- --------------------------------------------------------------------------------
T. Rowe Price
- --------------------------------------------------------------------------------
Semiannual Report
New Asia Fund
- --------------------------------------------------------------------------------
April 30, 1999
- --------------------------------------------------------------------------------
REPORT HIGHLIGHTS
================================================================================
* After more than two years of decline, Asian stock markets rose sharply in
the six months ended April 30.
* The fund provided double-digit returns for the past six and 12 months, but
trailed its benchmarks.
* We sharply reduced cash reserves as corporate restructuring has created
better investment opportunities.
* We trimmed Hong Kong, still our major focus, and boosted exposure to South
Korea.
* While many believe the Asian financial crisis is over, we expect recovery
to be slow and painful.
================================================================================
FELLOW SHAREHOLDERS
================================================================================
For the first time in more than two years, investors in Asia have something
to cheer about. Just over six months ago, the global financial crisis spread by
the "Asian contagion" was at its peak, and equity prices were near their lows.
But falling nominal interest rates sparked a dramatic rally in stocks around the
world. Asian markets rose nearly 44% in the six months ended April 30, led by
financials and, more recently, by stocks of highly cyclical companies.
As the first half of your fund's fiscal year drew to a close, prominent
observers were proclaiming the end of the crisis that had begun with the
devaluation of the Thai currency in the spring of 1997. While we remain somewhat
cautious, we are nonetheless pleased that asset values and investment
opportunities are once again being recognized in Asia.
<PAGE>
================================================================================
Performance Comparison
----------------------
Periods Ended 4/30/99 6 Months 12 Months
--------------------- -------- ---------
New Asia Fund 25.39% 10.78%
MSCI All Country Far East
Free Ex-Japan 43.96 25.68
Lipper Pacific Ex-Japan
Funds Average 33.45 13.35
================================================================================
The fund gained 25.39% in the past six months, a welcome result in absolute
terms given the devastation of asset values over the last two years. However,
this solid return trailed the Morgan Stanley Capital International benchmark
significantly, as shown in the table. The fund also lagged an average of similar
funds by a lesser margin. The same cautious posture that cushioned the fund's
decline in our last fiscal year N including a relatively low exposure to the
financial sector and lower-quality companies N has restrained our returns so far
this year. Over the past 12 months, the fund returned 10.78%, again behind the
benchmark index and the Lipper average, as shown in the table.
The accommodative stance of the world's central banks N especially those
within Asia N created tremendous liquidity, which drove the traditional "asset
inflation" stocks such as those of banks and property companies. Nominal
interest rates are now at historically low levels in many Asian countries. While
this provided temporary relief for many troubled, heavily indebted companies, it
also tended to reduce the impetus for painful reforms within the companies and
countries that most need them. In our view, the region will remain highly
susceptible to negative external shocks until these necessary structural reforms
are successfully implemented.
================================================================================
PORTFOLIO REVIEW
================================================================================
Our overall strategy of investing in companies with solid business
franchises and strong balance sheets around the region remains generally in
place. However, we have begun to add companies that have recently undergone
management changes and are likely candidates for balance sheet restructuring,
even though their franchises are strong. We have found such investments
primarily in South Korea but also in Thailand and Singapore.
<PAGE>
================================================================================
Market Performance
------------------
(In U.S. Dollar Terms)
Periods Ended 4/30/99 6 Months 12 Months
--------------------- -------- ---------
China Free 4.89% -27.67%
Hong Kong 27.94 40.22
India 17.76 -19.67
Malaysia 109.35 -9.62
Philippines 45.52 26.53
Singapore 54.76 24.12
Korea 122.81 113.05
Taiwan 15.23 -2.13
Thailand 46.70 10.24
Source: FAME Information Services, Inc., using MSCI indices.
================================================================================
As a result, country allocations have changed somewhat since our last
report. The biggest shift was an increase in exposure to South Korea, from about
3% six months ago to 17%, making it our second-largest weighting. This is the
result of both new investments and the sharp increase in Korean share prices.
