nq013110cerf.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: 1/31/10
  
 ITEM 1.  SCHEDULE OF INVESTMENTS
 
 
THE CENTRAL EUROPE AND RUSSIA FUND, INC.
 
 
SCHEDULE OF INVESTMENTS — JANUARY 31, 2010 (unaudited)
 
Shares
  
Description
  
Value(a)
  
INVESTMENTS IN RUSSIAN
SECURITIES – 67.2%
      
   
COMMON STOCKS – 66.1%
  
   
COMMERCIAL BANKS – 9.7%
  
 
18,500,000
    
Sberbank
  
$
53,927,500
    
   
CONSTRUCTION
MATERIALS – 0.7%
  
 
504,000
    
LSR Group (GDR) Reg S*
    
4,132,800
    
   
DIVERSIFIED
TELECOMMUNICATION – 3.2%
  
 
800,000
    
Comstar United Telesystems
(GDR) Reg S
    
4,776,000
    
 
700,000
    
Vimpel Communications (ADR)
    
13,018,810
    
     
17,794,810
    
   
ELECTRIC-INTEGRATED – 1.5%
  
 
216,633
    
OJSC Enel OGK-5 (GDR)*
    
893,394
    
 
1,750,000
    
RusHydro (ADR)*
    
7,630,000
    
     
8,523,394
    
   
ENERGY EQUIPMENT &
SERVICES – 0.8%
  
 
1,270,371
    
Integra Group Holdings (GDR)*
    
4,382,780
    
   
FOOD & STAPLES
RETAILING – 0.7%
  
 
297,710
    
Magnit (GDR) (144A)*
    
4,054,959
    
   
FOOD PRODUCTS – 0.9%
  
 
240,000
    
Wimm Bill Dann Foods (ADR)*†
    
4,877,808
    
   
MEDIA – 0.8%
  
 
350,000
    
CTC Media*
    
4,749,500
    
   
METALS & MINING – 8.8%
  
 
100,000
    
Evraz Group S.A. (GDR)*
    
3,320,000
    
 
276,100
    
Magnitogorsk Iron & Steel
Works (GDR)*
    
3,495,426
    
 
300,000
    
Mechel Steel Group
    
6,324,000
    
 
1,850,000
    
MMC Norilsk Nickel (ADR)*
    
28,767,500
    
 
1,300,000
    
Raspadskaya*
    
7,169,500
    
     
49,076,426
    
   
OIL, GAS & CONSUMABLE
FUELS – 34.9%
  
 
3,198,000
    
Gazprom
    
19,188,000
    
 
2,133,774
    
Gazprom (ADR)
    
52,512,178
    
 
300,000
    
LUKOIL
    
16,200,000
    
 
540,000
    
LUKOIL (ADR)†
    
29,889,000
    
 

 
Shares
  
Description
  
Value(a)
  
 
400,000
    
NovaTek OAO (GDR) Reg S
  
$
28,600,000
    
 
300,000
    
Rosneft Oil
    
2,295,000
    
 
4,000,000
    
Rosneft Oil (GDR) Reg S
    
31,160,000
    
 
1,000,000
    
Surgutneftegaz (ADR)†
    
8,477,000
    
 
200,000
    
Tatneft (ADR)*
    
6,240,000
    
 
52,000
    
Vostok Gas*†
    
1,558
    
     
194,562,736
    
   
WIRELESS TELECOMMUNICATION
SERVICES – 4.1%
  
 
1,200,000
    
Mobile Telesystems
    
9,180,000
    
 
130,000
    
Mobile Telesystems (ADR)
    
6,258,265
    
 
100,000
    
Mobile Telesystems (GDR) Reg S
    
4,814,050
    
 
100,000
    
Sistema JSFC (GDR) Reg S*
    
2,500,000
    
     
22,752,315
    
       
Total Common Stocks
(cost $265,675,686)
    
