<PAGE>
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THE MEXICO FUND, INC.
THIRD QUARTER REPORT
JULY 31, 1998
HIGHLIGHTS
.. The Fund's third quarter of fiscal 1998 ended July 31, 1998.
.. All financial markets of developed and emerging countries continued to be
negatively affected by international events like the Asian and Russian cri-
ses, the devaluation of the ruble and the continuous decline of international
oil prices.
.. These events have generated strong pressures on the Mexican currency market,
and the rate of exchange of the peso against the dollar increased from around
Ps. 8.50 at the end of April 1998 to around Ps. 10.20 at the beginning of
September 1998.
.. Banco de Mexico (central bank), responded to these pressures by tightening
the monetary policy. Interest rates of the 28-day Cetes (treasury bills) have
increased from approximately 18% at the end of April 1998, to approximately
37% at the beginning of September 1998.
.. Mexico's inflation rate for the year ended August 31, 1998 was 15.5%,
slightly lower than the 15.7% observed at the end of 1997.
.. During the first half of calendar 1998, the Mexican gross domestic product
(GDP) increased 5.4% in real terms.
.. As a result of the prevailing worldwide situation, the Mexican Stock Exchange
index and the Fund's net asset value per share (NAV) decreased 21% and 20%,
respectively, during the third fiscal quarter of 1998.
.. Similarly, the Fund's market price per share also decreased 20% during this
reporting period, and the discount between market price and NAV ended July
1998 at around 25%.
.. The Fund's Board of Directors declared a dividend of 12 cents per share, pay-
able on October 30, 1998, to shareholders of record on September 30, 1998.
.. After the necessary approvals from the Fund's shareholders and its Board of
Directors were obtained, the Fund commenced its Securities Lending Program in
August 1998.
.. The Fund's Board of Directors recognizes and thanks Messrs. David Gemmill,
Antonio Madero, Joaquin Munoz Izquierdo, Bernardo Quintana and Dr. Martin
Murtfeld for their invaluable contribution and service to the Fund as Direc-
tors until 1993 and as Counselors until September 1998.
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THE MEXICO FUND, INC.
TO OUR SHAREHOLDERS:
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ECONOMIC COMMENTS AND INTERNATIONAL EVENTS.
The market sentiment towards emerging countries continued to be negative
principally due to events like the Asian and Russian crises and the persistent
low levels of international oil prices, among others. Significant interna-
tional resources have been withdrawn from emerging markets in a "flight to
safety" to instruments such as US treasury bills. Mexico has not escaped this
phenomenon and its financial markets continued to be adversely impacted.
The Mexican peso has also suffered severe pressures. The rate of exchange of
the peso against the dollar increased 20%, from around Ps. 8.50 at the end of
April 1998 to around Ps. 10.20 at the beginning of September. During the first
eight months of calendar 1998, the rate of exchange of the peso against the
dollar has increased almost 25%.
This devaluation of the peso has generated inflationary pressures on the Mex-
ican economy. In an attempt to counteract this negative impact, Banco de Mex-
ico decided to implement a tighter monetary policy. Higher interest rates re-
sulted from this action, which are intended to stimulate investments in peso
denominated instruments. The interest rate of the 28-day Cetes increased from
approximately 18% at the end of April 1998 to approximately 37% at the begin-
ning of September 1998.
Mexico's inflation rate, which in the recent past showed a declining trend,
has now stabilized at levels of around 15.5% at the end of August 1998. Pri-
vate firms now estimate that annual inflation at the end of 1998 will reach a
level of around 16.15%, compared with 15.72% one year earlier.
The low levels of international oil prices continued to affect the Mexican
economy. Even though oil exports now represent less than 7% of total exports,
oil-related income represents around 22% of the Mexican government's total
budgetary income. The price of the Mexican oil mix ended August 1998 at a
level of $9.60 per barrel compared with $13.43 per barrel at the end of 1997
and with $21.66 per barrel at the end of 1996. The Mexican authorities have
already announced three reductions to the public sector's budget in order to
compensate for lower oil-related income. The adjustments were made to maintain
a public sector deficit target equivalent to 1.25% of GDP during 1998.
Mexican economic activity continued to grow dynamically. According to prelim-
inary figures published by the Mexican authorities, during the first half of
calendar 1998, Mexico's GDP increased 5.4% in real terms, compared with the
same period of 1997. During the same period, the industrial sector of the
economy reported the most dynamic performance, increasing 7.5%, and within
this sector, the manufacturing industry grew 8.2% and construction 6.2%. The
services sector grew 5.6%, and within this sector, transportation activity ex-
panded 8.2% and the commerce, restaurant and hotel industry 7.4%. The primary
sector, which includes agriculture, livestock and fishery, continued register-
ing a negative performance and declined 5.3%, mainly because of adverse cli-
mate conditions.
Factors such as the restrictive monetary policy currently in place, its re-
sulting higher interest rates and a lower public sector spending, have re-
sulted in lower GDP growth estimates for 1998. Both private firms and govern-
mental authorities have
<PAGE>
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reduced their estimated 1998 GDP growth from more than 5% at the end of 1997
to around 4.4% in August 1998.
During the first half of calendar 1998, the Mexican current account regis-
tered a deficit of $6.97 billion, and within this, the trade balance deficit
amounted to almost $3 billion. During the same period, the capital account
registered a surplus of $7.13 billion, which more than compensated for the
current account deficit, and within this, direct foreign investment amounted
to around $5.3 billion. Gross and net international reserves at Banco de
Mexico reached $29.4 billion and $21.2 billion, respectively, at the end of
August 1998.
THE BOLSA AND THE FUND'S PERFORMANCE.
The negative sentiment towards emerging markets, combined with several eco-
nomic issues of concern in Mexico previously mentioned in this report, have
resulted in a significant decline of the Bolsa index. During the third quarter
of fiscal 1998, the Bolsa index decreased 21% and almost 50% during the first
eight months of calendar 1998. Similar to the behavior of the Bolsa index, the
Fund's NAV and market price per share both decreased 20% during this third
quarter of fiscal 1998 and 44% and 49%, respectively, during the first eight
months of 1998. The Fund's market price and NAV per share ended August 1998 at
$9.125 and $12.66, respectively, reflecting a discount of 27.9%.
