-----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, HmmYzJJ10ky1KREw6Q4QZffggX0enCoRiGfF+G98zTJChpq/3vZZAMPFHCd0eyzA 2h1ah+M1/Y4C1AwVoNpTLA== 0000912057-96-011315.txt : 19960604 0000912057-96-011315.hdr.sgml : 19960604 ACCESSION NUMBER: 0000912057-96-011315 CONFORMED SUBMISSION TYPE: N-30B-2 PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960603 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: MORGAN STANLEY 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: 1940 Act SEC FILE NUMBER: 811-08388 FILM NUMBER: 96575822 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 INVESTMENT FUND INC DATE OF NAME CHANGE: 19940316 N-30B-2 1 N-30B-2 MORGAN STANLEY ASIA-PACIFIC FUND, INC. - --------------------------------------------- OFFICERS AND DIRECTORS Barton M. Biggs William G. Morton, Jr. CHAIRMAN OF THE BOARD DIRECTOR OF DIRECTORS James W. Grisham Frederick B. Whittemore VICE PRESIDENT VICE-CHAIRMAN OF THE Michael F. Klein BOARD OF DIRECTORS VICE PRESIDENT Warren J. Olsen Harold J. Schaaff, Jr. PRESIDENT AND DIRECTOR VICE PRESIDENT Peter J. Chase Joseph P. Stadler DIRECTOR VICE PRESIDENT John W. Croghan Valerie Y. Lewis DIRECTOR SECRETARY David B. Gill James R. Rooney DIRECTOR TREASURER Graham E. Jones Joanna M. Haigney DIRECTOR ASSISTANT TREASURER John A. Levin DIRECTOR
- --------------------------------------------- INVESTMENT ADVISER Morgan Stanley Asset Management Inc. 1221 Avenue of the Americas New York, New York 10020 - -------------------------------------------------------- ADMINISTRATOR The Chase Manhattan Bank, N.A. 73 Tremont Street Boston, Massachusetts 02108 - -------------------------------------------------------- CUSTODIANS Morgan Stanley Trust Company (International) One Pierrepont Plaza Brooklyn, New York 11201 The Chase Manhattan Bank, N.A. (Domestic) 770 Broadway New York, New York 10003 - -------------------------------------------------------- SHAREHOLDER SERVICING AGENT American Stock Transfer & Trust Company 40 Wall Street New York, New York 10005 (800) 278-4353 - -------------------------------------------------------- LEGAL COUNSEL Rogers & Wells 200 Park Avenue New York, New York 10166 - -------------------------------------------------------- INDEPENDENT ACCOUNTANTS Price Waterhouse 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. ------------------------ MORGAN STANLEY ASIA-PACIFIC FUND, INC. --------------------- FIRST QUARTER REPORT MARCH 31, 1996 MORGAN STANLEY ASSET MANAGEMENT INC. INVESTMENT ADVISER LETTER TO SHAREHOLDERS - -------- For the three months ended March 31, 1996, the Morgan Stanley Asia-Pacific Fund, Inc. had a total return, based on net asset value per share, of 5.02% compared to its benchmark (as defined following) of 2.20%. For the period since the Fund's commencement of operations on August 2, 1994 through March 31, 1996, the Fund's total return based on net asset value per share is 7.91% compared with - -0.62% for the benchmark. (The benchmark for investment performance is the weighted average of the percentage change month-on-month of each of four Morgan Stanley Capital International (MSCI) indices; Japan, Combined Asia Free ex-Japan, Australia, and New Zealand, where the weights are based on the respective market capitalizations of these indices at the beginning of the month). On March 29, 1996, the closing price of the Fund's shares on the New York Stock Exchange was $13 1/8 representing a 12.8% discount to the net asset value per share. JAPAN At the beginning of the quarter, a weaker yen, expectations of Hashimoto's Liberal Democratic Cabinet guiding the nation from recession and a positive overall improvement in sentiment contributed to steady purchases of equities by foreign and domestic institutional investors. Individual investors also stepped up purchases in speculative short term trading with Japan's record low interest rates and mounting confidence in the economy. The Paris G-7 meeting in January confirmed that Japan, as a responsible member in the global community, must resolve the "Jusen" non-performing loans and that the G-7, in general, was in favor of a stronger dollar. Local sentiment was also helped by the consecutive new highs in the U.S. and the lowering of the discount rate by the Federal Reserve. Despite such positive developments, Finance Minister Kubo's comments during February, calling for higher interest rates to help pensioners, cooled the market. Additionally, strong opposition, using taxpayers' funds for Jusen loans, stalled the market. With short rates rising on Kubo's statements and short covering by "carry-trades" for hedge funds, the yen began to rally and this adversely affected the market. However, we believe Kubo's comments were a) politically motivated for electoral votes, b) meant to slow speculative rises in the stock market, and c) assess the vulnerability of the yen to rising rates. In fact, following the "panic" rise of the yen, the Ministry of Finance, almost on cue, announced that Hong Kong and Singapore monetary authorities would consider working together with the Bank of Japan to support a weaker yen. Furthermore, comments that low interest rates would continue by Bank of Japan Governor Matsushita and massive currency intervention seemed to support our belief that Mr. Kubo's comments were a "test" to determine the sensitivity of the market to rising interest