<PAGE>
Annual Report
Emerging
Markets
Stock Fund
----------------
October 31, 1997
----------------
[GRAPHIC APPEARS HERE]
T. Rowe Price
<PAGE>
REPORT HIGHLIGHTS
----------------------------------------------------------------------------
Emerging Markets Stock Fund
. Emerging stock markets endured a difficult six months as pressure on
currencies forced interest rates higher, sending stock prices lower.
. The selling spread throughout Southeast Asia, eventually spilling over to
worldwide markets and leaving no place left to hide.
. Your fund's -1.60% return over the 12 months was ahead of the MSCI index's -
8.48% but behind the average 3.17% of the Lipper peer group.
. Our major investment decision was to trim exposure to Southeast Asia once it
was clear that the selling was spreading from Thailand to other Asian
countries.
. While we expect the volatility to continue near term, stock valuations in
various markets look attractive and we expect above-average growth to resume
over time.
<PAGE>
Fellow Shareholders
Emerging markets suffered a difficult six-month period through the end of
October, driving performance for the entire year into negative territory.
During the summer severe problems affected the Southeast Asian markets of
Thailand, Malaysia, Indonesia, and the Philippines, where high current account
deficits led to pressure on the currencies, which were subsequently devalued.
High interest rates swiftly followed, weighing further on equity markets.
<TABLE>
<CAPTION>
- -----------------------
Performance Comparison
- ------------------------------------------------------------------------------
Periods Ended 10/31/97 6 Months 12 Months
- ------------------------------------------------------------------------------
<S> <C> <C>
Emerging Markets
Stock Fund - 11.43% - 1.60%
..............................................................................
MSCI Emerging
Markets Free Index - 17.54 - 8.48
..............................................................................
Lipper Emerging Markets
Funds Average - 9.34 3.17
..............................................................................
</TABLE>
However, up until mid-October the crisis remained a relatively localized
problem among emerging markets, and your fund was weathering the storm
handsomely. Then the crisis spread, with Taiwan and Korea indulging in
competitive devaluations; soon the Hong Kong dollar came under
speculative attack with overnight interest rates surging to over 100%.
At this point, no emerging market sector was saved as the risk premium
of local interest rates over Treasuries jumped from under 300 basis
points to an average of over 800 (100 basis points equal one percent).
Sharp drops in the thus-far steady markets of Latin America and emerging
Europe ensued. There was no place left to hide and the selling grew
indiscriminate, with the largest and most-liquid areas often taking the
biggest hits.
While your fund lost a significant amount of value over the half year in
absolute terms, it surpassed the MSCI Emerging Markets Free Index by a
handsome margin. Returns were - 11.43% for the fund compared with -
17.54% for the index. The fund was down 1.60% for the past 12 months
versus - 8.48% for the index. However, your fund trailed the Lipper peer
group average performance over both periods.
1
<PAGE>
For the half year, value added versus the index came from many different
areas. In Europe we benefited from an average weighting of 8% in Russia
where the market was up substantially, posting the best returns in the
world so far this year. Russia is still not part of the index but is
scheduled to enter in late November. The Hungarian stock market, where
we were overweighted 4% compared with the index, also made a positive
contribution, rallying more than 20%. In the Southeast Asian markets we
avoided some of the woes with a 10% underweighting overall in Thailand,
Indonesia, Malaysia, and the Philippines. However, all holdings in
those markets fell savagely, hurting performance in absolute terms.
Latin America had a modestly positive impact on results, with Brazil
retreating but Mexico, where we were slightly overweighted, up more than
17%. Our underperformance versus the Lipper average of similar funds
was largely due to our relative weightings in various markets compared
with those of our peers.
<TABLE>
<CAPTION>
- -------------------
Market Performance
- ------------------------------------------------------------------------------
(In U.S. Dollar Terms)
Periods Ended 10/31/97 6 Months 12 Months
- ------------------------------------------------------------------------------
<S> <C> <C>
Argentina - 3.08% 24.45%
..............................................................................
Brazil - 14.18 18.82
..............................................................................
Chile - 1.93 3.10
..............................................................................
China (Free) - 15.01 22.29
..............................................................................
Israel (Nondomestic) 32.47 46.47
..............................................................................
Malaysia EMG - 54.08 - 57.10
..............................................................................
Mexico 17.17 37.25
..............................................................................
Poland - 16.25 - 9.81
..............................................................................
South Africa - 14.07 - 5.67
..............................................................................
Thailand - 57.49 - 68.46
..............................................................................
</TABLE>
Source: FAME Information Services, Inc.; based on MSCI indices.
In stock selection terms, most of the relative value was added in Asia,
where our avoidance of banks helped as worries about the financial
system mounted. The fund also benefited from weakness in worldwide
commodity prices due to its light exposure to natural resources and
greater focus on better-performing service industries. Our major
portfolio move during the past few months was a further cut in Southeast
Asian stock holdings once it became clear that the domino effect was
spreading from Thailand to other countries in the region. Over the half
year, exposure to Asia fell to 23% of fund assets, with the major
positions concentrated in India, Taiwan, and China. Most of the
proceeds from sales of Asian securities were invested in Europe, where
our Russian holdings advanced from only 1% of assets in April to 11% at
fiscal year-end. We initiated positions in Greek equities,
establishing about a 3.5% share of assets in that market. The economic
environment there looks healthy, and we have identified several
2
<PAGE>
potentially rewarding growth stocks. We trimmed Latin American stocks
slightly as the economic picture in Brazil worsened after a period of
strong performance.
MARKET REVIEW
Far East
Asia clearly had a miserable six months, although most of the misery was
concentrated in Southeast Asian markets. In U.S. dollar terms,
Thailand, Indonesia, Malaysia, and the Philippines all lost
approximately 50%. Other parts of Asia fared better, but almost all
were still down in absolute terms. High and rising current account
deficits led to pressure on exchange rate regimes, which finally cracked
in July and August. The currencies of all these countries have now
fallen over 25% so far this year as a move away from managed pegs to the
U.S. dollar became increasingly inevitable.
Sadly, the woes were compounded by policy incompetence, sharply higher
interest rates, and even verbal attacks on currency traders by the Prime
Minister of Malaysia. A $100 billion rescue package, said to be led by
Japan, appears to be more talk than action. While it is tempting to
feel that markets have overreacted with such massive declines, the
banking problem of excess property lending and nonperforming loans of
more than 5% of all outstanding loans leads us to remain cautious.