The Bolsa index, expressed in dollar terms, is now at levels similar to those
observed in April 1991 and February 1995. The following table shows some valu-
ation indicators of the Bolsa during these periods.
<TABLE>
<CAPTION>
APRIL FEBRUARY AUGUST
1991 1995 1998
----- -------- ------
<S> <C> <C> <C>
Bolsa index (dollar terms) 300 300 300
Price/Earnings ratio (times) 16.1 15.1 11.0
Price/Book Value ratio (times) 1.8 1.6 1.3
</TABLE>
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Source: Impulsora del Fondo Mexico, sa de cv with figures provided by the
Bolsa.
Fund management believes that the financial situation of listed companies and
the macroeconomic fundamentals of Mexico do not correspond to the current mar-
ket valuations and that prices of listed companies will eventually recognize
this disparity by returning to more reasonable levels. However, there can be
no assurance that the price levels of listed companies will improve.
The Fund's investments during the third quarter of fiscal 1998 were directed
to companies of the cement, construction, housing, entertainment,
agrobiotechnology and insurance sectors. On the other side, during the same
period, the Fund red-
uced some of its investment in the steel, mining, consumer goods, financial
and retail sectors. In addition to a presentation of the entire composition of
the Fund's portfolio, we have included in this report a brief description of
the Fund's ten largest holdings.
In reviewing the Fund's portfolio, shareholders should note that several new
classifications have been added in the Fund's Schedule of Investments, and one
category has been deleted. Historically, the Fund has used the industry clas-
sifications assigned by the Mexican Stock Exchange to listed portfolio securi-
ties. However, the Fund's investment adviser and the Board of Directors have
determined that modification of the Fund's industry classifications would more
accurately reflect the major
<PAGE>
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business activities of the Fund's portfolio com- panies and would help share-
holders better understand the Fund's portfolio composition.
Fund shares continued to register high levels of liquidity. During the first
eight months of calendar 1998 a total of 36 million shares traded on all US
consolidated markets, which is equivalent to 74% of total shares outstanding
and to a daily average of around 220,000 shares per day.
The Fund's Board of Directors recognizes and expresses its gratitude to
Messrs. David Gemmill, Antonio Madero, Joaquin Munoz Izquierdo, Dr. Martin
Murtfeld and Bernardo Quintana for their invaluable contribution and service
to the Fund as members of its Board of Directors until 1993 and as Counselors
until September 1998.
SECURITIES LENDING PROGRAM
Further to the approvals obtained from the Fund's Board of Directors and its
shareholders, the Fund has commenced a Securities Lending Program. After a
careful review of the available alternatives, the Fund's Board of Directors
appointed Merrill Lynch Portfolio Services, Inc. as the Agent for this Pro-
gram, which commenced operations during August 1998. This Program is aimed at
increasing the Fund's net investment income distributed to shareholders.
DECLARATION OF DIVIDEND
The Fund's Board of Directors has declared a dividend of 12 cents per share
to shareholders of record on September 30, 1998, payable on October 30, 1998.
This dividend is comprised entirely of net investment income and is not sub-
ject to any Mexican withholding tax.
DIVIDEND REINVESTMENT PLAN
The Fund's Dividend Reinvestment Plan (the Plan) provides a convenient way to
increase your holdings in the Common Stock of the Fund through the reinvest-
ment of net investment income and capital gain distributions. UNDER THE TERMS
OF THE PLAN, FUND SHAREHOLDERS ARE AUTOMATICALLY ENROLLED AS PARTICIPANTS IN
THE PLAN. IF YOU DO NOT WISH TO PARTICIPATE IN THE PLAN, PLEASE CONTACT THE
PLAN AGENT. Upon any termination of participation under the Plan, the Plan
Agent will cause a share certificate for the appropriate number of full shares
to be delivered to the participant, and a cash adjustment for any fractional
share. At a shareholder's request, the Plan Agent will sell the participant's
shares and remit any proceeds to the participant, net of brokerage commis-
sions. Shareholders who do not participate in the Plan will receive distribu-
tions in cash. The Plan provides a convenient way to increase your holdings in
Common Stock through the reinvestment of distributions.
Under the terms of the Plan, whenever the Fund declares a distribution, Plan
participants will receive their distribution entirely in shares of Common
Stock purchased either in the open market or from the Fund. If, on the date a
distribution becomes payable or such other date as may be specified by the
Fund's Board of Directors (the valuation date), the market price of the Common
Stock plus estimated brokerage commissions is equal to or exceeds the NAV per
share of Common Stock, the Plan Agent will invest the distribution in newly
issued shares of Common Stock, which will be priced at NAV. If on the valua-
tion date, the market price of the Common Stock plus estimated brokerage com-
missions is lower than the NAV per share, the Plan Agent will buy Common Stock
in the open market. As a participant in the Plan, you will be charged a pro
rata portion of brokerage commissions on all open market purchases.
<PAGE>
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If your shares are registered in the name of a broker-dealer or any other nom-
inee, you must contact the broker-dealer or other nominee regarding his or her
status under the Plan, including whether such broker-dealer or nominee will
participate in the Plan on your behalf. Generally, shareholders receiving Com-
mon Stock under the Plan will be treated as having received a distribution
equal to the amount payable to them in cash as a distribution had the share-
holder not participated in the Plan.
If you have any questions concerning the Plan or would like a copy of the Plan
brochure, please contact the Plan Agent:
American Stock Transfer & Trust Company
Attention: Dividend Reinvestment Department
40 Wall Street
New York, NY 10005
(212) 936-5100
COMMUNICATIONS WITH SHAREHOLDERS
For the benefit of the Fund's shareholders and the investing public, the Fund
has created a Web Site that contains, among other information, a daily update
of the Fund's NAV per share, market price, discount or premium, and total net
asset level. We invite shareholders and individuals interested in information
about the Fund to consult the Fund's Web Site at the following Internet ad-
dress:
WWW.THEMEXICOFUND.COM
The Adviser prepares a Monthly Summary Report with information relating to the
Fund, as well as other indicators of the Mexican economy and the Bolsa. This
report is available, free of charge, on the Fund's Web Site, or by mail, if re-
quested by writing to the Adviser at:
IMPULSORA DEL FONDO MEXICO, SA DE CV.
