Semiannual Report
International Stock Fund
April 30, 1996
T. Rowe Price
Report Highlights
o Worldwide economic activity was more muted than in the U.S. Signs of
recovery were widespread in Japan, but the pace was slower than in the
past.
o The return over the last six months was just ahead of the unmanaged
benchmark and was strong in absolute terms. Over the 12-month period,
performance was well ahead of the EAFE index.
o Country weightings were moderately helpful to performance, and stock
selection added significant value.
o Our current investment policy is to maintain a neutral weighting in
Europe, an underweighting in Japan, and an overweighting in the smaller
markets of Southeast Asia and Latin America.
o The portfolio remains well diversified, and we believe that our
preference for established growth companies is appropriate given a
background of muted economic activity.
Fellow Shareholders
International stock markets and your fund made steady progress during the
period under review. Economic activity overseas was much more muted than in
the U.S. but, in Europe at least, this allowed further declines in interest
rates. In Japan the signs of recovery were widespread, but the pace was far
slower than previous recoveries. Southeast Asian markets came to life
following a long dull patch, and the markets of Latin America performed
strongly as confidence returned following the peso crisis 18 months ago. In
currency markets, the U.S. dollar was firm against both the yen and European
currencies.
PERFORMANCE REVIEW
Performance Comparison
Periods Ended 4/30/96 6 Months 12 Months
_____________________________________________________________________________
International Stock Fund 13.68% 17.97%
MSCI EAFE Index* 13.21 11.41
* Net of withholding taxes.
As shown in the table, the return from the T. Rowe Price International Stock
Fund over the six-month period ended April 30 was strong in absolute terms and
was just ahead of the unmanaged Morgan Stanley Capital International Europe,
Australia and Far East (EAFE) Index. During this period, country weightings
against the index were moderately helpful, and stock selection added
significant value with our quality growth stocks performing well in a number
of markets.
Over the 12-month period, the fund's returns were well ahead of the EAFE
index. Stock selection again added value over this period, and the
underweighting in Japan helped relative returns as the Tokyo market fell
behind. An overweighting in the buoyant markets of Southeast Asia was also
positive, while the portfolio's Latin American positions performed strongly.
INVESTMENT REVIEW
Far East
In Japan the economy continued to grow at a steady if modest pace. In common
with most developed countries, consumer expenditure is the largest component
of the economy and this sector finally showed some signs of life. Department
store sales were again positive after almost four years of decline. A year
ago, when the yen was at an all-time high, producer prices were in decline and
there was serious concern that a deflationary spiral could take hold. Today
the yen is significantly lower but the Bank of Japan is still able to pursue a
supportive monetary policy without any serious risk of inflation. The
financial press is still dominated by the debate over who should pay for the
debts incurred by the failed housing loan companies. The banks have already
recognized large amounts of their bad debts and will report sharp losses in
the fiscal year just ended.
_____________________________________________________________________________
IN SOUTHEAST ASIA, STOCK MARKETS HAVE PERFORMED WELL SINCE THE BEGINNING OF
THE YEAR.
The stock market performed reasonably well in local currency terms but, given
the weakness of the yen, dollar returns were less compelling. Our strategy in
Tokyo was to avoid the banking sector (a large part of the index) and to focus
on international technology companies such as Kyocera, NEC, and Canon.
In Southeast Asia, stock markets have performed well since the beginning of
the year. A number of these markets traditionally rally at the time of Chinese
New Year, but there were also clear signs that U.S. investors have returned
following two years of underperformance compared with the U.S. Most of the
economies in the region showed high rates of growth but have still managed to
keep inflation and their balance of payments under reasonable control.
Valuations compared with the rest of the world began to look reasonable again,
and an added attraction for the U.S. investor was that many of these
currencies are linked to the strengthening U.S. dollar.
Malaysia was one of the best performers in the region, up 28% during the past
six months. Foreign investors had become excessively cautious about the
Malaysian economy last year but, following a surprisingly strong trade surplus
in December and increasing signs of an economic soft landing, they rushed back
in February. With its abundance of natural resources, stable politics, and
sensible economic policies, Malaysia remained a core part of our Southeast
Asian positions. Our holdings in United Engineers and Renong are well placed
to benefit from the current infrastructure spending boom.
In Korea the market also rallied strongly. A slush fund scandal involving two
previous presidents held the market back earlier in the year, but sentiment
has now improved. With interest rates falling again and a recent increase in
the permitted levels of foreign ownership, we took the opportunity to increase
our positions here. Many of Korea's better-managed companies are selling for
under five times cash flow and they remain fierce competitors in world
markets.
Market Performance
Six Months Local Local Currency U.S.
Ended 4/30/96 Currency vs. U.S. Dollars Dollars
_____________________________________________________________________________
France 21.4% - 5.5% 14.8%
Germany 13.9 - 8.2 4.6
Hong Kong 16.0 - 0.1 16.0
Italy 15.2 1.9 17.4
Japan 21.1 - 2.4 18.2
Mexico 36.1 - 4.5 30.1
Netherlands 24.8 - 7.9 14.9
Singapore 15.2 0.6 15.9
Sweden 12.4 - 2.3 9.9
Switzerland 18.5 - 8.7 8.2
United Kingdom 10.8 - 4.9 5.4
Source: Randall Helms Database, using MSCI Indices.
Not all the markets in the region were so buoyant. Hong Kong has been dull
recently, with better sentiment in the property sector counterbalanced by
caution over the future of U.S. interest rates. Singapore also made little
progress with export growth affected by a worldwide slowdown in the
electronics industry. However, the Singapore economy continues to be very well
managed and, with interest rates staying low, our positions in property stocks
and bank stocks were able to make progress.
Europe
The broad picture in Europe was one of stagnant economic activity countered by
looser monetary policy from most of the central banks.
Germany is typical here. For some time now the economy has been suffering from
high wage costs, rising taxes, and a strong currency; therefore the recent
moves by the Bundesbank to lower interest rates together with a weaker
deutschemark must be welcome news for the German manufacturing industry. Given
the preponderance of large cyclical and interest rate-sensitive stocks, we
remained underweighted in this market but our positions in the health care
stocks Bayer and Rhoen Klinikum performed well. We also recently added to an
old favorite, Gehe, a pharmaceutical wholesaler.
Monetary easing in Germany was welcome news in France, where the Chirac
administration was making better progress in tackling the country's large
budget deficit. The economy has also been depressed for some time, and a
combination of lower interest rates and a weak currency could provide a much
needed kick start. After a period of disappointing performance, the French
stock market rose strongly with growth stocks leading the way. We maintained
our overweighted position; Eaux Cie Generale, a conglomerate based on water
services, LVMH, a leader in luxury goods, and supermarket chain Carrefour
remained core holdings.
