Annual Report
Global
Stock Fund
October 31, 1997
T. Rowe Price
Report Highlights
Global Stock Fund
o Overall returns from global stock markets were attractive
for the six and 12 months ended October 31, 1997.
o The fund's underweighting in Japan and low exposure to
turbulent emerging markets helped it keep pace with the
EAFE and Lipper benchmarks over the year, but lower U.S.
exposure hurt results slightly in recent months.
o The Global Stock Fund generated solid returns of 8.06% and
16.98% over the 6- and 12-month periods, respectively.
o Your fund was invested most heavily in Europe and the U.S.,
where we continued to find attractive stocks in relatively
stable environments.
o The portfolio's regional allocation could provide
continuing good results, in our view.
Fellow Shareholders
The year ended October 31, 1997, was rewarding overall for the
global investor, despite the sell-off in recent months. In the
first half most markets performed well, led by the U.S. where
the S&P 500 kept advancing to new highs. However, as the summer
progressed there was a growing realization that a number of
economies in the emerging markets of Southeast Asia had become
overextended, which led to heavy selling in the region that
spilled over to other global markets.
Performance Comparison
Periods Ended 10/31/97 6 Months 12 Months
_________________________________________________________
Global Stock Fund 8.06% 16.98%
MSCI World Index 8.78 17.25
Lipper Global Funds Average 9.05 16.50
During the last 12 months, the Global Stock Fund performed
generally in line with both the MSCI World Index and the Lipper
Global Funds Average. Over the final six months, the fund's
return of 8.06% was somewhat behind both the MSCI index and
Lipper, largely due to a slight underweighting in the robust
U.S. market.
Over the 12-month period, fund performance was helped by an
underweighting in Japan where the market performed poorly in
U.S. dollar terms. At fiscal year-end, your fund had only 4% of
its assets invested in the volatile markets of Southeast Asia
apart from Japan, and a similar amount in Latin America, which
declined during the final months of the reporting period. During
the past six months, the fund lagged the benchmarks due
primarily to its weighting in emerging markets and its
relatively low U.S. exposure. In addition, a number of our
favorite growth stocks fell behind the indices after a long
period of outperformance. Our peers tend to focus more on
recovery stocks and cyclical situations, many of which have
performed strongly this year.
The U.S. market continued to be driven by robust corporate
earnings and, with inflation well under control, by stable
interest rates. Overseas the economic picture was not quite as
positive, but the stock markets of Europe performed well. In
addition, there was a powerful bull run in the markets of Latin
America earlier in the year.
Market Performance
Six Months Local Local Currency U.S.
Ended 10/31/97 Currency vs. U.S. Dollars Dollars
__________________________________________________________
France 2.98% 1.40% 4.42%
Germany 7.32 0.61 7.98
Hong Kong -17.50 0.22 -17.32
Italy 18.75 1.29 20.28
Japan -10.49 5.52 -5.55
Mexico 23.89 -5.42 17.17
Netherlands 16.27 0.38 16.71
Norway 15.52 1.72 17.51
Switzerland 11.32 5.52 17.47
United Kingdom 10.44 3.35 14.14
United States 14.90 - 14.90
Source: FAME Information Services, Inc.; based on MSCI Indices.
In emerging markets, the principal culprit was Thailand where
there has been imprudent bank lending and excessive real estate
development. The weak government, dogged by constant changes in
leadership, proved unable to handle the mounting crisis, and the
result was a collapsing stock market. At first, the problem
seemed confined to Thai-land, but attention soon shifted to a
number of other economies in the region where rapid growth
looked unsustainable given the similar pattern of indebtedness.
The last six months have seen a savage bear market take hold in
Asia, and as the ripples spread to more established markets such
as Tokyo and Wall Street, investors questioned the impact of
these developments on Japanese and U.S. multinationals operating
in the area. Europe was also caught up in the turbulence but the
most spectacular declines occurred in Latin America, which
somewhat belatedly was dragged down by the widening loss of
confidence in emerging markets.
Turning to currency markets, the dollar has been strong against
most overseas currencies since the beginning of the year,
dampening returns for U.S. investors, but has turned in a mixed
performance over the last three months. European currencies
picked up, with a particularly strong performance from the
British pound, but the minor Asian currencies continued to slip.
Even the yen has weakened recently against the dollar despite
Japan's ever-widening current account surplus.
INVESTMENT REVIEW
United States
The U.S. stock market continued in its global leadership role,
with the S&P 500 up 15% over the last six months and 32% over
the fund's fiscal year. Overall, we were well-positioned in the
U.S., and our stocks did well. However, this positive effect on
your portfolio was offset by our relatively low position in the
U.S. market compared with the MSCI index. The sharp sell-off in
emerging markets was more than we expected. The subsequent shift
in assets to safe markets, and the positive impact of the global
economic slowdown on inflation particularly favored U.S.
financial markets.
Chart 1 - Geographic Diversification
Many fund holdings benefited in this environment. Over the last
six months, several insurance stocks, including ACE Limited,
EXEL, and Mid Ocean Limited, did extremely well. Two
pharmaceutical positions, Pfizer and Bristol-Myers Squibb, were
also good contri-butors due to stronger-than-expected product
offerings and new product pricing. Our investments in the
lodging industry, Starwood Lodging and Patriot American
Hospitality, benefited from strong pricing and were up
significantly. While technology was mixed, our positions in BMC
Software, Dell Computer, and CUC International added to fund
returns.
On the negative side, earnings results from First Data, Philip
Morris, and AlliedSignal held performance down. However, we
continue to believe in the growth and cash generation potential
of all three companies and have maintained or added to these
fairly significant positions.
During the past six months, weakness in several technology
stocks created an opportunity to add modestly to this sector. We
increased our stakes in Parametric Technology and Microsoft and
built positions in McAfee Associates, National Semiconductor,
and COMPAQ Computer. We also found good value in several other
stocks, including Safeway, Meredith, and United HealthCare. We
continue to look for leaders in growth segments and managements
that generate strong free cash flow and use it wisely.