368,835,028
    
   
PREFERRED STOCKS – 1.1%
  
   
OIL, GAS & CONSUMABLE
FUELS – 1.1%
  
 
1,320,000
    
Surgutneftegaz (ADR)†
(cost $6,310,195)
    
6,226,427
    
       
Total Investments in
Russian Securities
(cost $271,985,881)
    
375,061,455
    
INVESTMENTS IN TURKISH
COMMON STOCKS – 17.7%
      
   
AUTOMOBILES – 0.9%
  
 
1,300,000
    
Tofas Turk Otomobil Fabrikasi
    
5,015,096
    
   
COMMERCIAL BANKS – 7.2%
  
 
2,500,000
    
Sekerbank TAS*
    
4,360,953
    
 
3,500,000
    
Turkiye Garanti Bankasi
    
14,911,103
    
 
1,000,000
    
Turkiye Halk Bankasi
    
6,910,433
    
 
1,825,000
    
Turkiye IS Bankasi
    
8,142,402
    
 
2,500,000
    
Yapi ve Kredi Bankasi*
    
6,105,334
    
     
40,430,225
    
   
COMMERCIAL SERVICES &
SUPPLIES – 0.3%
  
 
450,000
    
Koza Anadolu Metal Madencilik
Isletmeleri*
    
1,569,943
    
   
CONSTRUCTION &
ENGINEERING – 1.2%
  
 
1,750,000
    
Tekfen Holding*
    
6,633,680
    
 


 
 
 
THE CENTRAL EUROPE AND RUSSIA FUND, INC.
 
 
SCHEDULE OF INVESTMENTS — JANUARY 31, 2010 (unaudited) (continued)
 
Shares
  
Description
  
Value(a)
  
INVESTMENTS IN TURKISH
COMMON STOCKS – (continued)
      
   
CONSTRUCTION
MATERIALS – 0.6%
  
 
650,000
    
Akcansa Cimento
  
$
3,248,910
    
   
DIVERSIFIED FINANCIAL
SERVICES – 0.7%
  
 
930,809
    
Haci Omer Sabanci Holding*
    
4,027,989
    
   
FOOD & STAPLES
RETAILING – 0.6%
  
 
75,000
    
Bim Birlesik Magazalar
    
3,446,830
    
   
HOUSEWARES – 0.6%
  
 
2,500,000
    
Turk Sise ve Cam Fabrikalari*
    
3,270,714
    
   
INDUSTRIAL
CONGLOMERATES – 0.9%
  
 
1,100,000
    
Enka Insaat ve Sanayi
    
5,202,952
    
   
INSURANCE – 0.8%
  
 
1,300,000
    
Anadolu Hayat Emeklilik
    
4,308,621
    
   
OIL, GAS & CONSUMABLE
FUELS – 0.6%
  
 
900,000
    
Turcas Petrolculuk
    
3,230,459
    
   
TELECOM SERVICES – 1.6%
  
 
2,600,000
    
Turk Telekomunikasyon
    
9,070,782
    
   
TRANSPORTATION
INFRASTRUCTURE – 0.8%
  
 
1,000,000
    
TAV Havalimanlari Holding*
    
4,159,678
    
   
WIRELESS TELECOMMUNICATION
SERVICES – 0.9%
  
 
700,000
    
Turkcell Iletism Hizmetleri
    
5,166,052
    
       
Total Investments in Turkish
Common Stocks
(cost $65,348,280)
    
98,781,931
    
INVESTMENTS IN POLISH
COMMON STOCKS – 7.7%
      
   
COMMERCIAL BANKS – 4.7%
  
 
200,000
    
Bank Pekao*
    
11,784,976
    
 
1,075,000
    
Powszechna Kasa Oszczednosci
Bank Polski
    
14,539,542
    
     
26,324,518
    
 

 
Shares
  
Description
  
Value(a)
  
