nq073110cerf.htm

 
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 and 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: 7/31/10

ITEM 1.
SCHEDULE OF INVESTMENTS
 
THE CENTRAL EUROPE AND RUSSIA FUND, INC.
 
 
SCHEDULE OF INVESTMENTS — JULY 31, 2010 (unaudited)
 
Shares
  
Description
  
Value(a)
  
INVESTMENTS IN RUSSIAN
SECURITIES – 65.3%
      
   
COMMON STOCKS – 64.1%
  
   
COMMERCIAL BANKS – 9.7%
  
 
18,500,000
    
Sberbank
  
$
51,800,000
    
   
CONSTRUCTION
MATERIALS – 1.8%
  
 
1,083,420
    
LSR Group (GDR) Reg S*
    
9,859,122
    
   
ELECTRIC UTILITIES – 1.9%
  
 
216,633
    
OJSC Enel OGK-5 (GDR)*
    
904,876
    
 
1,750,000
    
RusHydro (ADR)*
    
9,135,000
    
     
10,039,876
    
   
FOOD & STAPLES
RETAILING – 0.9%
  
 
247,710
    
Magnit (GDR) (144A)*
    
4,862,894
    
   
FOOD PRODUCTS – 0.7%
  
 
200,000
    
Wimm Bill Dann Foods (ADR)
    
3,855,560
    
   
MEDIA – 1.2%
  
 
350,000
    
CTC Media†
    
6,209,000
    
   
METALS & MINING – 8.6%
  
 
276,100
    
Magnitogorsk Iron &
Steel Works (GDR)
    
2,945,987
    
 
500,000
    
Mechel Steel Group†
    
10,895,000
    
 
1,650,000
    
MMC Norilsk Nickel (ADR)*†
    
27,048,450
    
 
1,300,000
    
Raspadskaya*
    
5,083,000
    
     
45,972,437
    
   
OIL, GAS & CONSUMABLE
FUELS – 32.7%
  
 
3,198,000
    
Gazprom
    
16,789,500
    
 
2,133,774
    
Gazprom (ADR)†
    
46,046,843
    
 
300,000
    
LUKOIL
    
16,950,000
    
 
540,000
    
LUKOIL (ADR)
    
30,915,000
    
 
400,000
    
NovaTek OAO (GDR) Reg S
    
30,000,000
    
 
300,000
    
Rosneft Oil
    
1,959,000
    
 
2,800,000
    
Rosneft Oil (GDR) Reg S*
    
18,704,000
    
 
650,000
    
Surgutneftegaz (ADR)†
    
6,591,000
    
 
200,000
    
Tatneft (ADR)
    
6,230,000
    
 
52,000
    
Vostok Gas*†
    
1,583
    
     
174,186,926
    
 
 
 

 
 
 

 

 
Shares
  
Description
  
Value(a)
  
   
WIRELESS TELECOMMUNICATION
SERVICES – 6.6%
  
 
1,200,000
    
Mobile Telesystems
  
$
9,420,000
    
 
325,000
    
Mobile Telesystems (ADR)†
    
7,035,762
    
 
250,000
    
Mobile Telesystems
(GDR) Reg S
    
5,412,125
    
 
200,000
    
Sistema JSFC (GDR) Reg S
    
4,848,000
    
 
525,000
    
VimpelCom Ltd. (ADR)*
    
8,354,693
    
     
35,070,580
    
       
Total Common Stocks
(cost $235,737,239)
    
341,856,395
    
   
PREFERRED STOCKS – 1.2%
  
   
OIL, GAS & CONSUMABLE
FUELS – 1.2%
  
 
1,320,000
    
Surgutneftegaz (ADR)†
(cost $6,310,195)
    
6,118,358
    
       
Total Investments in
Russian Securities
(cost $242,047,434)
    