As always, we continually monitor existing holdings and evaluate
each investment thesis. As a result, we eliminated positions in
Corning, Goodrich, Money Store, Pharmacia & Upjohn, and Richfood
Holdings. In each case, our reason for investing in the stock
had changed or we felt the risk outweighed the potential
medium-term reward.
Europe
The economies of Europe made steady progress over the last six
months. The U.K. continued to lead the way, with strong consumer
expenditure driving the service sector and a surprisingly
resilient performance turned in by exporters. The new Labour
government granted the Bank of England independence to set
interest rates so that monetary policy should now be based on
controlling inflation over the longer term rather than on
political expediency. Seizing its new mandate with vigor, the
Bank raised base rates four times during the summer in an effort
to rein in an economy with the potential to overheat even though
inflation is still moderate. This, in turn, has supported
sterling, recently the strongest of the major currencies.
The economies of europe made steady progress over the last six
months.
A strong currency and rising interest rates would usually have
been enough to unsettle the U.K. stock market, and the turmoil
in Asia certainly did not help. Nevertheless, British stocks
held up well in dollar terms. As investor attention focused on
the possibility of slower economic growth, our bias toward
growth stocks and smaller companies was justified as cyclicals
and manufacturing stocks sold off sharply. Elsewhere in Europe,
there are signs that the major economies have survived the
stranglehold of tight fiscal policies as governments struggled
to keep their deficits in line with the Maastricht convergence
criteria. Helped by weak currencies and loose monetary policies,
there are tentative signs of recovery, particularly in the
export sector. Germany is typical here. Earlier this year German
unemployment hit record levels and it looked as though even the
Germans, always at the vanguard of European integration, would
fail to meet the stringent criteria required to join the
European Monetary Union (EMU). In fact, the German budget is in
surplus and any weakness is entirely due to the problems of the
old East Germany. Therefore, progress depends on structural
improvement in the east, a long-term process. The fiscal
position would also improve if the government could agree on tax
reform, but the corporate sector is at least seeing a recovery
in profitability, and the stock market has performed well.
In France the picture is similar with high unemployment, but the
trade account is in surplus and inflation remains low. France
also intends to be a founder member of the European Monetary
Union, and there is little room for relaxation of economic
policy. Even the new left wing government under Monsieur Jospin
realizes that EMU ambitions must prevail, and the outlook is
definitely a little brighter than it was six months ago. Italy
has come through another of its political crises with Mr. Prodi
facing down a revolt of his Communist governing partners to pass
a budget that looked remarkably sound by Italian standards.
There is rising confidence that Italy can improve on its record
of government overspending, and it looks an increasingly likely
candidate to join EMU in the first round.
Another feature livening up market sentiment was a wave of
mergers and acquisitions.
The stock markets of Continental Europe also did reasonably well
over the last six months and, as in the U.K., stock prices in
general held up better than in Asia during the turbulence of
October. As can be seen in the table on Page 2, all of them are
ahead in U.S. dollar terms over the last six months, with
double-digit returns from the U.K., Switzerland, and the
Netherlands, all of which are well represented in your
portfolio.
Another feature livening up market sentiment was a wave of
mergers and acquisitions as corporations sought to position
themselves better for an integrated Europe and to compete on a
wider global scale. In terms of size, one of the largest was a
$32 billion merger between the Anglo Dutch publisher Reed
Elsevier and its German Dutch rival Wolters Kluwer, which has
long been in the works and was finally announced. Reed Elsevier
is becoming the world's main provider of specialist professional
information-"must-have" data for lawyers, accountants, and
scientists. Wolters Kluwer is the biggest legal publisher in
Germany and the Benelux countries, and there will be many
synergies from this combination. Two British drinks and food
firms, Guinness and Grand Metropolitan, finally consummated
their marriage as the chairman of LVMH, the French luxury goods
company with a stake in Guinness, finally agreed to terms. Since
the two firms have a strong portfolio of brands that complement
each other, distribution and marketing costs should fall.
Europe's financial services industry is also consolidating, with
a merger between the Swiss insurance company Zurich Group and
the British conglomerate BAT, an important merger between
Swedish bank Nordbanken and Finland's Merita, and also a bid by
Italian insurer Assicurazioni Generali for Assurances Generales
de France, France's third-largest insurer.
Far East
In Japan, the economic picture has changed quite dramatically
over the last six months. At the beginning of the year, growth
was robust as the yen's weakness of 1996 fueled an export boom
and a strong service sector. In April, the government raised the
sales tax from 3% to 5%, which had the effect of causing an
anticipatory consumer boom in March followed by a sharp downturn
in April. With more than half of Japan's GDP accounted for by
consumer spending, the economy never recovered and the trend was
not helped by the depressed housing sector and by weak capital
investment. The only bright spot was the export sector, with
sales of electronic equipment and vehicles to the U.S. and
Europe particularly strong. Reflecting the dire state of the
domestic economy, imports have stagnated and the trade surplus
rose over 50% in yen terms in the six months through September.
Japan is now a significant overseas creditor and its current
account, supported by a net interest surplus, grew even more
sharply.
Industry Diversification
Percent of Percent of
Net Assets Net Assets
4/30/97 10/31/97
___________________________________________________________
Services 25.7% 27.5%
Consumer Goods 19.9 20.5
Finance 15.4 16.7
Capital Equipment 14.5 13.9
Energy 7.9 9.1
Materials 6.9 4.0
Multi-industry 2.9 2.5
Miscellaneous 0.1 0.1
Reserves 6.7 5.7
___________________________________________________________
Total 100.0% 100.0%
Despite the positives of a strong trade position and minimal inflation, the
government faces a considerable policy dilemma as it contemplates a very weak
economy. Monetary policy is already very loose and Japanese government bond
yields recently dipped below 2%. The economy has been awash with liquidity
for some time, and any further weakening of the yen will stimulate exports.
Moderate currency depreciation is probably a secret hope of Japan's
policymakers, but the trade surplus with the U.S. is already at levels that
historically have triggered loud complaints from Washington. A more
stimulatory fiscal policy is a reasonable option, but conservatism holds sway
in the Ministry of Finance as evidenced by the sales tax increase last
spring.