Crucially, risk premiums have soared and equities are no longer valued
relative to previously modest U.S. dollar-linked interest rates.
[PIE CHART APPEARS HERE]
<TABLE>
<CAPTION>
- ---------------------------
Geographic Diversification
- ------------------------------------------------------------------------------
<S> <C>
Latin America 40%
Far East 23%
Europe 21%
Africa and the Middle East 11%
Other and Reserves 5%
</TABLE>
Based on net assets as of 10/31/97
It is clear that forthcoming corporate earnings reports will be
miserable due to a combination of slowing economies and much higher
financing costs. What is needed is tough action from governments, but
thus far
3
<PAGE>
their close personal ties to business have made this difficult.
Toward the end of the quarter pressure also mounted on South Korea,
which has excessive corporate debt and a fragile banking system, and we
reduced exposure there. Fortunately, the economic cycle in China looks
far healthier, with inflation at around 5% and the trade surplus rising.
This liquidity should help to support not only the mainland but Taiwan
as well, where electronics firms are performing strongly. India, our
largest Asian weighting, also looks relatively robust. Our top stocks
there all have returns on capital of more than 25%, well in excess of
their cost of capital.
Eastern Europe
In contrast to Asia, emerging Europe enjoyed a good half year, although
much of the shine was removed in late October. Russian stocks starred
once again, rising over 36%, but Hungary and Greece also produced
healthy returns. In Russia, inflation continues to fall, the ruble has
been steady against the U.S. dollar, and the reformers in Boris
Yeltsin's cabinet have clearly got the upper hand. Perhaps most
important, industrial production has now improved for five months in
succession, and it looks as though GDP growth will finally turn positive
in 1998 after the severe post-Communist depression. Also, debt levels
and the trade account are not in bad shape compared with many emerging
economies. In addition, many stocks still sell for three or four times
cash flow with assets typically at deep discounts to international
peers. We focused our stock selection here on the oil and energys
sectors, including Lukoil and Unified Energy Systems.
- --------------------------------------------------------------------------------
IN CONTRAST TO ASIA, EMERGING EUROPE ENJOYED A GOOD HALF YEAR, ALTHOUGH MUCH OF
THE SHINE WAS REMOVED IN LATE OCTOBER.
- --------------------------------------------------------------------------------
In the rest of Eastern Europe we are concerned about deteriorating
external balances in the Czech Republic and Poland, but Hungary
represents a notable bright spot. Early structural reforms laid good
foundations for sustainable growth, and foreign direct investment has
been the highest in the region. Hungary is home to several well-managed
growth companies, many in the pharmaceutical sector. Richter Gedeon, for
example, has a return on equity of more than 25%. In Southern Europe we
played the region through Greece rather than Turkey. Greece offers a
steady path to European Monetary Union convergence, with inflation
around 6% and falling real interest rates of just under 400 basis
points. By contrast, Turkey still has hyper-inflation and a pro-Islamic
coalition that seems to have little regard for
4
<PAGE>
IMF-style fiscal discipline. Despite this, the Turkish stock market was
strong and our zero weighting proved to be a mistake.
Latin America
Latin America was cruising along quite nicely until mid-October, when it
caught a bad dose of Asian flu. Bond yields ballooned over those of
U.S. Treasury bonds, and equity markets fell sharply as a consequence.
Brazil also gave up its regional leadership role as it fell 14% over the
half year while Mexico rose 17%.
In Brazil the attention turned to a current account deficit equivalent
to about 4.5% of GDP, slowing exports, and the overvalued currency. On
October 30 the central bank raised the overnight interest rate from a
floor of 20% to a new floor of 43%. Despite the trouble, however, there
is some cause for optimism. In striking contrast to Southeast Asia, the
Brazilian government has demonstrated a strong political will to defend
the currency even at the cost of pushing the economy into recession. A
sharp austerity budget was recently announced, and the planned $70
billion privatization program over the next three years remains in
place. Encouragingly, privatization since the crisis began has been
well received. It should also not be forgotten that the recent weakness
left the Brazilian market selling at less than book value. Our stock
selection focuses on privatization and reform, not economically
sensitive areas. Telecomunicacoes Brasileiras was the fund's largest
holding.
<TABLE>
<CAPTION>
- --------------------------
Industry Diversification
- ------------------------------------------------------------------------------
Percent of Percent of
Net Assets Net Assets
4/30/97 10/31/97
- ------------------------------------------------------------------------------
<S> <C> <C>
Services 26.9% 27.9%
..............................................................................
Energy 15.8 27.0
..............................................................................
Consumer Goods 12.8 12.7
..............................................................................
Finance 16.1 12.7
..............................................................................
Materials 12.6 9.4
..............................................................................
Capital Equipment 3.2 4.0
..............................................................................
Multi-industry 5.5 1.2
..............................................................................
All Other 0.3 0.1
..............................................................................
Reserves 6.8 5.0
- ------------------------------------------------------------------------------
Total 100.0% 100.0%
</TABLE>
In Mexico the economic environment is in better shape with a surplus in
the trade account, a current account deficit of less than 2% of GDP,
inflation down around 15%, and signs of improving consumer confidence.
The banking system is also much more robust than it was three years
5
<PAGE>
ago. This led us to maintain our overweighted position, including a
significant holding in Telefonos de Mexico. We remained underweighted
in Chile. While Chile offers a safe haven in times of trouble, more
than 40% of its exports are still attributable to the copper industry,
and we find few steady growth opportunities there at present.
Africa
African markets did poorly during the past six months, with South Africa
declining 14%. Real interest rates remained prohibitively high at
around 10% as the central bank attempted to protect the value of the
rand. While rates must fall from these levels, we have major
reservations about the sustainability of growth due to low productivity
relative to wages, high union power, and shocking levels of crime. The
extensive cross-shareholding structure also makes it hard to find
attractive companies that are free from excessive conglomeratization.
Fund exposure in this market at fiscal year-end was exclusively in
industrial stocks at the expense of natural resources shares.
OUTLOOK
The six months ended October 31, 1997, were a tough half year for
investment in emerging markets. Financial system worries in Japan,
jitters on Wall Street, and currency problems in Asia led to sharply
rising interest rates in many markets where your fund invests. In
retrospect, there is little doubt that we underestimated the risk in
emerging market stocks against the backdrop of ever-ascending prices on
Wall Street.
