-----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, N0SfoTjQoKOs/iU3CE6h/jNdoopgksTu/rVfUhk7hY6+ibZdm038wGG99aVxBooo DFmYaOwNozrUF99z5J5v2Q== 0000814083-97-000006.txt : 19971126 0000814083-97-000006.hdr.sgml : 19971126 ACCESSION NUMBER: 0000814083-97-000006 CONFORMED SUBMISSION TYPE: N-30B-2 PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19970930 FILED AS OF DATE: 19971125 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CLEMENTE GLOBAL GROWTH FUND INC CENTRAL INDEX KEY: 0000814083 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 133407699 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30B-2 SEC ACT: SEC FILE NUMBER: 811-05150 FILM NUMBER: 97728082 BUSINESS ADDRESS: STREET 1: 237 PARK AVE STREET 2: C/O FURMAN SELZ CITY: NEW YORK STATE: NY ZIP: 10017 BUSINESS PHONE: 2128083942 MAIL ADDRESS: STREET 1: 152 W 57TH ST 25TH FLOOR STREET 2: CARNEGIE HALL TOWER CITY: NEW YORK STATE: NY ZIP: 10019 N-30B-2 1 CLEMENTE GLOBAL GROWTH FUND, INC. LETTER TO SHAREHOLDERS NOVEMBER 14, 1997 =============================================================== Dear Shareholder: Global equity investors experienced a roller coaster ride in the third quarter of 1997: markets enjoyed strong gains in July, fell sharply in August, and recovered with a flourish in September. Clemente Global Growth Fund (CLM) went along for the ride, and, with the help of a few adjustments, came through the turbulence in generally fine shape. Quarterly gains of 7.41% for CLM and 2.76% for the FT World Index increased the year-to-date gains, through three quarters, to 27.72% for the Fund and 17.17% for the FT World Index. The price of CLM on the New York Stock Exchange was $10.50 on September 30, 1997, up from $10.06 on June 30, 1997, an appreciation of 4.37% in the quarter, while the discount expanded slightly from 16.22% to 18.60%. A VOLATILE QUARTER USHERS IN A RISKIER ENVIRONMENT The quarter began on a promising note. Buoyed by a pick-up in world growth, and by still subdued inflation, equity markets in the FT World Index rose 4.53% in July and made possible a 6.83% increase in the NAV of CLM. But the world had become a more dangerous place on July 2, as Thailand's currency plunged, and equity markets could not overlook for long the turmoil enveloping Southeast Asia, or the deterioration in the interest rate outlook for Germany and the US. Down came both the FT World Index (- 6.90%) and CLM (-6.47%) during August. A very nervous optimism returned in September and made possible a rebound in global equity markets. The FT World Index rose 5.6% in US dollars, while the CLM portfolio was up 7.5%. A high degree of volatility characterized equity markets everywhere, but the weakest performers were found, not surprisingly, in Southeast Asian markets plagued by currency crises and capital flight. European markets, supported by economic recovery and company restructuring, turned in the strongest performances. North American shares matched the average gains of Europe, with Canadian stocks buoyed by a benign economic environment, and US blue chips getting an assist from smaller cap stocks. Latin America produced a modest advance, with considerable variation from market to market. PORTFOLIO STRATEGY AND RESPONSE TO THIRD QUARTER EVENTS There was little change in trategy from the second quarter. Equity markets continued to be supported by non-inflationary growth, but uncertainties and risks were expected to rise, and our strategy involved: overweight Europe, but expect some turbulence as interest rate hikes could follow economic recovery and the march toward EMU; underweight the US, and anticipate the volatility that will accompany speculation about Federal Reserve intentions or occasional disappointments in corporate earnings; underweight Japan, and stick largely to blue-chip exporters who represent the only signs of life in the moribund economy; stay away from Southeast Asia and its financial market/currency worries; continue to overweight a recovering and restructuring Latin America. With the fear that stronger than expected growth in the US might trigger earlier than expected Federal Reserve tightening, we kept an underweight position of about 30% to 32% in US equities, with emphasis on companies judged capable of delivering steady growth of earnings. Fitting this description were two additions made during the quarter, namely, DRESSER INDUSTRIES, an energy sector play, and PEPSICO, a consumer non-durable stock. We lightened our Japanese holdings of companies that depended on strong Asia/Pacific growth, such as the trading company ITOCHU, or on an early domestic recovery, as in the case of KAWASAKI HEAVY