The pace of reform is quite visible in South Korea, particularly in the
financial sector, where we added Hana Bank and Shinhan Bank, as well as
Ssangyong Investment & Securities, which has a promising asset management
business. We also added a new listing, Korea Telecom, the dominant provider of
telecommunications services in the country.
Hong Kong remained our largest single market, though we reduced its
weighting to 38% of assets from 45% six months ago. Throughout the past two
years, Hong Kong has been somewhat of a defensive haven for us, as it is home to
some of the most financially sound and best-managed companies in the region. The
emergence of restructuring-driven investment opportunities elsewhere led us to
reduce our overweighting in the former British colony. In addition, economic
data continued to be weak. Hong Kong's economic adjustment has been one of the
harshest in the region as a result of the currency's peg to the U.S. dollar. GDP
has now contracted for two consecutive quarters, officially placing Hong Kong in
its first recession in 13 years. Unemployment rose to 15-year highs, and exports
to China slowed. Nonetheless, the fund's three largest holdings are based in
Hong Kong. Hutchison Whampoa and Cheung Kong Holdings, both major investment and
property development groups, and Hong Kong Telecommunications, exemplify the
types of high-quality companies we favor there.
Our third-largest country allocation was to India, where we increased
exposure by about three percentage points to 14%. Pharmaceutical companies such
as Ranbaxy Laboratories continued to do quite well following new developments in
research and development. We added another drug company, Cipla, a leader in the
domestic market. In branded snack foods we added Britannia Industries, which has
undergone a management change and corporate restructuring and now leads the
sector in volume and revenue growth. We believe that India has great potential
as a provider of outsourced services, such as in software. In that category we
added Pentafour Software, which specializes in animation and other multimedia
services. Domestic investment in computerization is growing rapidly due to the
need to reduce operating costs and improve services, and new holding HCL
Infosystems is the domestic leader in systems integration. Another new
investment was Zee Telefilms, a highly profitable provider of India's most
popular television programming and also the largest cable television operator in
the country.
<PAGE>
[Geographic Diversification pie chart showing Hong Kong 38%; South Korea
17%; India 14%; Taiwan 13%; Singapore 6%; China 3%; Thailand 2%; Other and
Reserves 7%]
Exposure to Taiwan was reduced modestly, to about 13%, due to the market's
relatively poor performance and because we took profits in the technology
sector, which composed a majority of our holdings. The Taiwanese economy
continues to weaken as deflationary pressure is causing a credit crunch in
second-tier banks. Much of the southern Chinese triangle is suffering from a
debt overhang, and this is not helping the financial system. However, Taiwan
continues to benefit from the global technology boom due to its highly efficient
component production industry. Local companies are also focused on the bottom
line, which is not always the case in Asia.
Weightings in other countries remained about the same. New investments were
funded by a sizable reduction in the cash position, from more than 12% six
months ago to less than 6%. Over the period, we began to see more concrete
evidence of corporate balance sheet and operational restructuring, which gave us
more conviction to invest in specific situations. Although the overall pace of
corporate reform in Thailand is slow, there have been a few exceptions. We added
a holding in Telecomasia, the country's dominant provider of fixed line
telecommunications services, after a change in its senior management. Cuts in
operating costs and a renewed marketing effort have begun to show up in monthly
cash flow statements, and we are optimistic that a balance sheet restructuring
will follow the improvements in operations.
In Singapore, we added a major position in Fraser & Neave, which boasts one
of the most recognized beer brands in the region, following its initial moves to
restructure underperforming operations. We have also begun to build a position
in Singapore-based Sembcorp Logistics, a highly profitable provider of
supply-chain logistics services, mainly in India and China. Also in Singapore,
we invested in United Overseas Bank, an example of a company that has developed
a viable strategy to improve returns and defend its franchise in its
increasingly deregulated home market.
