- --------------------------------------------------------------------------------
T. Rowe Price
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Semiannual Report
New Asia Fund
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April 30, 1998
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REPORT HIGHLIGHTS
================================================================================
New Asia Fund
* The bear market in East Asian equities continued during the six months
ended April 30, although some currencies rebounded from depressed levels.
* The fund's returns were negative for the 6- and 12-month periods but
compared favorably with the even steeper losses of its Morgan Stanley
benchmark and the average competitor fund.
* The fund benefited from increased holdings in Taiwan and India, both of
which held up better than most other Asian stock markets.
* We continued to focus on Hong Kong, home of some of the region's strongest
companies.
* We believe the investing environment will remain difficult in Asia, but it
offers interesting opportunities that should bear fruit as needed reforms
are made.
<PAGE>
Fellow Shareholders
The past six months saw a continuation of the savage bear market that began
in the summer of 1997. Although the hardest-hit Asian currencies rebounded in
early 1998 after some IMF programs were instituted in the more troubled
economies, the period ending April 30, 1998, saw markets broadly down about 12%.
Were it not for the positive performance of many currencies against the U.S.
dollar, the decline would have been worse.
================================================================================
Performance Comparison
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Periods Ended 4/30/98 6 Months 12 Months
- --------------------------------------------------------------------------------
New Asia Fund -4.89% -33.58%
MSCI All Country Far East
Free Ex-Japan -11.87 -41.50
Lipper Pacific Ex-Japan
Funds Average -10.92 -34.79
================================================================================
The value of the fund's assets fell 4.89% over the past six months. The
difficult conditions of recent months were reflected in the much steeper losses
recorded by the Morgan Stanley Capital Inter-national benchmark and by the
average competitor fund, both shown in the table. Your fund's better showing can
be attributed to increased investments in Taiwan and India, which performed
relatively well during the period, to favorable stock selection, and to our cash
position of about 8%. For the 12-month period, the fund lost one-third of its
value, which was marginally better than the average competitor fund and quite a
bit better than the MSCI benchmark.
PORTFOLIO REVIEW
We continued to focus on HONG KONG, maintaining a weighting in the 44% to
46% range over the last six months. Hong Kong remains the fund's largest country
exposure because companies there are some of the most financially sound in the
region and because of our present lack of enthusiasm for most other Asian
markets. Hong Kong's econ-omy, however, should decelerate further as trade flows
around the region slow. In addition, asset deflation, particularly of property,
has commenced due to a high interest rate environment, which is in itself a
result of the Hong Kong Monetary Authority's determination to defend the Hong
Kong dollar peg to the U.S. dollar. We believe that the Authority will hold fast
to the policy of a pegged currency, which gives some stability to the Hong Kong
economy not seen in other parts of Asia.
<PAGE>
================================================================================
Market Performance
- --------------------------------------------------------------------------------
In U.S. Dollar Terms
Periods Ended 4/30/98 6 Months 12 Months
- --------------------------------------------------------------------------------
China Free -29.84% -40.37%
Hong Kong -9.62 -25.27
India -1.51 0.01
Malaysia -14.13 -60.69
Philippines 6.13 -46.20
Singapore -3.18 -24.22
South Korea -19.86 -49.21
Taiwan 1.13 -20.87
Thailand -4.14 -59.25
Source: FAMEInformation Services, Inc.; using MSCI indices.
================================================================================
In Hong Kong, as elsewhere in Asia, we have shied away from large exposure
to financials and property. Where we do have holdings in these areas (CHEUNG
KONG, HSBC, NEW WORLD DEVELOPMENT), we have tried to focus only on companies
with very solid balance sheets. Because of the strength of their franchise and
management skills, such companies can still make a decent profit in a depressed
environment. They are also well placed to capitalize on China's tremendous
long-term potential. Since our last report to you on October 31, 1997, we sold
out of smaller, more marginal industry players (LAI SUN DEVELOPMENT, GUOCO,
HYSAN DEVELOPMENT) in favor of these larger companies that stand to benefit
competitively from any shakeout resulting from the economic downturn.