With this uncertainty, it is not surprising that the Japanese stock market
turned in a poor performance over the last six months. Corporations exposed
to the domestic economy were particularly weak but, in sharp contrast, the
multinationals fared much better.
Our strategy in the Tokyo market continued to favor the export and technology
sectors. Stocks such as NEC (communications and computers), Sony (consumer
electronics and media), and Canon (cameras and office equipment) remain among
our largest positions. In contrast, the portfolio has no exposure to bank
stocks-the largest sector in the index itself-where valuations remain
excessive given the problems of their loan books. Banking failures are likely
before the situation begins to improve, and with a high weighting in the
financial sector, the market as a whole is unlikely to perform well until
these problems are resolved.
Elsewhere in the Pacific, the economic turmoil that began in Thailand rapidly
spread to the "junior tigers" of the region, including Indonesia, Malaysia,
the Philippines, and eventually Hong Kong. Your fund had little or no
exposure to these markets, except for Hong Kong and Malaysia where only 1.50%
and 0.30% of fund assets were invested, respectively. As mentioned, only 4%
of assets were committed to Asian markets overall outside of Japan. Countries
in the region share a common pattern of overlending to infrastructure and
industrial development, which became vulnerable as the export boom failed to
follow through. Even traditional, commodity-based exports began to falter,
and there was a round of competitive devaluations either by choice or else
imposed by speculative pressure.
Latin America
The Latin American stock markets performed extremely well at the beginning
of the year but, not surprisingly, they were caught up in October's upheaval
in the emerging markets. Your fund had a low 4% weighting throughout the
region. These developing economies are in better shape in many ways than
their counterparts in Asia. For example, the government of Brazil has
demonstrated a strong political will to protect the currency even though this
may push the economy into recession. President Cardoso has orchestrated a
strong campaign to defend the real through aggressive intervention on the
foreign exchange markets and a substantial increase in overnight interest
rates. Consumer expenditure in Brazil was already weak even ahead of the hike
in interest rates, but at least the slowing economy has pushed inflation down
to under 5%-a remarkable achievement for this country. For the foreign
investor, one of the most important developments in Brazil is the continuing
privatization program valued at $70 billion over the next three years.
Clearly this is ambitious, but the government has indicated this program will
go ahead despite the pressure on its currency and a very unsettled stock
market.
The prospects for the stock market depend on how quickly confidence returns
and interest rates fall. Much hinges on what damage is done to the economy,
but the banking system is in better shape than it has been for many years.
Brazil remains the core of our Latin American strategy and our exposure is
focused on the large utilities such as Telecomunicacoes Brasileiras, which
are at the center of the reform and privatization program.
Mexico has already experienced a painful readjustment process following the
peso devaluation at the end of 1994. Since then, the economy is much stronger
with foreign participation in the banking industry and wider integration with
the U.S. and Canada under NAFTA. The trade account is now in surplus, and
even the current account deficit is less than 2% of the GDP. With inflation
falling to under 15% in 1997 and consumers beginning to regain confidence,
the economy could well be entering a period of sustainable growth.
INVESTMENT POLICY AND OUTLOOK
Despite the sound fundamentals of the U.S. economy, even Wall Street was
caught up in the global turbulence of recent months. While our caution on
U.S. securities was unwarranted due to continued low inflation, solid
earnings, and a retreat by global investors to established markets, we still
believe U.S. equity returns cannot continue to outpace earnings growth. As
the recent turbulence in Far East and Latin American markets begins to affect
U.S. companies, earnings growth could slow. For these reasons, we expect more
modest U.S. returns overall in the next year. However, we modestly increased
our investments in individual U.S. stocks during the past six months to take
advantage of attractively valued shares with strong growth potential.
It is important to look through the recent period of stock market turbulence
to see how other world economies might develop from here. In Europe, which
accounts for 37% of the fund's portfolio, we have seen an encouraging picture
of improving economic growth, rising exports, and currencies that have now
stabilized against the U.S. dollar. Valuations in Europe look reasonable, and
there is the added interest of corporate restructuring as companies position
themselves for European Monetary Union. As noted, we have already seen
activity in this area and expect the trend to continue as management
increasingly recognizes the importance of shareholder value. With a pickup
in economic growth, corporate restructuring, and a benign interest rate
environment, Europe in many ways looks similar to the U.S. economy several
years ago. If this is the case, maintaining a large position in Europe seems
sensible.
Europe . . . looks similar to the u.s. economy several years ago.
Turning to the Far East, clearly the prospects are less certain, and it will
take some time for the less developed economies of Asia to put themselves
back on a sounder footing. Japan is still the largest economy in the Pacific,
but its economy is struggling at the moment. However, unlike many of the
smaller economies of the region, it at least has a strong current account
surplus and substantial foreign exchange reserves. Its stock market lists
some of the best-managed companies in the world, and we believe it is right
to take advantage of current weakness by adding to our favorites.
In Latin America, the markets will remain volatile, but again one cannot
ignore the economic achievements of these countries. Governments there seem
committed to the right policies for the future, and greater political
stability provides a firm platform for implementing them.
Summing up, we believe the current structure of the portfolio will continue
to serve investors well in the future.
Respectfully submitted,
Martin G. Wade
President
November 21, 1997
T. Rowe Price Global Stock Fund
Portfolio Highlights
TWENTY-FIVE LARGEST HOLDINGS
Percent of
Net Assets
10/31/97
___________________________________________________________
Royal Dutch Petroleum, Netherlands 1.6%
Novartis, Switzerland 1.2
National Westminster Bank, United Kingdom 1.2
SmithKline Beecham, United Kingdom 1.1
Wolters Kluwer, Netherlands 1.0
___________________________________________________________
Reed International, United Kingdom 0.9
Telecom Italia, Italy 0.9
Shell Transport & Trading, United Kingdom 0.8
Telecomunicacoes Brasileiras, Brazil 0.8
Elsevier, Netherlands 0.8
___________________________________________________________
GE, United States 0.8
Sumitomo Electric Industries, Japan 0.8
ING Groep, Netherlands 0.8
Nestle, Switzerland 0.7
Eaux Cie Generale, France 0.7
___________________________________________________________
Glaxo Wellcome, United Kingdom 0.7
Kingfisher, United Kingdom 0.7
Roche Holdings, Switzerland 0.7
Canon, Japan 0.7
Orkla, Norway 0.6
___________________________________________________________
Sankyo, Japan 0.6
Mobil, United States 0.6
Fannie Mae, United States 0.6
Total, France 0.6
Danaher, United States 0.6
___________________________________________________________
Total 20.5%
T. Rowe Price Global 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.
Global Stock Fund
Lipper Global MSCI Global Stock
Funds Average World Index Fund
12/29/95 $ 10,000 $ 10,000 $ 10,000
10/96 11,158 10,967 11,350
10/97 13,018 12,858 13,277
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.
