-----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, DPiUEzV9s4XXcCvnJpu8/AIyWMEvGOrK0UHyjVoaxBisz7U5nyedNlYjY9i1rdIn dAO+6ee9cJeFRTq9SyhLaA== 0000950109-95-005039.txt : 19951205 0000950109-95-005039.hdr.sgml : 19951205 ACCESSION NUMBER: 0000950109-95-005039 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19951031 FILED AS OF DATE: 19951204 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: 1940 Act SEC FILE NUMBER: 811-02958 FILM NUMBER: 95598896 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 EMERGING MKTS FUND - -------------------------------------------------------------------------------- Fellow Shareholders - -------------------------------------------------------------------------------- In the last quarter, your fund gave up some of its earlier gains as the economic rebound in Latin America proved to be more elusive than expected. Latin American stocks sustained heavy losses and many Asian stock markets also lost ground after their strong performance in the previous quarter. Fund performance was in negative territory in the quarter ended October 31, but surpassed the benchmark shown below during its seven months of operation. - -------------------------------------------------------------------------------- Performance Comparison - --------------------------------------------------------------------------------
Periods Ended 10/31/95 Since Inception 3 Months (3/31/95) -------- --------- Emerging Markets Stock Fund -8.55% 4.80% MSCI Emerging Markets Free Index -6.90 4.26
- -------------------------------------------------------------------------------- Market Review In Brazil, the dramatic success of the real (the local currency) restructuring plan in early 1995 forced the government to restrain the overheating economy by restricting credit and imports while raising interest rates, a policy that slowed retail sales. The ongoing implementation of state, fiscal, and social security reforms, vital for long-term sustainable growth, is causing inevitable short-term pain. This is also the case in Argentina, where a sharp drop in economic activity (industrial production fell 7.9% in August) and high rates of unemployment have put pressure on Finance Minister Cavallo. Stock valuations in Argentina are low, and prospects seem favorable for the telephone and energy sectors, and major banks. Quilmes Industrial was among the fund's largest holdings on October 31. In Mexico, the program of economic rehabilitation was fitful during the quarter. While - -------------------------------------------------------------------------------- Market Performance - --------------------------------------------------------------------------------
Periods Ended 10/31/95 (in U.S. Dollar Terms) 3 Months 12 Months -------- --------- Argentina -10.2% -26.3% Brazil 0.4 -25.5 Chile -11.6 -9.9 China (Free)* -15.7 n/a Israel (Nondomestic) 2.9 2.5 Malaysia -12.6 -13.8 Mexico -16.2 -54.5 Poland -7.7 -6.3 South Africa 5.6 14.0 Thailand -7.4 -14.5
- -------------------------------------------------------------------------------- *China (Free) is shown excluding dividends Source: MSCI EMF and Emerging Markets Perspective, with gross dividends reinvested. the trade balance showed a surplus and monthly inflation fell back to 1.7% in September from an April peak of 8%, the peso fell to new lows versus the dollar and interest rates spiked to more than 50%. We believe that the foundations for growth and stability are now in place and should start to benefit the stock market. Grupo Televisa and Telefonos de Mexico were included among our major Latin American positions. In Southeast Asia, the positive impact of lower U.S. interest rates was less pronounced than in previous quarters. The strength of the economies in Malaysia and Thailand actually required a slight rise in rates, with credit growth an unsustainable 25% in Malaysia. In China, all macroeconomic evidence plus our own visits to mainland companies reveal a successful soft landing in progress for this formerly overheated mega-economy, as inflation fell to 12% from 25% at the end of 1994. The government has been easing credit gradually, and foreign reserves look extremely healthy. - -------------------------------------------------------------------------------- Geographic Diversification - -------------------------------------------------------------------------------- [PIE CHART APPEARS HERE] Geographical diversification pie chart showing Latin America 38%, Southeast Asia 45%, U.S. Short-Term 13%, All Other 4%. Based on net assets as of 10/31/95. - -------------------------------------------------------------------------------- Our long-term confidence in the growth potential of Southeast Asia