rates. While Mr. Kubo's interest rate comments had a momentary effect on the market, the inability of congress to agree on the use of public funds for Jusen escalated into "sit-ins" by members of the opposition party. Fiscal 1996 budget talks were halted and thus economic recovery anxiety spilled over into the capital markets from mid-February to mid-March. Foreign investors, also concerned by a highly volatile U.S. market reflecting rising U.S. interest rates, backed away from further commitments to Japan. Moreover, domestic institutional investors in closing their fiscal year at March-end were inactive while domestic corporations continued their structural selling. After rising almost 6% since January 1996, the equity market ended almost flat by the middle of March. Towards the end of the first quarter, it became evident to investors that the yield gap between the U.S. and Japan had widened considerably and that the yen would likely continue to weaken. With Bank of Japan comments that interest rates will remain low, a favorable stream of economic data and perception by investors that the worst news for Jusen was known, the stock market rallied to close at a four year high. Although the index ended higher, economic sensitive and blue chips were largely ignored with domestic and foreign institutions on the sidelines. Moreover, the drop in book-to-bill ratio and perceived weakness in the U.S. economy also negatively affected the blue chips and the Fund's performance. A clear consensus has yet to form regarding the economic recovery and we continue to remain optimistic that upside surprises in earnings will occur. Corporate earnings should remain strong throughout fiscal year 1996 and 1997 excluding the financial sector (banks) and the yen should continue to weaken verses the dollar in our view. Policy makers in Japan will keep interest rates low while supply and demand will improve as local pension funds commit an increasing amount of their asset allocation to equities. On the other hand, Japanese corporations will likely maintain their current position to gradually liquidate cross-holdings of shares, however, this selling will be much smaller than in the past. We also believe that the Jusen problem is now well known and already discounted by the market. If congress fails to reach a consensus to 2 resolve Jusen issues, the market will fall but this in turn will most likely force policy makers to compromise. We will continue to maintain our overweightings in economic sensitive sectors and international blue-chips which are expected to benefit from this scenario, while excluding bank shares which do not have "value" in our opinion. ASIA EX-JAPAN The Asian markets performed strongly during the first quarter of 1996, with the benchmark MSCI combined Far East Free ex-Japan Index posting a 9.2% gain. Gains were widespread throughout the region with the exception of Korea (-2.4%) and Taiwan (-0.3%). The best performing markets, in U.S. dollar terms, were Malaysia (+14.2%), Indonesia (+13.3%) and Hong Kong (+10.9%). They were followed by Singapore (+7.7%), Philippines (+6.2%) and Thailand (+0.7%). Nearly the entire gain during the quarter was made in January when expectations of falling global interest rates and continued weak yen triggered waves of foreign portfolio investments into Asia. Escalating political tensions between China and Taiwan and a change in market expectations about interest rates in the latter half of the quarter resulted in mild corrections in Asian stocks. As the largest and most liquid Asian market, Hong Kong benefitted from the surge of funds into Asia. The market was driven by the direction of U.S. interest rates, Sino-Taiwanese relations and corporate earnings. Earnings announcements during the quarter were generally in line with market expectations, while the economy and the property market had shown signs of recovery. The latest land auctions attracted strong interest from established developers and several residential project launches also met with good responses. In Singapore, investors were encouraged by a stronger than expected 1995 real GDP growth of 8.9% and high liquidity in the financial system. Several new transactions in the prime office sector during the first quarter reflected higher rentals and capital values, while a swift reversal in sentiment resulted in strong response to many new residential launches. Several land tenders in the prime area also achieved record prices. As a result, property stocks were well sought after by investors. Banks performed well initially but succumbed to profit-taking later as concerns over slow earnings growth resurfaced. The marine sector continued to underperform on the back of very tough industry operating conditions. The Malaysian market, which was shunned by most international funds last year, saw a resurgence of foreign interest during the quarter. Better trade account numbers coupled with resolutions on the tariff structures for Telekom and Tenaga, the two major listed utilities, resulted in an improvement in market sentiment. A good crop of corporate results and active retail participation also kept the market buoyant. Thailand started off on a strong note in January, reaching a peak in early February. The rally ended abruptly as regional markets underwent a correction. The poor spate of earnings being