Periods Ended Since Inception
10/31/97 1 Year Inception Date
___________________________________________________________
Global Stock
Fund 16.98% 16.67% 12/29/95
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 Global Stock Fund
For a share outstanding throughout each period
Financial Highlights
Year 12/29/95
Ended to
10/31/97 10/31/96
NET ASSET VALUE
Beginning of period $ 11.35 $ 10.00
Investment activities
Net investment income 0.06* 0.05*
Net realized and
unrealized gain (loss) 1.84 1.30
Total from
investment activities 1.90 1.35
Distributions
Net investment income (0.06) -
Net realized gain (0.18) -
Total distributions (0.24) -
NET ASSET VALUE
End of period $ 13.01 $ 11.35
____________________
Ratios/Supplemental Data
Total return 16.98%* 13.50%*
Ratio of expenses to
average net assets 1.30%* 1.30%*!
Ratio of net investment
income to average
net assets 0.68%*0.88%*!
Portfolio turnover rate 41.8% 50.0%!
Average commission rate paid $ 0.0015 $ 0.0026
Net assets, end of period
(in thousands) $ 32,020 $ 14,916
* Excludes expenses in excess of a 1.30% voluntary expense limitation in
effect through 10/31/97.
! Annualized.
The accompanying notes are an integral part of these financial statements.
T. Rowe Price Global Stock Fund
October 31, 1997
Statement of Net Assets
Shares/Par Value
In
thousands
ARGENTINA 0.6%
Common Stocks 0.6%
Banco de Galicia Buenos Aires
(Class B) ADR (USD) 659 $ 16
Banco Frances del Rio de la
Plata ADR (USD) 675 17
Perez Companc (Class B) 4,934 31
Telecom Argentina Stet (Class B) 930 5
Telecom Argentina Stet (Class B)
ADR (USD) 220 5
Telefonica de Argentina (Class B)
ADR (USD) 1,080 30
YPF Sociedad Anonima (Class D)
ADR (USD) 2,268 73
Total Argentina (Cost $176) 177
AUSTRALIA 1.4%
Common Stocks 1.3%
Australia & New Zealand Bank Group 2,000 14
Australian Gas Light Company 5,052 34
Boral Limited 4,075 11
Brambles Industries 1,000 19
Broken Hill Proprietary 5,300 52
Commonwealth Bank of Australia 141 2
Commonwealth Bank of Australia,
Installment Receipts, 11/14/97 3,600 30
Fosters Brewing Group 12,000 23
John Fairfax Holdings 8,000 18
Lend Lease 1,609 33
National Australia Bank 2,037 28
News Corporation 5,919 28
Publishing & Broadcasting 4,400 25
St. George Bank 3,102 19
Tabcorp Holdings 4,500 21
Westpac Bank 4,200 24
WMC 3,500 12
Woodside Petroleum 4,000 34
427
Preferred Stocks 0.1%
News Corporation 2,116 10
Sydney Harbour Casino Holdings 13,000 13
23
Total Australia (Cost $466) 450
BELGIUM 0.7%
Common Stocks 0.7%
Dexia 139 $ 15
Generale de Banque 107 44
Generale de Banque, VVPR Strip* 7 0
Kredietbank 345 145
UCB 9 31
Total Belgium (Cost $182) 235
BRAZIL 1.9%
Common Stocks 0.2%
Companhia Siderurgica Nacional 481,000 18
Eletrobras 69,910 28
Pao de Acucar GDS (USD) 1,000 18
Usiminas ADR (USD) 290 2
White Martins 3,922 7
73
Preferred Stocks and Rights 1.7%
Banco Bradesco 3,059,426 23
Banco Itau 31,000 13
Brahma 32,654 20
Brasmotor 23,775 3
Cia Cimento Portland Itau 28,000 7
Cia Energetica Minas Gerais 501,000 20
Cia Energetica Minas Gerais
ADR (144a) (USD) * 150 6
Cia Energetica Minas Gerais ADR
Sponsored, Nonvoting (USD) * 392 16
Cia Tecidos Norte de Minas 23,000 9
Encorpar * 23,000 0
Lojas Americanas 374,000 3
Pao de Acucar GDS (USD) 190 3
Petrol Brasileiros 138,000 26
Telecomunicacoes Brasileiras
ADR (USD) 2,555 259
Telecomunicacoes de Minas
Gerais (Class B) 73,000 9
Telecomunicacoes de Minas Gerais
(Class B)
Preference Receipts * 905 0
Telecomunicacoes de Sao Paulo 185,887 $ 49
Telecomunicacoes de Sao Paulo,
Rights, 11/11/97 * 6,215 0
Telecomunicacoes do Rio de Janeiro 81,654 8
Telecomunicacoes do Rio de
Janeiro, Rights, 11/11/97 * 3,166 0
Unibanco, Units (Each unit
consists of 1 preferred
share and 1
Unibanco Holdings (Class B)
share) * 346,851 19
Usiminas 2,937 21
Usiminas ADR (USD) 1,257 9
523
Total Brazil (Cost $613) 596
CANADA 0.5%
Common Stocks 0.5%
Alcan Aluminium 1,080 30
Fairfax Financial * 300 74
Royal Bank of Canada 430 23
Royal Bank of Canada (USD) 800 43
Total Canada (Cost $166) 170
CHILE 0.3%
Common Stocks 0.3%
Chilectra ADR (144a) (USD) 584 15
Chilgener ADS (USD) 573 16
Compania Cervecerias Unidas
ADS (USD) 200 5
Compania de Telecomunicaciones
de Chile ADR (USD) 578 16