77 Aristoteles St., 3rd Floor
11560, Mexico, D.F.
MEXICO
Additionally, the Fund has made arrangements to improve communications with
Fund shareholders and the investing public through a toll free telephone number
and a liaison office. Upon request, this office will be pleased to provide you
with the Fund's current NAV, quarterly reports and other materials available
from the Fund. The office will also be able to direct your inquiries regarding
other Fund matters to the appropriate firms or individuals. Please refer your
information requests to:
MORROW & CO., INC.
14755 Preston Road--Suite 725
One Signature Place
Dallas, TX 75240
(800) 224-4134
By: /s/ Jose Luis Gomex By: /s/ Juan Gallardo T.
------------------- --------------------
JOSE LUIS GOMEZ JUAN GALLARDO T.
PIMIENTA Chairman of the Board
President
September 9, 1998
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THE FUND'S GERMAN DOMESTIC TAX REPRESENTATIVE IS:
ARTHUR ANDERSEN
Wirtschaftsprufungsgesellschaft
Steuerberatungsgesellschaft mbH
Mergenthalerallee 10-12
65760 Eschborn/Frankfurt/M.
Postfach 53 23
65728 Eschborn/Frankfurt/M.
Germany
Telefon 06196-99-6264
Telefax 06196-99-6419
SHAREHOLDER INFORMATION
Daily NAV and market price for the Fund's shares are available on the
Fund's Web site at:
WWW.THEMEXICOFUND.COM
Weekly comparative NAV and market price information about the Fund's
shares is published in The Wall Street Journal, The New York Times and
other newspapers in a table called "Closed-End Funds". Daily market price
for the Fund's shares is published in the New York Stock Exchange Composite
Transactions under the designations "MexFd" or "MexicoFd". The Fund's New
York Stock Exchange trading symbol is MXF. The Fund's shares are also
listed and traded on the Third Section ("Freiverkehr") of the Stuttgart
Stock Exchange.
For current NAV information or copies of reports, call (800) 224-4134.
For information about dividends and shareholder accounts, call Shareholder
Services (212) 936-5100.
<PAGE>
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DESCRIPTION OF THE FUND'S TEN LARGEST HOLDINGS AS OF JULY 31, 1998
1. CIFRA, S.A. DE C.V. (8.36)
Cifra is the largest chain of retail stores in Mexico and has the dominant
market position in the commercial sector of the country. The Company is a sub-
sidiary of the US firm Wal-Mart Stores, Inc. At the end of 1997, Cifra had a
total of 388 units in Mexico, which included supermarkets, retail stores and
restaurants.
2. GRUPO MODELO, S.A. DE C.V. (7.95%)
Founded in 1925, Grupo Modelo is the leader in the production, distribution
and sale of beer in Mexico with a market share in the domestic and export mar-
kets of 57.9%. The group currently owns 10 brand names, including Corona, the
largest Mexican beer sold in the world, Victoria and Modelo. The company also
imports and distributes in Mexico brand names of beer produced by its partner
Anheuser-Busch from the United States, including Budweiser and Bud Light.
3. GRUPO INDUSTRIAL BIMBO, S.A. DE C.V. (6.69%)
Bimbo is the most important food producer in Mexico and one of the largest of
Latin America. The company is dedicated to the production, distribution and
sale of bread, cookies, cakes, candies, chocolates, snacks, tortillas and
processed foods. Bimbo is the leader in the bread market of Mexico and has the
largest distribution network of the country. Since 1989, Bimbo has expanded
its operations to the United States and Central and South America.
4. KIMBERLY CLARK DE MEXICO, S.A. DE C.V. (6.33%)
The company is dedicated to the manufacturing, marketing and sale of paper
and consumer products for personal care. Kimberly has the leading market posi-
tion in every product category where it competes. Products sold by the company
include tissue paper, diapers, feminine care, notebooks, office paper and spe-
cialty products.
5. TELEFONOS DE MEXICO, S.A. DE C.V. (5.16%)
Telmex is the major telecommunications company in Mexico and provides local
telephone, domestic and international long-distance, wireless, data, and video
transmission services. Since its privatization in 1990, Telmex has been one of
the fastest companies to modernize and has emerged as a leader in telecommuni-
cations services in Latin America.
6. CEMEX, S.A. DE C.V. (5.04%)
Cemex is the largest cement company in the Americas and one of the three
largest of the world. The company and its subsidiaries are dedicated to the
production, distribution, commercialization and sale of cement, concrete mix,
clinker and value added products. Cemex operates in 22 countries around the
world and has commercial relations with 60 countries. Cemex is the leader in
the cement markets of Mexico, Spain, Venezuela, Panama and Dominican Republic
and has important market presence in the Caribbean, Philippines and the south-
west region of the United States.
7. DESC, S.A. DE C.V. (5.01%)
Desc is one of Mexico's largest holding groups and focuses its activities in
five business sectors: autoparts, chemicals, consumer products, food
<PAGE>
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and real estate. The company's diversification has enabled it to compensate
for the effects of the natural cycles of the business sectors in which it par-
ticipates.
8. FOMENTO ECONOMICO MEXICANO, S.A. DE C.V. (4.94%)
Femsa is the largest, totally integrated producer of soft drinks and beer in
Mexico, and exports its products worldwide. Femsa also operates the largest
chain of convenience stores in Mexico (Oxxo), produces packaging materials and
is an important bottler in Argentina. Brand names produced by Femsa include
Sol beer and Coca Cola, among others.
9. ALFA, S.A. DE C.V. (4.16%)
Alfa is a Mexican company that is primarily active in the petrochemical, syn-
thetic fibres, steel, food products, autoparts and telecommunications indus-
tries. The Company has a leadership position in the majority of the markets it
serves. Alfa has established alliances with 17 leading companies from the
United States, Europe and Mexico.
10. GRUPO CARSO, S.A. DE C.V. (3.67%)
Carso is a diversified holding company with interests in key sectors of the
Mexican economy such as telecommunications, consumer goods, retail, construc-
tion, autoparts and mining. The Company holds large market shares in most of
the businesses in which it participates and its strategy consists in acquiring
controlling interests in undervalued companies to maximize their long-term
growth and value.
