UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-Q
QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED
MANAGEMENT INVESTMENT COMPANY
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Investment Company Act file number |
811-08388 | |||||||
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|
Morgan Stanley Asia-Pacific Fund, Inc. | ||||||||
|
(Exact name of registrant as specified in charter) | ||||||||
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| ||||||||
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522 Fifth Avenue, New York, New York |
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10036 | ||||||
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(Address of principal executive offices) |
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(Zip code) | ||||||
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John H. Gernon 522 Fifth Avenue, New York, New York 10036 | ||||||||
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(Name and address of agent for service) | ||||||||
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Registrant’s telephone number, including area code: |
212-296-0289 |
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Date of fiscal year end: |
December 31, |
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Date of reporting period: |
September 30, 2016 |
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Item 1. Schedule of Investments.
The Fund’s schedule of investments as of the close of the reporting period prepared pursuant to Rule 12-12 of Regulation S-X is as follows:
Morgan Stanley Asia-Pacific Fund, Inc.
Portfolio of Investments
Third Quarter Report
September 30, 2016 (unaudited)
|
|
|
Shares |
|
Value |
| |
|
Common Stocks (98.7%) |
|
|
|
|
| |
|
Australia (15.8%) |
|
|
|
|
| |
|
Banks |
|
|
|
|
| |
|
Commonwealth Bank of Australia |
|
102,123 |
|
$ |
5,680 |
|
|
Westpac Banking Corp. |
|
178,309 |
|
4,053 |
| |
|
|
|
|
|
9,733 |
| |
|
Biotechnology |
|
|
|
|
| |
|
CSL Ltd. |
|
38,088 |
|
3,128 |
| |
|
|
|
|
|
|
| |
|
Capital Markets |
|
|
|
|
| |
|
ASX Ltd. |
|
69,658 |
|
2,575 |
| |
|
|
|
|
|
|
| |
|
Commercial Services & Supplies |
|
|
|
|
| |
|
Brambles Ltd. |
|
272,901 |
|
2,509 |
| |
|
|
|
|
|
|
| |
|
Construction Materials |
|
|
|
|
| |
|
Boral Ltd. |
|
480,148 |
|
2,489 |
| |
|
|
|
|
|
|
| |
|
Food & Staples Retailing |
|
|
|
|
| |
|
Woolworths Ltd. |
|
169,056 |
|
3,020 |
| |
|
|
|
|
|
|
| |
|
Health Care Equipment & Supplies |
|
|
|
|
| |
|
ResMed, Inc. |
|
641,496 |
|
4,174 |
| |
|
|
|
|
|
|
| |
|
Hotels, Restaurants & Leisure |
|
|
|
|
| |
|
Tabcorp Holdings Ltd. |
|
880,330 |
|
3,369 |
| |
|
|
|
|
|
|
| |
|
Insurance |
|
|
|
|
| |
|
QBE Insurance Group Ltd. |
|
278,882 |
|
1,989 |
| |
|
|
|
|
|
|
| |
|
Oil, Gas & Consumable Fuels |
|
|
|
|
| |
|
Santos Ltd. |
|
590,577 |
|
1,661 |
| |
|
|
|
|
|
|
| |
|
Real Estate Management & Development |
|
|
|
|
| |
|
Lend Lease Group REIT |
|
297,744 |
|
3,211 |
| |
|
|
|
|
|
37,858 |
| |
|
China (21.4%) |
|
|
|
|
| |
|
Automobiles |
|
|
|
|
| |
|
Chongqing Changan Automobile Co., Ltd. B Shares |
|
354,500 |
|
578 |
| |
|
|
|
|
|
|
| |
|
Banks |
|
|
|
|
| |
|
Bank of China Ltd. H Shares (a) |
|
8,099,000 |
|
3,734 |
| |
|
China Construction Bank Corp. H Shares (a) |
|
6,898,560 |
|
5,149 |
| |
|
|
|
|
|
8,883 |