347,974,753
    
INVESTMENTS IN TURKISH
COMMON STOCKS – 17.2%
      
   
AIRLINES – 0.6%
  
 
1,142,857
    
Turk Hava Yollari*
    
3,306,035
    
   
AUTOMOBILES – 0.5%
  
 
650,000
    
Tofas Turk Otomobil Fabrikasi
    
2,479,764
    
   
BUILDING PRODUCTS – 0.5%
  
 
2,000,000
    
Trakya Cam Sanayi
    
2,892,781
    
   
COMMERCIAL BANKS – 6.0%
  
 
3,000,000
    
Turkiye Garanti Bankasi
    
15,525,478
    
 
500,000
    
Turkiye Halk Bankasi
    
4,047,240
    
 
2,141,663
    
Turkiye IS Bankasi
    
8,028,394
    
 
1,400,000
    
Yapi ve Kredi Bankasi*
    
4,254,246
    
     
31,855,358
    
   
CONSTRUCTION &
ENGINEERING – 1.5%
  
 
2,400,000
    
Tekfen Holding
    
8,041,401
    
   
CONSTRUCTION
MATERIALS – 0.6%
  
 
600,000
    
Akcansa Cimento
    
2,925,955
    
 
 
 

 
 
 

 

 
 
THE CENTRAL EUROPE AND RUSSIA FUND, INC.
 
 
SCHEDULE OF INVESTMENTS — JULY 31, 2010 (unaudited) (continued)
 
Shares
  
Description
  
Value(a)
  
INVESTMENTS IN TURKISH
COMMON STOCKS – (continued)
      
   
DIVERSIFIED FINANCIAL
SERVICES – 0.8%
  
 
930,809
    
Haci Omer Sabanci Holding
  
$
4,323,025
    
   
DIVERSIFIED
TELECOMMUNICATIONS – 1.8%
  
 
2,600,000
    
Turk Telekomunikasyon
    
9,746,550
    
   
FOOD & STAPLES
RETAILING – 0.9%
  
 
150,000
    
Bim Birlesik Magazalar
    
4,602,906
    
   
INDUSTRIAL
CONGLOMERATES – 0.9%
  
 
1,344,444
    
Enka Insaat ve Sanayi
    
4,950,680
    
   
INSURANCE – 0.7%
  
 
1,300,000
    
Anadolu Hayat Emeklilik
    
3,881,370
    
   
METALS & MINING – 0.4%
  
 
275,000
    
Koza Altin Isletmeleri
    
2,390,194
    
   
OIL, GAS & CONSUMABLE
FUELS – 0.6%
  
 
900,000
    
Turcas Petrolculuk
    
3,134,952
    
   
TRANSPORTATION
INFRASTRUCTURE – 0.6%
  
 
700,000
    
TAV Havalimanlari Holding*
    
2,972,399
    
   
WIRELESS TELECOMMUNICATION
SERVICES – 0.8%
  
 
700,000
    
Turkcell Iletism Hizmetleri
    
4,110,271
    
       
Total Investments in Turkish
Common Stocks
(cost $57,900,053)
    
91,613,641
    
INVESTMENTS IN POLISH
COMMON STOCKS – 8.4%
      
   
COMMERCIAL BANKS – 4.6%
  
 
200,000
    
Bank Pekao
    
10,668,836
    
 
1,075,000
    
Powszechna Kasa Oszczednosci
Bank Polski
    
13,715,216
    
     
24,384,052
    
   
DIVERSIFIED
TELECOMMUNICATIONS – 1.9%
  
 
2,000,000
    
Telekomunikacja Polska
    
10,356,387
    
 
 
 

 
 
 

 

 
Shares
  
Description
  
Value(a)
  
   
METALS & MINING – 1.3%
  
 
200,000
    
KGHM Polska Miedz
  
$
6,945,484
    
   
OIL, GAS & CONSUMABLE
FUELS – 0.6%
  
 
275,000
    
Grupa Lotos S.A.*
    
2,893,654
    
       
Total Investments in Polish
Common Stocks
(cost $28,500,984)
    
44,579,577
    
INVESTMENTS IN CZECH REPUBLIC
COMMON STOCKS – 3.6%
      
   
DIVERSIFIED
TELECOMMUNICATIONS – 0.5%
  
 
125,000
    
Telefonica O2 Czech Republic
    
2,855,080
    
   
ELECTRIC UTILITIES – 2.2%
  
 
255,000
    
Ceske Energeticke Zavody
    
11,650,065
    
   
METALS & MINING – 0.9%
  
 
400,000
    
New World Resources*†
    
4,704,647
    
       
Total Investments in Czech
Republic Common Stocks
(cost $5,387,649)
    
