Central European Equity Funds Sees Russian Oil Industry Positioned for Growth.

Business Editors

NEW YORK--(BUSINESS WIRE)--Feb. 25, 2003

In the wake of its deep oil reserves and increased foreign direct investments in the area, The Central European Equity Fund (NYSE:CEE), sees the potential for significant growth in the Russian oil sector.

CEE is a closed-end investment company that invests in Central European and Russian equities.

Hanspeter Ackermann, portfolio manager of CEE commented, "We believe BP's recently announced $6.75 billion strategic partnership with Alpha Group and Access Renova (AAR) to create a leading oil & gas business in Russia is just the beginning. More than double the average of all other foreign direct investments in Russia in the past five years, this alliance gives BP and AAR access to the vast Russian oil and gas market. We see more foreign companies following suit as Russia looks for additional capital to awaken its dormant oil resources."

CEE currently has 13% (as of 02/24/03) of its assets invested in four different Russian oil and gas companies, including Lukoil(4.1%), Yukos (4.9%), Surgutneftegaz (3.5%) and Gazprom (0.2%). The Fund's overall Russian equity exposure amounts to 19%.

"Russia has enormous catch up potential," Ackermann says. "We view Russia's energy sector as massively undervalued relative to other established energy companies. For example, although the leading four Russian oil companies own about ten times the oil and gas reserves than Exxon, the market capitalization of these companies make up only one third of Exxon's. Also, Russia's top oil companies are trading at about 6 times estimated earnings, versus the S&P 500 Integrated Oil Index of nearly fifteen (as of 2/24/02)."

The Central European Equity Fund is a non-diversified, closed-end investment company seeking capital appreciation primarily through investment in Central European and Russian equities. The Fund is listed on the New York Stock Exchange under the symbol CEE. Its net assets aggregate $130 million (as of 2/24/03).

The opinions and forecasts expressed are made as of February 25, 2003 and may not actually come to pass. This information is subject to change at any time, based on market and other conditions and should not be construed as a recommendation of any specific security Investments in the securities of issuers located in emerging market countries involve greater volatility as well as a higher degree of risk than investments in securities traded on major international markets.