-----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, KgnJ+hY1ukf3aXDqQz9RS16j1l3CHFTD4PTe8hn47iAmQ2zeNXUcRQTrOHQRvKU+ Lbmu3Oz9rqgj/LgKtkI6NA== /in/edgar/work/20000606/0000912057-00-027481/0000912057-00-027481.txt : 20000919 0000912057-00-027481.hdr.sgml : 20000919 ACCESSION NUMBER: 0000912057-00-027481 CONFORMED SUBMISSION TYPE: N-30B-2 PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20000331 FILED AS OF DATE: 20000606 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MORGAN STANLEY DEAN WITTER ASIA PACIFIC FUND INC CENTRAL INDEX KEY: 0000919808 STANDARD INDUSTRIAL CLASSIFICATION: [ ] IRS NUMBER: 000000000 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30B-2 SEC ACT: SEC FILE NUMBER: 811-08388 FILM NUMBER: 649978 BUSINESS ADDRESS: STREET 1: 1221 AVENUE OF THE AMERICAS CITY: NEW YORK STATE: NY ZIP: 10020 BUSINESS PHONE: 6175578742 MAIL ADDRESS: STREET 1: MORGAN STANLEY ASIA PACIFIC FUND STREET 2: 1221 AVENUE OF THE AMERICAS CITY: NEW YORK STATE: NY ZIP: 10020 FORMER COMPANY: FORMER CONFORMED NAME: MORGAN STANLEY ASIA PACIFIC FUND INC DATE OF NAME CHANGE: 19940505 FORMER COMPANY: FORMER CONFORMED NAME: MORGAN STANLEY ASIA INVESTMENT FUND INC DATE OF NAME CHANGE: 19940316 N-30B-2 1 n-30b_2.txt N-30B-2 ---------------------------------------------------------- MORGAN STANLEY DEAN WITTER ASIA-PACIFIC FUND, INC. ---------------------------------------------------------- FIRST QUARTER REPORT MARCH 31, 2000 MORGAN STANLEY DEAN WITTER INVESTMENT MANAGEMENT INC. INVESTMENT ADVISER MORGAN STANLEY DEAN WITTER ASIA-PACIFIC FUND, INC. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- DIRECTORS AND OFFICERS Barton M. Biggs CHAIRMAN OF THE BOARD OF DIRECTORS Harold J. Schaaff, Jr. PRESIDENT AND DIRECTOR Peter J. Chase DIRECTOR John W. Croghan DIRECTOR Graham E. Jones DIRECTOR John A. Levin DIRECTOR William G. Morton, Jr. DIRECTOR Stefanie V. Chang VICE PRESIDENT Joseph P. Stadler VICE PRESIDENT Mary E. Mullin SECRETARY Belinda A. Brady TREASURER Robin L. Conkey ASSISTANT TREASURER - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- INVESTMENT ADVISER Morgan Stanley Dean Witter Investment Management Inc. 1221 Avenue of the Americas New York, New York 10020 ADMINISTRATOR The Chase Manhattan Bank 73 Tremont Street Boston, Massachusetts 02108 CUSTODIAN The Chase Manhattan Bank 3 Chase MetroTech Center Brooklyn, New York 11245 SHAREHOLDER SERVICING AGENT American Stock Transfer & Trust Company 40 Wall Street New York, New York 10005 (800) 278-4353 LEGAL COUNSEL Rogers & Wells LLP 200 Park Avenue New York, New York 10166 INDEPENDENT ACCOUNTANTS PricewaterhouseCoopers LLP 1177 Avenue of the Americas New York, New York 10036 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- For additional Fund information, including the Fund's net asset value per share and information regarding the investments comprising the Fund's portfolio, please call 1-800-221-6726 or visit our website at www.msdw.com/institutional/investmentmanagement. LETTER TO SHAREHOLDERS - -------- For the three months ended March 31, 2000, the Morgan Stanley Dean Witter Asia-Pacific Fund, Inc. (the "Fund") had a total return, based on net asset value per share, of 1.11% compared to -0.72% for its benchmark (described below). For the period from the Fund's commencement of operations on August 2, 1994 through March 31, 2000, the Fund's total return, based on net asset value per share, was 29.91% compared with 1.41% for the benchmark. The benchmark for the Fund is comprised of two Morgan Stanley Capital International (MSCI) indices; Japan and All-Country Asia-Pacific Free ex-Japan, with each index weighted equally. On March 31, 2000, the closing price of the Fund's shares on the New York Stock Exchange was $10 7/8, representing a 29.5% discount to the net asset value per share. ASIA EX-JAPAN Asia Ex-Japan markets in the first quarter were resilient, albeit with much higher volatility. The volatility increased due to increased daily correlation with the NASDAQ, which was extremely volatile. The NASDAQ outperformed the broader U.S. markets, even in the face of continued Federal Reserve tightening, reflecting the stark divergence in market performance between technology and non-technology stocks globally. Positive macro-economic conditions for Asia ex-Japan witnessed in 1999 continued in the first quarter of 2000. Overall liquidity conditions are still propitious for equity markets. Economic growth and earnings growth numbers are surprising on the upside, especially in North Asian economies. The overall growth outlook for 2000 has been upgraded. Before the crisis, the Asian growth story was a top-line growth story. The current phase is predominantly an earnings growth story as restructuring by large corporates and rapid adoption of new technologies is enhancing ROEs to a structurally higher level than seen in the past decade. Asia is likely to post reasonable trade surpluses for a third consecutive year in 2000 as exports continue to grow aided by secular trends seen in outsourcing of semiconductor, computer assemblies and telecommunication equipment. With all-round positive consumer sentiment, Asia's export led recovery is being supplemented by domestic consumption growth. Among the large Asian markets Taiwan was the best performing market, despite heightened investor nervousness around cross-strait relations leading up to the presidential elections on March 18. Taiwan reaffirmed its position as a vibrant democracy, with voters electing