However, we believe that conditions in many emerging markets are still
favorable, with low inflation globally, structural changes opening more
and more markets for investment, and a general commitment to expanding
free trade. Governments in Latin America and emerging
6
<PAGE>
Europe have shown their willingness to make the hard decisions necessary
to defend their currencies in times of trouble, and stocks in Brazil and
Russia currently carry reasonable valuations, with many selling for less
than book value. In Southeast Asia, the near-term outlook is uncertain.
However, the latest turbulence may spur local governments to tighten the
fiscal reins and the private sector to concentrate on enhancing
shareholder value.
While the overall environment in emerging markets is likely to remain
volatile for some months to come, we believe these markets will
eventually return to above-average growth and perform well over time.
Therefore, it is important for investors to maintain their long-term
perspective.
Respectfully submitted,
/s/ Martin G. Wade
Martin G. Wade
President
November 21, 1997
7
<PAGE>
T. Rowe Price Emerging Markets Stock Fund
- --------------------------------------------------------------------------------
- --------------------
Portfolio Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TWENTY-FIVE LARGEST HOLDINGS
Percent of
Net Assets
10/31/97
- --------------------------------------------------------------------------------
<S> <C>
Telecomunicacoes Brasileiras, Brazil 6.6%
................................................................................
Lukoil, Russia 3.8
................................................................................
Richter Gedeon, Hungary 3.2
................................................................................
Unified Energy Systems, Russia 2.8
................................................................................
Telefonos de Mexico, Mexico 2.6
- --------------------------------------------------------------------------------
YPF Sociedad Anonima, Argentina 2.1
................................................................................
Mahanagar Telephone, India 1.6
................................................................................
Hellenic Telecommunication, Greece 1.6
................................................................................
Eletrobras, Brazil 1.6
................................................................................
Petrol Brasileiros, Brazil 1.5
- --------------------------------------------------------------------------------
AO Tatneft, Russia 1.5
................................................................................
Brahma, Brazil 1.5
................................................................................
Cemex, Mexico 1.4
................................................................................
Huaneng Power International, China 1.4
................................................................................
Industrial Credit & Investment Corporation of India, India 1.2
- --------------------------------------------------------------------------------
AO Mosenergo, Russia 1.1
................................................................................
Cia Energetica Minas Gerais, Brazil 1.1
................................................................................
Sasol, South Africa 1.1
................................................................................
Telefonica de Argentina, Argentina 1.1
................................................................................
MISR International Bank, Egypt 1.0
- --------------------------------------------------------------------------------
Fomentos Economico Mexicano, Mexico 1.0
................................................................................
Surgutneftegaz, Russia 1.0
................................................................................
Ameriyah Cement, Egypt 1.0
................................................................................
SPT Telecom, Czech Republic 0.9
................................................................................
Hindustan Lever, India 0.9
- --------------------------------------------------------------------------------
Total 44.6%
</TABLE>
8
<PAGE>
T. Rowe Price Emerging Markets 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.
EMERGING MARKETS STOCK FUND
-----------------------------------------------------------------------------
[LINE CHART APPEARS HERE]
<TABLE>
<CAPTION>
Emerging MSCI Emerging Lipper Emerging
Date Markets Stock Fund Markets Free Index Markets Funds Average
- ---- ------------------ ------------------ ---------------------
<S> <C> <C> <C>
03/31/95 10,000 10,000 10,000
10/95 10,480 10,547 10,568
10/96 11,600 11,230 11,489
10/97 11,415 10,278 11,620
</TABLE>
- ------------------------------------
Average Annual Compound Total Return
- --------------------------------------------------------------------------------
This table shows how the fund would have performed each year if its actual
(or cumulative) returns for the periods shown had been earned at a constant
rate.
<TABLE>
<CAPTION>
Since Inception
Periods Ended 10/31/97 1 Year Inception Date
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Emerging Markets Stock Fund - 1.60% 5.25% 3/31/95
................................................................................
</TABLE>
Investment return and principal value represent past performance and will
vary. Shares may be worth more or less at redemption than at original
purchase.
9
<PAGE>
T. Rowe Price Emerging Markets Stock Fund
- --------------------------------------------------------------------------------
- --------------------
FINANCIAL HIGHLIGHTS For a share outstanding throughout each period
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year 3/31/95
Ended to
10/31/97 10/31/96 10/31/95
<S> <C> <C> <C>
NET ASSET VALUE
Beginning of period $ 11.59 $ 10.48 $ 10.00
......................................
Investment activities
Net investment income 0.02 0.02* 0.02*
Net realized and unrealized
gain (loss) (0.23) 1.08 0.44
......................................
Total from investment activities (0.21) 1.10 0.46
......................................
Distributions
Net investment income (0.04) (0.01) -
Net realized gain (0.30) - -
......................................
Total distributions (0.34) (0.01) -
......................................
Redemption fees added to
paid-in-capital 0.04 0.02 0.02
......................................
NET ASSET VALUE
End of period $ 11.08 $ 11.59 $ 10.48
--------------------------------------
<CAPTION>
Ratios/Supplemental Data
<S> <C> <C> <C>
Total return (1.60)% 10.69%* 4.80%*
...............................................................................
Ratio of expenses to
average net assets 1.75% 1.75%* 1.75%+*
...............................................................................
Ratio of net investment income to
average net assets 0.21% 0.44%* 0.54%+*
...............................................................................
Portfolio turnover rate 84.3% 41.7% 28.8%+
...............................................................................
Average commission rate paid $ 0.0003 $ 0.0004 $ -
...............................................................................
Net assets, end of period
(in thousands) $ 119,285 $ 67,896 $ 14,399
...............................................................................
</TABLE>
* Excludes expenses in excess of a 1.75% voluntary expense limitation in effect
through 10/31/98.
+ Annualized.
The accompanying notes are an integral part of these financial statements.
10
<PAGE>
T. Rowe Price Emerging Markets Stock Fund
- --------------------------------------------------------------------------------
October 31, 1997
<TABLE>
<CAPTION>
- -----------------------
Statement of Net Assets Shares/Par Value
- --------------------------------------------------------------------------------
In thousands
ARGENTINA 5.3%
<S> <C> <C>
Common Stocks 5.3%
Banco Frances del Rio de la Plata ADR (USD) 27,300 $ 672
................................................................................