Empresa Nacional de Electricidad de
Chile ADR (USD) 856 17
Enersis ADS (USD) 496 17
Santa Isabel ADR (USD) 339 6
Total Chile (Cost $93) 92
CHINA 0.2%
Common Stocks 0.2%
Huaneng Power International (Class N)
ADR (USD) * 3,100 68
Total China (Cost $57) 68
CZECH REPUBLIC 0.0%
Common Stocks 0.0%
SPT Telecom 40 $ 5
Total Czech Republic (Cost $5) 5
DENMARK 0.2%
Common Stocks 0.2%
Den Danske Bank 260 29
Tele Danmark (Class B) 80 5
Unidanmark (Class A) 280 19
Total Denmark (Cost $39) 53
FINLAND 0.2%
Common Stocks 0.2%
Nokia (Class A) 620 55
Total Finland (Cost $32) 55
FRANCE 4.8%
Common Stocks 4.8%
Accor 126 23
Alcatel Alsthom 675 81
Assurances Generales de France 460 24
AXA 653 45
Canal Plus 180 31
Carrefour 102 53
Cie de St. Gobain 402 58
Credit Commercial de France 387 22
Danone 130 20
Dexia France, Bearer 110 11
Eaux Cie Generale 2,037 237
Elf Aquitaine 662 82
GTM Entrepose 210 13
Guilbert 200 26
Havas 140 9
L'Oreal 64 23
Lapeyre 404 $ 24
Legrand 150 28
LVMH 299 51
Pathe 117 21
Pinault Printemps 321 147
Primagaz 130 10
Promodes 30 10
Rexel 20 5
Sanofi 795 75
Schneider 1,405 75
Societe Generale 293 40
Sodexho 104 52
Television Francaise 523 49
Total (Class B) 1,733 192
Total France (Cost $1,442) 1,537
GERMANY 3.1%
Common Stocks and Warrants 2.9%
Allianz 430 97
Allianz, Warrants, 2/23/98 * 105 11
Bayer 1,742 61
Bayerische Hypotheken und
Wechsel Bank 1,219 51
Bayerische Vereinsbank 363 21
Bilfinger & Berger 490 18
Buderus 30 15
Commerzbank 680 23
Deutsche Bank 1,508 99
Deutsche Telekom 1,876 35
Gehe 1,780 93
Hoechst 610 23
Hornbach Baumarkt 120 4
Mannesmann 67 28
Rhoen Klinikum 317 30
SAP 240 69
Siemens 1,013 62
Veba 2,130 119
Veba, Warrants, 4/6/98 * 59 20
Volkswagen 57 34
913
Preferred Stocks 0.2%
Fielmann 120 $ 3
Fresenius 100 17
Hornbach Holdings 230 15
SAP 120 36
71
Total Germany (Cost $945) 984
HONG KONG 1.5%
Common Stocks 1.5%
China Light & Power 4,000 21
Dao Heng Bank Group 10,000 23
First Pacific 28,231 18
Guoco Group 11,000 24
Henderson Land Development 4,000 22
Hong Kong Land Holdings (USD) 23,575 54
Hutchison Whampoa 17,000 117
New World Development 23,207 82
Sun Hung Kai Properties 2,000 15
Swire Pacific (Class A) 9,000 48
Wharf Holdings 21,000 43
Total Hong Kong (Cost $707) 467
ITALY 2.0%
Common Stocks 2.0%
Assicurazioni Generali 1,000 22
Banca Commerciale Italiana 3,000 8
Banca Fideuram 3,455 13
Credito Italiano 25,825 69
ENI 18,609 105
Gucci Group (USD) 635 23
IMI 3,000 27
Industrie Natuzzi ADR (USD) 1,000 22
Italgas 4,600 17
Mediolanum 2,846 48
Rinascente 1,000 8
Telecom Italia 22,440 $ 141
Telecom Italia Mobile 33,000 122
Telecom Italia Mobile, Savings
Shares 6,000 12
Total Italy (Cost $529) 637
JAPAN 12.7%
Common Stocks 12.7%
Advantest 300 25
Alps Electric 3,000 34
Amada 5,000 27
Canon 9,000 218
Citizen Watch 4,000 26
Daifuku 1,000 7
Daiichi Pharmaceutical 6,000 85
DaiNippon Screen Manufacturing 4,000 32
Daiwa House 6,000 58
DDI 10 33
Denso 8,000 173
East Japan Railway 15 73
Fanuc 1,200 48
Hitachi 9,000 69
Hitachi Zosen 7,000 15
Honda Motor 1,000 34
Inax 3,000 13
Ishihara Sangyo Kaisha 3,000 6
Ito-Yokado 2,000 99
Kao 4,000 56
Kokuyo 2,000 47
Komatsu 6,000 32
Komori 2,000 37
Kumagai Gumi 3,000 3
Kuraray 5,000 45
Kyocera 3,000 172
Makita 4,000 56
Marui 6,000 101
Matsushita Electric Industrial 9,000 151
Mitsubishi 5,000 43
Mitsubishi Heavy Industries 28,000 $ 137
Mitsubishi Paper Mills 2,000 5
Mitsui Fudosan 12,000 136
Mitsui Petrochemical Industries 3,000 11
Murata Manufacturing 3,000 122
National House Industrial 1,000 11
NEC 15,000 165
Nippon Hodo 1,000 6
Nippon Steel 33,000 68
Nippon Telephone & Telecom 7 59
Nomura Securities 8,000 93
Pioneer Electronic 3,000 49
Sangetsu 1,000 16
Sankyo 6,000 198
Sega Enterprises 1,000 25
Sekisui Chemical 8,000 63
Sekisui House 5,000 43
Seven Eleven Japan 1,000 75
Sharp 8,000 62
Shin-Etsu Chemical 4,000 98
Shiseido 1,000 14
Sony 2,000 166
Sumitomo 9,000 64
Sumitomo Electric Industries 12,000 159
Sumitomo Forestry 3,000 22
TDK 2,000 166
Teijin 12,000 39
Tokio Marine & Fire Insurance 3,000 30
Tokyo Electronics 1,000 50
Tokyo Steel Manufacturing 2,300 16
Toppan Printing 4,000 50
Uny 2,000 32
Yurtec 1,000 7
Total Japan (Cost $4,608) 4,075
MALAYSIA 0.3%
Common Stocks 0.3%
