Fellow Shareholders
We have often remarked on the volatility of the markets your Fund invests in,
and the past two years have been a good illustration. During the Fund's
previous fiscal period ended October 31, 1993, the volatility was the kind we
like - on the upside - with the Fund rising almost 56%. The past 12 months
were another story: negative returns in the spring were offset in recent
months to provide positive but modest performance for the year.
The last quarter saw a reversal of the generally lacklustre results seen
in the first half of 1994. Most of the markets in the Pacific region rose,
with a number continuing the better trends first evident last May. Korea and
Singapore performed particularly well while Malaysia, New Zealand, and
Indonesia were not far behind. These gains reflected strong corporate profits
which, in turn, benefited from better-than-expected economic growth and
increasing optimism that U.S. interest rates were near a short-term peak.
Your Fund's three-month performance compared favorably with the
benchmark index, as shown below. For the year, however, results lagged for two
main reasons. First, the Fund's overweighted positions in Indonesia and
Malaysia together with an underweighted exposure to the Australian market
subtracted value relative to the index. Second, stock selection results were
mixed, with medium-sized companies, to which your Fund has a reasonable
exposure, performing particularly poorly in Hong Kong and Thailand.
Performance Comparison
Periods Ended 10/31/94
3 Months 12 Months
_____________________
New Asia Fund 7.2% 4.1%
MSCI Pacific ex-Japan 5.6 11.3
Market Review
The Malaysian stock market rose almost 10% over the final fiscal quarter, as
investors were encouraged by surprisingly low inflation numbers. Economic
growth continues above 8% this year, powered by the export and investment
sectors. Consumption remained restrained, which has delayed the usual
end-of-cycle inflation and trade deficits. We trimmed some of our Aokam
Perdana holding when it hit new highs, and we sold some of lottery manager
Berjaya Sports Toto as gambling became an election-year issue for the Muslim
majority, but we are otherwise happy with our 22% weighting in this market.
Hong Kong also improved a little over the third quarter, rising 2%. All
of last year's positives were reversed in 1994. Fiscal policy, now set in
Beijing, is becoming restrictive as China overheats. Monetary policy,
effectively set by the Federal Reserve because of the Hong Kong dollar's link
to the U.S. currency, also turned restrictive. Real estate prices,
traditionally closely correlated with stock prices, are no longer a one-way
street to wealth. Government measures and buyer/tenant resistance have
triggered what is for now a mild correction in office and residential prices.
Finally, the sharply higher supply of new stock from investment bankers eager
to help China finance its growth is meeting much less demand from foreign
mutual funds and institutions. We reduced holdings in Hong Kong
Telecommunications and New World Development, the former on valuation worries
and the latter on property market concerns. We also trimmed our large position
in Swire Pacific; it had performed very well this year and was looking
expensive. We added Shangri-La Asia capital after excellent interim results.
The company is rapidly becoming the number one luxury hotel chain in Asia,
including China. Your Fund's Hong Kong weighting has fallen to 22% of the
portfolio from about 27% last year and is likely to move lower as we go into
1995.
The Chinese stock market finally bottomed in late July. The
announcement of government measures to stem the share collapse cheered
investors, especially in the domestic "A" share market. We added some Yizheng
Chemical Fibre, a leading
Chart 1 - Geographic Diversification
Chinese polyester fibre maker listed in Hong Kong. It is benefiting handsomely
from higher cotton prices in China and a consequent shift of demand toward
synthetic fibres. We also added to our holding in appliance maker Shanghai
Shangling Electric Appliance.
In Australia, the market was slightly disappointed by the industrial
sector earnings growth of 18% in the fiscal year ended June 1994. Investors
were more interested in the potential for huge resource sector earnings growth
over the next two to three years. Western Mining, a play on aluminium, nickel,
and gold, is now our largest holding in this market. New Zealand is similarly
well placed to benefit from the pickup in global pulp and paper prices. Our
portfolio is structured to reflect this, with large positions in Fletcher
Challenge and Carter Holt Harvey. Australia and New Zealand are our fourth-
and sixth-largest weightings, as shown in the pie chart.
The Indonesian market also recovered over the quarter, but remained
disappointing for the year to date. It appears that some of the demand for
real estate developments seen in 1993 was more speculative than previously
thought, and with interest rates rising in line with those in the U.S., demand
forecasts for certain projects in Jakarta and especially Surabaya will have to
be scaled back. Furthermore, a sudden glut of apartments in Jakarta has forced
developers to sell projects at much lower prices. Property stocks have been
duly savaged. We added to consumer play Hanjaya Mandala Sampoerna whose
earnings are growing strongly helped by robust overall economic growth, but
your portfolio's Indonesian weighting remains at 4%.
After another good quarter, the Indian market became the region's top
performer for the year. Freed from the shackles of extreme government
intervention following the radical deregulation process initiated in 1991,
industry is now picking up strongly and corporate earnings are surging.
Unfortunately, custodial arrangements in Bombay are as yet unsatisfactory, and
we will confine our Indian exposure (now 2%) for the time being to Euro-issues
trading offshore. In any case, these tend to be higher quality and better
values than the overall Indian market.
Thailand's stock market revived over the quarter. After a three-year
period of adjustment, the outlook for the economy is brighter than ever.
Exports are growing at rates not seen since the boom years of the late 1980s
and are concentrated in higher value-added areas such as electronics,
plastics, and packaging. Even more encouraging, there has been a sudden surge
in foreign direct investment applications reflecting renewed offshore
confidence. The cheaply valued banking sector was a market leader as analysts
upgraded earnings once more. We continue to like this market and are happy
with our 9% weighting.
