MERRILL LYNCH
BASIC VALUE
FUND, INC.
FUND LOGO
Quarterly Report
March 31, 1998
This report is not authorized for use as an offer of sale or a
solicitation of an offer to buy shares of the Fund unless
accompanied or preceded by the Fund's current prospectus. Past
performance results shown in this report should not be considered a
representation of future performance. Investment return and
principal value of shares will fluctuate so that shares, when
redeemed, may be worth more or less than their original cost.
Statements and other information herein are as dated and are subject
to change.
Merrill Lynch
Basic Value Fund, Inc.
Box 9011
Princeton, NJ
08543-9011
Printed on post-consumer recycled paper
MERRILL LYNCH BASIC VALUE FUND, INC.
TO OUR SHAREHOLDERS
The quarter ended March 31, 1998 was positive for most capital
markets worldwide, despite periods of volatility. Investors
continued to focus on the impact that the financial crisis in Asia
would have on economic growth worldwide. In the United States,
sentiment fluctuated between a variety of outlooks. At times, US
stock and bond prices reflected expectations that the slowdown in
Asian economic growth would lead to a sharp decline in US business
activity and, ultimately, a deflationary environment. The
deterioration of economic conditions in Japan was of particular
concern. During other periods, US investors appeared to expect that
the positive trends of a moderately expanding economy, declining
unemployment, enhanced productivity and corporate profits growth
would continue, unimpeded by the developments in Asia. To date,
there have been only a few signs that Asia's troubles are
influencing US economic activity.
The Federal Open Market Committee did not change monetary policy at
its meeting in early February. Subsequently, in his Humphrey-Hawkins
testimony before Congress, Federal Reserve Board Chairman Alan
Greenspan indicated that monetary policy might remain steady for
some time. This raised concerns among those US bond investors who
had expected imminent monetary policy easing. However, subsequent
data releases suggested that US economic growth would remain
moderate, which stabilized the bond market.
As 1998 progresses, it is likely that investor focus will remain on
developments in Asia, their potential impact on the US economy, and
the Federal Reserve Board's response to them.
Portfolio Matters
Security purchases in the first quarter of 1998 amounted to $444
million, while equity sales totaled $507 million. On the buy side,
we initiated positions in three new holdings and added to 15
existing positions. On the sell side, we eliminated three holdings
and reduced positions in 21 commitments. Our cash position increased
to 13.7% of net assets on March 31, 1998 from 11.6% on December 31,
1997.
The largest of the new positions was Caterpillar, Inc., the world's
largest manufacturer of earthmoving machinery and equipment. The
stock underperformed the stock market in recent months largely as a
result of concerns over the company's Asian operations. A slowdown
in Asian economies will have some impact, but should be more than
absorbed by strength in other regions. We anticipate solid earnings
growth, and with the stock selling at a substantial discount to the
market, the reward/risk relationship seems to be in our favor.
We also initiated positions in Diamond Offshore Drilling, Inc. and
National City Corp. Diamond Offshore is one of the largest providers
of deepwater offshore drilling rigs for the energy industry. The
stock price has come under pressure in conjunction with weakening
oil prices. The majority of the company's rigs are under long-term
contract, and while 1998 earnings gains are likely to be limited by
some downtime for rig repairs, the profit outlook for 1999 and
beyond is impressive. Generally, deepwater drilling contracts are
long term in nature and not subject to the vagaries of oil price
fluctuations.
Merrill Lynch Basic Value Fund, Inc.
March 31, 1998
With the culmination of a number of recent acquisitions, National
City Corp. has reinforced its position as a major banking presence
in the Midwest. At our entry level price, this now thirteenth
largest bank in the United States provided a well above-average
yield and a very reasonable price/earnings ratio, along with
prospects for consistent long-term growth.
Finally, we acquired Starwood Hotels & Resorts Worldwide, Inc., a
major Real Estate Investment Trust (REIT), through its acquisition
of ITT Corp. When the takeover was first announced, we sold a
significant amount of ITT on the initial price advance, but
eventually decided the long-term prospects for Starwood were
sufficiently attractive to warrant retention. Like most REITs,
Starwood has been a lackluster performer recently, and we have added
to the position on weakness.