The fund was also overweighted in the Netherlands, which continued to perform
well. Our optimism here was based on individual holdings, the bulk of which
are multinational companies, rather than on the fundamentals of the Dutch
economy. Publishers Elsevier and Wolters Kluwer led the market, but we
recently trimmed our positions here following a period of outstanding
performance. It is interesting to note that a number of our Dutch holdings are
parts of Anglo-Dutch combines in which we also invest through the U.K.-listed
entity. The Royal Dutch Shell Group is jointly owned by Royal Dutch Petroleum
in the Netherlands and Shell Transport & Trading in the U.K. Similarly, Reed
Elsevier is now an international publishing business which can be bought
through Reed International in London and Elsevier in Amsterdam. We owned all
four stocks in the portfolio, a useful reminder that market weightings are to
a significant extent a function of the relative attractiveness of individual
companies.
_____________________________________________________________________________
IN THE U.K. THE ECONOMY HAS RECENTLY DECELERATED, REVIVING OPTIMISM THAT
INTEREST RATES CAN FALL AGAIN.
In the U.K. the economy has recently decelerated, reviving optimism that
interest rates can fall again. With sterling weakening against the dollar,
attention focused on the large multinationals that dominate the index. Our
core holdings Glaxo Wellcome and Smithkline Beecham are two of the world's
leading pharmaceutical companies, but we also own Grand Metropolitan, the
international drinks group, and Cable & Wireless, the telecommunications
company with important interests in the Far East.
Chart 1 - Geographic Diversification
Turning to the smaller markets, in Italy both the market and the currency
performed well. Following the elections in April, the prime minister-designate
made encouraging statements about fiscal reform and returning the lira to the
European monetary system. Spain also performed well following the election of
a pro-business government, although the party failed to win an outright
majority. In Switzerland the overall market was dull, but there was a strong
performance from pharmaceutical companies Ciba-Geigy and Sandoz, both holdings
in the portfolio, which announced a merger.
Latin America
The stock markets of Latin America have performed well since the beginning of
the year. In Brazil, a sharp decline in inflation combined with strong
economic growth boosted confidence and gave President Cardoso a high rating in
the opinion polls. This in turn will help him push through much-needed fiscal
reforms. With economic policy on track and the trade account in moderate
surplus, the currency remained steady with positive implications for both
inflation and interest rates.
Mexico has seen the first signs of economic recovery and, with the peso now
more stable, the stock market blazed ahead on increasing confidence that
interest rates could fall from current levels. Our overweighting in the region
versus the benchmark helped fund performance.
INVESTMENT POLICY AND OUTLOOK
Our current investment policy for the fund is to maintain a neutral weighting
in Europe, an underweighting in Japan, and an overweighting in the smaller
markets of Southeast Asia and Latin America. This strategy is based on several
assumptions. In Europe we see a helpful mix of improving economies and falling
interest rates and we can also find quality growth stocks with reasonable
valuations by world standards. In Japan, we expect the economic recovery to
continue, but our confidence is tempered by the high valuations in certain
areas of the market and a suspicion that interest rates have reached the
bottom of their cycle.
Industry Diversification
Percent of Percent of
Net Assets Net Assets
10/31/95 4/30/96
_____________________________________________________________________________
Services 23.4% 23.9%
Finance 16.9 17.6
Consumer Goods 15.7 16.4
Capital Equipment 16.7 15.7
Energy 11.4 10.6
Materials 9.4 8.4
Multi-Industry 3.2 2.9
Miscellaneous 0.1 0.1
Reserves 3.2 4.4
_____________________________________________________________________________
Total 100.0% 100.0%
The overweighting of Southeast Asia assumes that this part of the world will
continue to see high rates of economic growth. Valuations are attractive
following a long period of dull market performance. In Latin America, we
remain optimistic about the long-term prospects. The portfolio remains well
diversified, and we believe that our preference for established growth
companies is appropriate given a background of muted economic activity.
This broad strategy has served the fund well recently and we believe it will
continue to do so in the future.
Respectfully submitted,
Martin G. Wade
President
May 24, 1996
Revisiting the Case for International Equity Investing
Chart 2 - Correlation of Returns
Over the past 15 years, a growing number of U.S. investors have added
international stocks to their portfolios, mixing domestic and foreign stocks
in the pursuit of higher overall returns with lower volatility. In recent
months, however, some naysayers have questioned the benefits of international
diversification. Some claim that the era of higher international returns is
over, citing the recent superior performance of U.S. stocks. Others point to
short periods when U.S. and international markets moved in tandem, so-called
"high correlation," as proof that foreign stocks no longer offer adequate
diversification.
On the contrary, performance and correlation, when viewed over the long term,
reinforce the case for international diversification. For instance, although
U.S. stocks have recently outperformed, foreign stocks have outpaced them in
seven of the last 12 years. (We used the MSCI Europe, Australia, and Far East
Index - EAFE - to measure foreign stocks and the Standard & Poor's 500 Stock
Index for domestic equities.)
Furthermore, correlations have remained low over the long term. The chart
shows the correlation of various foreign markets to the U.S. over two 10-year
periods. A measurement of 100% would indicate that foreign stocks moved in the
same direction as U.S. stocks all of the time. The overall correlation of
foreign stocks has actually declined: from 1981 through 1990, the EAFE and the
S&P 500 moved in the same direction 41% of the time, but from 1986 through
1995, the correlation dropped to 34%. Correlations declined in the
Netherlands, Germany, and Japan and rose only modestly in the U.K. and Hong
Kong.
Inevitably, there are short periods when foreign markets move with the U.S.
market, usually when the latter is experiencing significant volatility. In
general, however, foreign markets follow their own path depending mostly on
the unique fundamentals of each country. In our opinion, the case for
international diversification remains solid. Foreign stocks may be poised to
regain leadership because many international economies are at earlier stages
of expansion than the U.S. economy. If correlations remain low over the long
term, as we expect, diversifying into foreign stocks could continue to be an
effective way to limit risk and enhance returns.
