<PAGE>
- --------------------------------------------------------------------------------
Fellow Shareholders
- --------------------------------------------------------------------------------
Pacific stock markets were as volatile as ever in the early months of 1995.
Markets weakened in January as worries spread about the health of all
developing economies in the wake of Mexico's problems. This reversed in
February when investors realized that most Asian economies were much stronger
than their Latin American counterparts. Hong Kong, Malaysia, and New Zealand
were the best markets during the quarter, while Thailand, the Philippines,
and Indonesia were among the weakest.
Last year, we shifted your portfolio away from Hong Kong, Malaysia, and
Thailand in view of their lofty valuations, toward Australia and New Zealand,
which seemed to offer better value at a time of general market weakness. Over
the first quarter, we began to reverse this process since stock valuations
had become more reasonable in the fast growing economies of Asia.
Your fund provided a solid return for the quarter, although relative
performance was hurt by our underweighting in Australia versus the unmanaged
benchmark and by the continued underperformance of smaller-cap stocks
relative to large-cap. Small companies compose about 25% of the portfolio.
- --------------------------------------------------------------------------------
Performance Comparison
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Periods Ended 4/30/95
3 Months 6 Months
---------------------
<S> <C> <C>
New Asia Fund 7.8% -13.8%
MSCI Pacific ex-Japan 12.0 -7.4
- --------------------------------------------------------------------------------
</TABLE>
MARKET REVIEW
Investor sentiment toward CHINA is now very poor, in contrast to 1993's
euphoria. Problems of inflation, economic overheating and then slowdown,
social unrest, political succession, unpaid debts, and broken contracts are
combining to turn foreign investors bearish on the mainland's prospects.
While we acknowledge the near-term problems, we remain confident of the
country's long-term potential. Periods of pessimism are the times to buy the
best-managed companies, when the stock market accords their prices a single-
digit multiple of earnings. YIZHENG CHEMICAL FIBRE and SHANGHAI PETROCHEMICAL,
for instance, are plays on higher chemical prices and overall economic
growth, with a short-term benefit from higher cotton and polyester prices. We
also added to our position in HUANENG POWER INTERNATIONAL, a multi-province
independent power producer listed on the New York Stock Exchange, and CHINA
NORTH INDUSTRIES, a manufacturing holding company. Over the quarter, your
portfolio's exposure to China rose slightly to just over 3% of assets.
HONG KONG led the Asian markets with a 15% gain over the quarter. We
think Hong Kong is a good value at these levels -- 11 times this year's
earnings versus a long-term average of 12 times -- but earnings growth is
decelerating rapidly, led by the real estate sector. In light of this, your
weighting was held at 19%. It has been difficult for Hong Kong stocks to rise
much in past slowdowns, so we will stick to China and infrastructure plays
and avoid real estate.
The MALAYSIAN stock market rose strongly during the quarter. The economy is
entering its eighth year of 8% or better real GNP growth, and inflation and the
trade position remain only potential problems. Earnings growth is decelerating,
however. Malaysian investment this year and next will be directed more to
infrastructure than export capacity, the former being crucial to long-term
growth. With valuations looking more reasonable and a number of well-managed
companies available for investment, we raised your weighting from 19% to 21%.
<PAGE>
- --------------------------------------------------------------------------------
Market Performance
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Periods Ended 4/30/95
In U.S. Dollar Terms
--------------------------
3 Months 6 Months
--------------------------
<S> <C> <C>
Australia 9.3% 1.2%
Hong Kong 14.9 -13.6
Indonesia -2.1 -23.8
Korea 6.2 -13.6
Malaysia 12.6 -0.3
New Zealand 17.7 12.3
Philippines -1.9 -20.2
Singapore 7.8 -5.5
Thailand 1.6 -20.1
- --------------------------------------------------------------------------------
</TABLE>
Source: Morgan Stanley Capital International
THAILAND was one of the weakest of the major markets. An investment-led
boom boosted by foreign direct investment soaked up liquidity, and short-term
interest rates rose sharply. With foreigners remaining in the wings, the
market eked out a gain on lackluster volume over the quarter. Nevertheless,
corporate earnings growth should be strong this year, and we retained our
overweighted position in the relatively cheap banking sector. Overall
exposure remained at 10%.
INDONESIA and the PHILIPPINES were both affected by fallout from the
Mexican economic crisis as investors scoured the world looking for the next
currency collapse. There was a brief flurry of speculative activity against
both currencies, and the Philippine peso ended the quarter down 5% against
the U.S. dollar while the Indonesian rupiah fell 1.6%. Speculators were
focusing on both countries' emerging market status and their relatively high
current account deficits associated with significant levels of external debt
(held by foreigners). Nevertheless, their debt ratios are satisfactory; the
external debt service ratios in the Philippines and Indonesia are 27.7% and
32.1%, respectively, compared with 44.4% in Mexico. Now that the speculators
have moved on, the bout of currency weakness appears to be over. We took
advantage of market conditions to add to PHILIPPINE LONG DISTANCE TELEPHONE,
taking your weighting in this market to 2%.
The Australasian economies are now past their cyclical peaks. In AUSTRALIA,
the specter of twin current account and budget deficits looms large, and we are
afraid this will turn out to be another typical boom and bust affair. We added
to stocks we believe will be relatively unaffected by a slowdown, such as BURNS
PHILP (global yeast), and cut cyclical stocks such as PUBLISHING AND
BROADCASTING LIMITED, taking your weighting down to 4% from 10%.