INDUSTRIES. CLEMENTE GLOBAL GROWTH FUND, INC. LETTER TO SHAREHOLDERS NOVEMBER 14, 1997 =============================================================== Positive surprises in European growth encouraged investment in cyclicals, in addition to the on-going corporate restructuring stories. Overweighting was maintained for the region, with focus on Scandinavia, Germany, Holland, and growing interest in Italy and Spain. A construction company, OCP CONSTRUCCIONES was added in Spain, where the economy was growing faster than the European average, and in Switzerland we purchased ZURICH VERSICHER, an important player in the very dynamic European insurance sector. Telecoms remain an important European theme, and this is reflected in the purchases of a telecom carrier, TELECOM ITALIA, and a telecom manufacturer, NOKIA of Finland. Another theme, corporate restructuring and capital spending, led to the purchase of SIEBE , a UK producer of industrial and electronic equipment. Latin America, on the brink of sustainable growth, remained the emerging market region of choice, with Mexico challenging Brazil as the favorite market. LOOKING AHEAD AT A RAPIDLY CHANGING GLOBAL ENVIRONMENT A more defensive stance will be needed over the coming quarters. The Asian currency crisis will not plunge the world into recession, although Asian economies will be hard hit, and, with the risk of escalating inflation abating, dramatic rises in interest rates are not likely. Still, it would be wrong to treat this merely as an Asian crisis, and the contagion observed thus far in the fourth quarter of 1997 vividly demonstrates the folly of that position. The banking and currency crises of Southeast Asia have produced policy tightening, deteriorating growth prospects, and a need for pervasive and dramatic structural reforms. The immediate investment implications are clear: avoid direct contact with the affected Southeast Asia countries, and recognize that, while some exciting new opportunities are being sown during the present turmoil, the road back is likely to be both long and difficult. Making matters worse is the spread of the contagion to Northeast Asia, and in particular to Hong Kong, where the peg to the US dollar is being tested, and South Korea, where a banking crisis is gathering steam. Again, direct contact will be avoided, but this is not enough, for Asia/Pacific woes have implications of varying degrees of seriousness for almost the whole world. Let us briefly examine the implications for our investment strategy. - - Our Japanese exposure must be reassessed and very likely reduced, especially a strategy that focuses on blue-chip exporters and recovering bank/property companies. Fragile Japanese banks will be further undermined by loans to the region, and the weakened economies of Asia/Pacific will not be able to absorb their normal 44% share of Japan's exports. - - Almost all emerging markets will come under intense scrutiny, especially if they are dependent on capital inflows and have relatively fixed exchange rates. High on the list are Eastern Europe, which we have avoided, and Latin America, where we will have to reduce our exposure. - - Europe will feel the heat, especially if Asian contagion causes a Japanese recession and a dramatic slowing of US growth. But there will be winners in a region that will benefit from a sustained economic recovery, corporate restructuring, and continued monetary convergence. - - The United States will be another relative out-performer. It is not immune, of course, to weaker export markets abroad, or to the possibility that beleaguered public and private financial institutions in Asia will sell US Treasuries in order to satisfy a powerful need for cash. But the US economy is vibrant, CLEMENTE GLOBAL GROWTH FUND, INC. LETTER TO SHAREHOLDERS NOVEMBER 14, 1997 =============================================================== inflation is under control, the fiscal deficit hovers around zero, and the Federal Reserve has put tightening on hold in the face of global capital market uncertainty. In summary, the most prudent response is to assume a protracted period of adjustment, with deflationary forces, volatile equity markets, and currency crises. In this world of tightened economic policies, far-reaching structural change, excess capacity, and intense global competition, success will continue to depend on thorough stock analysis, and on the careful selection of companies capable of producing highly visible and sustainable earnings growth. Looking further out, we see some exciting prospects: world-class companies selling at valuations not seen in many years. But we must be patient just now, and wait for their time to come. /s/ E. Matthew Brown /s/ Thomas Prapas E. Matthew Brown Thomas Prapas Portfolio Manager (US) Portfolio Manager (International) Clemente Global Growth Fund, Inc. PORTFOLIO OF INVESTMENTS (UNAUDITED) SEPTEMBER 30, 1997 ===============================================================================