Security sales exceeded equity purchases in response to a very
strong first quarter stock market performance, which presented
profit-taking opportunities, along with some of our holdings being
takeover targets. Our two largest partial sales were Digital
Equipment Corporation, on the initial favorable reaction to its
potential acquisition by COMPAQ Computer Corporation, and the
aforementioned ITT Corp. Also, we again and sold shares of
existing holdings during the March quarter as price
volatility among various groups was extensive and presented
opportunities. We traded around core positions in British Petroleum
Company PLC, Citicorp, NationsBank Corporation and Occidental
Petroleum Corporation, securing a better than 15% cumulative gain.
We eliminated U S West Media Group, Inc. because of what we
considered were high valuations and small positions in Scania AB
Class A and B Shares, an investment that did not develop as we had
hoped.
In Conclusion
We thank you for your investment in Merrill Lynch Basic Value Fund,
Inc. We look forward to reviewing our outlook and strategy in our
upcoming annual report to shareholders.
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
(Paul M. Hoffmann)
Paul M. Hoffmann
Senior Vice President and Portfolio Manager
April 30, 1998
Merrill Lynch Basic Value Fund, Inc.
March 31, 1998
PERFORMANCE DATA
About Fund Performance
Investors are able to purchase shares of the Fund through the
Merrill Lynch Select Pricing SM System, which offers four pricing
alternatives:
* Class A Shares incur a maximum initial sales charge (front-end
load) of 5.25% and bear no ongoing distribution or account
maintenance fees. Class A Shares are available only to eligible
investors.
* Class B Shares are subject to a maximum contingent deferred sales
charge of 4% if redeemed during the first year, decreasing 1% each
year thereafter to 0% after the fourth year. In addition, Class B
Shares are subject to a distribution fee of 0.75% and an account
maintenance fee of 0.25%. These shares automatically convert to
Class D Shares after approximately 8 years. (There is no initial
sales charge for automatic share conversions.)
* Class C Shares are subject to a distribution fee of 0.75% and an
account maintenance fee of 0.25%. In addition, Class C Shares are
subject to a 1% contingent deferred sales charge if redeemed within
one year of purchase.
* Class D Shares incur a maximum initial sales charge of 5.25% and
an account maintenance fee of 0.25% (but no distribution fee).
None of the past results shown should be considered a representation
of future performance. Figures shown in the "Average Annual Total
Return" tables assume reinvestment of all dividends and capital
gains distributions at net asset value on the ex-dividend date.
Investment return and principal value of shares will fluctuate so
that shares, when redeemed, may be worth more or less than their
original cost. Dividends paid to each class of shares will vary
because of the different levels of account maintenance, distribution
and transfer agency fees applicable to each class, which are
deducted from the income available to be paid to shareholders.
Average Annual Total Return
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
Year Ended 3/31/98 +40.36% +32.99%
Five Years Ended 3/31/98 +20.61 +19.32
Ten Years Ended 3/31/98 +16.31 +15.69
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 3/31/98 +38.93% +34.93%
Five Years Ended 3/31/98 +19.39 +19.39
Inception (10/21/88) through 3/31/98 +14.67 +14.67
[FN]
*Maximum contingent deferred sales charge is 4% and is reduced
to 0% after 4 years.
**Assuming payment of applicable contingent deferred sales charge.
% Return % Return
Without CDSC With CDSC**
Class C Shares*
Year Ended 3/31/98 +38.89% +37.89%
Inception (10/21/94)
through 3/31/98 +24.86 +24.86
[FN]
*Maximum contingent deferred sales charge is 1% and is reduced
to 0% after 1 year.
**Assuming payment of applicable contingent deferred sales charge.
% Return Without % Return With
Sales Charge Sales Charge**
Class D Shares*
Year Ended 3/31/98 +39.99% +32.64%
Inception (10/21/94)
through 3/31/98 +25.85 +23.89
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
Merrill Lynch Basic Value Fund, Inc.