   
DIVERSIFIED
TELECOMMUNICATION – 0.9%
  
 
900,000
    
Telekomunikacja Polska
  
$
5,039,628
    
   
ELECTRIC UTILITIES – 0.9%
  
 
600,000
    
Polska Grupa Energetyczna*†
    
4,879,393
    
   
METALS & MINING – 1.2%
  
 
200,000
    
KGHM Polska Miedz
    
6,685,045
    
       
Total Investments in Polish
Common Stocks
(cost $25,160,805)
    
42,928,584
    
INVESTMENTS IN CZECH REPUBLIC
COMMON STOCKS – 3.4%
      
   
COMMERCIAL BANKS – 0.4%
  
 
10,000
    
Komercni Banka
    
2,028,284
    
   
ELECTRIC UTILITIES – 2.2%
  
 
255,000
    
Ceske Energeticke Zavody
    
12,472,753
    
   
MINING SERVICES – 0.8%
  
 
400,000
    
New World Resources†
    
4,234,143
    
       
Total Investments in Czech
Republic Common Stocks
(cost $4,062,401)
    
18,735,180
    
INVESTMENTS IN HUNGARIAN
COMMON STOCKS – 3.2%
      
   
COMMERCIAL BANKS – 2.7%
  
 
500,000
    
OTP Bank*†
    
14,984,114
    
   
OIL, GAS & CONSUMABLE
FUELS – 0.5%
  
 
30,000
    
MOL Hungarian Oil &
Gas NyRt*
    
2,804,909
    
       
Total Investments in Hungarian
Common Stocks
(cost $11,381,453)
    
17,789,023
    
       
Total Investments in Common
and Preferred Stocks – 99.2%
(cost $377,938,820)
    
553,296,173
    
 


 
 
 
THE CENTRAL EUROPE AND RUSSIA FUND, INC.
 
 
SCHEDULE OF INVESTMENTS — JANUARY 31, 2010 (unaudited) (continued)
 
Shares
  
Description
  
Value(a)
  
SECURITIES LENDING
COLLATERAL – 6.0%
  
 
33,816,103
    
Daily Assets Fund
Institutional, 0.17%
(cost $33,816,103)(b)(c)
  
$
33,816,103
    
CASH EQUIVALENTS – 0.1%
  
 
734,754
    
Central Cash Management
Fund, 0.17%
(cost $734,754)(c)
    
734,754
    
   
Total Investments – 105.3%
(cost $412,489,677)**
    
587,847,030
    
   
Other Assets and Liabilities,
Net – (5.3%)
    
(29,753,913
)
  
   
NET ASSETS – 100.0%
  
$
558,093,117
    
 
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 securities.
 
 
** The cost for federal income tax purposes was $412,645,387. At January 31, 2010, net unrealized appreciation for all securities based on tax cost was $175,201,643. This consisted of aggregate gross unrealized appreciation for all securities in which there was an excess of value over tax cost of $191,506,589 and aggregate gross unrealized depreciation for all securities in which there was an excess of tax cost over value of $16,304,946.
 
 
† All or a portion of these securities were on loan. The value of all securities loaned at January 31, 2010 amounted to $32,357,225 which is 5.8% 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 — JANUARY 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 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 January 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
  
$
375,061,455
    
$
0
    
$
0
    
$
375,061,455
  
Turkey
    
98,781,931
      
0
      
0
      
98,781,931
  
Poland
    
42,928,584
      
0
      
0
      
42,928,584
  
Czech Republic
    
18,735,180
      
0
      
0
      
18,735,180
  
Hungary
    
17,789,023
      
0
      
0
      
17,789,023
  
Short-Term Investments
    
34,550,857
      
0
      
0
      
34,550,857
  
Total
  
$
587,847,030
    
$
0
    
$
0
    
$
587,847,030
  
 
(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:
March 25, 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.

Registrant:
The Central Europe and Russia Fund, Inc.
   
By:
/s/Michael G. Clark
Michael G. Clark
President
   
Date:
March 25, 2010
   
   
   
By:
/s/Paul Schubert
Paul Schubert
Chief Financial Officer and Treasurer
   
Date:
March 25, 2010