UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM N-Q
QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED
MANAGEMENT INVESTMENT COMPANY
_______________________________
Investment Company Act file number 811-06041
The Central Europe & Russia Fund, Inc.
(Exact name of registrant as specified in charter)
345 Park Avenue
New York, NY 10154
(Address of principal executive offices) (Zip code)
Paul Schubert
345 Park Avenue
New York, NY 10154-0004
(Name and address of agent for service)
Registrant's telephone number, including area code: (212) 454-7190
Date of fiscal year end: 10/31
Date of reporting period: 7/31/09
ITEM 1. SCHEDULE OF INVESTMENTS
THE CENTRAL EUROPE AND RUSSIA FUND, INC.
SCHEDULE OF INVESTMENTS -
JULY 31, 2009 (unaudited)
| Shares | Description | Value(a) | |||||||||
| INVESTMENTS IN
RUSSIAN SECURITIES - 49.2% |
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| COMMERCIAL BANKS - 5.7% | |||||||||||
| 18,500,000 | Sberbank | $ | 25,345,000 | ||||||||
| CONSTRUCTION
MATERIALS - 0.5% |
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| 504,000 | LSR Group (GDR) Reg S* | 2,016,000 | |||||||||
| DIVERSIFIED
FINANCIAL SERVICES - 0.0% |
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| 52,000 | Vostok Nafta
Investment (SDR)* |
188,390 | |||||||||
| DIVERSIFIED
TELECOMMUNICATION - 2.9% |
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| 800,000 | Comstart United
Telesysems (GDR) Reg S |
4,000,000 | |||||||||
| 90,100 | Rostelecom (ADR)+ | 2,703,000 | |||||||||
| 500,000 | Vimpel
Communications (ADR)* |
6,332,800 | |||||||||
| 13,035,800 | |||||||||||
| ELECTRIC UTILITIES - 0.1% | |||||||||||
| 216,633 | OJSC Fifth Power
Generation (GDR)* |
454,713 | |||||||||
| ELECTRIC-INTEGRATED - 0.8% | |||||||||||
| 100,000,000 | RusHydro* | 3,470,000 | |||||||||
| ENERGY
EQUIPMENT & SERVICES - 0.6% |
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| 1,270,371 | Integra Group Holdings (GDR)* | 2,667,779 | |||||||||
| FOOD PRODUCTS - 1.2% | |||||||||||
| 80,000 | Wimm Bill Dann
Foods (ADR)*+ |
5,388,184 | |||||||||
| MEDIA - 0.9% | |||||||||||
| 350,000 | CTC Media*+ | 4,245,500 | |||||||||
| METALS & MINING - 5.3% | |||||||||||
| 4,650,000 | Kuzbassrazrezugol* | 825,375 | |||||||||
| 500,000 | Magnitogorsk Iron
& Steel Works* |
3,900,000 | |||||||||
| 1,550,000 | MMC Norilsk Nickel (ADR)* | 15,523,250 | |||||||||
| 1,300,000 | Raspadskaya* | 3,380,000 | |||||||||
| 23,628,625 | |||||||||||
| Shares | Description | Value(a) | |||||||||
| OIL, GAS &
CONSUMABLE FUELS - 26.7% |
|||||||||||
| 3,198,000 | Gazprom | $ | 16,149,900 | ||||||||
| 1,033,774 | Gazprom (ADR) | 21,192,367 | |||||||||
| 300,000 | LUKOIL | 15,030,000 | |||||||||
| 405,000 | LUKOIL (ADR) | 20,452,500 | |||||||||
| 140,000 | NovaTek OAO (GDR) Reg S | 6,035,400 | |||||||||
| 4,300,000 | Rosneft Oil
Company (GDR) Reg S |
26,273,000 | |||||||||
| 1,450,000 | Surgutneftegaz (ADR)+ | 11,179,500 | |||||||||
| 133,333 | Tatneft (GDR) Reg S* | 3,226,659 | |||||||||
| 52,000 | Vostok Gas*+ | 1,570 | |||||||||
