DK INVESTORS, INC.
________________________________
1999 SEMI-ANNUAL REPORT
________________________________
<PAGE>
DK INVESTORS, INC.
205 Lexington Avenue, 16th Floor
New York, New York 10016
(212) 779-4233
____________________________________________________________
September 15, 1999
To Our Shareholders:
I know that you are all aware that the financial markets have undergone
some wild gyrations during this past year. On the whole, bond prices are up
slightly and yields are down. We have had a substantial portion of of our
portfolio either mature or be called, and have had to replace those bonds
with bonds yielding a lower rate of interest.
At a recent meeting of the Board of Directors, we instructed our
investment advisor to try to replace the bonds which have matured with bonds
rated as low as A, in the hope that we could gain another 15 or 20 basis
points in interest. The Board was of the opinion that this added little,
if any, risk to the portfolio. The Board has always taken the position that
safety of principal is more important than immediate income. The annexed
report shows that during the first half of 1999 $364,472 was distributed to
shareholders. This is equivalent to $0.31 per share. The net asset value as
of June 30, 1999, was $14,919,176, which is equivalent to $12.69 per share.
At the annual meeting of the Corporation, held in May, Gene Nadler,
Harry Nadler, Francine Yellon, Angelo Balafas, Thomas B. Schulhof, Joseph
Kell, and Andrew Brucker were reelected to serve as Directors until next
year's annual meeting. Cummings & Carroll, P.C., will continue as the
Company's auditors, and Chase Asset Management will continue as the
investment advisor. The Board meets regularly and is in contact with the
investment advisor very frequently. The philosophy of the Board has not
changed: Asset protection is of primary import, together with maintaining
or increasing the dividend, but not at the sacrifice of asset protection. I
will keep you advised in the event of any unusual occurrences which might
affect our Company.
Sincerely,
Gene Nadler
President
<PAGE>
To the Shareholders and Board of Directors
DK Investors Inc.
We have performed a limited review of the statements of assets and
liabilities of DK Investors Inc., including the portfolio of investments as
of June 30, 1999, and the related statements of operations and changes in net
assets for the six months then ended. Our review was performed in accordance
with standards for such reviews promulgated by the American Institute of
Certified Public Accountants, and, accordingly, consisted principally of
obtaining an understanding of the accounting system for preparation of
interim financial information; making an analytical review of pertinent
financial data; and making inquiries of, and evaluating responses from
certain officials of the company who have responsibility for financial and
accounting methods. All information included in these financial statements
is the representation of the management of DK Investors Inc.
Because our limited review did not constitute an examination made in
accordance with generally accepted auditing standards, we express no opinion
on the aforementioned financial statements. Based on our review, we are not
aware of any material modifications that should be made to the accompanying
financial statements, in order for them to be in conformity with generally
accepted accounting principles.
CUMMINGS & CARROLL, P.C.
Certified Public Accountants
August 6, 1999
Great Neck, New York
<PAGE>
DK INVESTORS INC.
STATEMENTS OF ASSETS AND LIABILITIES
JUNE 30, 1998 and 1999 (Unaudited)
ASSETS
1999 1998
Investments in securities at market
(identified cost - 1999 $15,579,616
1998 $15,306,539) $15,441,263 $15,364,736
Accrued interest receivable 276,881 283,033
Deferred charge 10,984 24,459
Cash 4,278 106,120
----------- -----------
Total Assets $15,733,406 $15,778,348
LIABILITIES
Payable for securities purchased $ 596,898 $ 289,528
Accrued expenses 42,808 28,824
Dividends payable
(1999 - July 12, 1999
1998 - July 6, 1998) 176,358 188,115
----------- ----------
Total Liabilities 816,064 506,467
Net assets
(equivalent to $12.69 and $12.99 per share
respectively, based on 1,175,664 shares
capital stock outstanding) $14,917,342 $15,271,881
See accountants' review report and accompanying notes.
<PAGE>
<TABLE>
DK INVESTORS INC.
INVESTMENT IN SECURITIES
JUNE 30, 1999 (unaudited)
<CAPTION> % INV.
COUPON PRINCIPAL COST OR MARKET BASED
SECURITIES RATE MATURITY AMOUNT BASIS VALUE ON M.V.