<PAGE>
================================================================================
OUTLOOK
================================================================================
Industry Diversification
------------------------
Percent of Net Assets
10/31/98 4/30/99
-------- -------
Finance 21.0% 25.4%
Services 24.2 22.0
Consumer Goods 11.6 18.2
Capital Equipment 7.5 10.9
Energy 11.0 9.7
Multi-industry 11.4 8.0
Reserves 13.3 5.8
Total 100.0% 100.0%
================================================================================
Asia's overall export volume growth has been lackluster, though imports
have begun to rise due to inventory rebuilding. As a result, the buildup of
current account surpluses has been somewhat muted compared with the large
surpluses built up during the height of the crisis. While rising imports are a
sign of an improving economy, smaller current account surpluses are likely to
mean less capital for domestic investment, including domestic equities and
bonds. Coincidentally, there are indications that the decline in interest rates
may have run its course. Yet, with the exception of Korea, where there has been
a sharp pickup in industrial production, we have yet to see any sign of credit
expansion in Asia, suggesting that regional economies are still very weak, and
creditors are still highly risk-averse.
We continue to believe that corporate restructuring, more than top-down
government-led reforms, is key to any sustainable recovery in Asia. The buoyant
financial markets have provided an ideal opportunity for recapitalization of
troubled banks and property companies, which has been partially accomplished in
Thailand and Singapore. Corporate restructuring, however, is a slow, ongoing
process, and will take years for most of Asia. We expect that this reality will
cap overall economic growth at relatively low levels for some years.
Despite that, the environment should continue to generate interesting
investment opportunities as companies begin to restructure. Ultimately, we
believe that the real impetus of Asian companies to restructure will be
heightened competition, both from revitalized domestic entities and from new
entrants, domestic and foreign. Deregulation and lower barriers to entry are
quietly but rapidly taking place in many sectors across the region, from banking
in Korea, Singapore, and Thailand, to the consumer sector in India. Although the
decline in interest rates has pushed up the values of many lower-quality
companies, we still believe that only the best, the leanest, and the most
innovative companies will be able to dominate in this environment.
Respectfully submitted,
/s/
Martin G. Wade
President
May 19, 1999
<PAGE>
================================================================================
T. Rowe Price New Asia Fund
- ---------------------------
Portfolio Highlights
TWENTY-FIVE LARGEST HOLDINGS
- ----------------------------
Percent of
Net Assets
4/30/99
- -----------------------------------------------------------------------------
Hutchison Whampoa, Hong Kong 8.0%
- -----------------------------------------------------------------------------
Cheung Kong Holdings, Hong Kong 7.6
- -----------------------------------------------------------------------------
Hong Kong Telecommunications, Hong Kong 5.4
- -----------------------------------------------------------------------------
Samsung Electronics, South Korea 5.2
- -----------------------------------------------------------------------------
Ranbaxy Laboratories, India 3.0
=============================================================================
Korea Electric Power, South Korea 2.9
- -----------------------------------------------------------------------------
CLPHoldings, Hong Kong 2.8
- -----------------------------------------------------------------------------
Dao Heng Bank Group, Hong Kong 2.6
- -----------------------------------------------------------------------------
ITC, India 2.4
- -----------------------------------------------------------------------------
HSBC Holdings, Hong Kong 2.4
=============================================================================
Hong Kong and China Gas, Hong Kong 2.3
- -----------------------------------------------------------------------------
Taiwan Semiconductor Manufacturing, Taiwan 2.2
- -----------------------------------------------------------------------------
Korea Telecom, South Korea 1.9
- -----------------------------------------------------------------------------
Mahanagar Telephone, India 1.9
- -----------------------------------------------------------------------------
China Telecom, Hong Kong 1.8
=============================================================================
Singapore Telecommunications, Singapore 1.7
- -----------------------------------------------------------------------------
Asustek Computer, Taiwan 1.6
- -----------------------------------------------------------------------------
Hana Bank, South Korea 1.5
- -----------------------------------------------------------------------------
Singapore Press, Singapore 1.5
- -----------------------------------------------------------------------------
Hindustan Lever, India 1.4
<PAGE>
=============================================================================
Hon Hai Precision Industry, Taiwan 1.3
- -----------------------------------------------------------------------------
Compal Electronics, Taiwan 1.3
- -----------------------------------------------------------------------------
Far East Textile, Taiwan 1.2
- -----------------------------------------------------------------------------
Fraser & Neave, Singapore 1.1
- -----------------------------------------------------------------------------
Dah Sing Financial, Hong Kong 1.1
- -----------------------------------------------------------------------------
Total 66.1%
================================================================================
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.