reported for 1995 did not help sentiment and confidence, while the slight rumblings on the political front prompted speculation of further political turmoil in the Thai Cabinet. Indonesia performed strongly on the back of a surge in the share price of Telekom, which was heavily weighted in the Index. The Central Bank continued to maintain a restrictive monetary policy to avoid a possible blowout in the external accounts. GDP growth for 1996 is expected to slow down from the 8.2% achieved last year while the current account deficit is forecast to be within the targeted threshold of 4.0% of GDP. In the Philippines, stock prices were buoyed by strong corporate earnings announcements. A number of stocks reached their all-time highs during the rally, notably Ayala Land. The Taiwanese market continued to be plagued by cross-strait tensions during the quarter. Domestic investors remained largely cautious as China conducted missile tests near Taiwan ahead of Taiwan's first ever presidential election. Buying by the Government's Stock Market Stabilization Fund helped to limit losses. Shipping stocks performed particularly well as investors were hopeful for a peaceful resolution of the China-Taiwan dispute that would pave the way for the establishment of direct shipping links between Taiwan and the mainland. Banks and finance stocks rose strongly as a result of speculative buying despite their rich valuations. Sentiment was poor in Korea as fears of a rapidly declining economy and political uncertainties took their toll. Securities companies continued to unload stocks in a bid to reduce their equity exposure, while local investment trust companies raised cash to meet redemptions. A seemingly unstable North Korean regime also caused some concerns among investors. 3 Otherwise, the fundamentals of the market remained sound. Slower corporate investment activity led to lower interest rates, while export growth remained healthy despite the weak yen. OUTLOOK Asia has started the year strongly after two years of underperformance relative to the developed markets. On one hand, the Asian stock markets are no longer over-owned by institutional investors and there are no speculative excesses. On the other hand, stock prices in Asia have responded to several negative news items in the recent past. These include the potential adverse impact on the stability of the region arising from conflicts between China and Taiwan, the risk of rising interest rates as well as earnings downgrades in certain markets. These factors, together with continued robust earnings growth and modest valuations, should combine to provide a strong platform for further stock price advances. In Hong Kong, expectations of higher interest rates in the U.S. and caution over the Most-Favored-Nation (MFN) renewal issue could put pressure on the stock market in the near term. On the positive side, the Chinese economy is poised for a cyclical recovery this year. This will benefit the Hong Kong economy, lead to stronger corporate earnings growth and possibly spur capital flows from the mainland into Hong Kong. Singapore will continue to be underpinned by sound economic fundamentals and domestic liquidity. In the case of Malaysia, Thailand, Indonesia and the Philippines, while economic and interest rate risks tend to be higher, their rate of change at the margin has turned positive. We expect cross-strait tensions to ease after Taiwan's presidential election, although we recognize the dispute is unlikely to be resolved completely in the near term. Meanwhile, the Taiwanese stock market should regain part of its lost ground given the depth of its recent decline. The Korean market is also looking increasingly compelling after the recent sell-off. It is now one of the cheapest in Asia with good earnings growth prospects. The Fund successfully completed a rights offering on May 8, 1996 raising approximately $173 million (after deducting offering expenses) in order to take advantage of current market opportunities in the Asia - Pacific region. These proceeds have increased the Fund's total net assets to approximately $1.0 billion. We expect to complete the investment of these proceeds within the next few weeks. Sincerely, [SIGNATURE] Warren J. Olsen PRESIDENT AND DIRECTOR [SIGNATURE] Ean Wah Chin SENIOR PORTFOLIO MANAGER May 15, 1996 4 Morgan Stanley Asia-Pacific Fund, Inc. Investment Summary as of March 31, 1996 - -------------------------------------------------------------------------------- - --------------------------------------------------------------------------------
HISTORICAL INFORMATION (UNAUDITED) TOTAL RETURN (%) ---------------------------------------------------------------------------- MARKET VALUE (1) NET ASSET VALUE (2) INDEX (1)(3) ------------------------ ------------------------ ------------------------ AVERAGE AVERAGE AVERAGE CUMULATIVE ANNUAL CUMULATIVE ANNUAL CUMULATIVE ANNUAL ------------------------ ------------------------ ------------------------ FISCAL YEAR TO DATE -1.50% -- 5.02% -- 2.20% -- ONE YEAR 25.69 25.69% 18.31 18.31% 5.77 5.77% SINCE INCEPTION* -5.96 -3.63 7.91 4.68 -0.62 -0.37
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. - -------------------------------------------------------------------------------- RETURNS AND PER SHARE INFORMATION A BAR CHART REFLECTING THE DATA BELOW IS REFLECTED HERE.