Market Performance
Periods Ended 10/31/94
In U.S. Dollar Terms
______________________________
3 Months 12 Months
________ _________
Australia 2.1% 12.6%
Hong Kong 1.9 5.0
Indonesia 12.9 6.0
Korea 21.6 65.3
Malaysia 9.7 7.9
New Zealand 13.7 21.6
Philippines 7.9 38.3
Singapore 14.7 35.4
Thailand 10.4 32.9
Source: Morgan Stanley Capital International
Singapore, our third largest weighting, performed relatively well over
the quarter rising by 15%. The economy continued to deliver, with its strength
in electronics again the driving force. Non-oil exports rose a remarkable 38%
in August-the fastest monthly growth to date. Corporate profits again
surprised on the upside, particularly those of manufacturers and banks.
However, with interest rates clearly on the rise and selected valuations
looking high, we have trimmed our overall weighting. Exposure has been further
cut in the banking sector with a reduction of United Overseas Bank, and we
pared our Singapore Press holding as pulp prices rose. Property investment
stocks Singapore Land, DBS Land, and United Industrial were added because a
likely shortage of prime commercial property space should support capital
values.
Having all of the cyclical attractions of Japan but few of the valuation
constraints, stocks in Korea rose 21%. Stunning corporate results showing net
profits up 78% obviously helped, as did a supportive monetary stance from the
Bank of Korea. Despite signs that the trade account is worsening due to a
redirection of production to the booming domestic economy, we remain
optimistic. We continue to add wherever possible, but this is difficult since
foreign ownership limits have largely been reached. Not by choice, your
portfolio continues to have only a 2% commitment in this market.
Investment Outlook
In terms of sectors, we continue to bias your Fund away from banks and
utilities towards areas of faster growth such as consumption, media,
construction, and mobile telecommunications. We also remain overweighted in
Singaporean ship repair companies as well as regional real estate stocks.
We remain optimistic on the Pacific region given strong earnings growth
and generally acceptable valuations. We are likely to continue to trim Hong
Kong and may reduce Malaysia after its recent strong rally. Assets may be
directed instead toward New Zealand, Korea, Thailand, and India.
Your Fund has enjoyed substantial asset growth over the past year,
reflecting both appreciation and the addition of many new investors, whom we
welcome as New Asia shareholders.
Respectfully submitted,
Martin G. Wade
President
November 21, 1994
Industry Diversification
October 31, 1994
Percent of
Net Assets
__________
Financial/Insurance 40.8%
Basic Industry 17.9
Consumer Goods 14.6
Capital Goods 11.2
Transport/Storage 6.6
Utilities 3.3
Energy 0.8
Other Industries 0.2
Reserves 4.6
_____________________________________________________________________________
Net Assets 100.0%
Security Classification
October 31, 1994
Market
Cost Value
Percent of Net Assets (000) (000)
__________________________ _________ _________
Common Stocks, Rights
& Warrants, 94.0% $1,967,779 $2,164,953
Preferred Stocks, 0.1% 3,474 3,380
Bonds, 1.3% 28,920 29,730
Short-Term Investments, 3.8% 86,528 86,528
_________ _________
Total Investments, 99.2% 2,086,701 2,284,591
Other Assets Less
Liabilities, 0.8% 18,312 18,250
_____________________________________________________________________________
Total Net Assets, 100.0% $2,105,013 $2,302,841
Twenty-Five Largest Holdings
October 31, 1994
Percent of
Net Assets
__________
United Overseas Bank, Singapore 2.9%
Bangkok Bank, Thailand 2.4
Swire Pacific, Hong Kong 2.2
Aokam Perdana, Malaysia 2.1
Renong, Malaysia 2.0
Technology Resources Industries, Malaysia 1.9
Telecom Corporation of New Zealand,
New Zealand 1.8
United Engineers, Malaysia 1.8
Thai Farmers Bank, Thailand 1.7
Hutchison Whampoa, Hong Kong 1.7
Western Mining, Australia 1.6
Fletcher Challenge, New Zealand 1.6
Guoco Group, Hong Kong 1.6
Golden Plus Holdings, Malaysia 1.6
Carter Holt Harvey, New Zealand 1.5
Hysan Development, Hong Kong 1.5
Westmont, Malaysia 1.4
Hopewell Holdings, Hong Kong 1.4
Siam Cement, Thailand 1.4
Singapore Land, Singapore 1.4
Jurong Shipyard, Singapore 1.3
Great Eagle Holdings, Hong Kong 1.3
Citic Pacific, Hong Kong 1.3
Granite Industries, Malaysia 1.3
Wharf Holdings, Hong Kong 1.3
_____________________________________________________________________________
Total 42.0%
Chart 2 - Performance Comparison
Fiscal-Year Performance
Periods ended October 31, 1994
Since Inception
1 Year 9/28/90*
________ _____________
4.1% 21.1%
*Average Annual Compound Total Return
Income return and principal value represent past performance and will vary.
Shares may be worth more or less at redemption than at original purchase.
Reviewing Your International Investing Strategy
Not so very long ago, we probably would not have addressed this issue, because
relatively few U.S. investors had an international investing strategy to
review. In recent years, however, investor focus has broadened appreciably,
and now global investing seems finally to be catching up with "global
consuming."
The merits of placing a portion of your financial assets in overseas
investments have become widely recognized, as evidenced by the dramatic growth
of international mutual fund assets. Amid all the investment uncertainties
generated by rising interest rates this year - both in the U.S. and
a number of other countries - our international equity funds continued to
expand impressively.
The historic evidence is clear that a prudent equity diversification
strategy that includes foreign stocks can reduce the year-to-year volatility
of an equity portfolio and, over time, enhance overall returns. Volatility
may be reduced because foreign stocks often move in divergent directions from
the U.S. market. With over half of all stocks in the world originating and
trading outside the U.S. - many in countries growing faster than the U.S. - it
can be argued that the investor who restricts his or her portfolio entirely to
U.S. securities is less prudent than the one who diversifies more widely.
