nq013113cerf.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
60 Wall Street
New York, NY 10005
(Name and address of agent for service)
 
Registrant's telephone number, including area code:  (212) 250-3220
 
Date of fiscal year end:  10/31
 
Date of reporting period:  1/31/2013

ITEM 1.
SCHEDULE OF INVESTMENTS


Investment Portfolio    as of January 31, 2012  (Unaudited)
 
THE CENTRAL EUROPE AND RUSSIA FUND, INC.
SCHEDULE OF INVESTMENTS — JANUARY 31, 2013 (unaudited)
 
Shares
  
Description
  
Value(a)
  
INVESTMENTS IN RUSSIA – 71.9%
      
   
COMMON STOCKS – 67.8%
  
   
AIRLINES – 0.7%
  
 
2,000,000
    
Aeroflot - Russian Airlines OJSC
  
$
3,564,920
    
   
CHEMICALS – 3.3%
  
 
450,000
    
Uralkali (GDR) Reg S
    
17,163,000
    
   
COMMERCIAL BANKS – 11.2%
  
 
14,000,000
    
Sberbank
    
50,990,800
    
 
1,730,000
    
VTB Bank (GDR) Reg S
    
6,323,150
    
     
57,313,950
    
   
CONSTRUCTION
MATERIALS – 1.0%
  
 
1,000,000
    
LSR Group (GDR) Reg S
    
5,015,000
    
   
DIVERSIFIED
TELECOMMUNICATION
SERVICES – 0.4%
  
 
500,000
    
Rostelecom
    
2,016,550
    
   
ELECTRIC UTILITIES – 0.5%
  
 
216,633
    
OJSC Enel OGK-5 (GDR)*
    
619,722
    
 
750,000
    
RusHydro (ADR)
    
1,836,750
    
     
2,456,472
    
   
FOOD & STAPLES
RETAILING – 3.0%
  
 
350,000
    
Magnit (GDR) Reg S
    
15,561,000
    
   
INTERNET SOFTWARE
& SERVICES – 1.9%
  
 
77,000
    
Mail.Ru Group (GDR) Reg S
    
2,561,790
    
 
300,000
    
Yandex*
    
7,233,000
    
     
9,794,790
    
   
METALS & MINING – 7.0%
  
 
500,000
    
Mechel Steel Group†
    
3,275,000
    
 
57,884
    
MMC Norilsk Nickel
    
11,528,056
    
 
325,000
    
MMC Norilsk Nickel (ADR)†
    
6,461,000
    
 
200,000
    
Novolipetsk Steel OJSC
    
4,240,000
    
 
1,500,000
    
Polyus Gold International*
    
5,326,608
    
 
400,000
    
Severstal
    
5,020,072
    
     
35,850,736
    
Shares
  
Description
  
Value(a)
  
   
OIL, GAS & CONSUMABLE
FUELS – 30.6%
  
 
3,198,000
    
Gazprom
  
$
15,126,540
    
 
4,200,000
    
Gazprom (ADR)†
    
39,564,000
    
 
300,000
    
LUKOIL
    
20,186,850
    
 
415,000
    
LUKOIL (ADR)
    
28,000,880
    
 
190,000
    
NovaTek (GDR) Reg S
    
22,249,000
    
 
550,000
    
Rosneft Oil (GDR) Reg S
    
4,840,000
    
 
600,000
    
Surgutneftegaz (ADR)†
    
6,222,000
    
 
450,000
    
Tatneft (ADR)
    
20,776,500
    
     
156,965,770
    
   
SPECIALTY RETAIL – 1.3%
  
 
750,000
    
M Video
    
6,618,525
    
   
WIRELESS
TELECOMMUNICATION
SERVICES – 6.9%
  
 
300,000
    
MegaFon*
    
8,103,000
    
 
1,200,000
    
Mobile Telesystems
    
10,243,680
    
 
200,000
    
Mobile Telesystems (ADR)†
    
3,746,560
    
 
250,000
    
Mobile Telesystems (GDR) Reg S
    
4,683,200
    
 
400,000
    
Sistema JSFC (GDR) Reg S
    
8,800,000
    
     
35,576,440
    
       
Total Common Stocks
(cost $261,667,558)
    
347,897,153
    
   
PREFERRED STOCKS – 4.1%
  
   
DIVERSIFIED
TELECOMMUNICATION
SERVICES – 0.9%
  
 
1,600,000
    
Rostelecom
(cost $5,151,597)
    