YEARS ENDED DECEMBER 31: THREE MONTHS ENDED 1994* 1995 March 31, 1996 (Unaudited) Net Asset Value Per Share $13.20 $14.34 $15.06 Market Value Per Share $12.25 $13.33 $13.13 Premium/(Discount) -7.20% -7.00% -12.80% Income Dividends $0.04 $0.05 - Capital Gains Distributions $0.01 $0.02 - Fund Total Return (2) -5.94% 9.24% 5.02% Index Total Return (1)(3) ** -5.90% 0.87% 2.20%
(1) Assumes dividends and distributions, if any, were reinvested. (2) Total investment return based on per share net asset value 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 the weighted average of the percentage change month-on-month of each of four Morgan Stanley Capital International (MSCI) indices; Japan, Combined Asia Free ex-Japan, Australia, and New Zealand, where the weights are based on the respective market capitalizations of these indices at the beginning of the month. * The Fund commenced operations on August 2, 1994. ** Unaudited. 5 Morgan Stanley Asia-Pacific Fund, Inc. Portfolio Summary as of March 31, 1996 (Unaudited) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- PORTFOLIO INVESTMENTS DIVERSIFICATION EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC Equity Securities 98.2% Short-Term Investments 1.8%
- -------------------------------------------------------------------------------- SECTORS EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC Automobiles 4.1% Banking 10.8% Chemicals 6.1% Construction & Housing 4.1% Electrical & Electronics 11.6% Financial Services 6.0% Machinery & Engineering 7.1% Multi-Industry 7.7% Real Estate 10.4% Telecommunications 7.5% Other 24.6%
- -------------------------------------------------------------------------------- COUNTRY WEIGHTINGS EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC Japan 38.0% India 15.2% Hong Kong 13.2% Malaysia 7.6% Thailand 7.5% Singapore 6.5% Australia 4.8% Indonesia 3.7% Philippines 3.3% Korea 2.3% China 0.6% Other -2.7%
- -------------------------------------------------------------------------------- TEN LARGEST HOLDINGS
PERCENT OF NET ASSETS --------------- 1. Cheung Kong (Holdings) Ltd. 2.1% 2. Hutchison Whampoa Ltd. 1.7 3. HSBC Holdings plc 1.7 4. Housing Development Finance Corp. 1.6 5. Toshiba Corp. 1.5 PERCENT OF NET ASSETS --------------- 6. Charoen Pokphand Co. 1.5% 7. Bangkok Bank Ltd. 1.4 8. Broken Hill Proprietary Co., Ltd. 1.4 9. Lend Lease Corp. Ltd. 1.4 10. Hitachi Ltd. 1.2 --- 15.5% --- ---
6 INVESTMENTS (UNAUDITED) - --------- MARCH 31, 1996
VALUE SHARES (000) - ---------------------------------------------------------------- - ------------- COMMON STOCKS (101.1%) (Unless otherwise noted) - -------------------------------------------------- - ---------- AUSTRALIA (4.8%) BANKING National Australia Bank Ltd. 907,074 U.S.$ 8,083 -------------- ENERGY SOURCES Broken Hill Proprietary Co. Ltd. 780,127 11,110 -------------- METALS -- NON-FERROUS Western Mining Corp. Ltd. 1,295,750 8,568 -------------- REAL ESTATE Lend Lease Corp. Ltd. 758,877 10,986 -------------- 38,747 -------------- - ---------------------------------------------------------------- - ------------- CHINA (0.6%) AUTOMOBILES Shenzen North Jianshe Motorcycle 'B' 3,090,300 1,189 -------------- CHEMICALS Jilin Chemical Industrial Co. Ltd. 'H' 68,000 1,436 -------------- MACHINERY & ENGINEERING Harbin Power Equipment Co. Ltd. 'H' 810,000 149 -------------- TEXTILES & APPAREL Shenzhen Yizheng Chemical Fibre Co. Ltd. 'H' 3,558,000 920 -------------- UTILITIES -- ELECTRICAL & GAS Shandong Huaneng Power Co. Ltd. ADR 125,700 1,100 -------------- 4,794 -------------- - ---------------------------------------------------------------- - ------------- HONG KONG (12.5%) BANKING HSBC Holdings plc 899,148 13,485 -------------- FOOD & HOUSEHOLD PRODUCTS Charoen Pokphand Co. Ltd. 7,242,000 3,441 -------------- MULTI-INDUSTRY Citic Pacific Ltd. 1,565,000 6,070 Guangdong Investments Ltd. 11,316,000 7,169 Hutchison Whampoa Ltd. 2,210,000 13,944 Swire Pacific Ltd. 'A' 950,000 8,352 -------------- 35,535 -------------- REAL ESTATE Cheung Kong (Holdings) Ltd. 2,389,000 16,834 Hopewell Holdings 9,104,000 5,297 New World Development Co. Ltd. 1,648,000 7,670 Sun Hung Kai Properties Ltd. 708,000 6,339 Wharf (Holdings) Ltd. 390,000 1,472 -------------- 37,612 -------------- TELECOMMUNICATIONS Hong Kong Telecom Ltd. 4,110,000 8,210 -------------- TRANSPORTATION -- SHIPPING Cosco Pacific, Ltd. 516,000 407 -------------- UTILITIES -- ELECTRICAL & GAS China Light & Power Co. Ltd. 564,000 2,545 -------------- 101,235 -------------- - ---------------------------------------------------------------- - ------------- VALUE SHARES (000) - -------------------------------------------------------- - ------------ INDIA (14.5%) APPLIANCES & HOUSEHOLD DURABLES Peico Electronics & Electric 123,600 U.S.