<PAGE>
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THE MEXICO FUND, INC.
SCHEDULE OF INVESTMENTS AS OF JULY 31, 1998 (UNAUDITED)
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<TABLE>
<CAPTION>
PERCENT
SHARES VALUE OF NET
INDUSTRIES DIV HELD COMMON STOCK (94.65%) SERIES (NOTE 1) ASSETS
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
AGROBIOTECHNOLOGY (a) 1,500,000 Empresas la Moderna,
S.A. de C.V. .......... A $ 9,765,406 1.01%
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BEVERAGES 9,500,000 Coca-Cola Femsa, S.A. de
C.V. .................. L 16,805,478 1.73
15,570,000 Fomento Economico
Mexicano, S.A. de
C.V. .................. UBD 47,798,799 4.94
7,200,000 Grupo Continental,
S.A. .................. * 24,204,737 2.50
8,560,000 Grupo Modelo, S.A. de
C.V. .................. C 76,962,173 7.95
4,944,000 Sistema Argos, S.A. .... B 4,239,775 0.44
------------ -----
170,010,962 17.56
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CEMENT INDUSTRY 7,440,000 Apasco, S.A. de C.V. ... * 38,164,553 3.94
13,200,000 Cemex, S.A. de C.V. .... CPO 48,746,212 5.04
4,840,000 Corporacion Moctezuma,
S.A. de C.V. .......... B2 5,487,035 0.57
------------ -----
92,397,800 9.55
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COMMUNICATIONS 10,036,994 Carso Global Telecom,
S.A. de C.V. .......... A1 32,052,136 3.31
(a) 1,268,200 Grupo Televisa, S.A. ... CPO 22,149,727 2.29
10,000,000 Telefonos de Mexico,
S.A. de C.V. .......... A 25,086,991 2.59
10,000,000 Telefonos de Mexico,
S.A. de C.V. .......... L 24,918,622 2.57
------------ -----
104,207,476 10.76
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CONSTRUCTION & HOUSING (a) 2,102,000 Consorcio ARA, S.A. de
C.V. .................. * 6,736,121 0.70
(a) 2,000,000 Consorcio Hogar, S.A. de
C.V. .................. B 1,849,815 0.19
(a) 2,000,000 Corporacion Geo, S.A. de
C.V. .................. B 10,910,315 1.13
(a) 11,000,000 Empresas ICA, Sociedad
Controladora, S.A. de
C.V. .................. * 16,767,314 1.73
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36,263,565 3.75
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CONSUMER PRODUCTS Kimberly-Clark de
FOR PERSONAL CARE 21,000,000 Mexico, S.A. de C.V. .. A 61,286,340 6.33
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ENTERTAINMENT (a) 3,748,000 Corporacion
Interamericana de
Entretenimiento, S.A. . B 11,779,549 1.22
(a) 1,000,000 Corporacion
Interamericana de
Entretenimiento, S.A. . L 2,918,397 0.30
(a) 1,710,000 ECE, S.A. de C.V. ...... * 1,305,197 0.13
------------ -----
16,003,143 1.65
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FINANCIAL GROUPS (a) 4,000,000 Grupo Financiero Banamex
Accival, S.A. de C.V. . B 8,009,878 0.83
16,000,000 Grupo Financiero
Bancomer, S.A. de
C.V. .................. B 5,333,932 0.55
4,077,000 Grupo Financiero
Inbursa, S.A. de C.V. . B 11,829,661 1.22
(a)(b) 1,412,500 Grupo Financiero
Inverlat Recovery
Trust ................. BC -- 0.00
------------ -----
25,173,471 2.60
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FOOD (a) 2,930,000 Grupo Azucarero Mexico,
S.A. de C.V. .......... B 1,341,834 0.14
31,700,000 Grupo Industrial Bimbo,
S.A. de C.V. .......... A 64,759,232 6.69
16,000,000 Grupo Industrial Maseca,
S.A. de C.V. .......... B 12,535,638 1.29
1,000,000 Industrias Bachoco, S.A.
de C.V. ............... UBL 1,706,140 0.18
6,000,000 Pasteleria Francesa,
S.A. de C.V. .......... * 2,134,920 0.22
------------ -----
82,477,764 8.52
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HOLDINGS 10,000,001 Alfa, S.A. de C.V. ..... A 40,296,333 4.16
3,142,000 Cydsa, S.A. ............ A 4,761,140 0.49
1,789,190 Desc, S.A. de C.V. ..... A 9,639,816 1.00
6,506,190 Desc, S.A. de C.V. ..... B 38,851,645 4.01
8,320,000 Grupo Carso, S.A. de
C.V. .................. A1 35,487,709 3.67
</TABLE>
<PAGE>
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THE MEXICO FUND, INC.
SCHEDULE OF INVESTMENTS AS OF JULY 31, 1998 (UNAUDITED) -- (CONTINUED)
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<TABLE>
<CAPTION>
PERCENT
SHARES VALUE OF NET
INDUSTRIES DIV HELD COMMON STOCK (CONTINUED) SERIES (NOTE 1) ASSETS
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
HOLDINGS (CONTINUED) 3,519,000 Grupo Imsa, S.A. de
C.V. .................. UBC $ 5,253,418 0.54%
3,100,000 Sanluis Corporacion,
S.A. de C.V. .......... CPO 12,457,066 1.29
4,496,237 Vitro, S.A. ............ A 9,992,759 1.03
------------ ------
156,739,886 16.19
- ----------------------------------------------------------------------------------------------
INSURANCE (a) 1,000,000 Seguros Comercial
America, S.A. de C.V. . B 3,636,772 0.38
- ----------------------------------------------------------------------------------------------
IRON & STEEL INDUSTRY (a) 2,517,000 Altos Hornos de Mexico,
S.A. de C.V. .......... * 3,373,328 0.35
3,689,000 Hylsamex, S.A. de C.V. . BCP 10,724,559 1.11
(a) 1,705,000 Industrias CH, S.A. de
C.V. .................. B 6,124,144 0.63
1,011,000 Tubos de Acero de
Mexico, S.A. .......... * 10,043,046 1.04
------------ ------
30,265,077 3.13
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MINING INDUSTRY 7,000,000 Grupo Mexico, S.A. de
C.V. .................. B 17,914,469 1.85
4,000,000 Industrias Penoles, S.A.