Although CHINA has also been experiencing an economic slowdown and some
price deflation in traded goods and assets like property, the economy has been
relatively resilient. The closed nature of the econ-omy and capital account has
proved to be a strength in the current environment, and China has not been
subjected to the severe withdrawal of short-term capital flows as has the rest
of Asia. In terms of capturing market share of both foreign direct investment
and exports, China has gained from its neighbors' instability. This bodes well
for the Chinese currency, the renminbi, which China's leaders have pledged to
keep stable. The fund's holdings in China, about 4% of assets, remain
concentrated in infrastructure companies such as HUANENG POWER and CHINA TELECOM
(listed and traded in Hong Kong).
We steadily increased our exposure to TAIWAN, again on the basis of that
economy's relative strength and the quality of its companies, many of which are
competitive players in the world market, particularly in technology. Taiwan now
composes around 13% of fund assets, still below the weighting in the benchmark
but significantly higher than our 7% exposure six months ago. The fund's
exposure to Taiwan technology companies contributed positively to performance
over the period.
[Geographic Diversification pie chart showing Hong Kong 46%, Taiwan 13%,
India 11%, Malaysia 4%, China 4%, Singapore 3%, Thailand 3%, Other and Reserves
16%.]
<PAGE>
Our exposure to INDIA rose steadily over the past six months, and India now
accounts for 11% of the fund's assets, up from 8% last October. The reform
process there remains on track in spite of another change in the coalition
government ruling the country. Key financial sector reforms have meant that, for
the first time in modern Indian history, capital has been allocated and priced
on an economic basis. This simple change, along with increasing competition, is
forcing Indian companies to focus more on issues like increasing shareholder
value. In essence, as in the U.S., a more profitable and focused company should
be better able to defend its franchise and finance its growth. We have
identified several companies that fit into this category, most of which
(MAHANAGAR TELEPHONE, RANBAXY, ICICI, HOUSING DEVELOPMENT FINANCE) are strong
domestic franchises also benefiting from the thinning ranks of weaker
competitors. The fund's exposure to Indian companies was one of the major
positive contributors to performance over the period. (After the close of the
reporting period, some Indian stocks sold off following reports of the
government's nuclear tests, but our holdings were relatively unscathed. We
believe this weakness presents some buying opportunities.)
Our exposure to the rest of Asia, with the exception of the PHILIPPINES,
has been pared to a bare minimum. Together SINGAPORE, INDONESIA, MALAYSIA,
THAILAND, the Philippines, and KOREA account for around 15% of the fund's assets
versus nearly 23% six months ago and compared with a combined MSCI benchmark
weight of around 40%. As before, we have focused on cash-generating businesses
with strong enough balance sheets and management to withstand a severe downturn
and the inevitable increase in competition that should come with the
recapitalization of these economies by foreign companies. The severe deflation
that is hitting Southeast Asian property and other speculative asset classes
will continue to exert tremendous pressure on local banks, so your fund has no
exposure to these areas except for small holdings in the Philippines (BANK OF
THE PHILIPPINE ISLANDS, AYALA LAND), where we expect the downturn's effects to
be less vicious.
================================================================================
Industry Diversification
- --------------------------------------------------------------------------------
Percent of Net Assets
10/31/97 4/30/98
- --------------------------------------------------------------------------------
Finance 34.2% 27.0%
Services 19.1 24.2
Energy 9.5 10.6
Multi-industry 11.9 10.4
Consumer Goods 5.3 8.1
Capital Equipment 4.1 7.4
Materials 1.8 1.0
Reserves 14.1 11.3
- --------------------------------------------------------------------------------
Total 100.0% 100.0%
================================================================================
<PAGE>
OUTLOOK
The key external factors of the region's eventual recovery are the
supportive atmosphere of the international capital markets, whose liquidity is
badly needed to recapitalize the regional economies, and the buoyancy of
European and American economies, which buy Asian-produced goods. Obviously, the
addition of an economic revival in Japan would also aid the recovery process.