| |
|
Construction & Engineering |
|
|
|
|
| |
|
China Machinery Engineering Corp. H Shares (a) |
|
796,000 |
|
469 |
| |
|
|
|
|
|
|
| |
|
Diversified Consumer Services |
|
|
|
|
| |
|
New Oriental Education & Technology Group, Inc. ADR (b) |
|
20,292 |
|
941 |
| |
|
TAL Education Group ADR (b) |
|
15,823 |
|
1,121 |
| |
|
|
|
|
|
2,062 |
| |
|
Diversified Telecommunication Services |
|
|
|
|
|
|
China Unicom Hong Kong Ltd. (a) |
|
1,042,000 |
|
1,268 |
|
|
|
|
|
|
|
|
|
Food Products |
|
|
|
|
|
|
China Mengniu Dairy Co., Ltd. (a) |
|
434,000 |
|
813 |
|
|
|
|
|
|
|
|
|
Hotels, Restaurants & Leisure |
|
|
|
|
|
|
Shanghai Jin Jiang International Hotels Group Co., Ltd. H Shares (a) |
|
1,176,000 |
|
365 |
|
|
|
|
|
|
|
|
|
Independent Power and Renewable Electricity Producer |
|
|
|
|
|
|
Huadian Power International Corp., Ltd. H Shares (a) |
|
984,000 |
|
444 |
|
|
|
|
|
|
|
|
|
Insurance |
|
|
|
|
|
|
China Pacific Insurance Group Co., Ltd. H Shares (a) |
|
600,000 |
|
2,230 |
|
|
|
|
|
|
|
|
|
Internet & Direct Marketing Retail |
|
|
|
|
|
|
JD.com, Inc. ADR (b) |
|
66,808 |
|
1,743 |
|
|
|
|
|
|
|
|
|
Internet Software & Services |
|
|
|
|
|
|
Alibaba Group Holding Ltd. ADR (b) |
|
43,796 |
|
4,633 |
|
|
NetEase, Inc. ADR |
|
4,555 |
|
1,097 |
|
|
Tencent Holdings Ltd. (a) |
|
538,900 |
|
14,932 |
|
|
|
|
|
|
20,662 |
|
|
Machinery |
|
|
|
|
|
|
CRCC High-Tech Equipment Corp., Ltd. H Shares (a) |
|
1,243,500 |
|
583 |
|
|
|
|
|
|
|
|
|
Pharmaceuticals |
|
|
|
|
|
|
CSPC Pharmaceutical Group Ltd. (a) |
|
1,008,000 |
|
1,012 |
|
|
|
|
|
|
|
|
|
Real Estate Management & Development |
|
|
|
|
|
|
China Overseas Land & Investment Ltd. (a) |
|
466,000 |
|
1,596 |
|
|
|
|
|
|
|
|
|
Textiles, Apparel & Luxury Goods |
|
|
|
|
|
|
Shenzhou International Group Holdings Ltd. (a) |
|
191,000 |
|
1,335 |
|
|
|
|
|
|
|
|
|
Transportation Infrastructure |
|
|
|
|
|
|
Shenzhen International Holdings Ltd. (a) |
|
416,500 |
|
694 |
|
|
|
|
|
|
|
|
|
Wireless Telecommunication Services |
|
|
|
|
|
|
China Mobile Ltd. (a) |
|
533,500 |
|
6,550 |
|
|
|
|
|
|
51,287 |
|
|
Hong Kong (8.4%) |
|
|
|
|
|
|
Banks |
|
|
|
|
|
|
BOC Hong Kong Holdings Ltd. |
|
861,500 |
|
2,925 |
|
|
|
|
|
|
|
|
|
Capital Markets |
|
|
|
|
|
|
Hong Kong Exchanges and Clearing Ltd. |
|
59,200 |
|
1,562 |
|
|
|
|
|
|
|
|
|
Diversified Telecommunication Services |
|
|
|
|
|
|
HKT Trust & HKT Ltd. |
|
1,028,340 |
|
1,451 |
|
|
|
|
|
|
|
|
|
Electric Utilities |
|
|
|
|
|
|
Power Assets Holdings Ltd. |
|
60,000 |
|
588 |
|
|
|
|
|
|
|
|
|
Industrial Conglomerates |
|
|
|
|
|
|
CK Hutchison Holdings Ltd. |
|
393,768 |
|
5,024 |
|
|
Insurance |
|
|
|
|
|
|
AIA Group Ltd. |
|
698,200 |
|
4,678 |
|
|
|
|
|
|
|
|
|
Real Estate Management & Development |
|
|
|
|
|
|
Cheung Kong Property Holdings Ltd. |
|
332,768 |
|
2,454 |
|
|
|
|
|
|
|
|
|
Textiles, Apparel & Luxury Goods |
|
|
|
|
|
|
Samsonite International SA |
|
453,000 |
|
1,456 |
|
|
|
|
|
|
20,138 |
|
|
India (10.2%) |
|
|
|
|
|
|
Automobiles |
|
|
|
|
|
|
Maruti Suzuki India Ltd. |
|
22,078 |
|
1,823 |
|
|
|
|
|
|
|
|
|
Banks |
|
|
|
|
|
|
HDFC Bank Ltd. |
|
75,326 |
|
1,675 |
|
|
IndusInd Bank Ltd. |
|
123,749 |
|
2,235 |
|
|
|
|
|
|
3,910 |
|
|
Construction & Engineering |
|
|
|
|
|
|
Larsen & Toubro Ltd. |
|
97,968 |
|
2,117 |
|
|
|
|
|
|
|
|
|
