-----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, KXFuH/6dpxALikHPrFRYjvWgShve+szFatsnSSrJrK0RcT18O0LnVM2BL0RgGXDl 4kd34n9Umbpp8QFo9EAqUA== 0000912057-96-028657.txt : 19961210 0000912057-96-028657.hdr.sgml : 19961210 ACCESSION NUMBER: 0000912057-96-028657 CONFORMED SUBMISSION TYPE: N-30B-2 PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19960930 FILED AS OF DATE: 19961209 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: 96677494 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 Belinda A. Brady 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 73 Tremont Street Boston, Massachusetts 02108 - -------------------------------------------------------- CUSTODIANS Morgan Stanley Trust Company One Pierrepont Plaza Brooklyn, New York 11201 The Chase Manhattan Bank 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. --------------------- THIRD QUARTER REPORT SEPTEMBER 30, 1996 MORGAN STANLEY ASSET MANAGEMENT INC. INVESTMENT ADVISER LETTER TO SHAREHOLDERS - -------- For the nine months ended September 30, 1996, the Morgan Stanley Asia-Pacific Fund, Inc. (the "Fund") had a total return, based on net asset value per share, of 0.41% 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 September 30, 1996, the Fund's total return, based on net asset value per share, was 3.17% compared with -4.90% for the benchmark. (The benchmark for investment purposes 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 each month). On September 30, 1996, the closing price of the Fund's shares on the New York Stock Exchange was 10 7/8 representing a 14.2% discount to the net asset value per share. The Fund has outperformed the Index mainly because it was overweighted in Asia ex-Japan and underweighted in Japan. Asia ex-Japan markets were generally strong with a few exceptions, whereas the Japanese market fell 4.9%. Some of the better performing markets were the Philippines (up 17.8%), Malaysia (up 16.2%), Hong Kong (up 15.8%) and Indonesia (up 13.2%). The Fund however underperformed the benchmark by 1.0% for the third quarter. The Fund had a total return, based on net asset value per share, of -5.80% for the three months ended September 30, 1996, compared with -4.81% for the benchmark. The main reason for the underperformance was due to the overweight in several markets which fell sharply. These were India (down 17.8%), Thailand (down 13.5%) and South Korea (down 9.8%). The Fund made up some of the performance through its underweight in Japan, which was down 5.7% this quarter. JAPAN The Japanese equity market was in a consolidation phase for the most part of this year. The solid fundamental improvements during the first half of 1996 propelled equities to the highest closing levels since 1992. Some profit taking and consolidation occurred during May as the market entered a transition from a macro driven environment to a more earnings driven market. Over the first nine months of 1996 macro conditions in the Japanese economy showed evidence of a meaningful recovery underway, supported by a weakening Yen, economic stimulus packages and record low interest rates. A low interest rate, weaker Yen environment coupled with a 14 trillion Yen stimulus package announced in September 1995 had a very profound impact on GDP, corporate profits and business sentiment during the first half of 1996. Despite continued consensus by G7 to strengthen the Dollar versus the Yen during the Lyon G7 Summit and more favorable developments in Japanese individual company earnings forecasts, investors were thrown into confusion by the dramatic differences between first quarter GDP (up 12.7%) and the weaker than expected Tankan report of August. There were concerns regarding the sustainability of the Japanese economy and the interest rate outlook. A weaker than consensus book-to-bill ratio and uncertainty over U.S. interest rate direction resulted in fairly lackluster volume for the third quarter. ASIA EX-JAPAN In the first nine months of this year, Asian markets were generally on an uptrend. But the performances of the countries varied widely. Domestic factors were the key determinants of market directions for the most part of the year. Hong Kong rose 15.8% year-to-date. The markets that were very weak were Thailand and South Korea, which declined by 15.0% and 23.3% respectively. Both were affected by domestic issues such as rising