Banco Rio de la Plata ADR (USD) * 54,720 575
................................................................................
Perez Companc (Class B) 143,812 901
................................................................................
Telecom Argentina Stet (Class B) ADR (USD) 13,040 330
................................................................................
Telefonica de Argentina (Class B) ADR (USD) 45,560 1,281
................................................................................
YPF Sociedad Anonima (Class D) ADR (USD) 79,860 2,556
................................................................................
Total Argentina (Cost $6,598) 6,315
.............
BRAZIL 19.8%
Common Stocks 4.5%
Cia Paranaense de Energia Copel 38,306,000 448
................................................................................
Electricidade de Rio de Janeiro 1,617,585,000 1,012
................................................................................
Eletrobras 1,058,000 427
................................................................................
Eletrobras ADR (USD) 71,931 1,457
................................................................................
Light Servicos de Electricidade 1,473,000 489
................................................................................
Pao de Acucar GDS (USD) 37,000 676
................................................................................
Telecomunicacoes Brasileiras 8,468,000 753
................................................................................
Unibanco GDR (USD) 4,000 109
................................................................................
5,371
.............
Preferred Stocks and Rights 15.3%
Banco Bradesco 111,315,455 828
................................................................................
Banco Itau 996,960 402
................................................................................
Brahma 2,884,141 1,805
................................................................................
Cia Cimento Portland Itau 1,693,858 435
................................................................................
Cia Energetica de Sao Paulo * 6,598,000 413
................................................................................
Cia Energetica Minas Gerais 26,728,745 1,067
................................................................................
Cia Energetica Minas Gerais ADR, Sponsored
Nonvoting (USD) 6,890 274
................................................................................
Electricidade de Sao Paulo * 660,000 112
................................................................................
Electricidade de Sao Paulo, Rights, 11/27/97 * 158,470 1
................................................................................
Encorpar * 1,066,583 0
................................................................................
Ericsson Telecomunicacoes 11,474,000 338
................................................................................
Globex Utilidades 17,000 167
................................................................................
Lojas Americanas 13,956,000 114
................................................................................
</TABLE>
11
<PAGE>
T. Rowe Price Emerging Markets Stock Fund
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares/Par Value
- --------------------------------------------------------------------------------
In thousands
<S> <C> <C>
Lojas Renner 3,220,000 $ 115
................................................................................
Petrol Brasileiros 9,884,000 1,838
................................................................................
Telecomunicacoes Brasileiras ADR (USD) 77,839 7,901
................................................................................
Telecomunicacoes de Minas Gerais (Class B) 3,810,000 477
................................................................................
Telecomunicacoes de Minas Gerais (Class B)
Preference Receipts * 51,622 5
................................................................................
Telecomunicacoes de Sao Paulo 3,750,803 980
................................................................................
Telecomunicacoes de Sao Paulo, Rights, 11/11/97 * 125,417 0
................................................................................
Telecomunicacoes do Parana 325,036 169
................................................................................
Telecomunicacoes do Parana, Rights, 11/11/97 * 15,853 0
................................................................................
Telecomunicacoes do Rio de Janeiro 1,771,988 169
................................................................................
Telecomunicacoes do Rio de Janeiro, Rights, 11/11/97 * 68,706 1
................................................................................
Unibanco, Units (Each unit consists of 1 preferred
share and 1 Unibanco Holdings (Class B) share) * 11,261,000 633
................................................................................
18,244
...........
Total Brazil (Cost $25,717) 23,615
...........
CHILE 2.8%
Common Stocks 2.8%
Chilectra ADR (144a) (USD) 31,722 825
................................................................................
Chilgener ADS (USD) 17,797 485
................................................................................
Compania Cervecerias Unidas ADS (USD) 12,472 304
................................................................................
Compania de Telecomunicaciones de Chile ADR (USD) 16,786 466
................................................................................
Empresa Nacional de Electricidad de Chile ADR (USD) 49,370 993
................................................................................
Santa Isabel ADR (USD) 5,395 100
................................................................................
Sociedad Quimica Minera de Chile (Class B) ADR (USD) 2,380 123
................................................................................
Total Chile (Cost $3,119) 3,296
...........
CHINA 3.1%
Common Stocks 3.1%
China Southern Airlines (HKD) * 364,000 161
................................................................................
Guangdong Electric Power (Class B) (HKD) 1,776,981 1,002
................................................................................
Guangshen Railway (HKD) 460,000 143
................................................................................
Huaneng Power International (Class N) ADR (USD) * 75,000 1,650
................................................................................
Shenzhen Expressway (Class H) (HKD) * 2,870,000 616
................................................................................
Zhejiang Expressway (HKD) 618,000 120
................................................................................
Total China (Cost $4,468) 3,692
...........
</TABLE>
12
<PAGE>
T. Rowe Price Emerging Markets Stock Fund
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares/Par Value
- --------------------------------------------------------------------------------
In thousands
CZECH REPUBLIC 1.1%
<S> <C> <C>
Common Stocks 1.1%
Cokoladovny 1,415 $ 204
.............................................................................
SPT Telecom 9,364 1,080
.............................................................................
Total Czech Republic (Cost $1,203) 1,284
.............
EGYPT 1.9%
Common Stocks 1.9%
Ameriyah Cement 45,000 1,137
.............................................................................
MISR International Bank * 7,000 1,173
.............................................................................
Total Egypt (Cost $2,375) 2,310
.............
GREECE 3.5%
Common Stocks 3.5%
Alpha Credit Bank 8,360 553
.............................................................................
Ergo Bank 7,166 427
.............................................................................
Hellenic Bottling 5,770 238
.............................................................................
Hellenic Telecommunication 92,733 1,937
.............................................................................
Intracom 22,310 978
.............................................................................
Total Greece (Cost $4,285) 4,133
.............
HONG KONG 0.7%
Common Stocks 0.7%
China Pharmaceutical 620,000 100
.............................................................................
China Telecom 220,000 351
.............................................................................
Hong Kong China 932,000 244
.............................................................................
Legend Holdings 380,000 129
.............................................................................
Total Hong Kong (Cost $1,121) 824
.............
HUNGARY 4.5%
Common Stocks 4.5%
EGIS 14,090 662
.............................................................................
Fotex * 135,301 151
.............................................................................
Graboplast Textile 14,012 757
.............................................................................