Since you are an international investor, we do not want to preach to the
converted. Rather, we want to suggest you take a minute to review your T.
Rowe Price international investments to ensure they are in line with your
financial strategy and your overall portfolio.
An International Allocation
Except in unusual circumstances, we believe a majority of an investor's
international equity exposure should be in a core fund that has a broadly
diversified portfolio of well-established companies around the world. Our
International Stock Fund is designed to be such a core holding. If you have a
particular interest in a certain region, you may want to put some assets in a
more specialized fund. The New Asia, Europe, Latin America, and Japan Funds
have narrow geographic focuses, while our International Discovery Fund
emphasizes rapidly growing smaller companies in all of those areas. Without
the conviction to stick through potentially tough periods, you should be
cautious about investing in regional funds, which may have greater price
volatility.
Don't base your allocation decisions solely on the past performance of
any stock market, and keep in mind the risks of foreign investing, including
the possibility of unfavorable currency exchange rates. You may want to
consider shifting a portion of your investment dollars into a particular
international asset over a period of time, instead of all at once. By focusing
on your particular financial objectives, the length of time in which you hope
to achieve them, and your willingness to accept risks represented by various
investments, you should be in a good position to structure your international
investment portfolio.
This report has been preceded or is accompanied by a prospectus.
Portfolio of Investments (Value in thousands)
T. Rowe Price New Asia Fund / October 31, 1994
AUSTRALIA - 10.1%
Value
______
COMMON STOCKS
10,608,367 shs. ANI. . . . . . . . . . . . . . . . . . . $ 11,423
1,325,000 * Acacia Resources . . . . . . . . . . . . 1,968
1,748,730 Australia & New Zealand
Bank Group . . . . . . . . . . . . . . 5,065
2,961,000 Australia Gas & Light. . . . . . . . . . 9,565
1,906,097 Broken Hill Property . . . . . . . . . . 29,244
2,694,218 Burns, Philp & Company . . . . . . . . . 6,882
2,484,271 Email. . . . . . . . . . . . . . . . . . 7,472
1,250,000 Howard Smith . . . . . . . . . . . . . . 5,755
6,016,900 John Fairfax Holdings. . . . . . . . . . 12,421
4,795,390 MIM. . . . . . . . . . . . . . . . . . . 10,434
4,169,954 Mayne Nickless . . . . . . . . . . . . . 22,017
3,244,642 News Corporation . . . . . . . . . . . . 19,975
4,551,450 Nine Network . . . . . . . . . . . . . . 13,722
12,987,400 * TNT. . . . . . . . . . . . . . . . . . . 23,243
6,019,540 Western Mining . . . . . . . . . . . . . 37,504
7,175,052 Woolworths . . . . . . . . . . . . . . . 15,345
Total Australia 232,035
CHINA - 1.3%
COMMON STOCKS
4,228,000 * China North Industries (USD) . . . . . . 4,439
934,000 * Huaneng Power International
ADR (USD). . . . . . . . . . . . . . . 17,046
10,315,000 * Shanghai Haixin Shipping 'H'
(HKD). . . . . . . . . . . . . . . . . 1,949
1,918,000 * Shanghai Shangling Electric
Appliance 'B' (USD). . . . . . . . . . 1,565
13,713,000 Yizheng Chemical Fibre 'H'
(HKD). . . . . . . . . . . . . . . . . 5,457
Total China 30,456
HONG KONG - 21.5%
COMMON STOCKS & WARRANTS
16,400,200 Amoy Properties. . . . . . . . . . . . . 20,374
6,300,220 wts. * Amoy Properties, 3/31/95 . . . . . . . . 2,568
6,626,338 shs. Champion Technology. . . . . . . . . . . 2,144
7,850,000 China Strategic Investment . . . . . . . 3,352
1,452,000 wts. * China Strategic Investment,
8/30/97. . . . . . . . . . . . . . . . 658
10,092,000 shs. Citic Pacific. . . . . . . . . . . . . . 30,364
7,774,260 Dao Heng Bank Group. . . . . . . . . . . 25,805
16,672,000 ! Fairyoung Holdings . . . . . . . . . . . 6,580
11,520,000 Giordano Holdings. . . . . . . . . . . . 7,230
53,463,000 Great Eagle Holdings . . . . . . . . . . 30,442
8,256,000 wts. * Guangdong Investment,
12/31/94 . . . . . . . . . . . . . . . $ 3,793
7,659,000 shs. Guoco Group. . . . . . . . . . . . . . . 36,176
4,999,600 HKR International Limited. . . . . . . . 4,982
21,440,900 Hon Kwok Land Investment . . . . . . . . 6,937
4,061,000 Hong Kong China. . . . . . . . . . . . . 2,680
1,930,000 Hong Kong Ferry. . . . . . . . . . . . . 2,697
10,186,900 Hong Kong Land Holdings. . . . . . . . . 26,102
48,800 Hong Kong
Telecommunications . . . . . . . . . . 105
31,248,000 Hopewell Holdings. . . . . . . . . . . . 32,148
8,650,000 Hutchison Whampoa. . . . . . . . . . . . 39,962
12,707,000 Hysan Development. . . . . . . . . . . . 33,874
6,750,000 JCG Holdings . . . . . . . . . . . . . . 4,411
3,895,000 Lai Sun Garment International. . . . . . 7,435
21,381,881 Luks Industries. . . . . . . . . . . . . 3,984
3,036,776 wts. * Luks Industries, 6/30/96 . . . . . . . . 79