remains unshaken, as foreign direct investment (a key feature of the late 1980s economic boom) continued to pick up and could accelerate when the Japanese economy recovers. The region was represented in your fund's portfolio by United Communications of Thailand, Semen Gresik of Indonesia, Asas Dunia of Malaysia, and other stocks. Elsewhere, we have added a holding in the Czech telephone company SPT Telecom, which will benefit from a rapid expansion in domestic demand. Our confidence is supported by the company's strategic foreign alliance with KPN of the Netherlands and the Swiss telephone monopoly, which together purchased a 27% stake in the Czech firm. After the close of the reporting period, we added a position in the Israeli pharmaceutical firm Teva, which has a promising multiple sclerosis drug. Thanks to the company's research and development programs, the Israeli drug maker is well positioned to develop additional products. In South Africa, the improved current account situation and ongoing high- quality management by the central bank governor prompted us to reconsider our underweighting here. Barlow Limited is our largest holding in this country. However, our enthusiasm is tempered by dull economic performance (expected growth of 3% in 1995), which is insufficient to absorb the growth of the population. A continuing rise in crime is also a cause of concern, so we will be monitoring developments carefully in this potentially rewarding country. Outlook Essential economic reforms have been put in place in Latin America, the effects of which should begin to take hold in 1996. Recent volatility in stock markets reflect the pain of structural adjustments. In Southeast Asia, the emphasis has not been on reform, but rather on the maintenance of long-term, low-inflationary growth, a goal that has been achieved in the majority of countries in the region, but will require renewed commitment in Malaysia. Low stock valuations and steady rather than sharp earnings growth through 1996 in emerging markets should provide a good environment for stocks. We believe that after a disappointing year these markets will resume their trend of strong long-term performance. Respectfully submitted, /s/ Martin G. Wade Martin G. Wade President November 17, 1995 2 - -------------------------------------------------------------------------------- Portfolio Highlights - -------------------------------------------------------------------------------- Periods Ended October 31, 1995
Change in Price Per Share - --------------------------------- 3 Months (From $11.46 to $10.48) $-0.98 7 Months (From $10.00 to $10.48) 0.48 - ------------------------------------------------------------------------------- Total Net Assets $14.4 million ===============================================================================
- -------------------------------------------------------------------------------- Twenty-Five Largest Holdings - -------------------------------------------------------------------------------- October 31, 1995
Percent of Net Assets ---------- Backus y Johnston Cerveceria, Peru 2.5% Telecomunicacoes Brasilias ADR (USD), Brazil 2.5 Banco Bradesco, Brazil 2.3 Brahma, Brazil 2.3 Cia Tecidos Norte de Minas, Brazil 2.1 Centrais Electrobras ADR (USD), Brazil 2.0 Grupo Televisa GDR (USD), Mexico 1.7 Samsung Electronics, South Korea 1.7 Panamerican Beverages ADR (USD), Mexico 1.7 Cemex, Mexico 1.6 Compania Telecomunicaciones ADR (USD), Chile 1.6 Seoul Bank, South Korea 1.6 Usiminas, Brazil 1.6 BHI (USD), Belize 1.5 United Communications, Thailand 1.5 Telefonos de Mexico ADS (USD), Mexico 1.5 Semen Gresik, Indonesia 1.5 Asas Dunia, Malaysia 1.5 Barlow Limited, South Africa 1.5 Quilmes Industrial (USD), Argentina 1.4 Malaysian Assurance Alliance, Malaysia 1.4 Arab Malaysian Finance, Malaysia 1.4 Enersis ADS (USD), Chile 1.4 Cia Energetica Minas Gerais, Brazil 1.4 MTD Capital, Malaysia 1.3 - ------------------------------------------------------------------------------- Total 42.5% ===============================================================================
- -------------------------------------------------------------------------------- Industry Diversification - -------------------------------------------------------------------------------- October 31, 1995
Percent of Net Assets ---------- Finance 21.5% Materials 17.1 Consumer Goods 16.4 Services 15.8 Capital Equipment 8.9 Energy 8.6 Multi-Industry 0.9 Miscellaneous 1.6 Reserves 9.2 - ------------------------------------------------------------------------------- Total 100.0% ===============================================================================