</TABLE>
13
<PAGE>
T. Rowe Price Emerging Markets Stock Fund
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares/Par Value
- --------------------------------------------------------------------------------
In thousands
<S> <C> <C>
Richter Gedeon GDS (USD) 41,585 $3,867
.............................................................................
Total Hungary (Cost $5,081) 5,437
.......
INDIA 7.3%
Common Stocks 7.3%
Gujarat Ambuja Cement GDR (USD) 107,000 869
.............................................................................
Hindustan Lever 29,500 1,040
.............................................................................
Hindustan Petroleum 67,000 880
.............................................................................
Housing Development Finance 2,800 237
.............................................................................
Industrial Credit & Investment Corporation of India 615,450 1,487
.............................................................................
ITC 31,800 492
.............................................................................
ITC GDR (USD) 15,000 263
.............................................................................
Mahanagar Telephone 279,000 1,945
.............................................................................
Ranbaxy Laboratories 26,000 507
.............................................................................
State Bank of India 49,600 358
.............................................................................
Tata Engineering & Locomotive GDR (USD) 63,000 622
.............................................................................
Total India (Cost $9,125) 8,700
.......
INDONESIA 0.4%
Common Stocks and Warrants 0.4%
Bank International Indonesia, Warrants, 1/17/00 * 40 0
.............................................................................
Gulf Indonesia Resources (USD) * 22,000 462
.............................................................................
Total Indonesia (Cost $429) 462
........
ISRAEL 5.1%
Common Stocks 5.1%
Agis 89,140 738
.............................................................................
Bank Hapoalim 317,830 751
.............................................................................
Blue Square * 98,820 905
.............................................................................
Eci Telecom (USD) 27,320 755
.............................................................................
Elite Industries 18,073 482
.............................................................................
Koor Industries 5,730 591
.............................................................................
Super Sol 317,387 912
.............................................................................
Teva Pharmaceutical ADR (USD) 19,840 927
.............................................................................
Total Israel (Cost $6,494) 6,061
.......
</TABLE>
14
<PAGE>
T. Rowe Price Emerging Markets Stock Fund
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares/Par Value
- --------------------------------------------------------------------------------
In thousands
<S> <C> <C>
MALAYSIA 2.0%
Common Stocks 2.0%
Malaysian Assurance Alliance 171,300 $ 309
.............................................................................
MNI Holdings 236,000 570
.............................................................................
Resorts World 366,000 653
.............................................................................
Tenaga Nasional 389,000 840
.............................................................................
Total Malaysia (Cost $5,803) 2,372
.......
MEXICO 10.5%
Common Stocks 10.5%
Cemex (Class B) * 390,540 1,714
.............................................................................
Cifra (Class B) ADR (USD) 198,079 379
.............................................................................
Coca-Cola Femsa ADR (USD) 11,000 475
.............................................................................
Corporacion Geo * 47,000 253
.............................................................................
Fomentos Economico Mexicano (Class B) 166,024 1,168
.............................................................................
Gruma (Class B) * 62,779 246
.............................................................................
Grupo Elektra 700,000 952
.............................................................................
Grupo Financiero Banamex (Class B) * 336,000 665
.............................................................................
Grupo Industrial Maseca (Class B) 486,000 470
.............................................................................
Grupo Modelo (Class C) 104,000 776
.............................................................................
Kimberly-Clark Mexico (Class A) 176,000 772
.............................................................................
Panamerican Beverages (Class A) (USD) 31,380 973
.............................................................................
Telefonos de Mexico (Class L) ADR (USD) 70,995 3,071
.............................................................................
TV Azteca ADR (USD) * 30,500 583
.............................................................................
Total Mexico (Cost $11,264) 12,497
.......
PERU 1.0%
Common Stocks 1.0%
Credicorp (USD) 9,600 172
.............................................................................
Luz del Sur 490,700 600
.............................................................................
Telefonica del Peru (Class B) ADS (USD) 23,820 471
.............................................................................
Total Peru (Cost $1,367) 1,243
.......
</TABLE>
15
<PAGE>
T. Rowe Price Emerging Markets Stock Fund
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares/Par Value
- --------------------------------------------------------------------------------
In thousands
<S> <C> <C>
PHILIPPINES 1.4%
Common Stocks 1.4%
Ayala Land (Class B) 900,500 $ 349
.............................................................................
Bank of the Philippine Islands 97,000 256
.............................................................................
La Tondena Distillers 92,000 56
.............................................................................
Philippine Long Distance Telephone 3,000 74
.............................................................................
Philippine Long Distance Telephone ADS (USD) 30,000 728
.............................................................................
San Miguel (Class B) 171,700 191
.............................................................................
Universal Robina 423,000 54
.............................................................................
Total Philippines (Cost $3,179) 1,708
.......
POLAND 0.4%
Common Stocks 0.4%
Bank Rozwoju Eksportu 23,920 432
.............................................................................
Total Poland (Cost $722) 432
.......
PORTUGAL 0.6%
Common Stocks 0.6%
Portugal Telecom 18,250 749
.............................................................................
Total Portugal (Cost $597) 749
.......
RUSSIA 11.2%
Common Stocks 11.2%
AO Mosenergo ADR (USD) * 31,991 1,344
.............................................................................
AO Tatneft ADR (USD) 12,110 1,816
.............................................................................
Irkutskenergo ADR (USD) 44,520 623
.............................................................................
Lukoil (USD) 24,351 530
.............................................................................
Lukoil ADR (USD) 46,408 3,948
.............................................................................
Rao Gazprom ADS (USD) 29,057 650
.............................................................................
Surgutneftegaz ADR (USD) 124,163 1,148
.............................................................................
Unified Energy Systems GDR (USD) * 101,762 3,333
.............................................................................
Total Russia (Cost $13,615) 13,392
.......
</TABLE>
16
<PAGE>
T. Rowe Price Emerging Markets Stock Fund
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares/Par Value
- --------------------------------------------------------------------------------
In thousands
<S> <C> <C>
SOUTH AFRICA 4.3%
Common Stocks 4.3%
Barlow Limited 59,800 $ 603
.............................................................................
First National Bank 126,700 957
.............................................................................
Pick 'N Pay Stores 479,600 722
.............................................................................
Sasol 109,700 1,322
.............................................................................
South African Breweries ADS (USD) 27,100 722
.............................................................................
Standard Bank Investment Corporation 19,700 835
.............................................................................
Total South Africa (Cost $5,270) 5,161
.......