de C.V. ............... * 13,020,541 1.35
------------ ------
30,935,010 3.20
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RETAIL TRADE (a) 2,120,000 ACER Computec Latino
America, S.A. de C.V. . * 928,050 0.10
16,232,807 Cifra, S.A. de C.V. .... C 23,686,889 2.45
37,723,784 Cifra, S.A. de C.V. .... V 57,163,664 5.91
15,000,000 Controladora Comercial
Mexicana, S.A. de
C.V. .................. UBC 12,627,680 1.30
2,000,000 Grupo Corvi, S.A. de
C.V. .................. UBL 606,129 0.06
------------ ------
95,012,412 9.82
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SERVICE 7,822,000 Corporacion Mexicana de
Restaurantes, S.A. de
C.V. .................. B 1,975,474 0.20
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TOTAL COMMON STOCK
(Identified Cost--
$559,750,273) ......... 916,150,558 94.65
- ----------------------------------------------------------------------------------------------
<CAPTION>
PERCENT
FACE SHORT-TERM SECURITIES VALUE OF NET
SECURITIES VALUE (5.41%) (NOTE 1) ASSETS
- ----------------------------------------------------------------------------------------------
<C> <C> <C> <S> <C> <C> <C>
REPURCHASE $52,364,724 Bancomer, S.A., 17.20%,
AGREEMENTS dated 07/31/98, due
08/03/98, repurchase
price $52,439,780
collateralized by
Udibonos............... $ 52,364,724 5.41%
- ----------------------------------------------------------------------------------------------
TOTAL SHORT-TERM
SECURITIES (Identified
Cost--$52,364,724)..... 52,364,724 5.41
- ----------------------------------------------------------------------------------------------
TOTAL INVESTMENTS
(Identified Cost--
$612,114,997).......... 968,515,282 100.06
LIABILITIES IN EXCESS OF
OTHER ASSETS........... (558,805) (0.06)
------------ ------
NET ASSETS (Equivalent
to $19.16 per share on
50,506,925 Shares of
Capital Stock
Outstanding)........... $967,956,477 100.00%
------------ ------
</TABLE>
(a) Shares of these securities are currently non-income producing. Equity
investments that have not paid dividends within the last twelve months are
considered to be non-income producing.
(b) See Note 9 to Financial Statements.
Some issuers were reclassified within different sectors compared to previous
reports. The Board of Directors believes that the new classifications better
reflect the major business activities of the Fund's portfolio companies.
See Notes to Financial Statements.
<PAGE>
- --------------------------------------------------------------------------------
THE MEXICO FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES AS OF JULY 31, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
Investments:
Mexican securities, at value (Note 1):
Common stock (identified cost -- $559,750,273)..... $916,150,558
Short-term securities (identified cost --
$52,364,724)..................................... 52,364,724
------------
Total investments (identified cost --
$612,114,997)................................... $968,515,282
Receivables from securities sold.................... 520,489
Interest receivable................................. 25,019
------------
Total assets...................................... 969,060,790
------------
LIABILITIES:
Investment adviser (Note 2 and 3).................. 701,991
Accrued expenses and other liabilities............. 402,322
------------
Total liabilities................................. 1,104,313
------------
NET ASSETS -- Equivalent to $19.16 per share on
50,506,925 shares of capital stock outstanding
(Note 7)........................................... $967,956,477
============
</TABLE>
See Notes to Financial Statements.
<PAGE>
- --------------------------------------------------------------------------------
THE MEXICO FUND, INC.
STATEMENT OF OPERATIONS (UNAUDITED) FOR THE NINE MONTHS ENDED JULY 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
NET INVESTMENT INCOME:
Income (Note 1):
Dividends....................................... $ 17,380,624
Interest and discounts earned................... 6,419,994
-------------
Total income.................................... $ 23,800,618
Expenses:
Investment advisory fee (Note 2)................ 5,670,121
Administrative services (Note 3)................ 262,500
Trustee fee (Note 4)............................ 47,990
Value-added taxes (Note 1)...................... 914,783
Printing, distribution and mailing of
shareholder reports............................ 237,272
Legal fees...................................... 146,768
Directors' fees................................. 132,340
Directors' expenses............................. 28,186
Accounting and audit fees....................... 83,361
Custodian fees (Note 5)......................... 58,977
Transfer agent and dividend disbursement fees... 15,750
Shareholders' information....................... 32,574
Stock exchange fees............................. 25,257
Miscellaneous................................... 175,690
-------------
Operating expenses.............................. 7,831,569
-------------
Net investment income (Note 1).................. 15,969,049
-------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND FOREIGN CURRENCY:
Realized gain (loss) on investments and foreign
currency transactions (Notes 1 and 6):
Proceeds from sales............................. 50,374,673
Cost of securities sold......................... 67,335,180
-------------
Net realized loss on investments................ (16,960,507)
Net realized loss from foreign currency
transactions................................... (4,140,720)
-------------
Net realized loss on investments and foreign
currency transactions.......................... (21,101,227)
Increase (decrease) in net unrealized gain (loss)
on investments and translation of assets and
liabilities in foreign currency:
INVESTMENTS:
End of period (Note 6).......................... 356,400,285
Beginning of period............................. 532,153,219
-------------
Decrease in net unrealized gain on investments.. (175,752,934)
TRANSLATION OF ASSETS AND LIABILITIES IN FOREIGN
CURRENCY:
End of period................................... (1,711,705)
Beginning of period............................. (2,763,362)
-------------
Decrease in net unrealized loss on translation
of assets and liabilities in foreign currency.. 1,051,657
-------------
Decrease in net unrealized gain on investments
and translation of assets and liabilities in
foreign currency............................... (174,701,277)
-------------
NET DECREASE IN NET ASSETS RESULTING FROM
OPERATIONS...................................... $(179,833,455)
=============
</TABLE>
See Notes to Financial Statements.