4,717,120
    
   
OIL, GAS & CONSUMABLE
FUELS – 3.2%
  
 
2,000
    
AK Transneft
(cost $2,715,420)
    
4,693,280
    
 
5,000,000
    
Surgutneftegaz
(cost $3,097,934)
    
3,804,000
    
 
1,000,000
    
Surgutneftegaz (ADR)
(cost $4,690,963)
    
7,615,300
    
     
16,112,580
    
       
Total Preferred Stocks
(cost $15,655,914)
    
20,829,700
    
 

 
 
7
 
 
THE CENTRAL EUROPE AND RUSSIA FUND, INC.
 
SCHEDULE OF INVESTMENTS — JANUARY 31, 2013 (unaudited) (continued)
 
Shares
  
Description
  
Value(a)
  
INVESTMENTS IN RUSSIA – 71.9% (continued)
      
   
RIGHTS – 0.0%
  
   
ELECTRIC UTILITIES – 0.0%
  
 
750,000
    
RusHydro,
Expiration Date 02/15/2013*
(cost $0)
  
$
0
    
       
Total Rights
(cost $0)
    
0
    
       
Total Investments in Russia
(cost $277,323,472)
    
368,726,853
    
INVESTMENTS IN TURKEY – 15.5%
      
   
AUTOMOBILES – 0.5%
  
 
400,000
    
Tofas Turk Otomobil Fabrikasi
    
2,410,049
    
   
COMMERCIAL BANKS – 7.7%
  
 
1,750,000
    
Akbank
    
8,852,953
    
 
1,900,000
    
Turkiye Garanti Bankasi
    
9,525,379
    
 
800,000
    
Turkiye Halk Bankasi
    
7,912,238
    
 
1,250,000
    
Turkiye IS Bankasi
    
4,618,314
    
 
2,000,000
    
Turkiye Vaklifar Bakasi
    
5,843,233
    
 
1,000,000
    
Yapi ve Kredi Bankasi*
    
2,932,985
    
     
39,685,102
    
   
CONSTRUCTION &
ENGINEERING – 0.9%
  
 
1,175,000
    
Tekfen Holding
    
4,808,731
    
   
DIVERSIFIED FINANCIAL
SERVICES – 0.6%
  
 
500,000
    
Haci Omer Sabanci Holding
    
2,884,670
    
   
FOOD & STAPLES
RETAILING – 1.6%
  
 
115,000
    
Bim Birlesik Magazalar
    
5,572,529
    
 
175,000
    
Bizim Toptan Satis Magazalari
    
2,904,564
    
     
8,477,093
    
   
INDUSTRIAL
CONGLOMERATES – 0.4%
  
 
725,000
    
Enka Insaat ve Sanayi
    
2,175,865
    
   
INSURANCE – 0.5%
  
 
850,000
    
Anadolu Hayat Emeklilik
    
2,425,397
    
   
METALS & MINING – 1.2%
  
 
150,000
    
Koza Altin Isletmeleri
    
3,691,809
    
 
800,000
    
Koza Anadolu Metal Madencilik
Isletmeleri*
    
2,291,821
    
     
5,983,630
    
Shares
  
Description
  
Value(a)
  
   
OIL, GAS & CONSUMABLE
FUELS – 0.4%
  
 
75,000
    
Tupras Turkiye Petrol Rafinerileri
  
$
2,067,584
    
   
TRANSPORTATION
INFRASTRUCTURE – 1.0%
  
 
850,000
    
TAV Havalimanlari Holding
    
5,290,456
    
   
WIRELESS
TELECOMMUNICATION
SERVICES – 0.7%
  
 
550,000
    
Turkcell Iletism Hizmetleri*
    
3,423,237
    
       
Total Investments in Turkey
(cost $48,336,297)
    
79,631,814
    
INVESTMENTS IN POLAND – 8.6%
      
   
COMMERCIAL BANKS – 4.0%
  
 
105,000
    
Bank Pekao
    
5,160,655
    
 
1,400,000
    
Powszechna Kasa Oszczednosci
Bank Polski†
    
15,656,021
    
     
20,816,676
    
   
DIVERSIFIED
TELECOMMUNICATION
SERVICES – 1.0%
  
 
1,285,231
    
Telekomunikacja Polska
    
4,980,389
    
   
INSURANCE – 1.3%
  
 
50,000
    
Powszechny Zaklad Ubezpieczen
    
6,579,585
    
   
METALS & MINING – 2.3%
  
 
190,000
    
KGHM Polska Miedz
    
11,590,080
    
       
Total Investments in Poland
(cost $28,804,372)
    