March 31, 1998
PERFORMANCE DATA (concluded)
Results of a $1,000 Investment Since Inception--Class A Shares
(5.25% current sales charge--$947.50 net amount invested; assuming
reinvestment of all dividends and capital gains distributions)
A mountain chart depicting the growth of an investment in the
Fund's Class A Shares from $947.50 on July 1, 1997 to
$24,321.19 on March 31, 1998.
<TABLE>
Recent Performance Results
<CAPTION>
Ten Years/
12 Month 3 Month Since Inception
Total Return Total Return Total Return
<S> <C> <C> <C>
ML Basic Value Fund Class A Shares* +40.36% +11.52% +353.21%
ML Basic Value Fund Class B Shares* +38.93 +11.24 +264.24
ML Basic Value Fund Class C Shares* +38.89 +11.21 +114.69
ML Basic Value Fund Class D Shares* +39.99 +11.43 +120.57
Dow Jones Industrial Average** +36.04 +11.73 +496.77/+439.63/+144.86
Standard & Poor's 500 Index** +48.01 +13.95 +465.74/+405.64/+155.30
<FN>
*Investment results shown do not reflect sales charges; results
shown would be lower if a sales charge was included. Total
investment returns are based on changes in net asset values for the
periods shown, and assume reinvestment of all dividends and capital
gains distributions at net asset value on the ex-dividend date. The
Fund's ten-year/inception dates are: Class A Shares, ten years ended
3/31/98; Class B Shares, 10/21/88; and Class C and Class D Shares,
10/21/94.
**An unmanaged broad-based index comprised of common stocks. Total
investment returns for unmanaged indexes are based on estimates. Ten
years/since inception total returns are: for the ten years ended
3/31/98; from 10/21/88 to 3/31/98; and from 10/21/94 to 3/31/98,
respectively.
</TABLE>
Merrill Lynch Basic Value Fund, Inc.
March 31, 1998
<TABLE>
SCHEDULE OF INVESTMENTS
<CAPTION>
Shares Percent of
Industry Held Stocks Cost Value Net Assets
Low Price to Book Value
<S> <C> <S> <C> <C> <C>
Metals/Non-Ferrous 1,400,000 ASARCO Inc. $ 36,667,971 $ 37,362,500 0.3%
Insurance 2,500,000 American General Corporation 54,530,936 161,718,750 1.3
Insurance 260,000 American National Insurance Co. 9,749,442 25,382,500 0.2
Steel 4,500,000 Bethlehem Steel Corporation 56,745,956 61,031,250 0.5
Restaurants 3,900,000 Darden Restaurants, Inc. 36,505,673 60,693,750 0.5
Information Processing 1,700,000 Data General Corporation 23,665,586 30,068,750 0.2
Information Processing 3,300,000 Digital Equipment Corporation 123,104,550 172,631,250 1.3
Utilities--Electric 3,000,000 Entergy Corporation 69,641,133 89,250,000 0.7
Retail 2,900,000 Federated Department Stores, Inc. 83,496,624 150,256,250 1.2
Automotive 5,600,000 Ford Motor Company 162,471,869 362,950,000 2.8