current account deficits, securities margin calls and a rapidly slowing economy. The best performing market in the third quarter was Hong Kong. Hong Kong benefited mainly from flows into the region. The market had been volatile throughout most of the quarter, moving in line with the volatility in the U.S. equities markets. Half-year earnings came in strong and earnings were gradually revised. Sentiment also turned positive towards China-related stocks. With the U.S. Federal Reserve keeping interest rates unchanged, the market powered ahead further. Malaysia ended the quarter almost unchanged. The market had initially fallen on fears of disappointing earnings and poor trade figures. But many companies reported stronger than expected half-year earnings. In addition, the trade deficit for the first half of 1996 was only MR 0.8 billion versus MR 5.6 billion for the first half of 1995. This coupled with stable interest rates sparked a strong round of buying. The second board on the Kuala Lumpur Stock Exchange had, by the close of the quarter, outperformed the main board by a broad margin. The Indian market fell sharply in the third quarter as foreigners sold in anticipation of rising inflation, lower 2 corporate earnings and political uncertainty. The imposition of a minimum tax also caused earnings downgrades in many large corporates. The expected issue of several large-sized GDRs depressed sentiment further. Thailand came down hard in the third quarter with selling reaching climactic levels. Weak economic numbers had sparked fears of a growth recession, i.e. 6% GDP growth. For the first seven months of this year, exports had grown only 4% and all signs point to a widening of the trade and current account deficits. The slowdown has raised questions about the rapidly deteriorating real estate market and the asset quality of the banks and finance companies which have exposure to real estate. Sentiment was also not helped by a no-confidence motion against the Prime Minister, which eventually culminated in his resignation. In a subsequent surprise move, the parliament was dissolved and general elections were set for November 17. The other weak market was South Korea, which fell 9.9% in the third quarter. The Korean market continued to be plagued by weak economic numbers. Real GDP growth, for example, slowed to 6.7% in the second quarter of 1996, down from 7.9% in the first quarter. There was also growing concern over the widening trade deficit due to weak exports. South Korean competitiveness deteriorated with the Japanese Yen weakening, where Japan is a major export competitor. Redemption of stock margins and a massive supply of new equity (of close to US$2 billion) coming to the market prompted heavy selling. Even the foreign limit expansion from 18% to 20% on October 1, failed to lift the market towards the close of the quarter. PORTFOLIO ACTIVITIES Major purchases were made during the quarter in Hong Kong, Japan, Korea and Thailand. The Fund increased its weighting in Thailand and Korea as these markets have fallen sharply, yielding stocks at attractive valuations. Sales were made in India, the Philippines and Indonesia. The Fund took its weightings down in Indonesia and the Philippines. The political risks in Indonesia had basically increased due to widening wealth disparity and was heightened when the President underwent a medical examination. The market had risen as high as 23% at one stage. The Fund took advantage of this rise to trim overvalued stocks in the portfolio. In the Philippines, positions were reduced because several stocks had reached unsustainable valuations. India was reduced as the political and economic environment turned less favorable. MARKET OUTLOOK Asian markets in general are likely to continue to trend up on the back of sustained economic growth. In Japan, the consensus is increasingly heading towards better corporate earnings, supported by a weaker currency and continued record low interest rates. Furthermore, the bridge from a macro to a micro earnings-driven market will be led by economically sensitive and international blue chip issues and market leadership will emerge in these sectors propelling the overall market to post recovery highs. Hong Kong should continue to perform well because investors are becoming less and less concerned about the 1997 handover to China. As the