[SEC chart for New Asia Fund 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 4/30/99 1 Year 3 Years 5 Years Inception Date
- --------------------- ------ ------- ------- --------- ----------
New Asia Fund 10.78% -11.90% -5.22% 5.27% 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>
T. Rowe Price New Asia Fund
- ---------------------------
Unaudited
For a share outstanding throughout each period#
Financial Highlights
6 Months Year
Ended Ended
4/30/99 10/31/98 10/31/97 10/31/96 10/31/95 10/31/94
NET ASSET VALUE
Beginning of period $ 4.93 $ 5.95 $ 8.64 $ 8.12 $ 10.07 $ 9.88
- -------------------------------------------------------------------------------
Investment activities
Net investment income 0.01 0.13 0.09 0.06 0.08 0.06
Net realized and
unrealized gain (loss) 1.22 (1.07) (2.71) 0.55 (1.07) 0.36
- -------------------------------------------------------------------------------
Total from
investment activities 1.23 (0.94) (2.62) 0.61 (0.99) 0.42
- -------------------------------------------------------------------------------
Distributions
Net investment income (0.09) (0.08) (0.06) (0.09) (0.07) (0.04)
Net realized gain - - (0.01) - (0.89) (0.19)
- -------------------------------------------------------------------------------
Total distributions (0.09) (0.08) (0.07) (0.09) (0.96) (0.23)
- -------------------------------------------------------------------------------
NET ASSET VALUE
End of period $ 6.07 $ 4.93 $ 5.95 $ 8.64 $ 8.12 $ 10.07
Ratios/Supplemental Data
Total return* 25.39% (15.97)% (30.61)% 7.58% (9.70)% 4.11%
- -------------------------------------------------------------------------------
Ratio of total expenses
to average net assets 1.30%+ 1.29% 1.10% 1.11% 1.15% 1.22%
- -------------------------------------------------------------------------------
Ratio of net investment
income to average
net assets 0.36%+ 2.33% 0.76% 0.66% 0.97% 0.85%
- -------------------------------------------------------------------------------
Portfolio turnover rate 55.8%+ 68.1% 41.8% 42.0% 63.7% 63.2%
- -------------------------------------------------------------------------------
Net assets, end of
period (in millions) $ 794 $ 633 $ 877 $ 2,041 $ 1,909 $ 2,303
- -------------------------------------------------------------------------------
* Total return reflects the rate that an investor would have earned on an
investment in the fund during each period, assuming reinvestment of all
distributions.
# All per share figures reflect the 2-for-1 stock split effective 5/27/94.
+ Annualized
The accompanying notes are an integral part of these financial statements.
================================================================================
<PAGE>
T. Rowe Price New Asia Fund
- ---------------------------
Unaudited
April 30, 1999
PORTFOLIO OF INVESTMENTS
- ------------------------
Shares/Par Value
---------- -----
In thousands
CHINA 2.5%
Common Stocks 2.5%
China Telecom (HKD) 6,378,000 $ 14,565
- -------------------------------------------------------------------------------
Huaneng Power International ADR (USD) * 229,640 3,086
- -------------------------------------------------------------------------------
Shenzhen Expressway (Class H) (HKD) 10,332,000 2,119
- -------------------------------------------------------------------------------
Total China (Cost $18,706) 19,770
HONG=KONG==38.0%
Common Stocks and Warrants 38.0%
Cheung Kong Holdings 6,605,000 60,076
- -------------------------------------------------------------------------------
Cheung Kong Infrastructure 923,000 1,929
- -------------------------------------------------------------------------------
CLP Holdings 4,146,500 22,308
- -------------------------------------------------------------------------------
Dah Sing Financial 2,830,400 8,928
- -------------------------------------------------------------------------------
Dao Heng Bank Group 4,998,260 20,313
- -------------------------------------------------------------------------------
Dickson Concepts International 2,169,500 2,379
- -------------------------------------------------------------------------------
Esprit Holdings 8,709,000 5,225
- -------------------------------------------------------------------------------
Henderson Land Development 1,069,000 6,455
- -------------------------------------------------------------------------------
HKR International 10,670,144 7,916
- -------------------------------------------------------------------------------
Hong Kong and China Gas 12,896,170 18,052
