-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Ak1uzXoz7at1QOUHSZdhk+yo5O8yZB0Tb+UClKH2M3j/7ZRUK7FVQxA3EHdQC3r3 n5QL+mohOp2oS0w/qn5WNQ== 0000313212-98-000054.txt : 19980608 0000313212-98-000054.hdr.sgml : 19980608 ACCESSION NUMBER: 0000313212-98-000054 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19980430 FILED AS OF DATE: 19980605 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: PRICE T ROWE INTERNATIONAL FUNDS INC CENTRAL INDEX KEY: 0000313212 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 521175211 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30D SEC ACT: SEC FILE NUMBER: 811-02958 FILM NUMBER: 98642806 BUSINESS ADDRESS: STREET 1: 100 E PRATT ST CITY: BALTIMORE STATE: MD ZIP: 21202 BUSINESS PHONE: 3015472000 FORMER COMPANY: FORMER CONFORMED NAME: PRICE T ROWE INTERNATIONAL TRUST DATE OF NAME CHANGE: 19900301 FORMER COMPANY: FORMER CONFORMED NAME: PRICE T ROWE INTERNATIONAL FUND INC DATE OF NAME CHANGE: 19890914 N-30D 1 NEW ASIA FUND - -------------------------------------------------------------------------------- T. Rowe Price - -------------------------------------------------------------------------------- Semiannual Report New Asia Fund - -------------------------------------------------------------------------------- April 30, 1998 - -------------------------------------------------------------------------------- REPORT HIGHLIGHTS ================================================================================ New Asia Fund * The bear market in East Asian equities continued during the six months ended April 30, although some currencies rebounded from depressed levels. * The fund's returns were negative for the 6- and 12-month periods but compared favorably with the even steeper losses of its Morgan Stanley benchmark and the average competitor fund. * The fund benefited from increased holdings in Taiwan and India, both of which held up better than most other Asian stock markets. * We continued to focus on Hong Kong, home of some of the region's strongest companies. * We believe the investing environment will remain difficult in Asia, but it offers interesting opportunities that should bear fruit as needed reforms are made. Fellow Shareholders The past six months saw a continuation of the savage bear market that began in the summer of 1997. Although the hardest-hit Asian currencies rebounded in early 1998 after some IMF programs were instituted in the more troubled economies, the period ending April 30, 1998, saw markets broadly down about 12%. Were it not for the positive performance of many currencies against the U.S. dollar, the decline would have been worse. ================================================================================ Performance Comparison - -------------------------------------------------------------------------------- Periods Ended 4/30/98 6 Months 12 Months - -------------------------------------------------------------------------------- New Asia Fund -4.89% -33.58% MSCI All Country Far East Free Ex-Japan -11.87 -41.50 Lipper Pacific Ex-Japan Funds Average -10.92 -34.79 ================================================================================ The value of the fund's assets fell 4.89% over the past six months. The difficult conditions of recent months were reflected in the much steeper losses recorded by the Morgan Stanley Capital Inter-national benchmark and by the average competitor fund, both shown in the table. Your fund's better showing can be attributed to increased investments in Taiwan and India, which performed relatively well during the period, to favorable stock selection, and to our cash position of about 8%. For the 12-month period, the fund lost one-third of its value, which was marginally better than the average competitor fund and quite a bit better than the MSCI benchmark. PORTFOLIO REVIEW We continued to focus on HONG KONG, maintaining a weighting in the 44% to 46% range over the last six months. Hong Kong remains the fund's largest country exposure because companies there are some of the most financially sound in the region and because of our present lack of enthusiasm for most other Asian markets. Hong Kong's econ-omy, however, should decelerate further as trade flows around the region slow. In addition, asset deflation, particularly of property, has commenced due to a high interest rate environment, which is in itself a result of the Hong Kong Monetary Authority's determination to defend the Hong Kong dollar peg to the U.S. dollar. We believe that the Authority will hold fast to the policy of a pegged currency, which gives some stability to the Hong Kong economy not seen in other parts of Asia. ================================================================================ Market Performance - -------------------------------------------------------------------------------- In U.S. Dollar Terms Periods Ended 4/30/98 6 Months 12 Months - -------------------------------------------------------------------------------- China Free -29.84% -40.37% Hong Kong -9.62 -25.27 India -1.51 0.01 Malaysia -14.13 -60.69 Philippines 6.13 -46.20 Singapore -3.18 -24.22 South Korea -19.86 -49.21 Taiwan 1.13 -20.87 Thailand -4.14 -59.25 Source: FAMEInformation Services, Inc.; using MSCI indices. ================================================================================ In Hong Kong, as elsewhere in Asia, we have shied away from large exposure to financials and property. Where we do have holdings in these areas (CHEUNG KONG, HSBC, NEW WORLD DEVELOPMENT), we have tried to focus only on companies with very solid balance sheets. Because of the strength of their franchise and management skills, such companies can still make a decent profit in a depressed environment. They are also well placed to capitalize on China's tremendous long-term potential. Since our last report to you on October 31, 1997, we sold out of smaller, more marginal industry players (LAI SUN DEVELOPMENT, GUOCO, HYSAN DEVELOPMENT) in