$ 517 -------------- AUTOMOBILES Apollo Tyres Ltd. 424,625 2,229 Apollo Tyres Ltd. (Warrants) 170,168 265 Autolec Industries 152,800 431 Autolite Ltd. 171,100 1,054 Autopal Industries, Ltd. 15,000 22 Escorts Ltd. 558,800 1,950 Hero Honda 30,000 255 Jay Bharat Maruti 53,200 90 Lumax Automatic Parts Industries 95,400 369 Nippondenso India Ltd. 71,400 230 Patheja Forgings and Auto 'B' 527,000 1,199 Rico Auto Industries Ltd. 82,000 327 Sona Steering System 92,500 197 Tata Engineering & Locomotive 309,502 4,139 -------------- 12,757 -------------- BANKING State Bank of India 789,181 5,502 -------------- BEVERAGES & TOBACCO ITC Ltd. 442,200 2,970 United Breweries 149,100 153 -------------- 3,123 -------------- BUILDING MATERIALS & COMPONENTS Associated Cement Co. Ltd. 73,675 8,210 Gujarat Ambuja Cements Ltd. 212,500 2,193 India Cements, Ltd. 75,000 341 Madras Cements 3,695 1,192 Murudeshwar Ceramics Ltd. 46,000 108 Saurashtra Cement & Chemicals 'B' 26,200 60 -------------- 12,104 -------------- CHEMICALS Asian Paints Ltd. 54,200 545 Gujarat Narmada Valley Fertilizers Ltd. 275,000 2,117 Gujarat Narmada Valley Fertilizers Ltd. 'A' 263,600 406 Gujarat State Fertilizers 16,100 52 Hoechst India Ltd. 50,650 374 Indian Dyestuff Industries Ltd. 304,250 205 Indian Organic Chemical Ltd. 275,480 254 Indian Petro Chemical Corp. 1,013,300 4,665 Jaysynth Dyechem Ltd. 145,800 299 Sudarshan Chemicals Inds. Ltd. 4,600 45 -------------- 8,962 -------------- CONSTRUCTION & HOUSING Hindustan Construction Co. 116,300 206 Larsen & Toubro 150 1 Nagarjuna Construction 174,500 819 -------------- 1,026 -------------- CONSUMER GOODS Godrej Soaps 203,700 377 -------------- DATA PROCESSING & REPRODUCTION Modi Xerox Ltd. 16,850 94 -------------- ELECTRICAL & ELECTRONICS BPL Ltd. 263,000 504 Bajaj Electricals Ltd. 14,850 203 Rolta India Ltd. 1,000,000 469 -------------- 1,176 -------------- - ---------------------------------------------------------------- - -------------
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VALUE SHARES (000) - -------------------------------------------------------- - ------------ INDIA (CONTINUED) ELECTRONIC COMPONENTS & INSTRUMENTS Vikas WSP Ltd. 104,000 U.S.$ 427 Viral Filaments 5,000 12 -------------- 439 -------------- ENERGY EQUIPMENT & SERVICES Bharat Heavy Electricals 1,155,000 4,107 Crompton Greaves Ltd. 409,580 3,251 Esab India Ltd. 307,765 659 S & S Power Switchgear Ltd. 57,000 301 -------------- 8,318 -------------- FINANCIAL SERVICES Housing Development Finance Corp. 133,050 12,642 Industrial Finance Corp India 1,048,000 1,306 Tube Investments of India 102,600 439 -------------- 14,387 -------------- FOOD & HOUSEHOLD PRODUCTS Dhampur Sugar Mills Ltd. 15,400 52 -------------- FOREST PRODUCTS & PAPER Ballarpur Industries Ltd. 204,964 1,082 J.K. Corp. Ltd. GDR 61,140 191 J.K. Corp. Ltd. GDR 249,240 779 -------------- 2,052 -------------- HEALTH & PERSONAL CARE Sun Pharmaceutical 162,100 1,274 TTK Biomed Ltd. 21,500 25 -------------- 1,299 -------------- INDUSTRIAL COMPONENTS Indian Rayon & Industries Ltd. 10,000 136 Thermax Ltd. 50,000 484 -------------- 620 -------------- LEISURE & TOURISM ITC Hotels Ltd. 238,600 1,301 -------------- MACHINERY & ENGINEERING Artson Engineering Ltd. 235,600 142 Hindustan Power Plus Ltd. 67,000 151 Veejay Lakshmi Engineering 91,100 427 -------------- 720 -------------- METALS -- NON-FERROUS Hindalco Industries Ltd. 5,000 167 -------------- METALS -- STEEL KEC International Ltd. 350,000 1,155 Special Steels Ltd. 300,050 1,029 Special Steels Ltd. (Rights) 10 -- Tata Iron & Steel Co. Ltd. 270,150 1,569 -------------- 3,753 -------------- MISCELLANEOUS MATERIALS & COMMODITIES Amforge Industries 33,100 78 Amforge Industries (Rights) 5,225 7 Bharat Forge Co. Ltd. 260,000 1,125 Cosmo Films Ltd. 175,000 657 Essel Packaging Ltd. 138,800 871 Hindustan Development Corp. 1,048,500 723 ITW Signode India Ltd. 97,250 326 MRF Ltd. 7,050 538 Panyam Cements & Minerals 17,190 504 Polyplex Ltd. 225,000 435 Supreme Industries Ltd. 91,300 964 Wimco Ltd. 225,150 252 -------------- 6,480 -------------- - ---------------------------------------------------------------- - ------------- VALUE SHARES (000) - -------------------------------------------------------- - ------------ MULTI-INDUSTRY Bajaj Hindustan Ltd. 21,000 U.S.