- -------------------------------------------------------------------------------
Hong Kong and China Gas, Warrants, 9/30/99 * 315,350 52
- -------------------------------------------------------------------------------
Hong Kong Telecommunications 15,939,177 42,773
- -------------------------------------------------------------------------------
HSBC Holdings 509,878 18,880
- -------------------------------------------------------------------------------
Hutchison Whampoa 7,055,000 63,487
- -------------------------------------------------------------------------------
<PAGE>
Hysan Development 2,521,000 3,870
- -------------------------------------------------------------------------------
Li & Fung 1,618,000 3,966
- -------------------------------------------------------------------------------
National Mutual Asia 4,656,000 3,544
- -------------------------------------------------------------------------------
Sa Sa International Holdings 15,237,000 1,592
- -------------------------------------------------------------------------------
Sino Land Co 8,918,000 5,149
- -------------------------------------------------------------------------------
Wing Hang Bank 1,649,000 5,010
- -------------------------------------------------------------------------------
Total Hong Kong (Cost $239,764) 301,904
INDIA==14.2%
Common Stocks 14.2%
Britannia Industries * 235,200 8,228
- -------------------------------------------------------------------------------
Cipla 123,000 3,938
- -------------------------------------------------------------------------------
HCL Infosystems * 338,000 3,349
- -------------------------------------------------------------------------------
HDF Corporation 156,120 $ 7,443
- -------------------------------------------------------------------------------
Hindustan Lever 235,700 11,372
- -------------------------------------------------------------------------------
Hindustan Petroleum 586,800 2,540
- -------------------------------------------------------------------------------
Industrial Credit & Investment 6,719,800 7,342
- -------------------------------------------------------------------------------
ITC 866,000 19,386
- -------------------------------------------------------------------------------
Mahanagar Telephone 4,072,000 14,941
- -------------------------------------------------------------------------------
McDowell 361,400 676
- -------------------------------------------------------------------------------
Pentafour Software 229,000 5,486
- -------------------------------------------------------------------------------
Ranbaxy Laboratories 1,772,000 23,607
- -------------------------------------------------------------------------------
State Bank of India 50 --
- -------------------------------------------------------------------------------
Zee Telefilms 157,903 4,532
- -------------------------------------------------------------------------------
Total India (Cost $116,977) 112,840
<PAGE>
MALAYSIA==0.8%
Short-Term Investments 0.8%
Chase Manhattan Bank, N.A., fixed deposit
3.00 - 4.00%, 12/31/99 MYR 25,861,638 6,298
- -------------------------------------------------------------------------------
Total Malaysia (Cost $5,823) 6,298
PHILIPPINES==1.7%
Common Stocks 1.7%
La Tondena Distillers 5,084,800 6,552
- -------------------------------------------------------------------------------
San Miguel (Class B) 3,118,550 6,643
- -------------------------------------------------------------------------------
Total Philippines (Cost $13,382) 13,195
SINGAPORE==5.8%
Common Stocks 5.8%
Fraser & Neave 2,062,000 9,117
- -------------------------------------------------------------------------------
Sembawang Maritime 228,000 548
- -------------------------------------------------------------------------------
Singapore Airlines 314,000 2,888
- -------------------------------------------------------------------------------
Singapore Press 812,419 11,973
- -------------------------------------------------------------------------------
Singapore Telecommunications 7,134,000 13,206
- -------------------------------------------------------------------------------
United Overseas Bank 1,052,000 8,124
- -------------------------------------------------------------------------------
Total Singapore (Cost $40,706) 45,856
SOUTH=KOREA==16.8%
Common Stocks 16.8%
Dacom 26,810 $ 2,267
- -------------------------------------------------------------------------------
Hana Bank 942,719 12,295