the DPP candidate, Chen Shui Bian as the new president, ending 55 years of Nationalist KMT rule. We think that the outcome is extremely positive for the long term and is indicative of a vote in favor of a reformist, transparent political framework. Initial remarks from the President elect have been inspiring. He has delivered a cordial and conciliatory message to China, expressing eagerness to engage in constructive dialogue to ease cross-strait tensions. The underlying fundamentals of the Taiwanese economy continued to stay strong with most companies announcing first quarter results ahead of consensus estimates. Liquidity conditions are benign and the New Taiwan dollar has been appreciating steadily. Export-oriented technology stocks continued to outperform while domestic demand-related companies and banks underperformed on investors' worries that the ousted Kuomintang party may want to liquidate its stock market related assets. Going forward, we expect the market to range trade. Upward momentum will resume once the new President assumes office in May and is seen making further efforts to resolve political tensions with China. We continue to be overweight large cap Taiwan technology stocks - these companies are not only some of the best-managed companies in Asia but most of these companies have very strong secular earnings growth and are not subject to "new economy" hype valuations. The Korean market has been underperforming broader Asian markets over the last two quarters, after hitting a high in the middle of 1999. Part of the weak performance stemmed from the huge amounts of domestic retail money flowing into the KOSDAQ market, which added over U.S. $75 billion of market cap over the last 12 months. In addition there have been somewhat exaggerated concerns about inflation and investor caution ahead of the April parliamentary elections. Nevertheless, the economic fundamentals in Korea are very robust and mainboard Korean companies offer the cheapest valuations in the region relative to the underlying growth in operating earnings. A company such as Samsung Electronics, a global leader in the semi-conductor memory business is trading at a substantial discount relative to its U.S. peers. We think that its gains in global market share of the CDMA mobile handset business should see re-ratings of valuations. We continue to be overweight the Korean market as corporate Korea becomes more profit-focused rather than revenue-focused as in the past. The Hong Kong market was surprisingly strong in the first quarter, as it managed to de-couple from rising U.S. interest rates. The market was buoyed by a stunning GDP growth of 8.7% for the fourth quarter of 1999. While the market continued to do well in the first quarter, the breadth was narrow and dominated by news flow surrounding telecom and media stocks. With strong export numbers for the first two months of 2000, declining unemployment, easing deflation and improving consumer sentiment, Hong Kong should see significant upgrades on growth estimates for 2000. In the recently released budget, the government prudently did not raise or introduce any taxes. In China, the macroeconomic picture brightened considerably over the last two quarters. In the first quarter of this year, export growth was much stronger than expected. In- 2 dustrial production in China has accelerated and GDP growth should hit 8% for the first quarter, up from 6.8% in the fourth quarter of last year. As China prepares to enter the WTO, the government is embarking on accelerating the reform process. Continued modest deflation and higher unemployment has allowed the central bank to retain an easy monetary policy. Beijing has reiterated its uncompromising unilateral stance on Taiwan's claim for independence and the rhetoric is likely to continue. However, it is unlikely that China will take an extreme militant stance, as that would damage stability in East Asia and hurt its own economic interests. In the medium term, China equities should be bolstered by MSCI's revision, effective on May 31, 2000. Large cap red chip stocks like China Telecom, Legend Holdings and CITIC Pacific are to be included in the benchmark, raising China's overall weighting in Asian indexes by nearly ten times. The real economy in Thailand continued to bounce back after two years of deep recession. Thailand markets were sold down at the beginning of the year as the investors anxiously awaited the final ruling of the central bankruptcy court on the solvency of the country's most indebted company, TPI. On March 15th, the Thai bankruptcy court ruled TPI insolvent. This was a step in the right direction, showing commitment to enforce bankruptcy law in line with international practices. Following the ruling the Thailand market rallied strongly. The Indian market turned in a very strong performance during the first two months of the year, primarily driven by software services and media stocks. However, the budget for the fiscal year 2000-01 presented on February 29th was disappointing, bringing the markets down quickly, as the government failed to address India's key problems on rising central and state fiscal deficits. Investors were disappointed by the lack of more initiatives on privatization. Government interest payments are nearing 50% of revenue and the rising fiscal deficit is placing a constraint on India's ability to grow. India, however, continues to be a strong bottom-up story. The performance of India's software services