$ 48 Container Corp. of India 1,291,000 5,303 EID Parry Ltd. 64,300 209 Max India (Rights) 100,000 1,387 Morgan Stanley Growth Fund 5,855,900 962 Suashish Diamonds 71,600 298 UTI MasterShares Ltd. 2,270,030 885 VXL Ltd. 847,000 708 Voltas, Ltd. 15,250 31 -------------- 9,831 -------------- REAL ESTATE Alacrity Housing Ltd. 181,000 165 -------------- TELECOMMUNICATIONS Infosys Technology Ltd. 9,600 138 Mahanagar Telephone Nigam 572,000 3,019 Videsh Sanchar Nigam Ltd. 270,000 9,501 -------------- 12,658 -------------- TEXTILES & APPAREL Century Textile & Industry 1,945 344 Coates of India Ltd. 93,750 646 G.T.N. Textiles Ltd. 243,000 855 Garware Plastics & Polyester 157,800 972 Indo Rama Synthetics 379,900 446 Indo Rama Synthetics (Rights) 46,350 -- J.K. Synthetics Ltd. 605,500 515 Mahavir Spinning Mills Ltd. 145,450 529 Morajee Goculdas Spinning 125,000 587 Raymond Ltd. 239,850 2,356 Viniyoga Clothes Ltd. 486,600 143 Viral Syntex Ltd. 5,000 7 -------------- 7,400 -------------- TRANSPORTATION -- SHIPPING Great Eastern Shipping Ltd. 'A' 1,362,000 1,797 -------------- 117,077 -------------- - ---------------------------------------------------------------- - ------------- INDONESIA (3.7%) BUILDING MATERIALS & COMPONENTS Indocement Tunggal Perkasa (Foreign) 120,000 435 Semen Gresik (Foreign) 634,500 2,246 -------------- 2,681 -------------- CHEMICALS Sorini Corp. (Foreign) 600,000 3,157 -------------- CIGARETTES PT Hanjaya Mandala Sampoerna (Foreign) 100,000 1,045 -------------- FOOD & HOUSEHOLD PRODUCTS Mayora Indah (Foreign) 27,000 20 -------------- FOREST PRODUCTS & PAPER Barito Pacific Timber (Foreign) 1,387,000 1,394 -------------- HEALTH & PERSONAL CARE Kalbe Farma (Foreign) 883,500 2,692 -------------- MACHINERY & ENGINEERING United Tractors (Foreign) 716,500 1,440 -------------- MISCELLANEOUS MATERIALS & COMMODITIES Charoen Pokphand Indonesia (Foreign) 2,510,000 5,019 -------------- REAL ESTATE Duta Pertiwi Property (Foreign) 280,000 251 -------------- - ---------------------------------------------------------------- - -------------
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VALUE SHARES (000) - -------------------------------------------------------- - ------------ INDONESIA (CONTINUED) TELECOMMUNICATIONS Indosat (Foreign) 1,810,000 U.S.$ 6,213 Telekomunikasi Indonesia (Foreign) 3,637,000 5,678 -------------- 11,891 -------------- 29,590 -------------- - ---------------------------------------------------------------- - ------------- JAPAN (37.9%) AEROSPACE & MILITARY TECHNOLOGY Mitsubishi Heavy Industries Ltd. 1,220,000 10,540 -------------- AUTOMOBILES Asahi Tec Corp. 360,000 2,457 Kansei Corp. 170,000 1,384 Nissan Motor Co. 900,000 6,967 Suzuki Motor Co. Ltd. 660,000 8,145 -------------- 18,953 -------------- BUILDING MATERIALS & COMPONENTS Sangetsu Co. Ltd. 100,000 2,412 Sanwa Shutter Corp. (Warrants) expiring 1/20/98 49,400 898 -------------- 3,310 -------------- BUSINESS & PUBLIC SERVICES Dai Nippon Printing Co. Ltd. 280,000 5,105 -------------- CHEMICALS Daicel Chemical Industries 750,000 4,537 Fuji Photo Film Ltd. 160,000 4,578 Kaneka Corp. 999,000 6,613 Mitsubishi Chemical Corp. 1,160,000 6,128 Nifco 311,300 3,900 Okura Industrial Co. Ltd. 434,000 2,982 Sekisui Chemical Co. 520,000 6,807 -------------- 35,545 -------------- CONSTRUCTION & HOUSING Kyudenko Co. Ltd. 349,000 4,568 Matsui Construction 171,000 1,359 Nishio Rent All Co. 111,000 2,460 Nishio Rent All Co. (Warrants), expiring 2/20/98 1,055 475 Ohbayashi Corp. 320,000 2,747 Taisei Corp. Ltd. 1,240,000 8,811 Yahagi Construction 238,000 1,938 -------------- 22,358 -------------- ELECTRICAL & ELECTRONICS Canon Inc. 180,000 3,433 Hitachi Ltd. 1,085,000 10,550 Kyocera Corp. 40,000 2,715 Kyocera Corp. (Warrants), expiring 1/23/98 1,450 1,341 Matsushita Communication Industries 191,000 4,536 Matsushita Electric Industries Ltd. 555,000 9,029 NEC Corp. 775,000 8,985 Nintendo Ltd. 115,000 7,354 Ricoh Co. Ltd. 700,000 7,527 Sony Corp. 140,000 8,364 Stanley Electric Co. 750,000 4,972 Tokyo Electron Ltd. 175,000 5,972 Toshiba Corp. 1,630,000 12,375 -------------- 87,153 -------------- ELECTRONIC COMPONENTS & INSTRUMENTS Mitsumi Electric Co. Ltd. 388,000 6,603 Murata Manufacturing 50,000 1,720 TDK Corp. 135,000 6,955 -------------- 15,278 -------------- - ---------------------------------------------------------------- - ------------- VALUE SHARES (000) - -------------------------------------------------------- - ------------ FINANCIAL SERVICES Hitachi Credit Corp. 118,000 U.S.