43,966,730
    
INVESTMENTS IN
CZECH REPUBLIC – 2.0%
      
   
DIVERSIFIED
TELECOMMUNICATION
SERVICES – 1.2%
  
 
350,000
    
Telefonica Czech Republic
    
6,038,752
    
   
ELECTRIC UTILITIES – 0.8%
  
 
125,000
    
Ceske Energeticke Zavody
    
4,039,517
    
       
Total Investments in
Czech Republic
(cost $7,415,305)
    
10,078,269
    
 

 
 
8
 
 
THE CENTRAL EUROPE AND RUSSIA FUND, INC.
 
SCHEDULE OF INVESTMENTS — JANUARY 31, 2013 (unaudited) (continued)
 
Shares
  
Description
  
Value(a)
  
INVESTMENTS IN HUNGARY – 1.2%
      
   
COMMERCIAL BANKS – 1.2%
  
 
300,000
    
OTP Bank
  
$
6,443,074
    
       
Total Investments in Hungary
(cost $1,642,741)
    
6,443,074
    
       
Total Investments in Common
and Preferred Stocks – 99.2%
(cost $363,522,187)
    
508,846,740
    
SECURITIES LENDING
COLLATERAL – 2.6%
      
 
13,404,647
    
Daily Assets Fund
Institutional, 0.17%
(cost $13,404,647)(b)(c)
    
13,404,647
    
CASH EQUIVALENTS – 0.5%
      
 
2,474,887
    
Central Cash Management
Fund, 0.11%
(cost $2,474,887)(c)
    
2,474,887
    
       
Total Investments – 102.3%
(cost $379,401,721)**
    
524,726,274
    
       
Other Assets and Liabilities,
Net – (2.3%)
    
(11,826,090
)
  
       
NET ASSETS – 100.0%
  
$
512,900,184
    
 
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 $379,868,599. At January 31, 2013, net unrealized appreciation for all securities based on tax cost was $144,857,675. This consisted of aggregate gross unrealized appreciation for all securities in which there was an excess of value over tax cost of $170,400,294 and aggregate gross unrealized depreciation for all securities in which there was an excess of tax cost over value of $25,542,619.
†  All or a portion of these securities were on loan. The value of all securities loaned at January 31, 2013 amounted to $13,305,934, which is 2.6% of net assets.
(a)  Value stated in U.S. 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, U.S. persons, except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act of 1933.
For purposes of its industry concentration policy, the Fund classifies issuers of portfolio securities at the industry sub-group level. Certain of the categories in the above Schedule of Investments consist of multiple industry sub-groups or industries.
 

 
 
9
 
 
THE CENTRAL EUROPE AND RUSSIA FUND, INC.
 
SCHEDULE OF INVESTMENTS — JANUARY 31, 2013 (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 January 31, 2013 in valuing the Fund's investments.
Category
  
Level 1
  
Level 2
  
Level 3
  
Total
  
Common Stocks and/or Other Equity Investments(1)
  
Russia
  
$
368,107,131
    
$
619,722
    
$
—
    
$
368,726,853
    
Turkey
    
79,631,814
      
—
      
—
      
79,631,814
    
Poland
    
43,966,730
      
—
      
—
      
43,966,730
    
Czech Republic
    
10,078,269
      
—
      
—
      
10,078,269
    
Hungary
    
6,443,074
      
—
      
—
      
6,443,074
    
Short-Term Instruments(1)
    
15,879,534
      
—
      
—
      
15,879,534
    
Total
  
$
524,106,552
    
$
619,722
    
$
—
    
$
524,726,274
    
 
(1) See Schedule of Investments for additional detailed categorizations.
 
There have been no transfers between fair value measurement levels during the period ended January 31, 2013.
 

 
 
10



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/W. Douglas Beck
W. Douglas Beck
President
   
Date:
March 20, 2013


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/W. Douglas Beck
W. Douglas Beck
President
   
Date:
March 20, 2013
   
   
   
By:
/s/Paul Schubert
Paul Schubert
Chief Financial Officer and Treasurer
   
Date:
March 20, 2013