19,209,792
    
INVESTMENTS IN HUNGARIAN
COMMON STOCKS – 2.7%
      
   
COMMERCIAL BANKS – 2.2%
  
 
500,000
    
OTP Bank*†
    
11,998,075
    
   
OIL, GAS & CONSUMABLE
FUELS – 0.5%
  
 
30,000
    
MOL Hungarian Oil &
Gas NyRt*
    
2,698,020
    
       
Total Investments in Hungarian
Common Stocks
(cost $11,381,452)
    
14,696,095
    
       
Total Investments in Common
and Preferred Stocks – 97.2%
(cost $345,217,572)
    
518,073,858
    
 
 
 
 

 
 

 
 
 

 
THE CENTRAL EUROPE AND RUSSIA FUND, INC.
 
 
SCHEDULE OF INVESTMENTS — JULY 31, 2010 (unaudited) (continued)
 
Shares
  
Description
  
Value(a)
  
SECURITIES LENDING
COLLATERAL – 7.9%
  
 
42,385,169
    
Daily Assets Fund
Institutional, 0.33%
(cost $42,385,169)(b)(c)
  
$
42,385,169
    
CASH EQUIVALENTS – 0.2%
  
 
1,068,739
    
Central Cash Management
Fund, 0.25%
(cost $1,068,739)(c)
    
1,068,739
    
   
Total Investments – 105.3%
(cost $388,671,480)
    
561,527,766
    
   
Other Assets and Liabilities,
Net – (5.3%)
    
(28,319,151
)
  
   
NET ASSETS–100.0%
  
$
533,208,615
    
 
 
 
 
For information on the Fund's policies regarding the valuation of investments and other significant accounting policies, please refer to the Fund's most recent semi-annual or annual financial statements.
 
 
*  Non-income producing security.
 
 
**  The cost for federal income tax purposes was $388,827,190. At July 31, 2010, net unrealized appreciation for all securities based on tax cost was $172,700,576. This consisted of aggregate gross unrealized appreciation for all securities in which there was an excess of value over tax cost of $181,892,092 and aggregate gross unrealized depreciation for all securities in which there was an excess of tax cost over value of $9,191,516.
 
 
†  All or a portion of these securities were on loan. The value of all securities loaned at January 31, 2010 amounted to $41,012,886, which is 7.7% of the net assets.
 
 
(a)  Value 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
 
 
Reg S – Securities sold under Regulation S may not be offered, sold or delivered within the United States or to, or for the account or benefit of, US persons, except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act of 1933.
 
 
144A – Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.
 
 
 
 

 
THE CENTRAL EUROPE AND RUSSIA FUND, INC.
 
 
SCHEDULE OF INVESTMENTS — JULY 31, 2010 (unaudited) (continued)
 
 
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 observable 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, 2010 in valuing the Fund's investments.
 
Category
  
Level 1
  
Level 2
  
Level 3
  
Total
  
Common Stocks and/or Other Equity Investments(d)
  
Russia
  
$
347,974,753
    
$
—
    
$
—
    
$
347,974,753
    
Turkey
    
91,613,641
      
—
      
—
      
91,613,641
    
Poland
    
44,579,577
      
—
      
—
      
44,579,577
    
Czech Republic
    
19,209,792
      
—
      
—
      
19,209,792
    
Hungary
    
14,696,095
      
—
      
—
      
14,696,095
    
Short-Term Instruments
    
43,453,908
      
—
      
—
      
43,453,908
    
Total
  
$
561,527,766
    
$
—
    
$
—
    
$
561,527,766
    
 
 
 
 
There have been no transfers in and out of Level 1 and Level 2 fair value measurements during the period ended July 31, 2010.
 
 
(d)  See Schedule of Investments for additional detailed categorizations.
 
 

 

 
 
 

 

 
ITEM 2.
CONTROLS AND PROCEDURES
   
 
(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.
   
 
(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.
   
ITEM 3.
EXHIBITS
   
 
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.

Registrant:
The Central Europe and Russia Fund, Inc.
   
By:
/s/Michael G. Clark
Michael G. Clark
President
   
Date:
September 24, 2010


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.


By:
/s/Michael G. Clark
Michael G. Clark
President
   
Date:
September 24, 2010
   
   
   
By:
/s/Paul Schubert
Paul Schubert
Chief Financial Officer and Treasurer
   
Date:
September 24, 2010