T. Rowe Price International Stock Fund
Portfolio Highlights
TWENTY-FIVE LARGEST HOLDINGS
Percent of
Net Assets
4/30/96
_____________________________________________________________________________
Wolters Kluwer, Netherlands 2.1%
Elsevier, Netherlands 1.6
Royal Dutch Petroleum, Netherlands 1.6
National Westminster Bank, United Kingdom 1.2
Smithkline Beecham, United Kingdom 1.1
_____________________________________________________________________________
Reed International, United Kingdom 1.1
Eaux Cie Generale, France 1.0
Astra, Sweden 1.0
Roche Holdings, Switzerland 1.0
Kyocera, Japan 0.9
_____________________________________________________________________________
Telecomunicacoes Brasileiras, Brazil 0.9
Mitsubishi Heavy Industries, Japan 0.9
NEC, Japan 0.9
Internationale Nederlanden Groep, Netherlands 0.9
Nestle, Switzerland 0.8
_____________________________________________________________________________
Nippon Denso, Japan 0.8
Nomura Securities, Japan 0.8
Canon, Japan 0.8
Shell Transport & Trading, United Kingdom 0.8
Technology Resources Industries, Malaysia 0.7
_____________________________________________________________________________
Mitsui Fudosan, Japan 0.7
Gehe, Germany 0.7
Sumitomo Electric, Japan 0.7
Carrefour, France 0.7
Norsk Hydro, Norway 0.7
_____________________________________________________________________________
Total 24.4%
T. Rowe Price International Stock Fund
Performance Comparison
This chart shows the value of a hypothetical $10,000 investment in the fund
over the past 10 fiscal-year periods or since inception (for funds lacking
10-year records). The result is compared with a broad-based average or index.
The index return does not reflect expenses, which have been deducted from the
fund's return.
Chart 3 - SEC Chart - International Stock Fund
Average Annual Compound Total Return
1 3 5 10
Periods Ended 4/30/96 Year Years Years Years
_____________________________________________________________________________
International Stock Fund 17.97% 14.15% 11.51% 12.62%
Investment return and principal value represent past performance and will
vary. Shares may be worth more or less at redemption than at original
purchase.
T. Rowe Price International Stock Fund
Unaudited
Financial Highlights For a share outstanding throughout each period
6 Months Year 10 Months+ Year
Ended Ended Ended Ended 12/31 12/31
4/30/96 10/31/95 10/31/94 10/31/93 12/31/92 1991 1990
_____________________________________________________________________________
NET ASSET VALUE
Beginning of
period $ 12.09 $ 12.84 $ 11.74 $ 8.89 $ 9.54 $ 8.81 $ 10.24
Investment activities
Net
investment
income 0.10 0.18 0.09 0.10 0.14 0.15 0.22
Net realized
and unreal-
ized gain
(loss) 1.52 (0.19) 1.30 2.75 (0.47) 1.22 (1.13)
Total from
investment
activities 1.62 (0.01) 1.39 2.85 (0.33) 1.37 (0.91)
Distributions
Net
investment
income (0.18) (0.12) (0.09) - (0.16) (0.15) (0.16)
Net
realized
gain (0.20) (0.62) (0.20) - (0.16) (0.49) (0.36)
Total
distri-
butions (0.38) (0.74) (0.29) - (0.32) (0.64) (0.52)
NET ASSET VALUE
End of
period $ 13.33 $ 12.09 $ 12.84 $ 11.74 $ 8.89 $ 9.54 $ 8.81
Ratios/Supplemental Data
Total
return 13.7% 0.4% 12.0% 32.1% (3.5)% 15.9% (8.9)%
Ratio of
expenses
to average
net assets 0.88%! 0.91% 0.96% 1.01%! 1.05% 1.10% 1.09%
Ratio of net
investment
income to
average
net assets 1.69%! 1.56% 1.11% 1.52%! 1.49% 1.51% 2.16%
Portfolio
turnover
rate 16.7%! 17.8% 22.9% 29.8%! 37.8% 45.0% 47.1%
Average
commission
rate paid $0.0107 - - - - - -
Net assets,
end of
period (in
millions) $ 7,998 $ 6,386 $ 6,206 $ 3,746 $ 1,950 $ 1,476 $ 1,031
! Annualized.
+ The fund's fiscal year-end was changed to 10/31.
The accompanying notes are an integral part of these financial statements.
T. Rowe Price International Stock Fund
Unaudited April 30, 1996
Statement of Net Assets Shares/Par Value
In thousands
ARGENTINA 0.7%
Common Stocks 0.7%
Banco de Galicia Buenos Aires
(Class B) ADR (USD) 161,388 $ 3,793
Banco Frances del Rio de la Plata ADR 148,189 4,260
Buenos Aires Embotelladora
(Class B) ADR (USD) 68,512 1,088
Enron Global Power & Pipeline (USD) 79,819 1,965
Naviera Perez (Class B) 1,432,788 8,913
Sociedad Comercial del Plata * 251,880 753
Sociedad Comercial del Plata ADR (144a) (USD) * 79,613 2,378
Telecom Argentina Stet (Class B) 485,570 2,195
Telecom Argentina Stet (Class B) ADR (USD) 56,339 2,549
Telefonica de Argentina (Class B) ADR (USD) 480,340 14,050
Telefonica de Argentina (Class B) ADS (USD) 117,840 3,447
Transportadora de Gas del Sur ADR (USD) 185,858 2,393
YPF Sociedad Anonima (Class D) ADR (USD) 521,863 11,416
_____________________________________________________________________________
Total Argentina (Cost $54,871) 59,200
AUSTRALIA 1.8%
Common Stocks 1.7%
Amcor 851,000 6,110
Australia Gas & Light 3,029,798 12,614
Broken Hill Proprietary 1,329,836 20,465
Burns Philp & Company 2,049,313 4,202
Coca Cola Amatil 721,104 7,585
Howard Smith 1,341,123 7,796
Lend Lease 457,144 6,967
National Australia Bank 779,000 6,988
News Corporation 1,772,606 10,388
Publishing and Broadcasting 1,681,850 7,729
Tabcorp Holdings 2,572,000 10,647
TNT * 2,945,742 3,911
Westpac Banking 2,089,000 10,141
WMC 1,240,057 9,040
Woodside Petroleum 1,875,000 10,840
_____________________________________________________________________________
135,423
Preferred Stocks 0.1%
Sydney Harbour Casino Holdings * 3,780,800 $ 5,732
_____________________________________________________________________________
5,732
_____________________________________________________________________________
Total Australia (Cost $111,010) 141,155
AUSTRIA 0.1%
Common Stocks 0.1%
EVN 22,800 3,336
Flughafen Wien 57,126 4,006