<S> <C> <C> <C> <C> <C> <C>
Austin TX Utility 7.200 1999 30,000 30,234 30,404 0.20%
Garland TX Lt G.O. 8.000 2000 195,000 198,090 200,419 1.30%
Indiana Transp Fin. Auth 6.900 2000 150,000 152,586 154,470 1.00%
Wisc.Pub Pwr Sys 7.000 2000 500,000 512,159 516,895 3.35%
Carson City Nev Sch Dist 7.700 2001 265,000 279,700 280,381 1.82%
Delaware Trans Auth 7.100 2001 200,000 208,047 209,490 1.36%
Harrison Cnty MS Sch Dist 7.000 2002 70,000 74,805 74,610 0.48%
NYS Environ. Fac Corp. 7.300 2002 500,000 516,247 526,070 3.41%
Lewisville TX Indpt Sch Dist 7.500 2002 300,000 326,460 327,220 2.12%
Hamilton Twp NJ Sch Dist 7.000 2002 260,000 282,064 282,677 1.83%
Lincoln, MI Cons Sch Dist 7.000 2003 325,000 358,237 353,665 2.29%
Rowlett TX 6.000 2004 170,000 181,189 179,875 1.16%
Nevada State G/O 7.000 2004 125,000 131,162 127,869 0.83%
Louisiana St. Gas Fuel 7.250 2004 100,000 105,592 103,342 0.67%
Gladstone MI Pub Sch 6.500 2005 100,000 112,167 109,300 0.71%
NYS Dorm Auth 6.500 2005 250,000 274,260 271,250 1.76%
FL St Brd Mand SKG 7.500 2005 20,000 20,878 20,202 0.13%
Metro Pier and Expo 6.250 2005 100,000 111,537 107,817 0.70%
Metro Pier and Expo 6.500 2005 310,000 346,682 336,694 2.18%
Jackson Miss Pub Sch 6.250 2005 130,000 140,303 140,767 0.91%
NY Dorm Auth 7.800 2005 55,000 57,906 56,714 0.37%
Port Seattle Wash Rev 7.300 2005 300,000 323,844 319,104 2.07%
NYS Dorm Auth Rev 6.500 2006 190,000 214,359 207,319 1.34%
Hawaii State 7.000 2006 500,000 516,260 515,970 3.34%
Wisc St Clean Wtr Rev 6.125 2006 350,000 391,878 377,871 2.45%
Ohio St Bldg Auth 6.000 2006 210,000 229,045 225,796 1.46%
Scottsdale, AZ G/O 6.500 2006 250,000 278,176 277,375 1.80%
NJ Waste Wtr Treatment 7.000 2007 200,000 234,664 228,668 1.48%
Tucson, AZ Wtr 6.750 2007 200,000 228,277 225,522 1.46%
Wichita, KS W&S 6.000 2007 600,000 651,582 648,246 4.20%
NYS Dorm Auth 6.000 2008 240,000 268,231 254,561 1.65%
Anne Arudel Cnty Md 6.000 2008 210,000 233,260 227,151 1.47%
Los Vegas Valley Wtr 7.000 2008 225,000 242,985 237,614 1.54%
Columbus Indiana Swr 7.250 2009 260,000 280,399 271,123 1.75%
NYS Twy Auth Hwy & Brdg. 5.800 2009 180,000 195,364 192,812 1.24%
Pampa TX Wtr 7.400 2009 100,000 107,220 104,324 0.68%
Clark Cnty Nev Sch Dist 7.000 2009 350,000 364,237 372,264 2.41%
SE TX Hosp fin Agy 7.500 2009 95,000 99,109 107,089 0.69%
<TABLE/>
<PAGE>
</TABLE>
<TABLE>
DK INVESTORS INC.
INVESTMENT IN SECURITIES
JUNE 30, 1999 (unaudited)
<CAPTION> % INV.
COUPON PRINCIPAL COST OR MARKET BASED
SECURITIES RATE MATURITY AMOUNT BASIS VALUE ON M.V.