Despite a slight deterioration in NEW ZEALAND'S current account and
signs of economic slowdown, the overall outlook remains attractive. As an
example, substantial government surpluses over the next few years will be
used first to cut external debt and thereafter to cut taxes. As always in New
Zealand, it is difficult to access the domestic economy through the
stock market as most larger companies are either commodity-related or are in
relatively unattractive industries. In our view, TELECOM CORPORATION OF NEW
ZEALAND is the best way to gain exposure to economic growth and remains a
large part of our 3% position.
- --------------------------------------------------------------------------------
Geographical Diversification
- --------------------------------------------------------------------------------
[PIE CHART APPEARS HERE]
Entitled "Geographical Diversification": Shows Malaysia 21%; Hong Kong 19%;
Singapore 16%; Thailand 10%; Indonesia 5%; Australia 4%; and Other and Reserves
25%. Based on net assets as of April 30, 1995.
- --------------------------------------------------------------------------------
2
<PAGE>
The SINGAPORE economy remains in superb shape. Economic growth exceeded
10% in 1994, the current account is in substantial surplus, and inflation has
been kept to a modest 2.5%. The problem is that many companies in the more
attractive parts of the economy, principally the electronics sector, remain
privately held. However, quarterly earnings results were generally favorable,
notably from the banks and property stocks. We trimmed your exposure to the
hotel sector through OVERSEAS UNION ENTERPRISES; with hotel capacity slated
to rise over the next few years, earnings growth is likely to be lower than
forecast. Additions elsewhere brought the position from 14% to 16%.
The KOREAN market maintained the rally sparked by the further opening of
the stock market to foreigners in December 1994. We continue to look for
opportunities to add to your 3% exposure in what remains a cheap, if largely
closed, market. Nevertheless, over the quarter we reduced positions in
construction stocks where heavy government regulation continues to stifle
growth.
INVESTMENT OUTLOOK
We are shifting out of the safe havens of Australia and New Zealand and into
the now-unloved China market. We still believe in this monolith's long-term
potential, and share prices there are compellingly cheap. We are more
cautious on most Hong Kong stocks, however, as nearly every large company
there has exposure to its softening property market.
Asian stocks have been in a bear market since their peaks of early 1994,
when rising U.S. rates stopped the rally in its tracks. Rising rates had a
twofold effect on stock prices worldwide: price/earnings ratios fell as the
value of future earnings growth was reduced, and prospects for earnings
increases dimmed as higher rates were expected to slow economic growth. In
addition, higher rates competed for the marginal investment dollar. Safe
money market yields over 5% and bond yields of 8% were appealing alternatives
to volatile stock investments, especially those in emerging markets.
Now that U.S. rates have retreated as its economy slows and inflation fears
wane, shouldn't we be off to the races again? Is the continued sluggishness of
Asian markets -- a sharp contrast to the Dow's climb -- a buying opportunity? We
think it is, but not an enormous one like early 1993. The U.S. slowdown could
just be a pause before renewed strength and higher interest rates again in 1996.
More important, after several years of torrid growth, most Asian economies are
slowing. This is good for inflation, pollution, and the horrendous traffic in
most Asian cities. But from the stock market's perspective, most investors buy
earnings growth, and our research shows that Asian markets stall when it slows.
Looking out a number of months, therefore, we see higher stock markets in Asia
and perhaps higher returns than in the U.S., but we do not expect the powerful
returns of 1993.
Respectfully submitted,
/s/ Martin G. Wade
Martin G. Wade
President
May 19, 1995
3
<PAGE>
- --------------------------------------------------------------------------------
Twenty-Five Largest Holdings
- --------------------------------------------------------------------------------
April 30, 1995
<TABLE>
<CAPTION>
Percent of
Net Assets
----------
<S> <C>
United Overseas Bank, Singapore 3.4%
- --------------------------------------------------------------------------------
United Engineers, Malaysia 2.9
- --------------------------------------------------------------------------------
Hutchison Whampoa, Hong Kong 2.9
- --------------------------------------------------------------------------------
Renong, Malaysia 2.8
- --------------------------------------------------------------------------------
Swire Pacific 'A', Hong Kong 2.3
- --------------------------------------------------------------------------------
Singapore Land, Singapore 1.9
- --------------------------------------------------------------------------------
Bangkok Bank Public, Thailand 1.9
- --------------------------------------------------------------------------------
Technology Resources Industries, Malaysia 1.9
- --------------------------------------------------------------------------------
Thai Farmers Bank, Thailand 1.8
- --------------------------------------------------------------------------------
Malaysian Airline System, Malaysia 1.8
- --------------------------------------------------------------------------------
Huaneng Power International
'N' ADR (USD), China 1.7
- --------------------------------------------------------------------------------
Guoco Group, Hong Kong 1.7
- --------------------------------------------------------------------------------
Fletcher Challenge, New Zealand 1.7
- --------------------------------------------------------------------------------
Aokam Perdana, Malaysia 1.6
