The Central and Eastern Europe Fund, Inc. Provides Update on Developments Regarding Russian Holdings
The Central and Eastern Europe Fund (NYSE: CEE) has been valuing its Russian holdings at zero since March 2022 due to sanctions and measures by the Russian Central Bank and Government post-Ukraine invasion. In May 2024, CEE managed to sell depositary receipts of a non-sanctioned Russian issuer, positively impacting its net asset value. Despite this, many of its Russian assets remain unsellable due to sanctions. The fund will continue to monitor and may engage in opportunistic sales, but future sales are uncertain. CEE is engaging with shareholders for suggestions on managing these holdings.
- Successful sale of depositary receipts of a non-sanctioned Russian issuer in May 2024.
- Sale positively impacted the Fund's net asset value.
- Active monitoring and strategic response to sanctions.
- Management's openness to shareholder suggestions for managing Russian holdings.
- Russian holdings valued at zero since March 2022.
- Three positions in Russian local shares currently unsellable.
- Four positions in sanctioned Russian securities cannot be sold without special permissions.
- Continued valuation uncertainties impacting the Fund's asset value.
- Overall increased risk and volatility due to concentrated investments in a volatile region.
Insights
The recent update by The Central and Eastern Europe Fund, Inc. regarding its Russian holdings provides nuanced insights into the fund's portfolio and strategic decisions amidst geopolitical turmoil. The key takeaway is the valuation of Russian holdings at zero due to ongoing sanctions and measures by the Russian government. This move aligns with standard practices under such circumstances to maintain transparency and manage investor expectations.
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The Fund will continue to monitor developments in this area and may make further opportunistic sales of depositary receipts for Russian securities to the extent that such sales are deemed to be in the best interests of the Fund and its stockholders and consistent with applicable sanctions and other laws and regulations. However, there can be no assurances that any further such sales will be feasible or considered to be in the best interests of the Fund. Also, it should be noted that three of the Fund’s remaining 16 positions in Russian securities are “local shares” which cannot currently be sold by the Fund. In addition, four positions are in securities of issuers that are subject to
The Fund also confirmed that management continues to welcome suggestions from stockholders regarding its holdings of Russian securities and potential options for maximization of stockholder value with respect to such holdings. Such suggestions may be sent to Secretary, The Central and Eastern Europe Fund, Inc., C/O DWS Investment Management Americas, Inc., 100 Summer Street, Suite 800,
Important Information
The Central and Eastern Europe Fund, Inc. is non-diversified and can take larger positions in fewer issues, increasing its potential risk. Investing in foreign securities presents certain risks, such as currency fluctuations, political and economic changes, and market risks. Emerging markets tend to be more volatile and less liquid than the markets of more mature economies, and generally have less diverse and less mature economic structures and less stable political systems than those of developed countries. Any fund that focuses in a particular segment of the market or region of the world will generally be more volatile than a fund that invests more broadly. This fund is non-diversified and can take larger positions in fewer issues, increasing its potential risk.
Investing in foreign securities, particularly of emerging markets, presents certain risks, such as currency fluctuations, and risks of currency and capital controls, political and economic changes, and market risks. Any fund that concentrates in a particular segment of the market or a particular geographical region will generally be more volatile than a fund that invests more broadly.
War, terrorism, sanctions, economic uncertainty, trade disputes, public health crises and related geopolitical events have led, and, in the future, may lead to significant disruptions in US and world economies and markets, which may lead to increased market volatility and may have significant adverse effects on the funds and their investments.
The European Union,
Closed-end funds, unlike open-end funds, are not continuously offered. There is a one-time public offering and once issued, shares of closed-end funds are sold in the open market through a stock exchange. Shares of closed-end funds frequently trade at a discount to net asset value. The price of the fund’s shares is determined by a number of factors, several of which are beyond the control of the fund. Therefore, the fund cannot predict whether its shares will trade at, below or above net asset value.
This press release shall not constitute an offer to sell or a solicitation to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such offer or solicitation or sale would be unlawful prior to registration or qualification under the laws of such state or jurisdiction.
Certain statements contained in this release may be forward-looking in nature. These include all statements relating to plans, potential future transactions, expectations, and other statements that are not historical facts and typically use words like “may,” “expect,” “anticipate,” “believe,” “intend,” and similar expressions. Such statements represent management’s current beliefs, based upon information available at the time the statements are made, with regard to the matters addressed. All forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in, or implied by, such statements. Management does not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. The following factors, among others, could cause actual results to differ materially from forward-looking statements: (i) the effects of adverse changes in market and economic conditions; (ii) legal and regulatory developments including with respect to relevant sanctions; and (iii) other additional risks and uncertainties, including public health crises, war, terrorism, trade disputes and related geopolitical events.
Past performance is no guarantee of future results.
NOT FDIC/ NCUA INSURED • MAY LOSE VALUE • NO BANK GUARANTEE
NOT A DEPOSIT • NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY
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The brand DWS represents DWS Group GmbH & Co. KGaA and any of its subsidiaries such as DWS Distributors, Inc. which offers investment products or DWS Investment Management Americas, Inc. and RREEF America L.L.C. which offer advisory services. (R-101353) (05/24)
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Source: DWS
FAQ
What impact did the sale of Russian depositary receipts have on CEE's net asset value?
Why are CEE's Russian holdings valued at zero?
Can CEE sell its remaining Russian securities?
Is CEE engaging with shareholders regarding its Russian holdings?