Semiannual Report
New Asia Fund
April 30, 1996
T. Rowe Price
REPORT HIGHLIGHTS
o After lagging the U.S. stock market for two years, most Far East markets
staged welcome rallies during the six-month period ended April 30.
o Indonesia and Malaysia posted the largest gains, followed by Hong Kong
and Singapore. Thailand and South Korea lagged.
o The New Asia Fund rose 15% during the six months, about two percentage
points behind its benchmark.
o Overall geographic allocations were little changed, with Hong Kong
remaining the largest position (26% of net assets), followed by Malaysia
and Singapore.
o We are optimistic that the turnaround will continue in the various stock
markets as earnings growth seems poised to pick up, particularly in
China, and overall growth in the region remains strong.
Fellow Shareholders
The usual Christmas and Chinese New Year seasonal rally lifted most Asian
markets between 10% and 30% from their mid-November lows. Most of the action
in the larger markets took place in January. The peripheral and relatively
closed markets - Taiwan, South Korea, and India - led the charge in April as
the major markets fell back in the face of rising U.S. interest rates.
MARKET ENVIRONMENT
The catalysts for the rally included profit-taking by U.S. investors in
domestic equities, especially technology, followed by reallocation of those
funds to Asian markets, which had lagged far behind the U.S. for two years.
Tax-loss selling by investors who bought at the highs in late 1993 and then
threw in the towel after two frustrating years seemed to have ended. Other
factors fueling investor enthusiasm were declines in U.S. interest rates
during the fourth quarter and in January, the low level of valuations in Asian
markets last November, and superior earnings growth in Asia relative to the
late-cycle earnings deceleration in the U.S.
PERFORMANCE REVIEW
Performance Comparison
Periods Ended 4/30/96 6 Months 12 Months
_____________________________________________________________________________
New Asia Fund 15.05% 20.54%
MSCI All Country Far East Free Ex-Japan 17.10 25.42
Note: We have replaced the fund's previous benchmark, the MSCI Pacific
Ex-Japan, with the MSCI All Country Far East Free Ex-Japan Index. Since the
latter includes a larger number of developing Asian countries and excludes
Australia and New Zealand, it is more relevant to your fund's investment
program. For the 6- and 12-month periods, the previous benchmark's returns
were 18.18% and 24.90%, respectively.
Against this favorable backdrop, your fund provided a strong 15.05% return for
the six months ended April 30. The advance more than offset the weakness of
the preceding six months, putting the 12-month return solidly in the positive
column. The fund lagged the benchmark index for both periods, as shown. For
the shorter period the lower relative return reflected our overweightings in
Singapore, South Korea, and Thailand, and for the 12-month period it was due
primarily to our relative underweighting in Hong Kong, the best-performing
market. In addition, the markets did not share our bias toward small and
medium-sized companies.
MARKET AND STRATEGY REVIEW
Hong Kong stocks rose 16% during the past six months, supported by the
property sector, where prices were showing signs of bottoming, at least in the
residential sector. After a sharp rise in January, the market backed off in
sympathy with the fall in U.S. bonds (Hong Kong is sensitive to U.S. interest
rates because its currency is pegged to the U.S. dollar) and from concern over
Taiwan-mainland China tensions. We took profits in conglomerate Hutchison
Whampoa, which was trading at a record premium valuation relative to the rest
of the market. We also added back a small holding in Hopewell Holdings, a
Chinese/Asian infrastructure play that had fallen quite sharply in 1995.
The Singapore market also rose almost 16% for the six months ended April 30
but was flat after January. In line with our assumptions, the economy showed
signs of continued slowing, with non-oil exports up a mere 5.2% year-over-year
in February compared with the heady growth of around 20% in the second half of
last year. Slowing electronics demand worldwide was largely responsible.
Corporate earnings were also disappointing, with manufacturing companies
faring worst, notably the ship repair sector. However, with continued low
interest rates, asset prices again firmed, which benefited our overweighting
in property stocks. We added to positions in Overseas Union Bank, which
reported good results and healthy loan growth, while trimming Sembawang, the
diversified manufacturer. Overall, the market was supported by attractive
valuations and abundant liquidity despite a slowing of growth expectations.
Chart 1 - Geographic Diversification
Malaysia was one of the star markets, rising 28% over the six-month period.