Berjaya Sports Toto 10,000 $ 27
Commerce Asset Holdings 12,200 10
Resorts World 4,000 7
Tanjong 13,000 23
Time Engineering 8,000 3
United Engineers 7,000 17
Total Malaysia (Cost $223) 87
MEXICO 1.2%
Common Stocks 1.2%
Cemex (Class B) * 3,000 13
Cemex ADS (USD) * 10,000 77
Cifra (Class B) ADR (USD) 2,249 4
Fomentos Economico Mexicano
(Class B) 4,230 30
Gruma (Class B) * 4,826 19
Gruma (Class B) 144a ADS (USD) * 1,028 16
Grupo Financiero Banamex (Class B) * 6,490 13
Grupo Industrial Maseca (Class B) 12,000 12
Grupo Modelo (Class C) 3,000 22
Grupo Televisa GDR (USD) * 323 10
Kimberly-Clark Mexico (Class A) 7,721 34
Panamerican Beverages (Class A)
(USD) 1,670 52
Telefonos de Mexico (Class L)
ADR (USD) 1,680 73
TV Azteca ADR (USD) * 1,100 21
Total Mexico (Cost $369) 396
NETHERLANDS 6.6%
Common Stocks and Warrants 6.6%
ABN Amro Holdings 5,266 106
Ahold 1,121 29
Akzo Nobel 430 76
ASM Lithography (USD) * 700 51
Baan Company 629 44
Baan Company (USD) 380 27
CSM 1,498 $ 68
Elsevier 16,207 255
Fortis Amev 1,710 67
ING Groep 5,430 228
ING Groep, Warrants, 3/15/01 * 1,526 16
Koninklijke PTT Nederland 588 22
Nutricia 1,250 36
Otra 340 5
Polygram 1,785 102
Royal Dutch Petroleum 9,640 510
Unilever 2,724 145
Wolters Kluwer 2,688 330
Total Netherlands (Cost $1,908) 2,117
NEW ZEALAND 0.3%
Common Stocks 0.3%
Air New Zealand (Class B) 8,000 17
Carter Holt Harvey 3,300 6
Fletcher Challenge Building 5,450 16
Fletcher Challenge Energy 3,250 15
Fletcher Challenge Forests Division 7,465 7
Fletcher Challenge Paper 3,500 6
Telecom Corporation of New Zealand 4,800 23
Tranz Rail Holdings 1,000 4
Total New Zealand (Cost $105) 94
NORWAY 1.2%
Common Stocks 1.2%
Bergesen (Class A) 380 11
Norsk Hydro 3,020 167
Orkla (Class A) 2,153 198
Saga Petroleum (Class B) 400 7
Total Norway (Cost $305) 383
PANAMA 0.0%
Common Stocks 0.0%
Banco Latinoamericano de
Exportaciones (Class E) (USD) 182 $ 7
Total Panama (Cost $8) 7
PERU 0.0%
Common Stocks 0.0%
Credicorp (USD) 430 8
Telefonica del Peru (Class B)
ADS (USD) 419 8
Total Peru (Cost $18) 16
PORTUGAL 0.2%
Common Stocks 0.2%
Jeronimo Martins 926 60
Total Portugal (Cost $32) 60
RUSSIA 0.0%
Common Stocks 0.0%
Rao Gazprom ADS (USD) 278 6
Total Russia (Cost $6) 6
SINGAPORE 0.5%
Common Stocks 0.5%
City Developments 2,000 8
DBS Land 8,500 14
Fraser & Neave 3,000 15
Overseas Chinese Bank 1,200 7
Overseas Union Bank 3,400 11
Singapore Land 8,000 23
Singapore Press 3,600 50
United Overseas Bank 4,000 22
Total Singapore (Cost $280) 150
SOUTH KOREA 0.1%
Common Stocks 0.1%
Samsung Electronic 518 $ 20
Total South Korea (Cost $37) 20
SPAIN 1.2%
Common Stocks 1.2%
Argentaria Banca de Espana 510 28
Banco Bilbao Vizcaya 900 24
Banco Popular Espanol 788 46
Banco Santander 2,312 65
Centros Comerciales Pryca 700 11
Empresa Nacional de Electricidad 3,016 57
Gas Natural 515 24
Iberdrola 3,402 41
Repsol 663 28
Telefonica de Espana 2,333 64
Total Spain (Cost $344) 388
SWEDEN 1.9%
Common Stocks 1.9%
ABB (Class A) 3,230 38
Astra (Class B) 11,660 180
Atlas Copco (Class B) 1,810 54
Electrolux (Class B) 1,140 94
Esselte (Class B) 500 11
Granges * 350 6
Hennes and Mauritz 2,430 99
Nordbanken 1,410 44
Sandvik (Class A) 560 17
Sandvik (Class B) 1,795 55
Scribona (Class B) 440 6
Total Sweden (Cost $503) 604
SWITZERLAND 3.7%
Common Stocks 3.7%
ABB 110 $ 143
Adecco 266 84
Credit Suisse Group 300 42
Nestle 170 240
Novartis 251 393
Roche Holdings * 25 220
Schweizerischer Bankverein 270 73
Total Switzerland (Cost $1,017) 1,195
THAILAND 0.0%
Common Stocks 0.0%
Advanced Information Service 300 2
Siam Cement 400 3
Total Thailand (Cost $17) 5
UNITED KINGDOM 10.9%
Common Stocks 10.9%
Abbey National 6,000 95
Argos 7,480 80
Asda Group 20,000 52
BAA 1,000 9
BG 8,000 35
British Petroleum 6,000 88
Cable & Wireless 13,000 104
Cadbury Schweppes 10,000 101
Caradon 14,700 47
Centrica * 4,000 6
Compass Group 5,000 53
David S. Smith 9,000 34
Electrocomponents 5,000 39
GKN 1,000 22
Glaxo Wellcome 11,000 234
Grand Metropolitan 17,000 153
Guinness 14,100 126
Heywood Williams Group 1,000 $ 4
Hillsdown Holdings 5,000 14
John Laing (Class A) 4,000 25
Kingfisher 15,400 222
Ladbroke Group 9,000 40
National Westminster Bank 27,000 390
Rank Group 9,000 50
