outlook for the
manufacturing industry and record low funding costs expanding bank margins.

Poland also continued its strong run. Despite gathering economic storm clouds,
the market has continued to perform well. December saw the successful IPO of
financial Alior Bank, which finished its first day up 7%, demonstrating that
risk appetite for Polish stocks remains strong.

Russia performed in line with the index over the month. The most notable news
in Russia recently has been the implementation of some low-profile but
essential stock market reforms intended to improve ease of access for foreign
investors. At a stock level, increasing dividend yields have increased the
attractiveness of what were already extremely cheap stocks.

Hungary underperformed in December as Prime Minter Orban's intransigent stance
towards negotiations with the IMF over a deal to support the country's finances
impacted investor confidence.

Performance & Activity

In December, the Eastern European Trust returned 5.8%, underperforming the MSCI
Emerging Markets 10/40 index by 0.7%. Clearly, relative performance in 2012 has
been disappointing. Some of this has been caused by poor stock selection, but
much can be attributed to the valuations of already expensive stocks becoming
ever more stretched. As long-term investors, who focus on allocating capital
efficiently, we believe that is not in the Company's best interest to buy a
series of companies at the wrong valuation. The long-term track record in
Emerging Markets of momentum strategies and `theme'-led approaches has been
unexciting.

The largest individual contributor to performance in December was the
overweight position in Russian energy company, Transneft. The company opened a
2,000km pipeline which connects Transneft's network with the Kozimo port which
is on the Pacific coast. The pipeline was the main component of the company's
capital expenditure programme which will now stabilize, leading to speculation
that free cash-flow generation may improve.

The largest detractor from performance in December was Russian energy name
TNK-BP as Rosneft delayed giving clarity over its plans for minority investors
in the company. In December, portfolio turnover was low.

We added to the position in industrial company, HMS Group and exited the
position in Turkish financial, Sekerbank into share price strength.

Outlook

Russian and Eastern European markets have significant long-term structural
advantages. They benefit from flexible and dynamic economies with undervalued
currencies and educated and skilled workforces, allowing the countries of the
region to remain competitive in a globalized market. That said, the region has
not been immune from sentiment stemming from the problems which have beset the
Eurozone. Recent action from the ECB has reduced systemic financial risk and
that has been positive for all risk assets.

In Russia, the announcement that state-owned companies will return a target 25%
of profits to shareholders through dividends is positive. Private companies
have also followed suit, bringing dividend yields in Russia up to global
emerging market averages of c.4% for the first time. In addition, recently
announced buybacks from companies across Russia & CIS have totalled $10bn,
demonstrating that companies see value in their own capital.

Elsewhere, macroeconomic conditions in Turkey have improved and Hungary has
accessed international bond markets for the first time in 20 months to underpin
the country's fiscal position. However, the key driver of markets over recent
months is the fact that Emerging European stocks were exceptionally cheap,
universally disliked and widely misunderstood. As such, minor changes in
sentiment were able to have a meaningful impact on prices.

Although we still see upside for the region, we remain mindful of the risks
which could potentially emanate from three places; US, Europe or China.

The fortunes of global markets are still tied to varying degrees to the fate of
the US recovery which, although bumpy, is underway as reflected in a housing
market which is slowly returning to health. A fragile recovery, by definition,
could be blown off course and that is a risk for all markets, not just those of
Emerging Europe.

A slowdown in China will affect the demand for commodities, the prices of which
impact sentiment surrounding Russia, although this will be positive for Turkey
and central Europe, commodity importers.

While recent measures to stabilise the Eurozone have been positive, any
deterioration in the crisis will have implications for emerging Europe despite
their clear contrast to the economies of peripheral Europe. It is important to
remember that the economies of emerging European markets typically have lower
government budget deficits and lower debt burdens.

Despite the attendant risks, valuations are still attractive and many of these
risks remain reflected (and more) in the price. The long-term outlook for
Emerging Europe is bright.

18 January 2013

ENDS

Latest information is available by typing www.estplc.co.uk 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

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