SOUTH KOREA 1.9%
Common Stocks 1.9%
Kook Min Bank 6,746 55
.............................................................................
Korea Electric Power 49,110 697
.............................................................................
LG Electronics 44,000 593
.............................................................................
Pohang Iron & Steel 6,405 292
.............................................................................
Samsung Electronic 17,300 679
.............................................................................
Total South Korea (Cost $4,444) 2,316
.......
TAIWAN 4.5%
Common Stocks and Rights 4.5%
Acer* 165,000 226
.............................................................................
Acer GDR (USD) * 21,000 139
.............................................................................
Asustek Computer GDR (USD) * 47,000 567
.............................................................................
Bank Sino Pacific * 693,393 504
.............................................................................
Cathay Construction 214,000 228
.............................................................................
Cathay Life Insurance 97,000 433
.............................................................................
China Steel 551,000 422
.............................................................................
Chyang Sheng Dyeing and Finishing * 250 0
.............................................................................
Compal Electronics * 132,000 301
.............................................................................
Compal Electronics, Rights, 11/15/97 * 15,713 0
.............................................................................
Compeq Manufacturing * 46,000 222
.............................................................................
Delpha Construction * 68,879 82
.............................................................................
Delta Electronics 95,000 302
.............................................................................
Hung Poo Construction * 34,800 36
.............................................................................
Inventec * 111,000 439
.............................................................................
</TABLE>
17
<PAGE>
T. Rowe Price Emerging Markets Stock Fund
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares/Par Value
- --------------------------------------------------------------------------------
In thousands
<S> <C> <C>
Taichung Business Bank * 644,000 $ 887
.............................................................................
Taishin International Bank 402,150 308
.............................................................................
Walsin Lihwa * 292,677 178
.............................................................................
Yageo * 41,600 87
.............................................................................
Total Taiwan (Cost $7,919) 5,361
......
THAILAND 1.1%
Common Stocks 1.1%
Dusit Thani 196,700 139
.............................................................................
PTT Exploration & Production 84,800 847
.............................................................................
Siam Cement 43,400 362
.............................................................................
Total Thailand (Cost $2,459) 1,348
......
VENEZUELA 0.6%
Common Stocks 0.6%
Compania Anonima Nacional Telefonos de Venezuela
(Class D) ADR (USD) 15,365 672
.............................................................................
Total Venezuela (Cost $547) 672
......
SHORT-TERM INVESTMENTS 3.6%
Money Market Funds 3.6%
Reserve Investment Fund, 5.65% $4,277,170 4,277
.............................................................................
Total Short-Term Investments (Cost $4,277) 4,277
......
</TABLE>
18
<PAGE>
T. Rowe Price Emerging Markets Stock Fund
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Value
- --------------------------------------------------------------------------------
In thousands
<S> <C>
Total Investments in Securities
98.6% of Net Assets (Cost $131,478) $117,657
Other Assets Less Liabilities 1,628
........
NET ASSETS $119,285
--------
Net Assets Consist of:
Accumulated net realized gain/loss - net of distributions $ 1,501
Net unrealized gain (loss) (13,918)
Paid-in-capital applicable to 10,762,955 shares of $0.01 par
value capital stock outstanding; 2,000,000,000 shares of the
corporation authorized 131,702
........
NET ASSETS $119,285
--------
NET ASSET VALUE PER SHARE $ 11.08
--------
</TABLE>
* Non-income producing
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
0.7% of net assets.
ADR American depository receipt
ADS American depository share
GDR Global depository receipt
GDS Global depository share
HKD Hong Kong dollar
USD U.S. dollar
The accompanying notes are an integral part of these financial statements.
19
<PAGE>
T. Rowe Price Emerging Markets Stock Fund
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- -----------------------
Statement of Operations
- --------------------------------------------------------------------------------
In thousands
Year
Ended
10/31/97
<S> <C>
Investment Income
Income
Dividend (net of foreign taxes of $193) $ 1,916
Interest 409
........
Total income 2,325
........
Expenses
Investment management 1,402
Shareholder servicing 358
Custody and accounting 159
Registration 52
Prospectus and shareholder reports 25
Legal and audit 20
Directors 7
Miscellaneous 11
Reimbursed to manager 40
........
Total expenses 2,074
........
Net investment income 251
........
Realized and Unrealized Gain (Loss)
Net realized gain (loss)
Securities 1,924
Foreign currency transactions (517)
........
Net realized gain (loss) 1,407
........
Change in net unrealized gain or loss
Securities (11,932)
Other assets and liabilities
denominated in foreign currencies (79)
........
Change in net unrealized gain or loss (12,011)
........
Net realized and unrealized gain (loss) (10,604)
........
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS $(10,353)
--------
</TABLE>
The accompanying notes are an integral part of these financial statements.
20
<PAGE>
T. Rowe Price Emerging Markets Stock Fund
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ----------------------------------
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------
In thousands
Year Year
Ended Ended
10/31/97 10/31/96
<S> <C> <C>
Increase (Decrease) in Net Assets
Operations
Net investment income $ 251 $ 204
Net realized gain (loss) 1,407 1,610
Change in net unrealized gain or loss (12,011) (1,186)
....................
Increase (decrease) in net assets from
operations (10,353) 628
....................
Distributions to shareholders
Net investment income (243) (15)
Net realized gain (1,829) -
....................
Decrease in net assets from distributions (2,072) (15)
....................
Capital share transactions*
Shares sold 102,370 63,650
Distributions reinvested 2,007 15
Shares redeemed (40,915) (10,920)
Redemption fees received 352 139
....................
Increase (decrease) in net assets from capital
share transactions 63,814 52,884
....................
Net Assets
Increase (decrease) during period 51,389 53,497
Beginning of period 67,896 14,399
....................
End of period $ 119,285 $ 67,896
--------------------
* Share information
Shares sold 7,922 5,418
Distributions reinvested 173 1
Shares redeemed (3,192) (932)
....................
Increase (decrease) in shares outstanding 4,903 4,487
</TABLE>
The accompanying notes are an integral part of these financial statements.
21
<PAGE>
T. Rowe Price Emerging Markets Stock Fund
- --------------------------------------------------------------------------------
October 31, 1997
- -----------------------------
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 Emerging Markets Stock Fund (the
fund), a diversified, open-end management investment company, is one of the
portfolios established by the corporation and commenced operations on March
31, 1995.