Reed International 28,000 277
Rio Tinto 7,000 90
Rolls Royce 5,000 18
Safeway 11,000 72
Sears 3,000 3
Shell Transport & Trading 38,000 269
Smithkline Beecham 36,200 343
T & N 10,000 42
Tesco 9,000 72
Tomkins 29,000 149
United News & Media 10,400 131
Total United Kingdom (Cost $2,959) 3,489
VENEZUELA 0.0%
Common Stocks 0.0%
Compania Anonima Nacional
Telefonos de Venezuela
(Class D) ADR (USD) 390 17
Total Venezuela (Cost $13) 17
UNITED STATES 36.1%
Common Stocks 36.1%
3Com * 1,300 54
ACE Limited 1,600 149
Aetna 900 64
AlliedSignal 4,600 166
American Home Products 1,400 104
American Stores 5,900 151
Amgen * 1,400 69
Analog Devices * 2,400 73
AT&T 2,800 $ 137
Atlantic Richfield 2,300 189
BankBoston 1,500 122
Barnett Banks 1,300 90
Baxter International 1,700 79
BellSouth 1,900 90
BMC Software * 1,900 115
Boston Scientific * 400 18
Bristol-Myers Squibb 2,100 184
Carnival (Class A) 2,600 126
Cellular Communications
International * 2,400 96
Chase Manhattan 1,300 150
Cisco Systems * 800 66
Citicorp 1,000 125
Colgate-Palmolive 900 58
COMPAQ Computer * 1,500 96
Corporate Express * 6,750 99
CUC International * 5,650 167
CVS 1,142 70
Danaher 3,500 192
Dell Computer * 800 64
Dillard Department Stores 3,300 127
Disney 1,200 99
EMC * 800 45
EXEL 1,500 91
Fannie Mae 4,000 194
Federated Department Stores * 3,200 141
First Data 4,500 131
First Union 2,000 98
Freddie Mac 4,900 186
Galileo International * 4,000 100
GE 3,800 245
General Nutrition * 2,400 76
Great Lakes Chemical 1,100 52
Gulfstream Aerospace * 1,300 38
H&R Block 2,000 74
HealthSouth * 4,600 118
Hewlett-Packard 1,400 $ 86
Honeywell 1,700 116
Hubbell (Class B) 2,000 88
Ikon Office Solutions 2,800 79
Intel 1,400 108
ITT * 800 60
Johnson & Johnson 1,300 75
Kimberly-Clark 1,200 62
La Quinta Inns 3,200 57
Mattel 2,300 89
Maxim Integrated Products * 800 53
McAfee Associates * 2,300 114
McDonald's 800 36
MCI 3,300 117
Medtronic 1,400 61
Mellon Bank 1,800 93
Merck 1,800 161
Meredith 2,800 95
Microsoft 1,300 169
Mid Ocean Limited 2,100 136
Mobil 2,700 197
Nabisco Holdings 1,800 74
National Semiconductor * 2,700 97
Newell 1,900 73
Newmont Mining 1,900 66
Norwest 4,400 141
Oracle * 3,300 118
PacifiCare Health Systems
(Class B) * 500 32
Parametric Technology * 3,100 137
Partnerre 2,800 115
Patriot American Hospitality, REIT 3,799 125
PepsiCo 3,000 110
Pfizer 2,000 141
Philip Morris 4,800 190
PLATINUM Technology * 1,400 34
Procter & Gamble 600 41
Quorum Health Group * 2,100 51
Safeway * 2,700 $ 157
Sara Lee 2,200 112
SBC Communications 1,500 95
Service Corp. International 4,000 122
SLM Holding 300 42
St. John Knits 3,000 121
Starwood Lodging, REIT 1,100 66
Synopsys * 4,500 175
Teleflex 3,400 127
Tenet Healthcare * 3,500 107
Time Warner 2,200 127
Travelers Group 1,633 114
Travelers Property Casualty 2,900 105
Tribune 2,900 160
TriMas 4,900 143
Tyco International 4,332 163
United HealthCare 1,800 83
USA Waste Services * 3,300 122
USX-Marathon 4,600 164
Vencor * 4,000 108
Wal-Mart 4,900 172
Warnaco Group 5,800 164
Warner-Lambert 500 72
World Com * 2,600 87
Xerox 1,000 79
Total United States (Cost $9,932) 11,562
SHORT-TERM INVESTMENTS 5.8%
Money Market Funds 5.8%
Reserve Investment Fund, 5.65% $ 1,857,347 1,857
Total Short-Term Investments
(Cost $1,857) 1,857
Total Investments in Securities
100.1% of Net Assets
(Cost $29,993) $ 32,054
Other Assets Less Liabilities (34)
NET ASSETS $ 32,020
_________
Net Assets Consist of:
Accumulated net investment income -
net of distributions $ 162
Accumulated net realized gain/loss -
net of distributions 1,307
Net unrealized gain (loss) 2,064
Paid-in-capital applicable to
2,462,023 shares of $0.01 par
value capital stock outstanding;
2,000,000,000 shares of the
corporation authorized 28,487
NET ASSETS $ 32,020
_________
NET ASSET VALUE PER SHARE $ 13.01
_________
* 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 0.12% of net assets.
ADR American depository receipt
ADS American depository share
GDR Global depository receipt
GDS Global depository share
REIT Real estate investment trust
USD U.S. dollar
VVPR Entitles holders to a reduced rate of foreign withholding tax.
The accompanying notes are an integral part of these financial statements.