<PAGE>
- --------------------------------------------------------------------------------
THE MEXICO FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE
NINE MONTHS ENDED FOR THE
JULY 31, 1998 YEAR ENDED
(UNAUDITED) OCTOBER 31, 1997
- -------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS
Net investment income................ $ 15,969,049 $ 20,012,313
Net realized (loss) gain on
investments and foreign currency
transactions........................ (21,101,227) 50,449,917
Net (decrease) increase in unrealized
gain on investments and translation
of assets and liabilities in foreign
currency............................ (174,701,277) 255,566,988
-------------- --------------
Net (decrease) increase in net assets
resulting from operations........... (179,833,455) 326,029,218
Dividends to shareholders from net
investment income................... (5,555,761) (18,889,938)
Dividends to shareholders from net
realized gain on investments........ (29,625,602) (996,424)
Net increase in capital stock (Note
7).................................. 15,078,787 --
-------------- --------------
Total (decrease) increase in net
assets............................. (199,936,031) 306,142,856
NET ASSETS:
Beginning of period.................. 1,167,892,508 861,749,652
-------------- --------------
End of period........................ $ 967,956,477 (A) $1,167,892,508 (A)
============== ==============
</TABLE>
See Notes to Financial Statements.
(A) Including accumulated net investment loss of $(888,055) as of July 31, 1998
and $(7,160,623) as of October 31, 1997.
<PAGE>
- --------------------------------------------------------------------------------
THE MEXICO FUND, INC. FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE
NINE MONTHS
ENDED
JULY 31, FOR THE YEAR ENDED OCTOBER 31,
1998 ---------------------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period..... $ 23.49 $ 17.33 $ 13.80 $ 33.48 $ 28.88 $ 24.91
----------- ---------- -------- -------- ---------- ----------
Net investment income (Note 1).......... 0.32** 0.40 0.50 0.59** 0.21** 0.58**
Net (loss) gain on investments and
translation gain on investments gain
investments and translation of
foreign currency (Note 1)............. (3.89)** 6.16 3.46 (19.21)** 4.89** 8.77**
----------- ---------- -------- -------- ---------- ----------
Total from investments operations........ (3.57)** 6.56 3.96 (18.62)** 5.10** 9.35**
----------- ---------- -------- -------- ---------- ----------
Less dividends and distributions:
Dividends to common shareholders
from net investment income............. (0.11) (0.38) (0.43) -- (0.27) (0.49)
Distributions to common shareholders
from net capital gains................. (0.60) (0.02) -- (0.01) (0.23) (2.48)
----------- ---------- -------- -------- ---------- ----------
Total dividends and distributions........ (0.71) (0.40) (0.43) (0.01) (0.50) (2.97)
----------- ---------- -------- -------- ---------- ----------
Tax return of capital................... -- -- -- (0.05) -- --
----------- ---------- -------- -------- ---------- ----------
Capital charge resulting
from issuance of fund shares........... (0.05) -- -- (1.00) -- (2.41)
----------- ---------- -------- -------- ---------- ----------
Net asset value, end of period.......... $ 19.16 $ 23.49 $ 17.33 $ 13.80 $ 33.48 $ 28.88
=========== ========== ======== ======== ========== ==========
Market value per share, end of period... $ 14.38 $ 18.69 $ 14.13 $ 12.25 $ 31.38 $ 27.00
=========== ========== ======== ======== ========== ==========
TOTAL INVESTMENT RETURN BASED
ON MARKET VALUE PER SHARE.............. (19.94%) 35.03% 18.77% (60.79%) 15.39% 27.41%
RATIOS TO AVERAGE NET ASSETS:
Expenses................................ 0.91%* 0.91% 1.00% 1.14% 0.92% 1.08%
Net investment income................... 1.86%* 1.80% 2.93% 3.24% 0.63% 2.27%
SUPPLEMENTAL DATA:
Net assets at end of
period (in 000's)...................... $ 967,956 $1,167,893 $861,750 $685,896 $1,248,094 $1,075,948
Portfolio turnover rate................. 2.51% 7.58% 9.57% 10.61% 3.89% 5.14%
Average Commission Rate Paid............ $ 0.0022 $ 0.0034 $ 0.0026 -- -- --
</TABLE>
- --------
*Annualized
**Amounts were computed based on average shares outstanding during the period.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
----------------------------------------------------------------
QUARTER ENDED QUARTER ENDED QUARTER ENDED
07/31/1998 04/30/1998 01/31/1998
-------------------- --------------------- ---------------------
TOTAL PER SHARE TOTAL PER SHARE TOTAL PER SHARE
--------- --------- ---------- --------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
Investment Income.................................... $ 10,939 $ 0.22 $ 9,851 $ 0.20 $ 3,011 $ 0.06
Net investment Income................................ $ 8,456 $ 0.17 $ 7,240 $ 0.14 $ 273 $ 0.01
Net realized gain (loss) on investments.............. $ 2,744 $ 0.05 $ (3,675) $(0.07) $ (16,030) $(0.32)
Net realized loss from foreign currency transactions. $ (2,249) $(0.04) $ (597) $(0.01) $ (1,295) $(0.03)
Net (decrease) increase in unrealized gain on
investments......................................... $(257,338) $(5.10) $ 82,680 $ 1.64 $ (1,095) $(0.02)
Net decrease (increase) in unrealized loss on
translation of assets and liabilities in foreign
currency............................................ $ (186) $(0.00) $ 568 $ 0.01 $ 670 $ 0.01
Net asset value...................................... $ 967,956 $19.16 $1,222,086 $24.20 $1,135,869 $22.49
</TABLE>
- --------
See Notes to Financial Statements.
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
THE MEXICO FUND, INC.
NOTES TO FINANCIAL STATEMENTS--
JULY 31, 1998 (UNAUDITED)
- -------------------------------------------------------------------------------
1. OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES:
The Fund is registered under the Investment Company Act of 1940 as a diversi-
fied, closed-end management investment company. The investment objective of
the Fund is to seek long term capital appreciation through investment in secu-
rities, primarily equity but also fixed income securities, listed on the Mexi-
can Stock Exchange. On July 17, 1991, the Board of Directors voted to change
the year-end of the Fund from May 31 to October 31.