However, based purely on the necessary internal adjustments taking place-in
Southeast Asia, Korea, and Japan-we expect the region's overall environment to
remain difficult in 1998 and probably 1999. The most publicized angle of the
crisis, namely the bailout of financial systems, will probably result in a very
large burden on creditors, stockholders, and the Asian tax-paying
public-possibly the most costly bailout yet seen. The full cost of this exercise
is still unknown, due to the slowness of governments to forcefully execute
announced measures such as selling failed assets and restructuring domestic
corporations.
Some of the changes sweeping Asia are also likely to be momentous. The
traditional model of economic growth-close links between government and
business; the complicity of labor; the export-driven, market-share-oriented
growth strategy at the expense of domestic consumption-will be reexamined in the
coming months via public debate and perhaps by new political leadership. The
mettle of Asian corporations that have traditionally enjoyed a large degree of
protection is also likely to be tested by the market deregulation that will
inevitably accompany Asia's recapitalization. Overall, this process is likely to
cause a greater degree of uncertainty about future economic policy than perhaps
we have had in the past. This, in turn, will probably translate into a generally
higher risk premium for Asian investments and continued volatility in Asian
currencies.
Tremendous upside, however, will eventually come from those specific Asian
companies that are able to change, restructure, and refocus to meet these
challenges and perhaps become globally competitive. Our challenge is to identify
these future winners in what is still a very fluid environment. Weak markets
offer the opportunity to pick and choose these companies in a gradual and
selective manner. As in many parts of the world, we expect that the market will
in the end separate companies into distinct classes of winners and losers, each
with distinct valuation premiums and discounts. At present, we expect that many
of these winners will come from Hong Kong, China, Taiwan, and India, although
there have also been some encouraging developments among select Korean, Thai,
and Philippine companies as well.
In summary, we do not see the Asian crisis as a one-year event, and there
is likely to be further pain. But we believe the crisis presents opportunities
to build a portfolio of good but currently undervalued companies that should do
well when the region's underlying strengths gradually resurface.
<PAGE>
Respectfully submitted,
/s/
Martin G. Wade
President
May 21, 1998
T. Rowe Price New Asia Fund
================================================================================
================================================================================
Portfolio Highlights
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TWENTY-FIVE LARGEST HOLDINGS
Percent of
Net Assets
4/30/98
Hutchison Whampoa, Hong Kong ........................................ 8.6%
Hong Kong Telecommunications, Hong Kong ............................. 5.6
Cheung Kong Holdings, Hong Kong ..................................... 4.8
HSBC Holdings, Hong Kong ............................................ 4.1
New World Development, Hong Kong .................................... 3.1
Dao Heng Bank Group, Hong Kong ...................................... 2.8
Singapore Press, Singapore .......................................... 2.7
Mahanagar Telephone, India .......................................... 2.6
Huaneng Power International, China .................................. 2.2
CLP Holdings, Hong Kong ............................................. 2.1
New World Infrastructure, Hong Kong ................................. 2.0
China Telecom, Hong Kong ............................................ 1.8
ITC, India .......................................................... 1.8
Industrial Credit & Investment Corporation of India, India .......... 1.8
Sun Hung Kai Properties, Hong Kong .................................. 1.8
Samsung Electronic, South Korea ..................................... 1.8
Hong Kong Land Holdings, Hong Kong .................................. 1.7
Tanjong, Malaysia ................................................... 1.6
Ranbaxy Laboratories, India ......................................... 1.5
Hindustan Lever, India .............................................. 1.4
Hong Kong and China Gas, Hong Kong .................................. 1.4
Cathay Life Insurance, Taiwan ....................................... 1.3
Compal Electronics, Taiwan .......................................... 1.3
Swire Pacific, Hong Kong ............................................ 1.3
Taiwan Semiconductor Manufacturing, Taiwan .......................... 1.2
- --------------------------------------------------------------------------------
Total ............................................................... 62.3%
================================================================================
<PAGE>
T. Rowe Price New Asia 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.
[New Asia Fund SEC graph shown here]
================================================================================
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.