T. Rowe Price Global Stock Fund
Statement of Operations
In thousands
Year
Ended
10/31/97
Investment Income
Income
Dividend (net of foreign taxes
of $ 39) 382
Interest $ 96
Total income 478
Expenses
Custody and accounting 144
Shareholder servicing 94
Registration 28
Legal and audit 14
Prospectus and shareholder reports 11
Directors 7
Investment management 5
Miscellaneous 11
Total expenses 314
Net investment income 164
Realized and Unrealized Gain (Loss)
Net realized gain (loss)
Securities 1,329
Foreign currency transactions (14)
Net realized gain (loss) 1,315
Change in net unrealized gain or
loss on securities
Securities 1,339
Other assets and liabilities
denominated in foreign
currencies 3
Change in net unrealized gain
or loss on securities 1,342
Net realized and unrealized gain (loss) 2,657
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS $ 2,821
_________
The accompanying notes are an integral part of these financial statements.
T. Rowe Price Global Stock Fund
Statement of Changes in Net Assets
In thousands
Year 12/29/95
Ended to
10/31/97 10/31/96
Increase (Decrease) in Net Assets
Operations
Net investment income $ 164 $ 70
Net realized gain (loss) 1,315 246
Change in net unrealized
gain or loss 1,342 722
Increase (decrease) in net
assets from operations 2,821 1,038
Distributions to shareholders
Net investment income (85) -
Net realized gain (254) -
Decrease in net assets from
distributions (339) -
Capital share transactions*
Shares sold 23,635 16,948
Distributions reinvested 329 -
Shares redeemed (9,342) (3,070)
Increase (decrease) in net
assets from capital
share transactions 14,622 13,878
Net Assets
Increase (decrease) during
period 17,104 14,916
Beginning of period 14,916 -
End of period $ 32,020 $ 14,916
_______________________
*Share information
Shares sold 1,846 1,596
Distributions reinvested 28 -
Shares redeemed (726) (282)
Increase (decrease) in
shares outstanding 1,148 1,314
The accompanying notes are an integral part of these financial statements.
T. Rowe Price Global 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 Global Stock Fund (the fund), a
diversified, open-end management investment company, is one of the portfolios
established by the corporation and commenced operations on December 29, 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 accrued interest, approximates fair value.
For purposes of determining the fund's net asset value per share, the U.S.
dollar value of all assets and liabilities initially expressed in foreign
currencies is determined by using the mean of the bid and offer prices of
such currencies against U.S. dollars quoted by a major bank.
Assets and liabilities for which the above valuation procedures are
inappropriate or are deemed not to reflect fair value are stated at fair
value as determined in good faith by or under the supervision of the officers
of the fund, as authorized by the Board of Directors.
Currency Translation Assets and liabilities are translated into U.S. dollars
at the prevailing exchange rate at the end of the reporting period. Purchases
and sales of securities and income and expenses are translated into U.S.
dollars at the prevailing exchange rate on the dates of such transactions.
The effect of changes in foreign exchange rates on realized and unrealized
security gains and losses is reflected as a component of such gains and
losses.
Other Income and expenses are recorded on the accrual basis. Investment
transactions are accounted for on the trade date. Realized gains and losses
are reported on the identified cost basis. Dividend income and distributions
to shareholders are recorded by the fund on the ex-dividend date. Income and
capital gain distributions are determined in accordance with federal income
tax regulations and may differ from those determined in accordance with
generally accepted accounting principles.
Note 2 - Investment Transactions
Purchases and sales of portfolio securities, other than short-term
securities, aggregated $22,937,000 and $9,378,000, 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.
Undistributed net investment income $ 7,000
Paid-in-capital (7,000)
For federal income tax purposes the fund intends to elect to pass through
foreign source income of $252,000 and foreign taxes paid of $39,000 for its
tax year ended October 31, 1997; the per share effect of these pass-throughs
is $0.10 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 $29,993,000, and net unrealized gain
aggregated $2,061,000, of which $3,901,000 related to appreciated investments
and $1,840,000 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 $5,000 was payable at
October 31, 1997. The fee is computed daily and paid monthly, and consists
of an individual fund fee equal to 0.35% of average daily net assets and a
group fee. The group fee is based on the combined assets of certain mutual
funds sponsored by the manager or Price Associates (the group). The group fee
rate ranges from 0.48% for the first $1 billion of assets to 0.30% 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 which would cause the fund's ratio of expenses
to average net assets to exceed 1.30% through October 31, 1997, and 1.20%
thereafter through October 31, 1999. The fund is then 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 1.20%. Pursuant
to this agreement, $158,000 of management fees were not accrued by the fund
for the year ended October 31, 1997, and $165,000 of fees and expenses remain
subject to reimbursement through October 31, 1999.
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 $170,000 for the year ended October 31, 1997, of which
$16,000 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 $19,000 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 $260,000 with
certain affiliates of the manager and paid commissions of $1,000 related
thereto.
T. Rowe Price Global Stock Fund
Report of Independent Accountants
To the Board of Directors and Shareholders of
T. Rowe Price Global 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 Global Stock Fund (one of the portfolios constituting T.
Rowe Price International Funds, Inc., hereafter referred to as the "Fund")
at October 31, 1997, the results of its operations for the year then ended,
and the changes in its net assets and the financial highlights for the year
then ended and for the period December 29, 1995 (commencement of operations)
through October 31, 1996, 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
For yield, price, last transaction,
current balance, or to conduct
transactions, 24 hours, 7 days
a week, call Tele*Access(registered trademark):
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 Global 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
Invest With Confidence(registered trademark)
T. Rowe Price
T. Rowe Price Investment Services, Inc., Distributor.
F04-050 10/31/97
Chart 1 - Geographic Diversification - pie chart showing Europe 37%, United
States 36%, Japan 13%, Far East 4%, Latin America 4% and Other and Reserves
6%.
Chart 2 - Performance Comparison - Global Stock Fund - A line chart showing
the cumulative growth of $10,000 invested in the Global Stock Fund from
inception compared with $10,000 invested in a broad-based index or average
over the same period.