34,856,000 shs. Manhattan Card Company . . . . . . . . . 14,209
10,300,000 Ming Pao Enterprise. . . . . . . . . . . 7,264
8,000,000 wts. * National Mutual Asia, 3/31/95. . . . . . 2,614
71,008 shs. New World Development. . . . . . . . . . 226
8,655,000 Paliburg Development . . . . . . . . . . 1,232
22,783,622 Paliburg International . . . . . . . . . 14,079
3,010,636 Pioneer Industries International . . . . 2,143
21,500,000 S. Megga International . . . . . . . . . 3,311
1,000,000 wts. * S. Megga International, 12/29/96 . . . . 43
6,539,000 shs. Shangri-La Asia Capital. . . . . . . . . 9,435
5,146,780 Sing Tao Holdings. . . . . . . . . . . . 3,730
18,207,090 South Sea Development. . . . . . . . . . 1,437
10,868,000 Swank International
Manufacturing. . . . . . . . . . . . . 2,461
2,518,000 wts. * Swank International
Manufacturing, 6/30/95 . . . . . . . . 122
6,683,000 shs. Swire Pacific 'A'. . . . . . . . . . . . 51,025
7,567,103 Tai Cheung Holdings. . . . . . . . . . . 10,184
15,688,000 Techtronic Industries. . . . . . . . . . 2,213
4,007,000 Tian An China Investments. . . . . . . . 1,016
1,125,000 wts. * Tian An China Investments,
1/25/96. . . . . . . . . . . . . . . . 41
609,000 * Tomei International, 6/30/95 . . . . . . 3
2,000,000 shs. Ultronics International
Holdings . . . . . . . . . . . . . . . 163
7,547,000 Wharf Holdings . . . . . . . . . . . . . 29,788
1,461,000 Wing Hang Bank . . . . . . . . . . . . . 3,791
Total Hong Kong 495,412
INDIA - 1.8%
COMMON STOCKS
431,000 Grasim GDS (USD) . . . . . . . . . . . . 10,452
391,000 shs. Hindalco Industries GDR (USD). . . . . . $ 13,489
22,000 Hindalco Industries GDR,
new (USD). . . . . . . . . . . . . . . 753
70,000 Indian Rayon & Industries
GDR (USD). . . . . . . . . . . . . . . 1,330
610,000 Reliance Industries GDS (USD). . . . . . 15,555
Total India 41,579
INDONESIA - 4.1%
COMMON STOCKS
1,900,000 Astra International. . . . . . . . . . . 4,201
3,911,000 Bank Dagang Nasional
Indonesia. . . . . . . . . . . . . . . 7,566
3,844,000 Dharmala International . . . . . . . . . 5,267
1,364,166 Duta Anggada Realty. . . . . . . . . . . 1,382
149,600 Gadjah Tunggal . . . . . . . . . . . . . 255
3,506,000 Hanjaya Mandala Sampoerna. . . . . . . . 16,956
1,498,000 Indorama Synthetics. . . . . . . . . . . 6,003
185,000 * Indosat ADR (USD). . . . . . . . . . . . 7,331
1,100,000 * Indosat 'B'. . . . . . . . . . . . . . . 4,332
1,034,000 Inti Indorayon Utama . . . . . . . . . . 2,810
512,000 Modernland Realty. . . . . . . . . . . . 1,792
2,130,000 * Mulia Industrindo. . . . . . . . . . . . 6,230
3,622,000 Panin Bank . . . . . . . . . . . . . . . 6,339
1,438,400 Semen Cibinong . . . . . . . . . . . . . 5,101
524,500 Semen Gresik . . . . . . . . . . . . . . 2,826
874,000 United Tractors. . . . . . . . . . . . . 2,254
80,645
CORPORATE BOND
12,900,000 USD Global Mark International, Cv.,
3.50%, 4/6/97. . . . . . . . . . . . . 14,158
Total Indonesia 94,803
MALAYSIA - 22.1%
COMMON STOCKS, RIGHTS & WARRANTS
11,547,000 shs. Affin Holdings . . . . . . . . . . . . . 19,433
4,104,000 Aokam Perdana. . . . . . . . . . . . . . 33,892
1,260,000 * Aokam Perdana, new . . . . . . . . . . . 9,863
597,800 wts. * Aokam Perdana, 4/16/97 . . . . . . . . . 4,539
5,967,333 shs. Arab Malaysian Finance . . . . . . . . . 20,319
6,357,333 rts. * Arab Malaysian Finance . . . . . . . . . 846
15,769,000 shs. Berjaya Leisure. . . . . . . . . . . . . 18,515
10,684,666 Berjaya Sports Toto. . . . . . . . . . . 16,644
2,080,000 ! CHG Industries . . . . . . . . . . . . . 6,513
1,000,000 wts. * CHG Industries, 8/2/99 . . . . . . . . . 1,386
540,000 shs. Commerce Asset Holdings. . . . . . . . . 2,409
1,333,333 wts. * Commerce Asset Holdings,
6/27/98. . . . . . . . . . . . . . . . 2,688
7,410,666 shs. ! Golden Plus Holdings . . . . . . . . . . $ 35,966
11,008,000 *! Granite Industries . . . . . . . . . . . 29,944
2,211,400 Kelanamas Industries . . . . . . . . . . 5,323
5,557,000 Land & General . . . . . . . . . . . . . 27,404
2,000,000 Leader Universal Holdings. . . . . . . . 11,115
10,848,000 MBF Capital. . . . . . . . . . . . . . . 13,077
6,635,000 Malaysian Airline System . . . . . . . . 17,789
4,062,000 Malaysian Helicopter . . . . . . . . . . 10,016
5,761,000 ! Metacorp . . . . . . . . . . . . . . . . 22,322
1,425,000 Public Bank. . . . . . . . . . . . . . . 3,235
2,568,000 Public Finance . . . . . . . . . . . . . 5,025
30,000,000 Renong . . . . . . . . . . . . . . . . . 46,967
3,000,000 Resorts World. . . . . . . . . . . . . . 19,022
2,000,000 Selangor Properties. . . . . . . . . . . 2,536
916,000 wts. * Sungei Way Holdings, 8/20/97 . . . . . . 2,850
11,000,000 shs. * Technology Resources
Industries . . . . . . . . . . . . . . 42,838
7,574,000 United Engineers . . . . . . . . . . . . 40,909
4,613,000 Westmont . . . . . . . . . . . . . . . . 32,679
506,064
PREFERRED STOCK
2,347,000 Berjaya Sports Toto, 9.00% Cv.