- --------------------------------------------------------------------------------
Wharf Holdings, Hong Kong 1.4
- --------------------------------------------------------------------------------
Singapore Airlines, Singapore 1.4
- --------------------------------------------------------------------------------
Sembawang, Singapore 1.4
- --------------------------------------------------------------------------------
Dao Heng Bank Group, Hong Kong 1.4
- --------------------------------------------------------------------------------
Siam Commercial Bank, Thailand 1.3
- --------------------------------------------------------------------------------
Westmont, Malaysia 1.3
- --------------------------------------------------------------------------------
Land & General, Malaysia 1.3
- --------------------------------------------------------------------------------
Jurong Shipyard, Singapore 1.2
- --------------------------------------------------------------------------------
Hysan Development, Hong Kong 1.2
- --------------------------------------------------------------------------------
Siam Cement, Thailand 1.1
- --------------------------------------------------------------------------------
Great Eagle Holdings, Hong Kong 1.1
- --------------------------------------------------------------------------------
Total 44.4%
- --------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
Industry Diversification
- --------------------------------------------------------------------------------
April 30, 1995
<TABLE>
<CAPTION>
Percent of
Net Assets
----------
<S> <C>
Financial/Insurance 41.1%
- --------------------------------------------------------------------------------
Basic Industry 14.1
- --------------------------------------------------------------------------------
Capital Goods 13.1
- --------------------------------------------------------------------------------
Consumer Goods 10.1
- --------------------------------------------------------------------------------
Transport/Storage 6.7
- --------------------------------------------------------------------------------
Energy 2.3
- --------------------------------------------------------------------------------
Utilities 1.7
- --------------------------------------------------------------------------------
Short-Term Investments 6.2
- --------------------------------------------------------------------------------
Other Assets Less Liabilities 4.7
- --------------------------------------------------------------------------------
Total Net Assets 100.0%
- --------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
Security Classification
- --------------------------------------------------------------------------------
April 30, 1995
<TABLE>
<CAPTION>
Percent Market
of Net Cost Value
Assets (000) (000)
------- ---------- ----------
<S> <C> <C> <C>
Common Stocks,
Rights & Warrants 88.2% $1,764,755 $1,683,449
Preferred Stocks 0.4 7,753 7,254
Bonds 0.5 10,420 9,963
Short-Term
Investments 6.2 118,195 118,195
------- ---------- ----------
Total Investments 95.3 1,901,123 1,818,861
Other Assets Less
Liabilities 4.7 88,800 88,802
- --------------------------------------------------------------------------------
Total Net Assets 100.0% $1,989,923 $1,907,663
- --------------------------------------------------------------------------------
</TABLE>
4
<PAGE>
- --------------------------------------------------------------------------------
Portfolio of Investments
T. Rowe Price New Asia Fund / April 30, 1995 (Unaudited)
- --------------------------------------------------------------------------------
(values in thousands)
<TABLE>
- --------------------------------------------------------------------------------
AUSTRALIA -- 4.3%
- --------------------------------------------------------------------------------
Value
----------
<S> <C> <C> <C>
COMMON STOCKS
89,276 shs. Australia Gas & Light.................... $ 292
9,639,367 Australian National
Industries............................. 9,956
1,445,878 Broken Hill Proprietary.................. 21,075
1,390,218 Burns Philp & Company.................... 3,519
542,510 Email ................................... 1,416
1,682,954 Mayne Nickless .......................... 7,932
4,795,390 MIM...................................... 7,010
759,642 News Corporation ........................ 3,691
7,413,400 TNT...................................... 10,622
1,597,540 Western Mining .......................... 9,040
2,939,314 Woolworths .............................. 6,392
80,945
PREFERRED STOCK
413,321 News Corporation ........................ 1,825
TOTAL AUSTRALIA 82,770
- --------------------------------------------------------------------------------
CHINA -- 3.2%
- --------------------------------------------------------------------------------
COMMON STOCKS
4,998,000 *China North Industries
'A' (USD).............................. 4,998
2,296,900 +*Huaneng Power International
'N' ADR (USD).......................... 33,305
27,917,000 *Shanghai Haixing Shipping
'H' (HKD).............................. 5,193
19,638,000 Shanghai Petrochemical
'H' (HKD).............................. 5,645
1,918,000 Shanghai Shangling Electric
Appliance 'B' (USD).................... 1,419
32,418,000 Yizheng Chemical Fibre 'H'
(HKD).................................. 10,784
TOTAL CHINA 61,344
- --------------------------------------------------------------------------------
HONG KONG -- 19.4%
- --------------------------------------------------------------------------------
COMMON STOCKS & WARRANTS
1,683,200 Amoy Properties ......................... 1,402
7,850,000 China Strategic
Investment............................. 3,346
1,350,000 wts. *China Strategic Investment,
8/30/97................................ 78
10,138,260 shs. Dao Heng Bank Group...................... 25,932
19,344,000 +Fairyoung Holdings....................... 6,810
3,334,400 wts. +*Fairyoung Holdings,
6/30/96................................ 87
