-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, C3SRFdLUOY9ccBZ3Ou7pjdad2ZGrf4jFhZI2zVraCt3owrc9+6cAyLRyPm2o3umT sljQXijdoK/W9zXoHse4zw== 0000950123-95-002408.txt : 19950823 0000950123-95-002408.hdr.sgml : 19950823 ACCESSION NUMBER: 0000950123-95-002408 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19950630 FILED AS OF DATE: 19950822 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-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-05150 FILM NUMBER: 95565790 BUSINESS ADDRESS: STREET 1: 237 PARK AVE STREET 2: C/O FURMAN SELZ CITY: NEW YORK STATE: NY ZIP: 10017 BUSINESS PHONE: 2128083942 N-30D 1 SEMI-ANNUAL REPORT 1 - -------------------------------------------------------------------------------- LETTER TO SHAREHOLDERS - -------------------------------------------------------------------------------- Dear Fellow Shareholder: August 7, 1995 Clemente Global Growth Fund's net asset value (NAV) rose 3.6% to $10.42/share in the three month period ending June 30, 1995. The Fund's benchmark, the Financial Times Actuaries World Index (FT-World Index), over the same period rose 4.0%. For the 6 month period ending June 30, 1995, the Fund's NAV was down 2.9%, versus up 8.1% for the FT Actuaries World Index. Strong performance in the United States accounted for the benchmark's good showing in the first half of the year. THE PAST QUARTER The turn in world equity markets in the past quarter (vis-a-vis last quarter's mediocre performance) produced the best results in over a year. Europe was propelled forward by strong bond markets, and by continued gains in corporate earnings. Southeast Asia came alive as the Mexico effects faded, and the region's economic and corporate vitality again enticed inflows of capital. Latin America, flat on the ground after the first quarter collapse, jumped sharply upward as investors reassessed the risks, and saw reason for optimism in the austere policies adopted by the most vulnerable nations in the region. Of particular interest were the performances turned in by Tokyo and Wall Street. It is a tale of two rather different cities. The Japanese markets continued to struggle under a number of formidable burdens, most notably an unraveling economy, a heavily indebted financial system, and a leadership crisis. They were down 10% for the quarter, in local terms, and did not respond to the world interest rate environment until the start of the third quarter. The US was another story where the Dow Jones Industrial Average soared 9.6% led by the prospect of monetary easing by the Federal Reserve Bank and by strong corporate earnings, notably in the technology sector. Europe's markets rebounded in the second quarter with gains that came entirely from stock market rises, as opposed to the first quarter's currency gains, which are still a big component of the year-to-date returns. Only France missed out on the second quarter rally due to the fact that it was in the midst of a contentious election. The hard currency bloc, particularly Belgium, Denmark, Germany, the Netherlands, and Switzerland benefited from the greater stability of exchange rates, and from the bond rallies that were spawned by the strong US bond market. Spain and Sweden shrugged aside earlier political and budgetary woes and, with the adoption of policies that were perceived as credible, managed to produce strong market rallies. Italy was plagued by political uncertainties, particularly over budget matters, but the UK markets rallied after Mr. Major's victory in a vote within his own party. Finland, last year's best European performer, turned in this quarter's best performance, rising 32%. The impetus for market advances in the Asia/Pacific Rim region came largely from news that the US economy had slowed down enough to make further increases in interest rates counterproductive. Expectations of falling rates, supported by both economic data and by the bond market, encouraged investors in the Asia/Pacific markets. The best performances were turned in by the ASEAN markets which had been struggling for the past year. Indonesia, the Philippines, and Thailand, with good growth, and excellent corporate earnings, all rose by 14-15% in the quarter. More modest performances were turned in by nations that benefited from the change in interest rate policy in the US, notably Hong Kong, Malaysia, Australia, and New Zealand. Singapore was flat despite being a safe haven area for much of the first half of 1995. South Korea and Taiwan stumbled in the face of overheating economies that seemed to require higher interest rates and tighter conditions of liquidity. 1 2 The Latin comeback was sparked by US interest rate developments, and by actions taken by the various Latin American governments to continue their long-term reforms and to win back foreign investors. Argentina, with a favorable election outcome, and a renewed commitment to the US dollar currency link, rose 6.0%, but remained down almost 12% for the year as a whole. Brazil had a bigger second quarter gain (+15.3%), but it too was not enough to offset earlier losses due to uncertainty about the future of reforms and about the real/US$ link. PORTFOLIO ACTIVITY The most significant re-weighting in the portfolio that occurred was the reduction of our Japanese weighting from a market weighting 28.1% to 21.5%. We continued to reduce our investments in small capitalization issues there. Significant also was our increased exposure to Europe which grew from 25.4% to 29.6%. This increased weighting represents an overweighted position relative to the FT-World Index. Boosting our European weighting were our purchases of Banque Nationale de Paris and Compagnie Generale des Eaux, marking the Fund's first return to the French market since we sold Primagaz in 1993. Low inflation, pro-growth policies, and the possibility of lower interest rates caused us to market weight the Parisian market. In a departure from our more recent China oriented stock investments in Hong Kong, we established a half position in property developer Cheong Kong with the aim of eventually taking a full position. We continued our reduction in Latin America, selling holdings in Colombia (Corporacion Financiera del Valle), Mexico (Grupo Industrial Maseca), and Panama (Banco Latino Americano). LOOKING