favor of these larger companies that stand to benefit competitively from any shakeout resulting from the economic downturn. Although CHINA has also been experiencing an economic slowdown and some price deflation in traded goods and assets like property, the economy has been relatively resilient. The closed nature of the econ-omy and capital account has proved to be a strength in the current environment, and China has not been subjected to the severe withdrawal of short-term capital flows as has the rest of Asia. In terms of capturing market share of both foreign direct investment and exports, China has gained from its neighbors' instability. This bodes well for the Chinese currency, the renminbi, which China's leaders have pledged to keep stable. The fund's holdings in China, about 4% of assets, remain concentrated in infrastructure companies such as HUANENG POWER and CHINA TELECOM (listed and traded in Hong Kong). We steadily increased our exposure to TAIWAN, again on the basis of that economy's relative strength and the quality of its companies, many of which are competitive players in the world market, particularly in technology. Taiwan now composes around 13% of fund assets, still below the weighting in the benchmark but significantly higher than our 7% exposure six months ago. The fund's exposure to Taiwan technology companies contributed positively to performance over the period. [Geographic Diversification pie chart showing Hong Kong 46%, Taiwan 13%, India 11%, Malaysia 4%, China 4%, Singapore 3%, Thailand 3%, Other and Reserves 16%.] Our exposure to INDIA rose steadily over the past six months, and India now accounts for 11% of the fund's assets, up from 8% last October. The reform process there remains on track in spite of another change in the coalition government ruling the country. Key financial sector reforms have meant that, for the first time in modern Indian history, capital has been allocated and priced on an economic basis. This simple change, along with increasing competition, is forcing Indian companies to focus more on issues like increasing shareholder value. In essence, as in the U.S., a more profitable and focused company should be better able to defend its franchise and finance its growth. We have identified several companies that fit into this category, most of which (MAHANAGAR TELEPHONE, RANBAXY, ICICI, HOUSING DEVELOPMENT FINANCE) are strong domestic franchises also benefiting from the thinning ranks of weaker competitors. The fund's exposure to Indian companies was one of the major positive contributors to performance over the period. (After the close of the reporting period, some Indian stocks sold off following reports of the government's nuclear tests, but our holdings were relatively unscathed. We believe this weakness presents some buying opportunities.) Our exposure to the rest of Asia, with the exception of the PHILIPPINES, has been pared to a bare minimum. Together SINGAPORE, INDONESIA, MALAYSIA, THAILAND, the Philippines, and KOREA account for around 15% of the fund's assets versus nearly 23% six months ago and compared with a combined MSCI benchmark weight of around 40%. As before, we have focused on cash-generating businesses with strong enough balance sheets and management to withstand a severe downturn and the inevitable increase in competition that should come with the recapitalization of these economies by foreign companies. The severe deflation that is hitting Southeast Asian property and other speculative asset classes will continue to exert tremendous pressure on local banks, so your fund has no exposure to these areas except for small holdings in the Philippines (BANK OF THE PHILIPPINE ISLANDS, AYALA LAND), where we expect the downturn's effects to be less vicious. ================================================================================ Industry Diversification - -------------------------------------------------------------------------------- Percent of Net Assets 10/31/97 4/30/98 - -------------------------------------------------------------------------------- Finance 34.2% 27.0% Services 19.1 24.2 Energy 9.5 10.6 Multi-industry 11.9 10.4 Consumer Goods 5.3 8.1 Capital Equipment 4.1 7.4 Materials 1.8 1.0 Reserves 14.1 11.3 - -------------------------------------------------------------------------------- Total 100.0% 100.0% ================================================================================ OUTLOOK The key external factors of the region's eventual recovery are the supportive atmosphere of the international capital markets, whose liquidity is badly needed to recapitalize the regional economies, and the buoyancy of European and American economies, which buy Asian-produced goods. Obviously, the addition of an economic revival in Japan would also aid the recovery process. However, based purely on the necessary internal adjustments taking place-in Southeast Asia, Korea, and Japan-we expect the region's overall environment to remain difficult in 1998 and probably 1999. The most publicized angle of the crisis, namely the bailout of financial systems, will probably result in a very large burden on creditors, stockholders, and the Asian tax-paying public-possibly the most costly bailout yet seen. The full cost of this exercise is still unknown, due to the slowness of governments to forcefully execute announced measures such as selling failed assets and restructuring domestic corporations. Some of the changes sweeping Asia are also likely to be momentous. The traditional model of economic growth-close links between government and business; the complicity of labor; the export-driven, market-share-oriented growth strategy at the expense of domestic consumption-will be reexamined in the coming months via public debate and perhaps by new political leadership. The mettle of Asian corporations that have traditionally enjoyed a large degree of protection is also likely to be tested by the market deregulation that will inevitably