Investors became excessively gloomy on Malaysia last autumn, and foreigners
sold down their holdings aggressively. A surprisingly good trade surplus
report for December caught the bears wrong-footed, and foreign investors
rushed back to buy in February. We had cut our weightings in Malaysia
marginally last August but still remained overweighted there based on several
factors: the depth and energy of the economy, sensible and prescient
infrastructure spending (especially compared with everywhere else in Asia
except Singapore), and policies that seem to be cooling the economy without
freezing it. We took further profits in road-builder United Engineers and
bought a new position in Tanjong, a gaming stock that sold down in 1995 on
regulatory changes.
The Thai market fell 4.8% in the past fiscal quarter but generated a gain for
the six-month period. Inflation (6.9% in April alone) and the current account
deficit (around 8% of GDP) continued to worry the market, and earlier hopes
for a decline in interest rates, which had followed evidence that the economy
had peaked, proved to be premature. Outside the banking sector, where we are
overweighted, it was not easy to find growth stocks that fit our valuation
criteria.
Market Performance
In U.S. Dollar Terms
Periods Ended 4/30/96 6 Months 12 Months
_____________________________________________________________________________
Hong Kong 16.0% 35.3%
Indonesia 28.1 49.4
Malaysia 28.0 25.3
Philippines 11.4 7.2
Singapore 15.9 13.2
South Korea -3.4 8.9
Thailand 4.7 9.8
Source: Randall Helms Database
In Indonesia, regulatory risk once more dominated the headlines in recent
weeks, reflecting what continues to be a highly controlled economy. This time
around, a new National Auto Policy was announced that gave an exclusive
license with key tax advantages to a company connected with President
Suharto's family. The share price of Astra International, which until now was
the country's largest four-wheeler and motorcycle assembler and a leading
stock in the market, was duly hammered. Despite this, the market extended its
rally, gaining over 28% since October 31.
The Philippine market was dull so far this year but rose a respectable 11%
over the last six months. Overheating concerns remain for the country, but
inflation may start to drop later in 1996, based on lower food prices. The
boom in foreign investment is paying off in faster export growth, helping the
balance of payments.
Taiwan was the big story in Asia during the spring. Its first fully democratic
presidential election brought a national debate about independence versus
reunification with mainland China. China tried to influence that debate with
aggressive military maneuvers across the Taiwan Straits, but the scare tactics
backfired, and a full turnout of voters reelected Lee Teng-hui for another
four years. Immediately after the election, both sides (and the United States)
retreated from their bellicose stands to healthier statements of negotiation.
Just prior to the election, your fund was approved for direct foreign
investment in Taiwan. We added two banks to the portfolio, China Trust (a
leader in credit cards) and ICBC, both with good balance sheets in an industry
crippled by bad property loans four to six years ago. We also added Yageo,
which has steadily gained market share from the Japanese in resistors - a
vital component of nearly all electronics equipment.
South Korea rallied strongly in April but could not wholly offset earlier
declines, posting a small drop for the six-month period. The slush fund
scandal involving two former presidents continued to widen, and this, together
with the slowing world economy and weaker yen, which hurt Korea's
traditionally strong heavy industries, held back the market early in the year.
However, with interest rates having fallen to a five-year low of around 11%
and with the foreign ownership limit rising from 15% to 18%, the outlook
remains encouraging. Many of Korea's better managed companies sell at under
five times cash flow, and, as the political clouds lift, we would expect the
market to continue performing well.
Industry Diversification
Percent of Percent of
Net Assets Net Assets
10/31/95 4/30/96
_____________________________________________________________________________
Finance 44.5% 49.2%
Services 13.0 12.2
Materials 9.1 8.9
Multi-Industry 10.7 7.5
Energy 7.8 6.4
Capital Equipment 7.8 5.7
Consumer Goods 3.9 4.1
Miscellaneous 0.2 0.6
Reserves 3.0 5.4
_____________________________________________________________________________
Total 100.0% 100.0%
SUMMARY AND OUTLOOK
We believe the two-year bear market that followed the 1993 Asian bull market
has ended, and we anticipate a favorable investment environment. Valuations
are no longer as cheap as last November, and, by most measures, stock prices
are in the middle of historical ranges. However, earnings growth, which has
been decelerating since the end of 1994, looks set to pick up again in 1997.