AHEAD The forces that undermined global capital markets in 1994 and the first quarter of 1995 appear to be retreating in favor of forces more conducive to a continuation of the equity market rally begun in the past quarter. In particular, the dollar decline has been stemmed, for the time being, and interest rates have reversed course. The recent Federal Reserve Bank move is not much, but it does signal a change in policy concerns. Deflation grips the Japanese economy as a result of the strong yen, asset deflation and policy making indecisiveness. Real GDP gains were 0.5% in 1994, but the steady recovery that seemed in place last year is fading, and growth prospects are dim for this year (0-0.5%) and the next (1.0-1.5%). The most likely scenario is for below trend growth over the next 2-3 years. The economy is characterized by very weak nominal demand. The strong yen threatens exports and industrial production, and helps prolong the deep slump in business capital spending. The slump in asset prices undermines consumer confidence, as do weak labor markets and subdued income growth. Nonetheless, Japanese market valuations look attractive. Earnings growth is estimated at 10% for the current and next fiscal years (ending March 1996 and March 1997, respectively). With a price/book ratio of 1.8x, this is in line with European multiples and at a discount to the US multiple of 2.6x. The price to cash earnings ratio is similar to that of the United States (8.8x), although ahead of the comparable European measure (6.5x). In the rest of the Asian/Pacific Rim economies, GDP growth should decelerate somewhat in 1995 and 1996 (7.5-8.0% and 7.0-7.5%, respectively) but will remain robust in relation to the rest of the world. The economic recovery in industrial nations is providing a boost, but domestic demand is increasing in importance. Infrastructure spending is set to rise more than $1 trillion over the next 10 years, while private consumption is being driven by growing affluence, by changing social values, and by falling tariff barriers. Inflation will be the same, on average, as it was in 1994 (7.0-7.5%). The rise in food prices will ease, but the price of non-food items will escalate along with their demand. Faster wage increases will put pressure 2 3 on inflation, as will the costlier imports denominated in yen. The region's governments are responding to the overheating of their respective economies with structural policies designed to make needed infrastructure investments and to create a more competitive environment, and with tighter monetary and fiscal policies. Europeans have legitimate concerns about exports, given a slowing US economy and a weaker dollar, and lower consumption, given delayed improvement in labor markets. But the recovery of their economies appears to be well-established, with production at high levels, and no evidence of a significant build-up of inventories. Most European governments have adopted tighter fiscal policies for 1995-96, but only four nations--Denmark, Germany, the Netherlands, and the UK--will meet the Maastricht convergence criteria by the end of 1996, namely a deficit no larger than 3% of GDP. Despite high unemployment rates, there is little in the way of expansive discretionary fiscal policy. The problems are more likely to be the result of structural factors, including public health costs, public pensions, and support for the long-term unemployed. Gains in real GDP in 1995 are likely to be close to the average 3% rise for the region as a whole, while a slowing in growth will be experienced in 1996. Countries like Denmark, Ireland, Finland and Norway, with growth projected to be in the 3-5% range for 1995 and 3-4% in 1996, will outperform their European peers. The US economy stalled in the second quarter, with the majority of the economic numbers pointing to zero growth in the quarter. But there is also evidence that this is a pause and not the beginning of a slide into recession. A transition from growth of 4%+ to growth slightly below trend generally does not occur without some jolts to the economy. A modest rise in US GDP is likely in the third quarter (1.0-1.5%), then above trend growth for the next two quarters (2.5-3.0%) before the economy settles down to around trend growth through the remainder of 1996. Overall gains will be a bit under 2% this year and 2.5-3.0% in 1996. The Federal Reserve signaled with its recent rate cut in the first week of July that its concern has shifted from overheating to a cyclical downturn. Another cut is likely during the third quarter, but, with a rebound at year-end, rates may stabilize for a time. As a result of reduced foreign capital inflows, Latin American growth is set to decelerate from 3% the last two years to 1.0-1.5% in 1995, and a mild pickup to 2.0-2.5% in 1996. Mexico, Argentina and Venezuela seem destined for recessions this year. The austerity policies are producing a deep contraction in Mexico, while credit and fiscal tightening will bring a pause to Argentina's recent robust growth. Brazil has a strong expansion, on the back of wage and credit growth, and a policy induced slowdown is likely for 1996. Venezuela remains in recession for the third year in a row, with weak domestic demand and soaring unemployment. Chile, Peru and Colombia will grow at roughly their potential growth rates of 5.0-5.5% through next year. Capital inflows are financing current account deficits and making the expansions possible. Since the market capitalization guidelines were broadened in October of 19921, the Fund has enjoyed a whole new trove of investment opportunities that we would like to describe to investors. The most straight forward have involved investments in growth companies with market caps in excess of $1 billion, in some instances well in excess of this amount. Requiring a bit more explanation are the occasional purchases by Clemente Global Growth Fund of larger cap, "cyclical companies" not traditionally associated with growth. A number of factors prompted such investments. For one, it is the Fund adviser's - --------------- 1 From the inception of the Fund in June 1987 to October 1992, the Fund was restricted from investing in companies whose market capitalization (number of shares outstanding x market price per share) was greater than $1 billion. In a meeting of the Fund's Board in October 1992, it was resolved that the arbitrary limit of $1 billion be lifted. Please refer to the CLM Quarterly Report dated September 30, 1992. 