- -------------------------------------------------------------------------------- Security Classification - -------------------------------------------------------------------------------- October 31, 1995
Percent Market of Net Cost Value Assets (000) (000) ------ ----- ------ Common Stocks, Warrants, and Rights 77.9% $12,011 $11,212 Preferred Stocks and Rights 12.3 1,702 1,773 Bonds 0.6 83 92 Short-Term Investments 12.5 1,803 1,803 ----- ------- ------- Total Investments 103.3 15,599 14,880 Other Assets Less Liabilities -3.3 -479 -481 - ------------------------------------------------------------------------------- Total Net Assets 100.0% $15,120 $14,399 ===============================================================================
3 - -------------------------------------------------------------------------------- Performance Comparison - -------------------------------------------------------------------------------- [CHART APPEARS HERE]
Fund: Emerging Market Stock Fund Benchmark: MSCI Emerging Market Free Index Date $ Amount ($10,000 intial Date $ Amount ($10,000 initial investment) investment) 03/31/95 10,000 03/31/95 10,000 10/31/95 10,480 10/31/95 10,426
Note: The index return does not reflect expenses, which have been deducted from the fund's return. *Commencement of operations. - -------------------------------------------------------------------------------- Total Return - -------------------------------------------------------------------------------- Period Ended October 31, 1995 Since Inception (3/31/95) --------- 4.80% - -------------------------------------------------------------------------------- Note: For the above period ended 9/30/95, the fund's return was 11.30%. Investment return and principal value represent past performance and will vary. Shares may be worth more or less at redemption than at original purchase. 4 - -------------------------------------------------------------------------------- Statement of Net Assets T. Rowe Price Emerging Markets Stock Fund / October 31, 1995 - -------------------------------------------------------------------------------- (values in thousands)
Value ----------- ARGENTINA -- 3.9% COMMON STOCKS 11,853 shs Quilmes Industrial (USD)....................... $ 208 8,080 Telefonica de Argentina 'B' ADR (USD).................................... 168 10,700 YPF Sociedad Anonima 'D' ADR (USD).................................... 183 Total Argentina 559 BELIZE -- 1.5% COMMON STOCK 14,250 BHI (USD)...................................... 223 BRAZIL -- 14.0% COMMON STOCK 17,410 *Centrais Electrobras ADR (USD).................................... 248 PREFERRED STOCKS AND RIGHTS 36,404,481 Banco Bradesco................................. 333 853,491 Brahma......................................... 326 2,300 Centrais Electrobras ADR (USD).................................... 33 9,305,000 Cia Energetica Minas Gerais.................... 199 444,311 rts *Cia Energetica Minas Gerais.................... 0 960,000 shs Cia Tecidos Norte de Minas..................... 300 8,790 Telecomunicacoes Brasilias ADR (USD).................................... 357 240,740,000 Usiminas....................................... 225 1,773 Total Brazil 2,021 CHILE -- 5.3% COMMON STOCKS 6,420 Compania Cervecerias Unidas ADS (USD).................................... 148 3,230 Compania Telecomunicaciones ADR (USD).................................... 233 8,080 Enersis ADS (USD).............................. 203 4,140 Sociedad Quimica Minera de Chile 'B' ADR (USD)....................... 180 Total Chile 764 CHINA -- 4.5% COMMON STOCKS 8,300 shs *Huaneng Power International 'N' ADR (USD)................................ 134 536,000 Maanshan Iron & Steel (HKD)........................................ 98 180,000 Shanghai Diesel Engine 'B' (USD).................................... 80 240,000 *Shanghai New Asia 'B' (USD)........................................ 115 456,000 Shanghai Petrochemical 'H' (HKD).................................... 131 300,000 Yizheng Chemical Fibre 'H' (HKD).................................... 87 Total China 645 COLOMBIA -- 0.8% COMMON STOCK 6,110 Maderas y Sinteticos Sociedad Anoma ADR (USD).............................. 109 CZECH REPUBLIC -- 1.7% COMMON STOCKS 1,110 IPS Praha...................................... 92 1,600 *SPT Telecom.................................... 158 Total Czech Republic 250 HONG KONG -- 2.1% COMMON STOCKS AND WARRANTS 168,000 Guangdong Investment........................... 99 642,000 Hualing Holdings............................... 100 6,700 Pacific Basin Bulk Shipping (USD)........................................ 94 4,300 wts *Pacific Basin Bulk Shipping, 9/30/99 (USD)................................ 3 Total Hong Kong 296 INDIA -- 2.3% COMMON STOCKS 6,000 shs Ashok Leyland GDR (USD)........................ 63 1,700 Grasim Industries GDS (USD)........................................ 35 1,200 Hindalco GDR (USD)............................. 38 6,000 *Indian Hotels GDS (USD)........................ 110