Loan Stock, 10/30/97 . . . . . . . . . 3,380
Total Malaysia 509,444
NEW ZEALAND - 6.9%
COMMON STOCKS
4,899,484 Air New Zealand 'B'. . . . . . . . . . . 14,023
826,673 Brierley Investments . . . . . . . . . . 621
14,661,322 Carter Holt Harvey . . . . . . . . . . . 35,555
2,404,120 Fernz. . . . . . . . . . . . . . . . . . 8,582
11,992,300 Fletcher Challenge . . . . . . . . . . . 32,330
3,817,075 Fletcher Challenge, Forests
Division . . . . . . . . . . . . . . . 5,051
1,709,050 Independent Newspapers . . . . . . . . . 5,102
6,701,500 ! Shortland Properties . . . . . . . . . . 3,753
11,769,000 Telecom Corporation of
New Zealand. . . . . . . . . . . . . . 41,000
2,167,062 Wilson & Horton. . . . . . . . . . . . . 10,671
156,688
CORPORATE BOND
3,721,666 NZD Shortland Properties,
7.50%, 12/31/98. . . . . . . . . . . . 2,176
Total New Zealand 158,864
PHILIPPINES - 1.3%
COMMON STOCKS
17,113,500 shs. JG Summit Holdings 'B' . . . . . . . . . 6,889
50,000 JG Summit Holdings GDS
(USD). . . . . . . . . . . . . . . . . 2,037
69,220 shs. Philippine Long Distance
Telephone. . . . . . . . . . . . . . . $ 4,013
59,500 Philippine Long Distance
Telephone (USD). . . . . . . . . . . . 3,377
40,211,500 * SM Prime . . . . . . . . . . . . . . . . 13,760
Total Philippines 30,076
SINGAPORE - 13.6%
COMMON STOCKS & WARRANTS
7,859,000 DBS Land . . . . . . . . . . . . . . . . 27,561
2,710,000 Far East Levingston
Shipbuilding . . . . . . . . . . . . . 13,379
3,421,000 Jurong Shipyard. . . . . . . . . . . . . 30,751
2,058,000 Keppel . . . . . . . . . . . . . . . . . 18,919
7,788,000 Neptune Orient Lines . . . . . . . . . . 11,614
4,223,000 Overseas Union Enterprises . . . . . . . 27,032
3,585,000 Sembawang Shipyard . . . . . . . . . . . 27,830
2,550,000 Singapore Airlines . . . . . . . . . . . 24,484
4,877,000 Singapore Land . . . . . . . . . . . . . 31,384
1,057,300 Singapore Press. . . . . . . . . . . . . 19,368
268,000 Tiger Medicals . . . . . . . . . . . . . 358
13,703,000 United Industrial. . . . . . . . . . . . 14,184
5,613,750 United Overseas Bank . . . . . . . . . . 61,547
722,507 wts. * United Overseas Bank, 6/17/97. . . . . . 4,280
Total Singapore 312,691
SOUTH KOREA - 2.0%
COMMON STOCKS & RIGHTS
415,100 shs. * Daewoo Corporation . . . . . . . . . . . 8,302
8,899 * Daewoo Corporation, new. . . . . . . . . 173
470,000 Korea Electric Power . . . . . . . . . . 17,865
80 Korea Growth Trust IDR (USD) . . . . . . 3,520
120,000 Kun Young Construction . . . . . . . . . 2,529
27,971 rts. * Kun Young Construction . . . . . . . . . 165
79,890 shs. Pohang Iron & Steel. . . . . . . . . . . 9,231
95,682 Samsung Engineering
& Construction . . . . . . . . . . . . 4,110
Total South Korea 45,895
TAIWAN - 1.4%
COMMON STOCKS
525,000 * China Steel GDS (USD). . . . . . . . . . 9,581
601,000 * Tung Ho Steel Enterprise
GDS (USD). . . . . . . . . . . . . . . 9,316
18,897
CORPORATE BONDS
150,000 USD Acer, Cv., 4.00%, 6/10/01. . . . . . . . 379
6,355,000 Formosa Chemical & Fibre,
Cv., 1.75%, 7/19/01. . . . . . . . . . 5,974
3,120,000 USD Microtek International,
Cv., 3.50%, 6/26/01. . . . . . . . . . $ 3,284
959,000 Nan Ya Plastic, Cv., 1.75%,
7/19/01. . . . . . . . . . . . . . . . 887
2,710,000 Sincere Navigation, Cv.,
3.75%, 5/26/03 . . . . . . . . . . . . 2,872
13,396
Total Taiwan 32,293
THAILAND - 9.3%
COMMON STOCKS
786,000 shs. Advanced Information Service . . . . . . 13,624
5,145,500 Bangkok Bank . . . . . . . . . . . . . . 55,743
3,173,800 Bank of Ayudhya. . . . . . . . . . . . . 12,416
2,228,000 Krung Thai Bank. . . . . . . . . . . . . 7,599
326,000 Land & House . . . . . . . . . . . . . . 6,697
2,757,400 NTS Steel Group. . . . . . . . . . . . . 6,804
375,000 Shinawatra Computer &
Communication. . . . . . . . . . . . . 11,676
556,200 Siam Cement. . . . . . . . . . . . . . . 32,092
2,106,800 Siam Commercial Bank . . . . . . . . . . 21,809
4,561,720 Thai Farmers Bank. . . . . . . . . . . . 40,267
1,243,500 Thai Military Bank . . . . . . . . . . . 5,788
Total Thailand 214,515
SHORT-TERM INVESTMENTS - 3.8%
COMMERCIAL PAPER
$10,000,000 BMW U.S. Capital, 5.10%,
2/21/95. . . . . . . . . . . . . . . . 9,744
9,000,000 Canadian Wheat Board, 4.83%,
11/15/94 . . . . . . . . . . . . . . . 8,892
4,000,000 Chemical Bank, 5.10%, 11/28/94 . . . . . 3,973
4,300,000 Ciesco, 4.80%, 11/1/94 . . . . . . . . . 4,299
10,000,000 Cregem North America, 4.85%,