accompany Asia's recapitalization. Overall, this process is likely to cause a greater degree of uncertainty about future economic policy than perhaps we have had in the past. This, in turn, will probably translate into a generally higher risk premium for Asian investments and continued volatility in Asian currencies. Tremendous upside, however, will eventually come from those specific Asian companies that are able to change, restructure, and refocus to meet these challenges and perhaps become globally competitive. Our challenge is to identify these future winners in what is still a very fluid environment. Weak markets offer the opportunity to pick and choose these companies in a gradual and selective manner. As in many parts of the world, we expect that the market will in the end separate companies into distinct classes of winners and losers, each with distinct valuation premiums and discounts. At present, we expect that many of these winners will come from Hong Kong, China, Taiwan, and India, although there have also been some encouraging developments among select Korean, Thai, and Philippine companies as well. In summary, we do not see the Asian crisis as a one-year event, and there is likely to be further pain. But we believe the crisis presents opportunities to build a portfolio of good but currently undervalued companies that should do well when the region's underlying strengths gradually resurface. Respectfully submitted, /s/ Martin G. Wade President May 21, 1998 T. Rowe Price New Asia Fund ================================================================================ ================================================================================ Portfolio Highlights - -------------------------------------------------------------------------------- TWENTY-FIVE LARGEST HOLDINGS Percent of Net Assets 4/30/98 Hutchison Whampoa, Hong Kong ........................................ 8.6% Hong Kong Telecommunications, Hong Kong ............................. 5.6 Cheung Kong Holdings, Hong Kong ..................................... 4.8 HSBC Holdings, Hong Kong ............................................ 4.1 New World Development, Hong Kong .................................... 3.1 Dao Heng Bank Group, Hong Kong ...................................... 2.8 Singapore Press, Singapore .......................................... 2.7 Mahanagar Telephone, India .......................................... 2.6 Huaneng Power International, China .................................. 2.2 CLP Holdings, Hong Kong ............................................. 2.1 New World Infrastructure, Hong Kong ................................. 2.0 China Telecom, Hong Kong ............................................ 1.8 ITC, India .......................................................... 1.8 Industrial Credit & Investment Corporation of India, India .......... 1.8 Sun Hung Kai Properties, Hong Kong .................................. 1.8 Samsung Electronic, South Korea ..................................... 1.8 Hong Kong Land Holdings, Hong Kong .................................. 1.7 Tanjong, Malaysia ................................................... 1.6 Ranbaxy Laboratories, India ......................................... 1.5 Hindustan Lever, India .............................................. 1.4 Hong Kong and China Gas, Hong Kong .................................. 1.4 Cathay Life Insurance, Taiwan ....................................... 1.3 Compal Electronics, Taiwan .......................................... 1.3 Swire Pacific, Hong Kong ............................................ 1.3 Taiwan Semiconductor Manufacturing, Taiwan .......................... 1.2 - -------------------------------------------------------------------------------- Total ............................................................... 62.3% ================================================================================ T. Rowe Price New Asia Fund ================================================================================ ================================================================================ Performance Comparison - -------------------------------------------------------------------------------- This chart shows the value of a hypothetical $10,000 investment in the fund over the past 10 fiscal year periods or since inception (for funds lacking 10-year records). The result is compared with a broad-based average or index. The index return does not reflect expenses, which have been deducted from the fund's return. [New Asia Fund SEC graph shown here] ================================================================================ Average Annual Compound Total Return - -------------------------------------------------------------------------------- This table shows how the fund would have performed each year if its actual (or cumulative) returns for the periods shown had been earned at a constant rate. ================================================================================ Since Inception Periods Ended 4/30/98 1 Year 3 Years 5 Years Inception Date - -------------------------------------------------------------------------------- New Asia Fund -33.58% -9.39% -1.82% 4.56% 9/28/90 Investment return and principal value represent past performance and will vary. Shares may be worth more or less at redemption than at original purchase. ================================================================================ T. Rowe Price New Asia Fund ==================================================================================================================================== Unaudited For a share outstanding throughout each period# ==================================================================================================================================== Financial Highlights