<S> <C> <C> <C> <C> <C> <C>
New Mexico Mtg Fin Auth 6.850 2010 45,000 45,530 46,427 0.30%
NV Hsg Dev 7.550 2010 310,000 316,549 318,885 2.06%
NYS Mtg Ser NN 7.450 2010 250,000 256,271 257,453 1.67%
RI Hsg & Mtg 7.700 2010 500,000 514,647 513,735 3.33%
Kenosha, Wisc Wtwks 7.000 2011 350,000 382,407 375,921 2.43%
Austin TX Util Sys 6.750 2012 100,000 104,531 106,536 0.69%
Birmingham ALA UT 6.600 2012 275,000 283,224 293,175 1.90%
Jamesboro Ark Indl Dev 6.500 2012 500,000 543,365 532,905 3.45%
Penn St. Tpke. Comm. 7.500 2012 175,000 191,246 181,468 1.18%
Arkansas St. Dev. Fin. 7.000 2014 500,000 538,279 531,805 3.44%
Missouri St. Environmental 6.875 2014 110,000 120,951 117,634 0.76%
Indiana Mun Pwr 7.100 2015 100,000 106,858 103,786 0.67%
PA St. Higher Ed Auth 7.300 2015 425,000 457,543 433,543 2.81%
Missouri St Env Auth 7.200 2016 200,000 216,820 222,482 1.44%
Austin Comb Util 8.000 2016 125,000 139,469 133,809 0.87%
Maine St HSG Auth 7.100 2016 265,000 261,847 277,866 1.80%
Chicago, IL Wtr. 7.200 2016 100,000 107,066 103,384 0.67%
Wisconsin HSG & ECO 7.350 2017 75,000 75,223 76,558 0.50%
Wisconsin HSG & ECO 6.400 2017 350,000 346,500 365,547 2.37%
Michigan St trunk 7.000 2017 100,000 107,138 102,436 0.66%
Michigan St. Hosp. 7.500 2018 175,000 193,097 187,570 1.21%
Wisc. Hlth & Ed. Fac 7.125 2019 425,000 458,752 437,355 2.83%
Richmond, VA 6.250 2021 250,000 269,264 263,020 1.70%
Intermountain Pwr Utah 7.000 2021 250,000 263,844 255,023 1.65%
----------- ----------- ----------- -------
$14,570,000 $15,579,616 $15,441,263 100.00%
<FN>
See accountants' review report and accompanying notes.
<FN/>
<TABLE/>
DK INVESTORS, INC.
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1998 and 1999 (unaudited)
Income 1999 1998
Interest--municipal obligations
(Less amortization of premiums
1999 $73,793; 1998 $59,605) $ 416,980 $ 449,822
------------ ------------
Expenses
Investment advisory fee 29,934 30,213
Shareholder servicing costs, including
transfer agent and dividend disbursing
agent fees and expense 3,817 3,735
Reports to shareholders 4,150 3,965
Legal fees 12,757 12,849
Auditing fees 6,250 6,250
Directors fees 3,900 3,900
Insurance 12,540 18,263
Miscellaneous 1,938 1,894
------------ ------------
75,286 81,069
------------ ------------
Net investment income $ 341,694 $ 368,753
============ ============
Realized and Unrealized Gain (Loss) on Investments
Realized gain (loss) from sale of
securities (excluding short-term
securities)
Proceeds from sales $ 1,678,102 $ 1,926,500
Cost of securities sold 1,736,249 1,990,109
------------ ------------
Realized gain (loss) (58,147) (63,609)
------------ ------------
Unrealized appreciation (depreciation)
of investments
Beginning of period 140,713 72,736
End of period (138,353) 58,197
------------ ------------
Increase (decrease) in unrealized
appreciation (279,066) (14,539)
------------ ------------
Total Realized & Unrealized Gain (Loss)
on Investments $ (337,213) $ (78,148)
============ ============
See accountants' review report and accompanying notes.
<PAGE>
DK INVESTORS, INC.
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED JUNE 30, 1998 and 1999 (unaudited)
1999 1998
INVESTMENT ACTIVITIES
Net investment income $ 341,694 $ 368,753
Realized & unrealized gain (loss)
on investments (337,213) (78,148)
Distributions to shareholders (364,472) (387,987)
------------ ------------
Increase (decrease) in net assets (359,991) (97,382)
NET ASSETS
Beginning of period--January 1, 15,277,333 15,369,263
------------ ------------
End of period--June 30, $14,917,342 $15,271,881
============ ============
<PAGE>
Notes to Financial Statements
Note 1 - Summary of Significant Accounting Policies
The Company is registered under the Investment Company Act of 1940 as a
diversified, closed-end, management investment company. The significant
accounting policies followed by the Company are summarized as follows:
a. Security Valuation
Investments in securities were valued at the bid price by Chemical Bank.
b. Federal Income Taxes
The Company qualifies under Subchapter M of the Internal Revenue Code
as a "regulated investment company" for federal income tax purposes,
investing all of its assets in tax-exempt state and local obligations.
