NOMURA PACIFIC BASIN FUND INC, 497, 1996-08-01

NOMURA PACIFIC BASIN FUND INC
497, 1996-08-01

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<PAGE>
PROSPECTUS
Nomura Pacific Basin Fund, Inc.
180 Maiden Lane, New York, New York 10038 [LOGO]
(Telephone: (1-800) 833-0018)

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Nomura Pacific Basin Fund, Inc. (the "Fund") is a no-load, open-end
diversified management investment company seeking long-term capital appreciation
primarily through investments in equity securities of corporations domiciled in
Japan and other Far Eastern and Western Pacific ("Pacific Basin") countries. The
Fund contemplates that under normal conditions at least 70% of its assets will
consist of equity securities of Pacific Basin issuers and that a substantial
portion of its assets will be invested in securities of Japanese corporations.
Investments on an international basis involve certain special considerations and
risks. See "Investment Objective and Policies--Special Considerations and
Risks".

Nomura Capital Management, Inc. acts as the Manager for the Fund. Nomura
Investment Management Co., Ltd. and Nomura Capital Management (Singapore)
Limited act as Investment Advisers for the Fund. The Manager and the Investment
Advisers are affiliated with The Nomura Securities Co., Ltd., Tokyo, Japan.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
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Shares of the Fund are being offered at a price equal to the net asset
value per share next determined after receipt of the order, without sales
charge. The minimum initial investment is $1,000, and there is no minimum
subsequent investment. Shares may be redeemed at any time at net asset value as
described herein. See "Purchase of Shares" and "Redemption of Shares".
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This Prospectus is a concise statement of information about the Fund that
is relevant to making an investment in the Fund. Investors are encouraged to
read this Prospectus carefully and retain it for future reference. Additional
information about the Fund has been filed with the Securities and Exchange
Commission in a Statement of Additional Information, bearing the same date as
this Prospectus, which information is incorporated herein by reference and is
available without charge upon request by calling or writing the Fund at the
above telephone number or address.

Nomura Capital Management, Inc.--Manager
Nomura Investment Management Co., Ltd.--Investment Adviser
Nomura Capital Management (Singapore) Limited--Investment Adviser
Nomura Securities International, Inc.--Distributor

July 29, 1996

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NO DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS, OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS, AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND, THE MANAGER, THE
INVESTMENT ADVISERS OR THE DISTRIBUTOR. THIS PROSPECTUS DOES NOT CONSTITUTE AN
OFFERING IN ANY STATE IN WHICH SUCH OFFERING MAY NOT LAWFULLY BE MADE.

------------------------
TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
<S> <C>
Fee Table........................................................... 3
Financial Highlights................................................ 4
Investment Objective and Policies................................... 5
Investment Restrictions........................................ 7
Special Considerations and Risks............................... 7
Management of the Fund.............................................. 9
Board of Directors............................................. 9
Management and Investment Advisory Arrangements................ 9
Purchase of Shares.................................................. 11
Through Securities Brokers and Dealers......................... 11
By Mail........................................................ 11
By Telephone................................................... 11
By Bank Wire................................................... 12
General........................................................ 12
Redemption of Shares................................................ 13
By Mail........................................................ 13
By Telephone................................................... 13
Repurchase..................................................... 14
Dividends, Distributions and Taxes.................................. 14
Additional Information.............................................. 16
Determination of Net Asset Value............................... 16
Portfolio Transactions and Brokerage........................... 17
Shareholder Services........................................... 17
Organization of the Fund....................................... 18
Performance Data............................................... 18
Shareholder Inquiries.......................................... 18
</TABLE>

<PAGE>
FEE TABLE

<TABLE>
<S> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Charge Imposed on Purchases (as a percentage of offering price).... None
Maximum Sales Charge Imposed on Dividend Reinvestments (as a percentage
of offering price)............................................................. None
Redemption Fees.................................................................. None
Exchange Fee..................................................................... None
ANNUAL FUND OPERATING EXPENSES (AS A PERCENTAGE OF AVERAGE NET ASSETS)
FOR THE YEAR ENDED MARCH 31, 1996:
Management Fees.................................................................. 0.75%(a)
12b-1 Fees....................................................................... None(b)
Other Expenses
</TABLE>

<TABLE>
<S> <C>
Custodian Fees................................................... 0.35%
Shareholder Servicing Costs...................................... 0.12%(c)
Other............................................................ 0.56%
</TABLE>

<TABLE>
<S> <C>
Total Other Expenses (as a percentage of average net assets)......... 1.03%
-----
TOTAL FUND OPERATING EXPENSES......................................................... 1.78%
-----
-----
<FN>
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(a) See "Management of the Fund--Management and Investment Advisory
Arrangements"--page 9.
(b) See "Purchase of Shares--General--Distribution Plan"--page 13.
(c) See "Shareholder Services"--page 17.
</TABLE>