$ 2,184 Nikko Securities Co. 700,000 8,901 Nomura Securities Co. 335,000 7,361 Sumitomo Lease 102,000 525 -------------- 18,971 -------------- HEALTH & PERSONAL CARE Sankyo Co. Ltd. 217,000 4,971 Secom Co. 94,000 6,143 Yamanouchi Pharmaceutical Co. 240,000 5,341 -------------- 16,455 -------------- INSURANCE Nichido Fire & Marine Insurance Co. 215,250 1,620 Sumitomo Marine & Fire 600,000 5,150 -------------- 6,770 -------------- MACHINERY & ENGINEERING Amada Co. Ltd. 500,000 5,283 Daifuku 450,000 6,774 Daikin Kogyo Co. 600,000 6,171 Fuji Machine Co. 256,000 6,941 Kurita Water Industries 149,600 3,469 Teijin Seiki Co. 431,000 2,293 Tsubakimoto Chain 817,000 5,316 -------------- 36,247 -------------- REAL ESTATE Daibiru Corp. 308,000 4,031 Keihanshin Real Estate Co. 205,000 1,700 Mitsubishi Real Estate Co. Ltd. 470,000 6,460 -------------- 12,191 -------------- TELECOMMUNICATIONS Nippon Telephone & Telegraph 612 4,475 -------------- TEXTILES & APPAREL Japan Vilene Co. Ltd. 304,000 1,899 -------------- TRANSPORTATION -- ROAD & RAIL Nippon Konpo Unyu Soko 295,000 2,507 -------------- WHOLESALE & INTERNATIONAL TRADE FamilyMart 162,030 6,984 Inabata & Co. 249,000 1,727 -------------- 8,711 -------------- 306,468 -------------- - ---------------------------------------------------------------- - ------------- KOREA (2.3%) APPLIANCES & HOUSEHOLD DURABLES Samsung Electronics Co. RFD 12,266 1,443 Samsung Electronics Co. (Foreign) 40,701 4,787 Samsung Electronics Co. RFD (Foreign) 1,176 138 -------------- 6,368 -------------- BANKING Korea Housing Bank 23,550 653 -------------- CONSTRUCTION & HOUSING Hyundai Engineering RFD (Foreign) 2,488 119 Hyundai Engineering (Foreign) 132,963 6,340 -------------- 6,459 -------------- METALS -- STEEL Pohang Iron & Steel ADR 43,500 1,055 -------------- UTILITIES -- ELECTRICAL & GAS Korea Electric Power (Foreign) 93,920 3,955 -------------- 18,490 -------------- - ---------------------------------------------------------------- - -------------
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VALUE SHARES (000) - -------------------------------------------------------- - ------------ MALAYSIA (7.6%) BANKING Malayan Banking Bhd 1,127,000 U.S.$ 10,513 -------------- LEISURE & TOURISM Genting Bhd 513,000 4,643 Resorts World Bhd 711,000 4,047 -------------- 8,690 -------------- MACHINERY & ENGINEERING United Engineers, Ltd. 1,369,000 9,470 -------------- MULTI-INDUSTRY Renong Bhd 5,468,000 8,904 Renong Bhd (Rights) 1,093,600 -- Renong Bhd (Warrants) 683,500 -- -------------- 8,904 -------------- REAL ESTATE Bandar Raya Developments Bhd 1,161,000 1,983 -------------- TELECOMMUNICATIONS Technology Resources Industries Bhd 1,064,000 3,827 Telekom Malaysia Bhd 989,000 9,108 -------------- 12,935 -------------- UTILITIES -- ELECTRICAL & GAS Petronas Gas Bhd 200,000 901 Tenaga Nasional Bhd 1,920,000 8,120 -------------- 9,021 -------------- 61,516 -------------- - ---------------------------------------------------------------- - ------------- PHILIPPINES (3.2%) BEVERAGES & TOBACCO San Miguel Corp. 'B' 534,800 1,798 -------------- CONSTRUCTION & HOUSING DMCI Holdings Inc. 4,947,000 3,212 -------------- ENERGY SOURCES Petron Corp. 7,127,500 3,063 -------------- MULTI-INDUSTRY Ayala Corp. 'B' 1,519,000 2,205 JG Summit Holdings 'B' 6,423,700 2,233 -------------- 4,438 -------------- REAL ESTATE Ayala Land, Inc. 'B' 2,265,750 3,678 C&P Homes, Inc. 2,963,600 2,236 SM Prime Holdings, Inc. 8,031,400 2,393 -------------- 8,307 -------------- TELECOMMUNICATIONS Philippine Long Distance Telephone 'B' 55,650 3,018 -------------- UTILITIES -- ELECTRICAL & GAS Manila Electric Co. 'B' 285,270 2,517 -------------- 26,353 -------------- - ---------------------------------------------------------------- - ------------- SINGAPORE (6.5%) BANKING Development Bank of Singapore (Foreign) 448,000 5,506 Oversea-Chinese Banking Corp. (Foreign) 480,000 6,444 United Overseas Bank (Foreign) 979,200 9,878 -------------- 21,828 -------------- BEVERAGES & TOBACCO Fraser & Neave 218,400 2,467 -------------- BROADCASTING & PUBLISHING Singapore Press Holdings (Foreign) 120,000 2,395 -------------- - ---------------------------------------------------------------- - ------------- VALUE SHARES (000) - -------------------------------------------------------- - ------------ ELECTRICAL & ELECTRONICS Acma Ltd. 284,400 U.S.