3 4 belief that even cyclical companies enjoy a growth phase over the course of a typical business cycle, and that benefits accrue to investors from a more flexible pursuit of corporate growth. More complicated still, and another argument for a more flexible response, is the largely atypical nature of recent business cycles. The normal rhythm of improvement and deterioration in business conditions has been thrown off balance in recent years by massive structural change. Large cap companies, seemingly at a mature phase of their life cycle, suddenly faced competitive challenges and opportunities that produced, through restructuring, downsizing, or the generation of new subsidiaries, new or radically redefined lines of business that promised rates of growth not seen in many years. The broadened mandate allowed the Fund to participate in a wide range of opportunities made possible by often dramatic corporate change. The central philosophy of the Fund -- growth investing -- has not changed. We continue to invest in small to medium-sized growth companies across the globe, where the potential for tremendous price appreciation often exists, but we will diversify our holdings with investments in larger cap companies that stand to benefit from unusual business circumstances and non-traditional sources of growth. We would like to thank our fellow shareholders for their continued support and joining us in our vision for global investing. Sincerely yours, /s/ LILIA C. CLEMENTE /s/ LEOPOLDO M. CLEMENTE, JR. ----------------------- -------------------------------- Lilia C. Clemente Leopoldo M. Clemente, Jr. Chairman President
4 5 - -------------------------------------------------------------------------------- CLEMENTE GLOBAL GROWTH FUND, INC. REPORT OF THE ANNUAL MEETING - -------------------------------------------------------------------------------- The Fund held its annual meeting on April 26, 1995. At that meeting, the shareholders voted to elect three Class I directors for an additional three year term: Lilia C. Clemente, Robert B. Oxnam and Baron J.G.A. Sirtema van Grovestins. The shareholders also voted to ratify the selection of Price Waterhouse LLP as the Fund's independent accountants for the year ending December 31, 1995. The results of the voting were as follows:
ABSTENTIONS AND BROKER FOR AGAINST WITHHELD NON-VOTES ------------------------------------------------ Lilia C. Clemente...................................... 4,716,270 -- 234,800 -- Robert B. Oxnam........................................ 4,723,848 -- 227,222 -- Baron J.G.A. Sirtema van Grovestins.................... 4,708,008 -- 243,062 -- Selection of Price Waterhouse LLP...................... 4,830,967 68,229 -- 51,874
5 6 - ---------------------------------------------------------- CLEMENTE GLOBAL GROWTH FUND, INC. PORTFOLIO OF INVESTMENTS (UNAUDITED) JUNE 30, 1995
- ----------------------------------------------------- SHARES/PRINCIPAL AMOUNT DESCRIPTION VALUE ----------------------------------------------------- NEW ZEALAND--2.3% Common Stock--2.3% 500,000 Fletcher Challenge, Ltd.................. $ 1,404,480 (Energy & forestry products) Total Common Stock/Holdings-- ------------ New Zealand.......... 1,404,480 ------------ TOTAL HOLDINGS-- NEW ZEALAND.......... 1,404,480 ------------ FAR EAST--35.7% HONG KONG--0.9% Common Stock--0.9% 115,000 Cheung Kong Holdings, Ltd. ................ 569,719 (Real estate) Total Common Stock/Holdings-- ------------ Hong Kong............ 569,719 ------------ JAPAN--21.5% Common Stock--21.5% 54,000 Daiki Co., Ltd. ....... 912,335 (Home centers) 85,000 Hitachi Metals, Ltd. ................ 955,045 (High quality specialty steel producer) 26,000 Keiyu Co. ............. 571,361 (Used car dealer) 64,000 Kunimine Industries Co................... 793,951 (Building materials-- bentonite; used in automobiles and machinery) 10,000 Maruko Co., Ltd. ...... 648,629 (Textiles--lingerie) 62,000 Mitsui Trust & Banking Co., Ltd. ........... 801,749 (Financial services) - ----------------------------------------------------- SHARES/PRINCIPAL AMOUNT DESCRIPTION VALUE - ----------------------------------------------------- FAR EAST (CONTINUED) JAPAN (CONTINUED) Common Stock (continued) 61,000 Nichiha Corp. ......... $ 1,261,224 (Housing materials & supplies) 2,000 Nippon Kanzai Co. ..... 60,019 (Commercial services-- building maintenance) 50,000 Omron Corp. ........... 956,994 (Electronics) 26,000 Rohm Co., Ltd. ........ 1,342,391 (Electronics--semi- conductors) 50,000 Shin-Etsu Chemical Co. ................. 880,198 (Chemicals--semi- conductors & PVC) 103,000 Takuma Co. ............ 958,932 (Boiler maker) 24,000 TDK Corp. ............. 1,094,518 (Electronics) 36,000 Tokyo Electron, Ltd. ................ 1,233,459 (Computers-- electronics trading company) 56,000 Yorozu Corp. .......... 741,021 (Automobile parts) Total Common Stock/Holdings-- ------------ Japan................ 13,211,826 ------------ KOREA--4.0% Common Stock--3.9% 42,000 Korea Zinc Co. ........ 1,001,192 (Metals--diversified)
See Notes to Financial Statements 6 7 - ---------------------------------------------------------- CLEMENTE GLOBAL GROWTH FUND, INC. PORTFOLIO OF INVESTMENTS (UNAUDITED) (CONTINUED) JUNE 30, 1995