_____________________________________________________________________________
7,342
Preferred Stocks 0.0%
Creditanstalt Bankverein 43,844 2,448
_____________________________________________________________________________
2,448
_____________________________________________________________________________
Total Austria (Cost $8,245) 9,790
BELGIUM 1.0%
Common Stocks 1.0%
Generale Banque 56,016 19,752
Kredietbank 136,302 38,968
UCB 10,035 16,895
_____________________________________________________________________________
75,615
Convertible Bonds 0.0%
Kredietbank, 5.75%, 11/30/03 BEL38,115,000 1,399
_____________________________________________________________________________
1,399
_____________________________________________________________________________
Total Belgium (Cost $53,351) 77,014
BRAZIL 2.8%
Common Stocks 0.4%
Brazil Fund (USD) 254,600 5,506
Companhia Siderurgica Nacional 171,890,000 4,851
Eletrobras 37,089,553 8,935
Eletrobras ADR (USD) 86,277 1,041
Pao de Acucar GDR (USD) 147,000 2,223
Telecomunicacoes Brasileiras 166,493,000 7,065
_____________________________________________________________________________
29,621
Preferred Stocks and Warrants 2.4%
Banco Bradesco 1,558,017,178 $ 17,589
Banco Itau 11,295,000 4,417
Brahma 21,453,171 10,315
Brahma, warrants, exp. 9/30/96 * 1,827,222 460
Brasmotor 19,947,000 5,429
Cia Cimento Portland Itau 17,859,000 5,130
Cia Energetica de Sao Paulo ADS (USD) * 156,300 1,407
Cia Energetica Minas Gerais 262,919,692 6,625
Cia Energetica Minas Gerais ADR,
non voting (USD) * 435,562 10,944
Cia Tecidos Norte de Minas 13,940,000 5,845
Lojas Americanas 196,273,000 4,550
Petrol Brasileiros 40,258,000 4,687
Telecomunicacoes Brasileiras 236,993,267 12,828
Telecomunicacoes Brasileiras ADR (USD) 14,601 790
Telecomunicacoes Brasileiras ADR,
level II (USD) 965,062 52,234
Telecomunicacoes de Sao Paulo 91,069,458 16,248
Unibanco 202,555,000 8,657
Usiminas 10,623,600,000 12,100
Usiminas ADS (USD) 1,223,659 13,996
_____________________________________________________________________________
194,251
_____________________________________________________________________________
Total Brazil (Cost $182,386) 223,872
CANADA 0.4%
Common Stocks 0.4%
Alcan Aluminum 574,100 18,258
Macmillan Bloedel 318,420 4,233
Royal Bank of Canada 227,590 5,391
_____________________________________________________________________________
Total Canada (Cost $23,163) 27,882
CHILE 0.6%
Common Stocks 0.6%
AFP Providia ADR (USD) 54,044 1,236
Chile Fund (USD) 404,098 9,900
Chilectra ADR (144a) (USD) 122,656 6,746
Chilgener ADS (USD) 186,659 4,177
Cia de Telecomunicaciones de Chile ADR (USD) 71,340 $ 6,510
Compania Cervecerias Unidas ADS (USD) 160,311 3,407
Empresa Nacional de Electric ADS (USD) 449,408 8,763
Enersis ADS (USD) 260,256 7,743
_____________________________________________________________________________
Total Chile (Cost $49,124) 48,482
CHINA 0.5%
Common Stocks 0.5%
Huaneng Power International
(Class N) ADR (USD) * 1,335,000 19,358
Shanghai Petrochemical (Class H) (HKD) 43,596,000 12,962
Yizheng Chemical Fibre (Class H) (HKD) 31,441,000 8,434
_____________________________________________________________________________
Total China (Cost $48,969) 40,754
CZECH REPUBLIC 0.1%
Common Stocks 0.1%
SPT Telecom * 35,764 4,378
_____________________________________________________________________________
Total Czech Republic (Cost $3,397) 4,378
DENMARK 0.2%
Common Stocks 0.2%
Den Danske Bank 138,670 9,046
Tele Danmark (Class B) 60,017 3,020
Unidanmark (Class A) 146,749 6,539
_____________________________________________________________________________
Total Denmark (Cost $16,230) 18,605
FINLAND 0.1%
Common Stocks 0.1%
Nokia (Class A) 268,112 9,579
_____________________________________________________________________________
Total Finland (Cost $4,919) 9,579
FRANCE 7.7%
Common Stocks and Warrants 7.7%
Accor 104,243 14,484
Alcatel Alsthom 80,500 7,571
Assurances Generales de France 239,884 6,550
Canal Plus 31,100 $ 7,619
Carrefour 72,985 57,032
Castorama Dubois 42,171 8,071
Chargeurs 61,180 16,279
Cie de St. Gobain 255,128 30,561
Credit Local de France 131,308 10,370
Eaux Cie Generale 726,732 79,037
Ecco 117,532 26,406
Ecco Travail Temporaire 1,212 101
Elf Aquitaine 327,945 24,389
GTM Entrepose 108,850 7,014
Guilbert 86,273 14,174
Havas 87,050 7,230
Hermes International 10,196 2,701
L'Oreal 31,771 9,819
Lapeyre 212,150 11,696
Legrand 39,178 7,620
LVMH 216,042 55,270
Pinault Printemps 168,333 51,111
Poliet 190,110 19,498
Primagaz 100,189 10,741
Primagaz, warrants, exp. 6/30/98 * 7,294 143
Promodes 25,320 7,276
Rexel 48,950 11,737
Sanofi 113,935 9,194
Schneider * 159,380 7,427
Societe Generale de France 53,330 6,192
Sodexho 48,360 19,176
Television Francaise 408,766 44,298
Total (Class B) 373,860 25,373
_____________________________________________________________________________
Total France (Cost $493,421) 616,160
GERMANY 4.2%
Common Stocks and Warrants 3.9%
Allianz Holdings 23,577 40,288
Allianz Holdings, warrants, exp. 2/23/98 * 55,000 2,551
Altana 6,926 4,271
Bayer 138,703 $ 44,526
Bilfinger & Berger 25,925 9,813
Buderus 16,705 6,111
Deutsche Bank 370,500 17,633
Gehe 84,166 48,601
Gehe, new * 18,009 10,258
Hoechst 26,901 8,716
Hornbach Baumarkt 63,890 2,420
Mannesmann 40,868 13,962
Praktiker 137,751 3,086
Rhoen Klinikum 169,688 20,506
Schering 167,324 12,110
Siemens 24,872 13,620
Veba 720,310 35,806
Veba, warrants, exp. 4/06/98 * 58,698 14,072
Volkswagen 19,186 6,580
_____________________________________________________________________________
314,930
Preferred Stocks 0.3%
Fielmann 104,076 4,572
Hornbach 121,630 7,786
Krones 19,980 6,969