sector over the past five years in terms of revenue/profit growth and market value-added has focused government attention on promoting investments in knowledge sectors such as telecom, media, technology and pharmaceuticals. The benign domestic liquidity conditions are an added positive for the markets. With interest rates lower in nominal terms than they have been for many years, money has been flowing rapidly into the domestic mutual fund industry. After a strong performance in 1999, the Singapore stock market underperformed other Asian indexes in the first quarter of 2000. Most international investors were already overweight the market and valuations for the overall market were looking stretched at the beginning of the year. With the changes in MSCI indexes in second quarter of this year, Singapore's weighting will suffer a relative decline. The bottom-up restructuring of Singapore companies seems to be losing momentum. The newly listed semiconductor sector represented by Chartered Semiconductor and ST Assembly Test Services, are likely to show strong growth in the coming years as we continue to add these names. Malaysia was the best performing ASEAN market in the first quarter. While the exports engine continues to run smoothly, we are seeing a pick up in domestic consumption. To a large extent, the rise in the Malaysian stock market has been driven by investors pre-empting MSCI's re-inclusion of Malaysia into its indexes at end of May 2000. On a purchasing power parity basis, the Malaysian Ringgit is undervalued by almost 20%, resulting in continuing foreign direct investment. However, the thriving technology and export sectors are extremely underrepresented in the listed equity market, leaving very few inspiring bottom-up stock ideas. The banking and telecom sector heavyweight stocks like Maybank and Telekom Malaysia are already trading at the higher ends of their historical valuation ranges. The outlook for non-Japan Asia as an asset class continues to be positive. While the risks from a volatile U.S. market and a Fed tightening are well known, Asia is likely to weather that trend much better. The restructuring undertaken by Asian companies over the last 2 years should enable the return on equity for the region to exceed historic levels over the next 3 years. This shift upwards is more likely to be structural than cyclical. The strategy of focusing on stock selection, with an emphasis on attractively valued companies that should exceed consensus expectations, remains unchanged. JAPAN Most asset classes globally entered a highly volatile environment during the first quarter of 2000. In addition, the United States, ECB, UK and Australian central banks all committed to raising interest rates in order to cool their respective economies after flushing liquidity into the system during the fourth quarter 1999 to stem any potential problems related to Y2K. Markets such as NASDAQ, U.S. Treasuries, oil, the euro and the yen experienced one of the most dramatic periods of volatility and Japanese equities shifted focus from the "New Japan" stocks which imploded to "Real Japan" companies. The market was also able to absorb huge cross-holding sales by institutions during Japan's fiscal year end during March remarkably well. This was likely because of the relative stability of the yen, Bank of Japan's "0" interest rate policy and the fruits of restructuring by large capitalization companies allowing their free cash flow to be re-invested in information technology. Furthermore, the economic recovery in Asian economies, where approximately 40% of Japan's exports go, also began to contribute to chemical, steel and other basic industries' manufacturing output. Demand for Japanese digital products was also stronger than supply, which contributed positively to investor sentiment during the first quarter. In January, hostile 3 takeover bids were made on three Japanese corporations, another positive development for "value" investing due to changes in the commercial code which went into effect in November 1999. The carnage which hit "New Japan" companies will likely take some time to recover. Many investors owning Hikari Tsushin or Softbank, the bell-cows of the new economy, were devastated as they watched (these stocks traded limit down for many days) their investments implode and were simply unable to sell. On the other hand, the "Real Japan" companies' outlook appears increasingly promising. The $180 billion economic stimulus package will begin to be dispersed from April and larger companies in Japan are experiencing positive cash flow again and will begin to significantly increase CAPEX spending. While we are cautious for potential interest rate rises in Japan as the economy improves, it appears highly unlikely to happen during the second quarter until the July Summit Meeting in Japan. Fragility in corporate Japan was evidenced by the bankruptcy by prestigious Nagasakiya and EL Kakuei in the first quarter and the Bank of Japan will therefore continue to maintain ultra-easy momentary policy for at least the next several months. We also believe that restructurings by Japanese companies have allowed earnings to become highly geared, even with a modest pick-up in sales. Consumers will see a huge redemption in postal savings during the next eighteen months and while most of the 10 trillion yen will be re-invested back to postal savings, some of these funds will likely be spent on both durable and white goods because of pent