6 Months Year 10 Months++ Year Ended Ended Ended Ended 4/30/98 10/31/97 10/31/96 10/31/95 10/31/94 10/31/93 12/31/92 NET ASSET VALUE Beginning of period ............. $ 5.95 $ 8.64 $ 8.12 $ 10.07 $ 9.88 $ 6.34 $ 5.91 Investment activities Net investment income ........ 0.05 0.09 0.06 0.08 0.06 0.03 0.10 Net realized and unrealized gain (loss) ....... (0.34) (2.71) 0.55 (1.07) 0.36 3.51 0.56 Total from investment activities ........ (0.29) (2.62) 0.61 (0.99) 0.42 3.54 0.66 Distributions Net investment income ........ (0.08) (0.06) (0.09) (0.07) (0.04) -- (0.10) Net realized gain ............ -- (0.01) -- (0.89) (0.19) -- (0.13) Total distributions .......... (0.08) (0.07) (0.09) (0.96) (0.23) -- (0.23) NET ASSET VALUE End of period ................... $ 5.58 $ 5.95 $ 8.64 $ 8.12 $ 10.07 $ 9.88 $ 6.34 Ratios/Supplemental Data Total return .................... (4.89)% (30.61)% 7.58% (9.70)% 4.11% 55.84% 11.24% Ratio of expenses to average net assets .............. 1.24%+ 1.10% 1.11% 1.15% 1.22% 1.29%+ 1.51% Ratio of net investment income to average net assets ...................... 1.45%+ 0.76% 0.66% 0.97% 0.85% 1.02%+ 1.64% Portfolio turnover rate ......... 33.6% 41.8% 42.0% 63.7% 63.2% 40.4%+ 36.3% Average commission rate paid ....................... $ 0.0061 $ 0.0063 $ 0.0057 $- $- $- $- Net assets, end of period (in millions) ................... $ 770 $ 877 $ 2,041 $ 1,909 $ 2,303 $ 1,650 $ 315 + Annualized. ++ The fund' fiscal year-end was changed to 10/31. # All per share figures reflect the 2-for-1 stock split effective 5/27/94.
The accompanying notes are an integral part of these financial statements. T. Rowe Price New Asia Fund ================================================================================ Unaudited April 30, 1998 ================================================================================ Portfolio of Investments - -------------------------------------------------------------------------------- Shares/Par Value In thousands CHINA 3.6% Common Stocks 3.6% Guangdong Electric Power (Class B) (HKD) .............. 12,016,100 $ 6,655 Huaneng Power International (Class N) ADR (USD) * ..... 773,640 17,020 Shenzhen Expressway (Class H) (HKD) * ................. 15,460,000 4,241 Total China (Cost $24,865) ............................ 27,916 HONG KONG 45.6% Common Stocks and Warrants 45.6% Cheung Kong Holdings .................................. 5,570,000 37,033 Cheung Kong Infrastructure ............................ 2,829,000 7,177 China Telecom ......................................... 7,396,000 14,036 CLP Holdings .......................................... 3,303,000 15,863 Dao Heng Bank Group ................................... 7,236,260 21,393 Dickson Concepts International ........................ 1,122,500 1,551 Esprit Holdings ....................................... 8,277,000 3,286 Giordano International ................................ 5,826,000 1,354 Great Eagle Holdings .................................. 2,346,000 3,150 Great Eagle Holdings, Warrants, 11/30/98* ............. 353,000 10 HKR International ..................................... 7,898,144 4,741 HSBC Holdings ......................................... 1,112,678 31,746 Hong Kong and China Gas ............................... 7,943,700 10,819 Hong Kong and China Gas, Warrants, 9/30/99* ........... 315,350 25 Hong Kong & Shanghai Hotels, Warrants, 12/10/98* ...... 274,998 0 Hong Kong Land Holdings (USD) ......................... 9,143,950 12,893 Hong Kong Telecommunications .......................... 23,141,977 43,320 Hutchison Whampoa ..................................... 10,653,000 65,876 Lai Sun Hotels International, Warrants, 4/30/99* ...... 652,286 5 Legend Holdings ....................................... 5,648,000 2,424 New World Development ................................. 8,274,507 23,554 New World Infrastructure .............................. 7,009,200 15,066 QPL International ..................................... 5,503,000 2,380 Sa Sa International Holdings .......................... 13,344,000 2,498 Smartone Telecommunications ........................... 2,948,000 7,745 Sun Hung Kai Properties ............................... 2,303,000 13,676 Swire Pacific (Class A) ............................... 1,932,000 9,653 Total Hong Kong (Cost $384,857) 351,274 INDIA 11.0% Common Stocks 11.0% HDF Corporation * ..................................... 81,120 $ 6,591 Hindustan Lever ....................................... 275,500 10,939 Hindustan Petroleum ................................... 618,800 6,309 ITC ................................................... 696,000 13,873 Industrial Credit & Investment Corporation of India * . 5,284,800 13,773 Mahanagar Telephone * ................................. 3,172,000 20,127 Ranbaxy Laboratories .................................. 687,500 11,486 State Bank of India ................................... 164,900 1,198 Tata Engineering & Locomotive ......................... 300 2 Total India (Cost $76,881) ............................ 84,298 INDONESIA 0.9% Common Stocks 0.9% Gulf Indonesia Resources (USD) * ...................... 472,000 7,257 Total Indonesia (Cost $9,163) ......................... 7,257 MALAYSIA 3.7% Common Stocks 3.7% Resorts World * ....................................... 3,169,000 6,117 Tanjong ............................................... 5,271,000 12,012 Telekom Malaysia * .................................... 1,235,000 3,708 Tenaga Nasional ....................................... 3,305,000 6,601 Total Malaysia (Cost $54,185) ......................... 28,438 PHILIPPINES 2.5% Common Stocks 2.5% Ayala Land ............................................ 12,986,961 5,095 Bank of the Philippine Islands ........................ 850,500 2,118 Philippine Long Distance Telephone .................... 85,200 2,281 Philippine Long Distance Telephone ADS (USD) .......... 100,000 2,700 San Miguel (Class B) .................................. 2,963,550 4,872 Universal Robina ...................................... 11,588,000 2,193 Total Philippines (Cost $32,033) ...................... 