================================================================================
Since Inception
Periods Ended 4/30/98 1 Year 3 Years 5 Years Inception Date
- --------------------------------------------------------------------------------
New Asia Fund -33.58% -9.39% -1.82% 4.56% 9/28/90
Investment return and principal value represent past performance and will
vary. Shares may be worth more or less at redemption than at original purchase.
================================================================================
<PAGE>
<TABLE>
T. Rowe Price New Asia Fund
====================================================================================================================================
Unaudited
For a share outstanding throughout each period#
====================================================================================================================================
Financial Highlights
<CAPTION>
6 Months Year 10 Months++ Year
Ended Ended Ended Ended
4/30/98 10/31/97 10/31/96 10/31/95 10/31/94 10/31/93 12/31/92
<S> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE
Beginning of period ............. $ 5.95 $ 8.64 $ 8.12 $ 10.07 $ 9.88 $ 6.34 $ 5.91
Investment activities
Net investment income ........ 0.05 0.09 0.06 0.08 0.06 0.03 0.10
Net realized and
unrealized gain (loss) ....... (0.34) (2.71) 0.55 (1.07) 0.36 3.51 0.56
Total from
investment activities ........ (0.29) (2.62) 0.61 (0.99) 0.42 3.54 0.66
Distributions
Net investment income ........ (0.08) (0.06) (0.09) (0.07) (0.04) -- (0.10)
Net realized gain ............ -- (0.01) -- (0.89) (0.19) -- (0.13)
Total distributions .......... (0.08) (0.07) (0.09) (0.96) (0.23) -- (0.23)
NET ASSET VALUE
End of period ................... $ 5.58 $ 5.95 $ 8.64 $ 8.12 $ 10.07 $ 9.88 $ 6.34
Ratios/Supplemental Data
Total return .................... (4.89)% (30.61)% 7.58% (9.70)% 4.11% 55.84% 11.24%
Ratio of expenses to
average net assets .............. 1.24%+ 1.10% 1.11% 1.15% 1.22% 1.29%+ 1.51%
Ratio of net investment
income to average
net assets ...................... 1.45%+ 0.76% 0.66% 0.97% 0.85% 1.02%+ 1.64%
Portfolio turnover rate ......... 33.6% 41.8% 42.0% 63.7% 63.2% 40.4%+ 36.3%
Average commission
rate paid ....................... $ 0.0061 $ 0.0063 $ 0.0057 $- $- $- $-
Net assets, end of period
(in millions) ................... $ 770 $ 877 $ 2,041 $ 1,909 $ 2,303 $ 1,650 $ 315
<FN>
+ Annualized.
++ The fund' fiscal year-end was changed to 10/31.