up demand. Although Prime Minister Obuchi's demise from a stroke was truly unfortunate, the new Prime Minister and cabinet share a similar goal -- revive the economy -- and therefore we expect little material change in politics. Our Fund began shifting to deep value and economic sensitive sectors during the fourth quarter of 1999 including foods, utilities, warehousing and housing related stocks. During the first quarter, we have reduced positions in certain high tech companies such as Fujitsu, Sony and Rohm and have added to last year's purchases with the proceeds. We believe the shift from "New Japan" to "Real Japan" which occurred during the first quarter will continue and quality "Real Japan" such as Toyota, NEC, Hitachi will become leadership stocks in the market for the foreseeable future. Although the TMT sectors in Japan are yet in early stages of development and will likely continue to attract investor interest, economic sensitive sectors and cyclical stocks will become increasing attractive as the economic recovery gains momentum. Sincerely, /s/ Harold J. Schaaff, Jr.* Harold J. Schaaff, Jr.* PRESIDENT AND DIRECTOR April 2000 THE INFORMATION CONTAINED IN THIS OVERVIEW REGARDING SPECIFIC SECURITIES IS FOR INFORMATIONAL PURPOSES ONLY AND SHOULD NOT BE CONSTRUED AS A RECOMMENDATION TO PURCHASE OR SELL THE SECURITIES MENTIONED. - -------------------------------------------------------------------------------- DAILY NET ASSET AND MARKET VALUES, AS WELL AS MONTHLY PORTFOLIO INFORMATION FOR THE FUND, ARE AVAILABLE ON OUR WEBSITE AT www.msdw.com/institutional/investmentmanagement. * HAROLD J. SCHAAFF, JR. WAS ELECTED PRESIDENT AND DIRECTOR OF THE FUND ON MARCH 20, 2000. MR. SCHAAFF JOINED MORGAN STANLEY DEAN WITTER IN 1989 AND IS A MANAGING DIRECTOR OF MORGAN STANLEY & CO. INCORPORATED AND MORGAN STANLEY DEAN WITTER INVESTMENT MANAGEMENT INC. HE FORMERLY SERVED AS GENERAL COUNSEL AND SECRETARY OF MORGAN STANLEY DEAN WITTER INVESTMENT MANAGEMENT INC. 4 Morgan Stanley Dean Witter Asia-Pacific Fund, Inc. Investment Summary as of March 31, 2000 (Unaudited) - -------------------------------------------------------------------------------- - --------------------------------------------------------------------------------
HISTORICAL INFORMATION TOTAL RETURN (%) ---------------------------------------------------------------------- MARKET VALUE (1) NET ASSET VALUE (2) INDEX (3) -------------------- --------------------- --------------------- AVERAGE AVERAGE AVERAGE CUMULATIVE ANNUAL CUMULATIVE ANNUAL CUMULATIVE ANNUAL ---------- ------- ---------- ------- ---------- ------- Fiscal Year to Date -7.94% -- 1.11% -- -0.72 % -- One Year 36.39 36.39% 61.94 61.94% 40.06 40.06% Five Year 22.37 4.12 42.43 7.33 9.69 1.87 Since Inception* -8.44 -1.55 29.91 4.73 1.41 0.25
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. - -------------------------------------------------------------------------------- RETURNS AND PER SHARE INFORMATION [GRAPH]
YEAR ENDED DECEMBER 31, THREE MONTHS ENDED MARCH 31, 1994* 1995 1996 1997 1998 1999 2000 ------ ------ ------ ------ ------ ------ ------ Net Asset Value Per Share.... $13.20 $14.34 $11.95 $8.77 $8.73 $15.26 $15.43 Market Value Per Share....... $12.25 $13.33 $ 9.75 $7.44 $7.00 $11.81 $10.88 Premium/(Discount)........... -7.2% -7.0% -18.4% -15.2% -19.8% -22.6% -29.5% Income Dividends............. $ 0.04 $ 0.05 $ 0.61 $0.02 $0.01 $ 0.04 -- Capital Gains Distributions.. $ 0.01 $ 0.02 -- -- -- -- -- Fund Total Return (2)........ -5.94% 9.24% -2.87%+ -26.36% -0.34% 75.39% 1.11% Index Total Return (3)....... -5.24% 2.88% -3.63% -29.55% -0.30% 54.79% -0.72%
(1) Assumes dividends and distributions, if any, were reinvested. (2) Total investment return based on net asset value per share reflects the effects of changes in net asset value on the performance of the Fund during each period, and assumes dividends and distributions, if any, were reinvested. These percentages are not an indication of the performance of a shareholder's investment in the Fund based on market value due to differences between the market price of the stock and the net asset value per share of the Fund. (3) The benchmark for investment performance is comprised of two Morgan Stanley Capital International (MSCI) indices; Japan and All-Country Asia-Pacific Free ex-Japan with each index weighted equally. * The Fund commenced operations on August 2, 1994. + This return does not include the effect of the rights issued in connection with the Rights Offering. 5 Morgan Stanley Dean Witter Asia-Pacific Fund, Inc. Investment Summary as of March 31, 2000 (Unaudited) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- DIVERSIFICATION OF TOTAL INVESTMENTS [CHART] Equity Securities (99.2%) Short-Term Investments (0.8%)
- -------------------------------------------------------------------------------- INDUSTRIES [CHART] Banks (5.3%) Chemicals (3.6%) Computers & Peripherals (9.5%) Diversified Financials (5.5%) Diversified Telecommunication Services (5.7%) Electronic Equipment & Instruments (7.2%) Household Durables (6.8%) Machinery (6.2%) Real Estate (4.1%) Semiconductor Equipment & Products (9.0%) Other (37.1%)
- -------------------------------------------------------------------------------- COUNTRY WEIGHTINGS [CHART] Japan (47.6%) Hong Kong (11.8%) Taiwan (8.7%) South Korea (8.2%) Australia (7.8%) India (6.1%) Singapore (4.4%) Malaysia (2.2%) Thailand (1.2%) New Zealand (0.4%) Other (1.6%)