The mid-1997 transfer of Hong Kong to China will worry investors from time to
time, but our analysis is that China will seek a smooth transition to show
Taiwan that reunification is nothing to fear. Elsewhere around the region,
high savings and investment rates could continue to power superior economic
and stock market performance.
Respectfully submitted,
Martin G. Wade
President
May 20, 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 New Asia Fund
Portfolio Highlights
TWENTY-FIVE LARGEST HOLDINGS
Percent of
Net Assets
4/30/96
_____________________________________________________________________________
Hutchison Whampoa, Hong Kong 2.5%
United Overseas Bank, Singapore 2.5
Korea Electric Power, South Korea 2.3
Guoco Group, Hong Kong 2.2
Hong Kong Land Holdings, Hong Kong 2.0
_____________________________________________________________________________
Swire Pacific, Hong Kong 1.9
Technology Resources Industries, Malaysia 1.8
Singapore Land, Singapore 1.8
United Engineers, Malaysia 1.7
Renong, Malaysia 1.6
_____________________________________________________________________________
First Pacific, Hong Kong 1.6
Dao Heng Bank Group, Hong Kong 1.6
Siam Commercial Bank, Thailand 1.6
Bangkok Bank, Thailand 1.5
Magnum, Malaysia 1.5
_____________________________________________________________________________
Hong Kong & Shanghai Bank, Hong Kong 1.4
China Trust, Taiwan 1.4
DBS Land, Singapore 1.4
Huaneng Power International, China 1.4
Singapore Press, Singapore 1.3
_____________________________________________________________________________
Hopewell Holdings, Hong Kong 1.3
Affin Holdings, Malaysia 1.2
Southeast Asia Cement, Philippines 1.2
Samsung Electronic, South Korea 1.2
Arab Malaysian Finance, Malaysia 1.1
_____________________________________________________________________________
Total 41.0%
T. Rowe Price New Asia Fund
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 - Performance Comparison
Average Annual Compound Total Return
Periods Ended 1 3 5 Since Inception
4/30/96 Year Years Years Inception Date
_____________________________________________________________________________
New Asia Fund 20.54% 13.91% 13.16% 15.83% 9/28/90
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 New Asia Fund
Unaudited
Financial Highlights For a share outstanding throughout each period#
6 Months Year 10 Months!! Year 9/28/90
Ended Ended Ended Ended to
4/30/96 10/31/95 10/31/94 10/31/93 12/31/92 12/31/91 12/31/90
NET ASSET VALUE
Beginning of
period $ 8.12 $ 10.07 $ 9.88 $ 6.34 $5.91 $ 5.04 $ 5.00
Investment activities
Net investment
income 0.02 0.08 0.06 0.03 0.10 0.10* 0.04*
Net realized
and unrealized
gain (loss) 1.19 (1.07) 0.36 3.51 0.56 0.87 0.04
Total from
investment
activities 1.21 (0.99) 0.42 3.54 0.66 0.97 0.08
Distributions
Net investment
income (0.09) (0.07) (0.04) - (0.10) (0.10) (0.04)
Net realized
gain - (0.89) (0.19) - (0.13) - -
Total
distri-
butions (0.09) (0.96) (0.23) - (0.23) (0.10) (0.04)
NET ASSET VALUE
End of period $ 9.24 $ 8.12 $ 10.07 $ 9.88 $6.34 $ 5.91 $ 5.04
Ratios/Supplemental Data
Total return 15.1% (9.7)% 4.1% 55.8% 11.2% 19.3%* 1.6%*
Ratio of expenses
to average
net assets 1.10%! 1.15% 1.22% 1.29%! 1.51% 1.75%* 1.75%*!
Ratio of net
investment income
to average
net assets 0.43%! 0.97% 0.85% 1.02%! 1.64% 1.75%* 2.10%*!
Portfolio
turnover
rate 47.2%! 63.7% 63.2% 40.4%! 36.3% 49.0% 3.2%!
Average commission
rate paid $0.0051 - - - - - -
Net assets, end
of period
(in millions) $2,369 $ 1,909 $ 2,303 $1,650 $ 315 $ 103 $11
* Excludes expenses in excess of a 1.75% voluntary expense limitation in
effect through 12/31/92.
! Annualized.
!! The fund's fiscal year-end changed to 10/31.
# All per share figures reflect the 2-for-1 stock split effective 5/27/94.
The accompanying notes are an integral part of these financial statements.