The preparation of financial statements in conformity with U.S. generally ac-
cepted accounting principles requires management to make estimates and assump-
tions that affect the reported amounts of assets and liabilities at the date
of the financial statements and the reported amounts of revenues and expenses
for the period. Actual results could differ from those estimates. The follow-
ing is a summary of significant accounting policies followed by the Fund.
Valuation of investments -- Investments traded on the Mexican Stock Exchange
are valued at the last sale price. Short-term securities are carried at cost,
plus accrued interest, which approximates market value.
Foreign Currency -- The Fund has adopted the provisions of Statement of Posi-
tion 93-4, Foreign Currency Accounting and Financial Statement Presentation
for Investment Companies ("SOP") effective for the period ended October 31,
1995. The Fund has elected not to restate prior periods. The adoption of this
SOP results in the reclassification of net realized gain (loss) from foreign
currency transactions, previously included as a component of net investment
income, to net realized gain (loss) on investments and foreign currency trans-
actions, and the inclusion of unrealized gain (loss) on translation of cur-
rency into unrealized appreciation (depreciation) of investments and transla-
tion of assets and liabilities in foreign currencies.
The market value of Mexican securities, currency holdings and other assets
and liabilities denominated in "Peso (Ps.)" were recorded in the financial
statements after translation into U.S. dollars based on the open market ex-
change rate prevailing in Mexico City at the end of the period. The open mar-
ket exchange rate at July 31, 1998 was Ps. 8.909 to $1.00.
The identified cost of portfolio holdings is translated at approximate rates
prevailing when acquired. Income and expense amounts are translated at approx-
imate rates prevailing when earned or incurred.
Since the net assets of the Fund are determined based on the currency ex-
change rate and market values at the close of each business day, it is not
practicable to isolate that portion of the results of operations arising as a
result of changes in the foreign exchange rates from the fluctuations arising
from changes in the market prices of securities during the year. Accordingly,
the net realized and
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
unrealized gain on investments presented in the accompanying financial state-
ments include the effects of both such changes.
Reported net realized foreign exchange gains or losses arise from sales and of
short-term securities in exchange of property, payment of services or func-
tional currency denominated assets, currency gains or losses realized between
the trade and settlement dates on securities transactions, the difference be-
tween the amounts of dividends, interest, and foreign withholding taxes re-
corded by the Fund, and the U.S. dollar equivalent of the amount actually re-
ceived or paid.
Net unrealized foreign exchange gains and losses arise from changes in the
value of assets and liabilities other than investments in common stocks at fis-
cal year end, resulting from changes in the exchange rate.
Security transactions and investment income -- Security transactions are re-
corded on the date which the transactions are entered into (the trade date).
Dividend income is recorded on the ex-dividend date and interest income is re-
corded as it is earned.
Repurchase Agreements -- The repurchase agreements are traded with approved
institutions, and are collateralized by Mexican Government securities. The Fund
takes possession of the collateral and monitors the credit standing of
counterparties with whom it enters repurchase agreements.
Realized gains and losses on investments -- Realized gains and losses on in-
vestments are determined on the identified cost basis.
Taxes -- No provision has been made for U.S. income taxes for the nine months
ended July 31, 1998, on net investment company taxable income or net long-term
capital gains as defined by the Internal Revenue Code (the "Code"), since the
Fund intends to comply with the requirements of the Code applicable to regu-
lated investment companies and to distribute substantially all of such income
to its shareholders.
The Fund is subject to Mexican withholding taxes in accordance with the Mexi-
can Income Tax Law and with the provisions included in the treaty to avoid dou-
ble taxation signed between Mexico and the United States of America, on spe-
cific sources of income. For the nine months ended July 31, 1998, the Fund was
not subject to Mexican withholding taxes.
The provision for value-added taxes represents Mexican value-added tax on cer-
tain services rendered by Mexican corporations to the Fund.
Dividends to shareholders -- Cash dividends are recorded by the Fund on the
ex-dividend date. Dividends paid to shareholders are subject to Mexican with-
holding taxes if applicable.
2. INVESTMENT ADVISORY AGREEMENT:
The Fund has a management contract with Impulsora del Fondo Mexico, S.A. de
C.V. (the "Adviser"), a Mexican corporation registered under the U.S. Invest-
ment Advisers Act of 1940. The Adviser furnishes investment research and port-
folio management services consistent with the Fund's
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
stated investment policies. The Fund pays to the Adviser a monthly fee at the
annual rate of 0.85% on the first $200 million of average daily net assets,
0.70% on the excess over $200 million up to $400 million and 0.60% on the ex-
cess over $400 million.
3. ADMINISTRATIVE SERVICES AGREEMENT:
Effective April 1, 1994, the Fund entered into an Administrative Services
Agreement with the Adviser, which provides for certain administrative services
to be performed by the Adviser, including the determination and publication of
the net asset value of the Fund, the maintenance of the Fund's books and rec-
ords in accordance with applicable U.S. and Mexican Laws and the provision of
assistance to the Fund's auditors in the preparation and filing of annual re-
ports and tax returns. The term of this agreement was renewed until August 31,
1999. The annual fee payable to the Adviser under this agreement is $350,000.
4. TRUST AGREEMENT AND TRUSTEE:
At its June 7, 1995 meeting, the Board of Directors approved the appointment
of Bancomer, S.A. ("Bancomer") as the trustee for the Mexican Trust through
which the Fund invests. The Fund also obtained the approval of the Comision
Nacional Bancaria y de Valores and the Mexican Foreign Investment Commission
to permit Bancomer to become the trustee. Under this arrangement, effective
October 5, 1995, Bancomer received an amount denominated in Mexican pesos for
three years, subject to a monthly increase linked to the Mexican Consumer
Price Index, paid monthly on a cumulative basis, which for the five month pe-
riod ended March 31, 1998, amounted to $47,990, equivalent to a monthly aver-
age of $9,598.
During 1997 and 1998, the Mexican governmental authorities gave approval to
the Trustee for the transfer of the total assets and liabilities of the Trust
to the Fund. On February 27, 1998, the Fund's shareholders approved matters in
connection with the termination of the Trust Agreement with Bancomer. The ter-
mination was effective on March 31, 1998.