5 - -------------------------------------------------------------------------------- - --------------------------------------------------------------------------------
Value ----------- 2,160 shs Reliance Industries GDS (USD).................................... $ 33 19,000 Videocon International GDR (USD).................................... 48 Total India 327 INDONESIA -- 6.6% COMMON STOCKS 55,500 Bank Dagang Nasional........................... 50 13,500 Hanjaya Mandala Sampoerna...................... 125 27,000 Indofoods Sukses Makmur........................ 125 1,500 Indosat 'B' ADR (USD).......................... 50 55,000 Jaya Real Property............................. 157 132,000 Mayora Indah................................... 94 36,480 Pabrik Kertas Tjiwi Kimia...................... 67 59,250 Panin Bank..................................... 65 82,000 Semen Gresik................................... 213 Total Indonesia 946 ISRAEL -- 2.8% COMMON STOCKS 85,500 Bank Hapoalim.................................. 136 22,000 *Blue Square.................................... 144 3,100 Elco Holdings.................................. 130 Total Israel 410 MALAYSIA -- 14.8% COMMON STOCKS AND WARRANTS 59,000 Arab Malaysian Finance......................... 207 67,000 Asas Dunia..................................... 211 50,000 Berjaya Sports Toto............................ 104 45,000 Chemical Company of Malaysia................... 90 32,000 wts *Commerce Asset Holdings, 6/27/98............... 87 28,000 shs Hock Hua Bank.................................. 83 3,000 Hock Hua Bank (L).............................. 9 58,000 LB Aluminum.................................... 123 53,000 Lityan Holdings................................ 141 51,000 Malaysian Assurance Alliance................... 207 33,000 MTD Capital.................................... 184 71,250 Muda Holdings.................................. 79 62,000 Renong......................................... 95 66,000 Shah Alam Properties........................... 162 38,000 *Technology Resources Industries................ 96 16,000 United Engineers............................... 100 46,000 Westmont....................................... 159 Total Malaysia 2,137 MEXICO -- 10.3% COMMON STOCKS 76,770 shs Cemex 'B'...................................... 237 168,780 Cifra 'B' ADR (USD)............................ 180 41,300 Fomentos Economico Mexicano 'B'................ 86 32,300 *Gruma 'B'...................................... 95 14,630 Grupo Televisa GDR (USD)....................... 250 8,970 Panamerican Beverages 'A' ADR (USD)............ 246 7,775 Telefonos de Mexico 'L' ADS (USD).............. 214 45,100 Tolmex 'B'..................................... 169 Total Mexico 1,477 PERU -- 2.5% COMMON STOCK 202,361 Backus y Johnston Cerveceria 'T'............... 362 PHILIPPINES -- 1.4% COMMON STOCKS 7,000 Philippine Commerce International Bank......... 57 340 Philippine Long Distance Telephone............. 19 700 Philippine Long Distance Telephone ADR (USD)... 39 243,500 *SM Prime....................................... 66 148,000 *Southeast Asia Cement.......................... 19 Total Philippines 200 POLAND -- 0.1% COMMON STOCK 6,600 Mostostal Export.............................. 15 SOUTH AFRICA -- 2.5% COMMON STOCKS 16,300 Barlow Limited................................ 210 2,100 *Polifin....................................... 4 17,000 Sasol......................................... 147 Total South Africa 361 SOUTH KOREA -- 6.3% COMMON STOCKS 1,500 Cho Hung Bank................................. 21 5,600 Hanil Securities.............................. 86 2,710 Korea Electric Power.......................... 122 975 Pohang Iron & Steel........................... 97
6 - -------------------------------------------------------------------------------- - --------------------------------------------------------------------------------