11/23/94 . . . . . . . . . . . . . . . 9,875
14,000 Harvard University, 4.75%,
11/1/94. . . . . . . . . . . . . . . . 14
4,000,000 Kingdom of Sweden, 4.75%,
11/3/94. . . . . . . . . . . . . . . . 3,955
10,000,000 Preferred Receivables Funding,
4.85%, 12/12/94. . . . . . . . . . . . 9,873
7,000,000 Safeco Credit Company, 4.85%,
12/2/94. . . . . . . . . . . . . . . . 6,914
9,024,000 Yale University, 5.05%, 11/9/94. . . . . 8,991
66,530
OTHER
10,000,000 Corporate Asset Funding Floating
Rate Medium-Term Note,
4.98%, 12/12/94. . . . . . . . . . . . 9,998
$10,000,000 Goldman Sachs Group Floating
Rate Medium-Term Note,
5.13%, 12/2/94 . . . . . . . . . . . . $ 10,000
19,998
Total Short-Term Investments 86,528
Total Investments in Securities -
99.2% of Net Assets (Cost-$2,086,701) $2,284,591
* - Non-income producing
! - Affiliated company
(HKD) - Hong Kong dollar denominated
(NZD) - New Zealand dollar denominated
(USD) - U.S. dollar denominated
The accompanying notes are an integral part of these financial statements.
Statement of Assets and Liabilities
T. Rowe Price New Asia Fund / October 31, 1994
Amounts in Thousands
____________________
ASSETS
Investments in securities at value
Affiliated companies
(Cost - $109,700). . . . . . . . . . . . . . $ 105,078
Other companies
(Cost - $1,977,001). . . . . . . . . . . . . 2,179,513
Total investments in
securities . . . . . . . . . . . . . . . . . $ 2,284,591
Receivable for investment
securities sold. . . . . . . . . . . . . . . . 16,261
Other assets . . . . . . . . . . . . . . . . . . 56,050
__________
Total assets . . . . . . . . . . . . . . . . . . 2,356,902
LIABILITIES
Payable for investment securities purchased. . . 16,252
Other liabilities. . . . . . . . . . . . . . . . 37,809
__________
Total liabilities. . . . . . . . . . . . . . . . 54,061
__________
Net Assets Consisting of:
Accumulated net investment income -
net of distributions . . . . . . . . . . . . . . 15,701
Accumulated realized gains/losses -
net of distributions . . . . . . . . . . . . . . 198,053
Net unrealized appreciation
of investments . . . . . . . . . . . . . . . . . 197,828
Paid-in-capital applicable to
228,752,127 shares of $0.01 par
value capital stock outstanding;
2,000,000,000 shares of the
Corporation authorized . . . . . . . . . . . . . 1,891,259
__________
NET ASSETS . . . . . . . . . . . . . . . . . . . . $2,302,841
__________
__________
NET ASSET VALUE PER SHARE. . . . . . . . . . . . . $10.07
______
______
The accompanying notes are an integral part of these financial statements.
Statement of Operations
T. Rowe Price New Asia Fund / October 31, 1994
Amounts in Thousands
____________________
INVESTMENT INCOME
Income
Dividends (net of foreign taxes of $3,739). . . . $ 35,244
Interest. . . . . . . . . . . . . . . . . . . . . 7,270
_________
Total income. . . . . . . . . . . . . . . . . . . $ 42,514
Expenses
Investment management fees. . . . . . . . . . . . 17,320
Shareholder servicing fees
& expenses. . . . . . . . . . . . . . . . . . . 5,536
Custodian and accounting fees
& expenses. . . . . . . . . . . . . . . . . . . 1,308
Prospectus & shareholder reports. . . . . . . . . 404
Registration fees & expenses. . . . . . . . . . . 328
Proxy & annual meeting expenses . . . . . . . . . 139
Directors' fees & expenses. . . . . . . . . . . . 41
Legal & auditing fees . . . . . . . . . . . . . . 37
Miscellaneous expenses. . . . . . . . . . . . . . 28
_________
Total expenses. . . . . . . . . . . . . . . . . . 25,141
. . . . . . . . . . . . . . . . . . . . . . . . . _________
Net investment income. . . . . . . . . . . . . . . . 17,373
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain (loss)
Securities. . . . . . . . . . . . . . . . . . . . 205,174
Foreign currency transactions . . . . . . . . . . (2,254)
_________
Net realized gain . . . . . . . . . . . . . . . . . 202,920
_________
Change in net unrealized appreciation
or depreciation
Securities. . . . . . . . . . . . . . . . . . . (176,228)
Other assets and liabilities
denominated in foreign currencies . . . . . . (65)
_________
Change in net unrealized appreciation
or depreciation . . . . . . . . . . . . . . . . . (176,293)
_________
Net gain on investments. . . . . . . . . . . . . . . 26,627
_________
INCREASE IN NET ASSETS FROM OPERATIONS . . . . . . . $ 44,000
_________
_________
The accompanying notes are an integral part of these financial statements.