SHARES/PRINCIPAL AMOUNT VALUE ------ ----- COMMON STOCK - 99.5% BRAZIL - 6.3% Companhia Energetica De Minas Gerais ADR Utilities................. 17,000 $ 938,984 Telecomunicacoes Brasileiras S.A. ADR Telecommunications........ 22,500 2,896,875 Uniao De Bancos Brasileiras S.A. GDR Banking................... 25,000 915,625 ----------- 4,751,484 ----------- CANADA - 5.3% Newbridge Networks Corp. * Telecommunication Equipment 38,800 2,323,150 Power Corporation of Canada Holding Company........... 55,700 1,706,253 ----------- 4,029,403 ----------- FINLAND - 1.6% Nokia Corp. ADR Telecommunication Equipment 13,000 1,219,563 ----------- GERMANY - 8.0% Bayerische Vereinsbank AG Banking................... 37,000 2,147,592 Porsche AG - Preferred Shares Autos..................... 990 1,718,847 SAP AG Computer Services......... 8,600 2,206,933 ----------- 6,073,372 ----------- HONG KONG - 2.9% Cheung Kong Infrastructure Holdings, Ltd.+ Construction............. 380,000 1,134,211 China Merchants Holdings International Co., Ltd. Holding Company.......... 452,000 1,045,418 ----------- 2,179,629 ----------- INDIA - 1.2% Videsh Sanchar Nigam Ltd. Telecommunications....... 53,000 889,870 ----------- IRELAND - 2.5% Bank of Ireland Banking.................. 149,730 1,871,903 ----------- ITALY - 1.4% Telecom Italia SpA Telecom Services......... 163,000 1,081,375 ----------- JAPAN - 14.1% Bank of Tokyo-Mitsubishi Banking.................. 84,000 1,590,845 Canon, Inc. Electrical Equipment..... 75,000 2,180,001 Honda Motor Co. Autos.................... 50,000 1,733,296 Mitsubishi Estate Co., Ltd. Real Estate.............. 44,000 637,655 Clemente Global Growth Fund, Inc. PORTFOLIO OF INVESTMENTS (UNAUDITED) - CONTINUED SEPTEMBER 30, 1997 =============================================================================== SHARES/PRINCIPAL AMOUNT VALUE ------ ----- Seven-Eleven Japan Co., Ltd. Retail.................. 16,000 $ 1,193,628 Takeda Chemicals Industries Pharmaceuticals......... 42,000 1,251,926 TDK Corp. Electronics............. 24,000 2,134,301 ----------- 10,721,652 ----------- MEXICO - 5.4% Apasco S.A. Building Materials...... 133,000 1,009,082 Corporacion Interamericana de Entretenimiento S.A. Leisure Products........ 277,800 1,667,701 Kimberly-Clark De Mexico S.A. Paper & Related Products 270,000 1,401,885 ----------- 4,078,668 ----------- NETHERLANDS - 4.0% Baan Co., N.V.* Computer Services........ 21,500 1,546,181 Oce-Van Der Grinten N.V. Electrical Equipment..... 12,099 1,527,382 ----------- 3,073,563 ----------- NORWAY - 1.6% Smedvig ASA (A Shares) Oil Integrated........... 41,300 .1,245,659 ----------- PERU - 1.3% CPT Telefonica del Peru S.A. (B Shares) Telecommunications....... 410,000 958,875 ----------- SPAIN - 3.6% OCP Construcciones S.A. Building/Heavy Construction 12,000 1,151,059 Vallehermoso S.A. Real Estate.............. 59,000 1,621,750 ----------- 2,772,809 ----------- SWEDEN - 1.5% Trygg-Hansa AB (B Shares) Insurance................ 47,000 1,175,216 ----------- SWITZERLAND - 3.0% Alusuisse-Lonza Holding AG Multi-Industry........... 1,200 1,173,483 Zurich Versicherungsgesellschaft Insurance................ 2,500 1,085,987 ----------- 2,259,470 ----------- UNITED KINGDOM - 2.6% BAA plc Business/Public Services. 92,954 902,386 Siebe plc Machinery Manufacturer... 54,000 1,086,798 ----------- 1,989,184 ----------- UNITED STATES - 31.6% Air Products and Chemicals, Inc. Chemicals............... 16,500 1,368,469 Airtouch Communications, Inc. * Telecommunications...... 50,000 1,771,875 Clemente Global Growth Fund, Inc. PORTFOLIO OF INVESTMENTS (UNAUDITED) - CONTINUED SEPTEMBER 30, 1997 =============================================================================== SHARES/PRINCIPAL AMOUNT VALUE ------ ----- Baxter International, Inc. Medical Products........ 27,000 $ 1,410,750 Cisco Systems, Inc. Computer Software....... 22,000 1,607,375 Dresser Industries, Inc. Oil Field Machinery & Equipment............. 27,000 1,161,000 Fluor Corp. Construction............ 22,500 1,206,563 Harris Corp. Office Automation & Equipment............. 32,800 1,500,600 Health Management Assoc., Inc.* Healthcare.............. 50,000 1,581,250 Home Depot, Inc. Retail - Building Products 31,500 1,641,937 Illinois Tool Works, Inc. Diversified............. 27,600 1,380,000 Intel Corp. Semiconductors.......... 