# All per share figures reflect the 2-for-1 stock split effective 5/27/94.
</FN>
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
T. Rowe Price New Asia Fund
================================================================================
Unaudited April 30, 1998
================================================================================
Portfolio of Investments
- --------------------------------------------------------------------------------
Shares/Par Value
In thousands
CHINA 3.6%
Common Stocks 3.6%
Guangdong Electric Power (Class B) (HKD) .............. 12,016,100 $ 6,655
Huaneng Power International (Class N) ADR (USD) * ..... 773,640 17,020
Shenzhen Expressway (Class H) (HKD) * ................. 15,460,000 4,241
Total China (Cost $24,865) ............................ 27,916
HONG KONG 45.6%
Common Stocks and Warrants 45.6%
Cheung Kong Holdings .................................. 5,570,000 37,033
Cheung Kong Infrastructure ............................ 2,829,000 7,177
China Telecom ......................................... 7,396,000 14,036
CLP Holdings .......................................... 3,303,000 15,863
Dao Heng Bank Group ................................... 7,236,260 21,393
Dickson Concepts International ........................ 1,122,500 1,551
Esprit Holdings ....................................... 8,277,000 3,286
Giordano International ................................ 5,826,000 1,354
Great Eagle Holdings .................................. 2,346,000 3,150
Great Eagle Holdings, Warrants, 11/30/98* ............. 353,000 10
HKR International ..................................... 7,898,144 4,741
HSBC Holdings ......................................... 1,112,678 31,746
Hong Kong and China Gas ............................... 7,943,700 10,819
Hong Kong and China Gas, Warrants, 9/30/99* ........... 315,350 25
Hong Kong & Shanghai Hotels, Warrants, 12/10/98* ...... 274,998 0
Hong Kong Land Holdings (USD) ......................... 9,143,950 12,893
Hong Kong Telecommunications .......................... 23,141,977 43,320
Hutchison Whampoa ..................................... 10,653,000 65,876
Lai Sun Hotels International, Warrants, 4/30/99* ...... 652,286 5
Legend Holdings ....................................... 5,648,000 2,424
New World Development ................................. 8,274,507 23,554
New World Infrastructure .............................. 7,009,200 15,066
QPL International ..................................... 5,503,000 2,380
Sa Sa International Holdings .......................... 13,344,000 2,498
Smartone Telecommunications ........................... 2,948,000 7,745
Sun Hung Kai Properties ............................... 2,303,000 13,676
Swire Pacific (Class A) ............................... 1,932,000 9,653
Total Hong Kong (Cost $384,857) 351,274
<PAGE>
INDIA 11.0%
Common Stocks 11.0%
HDF Corporation * ..................................... 81,120 $ 6,591
Hindustan Lever ....................................... 275,500 10,939
Hindustan Petroleum ................................... 618,800 6,309
ITC ................................................... 696,000 13,873
Industrial Credit & Investment Corporation of India * . 5,284,800 13,773
Mahanagar Telephone * ................................. 3,172,000 20,127
Ranbaxy Laboratories .................................. 687,500 11,486
State Bank of India ................................... 164,900 1,198
Tata Engineering & Locomotive ......................... 300 2
Total India (Cost $76,881) ............................ 84,298
INDONESIA 0.9%
Common Stocks 0.9%
Gulf Indonesia Resources (USD) * ...................... 472,000 7,257
Total Indonesia (Cost $9,163) ......................... 7,257
MALAYSIA 3.7%
Common Stocks 3.7%
Resorts World * ....................................... 3,169,000 6,117
Tanjong ............................................... 5,271,000 12,012
Telekom Malaysia * .................................... 1,235,000 3,708
Tenaga Nasional ....................................... 3,305,000 6,601
Total Malaysia (Cost $54,185) ......................... 28,438
PHILIPPINES 2.5%
Common Stocks 2.5%
Ayala Land ............................................ 12,986,961 5,095
Bank of the Philippine Islands ........................ 850,500 2,118
Philippine Long Distance Telephone .................... 85,200 2,281
Philippine Long Distance Telephone ADS (USD) .......... 100,000 2,700
San Miguel (Class B) .................................. 2,963,550 4,872
Universal Robina ...................................... 11,588,000 2,193
Total Philippines (Cost $32,033) ...................... 19,259
SINGAPORE 3.2%
Common Stocks 3.2%