- -------------------------------------------------------------------------------- TEN LARGEST HOLDINGS*
PERCENT OF NET ASSETS 1. Samsung Electronics (South Korea) 3.4% 2. Hutchinson Whampoa Ltd. (Hong Kong) 3.0 3. Sony Corp. (Japan) 2.7 4. Cheung Kong (Holdings) Ltd. (Hong Kong) 2.2 5. NEC Corp. (Japan) 2.1 6. Taiwan Semiconductor Manufacturing Co., Ltd. (Taiwan) 2.0 7. Nintendo Co., Ltd. (Japan) 1.8 8. Fujitsu Ltd. (Japan) 1.7 9. Infosys Technology Ltd. (India) 1.7 10. Toshiba Company (Japan) 1.6 ----- 22.2% =====
* Excludes short-term investments. 6 FINANCIAL STATEMENTS - -------- STATEMENT OF NET ASSETS (UNAUDITED) - -------- MARCH 31, 2000
VALUE SHARES (000) - ---------------------------------------------------------------------------- COMMON STOCKS(99.0%) (Unless otherwise noted) - ---------------------------------------------------------------------------- AUSTRALIA(7.8%) AIRLINES Airways Ltd. 932,300 U.S.$ 1,945 -------------------- BANKS Commonwealth Bank of Australia 226,700 3,099 National Australia Bank Ltd. 388,350 4,989 Westpac Banking Corp., Ltd. 734,150 4,592 -------------------- 12,680 -------------------- BEVERAGES Coca-Cola Amatil Ltd. 461,200 1,147 Foster's Brewing Group Ltd. 1,340,000 3,324 -------------------- 4,471 -------------------- BIOTECHNOLOGY Sonic Healthcare Ltd. 242,000 873 -------------------- COMMERCIAL SERVICES & SUPPLIES Davnet Ltd. 1,027,200 3,364 -------------------- DIVERSIFIED FINANCIALS Lend Lease Corp., Ltd. 246,300 3,181 -------------------- DIVERSIFIED TELECOMMUNICATION SERVICES AAPT Ltd. 583,798 3,399 Macquarie Corporate Telecommunications Holdings Ltd. 1,008,000 1,834 Telstra Corp., Ltd. 2,098,950 8,477 -------------------- 13,710 -------------------- ELECTRONIC EQUIPMENT & INSTRUMENTS E.R.G. Ltd. 122,060 840 -------------------- INDUSTRIAL CONGLOMERATES Brambles Industries Ltd. 109,500 2,783 -------------------- MEDIA News Corp., Ltd. 883,350 12,333 -------------------- METALS & MINING Broken Hill Proprietary Co., Ltd. 665,150 7,198 Normandy Mining Ltd. 2,501,600 1,320 Rio Tinto Ltd. 592,600 8,415 -------------------- 16,933 -------------------- PHARMACEUTICALS CSL Ltd. 61,350 763 -------------------- SOFTWARE Solution 6 Holdings Ltd. 201,100 1,299 -------------------- 75,175 -------------------- - ---------------------------------------------------------------------------- CHINA(0.3%) OIL & GAS PetroChina Company Ltd. 15,487,000 2,546 -------------------- PERSONAL PRODUCTS Hengan International Group Co., Ltd. 1,549,700 358 -------------------- 2,904 -------------------- - ---------------------------------------------------------------------------- HONG KONG(11.8%) AIRLINES Cathay Pacific Airways 1,529,000 U.S.$ 2,268 -------------------- BANKS Hang Seng Bank Ltd. 226,500 1,978 Wing Hang Bank Ltd. 305,000 764 -------------------- 2,742 -------------------- COMMERCIAL SERVICES & SUPPLIES Cosco Pacific Ltd. 1,472,000 855 -------------------- COMPUTERS & PERIPHERALS Legend Holdings Ltd. 1,552,000 2,422 -------------------- DISTRIBUTORS Li & Fung Ltd. 1,100,000 5,100 -------------------- DIVERSIFIED FINANCIALS China Merchants Holdings International Co. Ltd. 1,302,000 844 Hutchison Whampoa Ltd. 1,584,500 28,591 Swire Pacific Ltd. 'A' 741,600 3,829 -------------------- 33,264 -------------------- DIVERSIFIED TELECOMMUNICATION SERVICES Hong Kong Telecommunications Ltd. 3,405,900 8,923 -------------------- ELECTRICAL EQUIPMENT Johnson Electric Holdings Ltd. 275,000 1,880 -------------------- ELECTRONIC EQUIPMENT & INSTRUMENTS Great Wall Technology Co., Ltd. 2,717,000 2,739 TCL International 1,918,000 1,441 -------------------- 4,180 -------------------- GAS UTILITIES Hong Kong & China Gas Co., Ltd. 1,835,000 2,298 -------------------- INTERNET SOFTWARE & SERVICES Sino-i.com Ltd. 6,295,000 606 SUNeVision Holdings Ltd. 249,585 417 -------------------- 1,023 -------------------- IT CONSULTING & SERVICES Timeless Software Ltd. 1,398,000 893 -------------------- MEDIA Asia Satellite Telecom Holdings 606,000 2,374 Television Broadcasts Ltd. 382,000 3,397 -------------------- 5,771 -------------------- REAL ESTATE Cheung Kong (Holdings) Ltd. 1,425,000 21,321 Hong Kong Land Holdings Ltd. 572,000 795 Sino Land Co. 2,899,000 1,210 Sun Hung Kai Properties Ltd. 928,546 8,049 -------------------- 31,375 -------------------- SEMICONDUCTOR EQUIPMENT & PRODUCTS ASM Pacific Technology 256,000 868 -------------------- WIRELESS TELECOMMUNICATION SERVICES China Telecom Ltd. 1,056,000 9,256 Smartone Telecommunications 191,000 698 -------------------- 9,954 -------------------- 113,816 -------------------- - ---------------------------------------------------------------------------- 7 VALUE SHARES (000) - ---------------------------------------------------------------------------- INDIA(6.1%) AUTO COMPONENTS Apollo Tyres Ltd. 15,875 U.S.