23,000 2,123,188 Pepsico, Inc. Beverages............... 18,500 750,406 Sungard Data Systems, Inc.* Computer Services....... 60,000 1,455,000 Suntrust Banks, Inc. Banking................. 34,000 2,309,876 Worldcom, Inc.* Telecommunications...... 78,400 2,773,400 ----------- 24,041,689 ----------- VENEZUELA - 1.6% Compania Anonima Telefonos De Venezuela ADR Telecommunications...... 27,000 1,235,250 ----------- Total Common Stock (Cost $53,295,895)...................................... 75,648,634 ----------- TIME DEPOSITS - 2.1% First National Bank Chicago 5.50%, 10/01/97 (Cost $1,570,000)....$1,570,000 1,570,000 ----------- TOTAL INVESTMENTS (COST $54,865,895)** - 101.6% $77,218,634 ----------- OTHER ASSETS AND LIABILITIES, NET - (1.6)%...................................... (1,185,720) ----------- NET ASSETS - 100.0%............................................................. $76,032,914 ----------- NET ASSET VALUE PER SHARE....................................................... $12.90 =========== + Security restricted as to resale to institutional investors under Rule 144A of the Securities Act. ADR American Depository Receipts GDR Global Depository Receipts * Non-Income Producing Security ** Summary of Total Investments: COST VALUE ----------- ----------- Common Stock............ $53,295,895 $75,648,634 Short-Term Instruments.. 1,570,000 1,570,000 ----------- ----------- Total Investments....... $54,865,895 $77,218,634 =========== ===========
DIRECTORS AND OFFICERS - LILIA C. CLEMENTE, CHAIRMAN AND DIRECTOR LEOPOLDO M. CLEMENTE, JR., PRESIDENT AND DIRECTOR ADRIAN C. CASSIDY, DIRECTOR ROBERT J. CHRISTIAN, DIRECTOR THOMAS H. LENAGH, DIRECTOR + SAM NAKAGAMA, DIRECTOR + ROBERT B. OXNAM, DIRECTOR + G. PETER SCHIEFERDECKER, DIRECTOR BARON J.G.A. SIRTEMA VAN GROVESTINS, DIRECTOR WILLIAM H. BOHNETT, SECRETARY THOMAS J. PRAPAS, TREASURER MARIA DISTEFANO, ASSISTANT SECRETARY - ---------------- + Members of Audit Committee - ------------------------------------------------------- EXECUTIVE OFFICES - 152 W. 57th Street, New York, NY 10019 (For latest net asset value and market data, please call 212-765-0700 or access our web site at http://www.clementecapital.com. For shareholder inquiries, please call 1-800-937-5449) INVESTMENT ADVISERS - Clemente Capital, Inc. Wilmington Trust Company ADMINISTRATOR - Rodney Square Management Corporation TRANSFER AGENT AND REGISTRAR - American Stock Transfer & Trust Company CUSTODIAN - Brown Brothers Harriman & Co. LEGAL COUNSEL - Fulbright & Jaworski L.L.P. INDEPENDENT ACCOUNTANTS - Price Waterhouse LLP [Outside Cover -- divided into two sections] [Left Section] SUMMARY OF GENERAL INFORMATION ============================== THE FUND Clemente Global Growth Fund, Inc. is a closed-end investment company whose shares trade on the New York Stock Exchange. The Fund seeks long-term capital appreciation primarily through investment in equity securities of companies located throughout the world. The Fund is managed by Clemente Capital, Inc. and Wilmington Trust Company. SHAREHOLDER INFORMATION Daily market prices for the Fund's shares are published in the New York Stock Exchange Composite Transactions section of most newspapers under the designation "ClemGlb". The Fund's New York Stock Exchange trading symbol is CLM. Net asset value (NAV) and market price information about Clemente Global Growth Fund, Inc. shares are published each Monday in The Wall Street Journal, The New York Times and other newspapers. For general information visit us at our web site http://www.clementecapital.com. For shareholder account inquiries call 1-800-937-5449. DIVIDEND REINVESTMENT PLAN Through its voluntary Dividend Reinvestment Plan, shareholders of Clemente Global Growth Fund, Inc. may elect to receive dividends and capital gains distributions in the form of additional shares of the Fund. - --------------------------------------------------------------------------- THIS REPORT IS TRANSMITTED TO THE SHAREHOLDERS OF CLEMENTE GLOBAL GROWTH FUND, INC. FOR THEIR INFORMATION. THIS IS NOT A PROSPECTUS, CIRCULAR OR REPRESENTATION INTENDED FOR USE IN THE PURCHASE OF SHARES OF THE FUND OR ANY SECURITIES MENTIONED IN THIS REPORT. NOTICE IS HEREBY GIVEN IN ACCORDANCE WITH SECTION 23(C) OF THE INVESTMENT COMPANY ACT OF 1940 THAT THE FUND MAY PURCHASE AT MARKET PRICES FROM TIME TO TIME SHARES OF ITS COMMON STOCK IN THE OPEN MARKET. - --------------------------------------------------------------------------- [Right Section] [GRAPHIC] Clemente Logo CLEMENTE GLOBAL GROWTH FUND, INC. QUARTERLY REPORT ================== SEPTEMBER 30, 1997 -----END PRIVACY-ENHANCED MESSAGE-----