Singapore Airlines .................................... 294,000 $ 1,914
Singapore Press ....................................... 1,853,466 20,496
Singapore Technologies Engineering * .................. 2,000,000 1,719
Singapore Telecommunications .......................... 407,000 700
Total Singapore (Cost $27,571) ........................ 24,829
SOUTH KOREA 2.3%
Common Stocks and Rights 2.3%
Korea Electric Power .................................. 298,000 4,058
Samsung Electronic .................................... 238,980 13,232
Samsung Electronic, Rights, 6/2/98* ................... 19,013 367
Total South Korea (Cost $16,292) ...................... 17,657
<PAGE>
TAIWAN 13.3%
Common Stocks 13.3%
Acer .................................................. 1,480,000 2,469
Acer GDR (USD) ........................................ 252,000 2,230
Asustek Computer GDR (USD) ............................ 365,000 7,483
Bank Sino Pacific ..................................... 7,797,412 5,675
Cathay Construction ................................... 5,795,840 5,378
Cathay Life Insurance ................................. 2,541,000 10,172
China Trust Commercial Bank ........................... 7,734,096 9,077
Chuntex Electronics ................................... 2,407,000 4,416
Compal Electronics .................................... 2,292,500 9,977
Compeq Manufacturing .................................. 705,000 5,431
D-Link Corporation .................................... 1,535,000 3,934
Delta Electronics ..................................... 1,000,000 3,670
Far East Textile ...................................... 3,611,000 3,285
Far Eastern Silo & Shipping ........................... 7,593,000 7,184
Hon Hai Precision Industry ............................ 1,544,000 8,990
Taiwan Semiconductor Manufacturing .................... 2,196,000 9,490
Tatung ................................................ 3,849,000 3,560
Total Taiwan (Cost $110,833) .......................... 102,421
THAILAND 2.6%
Common Stocks 2.6%
PTT Exploration & Production .......................... 692,600 $7,311
Siam Cement ........................................... 515,400 7,281
Siam Makro ............................................ 3,244,000 5,330
Total Thailand (Cost $26,141) ......................... 19,922
VIETNAM 0.0%
Common Stocks 0.0%
Lazard Vietnam Fund Limited (USD) * ................... 152,800 153
Total Vietnam (Cost $462) ............................. 153
SHORT-TERM INVESTMENTS 8.2%
Money Market Funds 8.2%
Reserve Investment Fund, 5.65% ........................ 62,833,998 62,834
Total Short-Term Investments (Cost $62,834) ........... 62,834
Total Investments in Securities
96.9% of Net Assets (Cost $826,117) ................... $ 746,258
Other Assets Less Liabilities ......................... 23,993
NET ASSETS ............................................ $ 770,251
* Non-income producing
ADR American depository receipt
ADS American depository share
GDR Global depository receipt
HKD Hong Kong dollar
USD U.S. dollar
The accompanying notes are an integral part of these financial statements.
<PAGE>
T. Rowe Price New Asia Fund
================================================================================
Unaudited April 30, 1998
================================================================================
Statement of Assets and Liabilities
- --------------------------------------------------------------------------------
In thousands
Assets
Investments in securities, at value (cost $826,117) ........... $ 746,258
Securities lending collateral pool ............................ 85,846
Other assets .................................................. 31,070
Total assets .................................................. 863,174
Liabilities
Securities lending collateral ................................. 85,846
Other liabilities ............................................. 7,077
Total liabilities ............................................. 92,923
NET ASSETS .................................................... $ 770,251
Net Assets Consist of:
Accumulated net investment income - net of distributions ...... $ 3,245
Accumulated net realized gain/loss - net of distributions ..... (250,771)
Net unrealized gain (loss) .................................... (81,112)
Paid-in-capital applicable to 138,103,634 shares of
$0.01 par value capital stock outstanding;
2,000,000,000 shares of the Corporation authorized ............ 1,098,889
NET ASSETS .................................................... $ 770,251
NET ASSET VALUE PER SHARE ..................................... $ 5.58
The accompanying notes are an integral part of these financial statements.