The accompanying financial statements are prepared in accordance with
generally accepted accounting principles for the investment company industry;
these principles may require the use of estimates by fund management.
Valuation Equity securities 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.
Short-term debt securities are valued at amortized cost which, when combined
with acccrued 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
22
<PAGE>
T. Rowe Price Emerging Markets Stock Fund
- --------------------------------------------------------------------------------
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 October 31, 1997, 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.
Other Purchases and sales of portfolio securities, other than short-term
securities, aggregated $147,647,000 and $91,301,000, respectively, for the
year ended October 31, 1997.
NOTE 3 - FEDERAL INCOME TAXES
No provision for federal income taxes is required since the fund intends to
continue to qualify as a regulated investment company and distribute all of
its taxable income.
In order for the fund's capital accounts and distributions to shareholders
to reflect the tax character of certain transactions, the following
reclassifications were made during the year ended October 31, 1997. The
results of operations and net assets were not affected by the
increases/(decreases) to these accounts.
<TABLE>
----------------------------------------------------------------------------
<S> <C>
Undistributed net investment income $(220,000)
Undistributed net realized gain 340,000
Paid-in-capital (120,000)
</TABLE>
For federal income tax purposes, fund distributions included $674,000 ($0.11
per share) of long-term capital gains, which were paid to shareholders of
record on December 26, 1996. The fund intends to elect to pass through
foreign
23
<PAGE>
T. Rowe Price Emerging Markets Stock Fund
- --------------------------------------------------------------------------------
source income of $196,000 and foreign taxes paid of $196,000 for its tax
year ended October 31, 1997; the per share effect of these pass-throughs is
$0.02 and $0.02, respectively, based on fund shares outstanding on October
31, 1997. These amounts may differ from amounts reported in the accompanying
financial statements due to differences in financial statement and federal
income tax reporting requirements.
At October 31, 1997, the aggregate cost of investments for federal income
tax and financial reporting purposes was $131,478,000 and net unrealized
loss aggregated $13,821,000, of which $5,148,000 related to appreciated
investments and $18,969,000 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 $154,000 was
payable at October 31, 1997. The fee is computed daily and paid monthly, and
consists of an individual fund fee equal to 0.75% 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 0.30% for assets in excess of $80 billion. At October 31, 1997,
and for the year then ended, the effective annual group fee rate was 0.32%.
The fund pays a pro-rata share of the group fee based on the ratio of its
net assets to those of the group.
Under the terms of the investment management agreement, the manager is
required to bear any expenses through October 31, 1998, which would cause
the fund's ratio of expenses to average net assets to exceed 1.75%.
Thereafter, through October 31, 2000, the fund is required to reimburse the
manager for these expenses, provided that average net assets have grown or
expenses have declined sufficiently to allow reimbursement without causing
the fund's ratio of expenses to average net assets to exceed 1.75%. Pursuant
to a prior agreement, $130,000 of previously unaccrued management fees and
$40,000 of fund expenses previously borne by the manager were reimbursed to
the manager during the year ended October 31, 1997. Unaccrued management
fees from previous years aggregating $81,000 are subject to reimbursement
through October 31, 1998.
24
<PAGE>
T. Rowe Price Emerging Markets Stock Fund
- --------------------------------------------------------------------------------
In addition, the fund has entered into agreements with Price Associates and
two wholly owned subsidiaries of Price Associates, pursuant to which the
fund receives certain other services. Price Associates computes the daily
share price and maintains the financial records of the fund. T. Rowe Price
Services, Inc. (TRPS) is the fund's transfer and dividend disbursing agent
and provides shareholder and administrative services to the fund. T. Rowe
Price Retirement Plan Services, Inc., provides subaccounting and
recordkeeping services for certain retirement accounts invested in the fund.
The fund incurred expenses pursuant to these related party agreements
totaling approximately $390,000 for the year ended October 31, 1997, of
which $38,000 was payable at period-end.
Additionally, the fund is one of several T. Rowe Price-sponsored mutual
funds (underlying funds) in which the T. Rowe Price Spectrum Funds
(Spectrum) may invest. Spectrum does not invest in the underlying funds for
the purpose of exercising management or control. Expenses associated with
the operation of Spectrum are borne by each underlying fund to the extent of
estimated savings to it and in proportion to the average daily value of its
shares owned by Spectrum, pursuant to special servicing agreements between
and among Spectrum, the underlying funds, T. Rowe Price, and, in the case of
T. Rowe Price Spectrum International, Rowe Price-Fleming International.
Spectrum International Fund held approximately 1.2% of the outstanding
shares of the Emerging Markets Stock Fund at 10/31/97. For the year then
ended, the fund was allocated $8,000 of Spectrum expenses, $1,000 of which
was payable at period-end.
The fund may invest in the Reserve Investment Fund and Government Reserve
Investment Fund (collectively, the Reserve Funds), open-end management
investment companies managed by T. Rowe Price Associates, Inc. The Reserve
Funds are offered as cash management options only to mutual funds and other
accounts managed by T. Rowe Price and its affiliates and are not available
to the public. The Reserve Funds pay no investment management fees.
Distributions from the Reserve Funds to the fund for the year ended October
31, 1997, totaled $50,000 and are reflected as interest income in the
accompanying Statement of Operations.
During the year ended October 31, 1997, the fund, in the ordinary course of
business, placed security purchase and sale orders aggregating $23,400,000
with certain affiliates of the manager and paid commissions of $103,000
related thereto.
25
<PAGE>
T. Rowe Price Emerging Markets Stock Fund
- --------------------------------------------------------------------------------
- ---------------------------------
Report of Independent Accountants
- --------------------------------------------------------------------------------
To the Board of Directors and Shareholders of
T. Rowe Price Emerging Markets Stock Fund
In our opinion, the accompanying statement of net assets and the related
statements of operations and of changes in net assets and the financial
highlights present fairly, in all material respects, the financial position
of T. Rowe Price Emerging Markets Stock Fund (one of the portfolios
constituting T. Rowe Price International Funds, Inc., hereafter referred to
as the "Fund") at October 31, 1997, and the results of its operations, the
changes in its net assets and the financial highlights for each of the
fiscal periods presented, in conformity with generally accepted accounting
principles. These financial statements and financial highlights (hereafter
referred to as "financial statements") are the responsibility of the Fund's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these financial
statements in accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements, assessing the accounting
principles used and significant estimates made by management, and evaluating
the overall financial statement presentation. We believe that our audits,
which included confirmation of securities at October 31, 1997 by
correspondence with custodians and, where appropriate, the application of
alternative auditing procedures for unsettled security transactions, provide
a reasonable basis for the opinion expressed above.