Chinese economy should also be stimulated by the recent credit easing. This should bode well for credit-strapped companies and some of the H-share companies are likely to perform well. South Korea continues to be plagued by technical and macroeconomic concerns. Until the macro picture improves, the market as a whole cannot take off. Malaysia should see interest returning to the big blue chip stocks, which have done less well than the broader market. Earnings are expected to pick up in these larger capitalization companies in the second half of the year. Previous fears about economic over-heating and a widening current account deficit appear to have receded. Liquidity remains ample in the system. Singapore should remain dull in the coming months as no major corporate developments are expected. But the correction in the market has taken it to the low end of its historical range for forward price-earnings ratios. The Philippines is currently trading at a relatively expensive valuation to the region. This will cap the upside on the market. This is demonstrated by the fact that despite very positive macroeconomic news and further upward earnings revision, the market has failed to scale new heights. Political changes in Thailand should be a positive step for the market. Still, there must be earnings momentum and an improving macro picture before the market can take off from here. There are small signs that the economy is rebounding, but remains to be seen whether it can be sustained. PORTFOLIO STRATEGY The Asia Pacific region continues to be one of the fastest growing regions in the world. Relatively strong economic growth in the rest of the OECD world should also buoy economic growth in this region. While there could be upward pressures on interest rates stemming from the U.S., the impact should be quite minimal. Over the next few months, the Fund is likely to continue its underweight position in Japan. On the positive side, China is 3 likely to begin its cyclical recovery. This will benefit the region as whole. The Fund will also seek out stocks that will benefit from a stronger Chinese economy. Countries like Thailand and South Korea, whose economies have slowed first, are also likely to see lower interest rates, which should be a good boost to their economies. The Fund is likely to increase its weighting in Thailand and Korea. Both these markets have been sold down to historically low levels but selective stocks appear very attractive. It could be a while before these markets turn upwards; the Fund will use this opportunity to accumulate stocks that offer great value in the long run. The increased allocations in these countries will come mainly from cash. The Fund successfully completed a rights offering on May 8, 1996, raising approximately $173 million. Sincerely, [SIGNATURE] Warren J. Olsen PRESIDENT AND DIRECTOR [SIGNATURE] Ean Wah Chin SENIOR PORTFOLIO MANAGER October 10, 1996 4 Morgan Stanley Asia-Pacific Fund, Inc. Investment Summary as of September 30, 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 -7.25%+ -- 0.41%+ -- -2.20% -- ONE YEAR 10.25+ 10.25%+ 5.63+ 5.63%+ 1.54 1.54% SINCE INCEPTION* -11.45+ -5.46+ 3.17+ 1.45+ -4.90 -2.29
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: NINE MONTHS ENDED 1994* 1995 SEPTEMBER 30, 1996 (UNAUDITED) Net Asset Value Per Share $13.20 $14.34 $12.67 Market Value Per Share $12.25 $13.33 $10.88 Premium/(Discount) -7.2% -7.0% -14.2% Income Dividends $0.04 $0.05 $0.35 Capital Gains Distributions $0.01 $0.02 -- Fund Total Return (2) -5.94% 9.24% 0.41%+ 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 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. This return does not include the effect of dilution in connection with the Rights Offering. 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. +Adjusted for Rights Offering. 5 Morgan Stanley Asia-Pacific Fund, Inc. Portfolio Summary as of September 30, 1996 (Unaudited) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- PORTFOLIO INVESTMENTS DIVERSIFICATION EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC Equity Securities 94.7% Short-Term Investments 5.2% Fixed Income Securities 0.1%
- -------------------------------------------------------------------------------- SECTORS EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC Automobiles 3.8% Banking 11.9% Chemicals 5.4% Construction & Housing 3.7% Electrical & Electronics 11.8% Financial Services 5.0% Machinery & Engineering 6.2% Multi-Industry 6.2% Real Estate 8.3% Telecommunications 7.9% Other 29.8%