11,220,000 Giordano Holdings........................ 7,392
11,942,200 shs. Great Eagle Holdings..................... $ 21,444
25,670,000 Guangdong Investment..................... 11,855
8,402,000 Guoco Group ............................. 31,910
6,155,600 HKR International ....................... 4,811
17,142,900 Hon Kwok Land
Investment............................. 3,986
2,107,000 Hong Kong China ......................... 898
1,426,000 Hong Kong Ferry ......................... 1,492
10,332,290 Hong Kong Land Holdings
(USD).................................. 19,425
20,177,462 Hopewell Holdings........................ 14,336
12,731,000 Hutchison Whampoa........................ 55,259
10,957,000 Hysan Development........................ 23,355
6,618,000 JCG Holdings ............................ 3,719
20,693,881 Luks Industrial.......................... 2,593
3,036,776 wts. *Luks Industrial, 6/30/96................. 26
35,772,000 shs. Manhattan Card .......................... 14,788
9,946,000 Ming Pao Enterprise ..................... 5,653
10,146,000 National Mutual Asia..................... 5,931
14,462,067 Paliburg International................... 8,220
14,520,000 S. Megga International................... 807
7,307,000 Shangri-La Asia Capital.................. 7,882
2,430,780 Sing Tao Holdings ....................... 1,586
17,247,090 South Sea Development.................... 824
10,868,000 Swank International
Manufacturers.......................... 1,235
2,518,000 wts. *Swank International
Manufacturers, 6/30/95................. 7
6,683,000 shs. Swire Pacific 'A'........................ 44,677
1,332,103 Tai Cheung Holdings ..................... 1,136
15,590,000 Techtronic Industries.................... 1,108
1,579,000 Tian An China
Investments............................ 251
246,000 Ultronics International.................. 12
9,106,000 Wharf Holdings .......................... 27,291
2,431,000 Wing Hang Bank .......................... 5,307
9,694,000 Yue Yuen Industrial ..................... 2,242
TOTAL HONG KONG 369,113
- --------------------------------------------------------------------------------
INDIA -- 1.6%
- --------------------------------------------------------------------------------
COMMON STOCKS
431,000 Grasim Industries GDS
(USD).................................. 8,728
181,000 *Hindalco GDR (USD)....................... 4,797
232,000 *Hindalco GDR, new
(USD).................................. 6,148
70,000 Indian Rayon & Industries
GDR (USD).............................. 1,085
610,000 Reliance Industries
GDS (USD).............................. 9,912
TOTAL INDIA 30,670
</TABLE>
5
<PAGE>
- --------------------------------------------------------------------------------
T. Rowe Price New Asia Fund / Portfolio of Investments (Unaudited)
- --------------------------------------------------------------------------------
(values in thousands)
<TABLE>
- --------------------------------------------------------------------------------
INDONESIA -- 4.7%
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCKS
1,900,000 shs. Astra International...................... $ 2,425
3,911,000 Bank Dagang Nasional .................... 4,860
2,200,000 +*Citra Marga Nusaphala
Persada................................ 2,044
3,824,000 Dharmala Intiland ....................... 2,226
1,364,166 Duta Anggada Realty ..................... 809
149,600 Gadjah Tunggal .......................... 131
2,169,500 Hanjaya Mandala
Sampoerna.............................. 12,728
809,500 Indocement Tunggal
Prakarsa............................... 2,683
4,400,300 *Indofoods Sukses
Makmur................................. 15,568
2,247,000 Indorama Synthetic ...................... 6,893
1,900,000 *Indosat ................................. 6,850
191,510 *Indosat 'B' ADR (USD).................... 6,918
1,362,000 *Inti Indorayon Utama..................... 2,745
512,000 Modernland Realty ....................... 825
3,834,000 Mulia Industrindo ....................... 6,610
3,622,000 Panin Bank .............................. 3,528
1,438,400 Semen Cibinong .......................... 3,865
1,418,000 Semen Gresik ............................ 6,477
874,000 United Tractors ......................... 1,527
89,712
CORPORATE BOND
1,228,800,000 IDR Modernland Realty, Cv.,
6.00%, 10/20/03........................ 543
TOTAL INDONESIA 90,255
- --------------------------------------------------------------------------------
MALAYSIA -- 20.6%
- --------------------------------------------------------------------------------
COMMON STOCKS & WARRANTS
12,461,000 shs. Affin Holdings .......................... 17,441
2,309,400 wts. *Affin Holdings, 8/22/99.................. 1,161
6,447,000 shs. Aokam Perdana ........................... 28,949
597,800 wts. *Aokam Perdana, 4/16/97................... 2,418
5,252,333 shs. Arab Malaysian Finance................... 13,280
1,938,000 Bandar Raya
Developments........................... 3,261
11,892,000 Berjaya Leisure.......................... 9,573
8,124,666 Berjaya Sports Toto ..................... 10,978
1,939,000 Chemical Company
of Malaysia............................ 7,138
2,180,000 +CHG Industries .......................... 5,732
1,333,333 wts. *Commerce Asset Holdings,
6/27/98................................ 2,481
1,502,000 shs. Ioi Properties .......................... 5,438
5,549,000 Land & General .......................... 16,050
2,778,500 *Land & General 'A', new.................. 8,037
11,042,000 Malaysian Airline
System................................. 34,171
3,010,000 shs. Malaysian Assurance
Alliance............................... $ 9,802
2,568,000 Public Finance .......................... 4,737
34,955,000 Renong................................... 53,451
2,320,000 Resorts World ........................... 12,201
3,467,000 Sungei Way Holdings ..................... 13,745
916,000 wts. *Sungei Way Holdings,
8/20/97................................ 2,909