Construction Materials |
|
|
|
|
|
|
Shree Cement Ltd. |
|
9,856 |
|
2,530 |
|
|
|
|
|
|
|
|
|
Consumer Finance |
|
|
|
|
|
|
Bharat Financial Inclusion Ltd. (b) |
|
90,830 |
|
1,207 |
|
|
Shriram Transport Finance Co., Ltd. |
|
133,528 |
|
2,339 |
|
|
|
|
|
|
3,546 |
|
|
Machinery |
|
|
|
|
|
|
Ashok Leyland Ltd. |
|
1,844,458 |
|
2,216 |
|
|
|
|
|
|
|
|
|
Media |
|
|
|
|
|
|
Inox Leisure Ltd. (b) |
|
266,040 |
|
1,051 |
|
|
Zee Entertainment Enterprises Ltd. |
|
230,056 |
|
1,893 |
|
|
|
|
|
|
2,944 |
|
|
Oil, Gas & Consumable Fuels |
|
|
|
|
|
|
Bharat Petroleum Corp., Ltd. |
|
229,026 |
|
2,112 |
|
|
|
|
|
|
|
|
|
Personal Products |
|
|
|
|
|
|
Marico Ltd. |
|
360,441 |
|
1,493 |
|
|
|
|
|
|
|
|
|
Pharmaceuticals |
|
|
|
|
|
|
Glenmark Pharmaceuticals Ltd. |
|
49,884 |
|
693 |
|
|
|
|
|
|
|
|
|
Transportation Infrastructure |
|
|
|
|
|
|
Gateway Distriparks Ltd. |
|
263,211 |
|
996 |
|
|
|
|
|
|
24,380 |
|
|
Indonesia (4.5%) |
|
|
|
|
|
|
Automobiles |
|
|
|
|
|
|
Astra International Tbk PT |
|
1,372,100 |
|
872 |
|
|
|
|
|
|
|
|
|
Banks |
|
|
|
|
|
|
Bank Mandiri Persero Tbk PT |
|
1,721,500 |
|
1,484 |
|
|
Bank Negara Indonesia Persero Tbk PT |
|
2,950,900 |
|
1,261 |
|
|
|
|
|
|
2,745 |
|
|
Construction Materials |
|
|
|
|
|
|
Semen Indonesia Persero Tbk PT |
|
1,294,500 |
|
1,006 |
|
|
|
|
|
|
|
|
|
Diversified Telecommunication Services |
|
|
|
|
|
|
Link Net Tbk PT |
|
2,534,600 |
|
845 |
|
|
Telekomunikasi Indonesia Persero Tbk PT |
|
2,844,000 |
|
942 |
|
|
|
|
|
|
1,787 |
|
|
Media |
|
|
|
|
|
|
Surya Citra Media Tbk PT |
|
3,683,700 |
|
795 |
|
|
|
|
|
|
|
|
|
Multi-line Retail |
|
|
|
|
|
|
Matahari Department Store Tbk PT |
|
382,300 |
|
543 |
|
|
|
|
|
|
|
|
|
Oil, Gas & Consumable Fuels |
|
|
|
|
|
|
United Tractors Tbk PT |
|
170,300 |
|
231 |
|
|
|
|
|
|
|
|
|
Real Estate Management & Development |
|
|
|
|
|
|
Bumi Serpong Damai Tbk PT |
|
7,368,900 |
|
1,254 |
|
|
|
|
|
|
|
|
|
Transportation Infrastructure |
|
|
|
|
|
|
Jasa Marga Persero Tbk PT |
|
618,000 |
|
218 |
|
|
|
|
|
|
|
|
|
Wireless Telecommunication Services |
|
|
|
|
|
|
XL Axiata Tbk PT (b) |
|
5,722,750 |
|
1,187 |
|
|
|
|
|
|
10,638 |
|
|
Korea, Republic of (18.9%) |
|
|
|
|
|
|
Aerospace & Defense |
|
|
|
|
|
|
Hanwha Techwin Co., Ltd. |
|
33,522 |
|
1,939 |
|
|
Korea Aerospace Industries Ltd. |
|
31,828 |
|
2,209 |
|
|
|
|
|
|
4,148 |
|
|
Auto Components |
|
|
|
|
|
|
Hyundai Wia Corp. |
|
12,224 |
|
966 |
|
|
Mando Corp. |
|
7,115 |
|
1,603 |
|
|
|
|
|
|
2,569 |
|
|
Biotechnology |
|
|
|
|
|
|
Hugel, Inc. (b) |
|
4,143 |
|
1,604 |
|
|
|
|
|
|
|
|
|
Construction & Engineering |
|
|
|
|
|
|
Hyundai Development Co-Engineering & Construction |
|
70,530 |
|
3,295 |
|
|
|
|
|
|
|
|
|
Electric Utilities |
|
|
|
|
|
|
Korea Electric Power Corp. |
|
38,875 |
|
1,904 |
|
|
|
|
|
|
|
|
|
Electrical Equipment |
|
|
|
|
|
|
LS Cable & System Asia Ltd. (b) |
|
55,815 |
|
342 |
|
|
|
|
|
|
|
|
|
Food Products |
|
|
|
|
|
|
CJ CheilJedang Corp. |
|
4,016 |
|
1,326 |
|
|
Household Durables |
|
|
|
|
|
|
Coway Co., Ltd. |
|
22,101 |
|
1,912 |
|
|
|
|
|
|
|
|
|
Industrial Conglomerates |
|
|
|
|
|
|
CJ Corp. |
|
8,319 |
|
1,410 |
|
|
SK Holdings Co., Ltd. |
|
12,618 |
|
2,433 |
|
|
|
|
|
|
3,843 |
|
|
Insurance |
|
|
|
|
|
|
Samsung Fire & Marine Insurance Co., Ltd. |
|
323 |
|
82 |
|
|