T. Rowe Price New Asia Fund
Unaudited April 30, 1996
Portfolio of Investments Shares/Par Value
In thousands
CHINA 3.9%
Common Stocks 3.9%
China North Industries Investment (USD) * 4,998,000 $ 3,748
Guangdong Electric Power (HKD) * 39,003,000 21,429
Huaneng Power International
(Class N) ADR (USD) * 2,235,140 32,409
Jilin Chemical Industrial (HKD)! 54,452,000 10,911
Qingling Motors (HKD) 16,922,000 5,524
Shanghai Petrochemical (Class H) (HKD) 30,186,000 8,975
Yizheng Chemical Fibre (Class H) (HKD) 34,878,000 9,356
_____________________________________________________________________________
Total China (Cost $100,421) 92,352
HONG KONG 26.3%
Common Stocks and Warrants 26.3%
Amway Asia Pacific (USD) 168,000 5,040
Bank of East Asia 2,777,426 9,335
CDL Hotels International 4,002,000 2,276
Cheung Kong Holdings 1,750,000 12,499
China Light & Power 2,250,000 10,617
China Strategic Investment, warrants,
exp. 8/30/97 * 1,350,000 100
Citic Pacific 2,000,000 7,860
Dao Heng Bank Group 10,004,260 38,282
Fairyoung Holdings! 20,344,000 8,153
Fairyoung Holdings, warrants,
exp. 6/30/96! * 3,334,400 7
First Pacific 28,814,000 38,367
Giordano International 3,142,000 2,904
Great Eagle Holdings 5,752,277 16,508
Guangdong Investment 27,868,000 17,203
Guangzhou Investment 59,218,000 14,698
Guoco Group 10,276,000 51,144
Henderson China Holdings * 1,198,000 3,322
Henderson Land Development 1,000,000 7,175
HKR International 8,000,400 9,101
Hon Kwok Land Investment 19,409,590 6,775
Hong Kong & Shanghai Bank 2,250,000 33,595
Hong Kong & Shanghai Hotels 918,000 1,584
Hong Kong Land Holdings (USD) 22,033,727 47,152
Hong Kong Telecommunications 5,000,000 $ 9,534
Hopewell Holdings 48,766,000 29,787
Hutchison Whampoa 9,546,000 59,234
Hysan Development 7,500,000 24,094
Hysan Development, warrants, exp. 4/30/98 * 375,000 189
Jardine International Motor Holdings 2,416,000 3,123
Kumagai Gumi 3,880,000 3,586
Manhattan Card 14,000,000 8,325
National Mutual Asia 13,480,000 11,414
New World Development 5,411,000 24,273
New World Infrastructure * 2,885,000 6,415
Pacific Basin Bulk Shipping (USD)! 710,000 7,810
Pokphand 15,586,000 6,599
Shangri-La Asia Capital 4,999,000 6,883
South Sea Development * 2,085,090 59
Sun Hung Kai Properties 600,000 5,720
Swire Pacific (Class A) 5,150,000 43,940
Wharf Holdings 4,668,000 17,289
Wing Hang Bank 2,925,500 10,703
_____________________________________________________________________________
Total Hong Kong (Cost $566,743) 622,674
INDIA 2.3%
Common Stocks 2.3%
Grasim Industries GDS (USD) 526,000 10,257
Hindalco GDR (USD) 463,000 20,418
Mahanagar Telephone 1,200,000 7,919
Reliance Industries GDS (USD)! 710,000 11,893
Tata Engineering & Locomotive 164,300 2,274
Tata Engineering & Locomotive GDR (USD) 124,800 2,278
_____________________________________________________________________________
Total India (Cost $50,032) 55,039
INDONESIA 5.6%
Common Stocks 5.6%
Astra International 280,000 414
Bank Dagang Nasional 3,421,250 3,409
Dharmala Intiland 1,912,000 1,495
Hanjaya Mandala Sampoerna 1,780,500 $ 19,648
Indofoods Sukses Makmur 2,325,300 10,687
Indorama Synthetic 2,280,500 7,379
Indosat (Class B) 2,350,000 8,157
Indosat (Class B) ADR (USD) 125,000 4,328
Jaya Real Property 1,188,000 4,124
Kalbe Farma 394,000 1,140
Modernland Realty 512,000 576
Mulia Industrindo 10,314,150 19,890
Pabrik Kertas Tjiwi Kimia 4,292,638 4,507
Panin Bank 4,527,500 4,608
Semen Cibinong 1,021,400 3,020
Semen Gresik 3,714,000 12,852
Telekom Indonesia * 8,411,000 13,967
Telekom Indonesia ADS (USD) * 382,000 12,940
_____________________________________________________________________________
133,141