98,000 *Sungei Way Holdings,
6/29/99................................ 131
2,140,000 shs. *Sunway Building
Technology............................. 7,791
14,180,000 Technology Resources
Industries............................. 36,138
9,773,000 United Engineers ........................ 56,139
5,627,000 +Westmont ................................ 24,356
387,508
PREFERRED STOCKS
7,104,333 Arab Malaysian Finance,
7.50% Cv. Loan
Stock, 11/20/99........................ 3,018
2,347,000 Berjaya Sports Toto,
9.00% Cv. Loan
Stock, 10/30/97........................ 2,411
5,429
TOTAL MALAYSIA 392,937
- --------------------------------------------------------------------------------
NEW ZEALAND -- 3.1%
- --------------------------------------------------------------------------------
COMMON STOCKS
3,747,184 Air New Zealand 'B' ..................... 12,588
1,604,120 Fernz ................................... 5,928
10,368,300 Fletcher Challenge....................... 27,864
2,847,075 Fletcher Challenge, Forests
Division............................... 3,979
1,158,050 Independent
Newspapers............................. 4,201
1,062,000 Telecom Corporation of
New Zealand............................ 4,459
TOTAL NEW ZEALAND 59,019
- --------------------------------------------------------------------------------
PHILIPPINES -- 2.0%
- --------------------------------------------------------------------------------
COMMON STOCKS
4,405,000 Ayala Land 'B' .......................... 5,496
469,100 Enron Global Power &
Pipeline (USD)......................... 11,317
17,113,500 JG Summit Holdings 'B'................... 5,387
50,000 JG Summit Holdings
'B' GDS (USD).......................... 1,525
69,220 Philippine Long Distance
Telephone.............................. 4,331
</TABLE>
6
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
77,500 shs. Philippine Long Distance
Telephone ADR (USD).................... $ 4,950
19,776,500 *SM Prime................................. 5,998
TOTAL PHILIPPINES 39,004
- --------------------------------------------------------------------------------
SINGAPORE -- 15.9%
- --------------------------------------------------------------------------------
COMMON STOCKS & WARRANTS
7,779,000 DBS Land ................................ 21,436
2,727,000 Far East Levingston
Shipbuilding........................... 11,937
3,081,000 Jurong Shipyard ......................... 23,658
2,278,000 Keppel .................................. 18,472
7,788,000 Neptune Orient Lines .................... 8,942
2,026,000 Overseas Union Bank ..................... 11,704
3,395,000 Overseas Union
Enterprises............................ 19,734
3,884,000 Sembawang ............................... 26,618
2,835,000 Singapore Airlines ...................... 27,262
5,752,000 Singapore Land .......................... 37,150
905,300 Singapore Press ......................... 15,592
142,000 Tiger Medicals .......................... 183
17,623,000 United Industrial........................ 16,441
5,733,750 United Overseas Bank .................... 59,662
818,507 wts. *United Overseas Bank,
6/17/97................................ 4,288
TOTAL SINGAPORE 303,079
- --------------------------------------------------------------------------------
SOUTH KOREA -- 2.9%
- --------------------------------------------------------------------------------
COMMON STOCKS
445,128 shs. Daewoo .................................. 5,576
69,305 Daewoo Securities ....................... 2,009
456,320 Hanil Bank .............................. 5,237
319,300 Hanil Securities ........................ 3,937
7,700 HS Chemical ............................. 315
470,000 Korea Electric Power .................... 17,717
433,540 Korea First Bank ........................ 4,072
80 Korea Growth Trust IDR
(USD).................................. 2,680
147,971 Kun Young Construction................... 2,155
79,890 Pohang Iron & Steel ..................... 8,249
134,924 Samsung Construction .................... 3,575
TOTAL SOUTH KOREA 55,522
- --------------------------------------------------------------------------------
TAIWAN -- 1.8%
- --------------------------------------------------------------------------------
COMMON STOCKS
466,000 China Steel GDS (USD).................... 9,087
383,000 *GVC Corporation GDR
(USD).................................. 6,080
301,000 *Tung Ho Steel Enterprise
GDS (USD).............................. 6,246
115,000 shs. Yageo GDR (USD) ......................... $ 2,300
14,900 Yageo GDR, new (USD) .................... 298
24,011
CORPORATE BONDS
660,000 USD Acer, Cv., 4.00%, 6/10/01................ 1,799
7,939,000 Formosa Chemical & Fibre,
Cv., 1.75%, 7/19/01.................... 7,621
9,420
TOTAL TAIWAN 33,431
- --------------------------------------------------------------------------------
THAILAND -- 9.5%
- --------------------------------------------------------------------------------
COMMON STOCKS & RIGHTS
786,000 shs. Advanced Information
Service Public......................... 11,569
3,751,900 Bangkok Bank Public ..................... 36,306
3,173,800 Bank of Ayudhya ......................... 14,195
983,000 Krung Thai Bank Public................... 2,978
326,000 Land & House ............................ 5,752
3,432,000 Sahavirya Steel, local
registered............................. 8,861
525,000 Shinawatra Computer
& Communication........................ 11,740
381,400 Siam Cement ............................. 21,927
2,974,800 Siam Commercial Bank .................... 25,158
3,894,820 Thai Farmers Bank ....................... 34,205
2,590,500 Thai Military Bank ...................... 8,321
518,100 rts. *Thai Military Bank....................... 1,032
TOTAL THAILAND 182,044
- --------------------------------------------------------------------------------
VIETNAM -- 0.1%
- --------------------------------------------------------------------------------
COMMON STOCK
140,800 shs. *Lazard Frier & Co.