Entertainment 1,250,000 Hartford Financial Services Group
Inc. (The) 31,155,644 135,625,000 1.1
Chemicals 800,000 Imperial Chemical Industries
PLC (ADR)* 45,969,824 57,500,000 0.4
Paper & Forest Products 3,100,000 International Paper Company 108,471,162 145,118,750 1.1
Retail 5,800,000 Kmart Corporation 69,437,129 96,787,500 0.7
Insurance 1,400,000 PartnerRe Ltd. 29,498,937 68,775,000 0.5
Beverages 2,600,000 Seagram Company Ltd. (The) 87,765,911 99,287,500 0.8
Steel 3,150,000 USX--US Steel Group, Inc. 94,976,906 118,912,500 0.9
Banking 475,000 Wells Fargo & Company 89,258,392 157,343,750 1.2
-------------- --------------- ------
1,213,113,645 2,030,695,000 15.7
Below-Average Price/Earnings Ratio
Insurance 2,500,000 Allstate Corporation (The) 58,084,911 229,843,750 1.8
Machinery & Equipment 2,400,000 Caterpillar, Inc. 135,070,849 132,150,000 1.0
Banking 2,450,000 Citicorp 153,353,998 347,900,000 2.7
Farm & Construction
Equipment 4,350,000 Deere & Company 101,162,341 269,428,125 2.1
Oil & Gas Producers 1,300,000 Diamond Offshore Drilling, Inc. 60,307,173 58,987,500 0.5
Photography 2,400,000 Eastman Kodak Company 138,451,618 155,700,000 1.2
Capital Goods 1,400,000 Eaton Corporation 72,067,416 133,262,500 1.0
Machinery & Equipment 2,500,000 Fluor Corporation 134,723,501 124,375,000 1.0
Automotive 2,700,000 General Motors Corporation 118,385,267 182,081,250 1.4
Chemicals 2,600,000 Hercules Inc. 69,675,936 128,375,000 1.0
Machinery 3,765,000 ITT Industries Inc. 74,801,185 143,305,312 1.1
Machinery 3,600,000 Ingersoll-Rand Company 83,867,995 172,575,000 1.3
Information Processing 3,300,000 International Business Machines
Corp. 134,053,804 342,787,500 2.7
Banking 2,800,000 NationsBank Corporation 85,514,320 204,225,000 1.6
Tobacco 3,400,000 Philip Morris Companies, Inc. 108,619,000 141,737,500 1.1
Electrical Equipment 3,300,000 Philips Electronics N.V.
(NY Registered Shares) 87,863,168 242,343,750 1.9
Fertilizers 1,600,000 Potash Corp. of Saskatchewan Inc. 125,426,223 145,400,000 1.1
Retail 3,650,000 Sears, Roebuck & Co. 100,683,617 209,646,875 1.6
Real Estate Investment
Trust 1,700,000 Starwood Hotels & Resorts
Worldwide, Inc. 91,784,296 90,843,750 0.7
Electronics 2,250,000 Tektronix, Inc. 58,632,719 100,406,250 0.8
Electrical Equipment 1,450,000 Thomas & Betts Corporation 68,369,642 92,800,000 0.7
Chemicals 2,600,000 Union Carbide Corporation 84,717,281 130,325,000 1.0
Retail 4,000,000 Woolworth Corporation 55,901,671 100,000,000 0.8
-------------- --------------- ------
2,201,517,931 3,878,499,062 30.1
</TABLE>
Merrill Lynch Basic Value Fund, Inc.