Statement of Changes in Net Assets
T. Rowe Price New Asia Fund
Year Ended Ten Months Ended Year Ended
Oct. 31, 1994 Oct. 31, 1993* Dec. 31, 1992
_____________ _______________ _____________
Amounts in Thousands
_____________________________________________
INCREASE (DECREASE) IN NET ASSETS
Operations
Net investment income . . . . . . $ 17,373 $ 5,979 $ 3,240
Net realized gain
on investments. . . . . . . . . 202,920 32,534 5,830
Change in net
unrealized
appreciation or
depreciation of
investments . . . . . . . . . . (176,293) 366,692 4,396
__________ _________ ________
Increase in net
assets from operations. . . . . . 44,000 405,205 13,466
__________ _________ ________
Distributions to shareholders
Net investment income . . . . . . (6,625) - (4,716)
Net realized gain
on investments. . . . . . . . . (35,973) - (6,130)
__________ _________ _________
Decrease in net assets from
distributions to
shareholders. . . . . . . . . . (42,598) - (10,846)
__________ _________ _________
Capital share transactions!
Sold 177,655, 131,068,
and 43,064 shares . . . . . . . . 1,784,458 1,033,146 276,494
Distributions
reinvested of
3,858, 0, and
1,640 shares. . . . . . . . . . 40,413 - 10,205
Redeemed 119,834,
13,586, and 12,532
shares. . . . . . . . . . . . . (1,173,882) (102,405) (79,353)
__________ _________ _________
Increase in net assets
from capital share
transactions. . . . . . . . . . 650,989 930,741 207,346
_________ _________ _________
Net equalization . . . . . . . . . - - 1,616
_________ _________ _________
Total increase . . . . . . . . . . 652,391 1,335,946 211,582
NET ASSETS
Beginning of period . . . . . . . 1,650,450 314,504 102,922
__________ _________ _________
End of period . . . . . . . . . . $2,302,841 $1,650,450 $ 314,504
__________ _________ _________
__________ _________ _________
* The Fund's fiscal year-end was changed to October 31.
! All share figures reflect the 2-for-1 stock split effective May 27, 1994.
The accompanying notes are an integral part of these financial statements.
Notes to Financial Statements
T. Rowe Price New Asia Fund / October 31, 1994
Note 1 - Significant Accounting Policies
T. Rowe Price International Funds, Inc. (the Corporation) is registered under
the Investment Company Act of 1940. The New Asia Fund (the Fund), a
diversified, open-end management investment company, is one of the portfolios
established by the Corporation.
A) Valuation - Equity securities listed or regularly traded on a securities
exchange (including NASDAQ) are valued at the last quoted sales price at the
time the valuations are made. A security which is listed or traded on more
than one exchange is valued at the quotation on the exchange determined to be
the primary market for such security. Other equity securities and those
listed securities that are not traded on a particular day are valued at a
price within the limits of the latest bid and asked prices deemed by the Board
of Directors, or by persons delegated by the Board, best to reflect fair
value.
Debt securities are generally traded in the over-the-counter market and
are valued at a price deemed best to reflect fair value as quoted by dealers
who make markets in these securities or by an independent pricing service.
Short-term debt securities are valued at their cost which, when combined with
accrued interest, approximates fair value.
For purposes of determining the Fund's net asset value per share, the
U.S. dollar value of all assets and liabilities initially expressed in foreign
currencies is determined by using the mean of the bid and offer prices of such
currencies against U.S. dollars quoted by a major bank.
Assets and liabilities for which the above valuation procedures are
inappropriate or are deemed not to reflect fair value are stated at fair value
as determined in good faith by or under the supervision of the officers of the
Fund, as authorized by the Board of Directors.
B) Affiliated Companies - Investments in companies 5% or more of whose
outstanding voting securities are held by the Fund are defined as "Affiliated
Companies" in Section 2(a)(3) of the Investment Company Act of 1940.
C) Currency translation - Foreign currency amounts are translated into U.S.
dollars at prevailing exchange rates as follows: assets and liabilities at
the rate of exchange at the end of the respective period, purchases and sales
of securities and income and expenses at the rate of exchange prevailing on
the dates of such transactions. The effect of changes in foreign exchange
rates on realized and unrealized security gains or losses is reflected as a
component of such gains or losses.
D) Other - Income and expenses are recorded on the accrual basis. Investment
transactions are accounted for on the trade date. Realized gains and losses
are reported on an identified cost basis. Dividend income and distributions to
shareholders are recorded by the Fund on the ex-dividend date. Income and
capital gain distributions are determined in accordance with federal income
tax regulations which may differ from generally accepted accounting
principles. Effective January 1, 1993, the Fund discontinued its practice of
equalization. The results of operations and net assets were not affected by
this change.
Note 2 - Investment Transactions
As a part of its investment program, the Fund engages in the following
activities, the nature and risk of which are set forth more fully in the
Fund's Prospectus and Statement of Additional Information.
A) Emerging Markets - The Fund has investments in securities of companies
located in emerging markets. Future economic or political developments could
adversely affect the liquidity or value, or both, of such securities.
B) Other - Purchases and sales of portfolio securities, other than short-term
and U.S. Government securities, aggregated $1,826,931,000 and $1,202,883,000,
respectively, for the year ended October 31, 1994.
Note 3 - Federal Income Taxes
No provision for federal income taxes is required since the Fund intends to
continue to qualify as a regulated investment company and distribute all of
its taxable income.
In order for the Fund's capital accounts and distributions to
shareholders to reflect the tax character of certain transactions, $3,780,000
of undistributed net investment income and $3,789,000 of undistributed net
realized gains were reclassified as a $9,000 decrease to paid-in-capital
during the year ended October 31, 1994. The results of operations and net
assets were not affected by the reclassifications.
At October 31, 1994, the aggregate cost of investments for federal
income tax and financial reporting purposes was $2,086,701,000 and net
unrealized appreciation aggregated $197,890,000, of which $300,192,000 related
to appreciated investments and $102,302,000 to depreciated investments.