19,259 SINGAPORE 3.2% Common Stocks 3.2% Singapore Airlines .................................... 294,000 $ 1,914 Singapore Press ....................................... 1,853,466 20,496 Singapore Technologies Engineering * .................. 2,000,000 1,719 Singapore Telecommunications .......................... 407,000 700 Total Singapore (Cost $27,571) ........................ 24,829 SOUTH KOREA 2.3% Common Stocks and Rights 2.3% Korea Electric Power .................................. 298,000 4,058 Samsung Electronic .................................... 238,980 13,232 Samsung Electronic, Rights, 6/2/98* ................... 19,013 367 Total South Korea (Cost $16,292) ...................... 17,657 TAIWAN 13.3% Common Stocks 13.3% Acer .................................................. 1,480,000 2,469 Acer GDR (USD) ........................................ 252,000 2,230 Asustek Computer GDR (USD) ............................ 365,000 7,483 Bank Sino Pacific ..................................... 7,797,412 5,675 Cathay Construction ................................... 5,795,840 5,378 Cathay Life Insurance ................................. 2,541,000 10,172 China Trust Commercial Bank ........................... 7,734,096 9,077 Chuntex Electronics ................................... 2,407,000 4,416 Compal Electronics .................................... 2,292,500 9,977 Compeq Manufacturing .................................. 705,000 5,431 D-Link Corporation .................................... 1,535,000 3,934 Delta Electronics ..................................... 1,000,000 3,670 Far East Textile ...................................... 3,611,000 3,285 Far Eastern Silo & Shipping ........................... 7,593,000 7,184 Hon Hai Precision Industry ............................ 1,544,000 8,990 Taiwan Semiconductor Manufacturing .................... 2,196,000 9,490 Tatung ................................................ 3,849,000 3,560 Total Taiwan (Cost $110,833) .......................... 102,421 THAILAND 2.6% Common Stocks 2.6% PTT Exploration & Production .......................... 692,600 $7,311 Siam Cement ........................................... 515,400 7,281 Siam Makro ............................................ 3,244,000 5,330 Total Thailand (Cost $26,141) ......................... 19,922 VIETNAM 0.0% Common Stocks 0.0% Lazard Vietnam Fund Limited (USD) * ................... 152,800 153 Total Vietnam (Cost $462) ............................. 153 SHORT-TERM INVESTMENTS 8.2% Money Market Funds 8.2% Reserve Investment Fund, 5.65% ........................ 62,833,998 62,834 Total Short-Term Investments (Cost $62,834) ........... 62,834 Total Investments in Securities 96.9% of Net Assets (Cost $826,117) ................... $ 746,258 Other Assets Less Liabilities ......................... 23,993 NET ASSETS ............................................ $ 770,251 * Non-income producing ADR American depository receipt ADS American depository share GDR Global depository receipt HKD Hong Kong dollar USD U.S. dollar The accompanying notes are an integral part of these financial statements. T. Rowe Price New Asia Fund ================================================================================ Unaudited April 30, 1998 ================================================================================ Statement of Assets and Liabilities - -------------------------------------------------------------------------------- In thousands Assets Investments in securities, at value (cost $826,117) ........... $ 746,258 Securities lending collateral pool ............................ 85,846 Other assets .................................................. 31,070 Total assets .................................................. 863,174 Liabilities Securities lending collateral ................................. 85,846 Other liabilities ............................................. 7,077 Total liabilities ............................................. 92,923 NET ASSETS .................................................... $ 770,251 Net Assets Consist of: Accumulated net investment income - net of distributions ...... $ 3,245 Accumulated net realized gain/loss - net of distributions ..... (250,771) Net unrealized gain (loss) .................................... (81,112) Paid-in-capital applicable to 138,103,634 shares of $0.01 par value capital stock outstanding; 2,000,000,000 shares of the Corporation authorized ............ 1,098,889 NET ASSETS .................................................... $ 770,251 NET ASSET VALUE PER SHARE ..................................... $ 5.58 The accompanying notes are an integral part of these financial statements. T. Rowe Price New Asia Fund ================================================================================ Unaudited ================================================================================ Statement of Operations - -------------------------------------------------------------------------------- In thousands 6 Months Ended 4/30/98 Investment Income Income Dividend (net of foreign taxes of $261) .................. $ 8,130 Interest ................................................. 2,670 Total income ............................................. 10,800 Expenses Investment management .................................... 3,298 Shareholder servicing .................................... 1,347 Prospectus and shareholder reports ....................... 131 Custody and accounting ................................... 126 Registration ............................................. 32 Legal and audit .......................................... 19 Directors ................................................ 4 Miscellaneous ............................................ 5 Total expenses ........................................... 4,962 Net investment income ....................................... 