$ 43 -------------------- AUTOMOBILES Hero Honda Ltd. 66,556 1,481 -------------------- BANKS State Bank of India Ltd. 1,112 5 -------------------- CHEMICALS Grasim Co. 297,628 2,068 Gujarat Narmada Valley Fertilizers Co., Ltd. GDR 49 --@ Supreme Industries Ltd. 50 --@ -------------------- 2,068 -------------------- COMMUNICATIONS EQUIPMENT Himachal Futuristic Communications 10,000 388 -------------------- COMPUTERS & PERIPHERALS Digital Equipment (India) Ltd. 100 2 Moser-Baer India Ltd. 98,475 799 -------------------- 801 -------------------- CONSTRUCTION & ENGINEERING Larsen & Toubro Ltd. 140,000 923 -------------------- CONSTRUCTION MATERIALS Associated Cement Co., Ltd. 8,600 27 Gujarat Ambuja Cements 255,000 1,246 -------------------- 1,273 -------------------- DIVERSIFIED FINANCIALS (b)Morgan Stanley Growth Fund 19,448,100 6,780 -------------------- DIVERSIFIED TELECOMMUNICATION SERVICES Mahanagar Telephone Nigam Ltd. 468,127 2,523 Videsh Sanchar Nigam Ltd. 75,810 3,200 -------------------- 5,723 -------------------- ELECTRIC UTILITIES BSES Ltd. 258,000 1,407 -------------------- ELECTRICAL EQUIPMENT Bharat Heavy Electricals Ltd. 450,200 1,291 Sterlite Industries 73,750 1,320 -------------------- 2,611 -------------------- GAS UTILITIES Gas Authority Of India 135,000 1,019 -------------------- INDUSTRIAL CONGLOMERATES Ramco Industries Ltd. 8,400 96 -------------------- IT CONSULTING & SERVICES HCL Technologies Ltd. 34,750 1,386 NIIT Ltd. 26,000 1,223 Ramco Sysytems Ltd. 23,400 1,868 -------------------- 4,477 -------------------- MACHINERY Escorts Ltd. 180,000 611 Punjab Tractors Ltd. 80,900 1,414 -------------------- 2,025 -------------------- METALS & MINING Tata Iron & Steel Co., Ltd. 2,195 6 -------------------- OIL & GAS REFINING & MARKETING UTI-MasterShares Ltd. 200 --@ -------------------- PHARMACEUTICALS Ranbaxy Laboratories Ltd. 68,000 1,103 -------------------- Container Corp. of India Ltd. 375,000 U.S.$ 1,315 -------------------- SOFTWARE Aptech Ltd. 82,400 3,512 Infosys Technology Ltd. 78,150 15,956 Leading Edge Systems Ltd. 24,600 1,126 SSI Ltd. 130,000 1,872 Tata Infotech Ltd. 25 --@ -------------------- 22,466 -------------------- TEXTILES & APPAREL J.K. Synthetics Ltd. 674 --@ Shopper Stop 324,100 1,189 Viniyoga Clothes Ltd. 5,300 --@ -------------------- 1,189 -------------------- TOBACCO ITC Ltd. 70,455 1,188 -------------------- 58,387 -------------------- - ---------------------------------------------------------------------------- INDONESIA(0.3%) DIVERSIFIED TELECOMMUNICATION SERVICES Telekomunikasi Indonesia ADR 208,356 1,980 -------------------- FOOD PRODUCTS Indofood Sukses Makmur 186,500 142 Indofood Sukses Makmur (Foreign) 453,500 344 -------------------- 486 -------------------- TOBACCO Gudang Garam 294,000 561 -------------------- 3,027 -------------------- - ---------------------------------------------------------------------------- JAPAN(47.6%) AUTO COMPONENTS Nifco, Inc. 375,000 3,949 -------------------- AUTOMOBILES Nissan Motor Co. 1,330,000 5,442 Suzuki Motor Co., Ltd. 430,000 6,555 Toyota Motor Corp. 220,000 11,508 -------------------- 23,505 -------------------- BANKS Bank of Tokyo-Mitsubishi, Ltd. 85,000 1,215 -------------------- BUILDING PRODUCTS Sanwa Shutter Corp., Ltd. 642,000 1,957 -------------------- CHEMICALS Daicel Chemical Industries Ltd. 1,220,000 4,160 Kaneka Corp. 859,000 10,727 Lintec Corp. 383,000 3,649 Mitsubishi Chemical Industries 950,000 3,785 Shin-Etsu Polymer Co., Ltd. 702,000 4,397 -------------------- 26,718 -------------------- COMMERCIAL SERVICES & SUPPLIES Dai Nippon Printing Co., Ltd. 413,000 6,703 Nissha Printing Co., Ltd. 105,000 632 -------------------- 7,335 -------------------- - ---------------------------------------------------------------------------- 8 VALUE SHARES (000) - ---------------------------------------------------------------------------- JAPAN(CONTINUED) COMPUTERS & PERIPHERALS Fujitsu Ltd. 528,000 U.S.$ 16,202 Mitsumi Electric Co., Ltd. 336,000 12,307 NEC Corp. 692,000 20,425 Toshiba Corp. 1,545,000 15,743 -------------------- 64,677 -------------------- CONSTRUCTION & ENGINEERING Kurita Water Industries Ltd. 295,000 5,719 -------------------- DISTRIBUTORS Nissei Sangyo 129,000 1,468 -------------------- DIVERSIFIED FINANCIALS Hitachi Credit Corp. 418,400 7,479 -------------------- DIVERSIFIED TELECOMMUNICATION SERVICES Nippon Telephone & Telegraph Corp. 932 14,799 -------------------- ELECTRIC UTILITIES Tokyo Electric Power 182,000 3,989 -------------------- ELECTRICAL EQUIPMENT Furakawa Electric Co. 385,000 6,469 Kyudenko Co., Ltd. 380,000 1,144 -------------------- 7,613 -------------------- ELECTRONIC EQUIPMENT & INSTRUMENTS Hitachi Ltd. 981,000 11,649 Kyocera Corp. 75,000 12,537 Ryosan Co., Ltd. 173,000 3,291 TDK Corp. 106,000 14,436 -------------------- 41,913 -------------------- FOOD & DRUG RETAILING Family Mart Co., Ltd. 131,200 6,493 -------------------- FOOD PRODUCTS House Foods Corp. 147,000 2,177 Nippon Meat Packers, Inc. 295,000 3,391 -------------------- 5,568 -------------------- HOUSEHOLD DURABLES Aiwa Co., Ltd. 169,800 2,944 Casio Computer Co., Ltd. 552,000 5,856 Matsushita Electric Industrial Co., Ltd. 489,000 14,624 Rinnai Corp. 160,700 2,959 Sangetsu Co., Ltd. 137,000 2,642 Sekisui Chemical Co. 1,043,000 3,444 Sekisui House Ltd. 665,000 6,096 Sony Corp. 186,000 26,273 -------------------- 64,838 -------------------- LEISURE EQUIPMENT & PRODUCTS Fuji Photo Film Ltd. 274,000 12,064 Nintendo Co., Ltd. 98,000 17,232 Yamaha Corp. 432,000 3,501 -------------------- 32,797 -------------------- MACHINERY Amada Co., Ltd. 772,000 6,242 Daifuku Co., Ltd. 696,000 6,265 Daikin Kogyo Co. 575,000 10,642 Fuji Machine Co. 193,000 14,345 Fujitec Co., Ltd. 440,000 3,708 Minebea Co., Ltd. 560,000 7,446 Mitsubishi Heavy Industries Ltd. 1,600,000 5,034 Tsubakimoto Chain Co. 832,000 3,485 -------------------- 57,167 -------------------- MARINE Mitsubishi Logistics Corp. 260,000 2,254 -------------------- OFFICE ELECTRONICS Canon, Inc. 324,000 14,045 Ricoh Co., Ltd. 706,000 15,130 -------------------- 29,175 -------------------- PHARMACEUTICALS Ono Pharmaceutical Co., Ltd. 219,000 7,744 Sankyo Co., Ltd. 