_____________________________________________________________________________
19,327
_____________________________________________________________________________
Total Germany (Cost $279,714) 334,257
HONG KONG 4.4%
Common Stocks 4.4%
Dao Heng Bank Group 5,029,000 19,244
First Pacific 27,337,819 36,401
Guangdong Investment 22,661,000 13,988
Guangzhou Investment 77,592,000 19,259
Guoco Group 5,997,000 29,847
Hong Kong Land Holdings (USD) 23,827,345 50,991
Hopewell Holdings 60,792,000 37,133
Hutchison Whampoa 6,508,000 40,383
New World Development 8,210,000 36,828
Swire Pacific (Class A) 3,721,500 31,752
Wharf Holdings 10,268,000 38,030
_____________________________________________________________________________
Total Hong Kong (Cost $332,732) 353,856
ITALY 2.0%
Common Stocks and Warrants 2.0%
Alleanza Assicurazioni, savings shares 3,797 $ 26
Assicurazioni Generali 1,200,739 29,942
Banca Fideuram 8,182,607 14,144
Danieli & Company, savings shares 655,800 2,359
Danieli & Company, warrants, exp. 11/30/99 * 101,700 91
ENI * 1,877,000 8,111
Finanziaria Autogrill * 1,183,047 1,257
IMI 406,527 3,227
Industrie Natuzzi ADR (USD) 77,050 4,007
Istituto Nazionale delle Assicurazioni 2,564,000 3,940
Italgas 2,340,093 8,090
RAS 187,252 2,089
Rinascente 745,400 5,159
Sasib 540 2
Sasib, savings shares 1,158,225 2,254
SME 1,183,047 1,317
Stet 6,565,680 22,194
Stet, savings shares 3,030,805 7,946
Telecom Italia 5,991,779 12,218
Telecom Italia Mobile * 10,808,182 23,872
Telecom Italia Mobile, savings shares * 505,345 708
Unicem * 387,997 2,658
_____________________________________________________________________________
155,611
Corporate Bonds 0.0%
Danieli & Company, 7.25%, 1/01/00 ITL610,200,000 352
_____________________________________________________________________________
352
_____________________________________________________________________________
Total Italy (Cost $125,514) 155,963
JAPAN 24.6%
Common Stocks 24.6%
Advantest 145,199 7,204
Alps Electric 1,212,000 14,251
Amada 2,624,000 30,604
Canon 3,074,000 61,124
Citizen Watch 1,637,000 $ 14,319
Daifuku 512,000 8,076
Daiichi Pharmaceutical 2,370,000 39,876
DaiNippon Screen Manufacturing 2,306,000 23,368
Daiwa House 2,995,000 47,815
DDI 3,488 29,977
East Japan Railway 7,495 40,053
Fanuc 640,000 27,838
Hitachi 3,992,000 43,124
Hitachi Zosen 3,501,000 19,211
Honda Motor 521,000 11,904
Inax 1,209,000 13,176
Ishihara Sangyo Kaisha * 1,347,000 4,996
Ito-Yokado 838,000 49,428
Kawada Industries 400,000 3,633
Kokuyo 1,207,000 33,462
Komatsu 3,252,000 31,399
Komori 972,000 25,832
Kumagai Gumi 2,315,000 9,937
Kuraray 2,482,000 28,710
Kyocera 987,000 74,352
Makita 1,746,000 28,208
Marui 1,980,000 43,724
Matsushita Electric Industrial 2,818,000 49,838
Mitsubishi 1,704,000 24,272
Mitsubishi Heavy Industries 8,032,000 71,716
Mitsubishi Paper Mills 1,676,000 10,767
Mitsui Fudosan 4,490,000 59,234
Mitsui Petrochemical Industries 1,123,000 9,480
Murata Manufacturing 1,111,000 43,121
National House Industrial 691,000 12,221
NEC 5,581,000 70,960
Nippon Denso 2,872,000 62,599
Nippon Hodo 642,000 11,416
Nippon Steel 13,972,000 50,489
Nippon Telephone & Telecom 3,440 26,670
Nomura Securities 2,859,000 62,316
Pioneer Electronic 1,418,000 $ 31,720
Sangetsu 272,000 6,761
Sankyo 2,072,000 50,312
Sega Enterprises 399,250 20,381
Sekisui Chemical 2,960,000 37,352
Sekisui House 2,189,000 27,204
Seven Eleven Japan 338,500 23,979
Sharp 2,797,000 48,664
Shin-Etsu Chemical 1,520,400 33,284
Sony 773,300 50,269
Sumitomo 4,315,000 51,563
Sumitomo Electric 4,076,000 58,448
Sumitomo Forestry 1,508,000 23,210
TDK 770,000 44,093
Teijin 5,331,000 29,304
Tokio Marine & Fire Insurance 1,246,000 17,153
Tokyo Electronics 454,000 16,883
Tokyo Steel Manufacturing 1,227,000 24,750
Toppan Printing 2,071,000 30,489
Yurtec 542,000 10,259
_____________________________________________________________________________
Total Japan (Cost $1,712,216) 1,966,778
MALAYSIA 3.2%
Common Stocks, Rights and Warrants 3.2%
Affin Holdings 18,492,000 45,612
Affin Holdings, warrants, exp. 11/15/99 * 3,530,200 3,710
Berjaya Sports Toto 5,899,000 18,927
Commerce Asset Holdings,
warrants, exp. 6/27/98 * 2,822,332 11,320
MBF Capital 10,910,000 16,365
Multi-Purpose Holdings 16,264,000 28,310
Renong 14,053,000 24,462
Renong, rights cv. into loan stock * 2,521,200 15
Renong, rights cv. into warrants * 1,575,750 442
Tanjong 3,005,000 11,450
Technology Resources Industries 17,421,000 59,391
United Engineers 5,666,000 38,860
_____________________________________________________________________________
Total Malaysia (Cost $202,097) 258,864
MEXICO 1.7%
Common Stocks 1.7%
Cemex (Class B) 1,534,044 $ 6,504
Cemex ADS (144a) (USD) * 1,914,463 15,076
Cifra (Class B) ADR (USD) * 14,824,371 19,939
Fomentos Economico Mexicano (Class B) 2,559,694 7,717
Gruma (Class B) * 2,142,160 8,649
Grupo Embotellador de Mexico * 2,237,447 3,403
Grupo Financiero Banamex (Class B) * 3,536,595 8,149
Grupo Financiero Banamex (Class L) * 144,991 298
Grupo Financiero Bancomer (Class B) GDS (USD) * 72,250 650
Grupo Financiero Bancomer (Class L) * 53,515 19
Grupo Industrial Maseca (Class B) 6,373,007 6,227
Grupo Modelo (Class C) 541,116 2,545
Grupo Televisa GDR (USD) * 303,346 9,404
Kimberly-Clark Mexico (Class A) 480,092 8,788
Panamerican Beverages (Class A) ADR (USD) 269,871 11,841
Telefonos de Mexico (Class L) ADS (USD) 797,542 27,116
_____________________________________________________________________________
Total Mexico (Cost $177,684) 136,325
NETHERLANDS 9.4%
Common Stocks and Warrants 9.4%
ABN Amro Holdings 607,147 31,429
Ahold 357,952 17,652
Akzo Nobel 74,504 8,653
CSM 857,656 41,344
Elsevier 8,664,522 130,461
Fortis AMEV 336,455 24,034