| 119,540,896 | |||||||||||
| WIRELESS
TELECOMMUNICATION SERVICES - 3.6% |
|||||||||||
| 1,200,000 | Mobile Telesystems | 6,660,000 | |||||||||
| 125,000 | Mobile Telesystems (ADR) | 5,174,112 | |||||||||
| 100,000 | Mobile
Telesystems (GDR) Reg S |
4,139,290 | |||||||||
| 15,973,402 | |||||||||||
| Total Common
Stocks (cost $208,521,227) |
215,954,289 | ||||||||||
| PREFERRED STOCKS - 0.9% | |||||||||||
| OIL, GAS &
CONSUMABLE FUELS - 0.9% |
|||||||||||
| 1,320,000 | Surgutneftegaz
(ADR) (cost $6,310,195) |
4,111,972 | |||||||||
| Total Investments
in Russian Securities (cost $214,831,422) |
220,066,261 | ||||||||||
| INVESTMENTS IN
POLISH COMMON STOCKS - 13.8% |
|||||||||||
| COMMERCIAL BANKS - 7.2% | |||||||||||
| 300,000 | Bank Pekao* | 14,944,574 | |||||||||
| 1,505,000 | Powszechna Kasa
Oszczednosci Bank Polski+ |
17,151,892 | |||||||||
| 32,096,466 | |||||||||||
| DIVERSIFIED
TELECOMMUNICATION - 2.8% |
|||||||||||
| 2,500,000 | Telekomunikacja Polska | 12,736,075 | |||||||||
| METALS & MINING - 2.8% | |||||||||||
| 425,000 | KGHM Polska Miedz | 12,577,836 | |||||||||
The accompanying notes are an integral part of the financial
statements.
6
THE CENTRAL EUROPE AND RUSSIA FUND, INC.
SCHEDULE OF INVESTMENTS -
JULY 31, 2009 (unaudited) (continued)
| Shares | Description | Value(a) | |||||||||
| INVESTMENTS IN
POLISH COMMON STOCKS - (continued) |
|||||||||||
| OIL, GAS &
CONSUMABLE FUELS - 1.0% |
|||||||||||
| 460,000 | Polski Koncern Naftowy Orlen* | $ | 4,475,982 | ||||||||
| Total Investments
in Polish Common Stocks (cost $47,675,793) |
61,886,359 | ||||||||||
| INVESTMENTS IN
TURKISH COMMON STOCKS - 13.6% |
|||||||||||
| AUTOMOBILES - 1.0% | |||||||||||
| 2,100,000 | Tofas Turk Otomobil Fabrikasi | 4,362,901 | |||||||||
| COMMERCIAL BANKS - 5.3% | |||||||||||
| 2,800,000 | Turkiye Garanti Bankasi* | 9,821,248 | |||||||||
| 1,700,000 | Turkiye Halk Bankasi | 9,001,686 | |||||||||
| 837,894 | Turkiye IS Bankasi | 2,882,468 | |||||||||
| 3,000,000 | Turkiye Sinai
Kalkinma Bankasi |
2,165,261 | |||||||||
| 23,870,663 | |||||||||||
| CONSTRUCTION
& ENGINEERING - 0.8% |
|||||||||||
| 1,246,735 | Tekfen Holding | 3,347,052 | |||||||||
| CONSTRUCTION
MATERIALS - 0.2% |
|||||||||||
| 415,645 | Akcansa Cimento | 1,093,434 | |||||||||
| DIVERSIFIED
OPERATIONS - 0.5% |
|||||||||||
| 1,000,000 | KOC Holding | 2,333,895 | |||||||||
| FOOD &
STAPLES RETAILING - 0.7% |
|||||||||||
| 75,000 | Bim Birlesik Magazalar | 2,934,233 | |||||||||
| INDUSTRIAL
CONGLOMERATES - 0.6% |
|||||||||||
| 750,000 | Enka Insaat VE Sanayi | 2,529,511 | |||||||||
| INSURANCE - 1.9% | |||||||||||
| 2,000,000 | Aksigorta | 6,016,863 | |||||||||
| 1,300,000 | Anadolu Hayat Emeklilik | 2,472,850 | |||||||||
| 8,489,713 | |||||||||||
| OIL, GAS &
CONSUMABLE FUELS - 0.6% |
|||||||||||
| 200,000 | Tupras-Turkiye Petrol Rafinerileri | 2,563,238 | |||||||||
| Shares | Description | Value(a) | |||||||||
| TELECOM SERVICES - 0.4% | |||||||||||
| 600,000 | Turk Telekomunikasyon | $ | 1,813,153 | ||||||||
| WIRELESS
TELECOMMUNICATION SERVICES - 1.6% |