- ----------------------------------------------------- SHARES/PRINCIPAL AMOUNT DESCRIPTION VALUE - ----------------------------------------------------- FAR EAST (CONTINUED) KOREA (CONTINUED) Common Stock (continued) 36,236 L.G. Electronics, Co. ................. $ 1,420,455 (Consumer electronics & electric appliance maker) Total Common Stock/Holdings-- ------------ Korea................ 2,421,647 ------------ Rights--0.1% 36,236 *L.G. Electronics, Co. ................. 54,861 (Consumer electronics & electric appliance maker) Total Rights--Korea.... ------------ 54,861 ------------ Total Holdings-- ------------ Korea................ 2,476,508 ------------ PHILIPPINES--7.9% Common Stock--7.9% 1,704,500 *+Grand Plaza Hotel Corp. (a)...... 834,557 (Property developer) 71,281 Metropolitan Bank & Trust Co. ........... 1,549,587 (Financial services-- commercial banks) 49,066 *Philex Mining Corp., Cl B................. 7,015 (Mining) 24,000,000 *Southeast Asia Cement Holdings Co. ........ 2,444,183 (Construction) Total Common Stock/Holdings-- ------------ Philippines.......... 4,835,342 ------------ - ----------------------------------------------------- SHARES/PRINCIPAL AMOUNT DESCRIPTION VALUE - ----------------------------------------------------- FAR EAST (CONTINUED) SINGAPORE--1.4% Common Stock--1.4% 430,000 United Overseas Land, Ltd. ................ $ 852,613 (Conglomerate--real estate) Total Common Stock/Holdings-- ------------ Singapore............ 852,613 ------------ TOTAL HOLDINGS-- FAR EAST............. 21,946,008 ------------ AFRICA--4.5% SOUTH AFRICA--4.5% Common Stock--4.5% 208,970 Murray & Roberts Holdings, Ltd. ...... 1,206,591 (Engineering & construction) 53,773 South Africa Breweries, Ltd. ................ 1,533,942 (Beverage, retail, and hotel holding company) Total Common Stock/Holdings-- ------------ South Africa......... 2,740,533 ------------ TOTAL HOLDINGS-- AFRICA............... 2,740,533 ------------ EUROPE--29.6% AUSTRIA--1.8% Common Stock--1.8% 8,150 Austria Mikro Systeme International A.G. ................ 1,076,574 (Electronics-- semiconductors) Total Common Stock/Holdings-- ------------ Austria.............. 1,076,574 ------------
See Notes to Financial Statements 7 8 - ---------------------------------------------------------- CLEMENTE GLOBAL GROWTH FUND, INC. PORTFOLIO OF INVESTMENTS (UNAUDITED) (CONTINUED) JUNE 30, 1995
- ----------------------------------------------------- SHARES/PRINCIPAL AMOUNT DESCRIPTION VALUE - ----------------------------------------------------- EUROPE (CONTINUED) FINLAND--5.0% Common Stock--5.0% 50,400 *Aamulehti Yhtymae Oy--II............... $ 1,031,305 (Publishing) 8,500 Kone Corp., Cl B....... 963,615 (Elevator manufacturer) 24,900 Metra Oy, Cl B......... 1,101,018 (Engineering & construction) Total Common Stock/Holdings-- ------------ Finland.............. 3,095,938 ------------ FRANCE--3.3% Common Stock--3.3% 20,700 Banque Nationale de Paris................ 1,000,640 (Banking--commercial centers) 9,200 Compagnie Generale des Eaux................. 1,026,298 (Utilities--water) Total Common Stock/Holdings-- ------------ France............... 2,026,938 ------------ GERMANY--2.0% Common Stock--2.0% 1,500 Wella A.G. ............ 1,216,334 (Personal care products manufacturer & marketer) Total Common Stock/Holdings-- ------------ Germany.............. 1,216,334 ------------ - ----------------------------------------------------- SHARES/PRINCIPAL AMOUNT DESCRIPTION VALUE - ----------------------------------------------------- EUROPE (CONTINUED) IRELAND--8.0% Common Stock--8.0% 212,650 Bank of Ireland Group plc.................. $ 1,227,810 (Commercial bank) 1,130,000 Fyffes plc............. 2,057,428 (Fresh fruit and produce distributor) 297,498 Independent Newspapers plc.................. 1,634,753 (Newspaper publishing, cable TV & advertising) Total Common Stock/Holdings-- ------------ Ireland.............. 4,919,991 ------------ NETHERLANDS--3.6% Common Stock--3.6% 17,600 Polygram NV............ 1,042,668 (Entertainment-- recorded music) 10,000 Verenidge Nederlendse Uitgevsbedri Verigd Bezit ............... 1,201,036 (Publishing & printing) Total Common Stock/Holdings-- ------------ Netherlands.......... 2,243,704 ------------ SWEDEN--4.1% Common Stock--4.1% 120,000 Munksjo A/B B Free..... 1,049,110 (Forest & paper products)
See Notes to Financial Statements 8 9 - ---------------------------------------------------------- CLEMENTE GLOBAL GROWTH FUND, INC. PORTFOLIO OF INVESTMENTS (UNAUDITED) (CONTINUED) JUNE 30, 1995
- ----------------------------------------------------- SHARES/PRINCIPAL AMOUNT DESCRIPTION VALUE - ----------------------------------------------------- EUROPE (CONTINUED) SWEDEN (CONTINUED) Common Stock (continued) 80,000 Sandvik A/B, B Free Cl B.................... $ 1,453,885 (Cemented carbide, stainless steel, saws & tools manufacturer) Total Common Stock/Holdings-- ------------ Sweden............... 2,502,995 ------------ UNITED KINGDOM--1.8% Common Stock--1.8% 131,000 Reuters Holdings plc ................. 1,093,004 (Publishing-- newspaper) Total Common Stock/Holdings-- ------------ United Kingdom....... 1,093,004 ------------ TOTAL HOLDINGS-- EUROPE............... 18,175,478 ------------ LATIN AMERICA--6.4% BRAZIL--1.1% Common Stock--1.1% 58,000 *++Usiminas Sideburg Minas ADS............ 652,500 (Steel producer) Total Common Stock/Holdings-- ------------ Brazil............... 652,500 ------------ - ----------------------------------------------------- SHARES/PRINCIPAL AMOUNT DESCRIPTION VALUE - ----------------------------------------------------- LATIN AMERICA (CONTINUED) CHILE--2.1% Common Stock--2.1% 250,000 Antofagasta Holdings plc.................. $ 1,275,040 (Copper & gold mining, railroad holding company) Total Common Stock/Holdings-- ------------ Chile................ 1,275,040 ------------ COLOMBIA--0.1% Common Stock--0.1% 4,937 ++Corporacion Financiera del Valle S.A. ADS............. 83,312 (Commercial banking) Total Common Stock/Holdings-- ------------ Colombia............. 83,312 ------------ MEXICO--3.1% Common Stock--3.1% 64,000 Panamerican Beverages, Inc. ADR............. 1,920,000 (Bottler of brand name soft drinks in Mexico, Brazil & Colombia) Total Common Stock/Holdings-- ------------ Mexico............... 1,920,000 ------------ TOTAL HOLDINGS-- LATIN AMERICA........ 3,930,852 ------------
See Notes to Financial Statements 9 10 - ---------------------------------------------------------- CLEMENTE GLOBAL GROWTH FUND, INC. PORTFOLIO OF INVESTMENTS (UNAUDITED) (CONTINUED) JUNE 30, 1995