Note 4 - Related Party Transactions
The Fund is managed by Rowe Price-Fleming International, Inc. (Price-Fleming),
which is owned by T. Rowe Price Associates, Inc. (Price Associates), Robert
Fleming Holdings Limited, and Jardine Fleming Holdings Limited under a joint
venture agreement.
The investment management agreement between the Fund and Price-Fleming
(the Manager) provides for an annual investment management fee, computed daily
and paid monthly, consisting of an Individual Fund Fee equal to 0.50% of
average daily net assets and a Group Fee. The Group Fee is based on the
combined assets of certain mutual funds sponsored by the Manager or Price
Associates (the Group). The Group Fee rate ranges from 0.48% for the first $1
billion of assets to 0.31% for assets in excess of $34 billion. The effective
annual Group Fee rate at October 31, 1994, and for the year then ended was
0.34%. The Fund pays a pro rata portion of the Group Fee based on the ratio of
the Fund's net assets to those of the Group.
During the year ended October 31, 1994, the Fund, in the ordinary course
of business, paid commissions of $3,067,000 to, and placed security purchase
and sale orders aggregating $622,844,000 with, certain affiliates of the
Manager in connection with the execution of various portfolio transactions at
the direction of Price-Fleming.
T. Rowe Price Services, Inc. (TRPS) and Retirement Plan Services, Inc.
(RPS) are wholly owned subsidiaries of Price Associates. TRPS provides
transfer and dividend disbursing agent functions and shareholder services for
all accounts. RPS provides subaccounting and recordkeeping services for
certain retirement accounts invested in the Fund. Price Associates, under a
separate agreement, calculates the daily share price and maintains the
financial records of the Fund. For the year ended October 31, 1994, the Fund
incurred fees totalling approximately $4,333,000 for these services provided
by related parties. At October 31, 1994, these investment management and
service fees payable were $1,985,000.
<TABLE>
Financial Highlights#
T. Rowe Price New Asia Fund
<CAPTION>
For a share outstanding throughout each period
_____________________________________________________________________
Ten Months Year Ended From September 28, 1990
Year Ended Ended December 31, (Commencement of
October 31, October 31, _________________ Operations) to
1994 1993## 1992 1991 December 31, 1990
_____________________________________________________________________
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD . . . . . . . .$ 9.88 $6.34 $5.91 $5.04 $5.00
Investment Activities
Net investment income . . . . . . . 0.06 0.03 0.10 0.10* 0.04*
Net realized and unrealized
gain . . . . . . . . . . . . . . 0.36 3.51 0.56 0.87 0.04
______ _____ _____ _____ _____
Total from Investment
Activities. . . . . . . . . . . . . 0.42 3.54 0.66 0.97 0.08
Distributions
Net investment income . . . . . . . (0.04) - (0.10) (0.10) (0.04)
Net realized gain . . . . . . . . . (0.19) - (0.13) - -
______ _____ _____ _____ _____
Total Distributions. . . . . . . . . . (0.23) - (0.23) (0.10) (0.04)
NET ASSET VALUE, END OF PERIOD . . . . $10.07 $9.88 $6.34 $5.91 $5.04
______ _____ _____ _____ _____
______ _____ _____ _____ _____
RATIOS/SUPPLEMENTAL DATA
Total Return . . . . . . . . . . . . . 4.11% 55.8% 11.2% 19.3% 1.6%
Ratio of Expenses to
Average Net Assets. . . . . . . . . 1.22% 1.29%! 1.51% 1.75%* 1.75%!*
Ratio of Net Investment Income to
Average Net Assets. . . . . . . . . 0.85% 1.02%! 1.64% 1.75% 2.10%!
Portfolio Turnover Rate. . . . . . . . 63.2% 40.4%! 36.3% 49.0% 3.2%!
Net Assets, End of Period
(in thousands). . . . . . . . . . .$2,302,841$1,650,450 $314,504 $102,922 $10,986
<FN>
# All per share figures reflect the 2-for-1 split effective May 27, 1994.
## The Fund's fiscal year-end was changed to October 31.
* Excludes expenses in excess of a 1.75% voluntary expense limitation in effect through December 31,
1992.
! Annualized.
</FN>
</TABLE>
Report of Independent Accountants
To the Board of Directors of T. Rowe Price International Funds, Inc. and
Shareholders of T. Rowe Price New Asia Fund
We have audited the accompanying statement of assets and liabilities,
including the portfolio of investments of T. Rowe Price New Asia Fund (one of
the portfolios comprising T. Rowe Price International Funds, Inc.), as of
October 31, 1994, and the related statement of operations for the year then
ended, the statement of changes in net assets for the year ended October 31,
1994, the ten month period ended October 31, 1993 and the year ended December
31, 1992, and the financial highlights for the year ended October 31, 1994,
the ten month period ended October 31, 1993 and each of the two years in the
period ended December 31, 1992 and for the period September 28, 1990
(commencement of operations) to December 31, 1990. These financial statements
and financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation of investments
owned as of October 31, 1994 by correspondence with the custodian and brokers.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of T. Rowe Price New Asia Fund, as of October 31, 1994, the results
of its operations, the changes in its net assets and financial highlights for
each of the respective periods stated in the first paragraph in conformity
with generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
Baltimore, Maryland
November 17, 1994
Chart 1 - Geographic Diversification
Pie chart for New Asia report (Oct. 31, 1994) entitled "Geographic
Diversification": Hong Kong 22%, Singapore 14%, Australia 10%, Thailand 9%,
New Zealand 7%, Malaysia 22%, Other 16%.
Chart 2 - Performance Comparison
Line graph for New Asia Fund annual report (Oct. 31, 1994) entitled
"Performance Comparison": shows $10,000 invested in New Asia Fund on 9/28/90
growing to $21,878 on 10/31/94, and $10,000 invested in MSCI Pacific ex-Japan
Index on 9/28/90 growing to $24,524 on 10/31/94.