- -------------------------------------------------------------------------------- COUNTRY WEIGHTINGS EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC Japan 39.8% India 12.8% Hong Kong 11.9% Australia 6.9% Thailand 6.3% Singapore 5.9% Korea 3.4% Malaysia 2.9% Indonesia 2.7% Philippines 2.6% Other 4.8%
- --------------------------------------------------------------------------------
TEN LARGEST HOLDINGS* PERCENT OF NET ASSETS --------------- 1. Cheung Kong (Holdings) Ltd. 2.1% 2. WMC Ltd. 1.9 3. HSBC Holdings plc 1.8 4. National Australia Bank Ltd. 1.8 5. Lend Lease Corp. Ltd. 1.7 PERCENT OF NET ASSETS --------------- 6. Hutchison Whampoa Ltd. 1.6% 7. Hong Kong Telecom Ltd. 1.6 8. Broken Hill Proprietary Co. Ltd. 1.5 9. Bangkok Bank Ltd. (Foreign) 1.4 10. Hitachi Ltd. 1.3 --- 16.7% --- ---
- -------------------------------------------------------------------------------- * Excludes short-term securities. 6 INVESTMENTS (UNAUDITED) - --------- SEPTEMBER 30, 1996
VALUE SHARES (000) - --------------------------------------------------------- - ------------ COMMON STOCKS (94.5%) (Unless otherwise noted) - -------------------------------------------------- - ---------- AUSTRALIA (6.9%) BANKING National Australia Bank Ltd. 1,571,884 U.S.$ 16,548 -------------- ENERGY SOURCES Broken Hill Proprietary Co. Ltd. 1,052,964 13,502 -------------- METALS -- NON-FERROUS WMC Ltd. 2,645,655 17,026 -------------- REAL ESTATE Lend Lease Corp. Ltd. 959,277 15,566 -------------- 62,642 -------------- - --------------------------------------------------------- - ------------ CHINA (0.2%) CHEMICALS Jilin Chemical Industrial Co. Ltd. ADR 'H' 68,000 977 -------------- UTILITIES -- ELECTRICAL & GAS Shandong Huaneng Power Co. Ltd. ADR 125,700 1,132 -------------- 2,109 -------------- - --------------------------------------------------------- - ------------ HONG KONG (11.9%) BANKING HSBC Holdings plc 899,148 16,685 -------------- MACHINERY & ENGINEERING Cheung Kong Infrastructure 721,000 1,189 -------------- MULTI-INDUSTRY Citic Pacific Ltd. 1,533,000 6,938 Hutchison Whampoa Ltd. 2,195,000 14,760 Swire Pacific Ltd. 'A' 1,040,000 9,314 -------------- 31,012 -------------- REAL ESTATE CDL Hotels International 740,000 402 Cheung Kong (Holdings) Ltd. 2,447,000 18,828 New World Development Co. Ltd. 1,731,000 9,088 Sun Hung Kai Properties Ltd. 649,000 6,903 Wharf (Holdings) Ltd. 1,198,000 4,957 -------------- 40,178 -------------- TELECOMMUNICATIONS Asia Satellite Telecom Holdings 671,500 1,776 Hong Kong Telecom Ltd. 8,050,200 14,574 -------------- 16,350 -------------- TRANSPORTATION -- ROAD & RAIL Guangshen Railway ADR 21,000 399 -------------- - --------------------------------------------------------- - ------------ VALUE SHARES (000) - --------------------------------------------------------- - ------------ UTILITIES -- ELECTRICAL & GAS China Light & Power Co. Ltd. 564,000 U.S.$ 2,626 -------------- 108,439 -------------- - --------------------------------------------------------- - ------------ INDIA (12.1%) APPLIANCES & HOUSEHOLD DURABLES Peico Electronics & Electric Ltd. 123,582 315 -------------- AUTOMOBILES Apollo Tyres Ltd. 647,775 2,090 Apollo Tyres Ltd. (Warrants, expiring 2/28/98) 190,368 290 Autolec Industries Ltd. 152,800 261 Autolite Ltd. 232,100 656 Autopal Industries, Ltd. 65,000 47 Bajaj Tempo Ltd. (Rights) 5,450 52 Ceat Tyres Ltd. 368,000 805 Escorts Ltd. 966,450 2,413 Hero Honda Ltd. 37,150 261 Jay Bharat Maruti Ltd. 53,200 46 Lumax Automatic Parts Industries Ltd. 100,825 221 MRF Ltd. 9,550 763 Nippondenso India Ltd. 71,400 240 Patheja Forgings and Auto Ltd. 677,700 946 Rico Auto Industries Ltd. 82,000 179 Sona Steering System Ltd. 56,000 98 Tata Engineering & Locomotive Ltd. 309,522 3,870 -------------- 13,238 -------------- BANKING State Bank of India Ltd. 793,481 5,626 -------------- BEVERAGES ITC Ltd. 440,330 3,709 United Breweries Ltd. 149,100 114 -------------- 3,823 -------------- BUILDING MATERIALS & COMPONENTS Associated Cement Co., Ltd. 128,209 6,401 Gujarat Ambuja Cements Ltd. 256,050 2,112 India Cements, Ltd. 75,000 252 Kesoram Industries Ltd. 311,100 359 Madras Cements Ltd. 50 15 Murudeshwar Ceramics Ltd. 46,000 67 Panyam Cements & Minerals Ltd. 27,580 728 Saurashtra Cement & Chemicals 26,200 30 -------------- 9,964 -------------- - --------------------------------------------------------- - ------------