- -------------------------------------------------------------------------------
Korea Electric Power (USD) 340,000 5,610
- -------------------------------------------------------------------------------
Korea Electric Power 611,000 17,582
- -------------------------------------------------------------------------------
Korea Telecom 285,100 14,969
- -------------------------------------------------------------------------------
LG Information & Communications 98,000 4,617
- -------------------------------------------------------------------------------
Mirae 1,669,900 7,938
- -------------------------------------------------------------------------------
Samsung 368,000 5,171
- -------------------------------------------------------------------------------
<PAGE>
Samsung Display Devices 64,000 3,285
- -------------------------------------------------------------------------------
Samsung Electronics 538,503 41,413
- -------------------------------------------------------------------------------
Samsung Securities 181,480 7,024
- -------------------------------------------------------------------------------
Shinhan Bank 489,000 5,390
- -------------------------------------------------------------------------------
Ssangyong Investment & Securities 502,900 5,924
- -------------------------------------------------------------------------------
Total South Korea (Cost $92,159) 133,485
TAIWAN==13.0%
Common Stocks 13.0%
Asustek Computer * 446,433 4,669
- -------------------------------------------------------------------------------
Asustek Computer GDR (USD) * 576,500 7,797
- -------------------------------------------------------------------------------
Asustek Computer GDR (144a) (USD) * 1,079 15
- -------------------------------------------------------------------------------
Cathay Life Insurance 2,057,200 7,361
- -------------------------------------------------------------------------------
Compal Electronics 2,905,909 10,042
- -------------------------------------------------------------------------------
D-Link 3,557,000 7,342
- -------------------------------------------------------------------------------
Far East Textile 7,078,320 9,503
- -------------------------------------------------------------------------------
Hon Hai Precision Industry 1,903,000 10,359
- -------------------------------------------------------------------------------
President Chain Store 2,211,716 6,831
- -------------------------------------------------------------------------------
Siliconware Precision Industries 2,944,000 5,267
- -------------------------------------------------------------------------------
Taiwan Semiconductor Manufacturing 5,136,650 17,358
- -------------------------------------------------------------------------------
United Micro Electric 4,248,000 6,625
- -------------------------------------------------------------------------------
Winbond Electric GDR (144a) (USD) * 253,300 2,609
- -------------------------------------------------------------------------------
Winbond Electronic 3,593,000 3,912
- -------------------------------------------------------------------------------
Yageo 3,634,000 3,389
- -------------------------------------------------------------------------------
Total Taiwan (Cost $85,984) 103,079
<PAGE>
THAILAND==2.3%
Common Stocks 2.3%
PTT Exploration & Production 778,600 $ 7,183
- -------------------------------------------------------------------------------
Siam Makro 1,138,000 2,088
- -------------------------------------------------------------------------------
Telecomasia 10,175,000 8,783
- -------------------------------------------------------------------------------
Total Thailand (Cost $17,404) 18,054
VIETNAM==0.0%
Common Stocks 0.0%
Lazard Vietnam Fund Limited (USD) * 152,800 153
- -------------------------------------------------------------------------------
Total Vietnam (Cost $462) 153
- -------------------------------------------------------------------------------
SHORT-TERM=INVESTMENTS==5.7%
Money Market Funds 5.7%
Reserve Investment Fund, 5.01% # 45,542,585 45,543
Total Short-Term Investments (Cost $45,543) 45,543
=Total=Investments=in=Securities
100.8% of Net Assets (Cost $676,910) $ 800,177
Other Assets Less Liabilities (6,116)
NET ASSETS $ 794,061
- --------------------------------------------------------------------------------
* Non-income producing
# Seven day yield
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 period-end amounts to
0.33% of net assets.