Convertible Bonds 0.0%
Modernland Realty, 6.00%, 1/04/03 IDR 1,228,800,000 416
_____________________________________________________________________________
416
_____________________________________________________________________________
Total Indonesia (Cost $97,779) 133,557
MALAYSIA 18.5%
Common Stocks, Rights and Warrants 17.5%
Affin Holdings 11,118,800 27,426
Affin Holdings, warrants, exp. 11/15/99 * 1,978,400 2,079
Arab Malaysian 722,000 2,925
Arab Malaysian Finance 4,561,333 21,038
Bandar Raya Developments 1,200,000 2,281
Bandar Raya Developments, warrants,
exp. 9/01/97 * 3,450,000 3,791
Berjaya Leisure 6,021,000 6,134
Berjaya Sports Toto 470,666 1,510
Chemical Company of Malaysia 2,781,000 8,867
Chemical Company of Malaysia, rights * 695,250 445
Commerce Asset Holdings 816,000 5,564
Commerce Asset Holdings, warrants,
exp. 6/27/98 * 2,304,333 9,242
Crest Petroleum * 969,000 3,614
Diversified Resources 2,500,000 8,172
Gadek 800,000 $ 5,262
Gadek, rights cv. into loan stock * 800,000 1,861
Gadek, rights cv. into warrants * 800,000 1,348
Hicom Holdings 2,500,000 7,370
Hicom Holdings, rights cv. into warrants * 625,000 594
Hong Leong Bank, warrants, exp. 2/28/99 * 286,500 339
Intiplus 1,000,000 1,095
IOI Properties 1,235,000 4,086
Magnum 20,026,000 34,698
Malaysian Airline System 2,430,000 8,041
Malaysian Assurance Alliance 2,742,250 16,388
MBF Capital 6,958,000 10,437
Metacorp 1,589,000 4,525
Multi-Purpose Holdings 5,000,000 8,703
Pacific & Orient 1,575,000 5,211
Pan Pacific Asia 1,000,000 3,670
Phileo Allied 2,000,000 11,952
Public Finance 3,600,000 8,663
Renong 21,150,000 36,815
Renong, rights cv. into loan stock * 4,630,000 28
Renong, rights cv. into warrants * 2,893,750 812
Resorts World 1,600,000 9,690
Sungei Way Holdings 2,820,000 13,007
Sungei Way Holdings, warrants, exp. 8/20/97 * 458,000 1,653
Sunway Building Technology 2,025,000 10,071
Tanjong 4,912,000 18,716
Technology Resources Industries * 12,713,000 43,340
United Engineers 4,000,000 27,434
Westmont Industries! 2,284,000 4,947
Westmont Industries (Class A)! * 5,565,600 11,608
_____________________________________________________________________________
415,452
Preferred Stocks 0.4%
Arab Malaysian Finance, cv. loan stock,
7.50%, 11/20/99 8,073,333 5,926
Berjaya Leisure, cv. loan stock,
6.00%, 1/31/01 * 2,007,000 1,183
Berjaya Sports Toto, cv. loan stock,
9.00%, 10/30/97 1,381,000 3,628
_____________________________________________________________________________
10,737
Convertible Bonds 0.6%
Renong, 2.50%, 1/15/05 USD 800,000 $ 922
United Engineers, 2.00%, 3/01/04 USD 10,460,000 12,467
_____________________________________________________________________________
13,389
_____________________________________________________________________________
Total Malaysia (Cost $373,294) 439,578
PHILIPPINES 4.4%
Common Stocks 4.4%
Ayala Land (Class B) 8,639,450 13,370
C & P Homes 5,798,000 4,985
Enron Global Power & Pipeline (USD) 469,100 11,552
Fil-Estate Land * 2,250,000 2,364
JG Summit Holdings (Class B) 16,113,500 6,619
JG Summit Holdings (Class B) GDS (USD) 50,000 2,037
Manila Electric 132,060 1,231
Metro Pacific 67,383,000 15,964
Philippine Commercial International Bank 640,000 8,559
Philippine Long Distance Telephone 20,950 1,065
Philippine Long Distance Telephone ADR (USD) 39,000 1,965
Philippine National Bank 147,730 2,202
Pilipino Telephone 1,144,500 1,684
SM Prime * 12,854,000 3,733
Southeast Asia Cement * 190,539,000 28,031
_____________________________________________________________________________
Total Philippines (Cost $87,626) 105,361
SINGAPORE 13.9%
Common Stocks and Warrants 13.9%