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VALUE SHARES (000) - --------------------------------------------------------- - ------------ INDIA (CONTINUED) CHEMICALS Asian Paints Ltd. 71,614 U.S.$ 672 EID Parry Ltd. 64,300 126 Gujarat Narmada Valley Fertilizers Ltd. 275,000 926 Gujarat Narmada Valley Fertilizers Ltd. 'A' 305,450 206 Gujarat State Fertilisers Ltd. 6,550 15 Indian Dyestuff Industries Ltd. 304,250 94 Indian Organic Chemical Ltd. 275,480 131 Indian Petro Chemical Corp. 1,140,700 3,560 Jaysynth Dyechem Ltd. 145,800 129 Sudarshan Chemicals 4,600 15 United Phosphorous Ltd. 97,500 543 -------------- 6,417 -------------- CONSTRUCTION & HOUSING Hindustan Construction Co. 257,100 252 Nagarjuna Construction Ltd. 151,200 361 -------------- 613 -------------- DATA PROCESSING & REPRODUCTION Modi Xerox Ltd. 16,850 53 -------------- ELECTRICAL & ELECTRONICS BPL Ltd. 263,000 273 Bajaj Electricals Ltd. 16,350 205 -------------- 478 -------------- ELECTRONIC COMPONENTS & INSTRUMENTS Infosys Technology Ltd. 9,600 178 Rolta India Ltd. 999,500 407 S & S Power Switchgear Ltd. 63,550 204 Samtel India Ltd. 1,000 1 Vikas WSP Ltd. 225,000 871 Viral Filaments Ltd. 5,000 9 -------------- 1,670 -------------- ENERGY EQUIPMENT & SERVICES Bharat Heavy Electricals Ltd. 2,042,000 10,239 Crompton Greaves Ltd. 455,410 2,117 KEC International Ltd. 350,000 667 -------------- 13,023 -------------- FINANCIAL SERVICES Housing Development Finance Corp. Ltd. 161,360 10,405 Industrial Finance Corp (India) Ltd. 1,294,800 1,235 -------------- 11,640 -------------- FOOD & HOUSEHOLD PRODUCTS Dhampur Sugar Mills Ltd. 141,850 209 -------------- FOREST PRODUCTS & PAPER Ballarpur Industries Ltd. 232,264 494 ITC Bhadrachalam Paperboards Ltd. 193,750 418 -------------- 912 -------------- - --------------------------------------------------------- - ------------ VALUE SHARES (000) - --------------------------------------------------------- - ------------ HEALTH & PERSONAL CARE Godrej Soaps Ltd. 197,700 U.S.$ 218 Hoechst India Ltd. 50,650 391 Sun Pharmaceutical Industries Ltd. 161,600 993 TTK Biomed Ltd. 21,500 14 -------------- 1,616 -------------- LEISURE & TOURISM ITC Hotels Ltd. 279,255 916 -------------- MACHINERY & ENGINEERING Artson Engineering Ltd. 234,700 135 DGP Windsor India Ltd. 218,800 681 Esab India Ltd. 307,265 690 Flat Products Equipments (India) Ltd. 174,900 828 Hindustan Power Plus Ltd. 70,600 201 Thermax Ltd. 31,900 371 Veejay Lakshmi Engineering Ltd. 150,700 380 -------------- 3,286 -------------- METALS -- STEEL Special Steels Ltd. 464,800 965 Special Steels Ltd. (Rights) 3,290 6 Tata Iron & Steel Co. Ltd. 47,790 230 -------------- 1,201 -------------- MISCELLANEOUS MATERIALS & COMMODITIES Amforge Industries Ltd. 34,855 38 Amforge Industries Ltd. (Warrants, expiring 7/1/97) 5,150 -- Bharat Forge Co. Ltd. 260,000 760 Cosmo Films Ltd. 175,000 243 Essel Packaging Ltd. 146,300 533 Hindustan Development Corp. 1,085,430 502 ITW Signode India Ltd. 329,732 714 Polyplex Ltd. 225,000 187 Suashish Diamonds Ltd. 71,600 104 Supreme Industries Ltd. 178,624 1,117 Wimco Ltd. 422,200 198 -------------- 4,396 -------------- MULTI-INDUSTRY Bajaj Hindustan Ltd. 21,000 29 Indian Rayon & Industries Ltd. 800 8 JK Corp. Ltd. GDR 61,140 69 JK Corp. Ltd. GDR 249,240 280 Max India Ltd. -- New 100,000 743 @Morgan Stanley Growth Fund 17,514,300 3,365 Straw Products Ltd. 100 -- UTI MasterShares Ltd. 2,268,290 856 Voltas Ltd. 147,950 148 VXL Ltd. 847,000 459 -------------- 5,957 -------------- REAL ESTATE Alacrity Housing Ltd. 381,000 209 -------------- RECREATION, OTHER CONSUMER GOODS Tube Investments of India Ltd. 109,450 273 -------------- - --------------------------------------------------------- - ------------