$ 885 -------------- MACHINERY & ENGINEERING Keppel Corp. 878,000 7,984 Sembawang Corp. 250,000 1,252 -------------- 9,236 -------------- MULTI-INDUSTRY Singapore Technologies Industrial Corp. 1,534,000 3,574 -------------- REAL ESTATE City Developments Ltd. 888,000 7,885 DBS Land Ltd. 1,153,000 4,423 -------------- 12,308 -------------- 52,693 -------------- - ---------------------------------------------------------------- - ------------- THAILAND (7.5%) BANKING Bangkok Bank Ltd. (Foreign) 840,300 11,316 Siam Commercial Bank Co., Ltd. (Foreign) 410,000 6,301 Thai Farmers Bank Ltd. (Foreign) 785,000 9,203 -------------- 26,820 -------------- BUILDING MATERIALS & COMPONENTS Siam Cement Co., Ltd. (Foreign) 48,700 2,508 -------------- ELECTRICAL & ELECTRONICS Shinawatra Computer Co. Ltd. (Foreign) 186,800 4,794 -------------- FINANCIAL SERVICES Finance One Co. Ltd. (Foreign) 898,727 6,728 National Finance & Securities Co., Ltd. (Foreign) 649,000 4,087 Phatra Thanakit Co., Ltd. (Foreign) 513,135 4,715 -------------- 15,530 -------------- MISCELLANEOUS MATERIALS & COMMODITIES Charoen Pokphand Feedmill Co., Ltd. (Local) 668,000 3,360 -------------- TELECOMMUNICATIONS Advanced Information Services Co. Ltd. (Foreign) 127,100 2,396 TelecomAsia Corp. Ltd. (Foreign) 920,000 2,605 United Communication Industry (Foreign) 175,000 2,398 -------------- 7,399 -------------- 60,411 -------------- - ---------------------------------------------------------------- - ------------- TOTAL COMMON STOCKS (Cost U.S. $782,190) 817,374 -------------- - ---------------------------------------------------------------- - ------------- FACE AMOUNT (000) - -------------------------------------------------------- - ------------ FIXED INCOME SECURITY (0.0%) - ---------------------------------------------------------------- - ------------- INDIA (0.0%) METALS -- STEEL Special Steels Ltd. 14.00%, 12/6/02 (Cost U.S. $8) INR 2,980 11 -------------- - ---------------------------------------------------------------- - ------------- REPURCHASE AGREEMENT (0.3%) - -------------------------------------------------------- - ------------ UNITED STATES REPURCHASE AGREEMENT The Chase Manhattan Bank, N.A. 5.15%, dated 3/29/96, due 4/1/96, to be repurchased at U.S.$2,568, collateralized by U.S.$1,725 United States Treasury Bond 11.25%, due 2/15/15, valued at U.S.$2,624 (Cost $2,567) U.S.$ 2,567 2,567 -------------- - ---------------------------------------------------------------- - -------------
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AMOUNT VALUE (000) (000) - -------------------------------------------------------- - ------------ FOREIGN CURRENCY ON DEPOSIT WITH CUSTODIAN (1.6%) Hong Kong Dollar HKD 45,164,972 U.S.$ 5,839 Indian Rupee INR 204,803,182 6,006 Japanese Yen JPY 55,464,997 519 Philippine Peso PHP 89,210 3 Singapore Dollar SGD 18,216 13 Thai Baht THB 877,461 35 -------------- (Cost U.S. $12,447) 12,415 -------------- - ---------------------------------------------------------------- - ------------- TOTAL INVESTMENTS (103.0%) (Cost U.S. $797,212) 832,367 -------------- - ---------------------------------------------------------------- - ------------- OTHER ASSETS AND LIABILITIES (-3.0%) Other Assets U.S.$ 7,481 Liabilities (31,564) (24,083) --------------- -------------- - ---------------------------------------------------------------- - ------------- NET ASSETS (100.0%) Applicable to 53,654,508, issued and outstanding U.S. $0.01 par value shares (200,000,000 shares authorized) U.S.$ 808,284 -------------- -------------- - ---------------------------------------------------------------- - ------------- NET ASSET VALUE PER SHARE U.S.$ 15.06 -------------- -------------- - ---------------------------------------------------------------- - -------------
ADR -- American Depositary Receipt GDR -- Global Depositary Receipt RFD -- Ranked For Dividend Note: Prior governmental approval for foreign investments may be required under certain circumstances in some emerging markets, and foreign ownership limitations may also be imposed by the charters of individual companies in emerging markets. As a result, an additional class of shares designated as "foreign" may be created and offered for investment. The "local" and "foreign" shares' market values may vary. 11 -----END PRIVACY-ENHANCED MESSAGE-----