DBS Land 8,016,000 32,502
Development Bank of Singapore 2,021,000 25,590
Far East Levingston Shipbuilding 1,291,000 7,530
Fraser & Neave 610,800 6,778
Jurong Shipyard 2,218,000 12,701
Keppel 1,149,000 10,380
Mandarin Oriental (USD) 3,359,761 4,771
Neptune Orient Lines 6,558,000 7,277
Overseas Union Bank 3,367,000 26,106
Overseas Union Enterprises 1,916,000 $ 10,972
Sembawang 1,441,000 7,483
Singapore Airlines 1,735,000 17,525
Singapore Land 5,889,000 41,891
Singapore Press 1,577,560 29,850
Straits Steamship Land 2,600,000 9,062
Straits Steamship Land, warrants,
exp. 12/12/00 * 325,000 509
United Industrial 18,478,000 18,796
United Overseas Bank 5,789,500 56,421
United Overseas Bank, warrants,
exp. 6/17/97 * 491,208 2,096
_____________________________________________________________________________
Total Singapore (Cost $294,698) 328,240
SOUTH KOREA 8.5%
Common Stocks 8.5%
Cho Hung Bank 1,146,000 17,812
Daewoo Securities 332,800 10,904
Hanil Bank 865,320 11,986
Hanil Securities 456,700 7,453
Keum Kang Development 100,000 1,940
Kook Min Bank 858,129 21,306
Korea Electric Power 1,139,000 54,410
Korea Growth Trust IDR (USD) 80 2,840
Korea Housing Bank * 476,630 15,092
Korea Mobile Telecommunications GDR (USD) * 60,000 3,420
Kun Young Construction 161,445 1,411
Pohang Iron & Steel 143,640 13,564
Samsung Electronic 158,256 21,555
Samsung Electronic, new 43,746 5,818
Seoul Bank * 696,000 6,376
Shinhan Bank 35,650 906
Yukong 105,000 3,913
_____________________________________________________________________________
Total South Korea (Cost $176,493) 200,706
TAIWAN 3.1%
Common Stocks 2.9%
China Steel GDS (USD) 258,000 5,805
China Trust 16,206,000 $ 33,099
GVC Corporation GDR (USD) * 296,303 2,919
ICBC * 3,750,000 12,489
Tung Ho Steel Enterprise GDS (USD) * 165,000 2,021
Yageo! * 5,302,000 10,731
Yageo GDR (USD) * 116,000 1,175
_____________________________________________________________________________
68,239
Convertible Bonds 0.2%
Acer, 4.00%, 6/10/01 USD 1,100,000 2,876
Formosa Chemical & Fibre, 1.75%, 7/19/01 USD 1,984,000 2,019
_____________________________________________________________________________
4,895
_____________________________________________________________________________
Total Taiwan (Cost $64,226) 73,134
THAILAND 8.0%
Common Stocks 7.9%
Advanced Information Service 173,000 2,933
Bangkok Bank 2,281,900 33,083
Bank of Ayudhya 2,366,800 13,969
Central Pattana 1,418,300 5,309
Central Pattana, local shares 30,800 115
Krung Thai Bank 1,139,300 5,596
Land & Houses 226,000 3,491
PTT Exploration & Production 895,000 12,480
Sahavirya Steel * 2,926,000 2,753
Siam Cement 170,300 8,770
Siam Commercial Bank 2,534,800 37,353
Thai Farmers Bank 1,882,620 21,627
Thai Military Bank 2,548,200 12,315
Total Access Communications (USD) 1,905,000 16,764
United Communications 800,000 10,965
_____________________________________________________________________________
187,523
Corporate Bonds 0.1%
Bangkok Bank, 3.25%, 3/03/04 USD 1,600,000 1,974
_____________________________________________________________________________
1,974
_____________________________________________________________________________
Total Thailand (Cost $133,172) 189,497
VIETNAM 0.1%
Common Stocks 0.1%
Lazard Freres & Co. Vietnam Fund (USD) * 152,800 $ 1,624
_____________________________________________________________________________
Total Vietnam (Cost $1,578) 1,624
SHORT-TERM INVESTMENTS 3.3%
Commercial Paper 3.3%
BHF Finance (Delaware), 5.16%, 7/18/96 $10,000,000 9,739
Caisse des Depots et Consignations, 4(2),
5.35%, 5/02/96 10,000,000 9,946
Delaware Funding, 4(2), 5.30%, 5/28/96 10,000,000 9,953