March 31, 1998
<TABLE>
SCHEDULE OF INVESTMENTS (continued)
<CAPTION>
Shares Percent of
Industry Held Stocks Cost Value Net Assets
Above-Average Yield
<S> <C> <S> <C> <C> <C>
Telecommunications 3,800,000 Ameritech Corporation $ 118,458,152 $ 187,862,500 1.5%
Oil--Domestic 1,950,000 Atlantic Richfield Company 106,571,450 153,318,750 1.2
Real Estate
Investment Trust 700,000 Avalon Properties, Inc. 13,974,920 20,300,000 0.2
Telecommunications 1,550,000 Bell Atlantic Corporation 80,362,277 158,875,000 1.2
Oil--International 1,966,803 British Petroleum Company PLC
(The)(ADR)* 66,670,458 169,267,983 1.3
Utilities--Electric 1,900,000 CINergy Corp. 53,375,204 70,300,000 0.5
Oil--International 2,700,000 Chevron Corporation 129,731,902 216,843,750 1.7
Utilities--Electric 1,650,000 Consolidated Edison Co. of New
York, Inc. 39,941,210 77,137,500 0.6
Utilities--Electric 956,250 DPL Inc. 6,204,369 18,646,875 0.1
Oil--International 4,500,000 Exxon Corporation 158,275,415 304,312,500 2.4
Telecommunications 3,300,000 GTE Corp. 109,572,500 197,587,500 1.5
Foods/Food Processing 1,450,000 General Mills, Inc. 67,972,787 110,200,000 0.9
Real Estate Investment
Trust 440,000 Irvine Apartment Communities, Inc. 7,126,791 13,860,000 0.1
Real Estate Investment
Trust 900,000 Liberty Property Trust 17,263,193 24,187,500 0.2
Real Estate Investment
Trust 500,000 Mills Corporation (The) 10,080,375 13,093,750 0.1
Oil--International 3,600,000 Mobil Corporation 122,850,898 275,850,000 2.1
Utilities--Electric 2,400,000 NIPSCO Industries, Inc. 27,387,777 67,200,000 0.5
Banking 975,000 National City Corp. 64,193,311 71,479,688 0.6
Oil--Domestic 4,000,000 Occidental Petroleum Corporation 89,410,660 117,250,000 0.9
Utilities--Electric 2,600,000 PECO Energy Company 62,537,242 57,525,000 0.5
Utilities--Electric 1,800,000 Public Service Enterprise Group, Inc. 48,476,636 68,175,000 0.5
Oil--International 4,400,000 Royal Dutch Petroleum Company (NY
Registered Shares) 91,937,333 249,975,000 1.9
Real Estate Investment
Trust 1,600,000 Simon DeBartolo Group, Inc. 32,239,889 54,800,000 0.4
Real Estate Investment
Trust 500,000 Summit Properties Inc. 9,048,400 10,062,500 0.1
Oil--International 3,500,000 Texaco Inc. 133,671,295 210,875,000 1.6
Utilities--Electric 2,700,000 Texas Utilities Company 95,066,608 106,143,750 0.8
Telecommunications 3,000,000 U S West Communications Group, Inc. 77,072,442 164,250,000 1.3
-------------- --------------- ------
1,839,473,494 3,189,379,546 24.7
Special Situations
Telecommunications 3,000,000 AT&T Corp. 108,117,587 196,875,000 1.5
Savings & Loans 1,700,000 Ahmanson (H.F.) & Company 37,928,399 131,750,000 1.0
Pharmaceuticals 1,400,000 Bristol-Myers Squibb Co. 40,000,109 146,037,500 1.1
Oil Services & Equipment 3,400,000 Dresser Industries, Inc. 79,584,474 163,412,500 1.3
Chemicals 3,750,000 duPont (E.I.) de Nemours & Co. 164,289,511 255,000,000 2.0
Pharmaceuticals 1,000,000 Merck & Co., Inc. 34,511,163 128,375,000 1.0
Banking 7,000,000 Norwest Corporation 86,170,521 290,937,500 2.3
Telecommunications 1,600,000 Telefonica de Espana S.A. (ADR)* 63,336,735 211,600,000 1.6
Semiconductors 2,400,000 Texas Instruments Inc. 108,063,732 129,900,000 1.0
Insurance 3,550,000 Travelers Group, Inc. 38,416,699 213,000,000 1.7
Information Processing 5,600,000 Unisys Corporation 60,913,547 106,400,000 0.8
Pharmaceuticals 440,000 Zeneca Group PLC (ADR)* 12,980,000 57,640,000 0.5
-------------- --------------- ------
834,312,477 2,030,927,500 15.8
Total Stocks 6,088,417,547 11,129,501,108 86.3
</TABLE>
Merrill Lynch Basic Value Fund, Inc.