- ----------------------------------------------------- SHARES/PRINCIPAL AMOUNT DESCRIPTION VALUE - ----------------------------------------------------- NORTH AMERICA--21.8% CANADA--4.3% Common Stock--4.3% 27,800 *Newbridge Networks Corp. ............... $ 979,950 (Telecommunications equipment) 120,000 ++Royal Plastics Group, Ltd. ................ 1,650,875 (Building materials) Total Common Stock/Holdings-- ------------ Canada............... 2,630,825 ------------ UNITED STATES--17.5% Common Stock--6.7% 66,000 *Dialogic Corp. ....... 1,171,500 (Computer software & services) 34,000 Enron Corp............. 1,194,250 (Oil/gas exploration & production) 122,000 *Geotek Industries, Inc. ................ 1,052,250 (Supplier of specialized mobile services) - ----------------------------------------------------- SHARES/PRINCIPAL AMOUNT DESCRIPTION VALUE - ----------------------------------------------------- NORTH AMERICA (CONTINUED) UNITED STATES (CONTINUED) Common Stock (continued) 24,200 *Sybase, Inc. ......... $ 710,875 (Computer software services) Total Common Stock-- ------------ United States........ 4,128,875 ------------ SHORT-TERM INSTRUMENTS--10.8% $ 6,640,000 Prudential Funding Corp. Commercial Paper 5.90% dated 06/30/95, due 07/03/95............. 6,640,000 Total Short-Term Instruments--United ------------ States............... 6,640,000 ------------ Total Holdings--United ------------ States............... 10,768,875 ------------ TOTAL HOLDINGS-- NORTH AMERICA........ 13,399,700 ------------
See Notes to Financial Statements 10 11 - ---------------------------------------------------------- CLEMENTE GLOBAL GROWTH FUND, INC. PORTFOLIO OF INVESTMENTS (UNAUDITED) (CONTINUED) JUNE 30, 1995
- ---------------------------------------------------------- SHARES/PRINCIPAL AMOUNT DESCRIPTION VALUE - ---------------------------------------------------------- Total Investments (Cost $53,601,298)**....... 100.3% $ 61,597,051 Other Assets Less Liabilities................ (0.3%) (195,901) ------------ Total Net Assets............. 100.0% $ 61,401,150 =========== Net Asset Value Per Share............ $10.42 ======= ADR American Depositary Receipts ADS American Depositary Shares * Non-Income Producing Security + Common stock has a warrant offering of 1 warrant for every 5 shares owned, expiring on 12/9/97. The warrants are valued at zero. ++ Security restricted as to resale to institutional investors (a) Fair value as determined by the Board of Directors
** SUMMARY OF TOTAL INVESTMENTS: COST VALUE ------------ ------------ Common Stock.......... $ 46,909,593 $ 54,902,190 Rights................ 51,705 54,861 Short-Term Instruments......... 6,640,000 6,640,000 ------------ ------------ Total Investments..... $ 53,601,298 $ 61,597,051 ========== ==========
See Notes to Financial Statements 11 12 - ---------------------------------------------------------- CLEMENTE GLOBAL GROWTH FUND, INC. STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED) JUNE 30, 1995 - ---------------------------------------------------------- ASSETS Investments, at value (cost $53,601,298)................. $61,597,051 Receivable for investments sold....... 343,244 Dividends receivable.................. 80,024 Accrued interest receivable........... 1,088 Other assets.......................... 12,739 ----------- Total Assets................... 62,034,146 ----------- LIABILITIES Due to custodian...................... 426,136 Investment advisory fee payable (note 2).................................. 25,549 Legal expense payable (note 2)........ 19,125 Administrative services fee payable (note 2)............................ 10,080 Accrued expenses payable.............. 152,106 ----------- Total Liabilities.............. 632,996 ----------- NET ASSETS............................ $61,401,150 =========== Net Assets consist of: Common stock, $.01 par (authorized 25,000,000 shares) outstanding 5,892,400 shares of common stock (note 4).......................... $ 58,924 Paid-in Capital..................... 54,405,494 Cost of 117,600 shares held in treasury.......................... (850,032) Accumulated net investment income... 123,816 Accumulated realized loss........... (318,533) Net unrealized appreciation of investments and translation of other assets denominated in foreign currencies................ 7,981,481 ----------- Net Assets............................ $61,401,150 =========== Net Asset Value Per Share ($61,401,150 / 5,892,400 shares of common stock issued and outstanding)........................ $ 10.42 ===========
- ---------------------------------------------------------- CLEMENTE GLOBAL GROWTH FUND, INC. STATEMENT OF OPERATIONS (UNAUDITED) SIX MONTHS ENDED JUNE 30, 1995 - ---------------------------------------------------------- INVESTMENT INCOME Dividends (net of foreign withholding taxes of $50,138) (note 1)......... $ 406,385 Interest.............................. 137,825 Miscellaneous Income.................. 13,170 ------------ Total income................... 557,380 ------------ EXPENSES Investment advisory fee (note 2).... 149,525 Administrative services fee (note 2)................................ 59,379 Custodian fees and expenses......... 53,245 Legal fee (note 2).................. 51,769 Directors' fees and expenses........ 42,238 Audit fee........................... 30,000 Shareholder reports................. 20,916 Registration and promotion expenses.......................... 17,877 Shareholder services................ 3,995 Insurance expense................... 2,817 Miscellaneous....................... 1,803 ------------ Total operating expenses....... 433,564 ------------ Net investment income................. 123,816 ------------ REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS Net realized loss on: Investments......................... (261,942) Foreign currency transactions....... (56,591) Net change in unrealized appreciation on investments...................... (1,605,240) Translation of other assets and liabilities denominated in foreign currencies........................ (15,057) ------------ Net realized and unrealized loss on investments and foreign currency transactions........................ (1,938,830) ------------ NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS..................... $ (1,815,014) ===========
See Notes to Financial Statements 12 13 - ---------------------------------------------------------- CLEMENTE GLOBAL GROWTH FUND, INC. STATEMENT OF CHANGES IN NET ASSETS (UNAUDITED) JUNE 30, 1995 - ----------------------------------------------------------