5,838 Realized and Unrealized Gain (Loss) Net realized gain (loss) Securities ............................................... (241,861) Foreign currency transactions ............................ (3,209) Net realized gain (loss) ................................. (245,070) Change in net unrealized gain or loss Securities ............................................... 200,582 Other assets and liabilities denominated in foreign currencies ........................ 885 Change in net unrealized gain or loss .................... 201,467 Net realized and unrealized gain (loss) ..................... (43,603) INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS ...................................... $ (37,765) The accompanying notes are an integral part of these financial statements. T. Rowe Price New Asia Fund ================================================================================ Unaudited ================================================================================ Statement of Changes in Net Assets - -------------------------------------------------------------------------------- In thousands
6 Months Year Ended Ended 4/30/98 10/31/97 Increase (Decrease) in Net Assets Operations Net investment income .............................................. $ 5,838 $ 14,020 Net realized gain (loss) ........................................... (245,070) 35,520 Change in net unrealized gain or loss .............................. 201,467 (400,999) Increase (decrease) in net assets from operations .................. (37,765) (351,459) Distributions to shareholders Net investment income .............................................. (11,045) (14,114) Net realized gain .................................................. -- (2,352) Decrease in net assets from distributions .......................... (11,045) (16,466) Capital share transactions * Shares sold ........................................................ 293,082 731,778 Distributions reinvested ........................................... 10,438 15,555 Shares redeemed .................................................... (361,246) (1,544,017) Increase (decrease) in net assets from capital share transactions ................................................. (57,726) (796,684) Net Assets Increase (decrease) during period .......................................... (106,536) (1,164,609) Beginning of period ........................................................ 876,787 2,041,396 End of period .............................................................. $770,251 $876,787 *Share information Shares sold ........................................................ 52,030 84,243 Distributions reinvested ........................................... 1,851 1,698 Shares redeemed .................................................... (63,117) (174,870) Increase (decrease) in shares outstanding .......................... (9,236) (88,929)
The accompanying notes are an integral part of these financial statements. T. Rowe Price New Asia Fund ================================================================================ Unaudited April 30, 1998 ================================================================================ Notes to Financial Statements - -------------------------------------------------------------------------------- NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES T. Rowe Price International Funds, Inc. (the corporation) is registered under the Investment Company Act of 1940. The New Asia Fund (the fund), a diversified, open-end management investment company, is one of the portfolios established by the corporation and commenced operations on September 28, 1990. The accompanying financial statements are prepared in accordance with generally accepted accounting principles for the investment company industry; these principles may require the use of estimates by fund management. VALUATION Equity securities are valued at the last quoted sales price at the time the valuations are made. A security which is listed or traded on more than one exchange is valued at the quotation on the exchange determined to be the primary market for such security. Debt securities are generally traded in the over-the-counter market and are valued at a price deemed best to reflect fair value as quoted by dealers who make markets in these securities or by an independent pricing service. Investments in open-end mutual funds are valued at the closing net asset value per share of the mutual fund on the day of valuation. For purposes of determining the fund's net asset value per share, the U.S. dollar value of all assets and liabilities initially expressed in foreign currencies is determined by using the mean of the bid and offer prices of such currencies against U.S. dollars quoted by a major bank. Assets and liabilities for which the above valuation procedures are inappropriate or are deemed not to reflect fair value are stated at fair value as determined in good faith by or under the supervision of the officers of the fund, as authorized by the Board of Directors. CURRENCY TRANSLATION Assets and liabilities are translated into U.S. dollars at the prevailing exchange rate at the end of the reporting period. Purchases and sales of securities and income and expenses are translated into U.S. dollars at the prevailing exchange rate on the dates of such transactions. The effect of changes in foreign exchange rates on realized and unrealized security gains and losses is reflected as a component of such gains and losses. PREMIUMS AND DISCOUNTS Premiums and discounts on debt securities are amortized for both financial reporting and tax purposes. OTHER Income and expenses are recorded on the accrual basis. Investment transactions are accounted for on the trade date. Realized gains and losses are reported on the identified cost basis. Dividend income and distributions to shareholders are recorded by the fund on the ex-dividend date. Income and capital gain distributions are determined in accordance with federal income tax regulations and may differ from those