|||||||||||
| 1,150,000 | Turkcell Iletism Hizmetleri | 7,252,951 | |||||||||
| Total Investments
in Turkish Common Stocks (cost $47,181,891) |
60,590,744 | ||||||||||
| INVESTMENTS IN
CZECH REPUBLIC COMMON STOCKS - 10.9% |
|||||||||||
| COMMERCIAL BANKS - 1.9% | |||||||||||
| 50,000 | Komercni Banka | 8,567,556 | |||||||||
| DIVERSIFIED
TELECOMMUNICATION - 3.0% |
|||||||||||
| 490,000 | Telefonica O2 Czech Republic | 13,284,276 | |||||||||
| ELECTRIC UTILITIES - 5.4% | |||||||||||
| 450,000 | Ceske Energeticke Zavody | 24,051,123 | |||||||||
| MINING SERVICES - 0.6% | |||||||||||
| 400,000 | New World Resources | 2,560,584 | |||||||||
| Total Investments
in Czech Republic Common Stocks (cost $19,102,731) |
48,463,539 | ||||||||||
| INVESTMENTS IN
HUNGARIAN COMMON STOCKS - 4.1% |
|||||||||||
| COMMERCIAL BANKS - 1.2% | |||||||||||
| 250,000 | OTP Bank*+ | 5,307,937 | |||||||||
| DIVERSIFIED
TELECOMMUNICATION - 1.4% |
|||||||||||
| 1,800,000 | Magyar Telekom
Telecommunications Plc |
6,498,540 | |||||||||
| PHARMACEUTICALS - 1.5% | |||||||||||
| 30,000 | Richter Gedeon Nyrt. | 5,885,320 | |||||||||
| 4,300 | Richter Gedeon Nyrt. (GDR) | 823,880 | |||||||||
| 6,709,200 | |||||||||||
| Total Investments
in Hungarian Common Stocks (cost $9,918,909) |
18,515,677 | ||||||||||
The accompanying notes are an integral part of the financial
statements.
7
THE CENTRAL EUROPE AND RUSSIA FUND, INC.
SCHEDULE OF INVESTMENTS -
JULY 31, 2009 (unaudited) (continued)
| Shares | Description | Value(a) | |||||||||
| INVESTMENTS IN
AUSTRIAN WARRANTS - 2.8% |
|||||||||||
| COMMERCIAL BANKS - 2.8% | |||||||||||
| 400,000 | Erste Group Bank
(issuer Morgan Stanley), Expiration Date 5/25/2010 (cost $9,373,733) |
$ | 12,549,208 | ||||||||
| INVESTMENTS IN
KAZAKHSTAN COMMON STOCKS - 1.2% |
|||||||||||
| OIL, GAS &
CONSUMABLE FUELS - 1.2% |
|||||||||||
| 250,000 | KazMunaiGas
Exploration Production (GDR) Reg S (cost $3,344,175) |
5,387,500 | |||||||||
| Total Investments
in Common and Preferred Stocks - 95.6% (cost $351,428,654) |
427,459,288 | ||||||||||
| SECURITIES
LENDING COLLATERAL - 6.9% |
|||||||||||
| 30,869,208 | Daily Assets Fund
Institutional, 0.39% (cost $30,869,208)(b)(c) |
30,869,208 | |||||||||
| CASH EQUIVALENTS - 1.3% | |||||||||||
| 5,777,827 | Cash Management
QP Trust, 0.27% (cost $5,777,827)(c) |
5,777,827 | |||||||||
| Total Investments
- 103.8% (cost $388,075,689) |
464,106,323 | ||||||||||
| Other Assets and
Liabilities, Net - (3.8%) |
(17,171,029 | ) | |||||||||
| NET ASSETS-100.0% | $ | 446,935,294 | |||||||||
* Non-income producing securities.
+ All or a portion of these securities were on loan. The value of all securities loaned at July 31, 2009 amounted to $29,510,943 which is 6.6% of the net assets.
(a) Values stated in US dollars.
(b) Represents collateral held in connection with securities lending. Income earned by the fund is net of borrower rebates.
(c) Affiliated fund managed by Deutsche Investment Management Americas Inc. The rate shown is the annualized seven-day yield at period end.