|
|
|
|
|
|
|
Internet Software & Services |
|
|
|
|
|
|
NAVER Corp. |
|
4,668 |
|
3,747 |
|
|
|
|
|
|
|
|
|
Media |
|
|
|
|
|
|
Innocean Worldwide, Inc. |
|
17,790 |
|
1,184 |
|
|
|
|
|
|
|
|
|
Personal Products |
|
|
|
|
|
|
Amorepacific Corp. |
|
7,927 |
|
2,804 |
|
|
Cosmax, Inc. |
|
5,206 |
|
717 |
|
|
|
|
|
|
3,521 |
|
|
Software |
|
|
|
|
|
|
Nexon Co., Ltd. |
|
119,400 |
|
1,866 |
|
|
|
|
|
|
|
|
|
Tech Hardware, Storage & Peripherals |
|
|
|
|
|
|
Samsung Electronics Co., Ltd. |
|
5,972 |
|
8,704 |
|
|
Samsung Electronics Co., Ltd. (Preference) |
|
3,736 |
|
4,410 |
|
|
|
|
|
|
13,114 |
|
|
Textiles, Apparel & Luxury Goods |
|
|
|
|
|
|
Hwaseung Enterprise Co., Ltd. (b) |
|
56,578 |
|
771 |
|
|
|
|
|
|
45,228 |
|
|
Philippines (2.7%) |
|
|
|
|
|
|
Banks |
|
|
|
|
|
|
BDO Unibank, Inc. |
|
352,030 |
|
799 |
|
|
Metropolitan Bank & Trust Co. |
|
596,653 |
|
1,051 |
|
|
|
|
|
|
1,850 |
|
|
Diversified Financial Services |
|
|
|
|
|
|
Ayala Corp. |
|
67,226 |
|
1,189 |
|
|
Metro Pacific Investments Corp. |
|
5,998,400 |
|
879 |
|
|
|
|
|
|
2,068 |
|
|
Industrial Conglomerates |
|
|
|
|
|
|
DMCI Holdings, Inc. |
|
2,912,200 |
|
726 |
|
|
LT Group, Inc. |
|
520,500 |
|
164 |
|
|
SM Investments Corp. |
|
65,460 |
|
913 |
|
|
|
|
|
|
1,803 |
|
|
Transportation Infrastructure |
|
|
|
|
|
|
International Container Terminal Services, Inc. |
|
409,630 |
|
654 |
|
|
|
|
|
|
6,375 |
|
|
Singapore (2.2%) |
|
|
|
|
|
|
Air Freight & Logistics |
|
|
|
|
|
|
Singapore Post Ltd. |
|
675,000 |
|
723 |
|
|
|
|
|
|
|
|
|
Distributors |
|
|
|
|
|
|
Jardine Cycle & Carriage Ltd. |
|
82,300 |
|
2,603 |
|
|
|
|
|
|
|
|
|
Health Care Providers & Services |
|
|
|
|
|
|
Raffles Medical Group Ltd. |
|
636,629 |
|
715 |
|
|
|
|
|
|
|
|
|
Multi-Utilities |
|
|
|
|
|
|
Keppel Infrastructure Trust (Units) (c) |
|
3,222,900 |
|
1,196 |
|
|
|
|
|
|
5,237 |
|
|
Taiwan (12.4%) |
|
|
|
|
|
|
Banks |
|
|
|
|
|
|
E.Sun Financial Holding Co., Ltd. |
|
2,227,500 |
|
1,269 |
|
|
|
|
|
|
|
|
|
Electronic Equipment, Instruments & Components |
|
|
|
|
|
|
Delta Electronics, Inc. |
|
370,532 |
|
1,985 |
|
|
Hon Hai Precision Industry Co., Ltd. |
|
492,855 |
|
1,248 |
|
|
Largan Precision Co., Ltd. |
|
14,000 |
|
1,701 |
|
|
|
|
|
|
4,934 |
|
|
Food & Staples Retailing |
|
|
|
|
|
|
President Chain Store Corp. |
|
124,000 |
|
990 |
|
|
|
|
|
|
|
|
|
Food Products |
|
|
|
|
|
|
Uni-President Enterprises Corp. |
|
1,198,046 |
|
2,257 |
|
|
|
|
|
|
|
|
|
Internet Software & Services |
|
|
|
|
|
|
PChome Online, Inc. |
|
118,466 |
|
1,400 |
|
|
|
|
|
|
|
|
|
Metals & Mining |
|
|
|
|
|
|
Yeong Guan Energy Technology Group Co., Ltd. |
|
158,000 |
|
868 |
|
|
|
|
|
|
|
|
|
Semiconductors & Semiconductor Equipment |
|
|
|
|
|
|
Advanced Semiconductor Engineering, Inc. |
|
1,638,000 |
|
1,966 |
|
|
Hermes Microvision, Inc. |
|
16,584 |
|
718 |
|
|
Taiwan Semiconductor Manufacturing Co., Ltd. |
|
1,409,592 |
|
8,267 |
|
|
|
|
|
|
10,951 |
|
|
Tech Hardware, Storage & Peripherals |
|
|
|
|
|
|
Catcher Technology Co., Ltd. |
|
279,000 |
|
2,279 |
|
|
Pegatron Corp. |
|
689,000 |
|
1,784 |
|
|
|
|
|
|
4,063 |
|
|
Textiles, Apparel & Luxury Goods |
|
|
|
|
|
|
Eclat Textile Co., Ltd. |
|
137,604 |
|
1,649 |
|
|
|
|
|
|
|
|
|
Wireless Telecommunication Services |
|
|
|
|
|
|
Taiwan Mobile Co., Ltd. |
|
371,000 |
