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Start of notes for The Central and Eastern Europe Fund
- Data as of 2024-11-09
- Ticker: CEE
- Exchange: NYSE
- CEE is a closed-end fund that invests in equities and equity-linked securities in Central and Eastern Europe. It is managed by DWS, which has €933 billion in assets under management as of 30 September 2024.
- CEE’s NAV per share as of 30 September 2024 is US$11.40, with total net assets of US$73 million, giving rise to about 6.4 million shares outstanding in the fund. Share price on 2024-11-09 is US$13.14.
- CEE’s Russian holdings have been valued at zero since 14 March 2022. The manager of the fund has observed occasional privately negotiated transactions in depositary receipts of non-sanctioned Russian issuers taking place (at prices that are deeply discounted from those taking place through the facilities of the Moscow Stock Exchange). In May 2024, CEE was successful in selling depositary receipts of one non-sanctioned Russian issuer in such a privately negotiated transaction, resulting in positive impact to the fund’s net asset value. DWS will continue to monitor developments in this area and may make further opportunistic sales of depositary receipts for Russian securities. Three of CEE’s remaining 16 positions in Russian securities are “local shares” which cannot currently be sold. In addition, four positions are in securities of issuers that are subject to US sanctions that bar CEE from selling, unless special permissions are granted by the US. So CEE continues to value certain Russian securities at zero, unless it has received a recent bid for the security and the sale of the security would be permissible under the applicable sanctions and other laws and regulations.
- CEE’s Russian stocks as of 30 April 2024 are shown in Table 1. Unsure which stock was sold in May 2024, but it was a depository receipt.
- Valuation on 2024-11-09:
- 6.4 million shares outstanding
- NAV of the Russian portfolio in Table 1 equates to US$9.88 per share for CEE (US$63.27 million divided by 6.4 million shares), so total NAV for CEE is US$21.28 (US$11.40 + US$9.88)
- If we remove the value of the most valuable depository receipt (Novatek PSJC) to account for the sale of a depository receipt in May 2024, the NAV of the Russian portfolio in Table 1 equates to US$9.32 (US$59.64 million divided by 6.4 million shares), so total NAV for CEE is US$20.72
- Stock price of US$13.14, so there’s a prospective return of around 60% if Russian stocks are no longer barred from being traded globally
- CEE’s portfolio characteristics are shown in Figure 1 below:
- A quick look at the current valuations of CEE’s 2024-09-30 top 10 holdings is shown in Table 2. It’s clear that most of the top 10 holdings carry very low valuations. The top 10 holdings account for 60% of CEE’s NAV. So CEE at its current state, even with the Russian holdings held at effectively zero, looks like a low-risk investment.
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