Value ----------- 1,100 shs *Samsung Electronics........................... $ 250 24,000 Seoul Bank.................................... 231 2,500 Yukong........................................ 94 Total South Korea 901 TAIWAN -- 1.1% COMMON STOCK 7,048 *Yageo GDR (USD)............................... 69 CONVERTIBLE BOND 30,000 USD Acer, 4.00%, 6/10/01.......................... 92 Total Taiwan 161 THAILAND -- 6.3% COMMON STOCKS 17,800 shs Bangkok Bank Public........................... 184 4,800 Land & House.................................. 78 2,700 Siam Cement................................... 147 10,000 Siam Commercial Bank.......................... 117 20,000 Thai Farmers Bank............................. 165 17,700 United Communications......................... 222 Total Thailand 913 SHORT-TERM INVESTMENTS -- 12.5% COMMERCIAL PAPER $400,000 Delaware Funding, 5.74%, 11/3/95.............. 398 350,000 Falcon Asset Securitization, 5.75%, 11/16/95.. 348 500,000 General Electric, 5.73%, 11/16/95............. 497 560,044 Investments in Commercial Paper through a joint account, 5.87 - 5.88%, 11/1/95........ 560 Total Short-Term Investments 1,803 - ------------------------------------------------------------------------------- Total Investments in Securities -- 103.3% of Net Assets (Cost $15,599) $14,880 - ------------------------------------------------------------------------------- Other Assets Less Liabilities...................................... $ (481) ------ Value -------- Net Assets Consist of: Accumulated net investment income - net of distributions........................... $ 35 Accumulated net realized gain/loss - net of distributions........................ (45) Net unrealized gain (loss)................................ (721) Paid-in-capital applicable to 1,373,323 shares of $0.01 par value capital stock outstanding; 2,000,000,000 shares of the Corporation authorized.................................. 15,130 ------ NET ASSETS................................................ $14,399 ======= NET ASSET VALUE PER SHARE................................. $10.48 ====== - -------------------------------------------------------------------------------
* Non-income producing HKD Hong Kong dollar USD U.S. dollar (L) Local registered shares The accompanying notes are an integral part of these financial statements. 7 - -------------------------------------------------------------------------------- Statement of Operations - -------------------------------------------------------------------------------- T. Rowe Price Emerging Markets Stock Fund / From March 31, 1995* to October 31, 1995 (in thousands)
INVESTMENT INCOME Income Dividend (net of foreign taxes of $11)................................ $ 81 Interest.............................................................. 50 ---- Total income.......................................................... 131 ---- Expenses Custody and accounting................................................ 72 Shareholder servicing................................................. 40 Legal and audit....................................................... 13 Prospectus and shareholder reports.................................... 4 Organization.......................................................... 4 Directors............................................................. 3 Registration.......................................................... 2 Miscellaneous......................................................... 2 Reimbursed by Manager................................................. (40) ---- Total expenses........................................................ 100 ---- Net investment income.................................................. 31 ---- REALIZED AND UNREALIZED GAIN (LOSS) Net realized gain (loss) on: Securities............................................................ (27) Foreign currency transactions......................................... (18) ---- Net realized gain (loss).............................................. (45) ---- Change in net unrealized gain or loss on: Securities............................................................ (719) Other assets and liabilities denominated in foreign currencies........ (2) ---- Change in net unrealized gain or loss................................. (721) ---- Net realized and unrealized gain (loss)................................ (766) ---- INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS...................... $(735) ===== - --------------------------------------------------------------------------------
*Commencement of Operations The accompanying notes are an integral part of these financial statements. 8 - -------------------------------------------------------------------------------- Statement of Changes in Net Assets - -------------------------------------------------------------------------------- T. Rowe Price Emerging Markets Stock Fund (in thousands)