<PAGE>
T. Rowe Price New Asia Fund
================================================================================
Unaudited
================================================================================
Statement of Operations
- --------------------------------------------------------------------------------
In thousands
6 Months
Ended
4/30/98
Investment Income
Income
Dividend (net of foreign taxes of $261) .................. $ 8,130
Interest ................................................. 2,670
Total income ............................................. 10,800
Expenses
Investment management .................................... 3,298
Shareholder servicing .................................... 1,347
Prospectus and shareholder reports ....................... 131
Custody and accounting ................................... 126
Registration ............................................. 32
Legal and audit .......................................... 19
Directors ................................................ 4
Miscellaneous ............................................ 5
Total expenses ........................................... 4,962
Net investment income ....................................... 5,838
Realized and Unrealized Gain (Loss)
Net realized gain (loss)
Securities ............................................... (241,861)
Foreign currency transactions ............................ (3,209)
Net realized gain (loss) ................................. (245,070)
Change in net unrealized gain or loss
Securities ............................................... 200,582
Other assets and liabilities
denominated in foreign currencies ........................ 885
Change in net unrealized gain or loss .................... 201,467
Net realized and unrealized gain (loss) ..................... (43,603)
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS ...................................... $ (37,765)
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
T. Rowe Price New Asia Fund
================================================================================
Unaudited
================================================================================
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------
In thousands
<CAPTION>
6 Months Year
Ended Ended
4/30/98 10/31/97
<S> <C> <C>
Increase (Decrease) in Net Assets
Operations
Net investment income .............................................. $ 5,838 $ 14,020
Net realized gain (loss) ........................................... (245,070) 35,520
Change in net unrealized gain or loss .............................. 201,467 (400,999)
Increase (decrease) in net assets from operations .................. (37,765) (351,459)
Distributions to shareholders
Net investment income .............................................. (11,045) (14,114)
Net realized gain .................................................. -- (2,352)
Decrease in net assets from distributions .......................... (11,045) (16,466)
Capital share transactions *
Shares sold ........................................................ 293,082 731,778
Distributions reinvested ........................................... 10,438 15,555
Shares redeemed .................................................... (361,246) (1,544,017)
Increase (decrease) in net assets from capital
share transactions ................................................. (57,726) (796,684)
Net Assets
Increase (decrease) during period .......................................... (106,536) (1,164,609)
Beginning of period ........................................................ 876,787 2,041,396
End of period .............................................................. $770,251 $876,787
*Share information
Shares sold ........................................................ 52,030 84,243
Distributions reinvested ........................................... 1,851 1,698
Shares redeemed .................................................... (63,117) (174,870)
Increase (decrease) in shares outstanding .......................... (9,236) (88,929)
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
T. Rowe Price New Asia Fund
================================================================================
Unaudited April 30, 1998
================================================================================
Notes to Financial Statements
- --------------------------------------------------------------------------------
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
T. Rowe Price International Funds, Inc. (the corporation) is registered
under the Investment Company Act of 1940. The New Asia Fund (the fund), a
diversified, open-end management investment company, is one of the portfolios
established by the corporation and commenced operations on September 28, 1990.
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.
Debt securities are generally traded in the over-the-counter market and are
valued at a price deemed best to reflect fair value as quoted by dealers who
make markets in these securities or by an independent pricing service.
Investments in open-end mutual funds are valued at the closing net asset
value per share of the mutual fund on the day of valuation.
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.
<PAGE>
PREMIUMS AND DISCOUNTS Premiums and discounts on debt securities are
amortized for both financial reporting and tax purposes.
OTHER Income and expenses are recorded on the accrual basis. Investment
transactions are accounted for on the trade date. Realized gains and losses are
reported on the identified cost basis. Dividend income and distributions to
shareholders are recorded by the fund on the ex-dividend date. Income and
capital gain distributions are determined in accordance with federal income tax
regulations and may differ from those determined in accordance with generally
accepted accounting principles.
NOTE 2 - INVESTMENT TRANSACTIONS
Consistent with its investment objective, the fund engages in the following
practices to manage exposure to certain risks or enhance performance. The
investment objective, policies, program, and risk factors of the fund are
described more fully in the fund's prospectus and Statement of Additional
Information.
EMERGING MARKETS At April 30, 1998, 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.