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VALUE SHARES (000) - --------------------------------------------------------- - ------------ INDIA (CONTINUED) TELECOMMUNICATIONS Mahanagar Telephone Nigam Ltd. 412,600 U.S.$ 2,381 Videsh Sanchar Nigam Ltd. 234,600 6,712 -------------- 9,093 -------------- TEXTILES & APPAREL Century Textile & Industry Ltd. 11,038 941 Coates of India Ltd. 100,700 499 DCL Polyesters Ltd. 195,000 68 Garware Plastics & Polyester 191,250 511 G.T.N. Textiles Ltd. 243,000 457 Indo Rama Synthetics 483,000 427 Indo Rama Synthetics Ltd. -- New 46,170 41 Indo Rama Synthetics (Rights) 180 -- J.K. Synthetics Ltd. 689,834 288 Mahavir Spinning Mills Ltd. 173,886 329 Morajee Goculdas Spinning Ltd. 125,000 196 Raymond Ltd. 253,724 1,592 Viniyoga Clothes Ltd. 486,600 55 Viral Syntex Ltd. 5,000 4 -------------- 5,408 -------------- TRANSPORTATION -- ROAD & RAIL Container Corp. of India Ltd. 1,199,600 7,302 -------------- TRANSPORTATION -- SHIPPING Great Eastern Shipping Ltd. 'A' 1,883,555 1,862 -------------- 109,500 -------------- - --------------------------------------------------------- - ------------ INDONESIA (2.7%) AUTOMOBILES Astra International (Foreign) 1,166,500 2,285 -------------- BANKING Bank International Indonesia (Foreign) 1,354,595 1,983 -------------- BEVERAGES Gudang Garam (Foreign) 1,076,000 4,053 -------------- CHEMICALS Sorini Corp. (Foreign) 2,700,000 1,743 -------------- FOREST PRODUCTS & PAPER Barito Pacific Timber (Foreign) 1,157,000 710 Indah Kiat Pulp & Paper (Foreign) 2,434,520 1,860 -------------- 2,570 -------------- MISCELLANEOUS MATERIALS & COMMODITIES Charoen Pokphand Indonesia (Foreign) 874,000 1,166 -------------- - --------------------------------------------------------- - ------------ VALUE SHARES (000) - --------------------------------------------------------- - ------------ TELECOMMUNICATIONS Telekomunikasi Indonesia (Foreign) 5,559,000 U.S.$ 8,615 -------------- TOBACCO Hanjaya Mandala Sampoerna (Foreign) 194,500 1,892 -------------- 24,307 -------------- - --------------------------------------------------------- - ------------ JAPAN (39.6%) AEROSPACE & MILITARY TECHNOLOGY Mitsubishi Heavy Industries Ltd. 1,150,000 9,347 -------------- APPLIANCES & HOUSEHOLD DURABLES Rinnai Corp. 109,100 2,503 -------------- AUTOMOBILES Asahi Tec Corp. 443,000 2,997 Kansei Corp. 154,000 1,305 Nissan Motor Co. 900,000 7,250 Suzuki Motor Co. Ltd. 630,000 7,679 -------------- 19,231 -------------- BUILDING MATERIALS & COMPONENTS Nippon Pillar Packing Co. 157,000 1,449 Sangetsu Co. Ltd. 100,000 2,321 Sanwa Shutter Corp. Ltd. 472,000 3,984 Sanwa Shutter Corp. Ltd. (Warrants, expiring 1/20/98) 2,400 780 Seksui House Ltd. 100,000 1,093 -------------- 9,627 -------------- BUSINESS & PUBLIC SERVICES Dai Nippon Printing Co. Ltd. 370,000 6,896 -------------- CHEMICALS Daicel Chemical Industries Ltd. 912,000 4,822 Fuji Photo Film Ltd. 240,000 7,291 Kaneka Corp. 899,000 5,518 Mitsubishi Chemical Corp. 1,510,000 6,360 Nifco, Inc. 330,000 3,696 Okura Industrial Co. Ltd. 434,000 2,858 Sekisui Chemical Co. 760,000 8,990 -------------- 39,535 -------------- CONSTRUCTION & HOUSING Kyudenko Co. Ltd. 389,000 4,985 Matsui Construction Co. 171,000 1,364 Nishio Rent All Co. 122,100 2,626 Nishio Rent All Co. (Warrants, expiring 2/20/98) 1,055 376 Ohbayashi Corp. 820,000 6,716 Taisei Corp. Ltd. 1,080,000 6,997 Yahagi Construction Co. 238,000 1,761 -------------- 24,825 -------------- - --------------------------------------------------------- - ------------
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VALUE SHARES (000) - --------------------------------------------------------- - ------------ JAPAN (CONTINUED) ELECTRICAL & ELECTRONICS Canon, Inc. 450,000 U.S.$ 8,831 Hitachi Ltd. 1,185,000 11,468 Kyocera Corp. 60,000 4,274 Kyocera Corp. (Warrants, expiring 1/23/98) 1,450 1,803 Matsushita Communication Industrial Co. 281,000 7,604 Matsushita Electric Industrial Co. Ltd. 562,000 9,417 NEC Corp. 975,000 11,445 Nintendo Ltd. 130,000 8,329 Ricoh Co. Ltd. 706,000 7,212 Sony Corp. 155,000 9,764 Stanley Electric Co. 690,000 4,261 Tokyo Electron Ltd. 245,000 7,092 Toshiba Corp. 1,630,000 11,263 -------------- 102,763 -------------- ELECTRONIC COMPONENTS & INSTRUMENTS Mitsumi Electric Co. Ltd. 388,000 6,781 Murata Manufacturing Co. 130,000 4,636 TDK Corp. 145,000 9,004 -------------- 20,421 -------------- FINANCIAL SERVICES Hitachi Credit Corp. 188,000 3,336 Nikko Securities Co. 757,000 8,072 Nomura Securities Co., Ltd. 435,000 7,991 Sumitomo Lease Co. 102,000 511 -------------- 19,910 -------------- HEALTH & PERSONAL CARE Sankyo Co. Ltd. 323,000 8,249 Secom Co. 130,000 8,213 Yamanouchi Pharmaceutical Co. 290,000 6,133 -------------- 22,595 -------------- INSURANCE Nichido Fire & Marine Insurance Co. 215,000 1,507 Sumitomo Marine & Fire