Vietnam Fund (USD)..................... 1,478
- --------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS -- 6.2%
- --------------------------------------------------------------------------------
COMMERCIAL PAPER
$ 8,000,000 Asset Securitization
Cooperative, 6.02%,
6/19/95................................ 7,916
10,000,000 B.B.V. Finance Delaware,
6.05%, 5/9/95.......................... 9,896
10,000,000 BHF Finance (Delaware),
6.00%, 5/31/95......................... 9,920
7,000,000 Caisse Nationale Des
Telecommunications,
6.05%, 5/5/95.......................... 6,929
11,477,000 Ciba-Geigy, 6.05%,
5/15 - 6/12/95......................... 11,312
10,000,000 Hanson Finance (U.K.),
6.125%, 5/15/95........................ 9,845
</TABLE>
7
<PAGE>
- --------------------------------------------------------------------------------
T. Rowe Price New Asia Fund / Portfolio of Investments (Unaudited)
- --------------------------------------------------------------------------------
(values in thousands)
<TABLE>
- --------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS (Cont'd)
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
$ 8,036,000 Hewlett Packard, 6.00%,
8/1/95................................. $7,905
10,000,000 Ontario Hydro, 6.05%,
6/1/95................................. 9,871
11,875,000 Preferred Receivables Funding,
6.00%, 7/25/95......................... 11,695
35,000 President & Fellows Harvard
College, 5.93%, 5/1/95................. 35
5,000,000 Safeco Credit, 6.10%,
5/16/95................................ 4,919
10,000,000 Southwestern Bell Capital
Corporation, 6.08%,
5/4/95................................. 9,856
8,100,000 UBS Finance (Delaware),
5.93%, 5/1/95.......................... 8,096
108,195
OTHER
$ 10,000,000 Avco Financial Services,
Floating Rate Medium-Term
Note, 6.16464%, 12/21/95............... $ 10,000
TOTAL SHORT-TERM INVESTMENTS 118,195
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES -- 95.3% OF
NET ASSETS (COST $1,901,123) $1,818,861
- --------------------------------------------------------------------------------
OTHER ASSETS LESS LIABILITIES....................................... 88,802
NET ASSETS.......................................................... $1,907,663
- --------------------------------------------------------------------------------
</TABLE>
* Non-income producing
+ Affiliated company
(HKD) Hong Kong dollar
(IDR) Indonesian rupia
(USD) U.S. dollar
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities
- --------------------------------------------------------------------------------
T. Rowe Price New Asia Fund / April 30, 1995 (Unaudited)
(in thousands, except capital stock information)
<TABLE>
<S> <C>
ASSETS
Investments in securities, at value (cost $1,901,123)............. $1,818,861
Cash in interest bearing accounts................................. 87,205
Other assets...................................................... 37,294
----------
Total assets...................................................... 1,943,360
----------
LIABILITIES....................................................... 35,697
----------
NET ASSETS........................................................ $1,907,663
==========
NET ASSETS CONSIST OF:
Accumulated net investment income - net of distributions.......... $ 9,072
Accumulated net realized gain/loss - net of distributions......... (42,883)
Net unrealized gain (loss)........................................ (82,260)
Paid-in-capital applicable to 246,064,541 shares of $0.01 par
value capital stock outstanding; 2,000,000,000 shares
of the Corporation authorized................................... 2,023,734
----------
NET ASSETS........................................................ $1,907,663
==========
NET ASSET VALUE PER SHARE......................................... $7.75
=====
</TABLE>
The accompanying notes are an integral part of these financial statements.
8
<PAGE>
- --------------------------------------------------------------------------------
Statement of Operations
- --------------------------------------------------------------------------------
T. Rowe Price New Asia Fund / Six Months Ended April 30, 1995 (Unaudited)
(in thousands)
<TABLE>
<S> <C>
INVESTMENT INCOME
Income
Dividend (net of foreign taxes of $1,959)......................... $ 16,197
Interest.......................................................... 4,178
---------
Total income...................................................... 20,375
---------
Expenses
Investment management........................................... 8,154
Shareholder servicing........................................... 2,222
Custody and accounting.......................................... 478
Prospectus and shareholder reports.............................. 189
Registration.................................................... 182
Proxy and annual meeting........................................ 94
Directors....................................................... 21
Legal and audit................................................. 7
Miscellaneous................................................... 26
---------
Total expenses.................................................. 11,373
---------
Net investment income............................................... 9,002
---------
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Securities........................................................ (40,827)
Foreign currency transactions..................................... (1,016)
---------
Net realized gain (loss).......................................... (41,843)
---------
Change in net unrealized gain or loss on:
Securities........................................................ (280,152)
Other assets and liabilities denominated in foreign currencies.... 64
---------
Change in net unrealized gain or loss............................. (280,088)
---------
Net realized and unrealized gain (loss)............................. (321,931)
---------
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS................... $(312,929)
=========
</TABLE>
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
9
<PAGE>
- --------------------------------------------------------------------------------
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------
T. Rowe Price New Asia Fund (Unaudited)
(in thousands)
<TABLE>
<CAPTION>
Six Months Ended Year Ended
April 30, 1995 October 31, 1994
---------------- ----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM
Operations
Net investment income.......................................................... $ 9,002 $ 17,373
Net realized gain (loss)....................................................... (41,843) 202,920
Change in net unrealized gain or loss.......................................... (280,088) (176,293)
---------- -----------
Increase (decrease) in net assets from operations.............................. (312,929) 44,000
---------- -----------
Distributions to shareholders
Net investment income.......................................................... (15,631) (6,625)
Net realized gain.............................................................. (199,093) (35,973)
---------- -----------
Decrease in net assets from distributions...................................... (214,724) (42,598)
---------- -----------
Capital share transactions*
Shares sold.................................................................... 403,309 1,784,458
Distributions reinvested....................................................... 204,999 40,413
Shares redeemed................................................................ (475,833) (1,173,882)
---------- -----------
Increase (decrease) in net assets from capital share transactions.............. 132,475 650,989
---------- -----------
Increase (decrease) in net assets................................................ (395,178) 652,391
NET ASSETS
Beginning of period.............................................................. 2,302,841 1,650,450
---------- -----------
End of period.................................................................... $1,907,663 $ 2,302,841
========== ===========
- -----------------------------------------------------------------------------------------------------------------------
*Share information
Shares sold.................................................................... 50,169 177,655+
Distributions reinvested....................................................... 25,593 3,858+
Shares redeemed................................................................ (58,449) (119,834)+
---------- -----------
Increase (decrease) in shares outstanding...................................... 17,313 61,679
========== ===========
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
+ Share figures reflect the 2-for-1 stock split effective May 27, 1994.