|
1,337 |
|
|
|
|
|
|
29,718 |
|
|
Thailand (1.2%) |
|
|
|
|
| |
|
Banks |
|
|
|
|
| |
|
Kasikornbank PCL NVDR |
|
182,900 |
|
995 |
| |
|
|
|
|
|
|
| |
|
Construction & Engineering |
|
|
|
|
| |
|
Sino-Thai Engineering & Construction PCL (Foreign) |
|
897,100 |
|
614 |
| |
|
|
|
|
|
|
| |
|
Hotels, Restaurants & Leisure |
|
|
|
|
| |
|
Minor International PCL (Foreign) |
|
747,620 |
|
846 |
| |
|
|
|
|
|
|
| |
|
Real Estate Management & Development |
|
|
|
|
| |
|
Central Pattana PCL (Foreign) |
|
230,400 |
|
389 |
| |
|
|
|
|
|
2,844 |
| |
|
United States (1.0%) |
|
|
|
|
| |
|
Household Durables |
|
|
|
|
| |
|
Nien Made Enterprise Co., Ltd. |
|
187,000 |
|
2,423 |
| |
|
Total Common Stocks (Cost $191,252) |
|
|
|
236,126 |
| |
|
|
|
|
|
|
| |
|
Short-Term Investment (1.1%) |
|
|
|
|
| |
|
Investment Company (1.1%) |
|
|
|
|
| |
|
Morgan Stanley Institutional Liquidity Funds - Government Portfolio - Institutional Class (d) (Cost $2,601) |
|
2,601,484 |
|
2,601 |
| |
|
Total Investments (99.8%) (Cost $193,853) (e)(f)(g) |
|
|
|
238,727 |
| |
|
Other Assets in Excess of Liabilities (0.2%) |
|
|
|
518 |
| |
|
Net Assets (100.0%) |
|
|
|
$ |
239,245 |
|
|
(a) |
Security trades on the Hong Kong exchange. |
|
(b) |
Non-income producing security. |
|
(c) |
Consists of one or more classes of securities traded together as a unit; stocks with attached warrants. |
|
(d) |
The Fund invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds - Government Portfolio - (the “Liquidity Funds”), an open-end management investment company managed by the Adviser. Advisory fees paid by the Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Fund due to its investment in the Liquidity Funds. For the nine months ended September 30, 2016, advisory fees paid were reduced by approximately $4,000 relating to the Fund’s investment in the Liquidity Funds. |
|
(e) |
The approximate fair value and percentage of net assets, $225,478,000 and 94.2%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in the Notes to the Portfolio of Investments. |
|
(f) |
The Fund is permitted to purchase and sell securities (“cross-trade”) from and to other Morgan Stanley Funds as well as other funds and client accounts for which the Adviser or an affiliate of the Adviser serves as investment adviser, pursuant to procedures approved by the Directors in compliance with Rule 17a-7 under the Act (the “Rule”). Each cross-trade is executed at the current market price in compliance with provisions of the Rule. For the nine months ended September 30, 2016, the Fund did not engage in any cross-trade transactions. |
|
(g) |
At September 30, 2016, the aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is approximately $52,088,000 and the aggregate gross unrealized depreciation is approximately $7,214,000 resulting in net unrealized appreciation of approximately $44,874,000. |
|
ADR |
American Depositary Receipt. |
|
NVDR |
Non-Voting Depositary Receipt. |
|
REIT |
Real Estate Investment Trust. |
Portfolio Composition
|
Classification |
|
Percentage of |
|
|
Other* |
|
68.5 |
% |
|
Banks |
|
13.5 |
|
|
Internet Software & Services |
|
10.8 |
|
|
Tech Hardware, Storage & Peripherals |
|
7.2 |
|
|
Total Investments |
|
100.0 |
% |
* Industries and/or investment types representing less than 5% of total investments.