YEAR ENDED SIX MONTHS ENDED DECEMBER JUNE 30, 31, 1995 1994 - ---------------------------------------------------------- Operations: Net investment income/(loss)..... $ 123,816 $ (178,099) Net realized gain/ (loss) on: Investments..... (261,942) 6,017,094 Foreign currency transactions... (56,591) (200,052) Net unrealized (depreciation) on: Investments..... (1,605,240) (9,595,152) Translation of other assets denominated in foreign currencies...... (15,057) (785) ---------------- ----------- Net (decrease) in net assets resulting from operations..... (1,815,014) (3,956,994) ---------------- ----------- Dividends and distributions to shareholders from: Net realized gain on investments....... -- (5,656,704) ---------------- ----------- -- (5,656,704) Total (decrease) in net assets.......... (1,815,014) (9,613,698) NET ASSETS Beginning of year..... 63,216,164 72,829,862 ---------------- ----------- End of period......... $ 61,401,150 $63,216,164 ================ ==========
- ---------------------------------------------------------- CLEMENTE GLOBAL GROWTH FUND, INC. NOTES TO FINANCIAL STATEMENTS (UNAUDITED) - ---------------------------------------------------------- NOTE 1. ACCOUNTING POLICIES Clemente Global Growth Fund, Inc. (the "Fund") was incorporated in Maryland on May 1, 1987, as a closed-end, diversified management investment company. The Fund had no operations until June 30, 1987, other than the sale of 10,000 shares of common stock for $100,000 to Clemente Capital, Inc. (the "Investment Adviser") on June 9, 1987. The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements. SECURITY VALUATION: Portfolio securities which are traded only on stock exchanges or on the NASDAQ National Market System are valued at the last sale price as of the close of business on the day the securities are being valued, or lacking any sales, at the mean between closing bid and asked prices. Other over-the-counter portfolio securities are valued at the most recent bid prices as obtained from one or more dealers that make markets in the securities. Portfolio securities which are traded both in the over-the-counter market and on a stock exchange are valued according to the broadest and most representative market as determined by the Board of Directors. Securities totalling $834,557 (1.36% of net assets) and assets for which market quotations are not readily available are valued at fair value as determined in good faith by or under the direction of the Board of Directors of the Fund. Short-term obligations, maturing within 60 days of the valuation date, are to be valued at amortized cost, unless this method, in the opinion of the Board of Directors, no longer produces fair valuations. See Notes to Financial Statements 13 14 - -------------------------------------------------------------------------------- CLEMENTE GLOBAL GROWTH FUND, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) - -------------------------------------------------------------------------------- SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are recorded on the trade date. Realized gains and losses on sales of investments are calculated on the identified cost basis. Dividend income is recorded on the ex-dividend date, or as soon thereafter when the information becomes publicly available. Interest income is recorded on an accrual basis. Such dividend income and interest income is recorded before non-U.S. withholding tax. Non-U.S. withholding tax is recorded as a reduction of income. FOREIGN CURRENCY TRANSLATION: The books and records of the Fund are maintained in United States dollars. Foreign currency amounts are translated as follows into U.S. dollars at the foreign exchange rates obtained from an independent investment data service which reports the exchange rates as of the close of the respective non-U.S. market: (i) market value of investment securities and other assets and liabilities at the exchange rate on the valuation date. (ii) purchases and sales of investment securities, income and expenses at the exchange rate prevailing on the respective date of such transactions. The Fund does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss from investments. Reported net realized foreign exchange gains or losses arise from sales and maturities of short-term securities, currency gains and losses realized between the trade and settlement dates on securities transactions, the difference between the amounts of dividends, interest and foreign withholding taxes recorded on the Fund's books, and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in the value of the assets and liabilities other than investments in securities at year end, resulting from changes in the foreign exchange rate. TAXES: No provision for Federal income tax is required since it is the policy of the Fund to comply with the provisions of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable income, including any net realized gains, in an amount sufficient to relieve the Fund of any Federal income tax liability. The Fund intends to comply with the requirements of the Internal Revenue Code as long as qualification is determined by the Board of Directors to be in the best interests of the shareholders. Dividends and interest from non-U.S. sources received by the Fund are generally subject to non-U.S. withholding taxes at rates of up to 25%. Such withholding taxes may be reduced or eliminated under the terms of applicable United States income tax treaties, and the Fund intends to undertake any procedural steps required to claim the benefits of such treaties. If more than 50% in value of the Fund's total assets at the close of any taxable year consists of stocks or securities of non-U.S. corporations, the Fund is permitted and may elect to treat any non-U.S. taxes paid by it if paid by its shareholders. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS: The Fund records dividends and distributions to its shareholders on the ex-dividend date. The amounts of dividends from net investment income and of distributions from net realized gains are determined in accordance with federal income tax regulations which may differ from generally accepted accounting principles. These "book/tax" differences are either considered temporary or per- 14 15 - -------------------------------------------------------------------------------- CLEMENTE GLOBAL GROWTH FUND, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) - -------------------------------------------------------------------------------- manent in nature. To the extent these differences are permanent in nature, such amounts are reclassified within the composition of net assets based on their federal tax-basis treatment; temporary differences do not require reclassification. Dividends and distributions to shareholders which exceed net investment income and net realized gains for financial reporting purposes but not for tax purposes are reported as dividends in excess of net investment income or net distributions in excess of net realized gains. To the extent they exceed net investment income and net realized gains for tax purposes, they are reported as distributions of capital. NOTE 2. INVESTMENT ADVISORY AND ADMINISTRATION AGREEMENTS The Fund will pay to the Investment Adviser as compensation for the services provided by the Investment Adviser under the Investment Advisory Agreement, a monthly fee comprised of a basic fee of 1% (on an annualized basis) of the month-end net assets of the Fund (the "Basic Fee") that is subject to adjustment as described below based on the investment performance of the Fund in relation to the investment record of the FT-Actuaries World Index (the "FT-Actuaries Index"). Adjustments to the Basic Fee are made by comparison of the Fund's investment performance for the applicable performance period with the investment record of the FT-Actuaries Index for the same period. The applicable performance period is a rolling 36-month period whereby the most recent calendar month is substituted for the earliest month as time passes. The Basic Fee for each month may be increased to a maximum of 1.50% (on an annualized basis) or decreased to a minimum of .50% (on an annualized basis) depending on the extent by which the Fund's performance varies from the FT-Actuaries Index over the performance period as set forth below. The following table illustrates the full range of permitted increases or decreases of the Basic Fee on an annualized basis:
PERCENTAGE POINT DIFFERENCE BETWEEN PERFORMANCE OF FUND AND % CHANGE IN FT- ADJUSTMENT FEE AS ACTUARIES BASIC TO BASIC FEE ADJUSTED MONTHLY FEE INDEX FEE (ANNUALIZED) (ANNUALIZED) RATE - ----------- ----- ------------ ------------ ------------ +10% or greater 1% + .50 % 1.50 % 1/12 x 1.50 % + 9 1 + .40 1.40 1/12 x 1.40 + 8 1 + .30 1.30 1/12 x 1.30 + 7 1 + .25 1.25 1/12 x 1.25 + 6 1 + .20 1.20 1/12 x 1.20 + 5 1 + .15 1.15 1/12 x 1.15 + 4 1 + .10 1.10 1/12 x 1.10 + 3 1 + .075 1.075 1/12 x 1.075 + 2 1 + .05 1.05 1/12 x 1.05 + 1 1 + .025 1.025 1/12 x 1.025 0 1 0 1.00 1/12 x 1.00 - -1 1 -.025 .975 1/12 x .975 - -2 1 -.06 .95 1/12 x .95 - -3 1 -.075 .925 1/12 x .925 - -4 1 -.10 .90 1/12 x .90 - -5 1 -.15 .85 1/12 x .85 - -6 1 -.20 .80 1/12 x .80 - -7 1 -.25 .75 1/12 x .75 - -8 1 -.30 .70 1/12 x .70 - -9 1 -.40 .60 1/12 x .60 - -10 or greater 1 -.50 .50 1/12 x .50
In calculating the investment performance of the Fund as compared with the investment record of the FT-Actuaries Index, dividends and other distributions of the Fund and dividends and other distributions reported with respect to component securities of the FT-Actuaries Index during the performance period will be treated as having been reinvested. Also, the withholding taxes paid or accrued by the Fund are added back in calculating the Fund's performance in order to be comparative with the FT-Actuaries Index. 15 16 - -------------------------------------------------------------------------------- CLEMENTE GLOBAL GROWTH FUND, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) - -------------------------------------------------------------------------------- The Fund incurred $149,525 in investment advisory fees for the six months ended June 30, 1995, which represents a reduction of $149,749 from the Basic Fee. Furman Selz Incorporated (the "Administrator") serves as the Fund's administrator pursuant to an Administration Agreement (the "Administration Agreement") with the Fund. Under the Administration Agreement, the Administrator generally assists in all aspects of the Fund's operations, other than providing investment advice, subject to the overall authority of the Fund's Board of Directors. The Administrator determines the Fund's weekly and monthly net asset value, prepares such figures for publication, maintains certain of the Fund's books and records that are not maintained by the Investment Adviser, custodian or transfer agent, assists in the preparation of financial information for the Fund's income tax returns, proxy statements, quarterly and annual shareholder reports, and responds to shareholder inquiries. Under the terms of the Administration Agreement, the Fund has agreed to pay the Administrator a monthly fee at the annual rate of .20% of the Fund's month end net assets. For the six months ended June 30, 1995 the Administrator earned a fee in the amount of $59,379. Certain directors and officers of the Fund are also directors and officers of the Investment Adviser. Each unaffiliated director receives an annual fee of $8,000 plus $500 for every meeting attended, together with out of pocket expenses. At June 30, 1995, the Fund has included in accrued expenses payable $21,957 in fees payable to the Fund's directors. The Fund incurred fees totalling $51,769 for the six months ended June 30, 1995, for legal services to a law firm of which the Fund's Secretary is a partner. NOTE 3. PORTFOLIO SECURITIES Purchases and sales of securities, other than short-term investments, for the six months ended June 30, 1995, were $24,653,189 and $31,937,302, respectively. For Federal income tax purposes, the cost of securities owned at June 30, 1995 was $53,601,298 and the net unrealized appreciation of investments was $7,995,753. Net unrealized appreciation was composed of gross appreciation of $10,702,208 for those investments having an excess of value over cost, and gross depreciation of $2,706,455 for those investments having an excess of cost over value. NOTE 4. CAPITAL STOCK There are 25 million shares of $.01 par value common stock authorized. Of the 5,892,400 shares outstanding at June 30, 1995, the Investment Adviser owned 10,000 shares. NOTE 5. OTHER MATTERS The Fund, in its ordinary course of business, invests in companies and emerging markets which may entail additional risks due to the potential political and economic instability of certain countries, the risks of restriction of repatriation, expropriation, nationalization or confiscatory taxation and the relative price volatility and liquidity of such emerging markets. 16 17 - -------------------------------------------------------------------------------- CLEMENTE GLOBAL GROWTH FUND, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) - -------------------------------------------------------------------------------- NOTE 6. QUARTERLY RESULTS OF OPERATIONS* (UNAUDITED)