The accompanying notes are an integral part of these financial statements.
10
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements
- --------------------------------------------------------------------------------
T. Rowe Price New Asia Fund / April 30, 1995 (Unaudited)
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 - Assets and liabilities are translated into U.S.
dollars at the prevailing exchange rate at the end of the reporting period.
Purchases and sales of securities and income and expenses are translated into
U.S. dollars at the prevailing exchange rate on the dates of such
transactions. The effect of changes in foreign exchange rates on realized and
unrealized security gains and losses is reflected as a component of such
gains and 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 and may differ from those determined in accordance with
generally accepted accounting principles.
NOTE 2-INVESTMENT TRANSACTIONS
Consistent with its investment objective, the fund engages in the following
practices to manage exposure to certain risks and enhance performance. The
investment objective, policies, program, risk factors, and following
practices of the fund are described more fully in the fund's Prospectus and
Statement of Additional Information.
A) Emerging Markets - At April 30, 1995, the fund held 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.
11
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (cont'd)
- --------------------------------------------------------------------------------
B) Other - Purchases and sales of portfolio securities, other than short-term
and U.S. government securities, aggregated $442,966,000 and $619,910,000,
respectively, for the six months ended April 30, 1995.
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.
At April 30, 1995, the aggregate cost of investments for federal income
tax and financial reporting purposes was $1,901,123,000 and net unrealized
loss aggregated $82,262,000, of which $129,688,000 related to appreciated
investments and $211,950,000 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, of which
$1,323,000 was payable at April 30, 1995. The fee is computed daily and paid
monthly, and consists 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. At April 30, 1995, and
for the six months then ended, the effective annual Group Fee rate was 0.34%.
The fund pays a pro rata share of the Group Fee based on the ratio of its net
assets to those of the Group.
In addition, the fund has entered into agreements with Price Associates
and two wholly owned subsidiaries of Price Associates, pursuant to which the
fund receives certain other services. Price Associates computes the daily
share price and maintains the financial records of the fund. T. Rowe Price
Services, Inc. (TRPS) is the fund's transfer and dividend disbursing agent
and provides shareholder and administrative services to the fund. T. Rowe
Price Retirement Plan Services, Inc. provides subaccounting and recordkeeping
services for certain retirement accounts invested in the fund. The fund
incurred expenses pursuant to these related party agreements totaling
approximately $1,803,000 for the six months ended April 30, 1995, of which
$472,000 was payable at period-end.
During the six months ended April 30, 1995, the fund, in the ordinary
course of business, paid commissions of $884,000 to, and placed security
purchase and sale orders aggregating $173,796,000 with, certain affiliates of
the Manager in connection with the execution of various portfolio
transactions.
12
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights ++++
- --------------------------------------------------------------------------------
T. Rowe Price New Asia Fund (Unaudited)
<TABLE>
<CAPTION>
For a share outstanding throughout each period
----------------------------------------------------------------------------------
From
September 28, 1990
Six Months Year Ten Months Year Ended (Commencement
Ended Ended Ended December 31, of Operations) to
April 30, October 31, October 31, ----------------- December 31,
1995 1994 1993++ 1992 1991 1990
----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD.............. $10.07 $ 9.88 $6.34 $ 5.91 $ 5.04 $ 5.00
------ ------ ----- ------ ------ ------
Investment Activities
Net investment income............ 0.04 0.06 0.03 0.10 0.10* 0.04*
Net realized and unrealized
gain (loss).................... (1.40) 0.36 3.51 0.56 0.87 0.04
------ ------ ----- ------ ------ ------
Total from Investment Activities..... (1.36) 0.42 3.54 0.66 0.97 0.08
------ ------ ----- ------ ------ ------
Distributions
Net investment income............ (0.07) (0.04) -- (0.10) (0.10) (0.04)
Net realized gain................ (0.89) (0.19) -- (0.13) -- --
------ ------ ----- ------ ------ ------
Total Distributions.................. (0.96) (0.23) -- (0.23) (0.10) (0.04)
------ ------ ----- ------ ------ ------
NET ASSET VALUE, END OF PERIOD....... $ 7.75 $10.07 $9.88 $ 6.34 $ 5.91 $ 5.04
====== ====== ===== ====== ====== ======
- ------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Total Return......................... (13.8)% 4.1% 55.8% 11.2% 19.3%* 1.6%*
Ratio of Expenses to Average
Net Assets....................... 1.18%+ 1.22% 1.29%+ 1.51% 1.75%* 1.75%+*
Ratio of Net Investment Income to
Average Net Assets............... 0.93%+ 0.85% 1.02%+ 1.64% 1.75%* 2.10%+*
Portfolio Turnover Rate.............. 47.8%+ 63.2% 40.4%+ 36.3% 49.0% 3.2%+
Net Assets, End of Period
(in thousands)................... $1,907,663 $2,302,841 $1,650,450 $314,504 $102,922 $10,986
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
++++ All per share figures reflect the 2-for-1 stock 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.
13
<PAGE>
- --------------------------------------------------------------------------------
Shareholder Services
- --------------------------------------------------------------------------------
To help shareholders monitor their current investments and make decisions that
accurately reflect their financial goals, T. Rowe Price offers a wide variety of
information and services--at no extra cost.