March 31, 1998
<TABLE>
SCHEDULE OF INVESTMENTS (continued)
<CAPTION>
Face Percent of
Amount Issue Cost Value Net Assets
Short-Term Securities
<S> <C> <S> <C> <C> <C>
Commercial Paper** Atlantic Asset Securitization
Corp.:
$14,204,000 5.56% due 4/13/1998 $ 14,175,481 $ 14,175,481 0.1%
35,000,000 5.57% due 4/16/1998 34,913,356 34,913,356 0.3
BTAB Holdings Funding Corp.:
50,000,000 5.65% due 4/21/1998 49,835,208 49,835,208 0.4
44,000,000 5.65% due 4/23/1998 43,841,172 43,841,172 0.3
25,000,000 CXC Inc., 5.55% due 4/27/1998 24,895,937 24,895,937 0.2
20,000,000 Centric Capital Corp., 5.56%
due 4/07/1998 19,978,378 19,978,378 0.2
56,000,000 Clipper Receivables Corp., 5.54%
due 4/07/1998 55,939,676 55,939,676 0.4
Corporate Asset Funding Co., Inc.:
40,000,000 5.52% due 4/02/1998 39,987,733 39,987,733 0.3
10,000,000 5.48% due 4/03/1998 9,995,433 9,995,433 0.1
50,000,000 5.50% due 4/03/1998 49,977,083 49,977,083 0.4
Countrywide Home Loans, Inc.:
19,000,000 5.56% due 4/06/1998 18,982,393 18,982,393 0.1
15,000,000 5.56% due 5/04/1998 14,921,233 14,921,233 0.1
66,000,000 5.56% due 5/27/1998 65,418,980 65,418,980 0.5
25,000,000 Eureka Securitization Inc., 5.48%
due 4/06/1998 24,977,167 24,977,167 0.2
50,000,000 Falcon Asset Securitization Corp.,
5.55% due 4/01/1998 49,992,292 49,992,292 0.4
Finova Capital Corp.:
35,000,000 5.57% due 4/15/1998 34,918,771 34,918,771 0.3
35,000,000 5.55% due 4/16/1998 34,913,667 34,913,667 0.3
70,000,000 5.56% due 4/20/1998 69,783,778 69,783,778 0.5
31,000,000 Fortune Brands Inc., 5.50% due
4/09/1998 30,957,375 30,957,375 0.2
63,353,000 General Motors Acceptance Corp.,
6.13% due 4/01/1998 63,342,212 63,342,212 0.5
59,030,000 International Securitization Corp.,
5.54% due 4/17/1998 58,875,571 58,875,571 0.5
Lehman Brothers Holdings Inc.:
100,000,000 5.52% due 4/09/1998 99,862,000 99,862,000 0.8
50,000,000 5.52% due 4/14/1998 49,892,667 49,892,667 0.4
Lexington Parker, Inc.:
25,389,000 5.48% due 4/03/1998 25,377,406 25,377,406 0.2
25,000,000 5.58% due 4/07/1998 24,972,875 24,972,875 0.2
30,000,000 5.57% due 4/09/1998 29,958,225 29,958,225 0.2
43,058,000 5.54% due 5/11/1998 42,786,328 42,786,328 0.3
Morgan Stanley Dean Witter & Company:
30,000,000 5.48% due 4/03/1998 29,986,300 29,986,300 0.2
20,000,000 5.49% due 4/06/1998 19,981,700 19,981,700 0.2
61,000,000 5.49% due 4/17/1998 60,841,857 60,841,857 0.5
50,000,000 5.52% due 5/01/1998 49,762,333 49,762,333 0.4
41,023,000 Park Avenue Receivables Corp.,
5.55% due 4/24/1998 40,871,215 40,871,215 0.3
Preferred Receivables Funding Corp.:
10,000,000 5.57% due 4/01/1998 9,998,453 9,998,453 0.1
16,500,000 5.57% due 4/02/1998 16,494,894 16,494,894 0.1
50,000,000 5.51% due 4/03/1998 49,977,042 49,977,042 0.4
25,875,000 5.52% due 5/01/1998 25,752,007 25,752,007 0.2
</TABLE>
Merrill Lynch Basic Value Fund, Inc.