NET REALIZED AND UNREALIZED GAIN NET (LOSS) ON INVESTMENT INVESTMENTS AND INVESTMENT INCOME FOREIGN CURRENCY INCOME (LOSS) TRANSACTIONS -------------- -------------- ---------------- PER PER PER QUARTER ENDED TOTAL SHARE TOTAL SHARE TOTAL SHARE - ----------------------- ------ ----- ----- ------ ------- ------ March 31, 1995......... $ 186 0.03 $ (35) (0.01) $(2,610) (0.44) June 30, 1995.......... 371 0.06 159 0.03 589 0.11 ------ ----- ----- ------ ------- ------ $ 557 $0.09 $ 124 $ 0.02 $(2,021) $(0.33) ======= ======= ======= ======= ========= ======= March 31, 1994......... $ 201 0.03 $(208) (0.03) $(3,335) (0.57) June 30, 1994.......... 368 0.07 79 0.01 1,218 0.21 September 30, 1994..... 143 0.02 (118) (0.02) (2,721) (0.46) December 31, 1994...... 356 0.06 69 0.01 1,059 0.18 ------ ----- ----- ------ ------- ------ $1,068 $0.18 $(178) $(0.03) $(3,779) $(0.64) ======= ======= ======= ======= ========= ======= March 31, 1993**....... $ 303 $0.05 $ 42 $ 0.01 $ 3,307 $ 0.56 June 30, 1993**........ 404 0.07 163 0.03 2,122 0.36 September 30, 1993..... 265 0.05 14 0.00 7,337 1.24 December 31, 1993...... 193 0.03 (119) (0.02) 8,254 1.40 ------ ----- ----- ------ ------- ------ $1,165 $0.20 $ 100 $ 0.02 $21,020 $ 3.56 ======= ======= ======= ======= ========= =======
- --------------- *Total expressed in thousands of dollars except per share amounts **Restated from amounts reported in the semi-annual report to reflect an increase of $3,373 (in thousands) in the second quarter realized and unrealized gains/losses and a corresponding decrease in the amount attributed to the first quarter. 17 18 - -------------------------------------------------------------------------------- CLEMENTE GLOBAL GROWTH FUND, INC. FINANCIAL HIGHLIGHTS (UNAUDITED) - --------------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED DECEMBER 31, PER SHARE OPERATING ------------- ------------------------------------------------------------------------------------- PERFORMANCE JUNE 30, 1995 1994 1993 1992 1991 1990 - --------------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period... $ 10.73 $ 12.36 $ 9.43 $ 10.82 $ 9.79 $ 11.71 ------------- ------------- ------------- ------------- ------------- ------------- Net investment income/(loss)......... 0.02 (0.03) 0.02 0.01 (0.01) (0.05) Net realized and unrealized gain/(loss) on investments and foreign currency transactions.......... (0.33) (0.64) 3.56 (0.35) 1.39 (1.71) ------------- ------------- ------------- ------------- ------------- ------------- Total from investment operations............ (0.31) (0.67) 3.58 (0.34) 1.38 (1.76) ------------- ------------- ------------- ------------- ------------- ------------- Distributions to shareholders from: Net investment income.............. -- -- -- (0.02) -- -- Net realized capital and currency gains............... (0.96) (0.65) (1.03) (0.35) (0.16) ------------- ------------- ------------- ------------- ------------- ------------- Total from distributions......... -- (0.96) (0.65) (1.05) (0.35) (0.16) ------------- ------------- ------------- ------------- ------------- ------------- Increase/(decrease) in net asset value....... (0.31) (1.63) 2.93 (1.39) 1.03 (1.92) ------------- ------------- ------------- ------------- ------------- ------------- Net asset value, end of period................ $ 10.42 $ 10.73 $ 12.36 $ 9.43 $ 10.82 $ 9.79 ============ ======= ======= ======= ======= ======= Per share market value, end of period......... 7 7/8 8 1/2 11 1/4 7 3/4 9 1/8 8 1/2 ============ ======= ======= ======= ======= ======= Total investment return*............... (7.35)% (15.91)% 53.55% (3.56)% 11.59% (14.47)% ============ ======= ======= ======= ======= ======= Net assets, end of period (in 000's)..... $61,401 $ 63,216 $ 72,830 $ 55,540 $ 63,763 $ 57,671 Ratios to average net assets/supplemental data: Net investment income.............. 0.42%** (0.25)% 0.16% 0.10% (0.11)% (0.42) Operating expenses.... 1.46%** 1.75% 1.68% 2.29% 2.74% 3.08% Portfolio turnover rate.................. 43.64% 81.73% 125.31% 82.49% 66.11% 28.69%
* Based on market value per share excluding commissions, adjusted for reinvestment of distributions and taxes. ** Annualized. 18 19 DIRECTORS AND OFFICERS LILIA C. CLEMENTE, Chairman and Director LEOPOLDO M. CLEMENTE, JR., President and Director ADRIAN C. CASSIDY, 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 DESTEFANO, 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; regarding shareholder inquiries, please call 1-800-432-8224) INVESTMENT ADVISER-- Clemente Capital, Inc. ADMINISTRATOR-- Furman Selz Incorporated TRANSFER AGENT AND REGISTRAR-- The Bank of New York CUSTODIAN-- Brown Brothers Harriman & Co. LEGAL COUNSEL-- Fulbright & Jaworski L.L.P. 20 - ------------------------------------------------- SUMMARY OF GENERAL INFORMATION - ------------------------------------------------- THE FUND Clemente Global Growth Fund 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 small and medium sized equities located throughout the world. The Fund is managed by Clemente Capital, Inc. 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 "ClmGlb". The Fund's New York Stock Exchange trading symbol is CLM. Net asset value (NAV) and market price information about Clemente Global Growth Fund shares are published each Monday in The Wall Street Journal and The New York Times and in other newspapers. DIVIDEND REINVESTMENT PLAN Through its voluntary Dividend Reinvestment Plan, shareholders of Clemente Global Growth Fund may elect to receive dividends and capital gains distributions in the form of additional shares of the Fund. Tel. #1-800-432-8224. 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. LOGO CLEMENTE GLOBAL GROWTH FUND, INC. SEMI-ANNUAL REPORT JUNE 30, 1995 -----END PRIVACY-ENHANCED MESSAGE-----