397,000 9,997 Yamanouchi Pharmaceutical Co., Ltd. 235,000 12,865 -------------------- 30,606 -------------------- REAL ESTATE Keihanshin Real Estate Co. 164,000 492 Mitsubishi Estate Co., Ltd. 457,000 4,955 -------------------- 5,447 -------------------- SEMICONDUCTOR EQUIPMENT & PRODUCTS Rohm Co., Ltd. 31,000 10,781 -------------------- 457,462 -------------------- - ---------------------------------------------------------------------------- MALAYSIA(2.2%) BANKS Malayan Banking Bhd 1,138,000 5,001 Public Bank Bhd 1,724,000 1,815 -------------------- 6,816 -------------------- BEVERAGES Carlsberg Brewery (Malaysia) Bhd 1,082,000 4,128 -------------------- DIVERSIFIED TELECOMMUNICATION SERVICES Telekom Malaysia Bhd 653,000 2,681 -------------------- FOOD PRODUCTS Nestle Bhd 409,000 1,948 -------------------- HOTELS RESTAURANTS & LEISURE Tanjong plc 84,000 230 -------------------- INDUSTRIAL CONGLOMERATES Sime Darby Bhd 651,000 850 -------------------- TOBACCO British American Tobacco 584,000 4,457 Bhd -------------------- 21,110 -------------------- - ---------------------------------------------------------------------------- NEW ZEALAND(0.4%) AIRLINES Air New Zealand Ltd. 'B' 505,000 584 -------------------- DIVERSIFIED TELECOMMUNICATION SERVICES Telecom Corp. of New Zealand Ltd. 671,100 3,032 -------------------- 3,616 -------------------- - ---------------------------------------------------------------------------- PHILIPPINES(0.1%) MEDIA ABS-CBN Broadcasting Corp. 834,300 1,176 -------------------- - ---------------------------------------------------------------------------- 9 VALUE SHARES (000) - ---------------------------------------------------------------------------- SINGAPORE(4.4%) AIRLINES Singapore Airlines Ltd. 448,000 U.S.$ 4,187 -------------------- BANKS DBS Group Holdings Ltd. 629,979 8,316 Oversea-Chinese Banking Corp., Ltd. (Foreign) 607,700 3,763 Overseas Union Bank Ltd. 'F' 356,210 1,602 United Overseas Bank Ltd. (Foreign) 298,016 1,828 -------------------- 15,509 -------------------- CHEMICALS Omni Industries Ltd. 594,000 1,395 -------------------- COMPUTERS & PERIPHERALS Natsteel Electronics Ltd. 532,000 3,480 -------------------- DIVERSIFIED TELECOMMUNICATION SERVICES Singapore Telecommunications, Ltd. 1,403,000 2,000 -------------------- ELECTRONIC EQUIPMENT & INSTRUMENTS Venture Manufacturing Ltd. 279,000 3,830 -------------------- MARINE Neptune Orient Lines 688,000 607 Sembcorp Logistics Ltd. 378,200 2,673 -------------------- 3,280 -------------------- MEDIA Singapore Press Holdings Ltd. 315,600 5,033 -------------------- REAL ESTATE City Developments Ltd. 297,000 1,344 -------------------- SEMICONDUCTOR EQUIPMENT & PRODUCTS Chartered Semiconductor 192,000 1,817 ST Assembly Test Services 99,000 488 -------------------- 2,305 -------------------- 42,363 -------------------- - ---------------------------------------------------------------------------- SOUTH KOREA(8.2%) AUTOMOBILES (a)Hyundai Motor Co. GDR 5,304 31 -------------------- BANKS Hana Bank 98,650 602 Housing & Commercial Bank 119,766 2,330 Housing & Commercial Bank GDR 7,400 143 Kookmin Bank 220,851 2,238 -------------------- 5,313 -------------------- COMMUNICATIONS EQUIPMENT Korealink Co Ltd. 11,110 744 LG Information & Communication Ltd. 4,830 607 Opicom Co Ltd. 10,980 854 Teleson Electronics Co., 65,750 988 Ltd. -------------------- 3,193 -------------------- DIVERSIFIED FINANCIALS Dongwon Securities Co. 43,481 655 Samsung Securities Co., Ltd. 57,670 1,383 -------------------- 2,038 -------------------- DIVERSIFIED TELECOMMUNICATION SERVICES Korea Telecom Corp. ADR 35,500 1,553 -------------------- ELECTRIC UTILITIES Korea Electric Power Corp. ADR 246,000 3,890 -------------------- ELECTRONIC EQUIPMENT & INSTRUMENTS Communication Network Interface Inc. 72,530 U.S.$ 1,053 Daeduck Electronics Co. 81,959 927 Humax Co., Ltd. 92,400 1,371 Pantech Co., Ltd. 50,424 995 Prochips Technology Inc. 62,000 578 Samsung Electro-Mechanics Co. 31,981 2,234 -------------------- 7,158 -------------------- EQUITY Mirae Co. Ltd. ADR 34,600 375 -------------------- FOOD PRODUCTS Cheil Jedang Corp. 21,674 1,426 Tongyang Confectionery Co. 31,030 870 -------------------- 2,296 -------------------- INTERNET & CATALOG RETAIL LG Home Shopping Inc. 12,250 1,308 -------------------- MEDIA 39 Shopping Corp. 21,850 1,404 Cheil Communications Inc. 13,340 1,653 -------------------- 3,057 -------------------- METALS & MINING Pohang Iron & Steel Ltd. ADR 112,500 3,094 -------------------- OIL & GAS Yukong Ltd. (Foreign) 70,410 1,624 -------------------- SEMICONDUCTOR EQUIPMENT & PRODUCTS Hyundai Electronics Industries Co. 49,077 1,092 Mirae Co. Ltd. 116,890 656 Samsung Electronics 108,417 32,861 -------------------- 34,609 -------------------- WIRELESS TELECOMMUNICATION SERVICES SK Telecom Co., Ltd. 229,600 8,954 -------------------- 78,493 -------------------- - ---------------------------------------------------------------------------- TAIWAN(8.7%) BANKS Chinatrust Commercial Bank 1,278,000 1,247 International Commercial Bank of China 1,029,500 1,008 Taishin International Bank 1,833,200 1,121 United World Chinese Commercial Bank 962,000 1,157 -------------------- 4,533 -------------------- CHEMICALS Formosa Plastics Corp. 547,000 1,231 Nan Ya Plastic Corp. 1,265,290 2,932 -------------------- 4,163 -------------------- COMMUNICATIONS EQUIPMENT Microelectronics Technology 308,000 1,508 -------------------- COMPUTERS & PERIPHERALS Acer Peripherals Inc. 748,960 3,766 Acer, Inc. 1,289,000 3,622 Advantech Co. Ltd. 161,000 1,407 Asustek Computer, Inc. 539,000 6,748 Compal Electronics 116,587 485 Compeq Manufacturing Co., Ltd. 268,000 1,761 - ---------------------------------------------------------------------------- 10 VALUE SHARES (000) - ---------------------------------------------------------------------------- COMPUTERS & PERIPHERALS (CONTINUED) Ritek Incorporation 85,000 U.S.