determined in accordance with generally accepted accounting principles. NOTE 2 - INVESTMENT TRANSACTIONS Consistent with its investment objective, the fund engages in the following practices to manage exposure to certain risks or enhance performance. The investment objective, policies, program, and risk factors of the fund are described more fully in the fund's prospectus and Statement of Additional Information. EMERGING MARKETS At April 30, 1998, the fund held investments in securities of companies located in emerging markets. Future economic or political developments could adversely affect the liquidity or value, or both, of such securities. SECURITIES LENDING The fund lends its securities to approved brokers to earn additional income and receives cash and U.S. Treasury securities as collateral against the loans. Cash collateral received is invested in a money market pooled account by the fund's lending agent. Collateral is maintained over the life of the loan in an amount not less than 100% of the value of loaned securities. Although risk is mitigated by the collateral, the fund could experience a delay in recovering its securities and a possible loss of income or value if the borrower fails to return them. At April 30, 1998, the value of loaned securities was $80,182,000; aggregate collateral consisted of $85,846,000 in the securities lending collateral pool and U.S. Treasury securities valued at $69,000. OTHER Purchases and sales of portfolio securities, other than short-term securities, aggregated $244,231,000 and $273,467,000, respectively, for the six months ended April 30, 1998. NOTE 3 - FEDERAL INCOME TAXES No provision for federal income taxes is required since the fund intends to continue to qualify as a regulated investment company and distribute all of its taxable income. The fund has unused realized capital loss carryforwards for federal income tax purposes of $2,626,000, which expire in 2003. The fund intends to retain gains realized in future periods that may be offset by available capital loss carryforwards. At April 30, 1998, the aggregate cost of investments for federal income tax and financial reporting purposes was $826,117,000, and net unrealized loss aggregated $79,859,000, of which $44,170,000 related to appreciated investments and $124,029,000 to depreciated investments. NOTE 4 - RELATED PARTY TRANSACTIONS The fund is managed by Rowe Price-Fleming International, Inc. (the manager), which is owned by T. Rowe Price Associates, Inc. (Price Associates), Robert Fleming Holdings Limited, and Jardine Fleming Holdings Limited under a joint venture agreement. The investment management agreement between the fund and the manager provides for an annual investment management fee, of which $543,000 was payable at April 30, 1998. The fee is computed daily and paid monthly, and consists of an individual fund fee equal to 0.50% of average daily net assets and a group fee. The group fee is based on the combined assets of certain mutual funds sponsored by the manager or Price Associates (the group). The group fee rate ranges from 0.48% for the first $1 billion of assets to 0.30% for assets in excess of $80 billion. At April 30, 1998, and for the six months then ended, the effective annual group fee rate was 0.32%. The fund pays a pro-rata share of the group fee based on the ratio of its net assets to those of the group. In addition, the fund has entered into agreements with Price Associates and two wholly owned subsidiaries of Price Associates, pursuant to which the fund receives certain other services. Price Associates computes the daily share price and maintains the financial records of the fund. T. Rowe Price Services, Inc. (TRPS) is the fund's transfer and dividend disbursing agent and provides shareholder and administrative services to the fund. T. Rowe Price Retirement Plan Services, Inc., provides subaccounting and recordkeeping services for certain retirement accounts invested in the fund. The fund incurred expenses pursuant to these related party agreements totaling approximately $1,060,000 for the six months ended April 30, 1998, of which $222,000 was payable at period-end. Additionally, the fund is one of several T. Rowe Price-sponsored mutual funds (underlying funds) in which the T. Rowe Price Spectrum Funds (Spectrum) may invest. Spectrum does not invest in the underlying funds for the purpose of exercising management or control. Expenses associated with the operation of Spectrum are borne by each underlying fund to the extent of estimated savings to it and in proportion to the average daily value of its shares owned by Spectrum, pursuant to special servicing agreements between and among Spectrum, the underlying funds, T. Rowe Price, and, in the case of T. Rowe Price Spectrum International, Rowe Price-Fleming International. Spectrum International Fund held approximately 0.3% of the outstanding shares of the New Asia Fund at April 30, 1998. For the six months then ended, the fund was allocated $7,000 of Spectrum expenses, $3,000 of which was payable at period-end. The fund may invest in the Reserve Investment Fund and Government Reserve Investment Fund (collectively, the Reserve Funds), open-end management investment companies managed by T. Rowe Price Associates, Inc. The Reserve Funds are offered as cash management options only to mutual funds and other accounts managed by T. Rowe Price and its affiliates and are not available to the public. The Reserve Funds pay no investment management fees. Distributions from the Reserve Funds to the fund for the six months ended April 30, 1998, totaled $2,251,000 and are reflected as interest income in the accompanying Statement of Operations. During the six months ended April 30, 1998, the fund, in the ordinary course of business, placed security purchase and sale orders aggregating $86,125,000 with certain affiliates of the manager and paid commissions of $292,000 related thereto. ================================================================================ T. Rowe Price Shareholder Services - -------------------------------------------------------------------------------- Investment Services And Information KNOWLEDGEABLE SERVICE REPRESENTATIVES BY PHONE 1-800-225-5132 Available Monday through Friday from 8 a.m. to 10 p.m. ET and weekends from 8:30 a.m. to 5 p.m. ET. IN PERSON Available in T. Rowe Price Investor Centers. ACCOUNT SERVICES CHECKING Available on most fixed income funds ($500 minimum). AUTOMATIC INVESTING From your bank account or paycheck. AUTOMATIC WITHDRAWAL Scheduled, automatic redemptions. DISTRIBUTION OPTIONS Reinvest all, some, or none of your distributions. AUTOMATED 24-HOUR SERVICES Including Tele*Access[Registration Mark] and the T. Rowe Price Web site on the Internet. Address: www.troweprice.com DISCOUNT BROKERAGE* INDIVIDUAL INVESTMENTS Stocks, bonds, options, precious metals, and other securities at a savings over regular commission rates. INVESTMENT INFORMATION COMBINED STATEMENT Overview of all your accounts with T. Rowe Price. SHAREHOLDER REPORTS Fund managers' reviews of their strategies and results. T. ROWE PRICE REPORT Quarterly investment newsletter discussing markets and financial strategies. PERFORMANCE UPDATE Quarterly review of all T. Rowe Price fund results. INSIGHTS Educational reports on investment strategies and financial markets. INVESTMENT GUIDES Asset Mix Worksheet, College Planning Kit, Diversifying Overseas: A Guide to International Investing, Personal Strategy Planner, Retirees Financial Guide, and Retirement Planning Kit. * A division of T. Rowe Price Investment Services, Inc. Member NASD/SIPC. T. Rowe Price Mutual Funds ================================================================================ STOCK FUNDS - ------------------------------ DOMESTIC Blue Chip Growth Capital Appreciation Capital Opportunity Diversified Small-Cap Growth Dividend Growth Equity Income Equity Index 500* Extended Equity Market Index Financial Services Growth & Income Growth Stock Health Sciences Media & Telecommunications** Mid-Cap Growth Mid-Cap Value New America Growth New Era New Horizons*** Real Estate Science & Technology Small-Cap Stock Small-Cap Value*** Spectrum Growth Total Equity Market Index Value INTERNATIONAL/GLOBAL Emerging Markets Stock European Stock Global Stock International Discovery International Stock Japan Latin America New Asia Spectrum International BOND FUNDS - ------------------------------ DOMESTIC TAXABLE Corporate Income GNMA High Yield New Income Short-Term Bond Short-Term U.S. Government Spectrum Income Summit GNMA Summit Limited-Term Bond U.S. Treasury Intermediate U.S. Treasury Long-Term DOMESTIC TAX-FREE California Tax-Free Bond Florida Insured Intermediate Tax-Free Georgia Tax-Free Bond Maryland Short-Term Tax-Free Bond Maryland Tax-Free Bond New Jersey Tax-Free Bond New York Tax-Free Bond Summit Municipal Income Summit Municipal Intermediate Tax-Free High Yield Tax-Free Income Tax-Free Insured Intermediate Bond Tax-Free Short-Intermediate Virginia Short-Term Tax-Free Bond Virginia Tax-Free Bond - ------------------------------ INTERNATIONAL/GLOBAL Emerging Markets Bond Global Bond + International Bond MONEY MARKET FUNDS++ - ------------------------------ TAXABLE Prime Reserve Summit Cash Reserves U.S. Treasury Money TAX-FREE California Tax-Free Money New York Tax-Free Money Summit Municipal Money Market Tax-Exempt Money BLENDED ASSET FUNDS - ------------------------------ Balanced Personal Strategy Balanced Personal Strategy Growth Personal Strategy Income Tax-Efficient Balanced T. ROWE PRICE NO-LOAD VARIABLE ANNUITY - ------------------------------ Equity Income Portfolio International Stock Portfolio Limited-Term Bond Portfolio Mid-Cap Growth Portfolio New America Growth Portfolio Personal Strategy Balanced Portfolio Prime Reserve Portfolio * Formerly named Equity Index. ** Formerly the closed-end New Age Media Fund. Converted to open-end status on 7/28/97. *** Closed to new investors. + Formerly named Global Government Bond. ++ Neither the funds nor their share prices are insured or guaranteed by the U.S. government. Please call for a prospectus. Read it carefully before investing. The T. Rowe Price No-Load Variable Annuity [#V6021] is issued by Security Benefit Life Insurance Company. In New York, it [#FSB201(11-96)] is issued by First Security Benefit Life Insurance Company of New York, White Plains, NY. T. Rowe Price refers to the underlying portfolios' investment managers and the distributors, T. Rowe Price Investment Services, Inc.; T. Rowe Price Insurance Agency, Inc.; and T. Rowe Price Insurance Agency of Texas, Inc. The Security Benefit Group of Companies and the T. Rowe Price companies are not affiliated. The variable annuity may not be available in all states. The contract has limitations. Call a representative for costs and complete details of the coverage. FOR YIELD, PRICE, LAST TRANSACTION, CURRENT BALANCE, OR TO CONDUCT TRANSACTIONS, 24 HOURS, 7 DAYS A WEEK, CALL TELE*ACCESS [REGISTRATION MARK]: 1-800-638-2587 toll free FOR ASSISTANCE WITH YOUR EXISTING FUND ACCOUNT, CALL: Shareholder Service Center 1-800-225-5132 toll free 410-625-6500 Baltimore area TO OPEN A DISCOUNT BROKERAGE ACCOUNT OR OBTAIN INFORMATION, call: 1-800-638-5660 toll free INTERNET ADDRESS: www.troweprice.com T. Rowe Price Associates 100 East Pratt Street Baltimore, Maryland 21202 This report is authorized for distribution only to shareholders and to others who have received a copy of the prospectus of the T. Rowe Price New Asia Fund. INVESTOR CENTERS: 101 East Lombard St. Baltimore, MD 21202 T. Rowe Price Financial Center 10090 Red Run Blvd. Owings Mills, MD 21117 Farragut Square 900 17th Street, N.W. Washington, D.C. 20006 ARCO Tower 31st Floor 515 South Flower St. Los Angeles, CA 90071 4200 West Cypress St. 10th Floor Tampa, FL 33607 T. Rowe Price Investment Services, Inc., Distributor. F39-051 4/30/98 -----END PRIVACY-ENHANCED MESSAGE-----