ADR - American Depositary Receipt
GDR - Global Depositary Receipt
SDR - Swedish Depositary Receipt
The accompanying notes are an integral part of the financial
statements.
8
THE CENTRAL EUROPE AND RUSSIA FUND, INC.
SCHEDULE OF INVESTMENTS -
JULY 31, 2009 (unaudited) (continued)
Fair Value Measurements
Financial Accounting Standards Board Statement of Financial Accounting Standards No. 157, "Fair Value Measurements", as amended, establishes a three-tier hierarchy for measuring fair value and requires additional disclosure about the classification of fair value measurements.
Various inputs are used in determining the value of the Fund's investments. These inputs are summarized in three broad levels. Level 1 includes quoted prices in active markets for identical securities. Level 2 includes other significant unobservable inputs (including quoted prices for similar securities, interest rates, prepayment speeds and credit risk). Level 3 includes significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments). The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The following is a summary of the inputs used as of July 31, 2009 in valuing the Fund's investments. Please see below for information on the Fund's policy regarding valuation inputs, and their aggregate levels used in the table below:
| Category | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||
| Common Stocks and/or Other Equity Investments(d) | |||||||||||||||||||
| Russia | $ | 220,066,261 | $ | 0 | $ | 0 | $ | 220,066,261 | |||||||||||
| Poland | 61,886,359 | 0 | 0 | 61,886,359 | |||||||||||||||
| Turkey | 60,590,744 | 0 | 0 | 60,590,744 | |||||||||||||||
| Czech Republic | 48,463,539 | 0 | 0 | 48,463,539 | |||||||||||||||
| Hungary | 18,515,677 | 0 | 0 | 18,515,677 | |||||||||||||||
| Kazakhstan | 5,387,500 | 0 | 0 | 5,387,500 | |||||||||||||||
| Austria | 0 | 0 | 12,549,208 | 12,549,208 | |||||||||||||||
| Short-Term Instruments(d) | 29,510,943 | 5,777,827 | (e) | 0 | 35,288,770 | ||||||||||||||
| Total | $ | 444,421,023 | $ | 5,777,827 | $ | 12,549,208 | $ | 462,748,058 | |||||||||||
(d) See Investment Portfolio for additional detailed categorizations.
(e) Investment in Cash Management QP Trust, an affiliated fund, is reflected as Level 2 since it is available only to affiliated funds.
The following is a reconciliation of the Portfolio's Level 3 investments for which significant unobservable inputs were used in determining value:
| Common Stock
and/or Other Equity Investments |
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| Level 3 Reconciliation | Austria | ||||||
| Balance as of April 30, 2009 | $ | - | |||||
| Realized gains (loss) | - | ||||||
| Change in unrealized appreciation (depreciation) | - | ||||||
| Amortization premium/discount | - | ||||||
| Net purchases (sales) | 12,549,208 | ||||||
| Net transfers in (out) of Level 3 | - | ||||||
| Balance as of July 31, 2009 | $ | 12,549,208 | |||||
| Net change in unrealized appreciation (depreciation) from investments still held as of July 31, 2009 | $ | 3,175,475 | |||||
The accompanying notes are an integral part of the financial
statements.
9
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ITEM 2. |
CONTROLS AND PROCEDURES |
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(a) The Chief Executive and Financial Officers concluded that the Registrant’s Disclosure Controls and Procedures are effective based on the evaluation of the Disclosure Controls and Procedures as of a date within 90 days of the filing date of this report. |
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(b) There have been no changes in the registrant’s internal control over financial reporting that occurred during the registrant’s last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal controls over financial reporting. |
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ITEM 3. |
EXHIBITS |
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Certification pursuant to Rule 30a-2(a) under the Investment Company Act of 1940 (17 CFR 270.30a-2(a)) is filed and attached hereto as Exhibit 99.CERT. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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Registrant: |
The Central Europe & Russia Fund, Inc. |
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By: |
/s/Michael G. Clark Michael G. Clark President |
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Date: |
September 23, 2009 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
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Registrant: |
The Central Europe & Russia Fund, Inc. |
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By: |
/s/Michael G. Clark Michael G. Clark President |
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Date: |
September 23, 2009 |
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By: |
/s/Paul Schubert Paul Schubert Chief Financial Officer and Treasurer |
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Date: |
September 23, 2009 |