Co. 642,000 5,051 -------------- 6,558 -------------- MACHINERY & ENGINEERING Amada Co. Ltd. 667,000 6,156 Daifuku Co. Ltd. 431,000 5,909 Daikin Kogyo Co. 600,000 5,860 Fuji Machine Co. 329,000 8,402 Kurita Water Industries Ltd. 274,000 5,918 Tsubakimoto Chain Co. 872,000 5,689 -------------- 37,934 -------------- REAL ESTATE Daibiru Corp. 308,000 3,947 Keihanshin Real Estate Co. 205,000 1,635 Mitsubishi Estate Co. Ltd. 597,000 8,185 -------------- 13,767 -------------- RECREATION, OTHER CONSUMER GOODS Square Co. Ltd. 51,900 2,976 -------------- - --------------------------------------------------------- - ------------ VALUE SHARES (000) - --------------------------------------------------------- - ------------ TELECOMMUNICATIONS Nippon Telephone & Telegraph Corp. 982 U.S.$ 7,216 -------------- TEXTILES & APPAREL Japan Vilene Co. Ltd. 304,000 1,751 -------------- TRANSPORTATION -- ROAD & RAIL Nippon Konpo Unyu Soko Co. 245,000 2,028 -------------- WHOLESALE & INTERNATIONAL TRADE FamilyMart 162,000 7,243 Inabata & Co. 406,000 2,911 -------------- 10,154 -------------- 360,037 -------------- - --------------------------------------------------------- - ------------ KOREA (3.4%) APPLIANCES & HOUSEHOLD DURABLES Samsung Electronics Co. (Foreign) 41,873 3,285 Samsung Electronics Co. RFD 12,619 990 -------------- 4,275 -------------- BANKING Kookmin Bank GDR 82,000 2,060 Housing & Commercial Bank, Korea 67,550 1,706 Shinhan Bank Co. Ltd. (Foreign) 42,040 972 -------------- 4,738 -------------- CONSTRUCTION & HOUSING Hyundai Engineering (Foreign) 135,502 4,167 Hyundai Engineering (Foreign) RFD 7,889 242 -------------- 4,409 -------------- METALS -- STEEL Pohang Iron & Steel ADR 161,500 3,453 -------------- TELECOMMUNICATIONS Korea Mobile Telecom (Foreign) 5,560 6,149 LG Information & Communication Ltd. 35,620 4,377 -------------- 10,526 -------------- UTILITIES -- ELECTRICAL & GAS Korea Electric Power (Foreign) 95,920 3,170 -------------- 30,571 -------------- - --------------------------------------------------------- - ------------ MALAYSIA (2.9%) BANKING Malayan Banking Bhd 430,000 4,272 -------------- LEISURE & TOURISM Genting Bhd 441,000 3,202 -------------- MACHINERY & ENGINEERING United Engineers Ltd. 584,000 4,520 -------------- - --------------------------------------------------------- - ------------
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VALUE SHARES (000) - --------------------------------------------------------- - ------------ MALAYSIA (CONTINUED) MULTI-INDUSTRY Renong Bhd 2,468,000 U.S.$ 3,781 Renong Bhd (Warrants, expiring 11/21/00) 683,500 284 Renong Bhd 4.00%, 5/21/01, CULS 1,093,600 402 -------------- 4,467 -------------- TELECOMMUNICATIONS Telekom Malaysia Bhd 847,000 7,468 -------------- UTILITIES -- ELECTRICAL & GAS Tenaga Nasional Bhd 563,000 1,978 -------------- 25,907 -------------- - --------------------------------------------------------- - ------------ PHILIPPINES (2.6%) CONSTRUCTION & HOUSING DMCI Holdings, Inc. 4,947,000 3,677 -------------- ENERGY SOURCES Petron Corp. 8,909,375 3,226 -------------- MULTI-INDUSTRY Ayala Corp. 'B' 727,900 832 JG Summit Holdings 'B' 11,933,700 3,776 -------------- 4,608 -------------- REAL ESTATE Ayala Land, Inc. 'B' 2,126,025 2,593 C&P Homes, Inc. 862,200 583 SM Prime Holdings, Inc. 9,637,680 2,241 -------------- 5,417 -------------- TELECOMMUNICATIONS Philippine Long Distance Telephone 'B' 64,250 3,992 -------------- UTILITIES -- ELECTRICAL & GAS Manila Electric Co. 'B' 370,851 2,744 -------------- 23,664 -------------- - --------------------------------------------------------- - ------------ SINGAPORE (5.9%) BANKING Development Bank of Singapore (Foreign) 884,000 10,860 Oversea-Chinese Banking Corp. (Foreign) 528,000 6,337 United Overseas Bank (Foreign) 979,200 9,526 -------------- 26,723 -------------- BEVERAGES Fraser & Neave 388,400 3,999 -------------- BROADCASTING & PUBLISHING Singapore Press Holdings (Foreign) 120,000 2,190 -------------- FINANCIAL SERVICES Kay Hian Holdings Ltd. (Foreign) 1,416,000 1,257 -------------- MACHINERY & ENGINEERING Keppel Corp. 978,000 7,571 Sembawang Corp. 369,000 1,729 -------------- 9,300 -------------- - --------------------------------------------------------- - ------------ VALUE SHARES (000) - --------------------------------------------------------- - ------------ MULTI-INDUSTRY Singapore Technologies Industrial Corp. 1,990,000 U.S.