Hagemeyer 153,700 10,522
Internationale Nederlanden Groep 749,464 57,866
Internationale Nederlanden Groep,
warrants, exp. 3/15/01 * 1,900,000 10,090
Koninklijke PTT Nederland 307,817 11,551
Nutricia 133,248 14,239
Polygram 905,574 53,906
Royal Dutch Petroleum 887,863 126,482
Unilever 285,944 39,016
Wolters Kluwer 1,560,830 $ 170,612
_____________________________________________________________________________
747,857
Preferred Stocks 0.0%
Internationale Nederlanden Groep 70,540 375
_____________________________________________________________________________
375
_____________________________________________________________________________
Total Netherlands (Cost $483,045) 748,232
NEW ZEALAND 0.6%
Common Stocks 0.6%
Air New Zealand (Class B) 2,047,864 7,175
Carter Holt Harvey 3,216,149 7,622
Fernz 1,553,577 4,802
Fletcher Challenge Building * 523,980 1,242
Fletcher Challenge Energy * 523,980 1,123
Fletcher Challenge Paper * 1,047,960 2,160
Fletcher Challenge, Forests Division 4,798,702 6,197
Telecom Corporation of New Zealand 4,093,628 17,379
_____________________________________________________________________________
Total New Zealand (Cost $46,171) 47,700
NORWAY 1.3%
Common Stocks 1.3%
Bergesen (Class A) 198,750 3,570
Kvaerner (Class A) 114,761 4,716
Norsk Hydro 1,227,706 56,063
Orkla (Class A) 786,336 38,422
Saga Petroleum (Class B) 314,380 4,259
_____________________________________________________________________________
Total Norway (Cost $81,576) 107,030
PERU 0.0%
Common Stocks 0.0%
Telefonica de Peru (Class B) 1,033,003 2,310
_____________________________________________________________________________
Total Peru (Cost $1,811) 2,310
PORTUGAL 0.4%
Common Stocks 0.4%
Jeronimo Martins 424,033 34,088
Portugal Fund (USD) * 25,000 $ 131
_____________________________________________________________________________
Total Portugal (Cost $14,081) 34,219
SINGAPORE 2.4%
Common Stocks and Warrants 2.4%
DBS Land 3,932,000 15,943
Development Bank of Singapore 1,060,000 13,421
Far East Levingston Shipbuilding 1,355,000 7,904
Fraser & Neave 634,800 7,044
Jurong Shipyard 1,284,000 7,353
Keppel 803,000 7,254
Neptune Orient Lines 3,831,000 4,251
Overseas Union Bank 3,707,000 28,743
Overseas Union Enterprises 962,000 5,509
Sembawang 1,335,000 6,932
Singapore Airlines 344,000 3,475
Singapore Land 4,220,000 30,018
Singapore Press 818,640 15,490
United Industrial 6,777,000 6,894
United Overseas Bank 3,112,154 30,329
United Overseas Bank, warrants, exp. 6/17/97 * 862,750 3,682
_____________________________________________________________________________
Total Singapore (Cost $174,029) 194,242
SOUTH KOREA 1.5%
Common Stocks 1.5%
Cho Hung Bank 37,360 581
Hanil Bank 420,960 5,831
Hanil Securities 414,804 6,769
Kook Min Bank 444,535 11,037
Korea Electric Power 528,700 25,256
Pohang Iron & Steel 214,130 20,221
Samsung Electronic 94,726 12,902
Samsung Electronic GDR (USD) * 90,961 3,577
Samsung Electronic GDS (USD) * 6,608 439
Samsung Electronic GDS, 1/2 non voting (USD) 301,820 12,601
Samsung Electronic GDS, 1/2 voting (USD) 21,928 1,666
Samsung Electronic, new 26,408 $ 3,512
Samsung Fire & Marine Insurance 300 216
Seoul Bank * 617,000 5,653
Shinhan Bank 36,210 920
Yukong 227,227 8,467
_____________________________________________________________________________
Total South Korea (Cost $107,507) 119,648
SPAIN 2.4%
Common Stocks 2.4%
Argentaria Banca de Espana 265,674 10,756
Banco Popular Espanol 125,139 20,738
Banco Santander 444,304 20,643
Centros Comerciales Pryca 367,159 8,472
Empresa Nacional de Electricidad 814,387 51,155
Fomento de Construcciones y Contra 46,561 3,972
Gas Natural 131,579 23,916
Iberdrola 1,880,939 18,410
Repsol 947,162 34,737
Repsol ADR (USD) 38,000 1,392
_____________________________________________________________________________
Total Spain (Cost $150,946) 194,191
SWEDEN 2.4%
Common Stocks 2.4%
Asea (Class A) 145,220 14,861
Astra (Class B) 1,768,323 78,096
Atlas Copco (Class B) 831,988 15,826
Electrolux (Class B) 550,243 27,749
Esselte (Class B) 173,520 3,480
Hennes & Mauritz (Class B) 228,219 15,749
Sandvik (Class A) 175,000 3,858
Sandvik (Class B) 943,470 20,799
Scribona (Class B) 233,080 2,234
Stora Kopparbergs (Class B) 600,800 8,062
_____________________________________________________________________________
Total Sweden (Cost $128,079) 190,714
SWITZERLAND 3.9%
Common Stocks 3.9%
BBC Brown Boveri 41,380 $ 49,859
Ciba-Geigy 29,827 34,617
CS Holding 147,785 13,420
Nestle 59,616 66,309
Roche Holdings 9,675 76,093
Sandoz 39,735 43,396
Schweizerische Bankgesellschaft 6,699 6,658
Schweizerischer Bankverein 65,743 24,622
_____________________________________________________________________________
Total Switzerland (Cost $220,206) 314,974
THAILAND 0.9%
Common Stocks 0.9%
Advanced Information Service 553,576 9,386
Bangkok Bank 1,212,203 17,575
Bank of Ayudhya 1,177,073 6,947
Land & Houses 224,000 3,461
Siam Cement 106,285 5,473
Siam Commercial Bank 912,833 13,451
Thai Farmers Bank 789,094 9,065
Total Access Communications (USD) 486,000 4,277
_____________________________________________________________________________
Total Thailand (Cost $41,625) 69,635
UNITED KINGDOM 14.3%
Common Stocks 14.3%
Abbey National 5,910,700 50,539
Argos 3,556,980 34,483
Argyll Group 4,639,920 23,154
Asda Group 15,302,000 26,145
BAA 823,180 6,778
British Gas 3,295,040 11,656
British Petroleum 1,954,500 17,609
Cable & Wireless 5,594,050 43,957
Cadbury Schweppes 4,260,793 33,160
Caradon 7,645,821 26,472
Coats Viyella 2,707,210 $ 7,763
Compass Group 2,333,000 19,140
David S. Smith 4,099,120 18,450
East Midlands Electricity 1,722,864 16,209
Electrocomponents 1,323,000 7,907