SECURITIES LENDING The fund lends its securities to approved brokers to
earn additional income and receives cash and U.S. Treasury securities as
collateral against the loans. Cash collateral received is invested in a money
market pooled account by the fund's lending agent. Collateral is maintained over
the life of the loan in an amount not less than 100% of the value of loaned
securities. Although risk is mitigated by the collateral, the fund could
experience a delay in recovering its securities and a possible loss of income or
value if the borrower fails to return them. At April 30, 1998, the value of
loaned securities was $80,182,000; aggregate collateral consisted of $85,846,000
in the securities lending collateral pool and U.S. Treasury securities valued at
$69,000.
OTHER Purchases and sales of portfolio securities, other than short-term
securities, aggregated $244,231,000 and $273,467,000, respectively, for the six
months ended April 30, 1998.
NOTE 3 - FEDERAL INCOME TAXES
No provision for federal income taxes is required since the fund intends to
continue to qualify as a regulated investment company and distribute all of its
taxable income. The fund has unused realized capital loss carryforwards for
federal income tax purposes of $2,626,000, which expire in 2003. The fund
intends to retain gains realized in future periods that may be offset by
available capital loss carryforwards.
<PAGE>
At April 30, 1998, the aggregate cost of investments for federal income tax
and financial reporting purposes was $826,117,000, and net unrealized loss
aggregated $79,859,000, of which $44,170,000 related to appreciated investments
and $124,029,000 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 $543,000 was payable
at April 30, 1998. The fee is computed daily and paid monthly, and consists of
an individual fund fee equal to 0.50% of average daily net assets and a group
fee. The group fee is based on the combined assets of certain mutual funds
sponsored by the manager or Price Associates (the group). The group fee rate
ranges from 0.48% for the first $1 billion of assets to 0.30% for assets in
excess of $80 billion. At April 30, 1998, and for the six months 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.
In addition, the fund has entered into agreements with Price Associates and
two wholly owned subsidiaries of Price Associates, pursuant to which the fund
receives certain other services. Price Associates computes the daily share price
and maintains the financial records of the fund. T. Rowe Price Services, Inc.
(TRPS) is the fund's transfer and dividend disbursing agent and provides
shareholder and administrative services to the fund. T. Rowe Price Retirement
Plan Services, Inc., provides subaccounting and recordkeeping services for
certain retirement accounts invested in the fund. The fund incurred expenses
pursuant to these related party agreements totaling approximately $1,060,000 for
the six months ended April 30, 1998, of which $222,000 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 0.3% of the outstanding shares of the New Asia Fund at April
30, 1998. For the six months then ended, the fund was allocated $7,000 of
Spectrum expenses, $3,000 of which was payable at period-end.
<PAGE>
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 six months ended April 30, 1998, totaled
$2,251,000 and are reflected as interest income in the accompanying Statement of
Operations.
During the six months ended April 30, 1998, the fund, in the ordinary
course of business, placed security purchase and sale orders aggregating
$86,125,000 with certain affiliates of the manager and paid commissions of
$292,000 related thereto.
<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[Registration Mark] and
the T. Rowe Price Web site on the Internet. Address: www.troweprice.com
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 all your accounts with T. Rowe Price.
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.
<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 500*
Extended Equity Market 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
Total Equity Market Index
Value
INTERNATIONAL/GLOBAL
Emerging Markets Stock
European Stock
Global Stock
International Discovery
International Stock
Japan
Latin America
New Asia
Spectrum International
<PAGE>
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 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
<PAGE>
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 named Equity Index.
** Formerly the closed-end New Age Media Fund. Converted to open-end status on
7/28/97.
*** Closed to new investors.
+ Formerly named Global Government Bond.
++ Neither the funds nor their share prices are insured or guaranteed by the
U.S. government.
Please call for a prospectus. Read it carefully before investing.
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.
FOR YIELD, PRICE, LAST TRANSACTION,
CURRENT BALANCE, OR TO CONDUCT
TRANSACTIONS, 24 HOURS, 7 DAYS
A WEEK, CALL TELE*ACCESS [REGISTRATION MARK]:
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
<PAGE>
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 New Asia 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
T. Rowe Price Investment Services, Inc., Distributor. F39-051 4/30/98