EXAMPLE:

<TABLE>
<CAPTION>
CUMULATIVE EXPENSES PAID FOR THE PERIOD OF:
-------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
An investor would pay the following expenses on a
$1,000 investment assuming an operating expense ratio
of 1.78% and a 5% annual return throughout the
period............................................ $ 19 $58 $99 $216
</TABLE>

The foregoing Fee Table is intended to assist investors in understanding
the costs and expenses that a shareholder in the Fund will bear directly or
indirectly. The Example set forth above assumes reinvestment of all dividends
and distributions and utilizes a 5% annual rate of return as mandated by
Securities and Exchange Commission regulations. THE EXAMPLE SHOULD NOT BE
CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES OR
ANNUAL RATE OF RETURN, AND ACTUAL EXPENSES AND ANNUAL RATE OF RETURN MAY BE MORE
OR LESS THAN THOSE ASSUMED FOR PURPOSES OF THE EXAMPLE.

<PAGE>
FINANCIAL HIGHLIGHTS

The financial information in the table below has been examined in
conjunction with the audits of the financial statements of the Fund for each of
the periods noted by Price Waterhouse LLP, independent accountants. Financial
statements and the report of Price Waterhouse LLP for the year ended March 31,
1996 are included in the Statement of Additional Information, copies of which
may be obtained by shareholders as noted on the Prospectus cover page. Further
information about the performance of the Fund is contained in the Fund's most
recent annual report to shareholders which may be obtained, without charge, by
calling or by writing the Fund at the telephone number or address on the front
cover of this Prospectus.

Selected per share data and ratios for a share of common stock outstanding
throughout each period:
<TABLE>
<CAPTION>
FOR THE YEAR ENDED MARCH 31,
----------------------------------------------------------------------------------------------
1996 1995 1994 1993 1992 1991 1990 1989 1988
------ ------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period................ $15.07 $18.07 $14.33 $12.49 $15.19 $15.36 $19.15 $20.59 $24.20
------ ------ ------ ------ ------ ------ ------ ------ ------
Income from investment
operations:
Net investment income
(loss)................. (0.04)+ (0.01)+ (0.01)+ 0.00+ 0.00+ 0.04 0.08 0.03 0.06+
Net realized and
unrealized gain (loss)
on investments and
foreign currencies..... 2.07+ (0.74)+ 4.03+ 1.87+ (1.84)+ 2.53 0.20 (0.21) 6.87+
------ ------ ------ ------ ------ ------ ------ ------ ------
Total from investment
operations............. 2.03+ (0.75)+ 4.02+ 1.87+ (1.84)+ 2.57 0.28 (0.18) 6.93+
Distributions to
shareholders from:
Net investment income.... -- -- (0.05) (0.02) (0.01) (0.04) (0.10) (0.05) (0.08)
Net realized capital
gains.................. (0.58) (2.25) (0.21) (0.01) (0.85) (2.70) (3.97) (1.21) (10.46)
In excess of net
investment income...... -- -- (0.02) -- -- -- -- -- --
------ ------ ------ ------ ------ ------ ------ ------ ------
Total distributions........ (0.58) (2.25) (0.28) (0.03) (0.86) (2.74) (4.07) (1.26) (10.54)
------ ------ ------ ------ ------ ------ ------ ------ ------
Net asset value, end of
period................... $16.52 $15.07 $18.07 $14.33 $12.49 $15.19 $15.36 $19.15 $20.59
------ ------ ------ ------ ------ ------ ------ ------ ------
------ ------ ------ ------ ------ ------ ------ ------ ------
Total investment return.... 13.7% (4.2%) 28.2% 15.0% (12.9%) 17.4% (1.7%) (0.9%) 35.3%
Ratio to average net
assets/ supplemental
data:
Net assets, end of period
(in 000)............... $34,022 42,684 55,060 46,095 43,203 54,274 53,933 73,169 94,786
Operating expenses....... 1.78% 1.38% 1.39% 1.51% 1.46% 1.42% 1.32% 1.25% 1.22%
Net investment income.... (0.28%) (0.07%) (0.10%) 0.01% 0.00% 0.28% 0.40% 0.07% 0.28%
Portfolio turnover....... 45% 49% 76% 55% 41% 76% 46% 37% 61%