GKN 504,000 7,473
Glaxo Wellcome 3,669,710 44,470
Grand Metropolitan 6,662,780 43,630
Guinness 5,674,000 40,913
Heywood Williams Group 1,034,875 3,848
Hillsdown Holdings 2,471,000 6,696
John Laing (Class A) 2,220,000 10,293
Kingfisher 5,480,733 49,090
Ladbroke Group 3,929,940 11,536
London Electricity 2,195,691 27,269
National Grid Group 3,405,895 10,562
National Westminster Bank 9,960,780 92,066
Rank Organisation 4,509,825 36,320
Reed International 5,214,430 89,327
Rolls Royce 2,043,925 7,261
RTZ 2,711,900 42,589
Sears 2,390,000 3,598
Shell Transport & Trading 4,617,000 60,884
Smithkline Beecham 8,628,740 91,184
Spring Ram 817,666 314
T & N 5,116,000 13,785
Tesco 3,693,395 15,623
Tomkins 11,438,430 47,093
United Newspapers 4,358,430 45,467
_____________________________________________________________________________
Total United Kingdom (Cost $945,015) 1,144,713
SHORT-TERM INVESTMENTS 2.5%
Commercial Paper 1.4%
Beta Finance, 4(2), 5.08%, 5/29/96 $ 10,000,000 9,863
Bex America Finance, 5.03%, 6/06/96 10,000,000 9,832
BHF Finance (Delaware), 5.16%, 7/18/96 21,000,000 20,452
BNP Canada, 5.35%, 5/02/96 10,000,000 9,955
Daimler-Benz North America, 5.00%, 6/26/96 $ 10,000,000 $ 9,833
Export Development, 5.30%, 5/03/96 20,000,000 19,935
H. J. Heinz, 4(2), 5.31%, 5/02/96 10,000,000 9,969
Korea Development Bank, 5.09%, 5/28/96 10,000,000 9,870
Investments in Commercial Paper through
a joint account, 5.36 - 5.37%, 5/01/96 8,839,836 8,839
_____________________________________________________________________________
108,548
Other 1.1%
Abbey National, Certificate of Deposit,
5.09%, 6/17/96 27,000,000 26,999
Bayerische Hypotheken, Certificate of Deposit,
5.65%, 5/16/96 20,000,000 20,021
Federal National Mortgage Association,
Floating Rate Medium-Term Note,
9/27/96 (Currently 5.435%) 15,000,000 15,000
Morgan Stanley Group, Floating Rate
Medium-Term Note, 1/31/97 (Currently 5.613%) 5,000,000 5,002
SMM Trust, Floating Rate Medium-Term Note,
3/26/97 (Currently 5.488%) 14,000,000 14,000
Societe Generale, Certificate of Deposit,
5.39%, 6/14/96 10,000,000 10,000
_____________________________________________________________________________
91,022
_____________________________________________________________________________
Total Short-Term Investments (Cost $199,570) 199,570
Total Investments in Securities 98.1% of Net Assets
(Cost $6,472,704) $ 7,850,092
Other Assets Less Liabilities 148,406
NET ASSETS $ 7,998,498
Net Assets Consist of:
Accumulated net investment income -
net of distributions $ 55,303
Accumulated net realized gain/loss -
net of distributions 89,929
Net unrealized gain (loss) 1,377,001
Paid-in-capital applicable to 600,221,921 shares
of $0.01 par value capital stock outstanding;
2,000,000,000 shares of the Corporation authorized 6,476,265
NET ASSETS $ 7,998,498
NET ASSET VALUE PER SHARE $ 13.33
* Non-income producing
BEL Belgian franc
HKD Hong Kong dollar
ITL Italian lira
USD U.S. dollar
4(2) Commercial paper sold within terms of a private placement memorandum,
exempt from registration under Section 4.2 of the Securities Act of
1933, as amended, and may be sold only to dealers in that program or
other "accredited investors."
144a Security was purchased pursuant to Rule 144a under the Securities Act
of 1933 and may not be resold subject to that rule except to qualified
institutional buyers - total of such securities at year-end amounts to
0.3% of net assets.
The accompanying notes are an integral part of these financial statements.
T. Rowe Price International Stock Fund
Unaudited
Statement of Operations
In thousands
6 Months
Ended
4/30/96
Investment Income
Income
Dividend (net of foreign taxes of $10,014) $ 80,496
Interest 10,025
Total income 90,521
Expenses
Investment management 24,003
Shareholder servicing 4,864
Custody and accounting 1,393
Prospectus and shareholder reports 296
Registration 147
Legal and audit 24
Directors 20
Miscellaneous 25
Total expenses 30,772
Net investment income 59,749
Realized and Unrealized Gain (Loss)
Net realized gain (loss)
Securities 102,311
Foreign currency transactions (2,636)
Net realized gain (loss) 99,675
Change in net unrealized gain or loss
Securities 747,396
Other assets and liabilities denominated
in foreign currencies (419)
Change in net unrealized gain or loss 746,977
Net realized and unrealized gain (loss) 846,652
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS $ 906,401
The accompanying notes are an integral part of these financial statements.
T. Rowe Price International Stock Fund
Unaudited
Statement of Changes in Net Assets
In thousands
6 Months Year
Ended Ended
4/30/96 10/31/95
Increase (Decrease) in Net Assets
Operations
Net investment income $ 59,749 $ 94,504
Net realized gain (loss) 99,675 47,559
Change in net unrealized gain or loss 746,977 (115,119)
Increase (decrease) in net assets
from operations 906,401 26,944
Distributions to shareholders
Net investment income (95,688) (57,811)
Net realized gain (106,311) (298,432)
Decrease in net assets from distributions (201,999) (356,243)
Capital share transactions*
Shares sold 1,350,832 1,729,049
Distributions reinvested 187,659 331,094
Shares redeemed (630,300) (1,550,652)
Increase (decrease) in net assets from
capital share transactions 908,191 509,491
Net Assets
Increase (decrease) during period 1,612,593 180,192
Beginning of period 6,385,905 6,205,713
End of period $ 7,998,498 $ 6,385,905
*Share information
Shares sold 107,058 147,854
Distributions reinvested 15,331 29,562
Shares redeemed (50,346) (132,547)
Increase (decrease) in shares outstanding 72,043 44,869
The accompanying notes are an integral part of these financial statements.