KNOWLEDGEABLE SERVICE REPRESENTATIVES
BY PHONE--Shareholder service representatives are available from 8:00 a.m. to
10:00 p.m., Monday - Friday, and weekends from 9:00 a.m. to 5:00 p.m ET. Call
1-800-225-5132 to speak directly with a representative who will be able to
assist you with your accounts.
IN PERSON--Visit one of our investor center locations to meet with a
representative who will be able to assist you with your accounts. While there,
you can drop off applications or obtain prospectuses and other literature.
AUTOMATED 24-HOUR SERVICES
Tele*Access(R) (1-800-638-2587) provides information such as account
balance, date and amount of your last transaction, latest dividend payment,
and fund prices and yields. Additionally, you have the ability to request
prospectuses, statements, account and tax forms; reorder checks; and initiate
purchase, redemption, and exchange orders for identically registered accounts.
PC*Access(R) provides the same information as Tele*Access, but on a
personal computer via dial-up modem.
ACCOUNT SERVICES
Checking--Write checks for $500 or more on any money market and most
bond fund accounts (except the High Yield Fund and Emerging Markets Bond Fund).
Automatic Investing--Build your account over time by investing directly
from your bank account or paycheck with Automatic Asset Builder.
Additionally, Automatic Exchange enables you to set up systematic investments
from one fund account into another, such as from a money fund into a stock
fund. A low, $50 minimum makes it easy to get started.
Automatic Withdrawal--If you need money from your fund account on a
regular basis, you can establish scheduled, automatic redemptions.
Dividend and Capital Gains Payment Options--Reinvest all or some of your
distributions, or take them in cash. We give you maximum flexibility and
convenience.
INVESTMENT INFORMATION
Combined Statement--A comprehensive overview of your T. Rowe Price
accounts. The summary page gives your earnings by tax category, provides
total portfolio value, and lists your investments by type--stock, bond, and
money market. Detail pages itemize account transactions by fund.
Quarterly Shareholder Reports--Portfolio managers review the performance
of the funds in plain language and discuss T. Rowe Price's economic outlook.
The T. Rowe Price Report--A quarterly newsletter with relevant articles
on market trends, personal financial planning, and T. Rowe Price's economic
perspective.
Insights--A library of information that includes reports on mutual fund
tax issues, investment strategies, and financial markets.
Detailed Investment Guides--Our widely acclaimed Asset Mix Worksheet,
College Planning Kit, Retirees Financial Guide, Retirement Planning Kit (also
available on disk for PC use), and Guide to Risk-Adjusted Performance can
help you determine and reach your investment goals.
DISCOUNT BROKERAGE
You can trade stocks, bonds, options, precious metals, and other securities
at a substantial savings over regular commission rates. Call a shareholder
service representative for more information.
14
<PAGE>
- --------------------------------------------------------------------------------
T. Rowe Price No-Load Mutual Funds
- --------------------------------------------------------------------------------
STABILITY
Prime Reserve
Summit Cash Reserves
U.S. Treasury Money
California Tax-Free Money
New York Tax-Free Money
Summit Municipal Money
Market
Tax-Exempt Money
CONSERVATIVE INCOME
Short-Term Bond
Short-Term Global Income
Short-Term U.S. Government
Summit Limited-Term Bond
U.S. Treasury Intermediate
Florida Insured Intermediate
Tax-Free
Maryland Short-Term
Tax-Free Bond
Summit Municipal
Intermediate
Tax-Free Insured
Intermediate Bond
Tax-Free Short-Intermediate
Virginia Short-Term
Tax-Free Bond
INCOME
Global Government Bond
GNMA
New Income
Spectrum Income
Summit GNMA
U.S. Treasury Long-Term
California Tax-Free Bond
Georgia Tax-Free Bond
Maryland Tax-Free Bond
New Jersey Tax-Free Bond
New York Tax-Free Bond
Summit Municipal Income
Tax-Free Income
Virginia Tax-Free Bond
AGGRESSIVE INCOME
Emerging Markets Bond
High Yield
International Bond
Tax-Free High Yield
CONSERVATIVE
GROWTH
Balanced
Capital Appreciation
Dividend Growth
Equity Income
Equity Index
Growth & Income
Spectrum Growth
Value
GROWTH
Blue Chip Growth
European Stock
Growth Stock
International Stock
Japan
Mid-Cap Growth
New Era
Small-Cap Value
AGGRESSIVE GROWTH
Capital Opportunity
Emerging Markets Stock
International Discovery
Latin America
New America Growth
New Asia
New Horizons
OTC
Science & Technology
PERSONAL STRATEGY FUNDS
Personal Strategy Income
Personal Strategy Balanced
Personal Strategy Growth
Call if you want to know
about any T. Rowe Price
fund. We'll send you a
prospectus with more
complete information,
including management
fees and other expenses.
Read it carefully before
you invest or send money.
15
<PAGE>
- --------------------------------------------------------------------------------
SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
T. Rowe Price
- -------------
NEW ASIA FUND
APRIL 30, 1995
FOR YIELD, PRICE, LAST TRANSACTION,
AND CURRENT BALANCE, 24 HOURS,
7 DAYS A WEEK, CALL:
1-800-638-2587 toll free
625-7676 Baltimore area
FOR ASSISTANCE WITH YOUR EXISTING
FUND ACCOUNT, CALL:
Shareholder Service Center
1-800-225-5132 toll free
625-6500 Baltimore area
T. ROWE PRICE
100 East Pratt Street
Baltimore, Maryland 21202
This report is authorized for distri-
bution only to shareholders and to
others who have received a copy of
the prospectus of the T. Rowe Price
New Asia Fund.
T. Rowe Price
Invest With Confidence/(R)/
NAF