Ford Credit Europe, 5.35%, 5/01/96 10,000,000 9,948
Great Lakes Chemical, 4(2), 5.35%, 5/03/96 10,000,000 9,945
Mobil Australia Finance, 4(2),
5.30%, 5/16/96 10,000,000 9,959
Telstra, 5.31%, 5/24/96 10,000,000 9,917
Investments in Commercial Paper through a
joint account, 5.36%-5.37%, 5/01/96 8,335,001 8,334
_____________________________________________________________________________
Total Short-term Investments (Cost $77,741) 77,741
Total Investments in Securities
97.9% of Net Assets (Cost $2,023,803) $ 2,319,503
Other Assets Less Liabilities 49,647
NET ASSETS $ 2,369,150
NET ASSET VALUE PER SHARE $ 9.24
* Non-income producing
! Affiliated company
HKD Hong Kong dollar
IDR Indonesian rupia
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."
The accompanying notes are an integral part of these financial statements.
T. Rowe Price New Asia Fund
Unaudited April 30, 1996
Statement of Assets and Liabilities
In thousands
Assets
Investments in securities, at value (cost $ 2,023,803) $ 2,319,503
Other assets 71,834
Total assets 2,391,337
Liabilities
Total liabilities 22,187
NET ASSETS $ 2,369,150
Net Assets Consist of:
Accumulated net investment income - net of distributions $ 1,244
Accumulated net realized gain/loss - net of distributions (58,451)
Net unrealized gain (loss) 295,719
Paid-in-capital applicable to 256,444,221 shares of
$0.01 par value capital stock outstanding;
2,000,000,000 shares of the Corporation authorized 2,130,638
NET ASSETS $ 2,369,150
NET ASSET VALUE PER SHARE $ 9.24
The accompanying notes are an integral part of these financial statements.
T. Rowe Price New Asia Fund
Unaudited
Statement of Operations
In thousands
6 Months
Ended
4/30/96
Investment Income
Income
Dividend (net of foreign taxes of $ 1,066) $ 13,357
Interest 2,706
Total income 16,063
Expenses
Investment management 8,726
Shareholder servicing 2,086
Custody and accounting 424
Prospectus and shareholder reports 190
Registration 62
Legal and audit 17
Directors 8
Miscellaneous 19
Total expenses 11,532
Net investment income 4,531
Realized and Unrealized Gain (Loss)
Net realized gain (loss)
Securities (Affiliated companies ($ 19,717)) (16,583)
Foreign currency transactions (838)
Net realized gain (loss) (17,421)
Change in net unrealized gain or loss
Securities 295,625
Other assets and liabilities
denominated in foreign currencies 105
Change in net unrealized gain or loss 295,730
Net realized and unrealized gain (loss) 278,309
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS $ 282,840
The accompanying notes are an integral part of these financial statements.
T. Rowe Price New Asia 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 $ 4,531 $ 19,512
Net realized gain (loss) (17,421) (42,464)
Change in net unrealized gain or loss 295,730 (197,839)
Increase (decrease) in net assets
from operations 282,840 (220,791)
Distributions to shareholders
Net investment income (20,403) (15,633)
Net realized gain - (199,093)
Decrease in net assets from
distributions (20,403) (214,726)
Capital share transactions*
Shares sold 589,513 666,757
Distributions reinvested 19,209 204,998
Shares redeemed (410,902) (830,186)
Increase (decrease) in net assets from
capital share transactions 197,820 41,569
Net Assets
Increase (decrease) during period 460,257 (393,948)
Beginning of period 1,908,893 2,302,841
End of period $ 2,369,150 $ 1,908,893
*Share information
Shares sold 66,922 81,249
Distributions reinvested 2,351 25,593
Shares redeemed (47,962) (100,461)
Increase (decrease) in shares
outstanding 21,311 6,381
The accompanying notes are an integral part of these financial statements.