T. Rowe Price International Stock Fund
Unaudited April 30, 1996
Notes to Financial Statements
Note 1 - Significant Accounting Policies
T. Rowe Price International Funds, Inc. (the Corporation) is registered under
the Investment Company Act of 1940. The International Stock Fund (the fund), a
diversified, open-end management investment company, is one of the portfolios
established by the Corporation and commenced operations on May 9, 1980.
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.
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.
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
the 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 or enhance performance. The
investment objective, policies, program, and risk factors of the fund are
described more fully in the fund's prospectus and Statement of Additional
Information.
Emerging Markets
At April 30, 1996, 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.
Commercial Paper Joint Account
The fund, and other affiliated funds, may transfer uninvested cash into a
commercial paper joint account, the daily aggregate balance of which is
invested in high-grade commercial paper. All securities purchased by the joint
account satisfy the fund's criteria as to quality, yield, and liquidity.
Securities Lending
To earn additional income, the fund lends its securities to approved brokers.
At April 30, 1996, the market value of securities on loan was $1,320,762,000,
which was fully collateralized with cash. Although the risk is mitigated by
the collateral, the fund could experience a delay in recovering its securities
and a possible loss of income or value if the borrower fails to return them.
Other
Purchases and sales of portfolio securities, other than short-term securities,
aggregated $1,181,401,000 and $563,102,000, respectively, for the six months
ended April 30, 1996.
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, 1996, the aggregate cost of investments for federal income tax
and financial reporting purposes was $6,472,704,000 and net unrealized gain
aggregated $1,377,388,000, of which $1,565,632,000 related to appreciated
investments and $188,244,000 to depreciated investments.
Note 4 - Related Party Transactions
The fund is managed by Rowe Price-Fleming International, Inc. (the Manager),
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 the Manager provides
for an annual investment management fee, of which $4,349,000 was payable at
April 30, 1996. The fee is computed daily and paid monthly, and consists of an
Individual Fund Fee equal to 0.35% 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, 1996, and for the six months then ended,
the effective annual Group Fee rate was 0.33%. 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. Additionally, the fund is
one of several T. Rowe Price mutual funds (the Underlying Funds) in which the
T. Rowe Price Spectrum Growth Fund (Spectrum) invests. In accordance with an
Agreement among Spectrum, the Underlying Funds, Price Associates, and TRPS,
expenses from the operation of Spectrum are borne by the Underlying Funds
based on each Underlying Fund's proportionate share of assets owned by
Spectrum. The fund incurred expenses pursuant to these related party
agreements totaling approximately $4,080,000 for the six months ended April
30, 1996, of which $703,000 was payable at period-end.
During the six months ended April 30, 1996, the fund, in the ordinary course
of business, paid commissions of $477,000 to, and placed security purchase and
sale orders aggregating $178,571,000 with, certain affiliates of the Manager
in connection with the execution of various portfolio transactions.
T. Rowe Price 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 Monday through
Friday from 8 a.m. to 10 p.m. ET and weekends from 8:30 a.m. to 5 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. You can also
drop off applications or obtain prospectuses and other literature.
Automated 24-Hour Services
Tele*Access(registered trademark) Call 1-800-638-2587 to obtain information
such as account balance, date and amount of your last transaction, latest
dividend payment, and fund prices and yields. Additionally, you can request
prospectuses, statements, new account and tax forms; reorder checks; and
initiate purchase, redemption, and exchange orders for identically registered
accounts.
PC*Access(registered trademark) Through a personal computer via dial-up modem,
you can replicate all the services available on Tele*Access.
Account Services
Checking Write checks for $500 or more on any money market and most bond fund
accounts (except the High Yield and Emerging Markets Bond Funds).
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 move investments systematically from one
fund account to another, such as from a money fund to 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.
Discount Brokerage
Investments Available You can trade stocks, bonds, options, precious metals,
and other securities at a substantial savings over regular commission rates.
To Open an Account Call a shareholder service representative at
1-800-225-5132.
Investment Information
Combined Statement A comprehensive overview of your T. Rowe Price accounts is
provided. The summary page gives you 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.
Shareholder Reports Portfolio managers review the performance of the funds in
plain language and discuss T. Rowe Price's economic outlook.
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T. Rowe Price Mutual Funds
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Capital Appreciation
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New Era
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Value
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Emerging Markets Stock
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Latin America
New Asia
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Domestic Taxable
Corporate Income
GNMA
High Yield
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Maryland Tax-Free Bond
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Tax-Free High Yield
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Tax-Free Insured
Intermediate Bond
Tax-Free Short-Intermediate
Virginia Short-Term
Tax-Free Bond
Virginia Tax-Free Bond
International/Global
Global Government Bond
Emerging Markets Bond
International Bond
Short-Term Global Income
Money Market
Taxable
Prime Reserve
Summit Cash Reserves
U.S. Treasury Money
Tax-Free
California Tax-Free Money
New York Tax-Free Money
Summit Municipal Money Market
Tax-Exempt Money
Blended Asset
Personal Strategy Balanced
Personal Strategy Growth
Personal Strategy Income
T. Rowe Price No-Load Variable Annuity
Equity Income Portfolio
International Stock Portfolio
Limited-Term Bond Portfolio
New America Growth Portfolio
Personal Strategy Balanced Portfolio
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:
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1-800-225-5132 toll free
625-6500 Baltimore area
T. Rowe Price
100 East Pratt Street
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This report is authorized for distribution only to shareholders and to others
who have received a copy of the prospectus of the T. Rowe Price International
Stock Fund(registered trademark).
Invest With Confidence(registered trademark)
T. Rowe Price
T. Rowe Price Investment Services, Inc., Distributor REPTISF 4/30/96
Chart 1 - Geographic Diversification - pie chart showing: Europe 49%, Japan
25%, Far East 15%, Latin America 6%, Other and Reserves 5%.
Chart 2 - Correlation of Returns - a bar chart showing the correlation of
total returns of various international countries with the US stock market from
1981-1990 and from 1986-1995.
Footnote: Percentage of time that foreign markets moved in the same direction
as the U.S. market. Sources: Morgan Stanley Capital International indexes,
Standard & Poor's 500 Stock Index, and Frank Russell Company.
Chart 3 - SEC Graph - International Stock Fund - line graph showing growth of
$10,000 in the fund and in MSCI EAFE Index from 4/30/86 through 4/30/96.