1987
------
<S> <C>
Net asset value, beginning
of period................ $15.68
------
Income from investment
operations:
Net investment income
(loss)................. 0.03+
Net realized and
unrealized gain (loss)
on investments and
foreign currencies..... 8.85+
------
Total from investment
operations............. 8.88+
Distributions to
shareholders from:
Net investment income.... 0.00
Net realized capital
gains.................. (0.36)
In excess of net
investment income...... --
------
Total distributions........ (0.36)
------
Net asset value, end of
period................... $24.20
------
------
Total investment return.... 57.6%
Ratio to average net
assets/ supplemental
data:
Net assets, end of period
(in 000)............... 81,850
Operating expenses....... 1.45%
Net investment income.... 0.14%
Portfolio turnover....... 46%
<FN>
- ---------------
+Based on average shares outstanding.
</TABLE>

<PAGE>
INVESTMENT OBJECTIVE AND POLICIES
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The Fund is designed for United States investors seeking diversification of
investments by participating in the economies of Pacific Basin countries. The
investment objective of the Fund is to seek long-term capital appreciation
primarily through investments in equity securities of corporations domiciled in
Pacific Basin countries including Japan, Australia, Hong Kong, Indonesia,
Malaysia, New Zealand, Singapore, South Korea, Taiwan, Thailand and the
Philippines. Current income from dividends and interest will not be an important
consideration in selecting portfolio securities. The Fund may, however, for
defensive purposes as described below invest in non-convertible fixed income
securities denominated in currencies of Pacific Basin countries and in United
States dollars. The investment objective described in this paragraph is a
fundamental policy of the Fund and may not be changed without the approval by
the holders of a majority of the Fund's outstanding shares. There can be no
assurance that the Fund will realize its objective.

The Fund anticipates that under normal conditions at least 70% of its
assets will consist of Pacific Basin corporate securities, primarily common
stock and, to a lesser extent, securities convertible into common stock and
rights to subscribe for common stock. It is expected that the Fund's investment
in securities of Japanese corporations will constitute a substantial part of its
assets under normal circumstances due to the size and liquidity of the Japanese
market and the availability of investment alternatives.

Over the past few decades to the present, certain foreign economies,
especially in the Pacific Basin region, have grown faster than the United
States' economy, and the return on equity investments in these markets has often
been superior to similar investments in the United States. The securities
markets of the Pacific Basin region have at times in the past moved relatively
independently of one another due to different economic, financial, political and
social factors. To the extent the various markets move independently, total
portfolio volatility tends to be reduced when the various markets are combined
into a single portfolio. A low correlation may, however, reduce the gains the
Fund might otherwise derive from movements in a particular market. Exchange
rates frequently move independently of securities markets in a particular
country. As a result, gains or losses in a particular securities market may be
affected by changes in exchange rates.

The Fund will attempt to maximize opportunity and reduce risk by investing
in a diversified portfolio of companies in different stages of development.
Portfolio companies will range from large, well-established companies to
medium-sized companies and smaller, less seasoned companies in an earlier stage
of development.

Investments in larger companies present certain advantages in that such
companies generally have greater financial resources, more extensive research
and development, manufacturing, marketing and service capabilities, more
stability and greater depth of management and technical personnel. Investments
in smaller, less seasoned companies may present greater opportunities for growth
but also involve greater risks than customarily are associated with more
established companies. The securities of smaller companies may be subject to
more abrupt or erratic market movements than larger, more established companies.
These companies may have limited product lines, markets or financial resources,
or they may be dependent upon a limited management group. Their securities may
be traded only in the over-the-counter market or on a regional securities
exchange and may not be traded every day or in the volume typical of trading on
a major securities exchange. As a result, the disposition by the Fund of
portfolio securities to meet redemptions or otherwise may require the Fund to
sell these securities at a discount from market prices or during a period when
such disposition is not otherwise desirable or to make many small sales over a
lengthy period of time. However, the Fund has adopted an investment restriction
pursuant to which it may not invest in securities which are subject to
restrictions on resale, or which are not otherwise readily marketable, if as a
result more than 5% of its total assets would be invested in such securities.
See "Investment Objective and Policies" in the Statement of Additional
Information.

<PAGE>

Although there can be no assurance that the conditions described above will
continue in the future, or that Nomura Capital Management, Inc. (the "Manager")
will be able to identify and invest in companies participating in the faster
growing Pacific Basin economies and markets, the Manager believes that
investment in Pacific Basin securities offers significant potential for
prospective long-term capital appreciation and an opportunity to achieve
effective investment diversification. The investment program of the Fund has
been developed in light of these beliefs.

Among the countries in the Far East, direct investments in listed
securities in certain countries by non-residents have historically been limited,
due to limitations set by the respective governments. The Fund may invest in the
shares of investment companies organized to invest in such markets subject to
the provisions of the Investment Company Act of 1940 and the policies and review
of the Board of Directors of the Fund. The applicable limitations under the
Investment Company Act of 1940 are discussed under "Investment Objective and
Policies" in the Statement of Additional Information.

If the Fund purchases securities of other investment companies, the
management fee paid by the Fund to the Manager will be proportionately reduced
to reflect the amount of management or other investment advisory fees paid by
such investment companies attributable to the value of the Fund's investment in
such companies.