T. Rowe Price New Asia 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 New Asia Fund (the fund), a
diversified, open-end management investment company, is one of the portfolios
established by the Corporation and commenced operations on September 28, 1990.
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.
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.
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
andmay 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 $76,425,000,
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 $583,268,000 and $471,440,000, 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. The fund has unused realized capital loss carryforwards
for federal income tax purposes of $40,050,000 which expire in 2003. The fund
intends to retain gains realized in future periods that may be offset by
available capital loss carryforwards.
At April 30, 1996, the aggregate cost of investments for federal income tax
and financial reporting purposes was $2,023,803,000 and net unrealized gain
aggregated $295,700,000, of which $370,719,000 related to appreciated
investments and $75,019,000 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 $1,597,000 was payable at
April 30, 1996. The fee is computed daily and paid monthly, and consists of an
Individual Fund Fee equal to 0.50% 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, 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., 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 $1,686,000
for the six months ended April 30, 1996, of which $363,000 was payable at
period-end.
During the six months ended April 30, 1996, the fund, in the ordinary course
of business, paid commissions of $1,000,000 to, and placed security purchase
and sale orders aggregating $204,151,000 with, certain affiliates of the
Manager in connection with the execution of various portfolio transactions.
During fiscal year 1995, Price Waterhouse LLP succeeded Coopers & Lybrand,
L.L.P. as independent accountants for the T. Rowe Price New Asia Fund, a
decision that was approved by the fund's Board of Directors. During fiscal
years 1993 and 1994, the fund has received unqualified opinions and has had no
disagreements with Coopers & Lybrand, L.L.P. or reportable events
that caused the change.
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 witha
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.
The T. Rowe Price Report This is a quarterly newsletter with relevant
articles on market trends, personal financial planning, and T. Rowe Price's
economic perspective.
Performance Update This quarterly report reviews recent market developments
and provides comprehensive performance information for each T. Rowe Price
fund.
Insights This library of information includes reports on mutual fund tax
issues, investment strategies, and financial markets.
Detailed Investment Guides Our widely acclaimed Asset Mix Worksheet, College
Planning Kit, Personal Strategy Planner, Retirees Financial Guide, and
Retirement Planning Kit (also available on disk for PC use) help you determine
and reach your investment goals.
T. Rowe Price Mutual Funds
STOCK FUNDS
Domestic
Balanced
Blue Chip Growth
Capital Appreciation
Capital Opportunity
Dividend Growth
Equity Income
Equity Index
Growth & Income
Growth Stock
Health Sciences
Mid-Cap Growth
New America Growth
New Era
New Horizons
OTC
Science & Technology
Small-Cap Value
Spectrum Growth
Value
International/Global
Emerging Markets Stock
European Stock
Global Stock
International Discovery
International Stock
Japan
Latin America
New Asia
BOND FUNDS
Domestic Taxable
Corporate Income
GNMA
High Yield
New Income
Short-Term Bond
Short-Term U.S. Government
Spectrum Income
Summit GNMA
Summit Limited-Term Bond
U.S. Treasury Intermediate
U.S. Treasury Long-Term
Domestic Tax-Free
California Tax-Free Bond
Florida Insured Intermediate Tax-Free
Georgia Tax-Free Bond
Maryland Short-Term Tax-Free Bond
Maryland Tax-Free Bond
New Jersey Tax-Free Bond
New York Tax-Free Bond
Summit Municipal Income
Summit Municipal Intermediate
Tax-Free High Yield
Tax-Free Income
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:
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 distribution only to shareholders and to others
who have received a copy of the prospectus of the T. Rowe Price New Asia Fund.
Invest With Confidence(registered trademark)
T. Rowe Price
T. Rowe Price Investment Services, Inc., Distributor REPTNAS 4/30/96
Chart 1 - Geographic Diversification - pie chart showing geographic
diversification of net assets as of 4/30/96: Hong Kong 26%; Malaysia 19%;
Singapore 14%; South Korea 9%; Thailand 8%; Indonesia 6%; Philippines 4%;
Other and Reserves 14%.
Chart 2 - Correlation of Returns - 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 - New Asia Fund - line graph showing growth of $10,000 in
the fund and in MSCI AC Far East Free Ex-Japan Index from 9//28/90 through
4/30/96.