The Company intends to distribute all of its net investment income to
its stockholders. The Company will be relieved of federal income taxes
on such income, and dividends so distributed will be tax-free to
shareholders.
c. Income and Expense Recognition
Interest income and related expenses are recognized on the accrual
basis. Amortization of bond premium calculated by the straight-line
method is charged against interest income over the term of the bond.
d. Other
As is common in the industry, security transactions are accounted for
on the date the securities are purchased or sold. Dividend income and
distribution to shareholders are recorded on the ex-dividend date.
Each expense accounting for 5 per cent of total expense is separately
reported.
Note 2 - Purchases and Sales of Securities
During the period ended June 30, 1999, purchases and sales of securities
other than short-term were $2,389,000 and $1,678,000, respectively.
During the period ended June 30, 1998, purchases and sales of securities
other than short-term were $2,140,000 and $1,927,000, respectively.
Note 3 - Investment Advisory Fee
The Company's agreement with Chemical Bank for investment management and
advisory services calls for an annual fee of 4/10ths of 1% of the average
portfolio value. The fee for the six months ended June 30, 1999 amounted
to $29,934.
Note 4 - Distributions
Distributions to shareholders were $364,472 or $.31 per share in 1999 and
$387,987 or $.33 per share in 1998. Distributions include $12,406 or
$.0106 per share and $24,577 or $.0209 per share paid in 1999 and 1998 as
supplemental distributions for 1998 and 1997 respectively.
Note 5 - Supplementary Information
Per share income and capital changes (for a share outstanding throughout
the period) ended:
</TABLE>
<TABLE>
<CAPTION>
June 30, June 30,
1999 1998
<S> <C> <C>
Investment income $ .35 $ .38
Expenses .06 .07
--------- ---------
Net investment income .29 .31
Distribution to Shareholders ( .31) ( .33)
Net realized and unrealized gain (loss)
on investments ( .29) ( .06)
--------- ---------
Net increase (decrease) in asset value $( .31) $( .08)
========= =========
Net assets value per share at end of year $ 12.69 $ 12.99
========= =========
Ratio of expenses to average net assets .49% .53%
Ratio of net investment income to average
net assets 2.2% 2.4%
Portfolio turnover 10.97% 12.8%
<FN>
Number of shares outstanding during the entire period was 1,175,664.
<FN/>
</TABLE>
DK INVESTORS, INC.
OFFICES: 205 Lexington Avenue, 16th Floor
New York, New York 10016
(212) 779-4233
OFFICERS: Gene Nadler President
Andrew Brucker, Esq. Vice President
Harry Nadler Secretary
DIRECTORS: Gene Nadler Chairman
Harry Nadler
Thomas B. Schulhof
Angelo J. Balafas
Joseph Kell
Andrew Brucker, Esq.
Francine Yellon
LEGAL COUNSEL: POMERANZ GOTTLIEB & MUSHKIN, LLC
205 Lexington Avenue, 16th Floor
New York, New York 10016
AUDITORS: CUMMINGS & CARROLL, P.C.
175 Great Neck Road
Great Neck, New York 11021
INVESTMENT
ADVISORS: Chase Asset Management, Inc.
Division of Chase Manhattan Bank (formerly Chemical Bank)
1211 Avenue of the Americas
New York, New York 10036
TRANSFER AGENT
AND REGISTRAR: American Stock Transfer & Trust Co.
40 Wall Street, 46th Floor
New York, New York 10005
CUSTODIAN: Chase Manhattan Bank (formerly Chemical Bank)
ANNUAL MEETING:
On May 12, 1999, a regular Annual Meeting of the Shareholders of the company
was held at 205 Lexington Avenue, 16th Floor, New York, New York.
REGISTERED UNDER THE INVESTMENT COMPANY ACT OF 1940 AS A DIVERSIFIED, CLOSED
END MANAGEMENT COMPANY. COPIES OF THE COMPANY'S ANNUAL REPORT FORM N-2 ARE
AVAILABLE TO REGISTERED STOCKHOLDERS UPON WRITTEN REQUEST TO THE SECRETARY
AT THE ABOVE ADDRESS.