ADR American depository receipt
GDR Global depository receipt
HKD Hong Kong dollar
MYR Malaysia ringgit
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, 1999
STATEMENT OF ASSETS AND LIABILITIES
- -----------------------------------
In thousands
Assets
Investments in securities, at value (cost $676,910)$ 800,177
Securities lending collateral 33,789
Other assets 24,096
-----------
Total assets 858,062
Liabilities
Obligation to return securities lending collateral 33,789
Other liabilities 30,212
-----------
Total liabilities 64,001
-----------
NET ASSETS $ 794,061
Net Assets Consist of:
Accumulated net investment income -
net of distributions $ 232
Accumulated net realized gain/loss -
net of distributions (398,515)
Net unrealized gain (loss) 121,798
Paid-in-capital applicable to 130,847,122 shares
of $0.01 par value capital stock outstanding;
2,000,000,000 shares of the Corporation authorized 1,070,546
NET ASSETS $ 794,061
NET ASSET VALUE PER SHARE $ 6.07
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
4/30/99
==Investment=Income============================================================
Income
Dividend (net of foreign taxes of $380) $ 3,772
Interest 1,498
- -------------------------------------------------------------------------------
Total income 5,270
- -------------------------------------------------------------------------------
Expenses
Investment management 2,610
Shareholder servicing 1,123
Custody and accounting 155
Prospectus and shareholder reports 150
Registration 18
Legal and audit 14
Directors 3
Miscellaneous 65
- -------------------------------------------------------------------------------
Total expenses 4,138
- -------------------------------------------------------------------------------
Net investment income 1,132
- -------------------------------------------------------------------------------
Realized=and=Unrealized=Gain=(Loss)
Net realized gain (loss)
Securities (22,276)
Foreign currency transactions (372)
- -------------------------------------------------------------------------------
Net realized gain (loss) (22,648)
- -------------------------------------------------------------------------------
Change in net unrealized gain or loss
Securities 178,380
Other assets and liabilities
denominated in foreign currencies (1,526)
- -------------------------------------------------------------------------------
Change in net unrealized gain or loss 176,854
- -------------------------------------------------------------------------------
Net realized and unrealized gain (loss) 154,206
- -------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS $ 155,338
The accompanying notes are an integral part of these financial statements.
================================================================================
<PAGE>
T. Rowe Price New Asia Fund
- ---------------------------
Unaudited
STATEMENT OF CHANGES IN NET ASSETS
- ----------------------------------
In thousands
6 Months Year
Ended Ended
4/30/99 10/31/98
Increase=(Decrease)=in=Net=Assets=========================================
Operations
Net investment income $ 1,132 $ 16,335
Net realized gain (loss) (22,648) (373,437)
Change in net unrealized gain or loss 176,854 227,523
- --------------------------------------------------------------------------
Increase (decrease) in net assets from operations 155,338 (129,579)
Distributions to shareholders
Net investment income (11,370) (11,046)
- --------------------------------------------------------------------------
Capital share transactions *
Shares sold 331,986 490,917
Distributions reinvested 10,841 10,444
Shares redeemed 325,570) (604,687)
- --------------------------------------------------------------------------
Increase (decrease) in net assets from capital
share transactions 17,257 (103,326)
Net=Assets
Increase (decrease) during period 161,225 (243,951)
Beginning of period 632,836 876,787
End of period $ 794,061 $ 632,836
*Share information
Shares sold 63,400 95,986
Distributions reinvested 2,217 1,852
Shares redeemed (63,207) (116,741)
- --------------------------------------------------------------------------
Increase (decrease) in shares outstanding 2,410 (18,903)
The accompanying notes are an integral part of these financial statements.
================================================================================
<PAGE>
T. Rowe Price New Asia Fund
- ---------------------------
Unaudited
April 30, 1999
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 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>
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. Credits earned on daily, uninvested cash
balances at the custodian are used to reduce the fund's custody charges.
================================================================================
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, 1999, 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. government 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, 1999, the value of
loaned securities was $33,824,000; aggregate collateral consisted of $33,789,000
in the securities lending collateral pool and U.S. government securities valued
at $2,434,000.
Other Purchases and sales of portfolio securities, other than short-term
securities, aggregated $210,264,000 and $166,092,000, respectively, for the six
months ended April 30, 1999.
================================================================================
<PAGE>
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. As of October 31, 1998, the fund had capital loss carryforwards
for federal income tax purposes of $373,612,000, of which $2,099,000 expires in
2003 and $371,513,000 in 2006. The fund intends to retain gains realized in
future periods that may be offset by available capital loss carryforwards.
At April 30, 1999, the cost of investments for federal income tax purposes
was substantially the same as for financial reporting and totaled $676,910,000.