Morgan Stanley Asia-Pacific Fund, Inc.
Notes to the Portfolio of Investments · September 30, 2016 (unaudited)
Security Valuation: (1) An equity portfolio security listed or traded on an exchange is valued at its latest reported sales price (or at the exchange official closing price if such exchange reports an official closing price), and if there were no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant exchanges; (2) all other equity portfolio securities for which over-the-counter (“OTC”) market quotations are readily available are valued at the latest reported sales price (or at the market official closing price if such market reports an official closing price), and if there was no trading in the security on a given day and if there is no official closing price from relevant markets for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant markets. Listed equity securities not traded on the valuation date with no reported bid and asked prices available on the exchange are valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (3) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Fund’s Board of Directors (the “Directors”). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads, and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges; (4) when market quotations are not readily available, including circumstances under which Morgan Stanley Investment Management Inc. (the “Adviser”) or Morgan Stanley Investment Management Company (“MSIM Company”) (the “Sub-Adviser”) determines that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of a security’s market value, portfolio securities are valued at their fair value as determined in good faith under procedures established by and under the general supervision of the Directors. Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange (“NYSE”). If developments occur during such periods that are expected to materially affect the value of such securities, such valuations may be adjusted to reflect the estimated fair value of such securities as of the close of the NYSE, as determined in good faith by the Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (5) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into United States dollar equivalents at the prevailing market rates prior to the close of the NYSE; and (6) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value as of the close of each business day.
The Directors have responsibility for determining in good faith the fair value of the investments, and the Directors may appoint others, such as the Fund’s Adviser or a valuation committee, to assist the Directors in determining fair value and to make the actual calculations pursuant to the fair valuation methodologies previously approved by the Directors. Under procedures approved by the Directors, the Fund’s Adviser has formed a Valuation Committee whose members are approved by the Directors. The Valuation Committee provides administration and oversight of the Fund’s valuation policies and procedures, which are reviewed at least annually by the Directors. These procedures allow the Fund to utilize independent pricing services, quotations from securities and financial instrument dealers, and other market sources to determine fair value.
The Fund has procedures to determine the fair value of securities and other financial instruments for which market prices are not readily available. Under these procedures, the Valuation Committee convenes on a regular and ad hoc basis to review such securities and considers a number of factors, including valuation methodologies and significant unobservable valuation inputs, when arriving at fair value. The Valuation Committee may employ a market-based approach which may use related or comparable assets or liabilities, recent transactions, market multiples, book values, and other relevant information for the investment to determine the fair value of the investment. An income-based valuation approach may also be used in which the anticipated future cash flows of the investment are discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any restrictions on the disposition of the investments. Due to the inherent uncertainty of valuations of such investments, the fair values may differ significantly from the values that would have been used had an active market existed. The Valuation Committee employs various methods for calibrating these valuation approaches including a regular review of
valuation methodologies, key inputs and assumptions, transactional back-testing or disposition analysis, and reviews of any related market activity.
Fair Value Measurement: Financial Accounting Standards Board (“FASB”) Accounting Standards CodificationTM (“ASC”) 820, “Fair Value Measurement” (“ASC 820”), defines fair value as the value that the Fund would receive to sell an investment or pay to transfer a liability in a timely transaction with an independent buyer in the principal market, or in the absence of a principal market the most advantageous market for the investment or liability. ASC 820 establishes a three-tier hierarchy to distinguish between (1) inputs that reflect the assumptions market participants would use in valuing an asset or liability developed based on market data obtained from sources independent of the reporting entity (observable inputs) and (2) inputs that reflect the reporting entity’s own assumptions about the assumptions market participants would use in valuing an asset or liability developed based on the best information available in the circumstances (unobservable inputs) and to establish classification of fair value measurements for disclosure purposes. Various inputs are used in determining the value of the Fund’s investments. The inputs are summarized in the three broad levels listed below.