From March 31, 1995* to October 31, 1995 ----------------------- INCREASE (DECREASE) IN NET ASSETS FROM Operations Net investment income......................................................... $ 31 Net realized gain (loss)...................................................... (45) Change in net unrealized gain or loss......................................... (721) -------- Increase (decrease) in net assets from operations............................. (735) -------- Capital share transactions+ Shares sold................................................................... 16,733 Shares redeemed............................................................... (1,627) Redemption fees received...................................................... 28 -------- Increase (decrease) in net assets from capital share transactions............. 15,134 -------- Increase (decrease) in net assets.............................................. 14,399 -------- NET ASSETS Beginning of period............................................................ -- -------- End of period.................................................................. $ 14,399 ======== - ----------------------------------------------------------------------------------------------------- +Share information Shares sold.................................................................. 1,518 Shares redeemed.............................................................. (145) -------- Increase (decrease) in shares outstanding.................................... 1,373 ======== - -----------------------------------------------------------------------------------------------------
* Commencement of Operations The accompanying notes are an integral part of these financial statements. 9 - -------------------------------------------------------------------------------- Notes To Financial Statements - -------------------------------------------------------------------------------- T. Rowe Price Emerging Markets Stock Fund / October 31, 1995 Note 1 - Significant Accounting Policies T. Rowe Price International Funds, Inc., (the Corporation) is registered under the Investment Company Act of 1940. The Emerging Markets Stock Fund (the fund), a diversified, open-end management investment company, is one of the portfolios established by the Corporation. A) Valuation - Equity securities listed or regularly traded on a securities exchange (including Nasdaq) 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. Other equity securities and those listed securities that are not traded on a particular day are valued at a price within the limits of the latest bid and asked prices deemed by the Board of Directors, or by persons delegated by the Board, best to reflect fair value. 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. Short- term debt securities are valued at their cost which, when combined with accrued interest, approximates fair value. 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. B) 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. C) 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 - Organization The fund was organized on January 25, 1995, and had no operations prior to March 31, 1995, other than those related to organizational matters. Note 3 - 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. A) Emerging Markets - At October 31, 1995, 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. 10 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- B) Commercial Paper Joint Account - The fund, and other affiliated funds, may transfer uninvested cash into a commercial paper joint account, the daily aggregate balance of which is invested in high-grade commercial paper. All securities purchased by the joint account satisfy the fund's criteria as to quality, yield, and liquidity. C) Other - Purchases and sales of portfolio securities, other than short-term securities, aggregated $14,712,000 and $897,000, respectively, for the period ended October 31, 1995. Note 4 - Federal Income Taxes No provision for federal income taxes is required since the fund intends 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 $27,000 which expire in 2003. The fund intends to retain gains realized in future periods that may be offset by available capital loss carryforwards. In order for the fund's capital accounts and distributions to shareholders to reflect the tax character of certain transactions, $4,000 of undistributed net investment income was reclassified as a decrease to paid-in-capital during the year ended October 31, 1995. The results of operations and net assets were not affected by the reclassification. At October 31, 1995, the aggregate cost of investments for federal income tax and financial reporting purposes was $15,599,000 and net unrealized loss aggregated $719,000, of which $410,000 related to appreciated investments and $1,129,000 to depreciated investments. Note 5 - 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. The fee is computed daily and paid