PRICE WATERHOUSE LLP
Baltimore, Maryland
November 19, 1997
26
<PAGE>
T. Rowe Price Shareholder Services
- --------------------------------------------------------------------------------
Investment Services And Information
Knowledgeable Service Representatives
By Phone 1-800-225-5132 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.
In Person Available in T. Rowe Price Investor Centers.
Account Services
Checking Available on most fixed income funds ($500 minimum).
Automatic Investing From your bank account or paycheck.
Automatic Withdrawal Scheduled, automatic redemptions.
Distribution Options Reinvest all, some, or none of your distributions.
Automated 24-Hour Services Including Tele*Access(R) and T. Rowe Price OnLine.
Discount Brokerage*
Individual Investments Stocks, bonds, options, precious metals, and other
securities at a savings over regular commission rates.
Investment Information
Combined Statement Overview of your T. Rowe Price accounts.
Shareholder Reports Fund managers' reviews of their strategies and results.
T. Rowe Price Report Quarterly investment newsletter discussing markets and
financial strategies.
Performance Update Quarterly review of all T. Rowe Price fund results.
Insights Educational reports on investment strategies and financial markets.
Investment Guides Asset Mix Worksheet, College Planning Kit, Diversifying
Overseas: A Guide to International Investing, Personal Strategy Planner,
Retirees Financial Guide, and Retirement Planning Kit.
*A division of T. Rowe Price Investment Services, Inc. Member NASD/SIPC.
27
<PAGE>
T. Rowe Price Mutual Funds
- --------------------------------------------------------------------------------
STOCK FUNDS
................................................................................
Domestic
Blue Chip Growth
Capital Appreciation
Capital Opportunity
Diversified Small-Cap Growth
Dividend Growth
Equity Income
Equity Index
Financial Services
Growth & Income
Growth Stock
Health Sciences
Media & Telecommunications*
Mid-Cap Growth
Mid-Cap Value
New America Growth
New Era
New Horizons**
Real Estate
Science & Technology
Small-Cap Stock***
Small-Cap Value**
Spectrum Growth
Value
International/Global
Emerging Markets Stock
European Stock
Global Stock
International Discovery
International Stock
Japan
Latin America
New Asia
Spectrum International
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
Emerging Markets Bond
Global Government Bond
International Bond
MONEY MARKET FUNDS
................................................................................
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 FUNDS
................................................................................
Balanced
Personal Strategy Balanced
Personal Strategy Growth
Personal Strategy Income
Tax-Efficient Balanced
T. ROWE PRICE NO-LOAD VARIABLE ANNUITY
................................................................................
Equity Income Portfolio
International Stock Portfolio
Limited-Term Bond Portfolio
Mid-Cap Growth Portfolio
New America Growth Portfolio
Personal Strategy Balanced Portfolio
Prime Reserve Portfolio
* Formerly the closed-end New Age Media Fund; converted to open-end status on
7/28/97.
** Closed to new investors.
*** Formerly the OTC Fund.
Please call for a prospectus. Read it carefully before you invest or send money.
The T. Rowe Price No-Load Variable Annuity [#V6021] is issued by Security
Benefit Life Insurance Company. In New York, it [#FSB201(11-96)] is issued by
First Security Benefit Life Insurance Company of New York, White Plains, NY.
T. Rowe Price refers to the underlying portfolios' investment managers and the
distributors, T. Rowe Price Investment Services, Inc.; T. Rowe Price Insurance
Agency, Inc.; and T. Rowe Price Insurance Agency of Texas, Inc. The Security
Benefit Group of Companies and the T. Rowe Price companies are not affiliated.
The variable annuity may not be available in all states. The contract has
limitations. Call a representative for costs and complete details of the
coverage.
28
<PAGE>
T. Rowe Price Discount Brokerage
- --------------------------------------------------------------------------------
DISCOUNT BROKERAGE
A Division of T. Rowe Price Investment Services, Inc., Member NASD/SIPC
This low-cost service gives you the opportunity to easily consolidate all your
investments with one company. Through T. Rowe Price Discount Brokerage, you can
buy and sell individual securities--stocks, bonds, options, and others--at
considerable commission savings over full-service brokers.* We also provide a
wide range of services, including:
Automated Telephone and Computer Services You can enter trades, access quotes,
and review account information 24 hours a day, seven days a week. Any trades
executed through these programs save you an additional 10% on commissions.**
Investor Information A variety of informative reports, such as our Brokerage
Insights series, S&P Market Month newsletter, and select stock reports, can help
you better evaluate economic trends and investment opportunities.
Dividend Reinvestment Service Virtually all stocks held in customer accounts
are eligible for this service, free of charge.
*Based on a February 1997 telephone survey that compared our commission rates
on stock transactions of various sizes with those of other full-service and
discount brokerages. Commission rates will vary based on size and nature of
trades. Services vary by firm. For additional information concerning our
commission rates and services, call 1-800-638-5660.
**Discount applies to our current commission schedule; subject to our $35
minimum commission.
29
<PAGE>
For yield, price, last transaction,
current balance, or to conduct
transactions, 24 hours, 7 days
a week, call Tele*Access/(R)/:
1-800-638-2587 toll free
For assistance
with your existing
fund account, call:
Shareholder Service Center
1-800-225-5132 toll free
410-625-6500 Baltimore area
To open a Discount Brokerage
account or obtain information,
call: 1-800-638-5660 toll free
Internet address:
www.troweprice.com
T. Rowe Price Associates
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 Emerging Markets
Stock Fund.
Investor Centers:
101 East Lombard St.
Baltimore, MD 21202
T. Rowe Price
Financial Center
10090 Red Run Blvd.
Owings Mills, MD 21117
Farragut Square
900 17th Street, N.W.
Washington, D.C. 20006
ARCO Tower
31st Floor
515 South Flower St.
Los Angeles, CA 90071
4200 West Cypress St.
10th Floor
Tampa, FL 33607
[LOGO OF T. ROWE PRICE APPEARS HERE]
T. Rowe Price Investment Services, Inc., Distributor. F05-050 10/31/97