· Level 1 — unadjusted quoted prices in active markets for identical investments
· Level 2 — other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)
· Level 3 — significant unobservable inputs including the Fund’s own assumptions in determining the fair value of investments. Factors considered in making this determination may include, but are not limited to, information obtained by contacting the issuer, analysts, or the appropriate stock exchange (for exchange-traded securities), analysis of the issuer’s financial statements or other available documents and, if necessary, available information concerning other securities in similar circumstances
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities and the determination of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to each security.
The following is a summary of the inputs used to value the Fund’s investments as of September 30, 2016.
|
Investment Type |
|
Level 1 |
|
Level 2 |
|
Level 3 |
|
Total |
| ||||
|
Assets: |
|
|
|
|
|
|
|
|
| ||||
|
Common Stocks |
|
|
|
|
|
|
|
|
| ||||
|
Aerospace & Defense |
|
$ |
— |
|
$ |
4,148 |
|
$ |
— |
|
$ |
4,148 |
|
|
Air Freight & Logistics |
|
— |
|
723 |
|
— |
|
723 |
| ||||
|
Auto Components |
|
— |
|
2,569 |
|
— |
|
2,569 |
| ||||
|
Automobiles |
|
— |
|
3,273 |
|
— |
|
3,273 |
| ||||
|
Banks |
|
— |
|
32,310 |
|
— |
|
32,310 |
| ||||
|
Biotechnology |
|
— |
|
4,732 |
|
— |
|
4,732 |
| ||||
|
Capital Markets |
|
— |
|
4,137 |
|
— |
|
4,137 |
| ||||
|
Commercial Services & Supplies |
|
— |
|
2,509 |
|
— |
|
2,509 |
| ||||
|
Construction & Engineering |
|
— |
|
6,495 |
|
— |
|
6,495 |
| ||||
|
Construction Materials |
|
— |
|
6,025 |
|
— |
|
6,025 |
| ||||
|
Consumer Finance |
|
— |
|
3,546 |
|
— |
|
3,546 |
| ||||
|
Distributors |
|
— |
|
2,603 |
|
— |
|
2,603 |
| ||||
|
Diversified Consumer Services |
|
2,062 |
|
— |
|
— |
|
2,062 |
| ||||
|
Diversified Financial Services |
|
— |
|
2,068 |
|
— |
|
2,068 |
| ||||
|
Diversified Telecommunication Services |
|
— |
|
4,506 |
|
— |
|
4,506 |
| ||||
|
Electric Utilities |
|
— |
|
2,492 |
|
— |
|
2,492 |
| ||||
|
Electrical Equipment |
|
342 |
|
— |
|
— |
|
342 |
| ||||
|
Electronic Equipment, Instruments & Components |
|
— |
|
4,934 |
|
— |
|
4,934 |
| ||||
|
Food & Staples Retailing |
|
— |
|
4,010 |
|
— |
|
4,010 |
| ||||
|
Food Products |
|
— |
|
4,396 |
|
— |
|
4,396 |
| ||||
|
Health Care Equipment & Supplies |
|
— |
|
4,174 |
|
— |
|
4,174 |
| ||||
|
Health Care Providers & Services |
|
— |
|
715 |
|
— |
|
715 |
| ||||
|
Hotels, Restaurants & Leisure |
|
— |
|
4,580 |
|
— |
|
4,580 |
| ||||
|
Household Durables |
|
— |
|
4,335 |
|
— |
|
4,335 |
| ||||
|
Independent Power and Renewable Electricity Producers |
|
— |
|
444 |
|
— |
|
444 |
| ||||
|
Industrial Conglomerates |
|
— |
|
10,670 |
|
— |
|
10,670 |
| ||||
|
Insurance |
|
— |
|
8,979 |
|
— |
|
8,979 |
| ||||
|
Internet & Direct Marketing Retail |
|
1,743 |
|
— |
|
— |
|
1,743 |
| ||||
|
Internet Software & Services |
|
5,730 |
|
20,079 |
|
— |
|
25,809 |
| ||||
|
Machinery |
|
— |
|
2,799 |
|
— |
|
2,799 |
| ||||
|
Media |
|
— |
|
4,923 |
|
— |
|
4,923 |
| ||||
|
Metals & Mining |
|
— |
|
868 |
|
— |
|
868 |
| ||||
|
Multi-line Retail |
|
— |
|
543 |
|
— |
|
543 |
| ||||
|
Multi-Utilities |
|
— |
|
1,196 |
|
— |
|
1,196 |
| ||||
|
Oil, Gas & Consumable Fuels |
|
— |
|
4,004 |
|
— |
|
4,004 |
| ||||
|
Personal Products |
|
— |
|
5,014 |
|
— |
|
5,014 |
| ||||
|
Pharmaceuticals |
|
— |
|
1,705 |
|
— |
|
1,705 |
| ||||
|
Real Estate Management & Development |
|
— |
|
8,904 |
|
— |
|
8,904 |
| ||||
|
Semiconductors & Semiconductor Equipment |
|
— |
|
10,951 |
|
— |
|
10,951 |
| ||||
|
Software |
|
— |
|
1,866 |
|
— |
|
1,866 |
| ||||
|
Tech Hardware, Storage & Peripherals |
|
— |
|
17,177 |
|
— |
|
17,177 |
| ||||
|
Textiles, Apparel & Luxury Goods |
|
771 |
|
4,440 |
|
— |
|
5,211 |
| ||||
|
Transportation Infrastructure |
|
— |
|
2,562 |
|
— |
|
2,562 |
| ||||
|
Wireless Telecommunication Services |
|
— |
|
9,074 |
|
— |
|
9,074 |
| ||||
|
Total Common Stocks |
|
10,648 |
|
225,478 |
|
— |
|
236,126 |
| ||||
|
Short-Term Investment |
|
|
|
|
|
|
|
|
| ||||
|
Investment Company |
|
2,601 |
|
— |
|
— |
|
2,601 |
| ||||
|
Total Assets |
|
$ |
13,249 |
|
$ |
225,478 |
|
$ |
— |
|
$ |
238,727 |
|
Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment’s valuation changes. The Fund recognizes transfers between the levels as of the end of the period. As of September 30, 2016, securities with a total value of approximately $583,000 transferred from Level 1 to Level 2. Securities that were valued using unadjusted quoted prices at December 31, 2015 were valued using other significant observable inputs at September 30, 2016. At September 30, 2016, the fair value of certain securities were adjusted due to developments which occurred between the time of the close of the foreign markets on which they trade and the close of business on the NYSE which resulted in their Level 2 classification.
Following is a reconciliation of investments in which significant unobservable inputs (Level 3) were used in determining fair value.
|
|
|
Common Stock |
| |
|
Beginning Balance |
|
$ |
967 |
|
|
Purchases |
|
— |
| |
|
Sales |
|
(606 |
) | |
|
Amortization of discount |
|
— |
| |
|
Transfers in |
|
— |
| |
|
Transfers out |
|
— |
| |
|
Corporate actions |
|
— |
| |
|
Change in unrealized appreciation (depreciation) |
|
108 |
| |
|
Realized gains (losses) |
|
(469 |
) | |
|
Ending Balance |
|
$ |
— |
|
|
|
|
|
| |
|
Net change in unrealized appreciation (depreciation) from investments still held as of September 30, 2016 |
|
$ |
— |
|
Item 2. Controls and Procedures.
(a) The Fund’s principal executive officer and principal financial officer have concluded that the Fund’s disclosure controls and procedures are sufficient to ensure that information required to be disclosed by the Fund in this Form N-Q was recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, based upon such officers’ evaluation of these controls and procedures as of a date within 90 days of the filing date of the report.
(b) There were no changes in the Fund’s internal control over financial reporting that occurred during the registrant’s fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Fund’s internal control over financial reporting.
Item 3. Exhibits.
(a) A separate certification for each principal executive officer and principal financial officer of the registrant are attached hereto.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Morgan Stanley Asia-Pacific Fund, Inc.
|
/s/ John H. Gernon |
|
|
John H. Gernon |
|
|
Principal Executive Officer |
|
|
November 17, 2016 |
|
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
|
/s/ John H. Gernon |
|
|
John H. Gernon |
|
|
Principal Executive Officer |
|
|
November 17, 2016 |
|
|
|
|
|
/s/ Francis Smith |
|
|
Francis Smith |
|
|
Principal Financial Officer |
|
|
November 17, 2016 |
|
Exhibit 99.CERT
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
I, John H. Gernon, certify that:
1. I have reviewed this report on Form N-Q of Morgan Stanley Asia-Pacific Fund, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the schedules of investments included in this report fairly present in all material respects the investments of the registrant as of the end of the fiscal quarter for which the report is filed;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Omitted;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report, based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer(s) and I have disclosed to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: November 17, 2016 |
/s/ John H. Gernon |
|
|
John H. Gernon |
|
|
Principal Executive Officer |
CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
I, Francis Smith, certify that:
1. I have reviewed this report on Form N-Q of Morgan Stanley Asia-Pacific Fund, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the schedules of investments included in this report fairly present in all material respects the investments of the registrant as of the end of the fiscal quarter for which the report is filed;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Omitted;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report, based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer(s) and I have disclosed to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date: November 17, 2016 |
/s/ Francis Smith |
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Francis Smith |
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Principal Financial Officer |