monthly, and consists of an Individual Fund Fee equal to 0.75% 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 0.31% for assets in excess of $34 billion. At October 31, 1995, and for the period then ended, the effective annual Group Fee rate was 0.34%. The fund pays a pro rata share of the Group Fee based on the ratio of its net assets to those of the Group. Under the terms of the investment management agreement, the Manager is required to bear any expenses through October 31, 1996 which would cause the fund's ratio of expenses to average net assets to exceed 1.75%. Thereafter through October 31, 1998, the fund is required to reimburse the Manager for these expenses, provided that average net assets have grown or expenses have declined sufficiently to allow reimbursement without causing the fund's ratio of expenses to average net assets to exceed 1.75%. Pursuant to this agreement, $62,000 of management fees were not accrued by the fund for the period ended October 31, 1995, and $40,000 of other expenses were borne by the Manager. 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. is the fund's transfer and dividend disbursing agent and provides shareholder and administrative services to the fund. 11 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 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 $85,000 for the period ended October 31, 1995, of which $11,000 was payable at period-end. During the period ended October 31, 1995, the fund, in the ordinary course of business, paid commissions of $31,000 to, and placed security purchase and sale orders aggregating $5,262,000 with, certain affiliates of the Manager in connection with the execution of various portfolio transactions. 12 - -------------------------------------------------------------------------------- Financial Highlights - -------------------------------------------------------------------------------- T. Rowe Price Emerging Markets Stock Fund
For a share outstanding throughout the period ----------------------- From March 31, 1995* to October 31, 1995 ----------------------- NET ASSET VALUE, BEGINNING OF PERIOD.......................... $10.00 ------ Investment activities Net investment income........................................ 0.02** Net realized and unrealized gain (loss)...................... 0.44++ ------ Total from investment activities............................. 0.46 ------ Redemption fees added to paid-in-capital...................... 0.02 ------ NET ASSET VALUE, END OF PERIOD................................ $10.48 ====== - ----------------------------------------------------------------------------------------------------- RATIOS / SUPPLEMENTAL DATA Total return.................................................. 4.8%** Ratio of expenses to average net assets....................... 1.75%+** Ratio of net investment income to average net assets.......... 0.54%+** Portfolio turnover rate....................................... 28.8%+ Net assets, end of period (in thousands)...................... $14,399 - -----------------------------------------------------------------------------------------------------
+ Annualized. * Commencement of operations. ** Excludes expenses in excess of a 1.75% voluntary expense limitation in effect through October 31, 1996. ++ The amount presented is calculated pursuant to a methodology prescribed by the Securities and Exchange Commission for a share outstanding throughout the period. This amount is inconsistent with the fund's aggregate gains and losses because of the timing of sales and redemptions of the fund's shares in relation to fluctuating market values for the investment portfolio. The accompanying notes are an integral part of these financial statements. 13 - -------------------------------------------------------------------------------- Report of Independent Accountants - -------------------------------------------------------------------------------- To the Board of Directors and Shareholders of T. Rowe Price Emerging Markets Stock Fund In our opinion, the accompanying statement of net assets and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of T. Rowe Price Emerging Markets Stock Fund (one of the portfolios constituting T. Rowe Price International Funds, Inc.) at October 31, 1995, and the results of its operations, the changes in its net assets and the financial highlights for the fiscal period presented, in conformity with generally accepted accounting principles. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Fund's management; our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit of these financial statements in accordance with generally accepted auditing standards which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audit, which included confirmation of securities at October 31, 1995 by correspondence with custodians and brokers and, where appropriate, the application of alternative auditing procedures for unsettled security transactions, provides a reasonable basis for the opinion expressed above. PRICE WATERHOUSE LLP Baltimore, Maryland November 17, 1995 14 - -------------------------------------------------------------------------------- Shareholder Services - -------------------------------------------------------------------------------- To help shareholders monitor their current investments and make decisions that accurately reflect their financial goals, T. Rowe Price offers a wide variety of information and services--at no extra cost. Knowledgeable Service Representatives By Phone--Shareholder service representatives are available from 8:00 a.m. to 10:00 p.m., Monday-Friday, and weekends from 9:00 a.m. to 5:00 p.m. ET. Call 1-800-225-5132 to speak directly with a representative who will be able to assist you with your accounts. In Person--Visit one of our investor center locations to meet with a representative who will be able to assist you with your accounts. While there, you can drop off applications or obtain prospectuses and other literature. Automated 24-Hour Services Tele*Access(R) (1-800-638-2587) provides information such as account balance, date and amount of your last transaction, latest dividend payment, and fund prices and yields. Additionally, you have the ability to request prospectuses, statements, account and tax forms; reorder checks; and initiate purchase, redemption, and exchange orders for identically registered accounts. PC*Access(R) provides the same information as Tele*Access, but on a personal computer via dial-up modem. Account Services Checking--Write checks for $500 or more on any money market and most bond fund accounts (except the High Yield Fund and Emerging Markets Bond Fund). Automatic Investing--Build your account over time by investing directly from your bank account or paycheck with Automatic Asset Builder. Additionally, Automatic Exchange enables you to set up systematic investments from one fund account into another, such as from a money fund into a stock fund. A low, $50 minimum makes it easy to get started. Automatic Withdrawal--If you need money from your fund account on a regular basis, you can establish scheduled, automatic redemptions. Dividend and Capital Gains Payment Options--Reinvest all or some of your distributions, or take them in cash. We give you maximum flexibility and convenience. Investment Information Combined Statement--A comprehensive overview of your T. Rowe Price accounts. The summary page gives your earnings by tax category, provides total portfolio value, and lists your investments by type--stock, bond, and money market. Detail page itemize account transactions by fund. Shareholder Reports--Portfolio managers review the performance of the funds in plain language and discuss T. Rowe Price's economic outlook. The T. Rowe Price Report--A quarterly newsletter with relevant articles on market trends, personal financial planning, and T. Rowe Price's economic perspective. Performance Update--A quarterly report reviewing recent market developments and providing comprehensive performance information for every T. Rowe Price fund. Insights--A library of information that includes reports on mutual fund tax issues, investment strategies, and financial markets. Detailed Investment Guides--Our widely acclaimed Asset Mix Worksheet, College Planning Kit, Retirees Financial Guide, Retirement Planning Kit (also available on disk for PC use), and Guide to Risk-Adjusted Performance can help you determine and reach your investment goals. Discount Brokerage You can trade stocks, bonds, options, precious metals, and other securities at a substantial savings over regular commission rates. Call a shareholder service representative for more information. 15 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- For yield, price, last transaction, and current balance, 24 hours, 7 days a week, call: 1-800-638-2587 toll free 625-7676 Baltimore area For assistance with your existing fund account, call: Shareholder Service Center 1-800-225-5132 toll free 625-6500 Baltimore area T. Rowe Price 100 East Pratt Street Baltimore, Maryland 21202 This report is authorized for distri- bution only to shareholders and to others who have received a copy of the prospectus of the T. Rowe Price Emerging Markets Stock Fund. [LOGO OF T. ROWE PRICE APPEARS HERE] EMF Annual Report T. Rowe Price - ------------- Emerging Markets Stock Fund October 31, 1995 -----END PRIVACY-ENHANCED MESSAGE-----