$ 4,720 Straits Steamship Land Ltd. 1,469,000 4,798 -------------- 9,518 -------------- 52,987 -------------- - --------------------------------------------------------- - ------------ THAILAND (6.3%) BANKING Bangkok Bank Ltd. (Foreign) 958,300 12,513 Siam Commercial Bank Co. Ltd. (Foreign) 632,500 7,662 Thai Farmers Bank Ltd. (Foreign) 1,024,000 10,794 Thai Farmers Bank Ltd. (Warrants expiring 9/15/02) 128,000 343 -------------- 31,312 -------------- BUILDING MATERIALS & COMPONENTS Siam Cement Co. Ltd. (Foreign) 41,000 1,671 -------------- ELECTRICAL & ELECTRONICS Shinawatra Computer Co. Ltd. (Foreign) 234,800 4,027 -------------- FINANCIAL SERVICES Finance One Co. Ltd. (Foreign) 1,119,527 6,605 National Finance & Securities Co. Ltd. (Foreign) 792,400 2,712 Phatra Thanakit Co. Ltd. (Foreign) 513,135 2,926 -------------- 12,243 -------------- TELECOMMUNICATIONS Advanced Information Services Co. Ltd. (Foreign) 136,300 1,769 Advanced Information Services Co. Ltd. (Local) 185,800 2,543 TelecomAsia Corp. Ltd. (Foreign) 920,000 1,864 United Communications Industry (Foreign) 175,000 1,597 United Communications Industry (Local) 60,000 624 -------------- 8,397 -------------- 57,650 -------------- - --------------------------------------------------------- - ------------ TOTAL COMMON STOCKS (Cost U.S. $881,978) 857,813 -------------- - --------------------------------------------------------- - ------------
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FACE AMOUNT VALUE (000) (000) - --------------------------------------------------------- - ------------ FIXED INCOME SECURITIES (0.1%) - --------------------------------------------------------- - ------------ INDIA (0.1%) METALS -- STEEL Special Steels Ltd. 14.00%, 12/6/02 INR 3,290 U.S.$ 4 -------------- MISCELLANEOUS MATERIALS & COMMODITIES Amforge Industries, Zero Coupon, 12/1/96 5,150 5 -------------- MULTI-INDUSTRY Max India Part B, Zero Coupon, 12/1/96 100,000 734 -------------- - --------------------------------------------------------- - ------------ TOTAL FIXED INCOME SECURITIES (Cost U.S. $755) 743 -------------- - --------------------------------------------------------- - ------------ SHORT-TERM INVESTMENT (4.3%) - --------------------------------------------------------- - ------------ UNITED STATES (4.3%) REPURCHASE AGREEMENT Chase Securities, Inc. 5.40%, dated 9/30/96, due 10/1/96, to be repurchased at U.S. $39,056, collateralized by U.S. $36,945 United States Treasury Notes 9.00%, due 5/15/98, valued at U.S.$39,727 (Cost $39,050) U.S.$ 39,050 39,050 -------------- - --------------------------------------------------------- - ------------ FOREIGN CURRENCY ON DEPOSIT WITH CUSTODIAN (0.8%) Hong Kong Dollar HKD 915 118 Indian Rupee INR 199,246 5,589 Indonesian Rupiah IDR 12,773 5 Japanese Yen JPY 218,772 1,960 Korean Won KRW 70,958 86 Philippine Peso PHP 428 16 Singapore Dollar SGD 129 93 -------------- (Cost U.S. $7,913) 7,867 -------------- - --------------------------------------------------------- - ------------ AMOUNT VALUE (000) (000) - --------------------------------------------------------- - ------------ TOTAL INVESTMENTS (99.7%) (Cost U.S. $929,696) U.S.$ 905,473 -------------- - --------------------------------------------------------- - ------------ OTHER ASSETS AND LIABILITIES (0.3%) Other Assets U.S.$ 225,818 Liabilities (223,220) 2,598 --------------- -------------- - --------------------------------------------------------- - ------------ NET ASSETS (100%) Applicable to 71,654,508 issued and outstanding U.S. $0.01 par value shares (200,000,000 shares authorized) U.S.$ 908,071 ------------ - --------------------------------------------------------- - ------------ NET ASSET VALUE PER SHARE U.S.$ 12.67 ------------ - --------------------------------------------------------- - ------------
ADR -- American Depositary Receipt. CULS -- Convertible Unsecured Loan Stock. RFD -- Ranked for Dividend GDR -- Global Depositary Receipt @ -- The Fund is advised by an affiliate NOTE: Prior Governmental approval for foreign investments may be required under certain circumstances in some markets, and foreign ownership limitations may also be imposed by the charters of individual companies in such 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.
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