Net unrealized gain aggregated $123,267,000 at period-end, of which $162,596,000
related to appreciated investments and $39,329,000 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 $490,000 was payable
at April 30, 1999. 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, 1999, 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 $959,000 for
the six months ended April 30, 1999, of which $236,000 was payable at
period-end.
<PAGE>
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 0.1% of the outstanding shares of the fund at April 30, 1999.
For the six months then ended, the fund was allocated $2,000 of Spectrum
expenses, $1,000 of which was payable at period-end.
The fund may invest in the Reserve Investment Fund and Government Reserve
Investment Fund (collectively, the Reserve Funds), open-end management
investment companies managed by T. Rowe Price Associates, Inc. The Reserve Funds
are offered as cash management options only to mutual funds and other accounts
managed by T. Rowe Price and its affiliates and are not available to the public.
The Reserve Funds pay no investment management fees. Distributions from the
Reserve Funds to the fund for the six months ended April 30, 1999, totaled
$1,099,000 and are reflected as interest income in the accompanying Statement of
Operations.
During the six months ended April 30, 1999, the fund, in the ordinary
course of business, placed security purchase and sale orders aggregating
$46,868,000 with certain affiliates of the manager and paid commissions of
$169,000 related thereto.
================================================================================
T. Rowe Price Shareholder Services
- ----------------------------------
INVESTMENT SERVICES AND INFORMATION
- -----------------------------------
KNOWLEDGEABLE SERVICE REPRESENTATIVES
-------------------------------------
By Phone 1-800-225-5132 Available Monday through Friday from
8 a.m. to 10 p.m. ET and weekends from 8:30 a.m. to 5 p.m. ET.
In Person Available in T. Rowe Price Investor Centers.
ACCOUNT SERVICES
----------------
Checking Available on most fixed income funds ($500 minimum).
Automatic Investing From your bank account or paycheck.
Automatic Withdrawal Scheduled, automatic redemptions.
Distribution Options Reinvest all, some, or none of your
distributions.
Automated 24-Hour Services Including Tele*Access(R) and the
T. Rowe Price Web site on the Internet. Address:
www.troweprice.com
BROKERAGE SERVICES*
-------------------
Individual Investments Stocks, bonds, options, precious metals,
and other securities at a savings over full-service commission
rates.**
<PAGE>
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.
================================================================================
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
<PAGE>
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 Growth & Income
International Stock
Japan
Latin America
New Asia
Spectrum International
BOND FUNDS
- ----------------------------------------
Domestic Taxable
Corporate Income
GNMA
High Yield
New Income
Short-Term Bond
Short-Term U.S. Government
Spectrum Income
Summit GNMA
Summit Limited-Term Bond
U.S. Treasury Intermediate
U.S. Treasury Long-Term
Domestic Tax-Free
California Tax-Free Bond
Florida Intermediate Tax-Free**
Georgia Tax-Free Bond
Maryland Short-Term
Tax-Free Bond
Maryland Tax-Free Bond
<PAGE>
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 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
BLENDED ASSET FUNDS
- ----------------------------------------
Balanced
Personal Strategy Balanced
Personal Strategy Growth
Personal Strategy Income
Tax-Efficient Balanced
T. ROWE PRICE NO-LOAD
VARIABLE ANNUITY
- ----------------------------------------
<PAGE>
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
* Closed to new investors.
** Formerly named Florida Insured Intermediate Tax-Free.
*** Formerly named Tax-Free Insured Intermediate Bond.
+ Investments in the funds are not insured or guaranteed by the FDIC or any
other government agency. Although the funds seek to preserve the value of
your investment at $1.00 per share, it is possible to lose money by
investing in the funds.
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
TO OPEN A BROKERAGE ACCOUNT OR
OBTAIN INFORMATION, CALL:
1-800-638-5660 toll free
<PAGE>
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
appropriate to the fund or
funds covered in this report.
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
4200 West Cypress St.
10th Floor
Tampa, FL 33607
4410 ArrowsWest Drive
Colorado Springs, CO 80907
Warner Center Plaza 5
Mezzanine Level 21800 Oxnard
Street, Suite 270 Woodland
Hills, CA 91367
(OPENS MID-JUNE)
T. Rowe Price Investment Services, Inc., Distributor. F79-051 4/30/99