$ 782 Wyse Technology Taiwan Ltd. 451,000 1,586 -------------------- 20,157 -------------------- ELECTRONIC EQUIPMENT & INSTRUMENTS Ambit Microsystems Corp. 85,000 1,003 Delta Electronic Industrial 361,000 1,981 Hon Hai Precision Industry 475,200 5,513 Universal Scientific IND 174,000 869 -------------------- 9,366 -------------------- FOOD & DRUG RETAILING President Chain Store Corp. 411,000 1,918 -------------------- INTERNET SOFTWARE & SERVICES GigaMedia Ltd. 9,100 494 -------------------- METALS & MINING China Steel Corp. 1,691,000 1,217 -------------------- SEMICONDUCTOR EQUIPMENT & PRODUCTS Advanced Semiconductor Engineering, Inc. 706,000 2,668 ASE Test Ltd. 30,800 893 Macronix International 322,000 921 Siliconware Precision Industries Co. 926,000 2,069 Taiwan Semiconductor Manufacturing Co., Ltd. 2,843,000 19,153 United Micro Electronics Corp., Ltd. 3,153,000 12,226 -------------------- 37,930 -------------------- TEXTILES & APPAREL (a)Far Eastern Textile Ltd. 941,040 1,948 Far Eastern Textile Ltd. GDR 7,100 186 -------------------- 2,134 -------------------- 83,420 -------------------- - ---------------------------------------------------------------------------- THAILAND(1.1%) BANKS Thai Farmers Bank Ltd. (Foreign) 1,611,600 1,779 -------------------- CONSTRUCTION MATERIALS Siam City Cement Public Co., Ltd. (Foreign) 251,933 846 -------------------- ELECTRONIC EQUIPMENT & INSTRUMENTS Delta Electronics Public Co., Ltd. (Foreign) 183,015 2,313 -------------------- MEDIA BEC World Public Co., Ltd. (Foreign) 143,500 1,070 -------------------- REAL ESTATE Golden Land Property Development Public Co., Ltd. 2,849,000 746 -------------------- WIRELESS TELECOMMUNICATION SERVICES Advanced Info. Services Public Co., Ltd. (Foreign) 231,000 3,481 -------------------- 10,235 -------------------- - ---------------------------------------------------------------------------- TOTAL COMMON STOCKS (Cost U.S.$694,068) 951,184 -------------------- NO. OF VALUE RIGHTS (000) - ---------------------------------------------------------------------------- RIGHTS (0.0%) - ---------------------------------------------------------------------------- SOUTH KOREA DIVERSIFIED FINANCIALS Dongwon Securities Co. (Cost U.S.$--) 41,410 U.S.$ 16 -------------------- - ---------------------------------------------------------------------------- NO. OF WARRANTS - ---------------------------------------------------------------------------- WARRANTS(0.1%) - ---------------------------------------------------------------------------- INDIA(0.0%) AUTO COMPONENTS Apollo Tyres Ltd. 2,150 --@ -------------------- - ---------------------------------------------------------------------------- THAILAND(0.1%) BANKS Siam Commercial Bank Public Co., Ltd., expiring 5/10/02 1,727,300 468 -------------------- - ---------------------------------------------------------------------------- TOTAL WARRANTS (Cost U.S.$140) 468 -------------------- - ---------------------------------------------------------------------------- FACE AMOUNT (000) - ---------------------------------------------------------------------------- SHORT-TERM INVESTMENTS(0.2%) - ---------------------------------------------------------------------------- UNITED STATES(0.2%) REPURCHASE AGREEMENT Chase Securities, Inc., 5.90%, dated 3/31/00, due 4/03/00, to be repurchased at U.S. $1,618, collateralized by U.S. $1,635 United States Federal Home Loan Note, 5.75%, due 7/15/03 (Cost U.S.$1,617) U.S.$ 1,617 1,617 -------------------- - ---------------------------------------------------------------------------- FOREIGN CURRENCY ON DEPOSIT WITH CUSTODIAN(0.6%) Hong Kong Dollar HKD 7 1 Indian Rupee INR 59 1 Malaysian Ringgit MYR 5,104 1,343 Pakistani Rupee PDR 257,982 4,772 South Korean Won KRW 3,871 4 Taiwan Dollar TWD 1,146 38 -------------------- (Cost U.S.$6,160) 6,159 -------------------- - ---------------------------------------------------------------------------- 11 AMOUNT VALUE (000) (000) - ---------------------------------------------------------------------------- TOTAL INVESTMENTS(99.9%) (Cost U.S.$701,985) U.S.$ 959,444 -------------------- - ---------------------------------------------------------------------------- OTHER ASSETS AND LIABILITIES (0.1%) Other Assets U.S.$ 7,480 Liabilities (6,518) 962 --------------------- -------------------- - ---------------------------------------------------------------------------- NET ASSETS (100%) Applicable to 62,233,974 issued and outstanding U.S.$0.01 par value shares (100,000,000 shares authorized) U.S.$ 960,406 -------------------- - ---------------------------------------------------------------------------- NET ASSET VALUE PER SHARE U.S.$ 15.43 -------------------- - ----------------------------------------------------------------------------
(a) -- 144A Security--certain conditions for public sale may exist. (b) -- The Fund is advised by an affiliate. @ -- Value is less than U.S.$500. GDR -- Global Depositary Receipt. ADR -- American Depositary Receipt. -----END PRIVACY-ENHANCED MESSAGE-----