March 31, 1998
<TABLE>
SCHEDULE OF INVESTMENTS (concluded)
<CAPTION>
Face Percent of
Amount Issue Cost Value Net Assets
Short-Term Securities (concluded)
<S> <C> <S> <C> <C> <C>
Commercial Paper** Republic Industries, Inc.:
(concluded) $15,000,000 5.52% due 4/02/1998 $ 14,995,400 $ 14,995,400 0.1%
40,000,000 5.50% due 4/13/1998 39,920,556 39,920,556 0.3
22,250,000 5.56% due 4/21/1998 22,177,836 22,177,836 0.2
Riverwoods Funding Corp.:
20,000,000 5.56% due 4/15/1998 19,953,667 19,953,667 0.1
50,000,000 5.53% due 5/15/1998 49,654,375 49,654,375 0.4
-------------- --------------- ------
1,533,840,032 1,533,840,032 11.9
US Government Agency Federal Home Loan Mortgage Corp.:
Obligations** 75,000,000 5.44% due 4/03/1998 74,966,000 74,966,000 0.6
65,000,000 5.47% due 4/06/1998 64,940,742 64,940,742 0.5
36,000,000 5.44% due 4/24/1998 35,869,440 35,869,440 0.3
56,000,000 5.46% due 4/24/1998 55,796,160 55,796,160 0.4
-------------- --------------- ------
231,572,342 231,572,342 1.8
Total Short-Term Securities 1,765,412,374 1,765,412,374 13.7
Total Investments $7,853,829,921 12,894,913,482 100.0
==============
Other Assets Less Liabilities 6,270,448 0.0
--------------- ------
Net Assets $12,901,183,930 100.0%
=============== ======
Net Asset Value: Class A--Based on net assets of $5,874,303,820 and
142,072,895 shares outstanding $ 41.35
===============
Class B--Based on net assets of $4,929,915,048 and
121,166,278 shares outstanding $ 40.69
===============
Class C--Based on net assets of $503,548,842 and
12,497,233 shares outstanding $ 40.29
===============
Class D--Based on net assets of $1,593,416,220 and
38,630,092 shares outstanding $ 41.25
===============
<FN>
*American Depositary Receipts (ADR).
**Commercial Paper and certain US Government Agency Obligations are
traded on a discount basis; the interest rates shown are the
discount rates paid at the time of purchase by the Fund.
</TABLE>
Merrill Lynch Basic Value Fund, Inc.
March 31, 1998
PORTFOLIO INFORMATION
As of March 31, 1998
Percent of
Ten Largest Stock Holdings Net Assets
Ford Motor Company 2.8%
Citicorp 2.7
International Business Machines Corp. 2.7
Exxon Corporation 2.4
Norwest Corporation 2.3
Mobil Corporation 2.1
Deere & Company 2.1
duPont (E.I.) de Nemours & Co. 2.0
Royal Dutch Petroleum Company
(NY Registered Shares) 1.9
Philips Electronics N.V. (NY Registered
Shares) 1.9
Portfolio Changes for the Quarter Ended
March 31, 1998
Additions
Caterpillar, Inc.
Diamond Offshore Drilling, Inc.
National City Corp.
Deletions
Scania AB (Class A)(ADR)
Scania AB (Class B)(ADR)
U S West Media Group, Inc.
Merrill Lynch Basic Value Fund, Inc.
March 31, 1998
OFFICERS AND DIRECTORS
Arthur Zeikel, President and Director
Donald Cecil, Director
M. Colyer Crum, Director
Edward H. Meyer, Director
Jack B. Sunderland, Director
J. Thomas Touchton, Director
Fred G. Weiss, Director
Terry K. Glenn, Executive Vice President
Norman R. Harvey, Senior Vice President
Paul M. Hoffmann, Senior Vice President
and Portfolio Manager
Donald C. Burke, Vice President
Gerald M. Richard, Treasurer
Thomas D. Jones, III, Secretary
Custodian
The Bank of New York
90 Washington Street, 12th Floor
New York, NY 10286
Transfer Agent
Merrill Lynch Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, FL 32246-6484
(800) 637-3863