5. MANDATE AGREEMENT AND MANDATORY PARTY:
In connection with the termination of the Trust Agreement explained in the
preceding note, on March 31, 1998, the Fund signed a Mandate Agreement with
Bancomer. Under this Agreement, Bancomer will act as the Mandatory Party, per-
forming certain activities related to the custody of the Fund's securities,
that were previously performed under the trust agreement.
The annual fee payable to Bancomer under this Agreement is denominated in
Mexican pesos, which translates to approximately $53,558, equivalent to a
monthly average of $4,463.
Due to the nature of this Agreement, the fees paid to Bancomer are consoli-
dated with the custodian fees.
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
6. PURCHASES AND SALES OF INVESTMENTS:
Purchases and sales of investments, excluding short-term securities, for the
nine months ended July 31, 1998 were as follows:
<TABLE>
<S> <C>
Purchases
- -------------------------------------------------------------------------------
Common Stock....................................................... $27,791,211
-----------
Total Purchases.................................................. $27,791,211
===========
Proceeds from Investments Sold
- -------------------------------------------------------------------------------
Common Stock....................................................... $50,374,673
-----------
Total Sales...................................................... $50,374,673
===========
</TABLE>
As of July 31, 1998, net unrealized gain on investments in common stocks for
Federal income tax purposes aggregated to approximately $356 million, of which
approximately $433 million related to appreciated securities and approximately
$77 million related to depreciated securities. The aggregate cost of invest-
ments in common stocks at July 31, 1998 for Federal income tax purposes was
approximately $560 million.
7. CAPITAL STOCK:
At July 31, 1998, there were 150,000,000 shares of $1.00 par value common
stock authorized, of which 50,758,750 shares were issued, 50,506,925 shares
were outstanding and 251,825 shares were held in treasury.
Starting with the distribution made to shareholders on July 30, 1993, the
Fund offered a Dividend Reinvestment Plan ("Plan"). Under this Plan, the Com-
pany sold, in fiscal year 1995, 4,571 shares of common stock held in treasury
which amounted to $89,706.
The Plan was amended by the Board of Directors at the December 7, 1994 Board
Meeting. The new Plan became effective April 1, 1995. Under the terms of the
amended Plan, Fund shareholders automatically will be enrolled as participants
in the Plan unless they notify the Fund otherwise.
On December 10, 1997, the Board of Directors declared a stock dividend of
$29,625,602. This dividend was paid in shares of common stock of the Fund, and
in cash by specific election. Some shareholders selected the stock dividend,
therefore the Company issued 791,018 shares, which amounted to $15,078,787.
As of July 31, 1998, net assets were comprised of the following:
<TABLE>
<S> <C>
Common Stock................................................. $ 50,506,925
Additional paid-in capital................................... 576,466,300
Accumulated net investment loss.............................. (888,055)
Accumulated net realized loss on investments................. (12,817,273)(A)
Unrealized appreciation of investments and depreciation on
translation of assets and liabilities in foreign currency 354,688,580
------------
$967,956,477
============
</TABLE>
- -------
(A) Including $4,143,234 of capital gains, net of income taxes paid in 1991,
which will not be distributed.
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Accumulated net realized (losses) from foreign currency transactions have
been netted against undistributed net investment income to be consistent with
the tax treatment for distributions from net investment income per the tax
code.
8. CAPITAL GAINS:
Net realized gains from security transactions, if any, are distributed annu-
ally to shareholders. Capital loss carryforwards will be used to offset future
capital gains available for distribution. The Fund had net capital loss
carryforwards at July 31, 1998 of approximately $ 16,961,000 expiring in 2006.
9. INVESTMENTS:
As a result of significant losses incurred by Grupo Financiero Inverlat, S.A.
de C.V. ("Inverlat"), certain significant shareholders, together with the fi-
nancial authorities, developed a recapitalization program. On July 23, 1996,
after the absorption of accumulated losses through the total reduction of cap-
ital stock, shareholders of Inverlat approved a cash contribution by FOBAPROA
(Banking Fund for Savings Protection) to cover such losses. As a consequence,
all shares outstanding prior to July 23, 1996, were cancelled . The Fund has
received an interest in a Recovery Trust set up to manage the recovery assets
of Inverlat. Through the trust agreement the Company may receive shares equal
to 9% and up to 36% of their ownership interest. Management has assigned the
market value of the Fund's holdings in the Recovery Trust at $0 as of July 31,
1998, due to the uncertainty regarding its ultimate realization.
<PAGE>
- --------------------------------------------------------------------------------
THE MEXICO FUND, INC.
- --------------------------------------------------------------------------------
DIRECTORS:
Juan Gallardo T. -- Chairman
Philip Caldwell
Jose Luis Gomez Pimienta
Claudio X. Gonzalez
Robert L. Knauss
Agustin Santamarina V.
Jaime Serra Puche
OFFICERS:
Jose Luis Gomez Pimienta -- President
Samuel Garcia-Cuellar -- Secretary
Allan S. Mostoff -- Assistant Secretary
Sander M. Bleber -- Assistant Secretary
Carlos H. Woodworth -- Treasurer
INVESTMENT ADVISER --
Impulsora del Fondo Mexico, S.A. de C.V.
CUSTODIAN --
Bancomer, S.A.
Merrill Lynch, Pierce, Fenner & Smith, Inc.
TRANSFER AGENT AND REGISTRAR --
American Stock Transfer & Trust Company
COUNSEL --
Dechert Price & Rhoads
Creel, Garcia-Cuellar y Muggenburg, S.C.
This report, including the financial statements herein, is transmitted to
shareholders of The Mexico Fund, Inc. for their information. It is not a
prospectus, circular or representation intended for use in the purchase of
shares of the Fund or any securities mentioned in the report.
- --------------------------------------------------------------------------------
---------------------------------
------------------------------
----------------------------
[LOGO OF THE MEXICO FUND, INC. APPEARS HERE]
THE MEXICO
FUND, INC.
(Unaudited)
----------------------
Quarterly Report
July 31, 1998
----------------------------
------------------------------
www.themexicofund.com
---------------------------------
- --------------------------------------------------------------------------------