Subject to policies and review of, and overall control by, the Board of
Directors of the Fund, the allocation of the Fund's assets among the various
securities markets in the Pacific Basin countries will be determined by the
Manager. In making the allocation of assets among the securities markets, the
Manager will consider such factors as technological developments in the various
countries, the condition and growth potential for the various economies and
securities markets, currency and taxation considerations and other pertinent
financial, social, national and political factors. Under certain adverse
investment conditions, the Fund may restrict the securities markets in which its
assets will be invested, and may increase the proportion of assets invested in
United States Government and money market securities.

As indicated above, the Fund anticipates that under normal conditions at
least 70% of its assets will consist of Pacific Basin corporate securities,
primarily equity securities. The Fund reserves the right as a defensive measure
to invest in non-convertible fixed income securities denominated in currencies
of Pacific Basin countries and in United States dollars. (For this purpose,
investments made for defensive purposes will be maintained only during periods
in which the Manager, subject to review by the Board of Directors, determines
that economic or financial conditions are adverse for holding equity securities
of Pacific Basin corporate issuers.) Securities held for defensive purposes,
which include non-convertible preferred stock, debt securities, government
securities issued by United States and Pacific Basin countries and money market
securities, may be held in such proportions as, in the opinion of the Manager,
prevailing market or economic conditions warrant. Debt securities that may be
held by the Fund include Euro-yen securities, which are debt securities
denominated in Japanese yen issued in the Euromarket. The Fund may also hold
cash (in United States dollars or Pacific Basin currencies) or short-term
securities denominated in such currencies to provide for redemptions; it is not
expected that such reserve for redemptions will exceed 10% of the Fund's assets.

Money market securities which may be held for defensive purposes or to
provide for redemptions include short-term corporate or government obligations
and bank certificates of deposit. The Fund may invest in securities subject to
repurchase agreements with banks and securities firms, which are instruments
under which the purchaser (i.e., the Fund) acquires a debt security and the
seller agrees, at the time of sale, to repurchase the obligation at a mutually
agreed upon time and price, thereby determining the yield during the purchaser's
holding period. Repurchase agreements may be construed to be collateralized
loans by the purchaser to the seller secured by the securities transferred to
the purchaser. The underlying securities will be limited to those which
otherwise qualify for investment by the Fund. In addition, the Fund will require
the seller to provide additional securities to it if the
6

<PAGE>
market value of the securities falls below the repurchase price at any time
during the term of the repurchase agreement. In the event of default by the
seller under a repurchase agreement, the Fund may suffer time delays and incur
costs or losses in connection with the disposition of the underlying securities.
The Fund will not enter into repurchase agreements maturing in more than seven
days.

The Fund may invest in the securities of foreign issuers in the form of
American Depositary Receipts (ADRs), European Depositary Receipts (EDRs), Global
Depositary Receipts (GDRs) or other securities convertible into securities of
foreign issuers. These securities may not necessarily be denominated in the same
currency as the securities into which they may be converted. ADRs are receipts
typically issued by an American bank or trust company which evidence ownership
of underlying securities issued by a foreign corporation. EDRs are receipts
issued in Europe, typically by banking institutions in London and Brussels,
which evidence a similar ownership arrangement. GDRs are receipts issued
globally, typically by banking institutions, and evidence a similar ownership
arrangement. Generally ADRs, in registered form, are designed for use in the
United States securities markets, and EDRs, in bearer form, are designed for use
in European securities markets. GDRs are tradeable both in the United States and
Europe and are designed for use throughout the world.

INVESTMENT RESTRICTIONS

The Fund has adopted a number of restrictions and policies relating to the
investment of its assets and its activities, which are fundamental policies and
may not be changed without the approval of the holders of a majority of the
Fund's outstanding voting securities, as defined in the Investment Company Act
of 1940. Among the more significant restrictions, the Fund may not:

--Invest in the securities of any one issuer if, immediately after and as a
result of such investment, the value of the holdings of the Fund in the
securities of such issuer exceeds 5% of the Fund's total assets, taken at market
value, except that such restriction shall not apply to securities issued or
guaranteed by the United States Government or its agencies or instrumentalities
or, with respect to 25% of the Fund's total assets, to securities issued or
guaranteed by the government of any country which is a member of the
Organisation for Economic Co-operation and Development.

--Invest in the securities of a single issuer if, immediately after and as
a result of such investment, the Fund owns more than 10% of the outstanding
securities, or more than 10% of the outstanding voting securities, of such
issuer.

--Invest more than 25% of its total assets, taken at market value at the
time of each investment, in the securities of issuers in any particular
industry.

Nothing in the foregoing restrictions shall be deemed to prohibit the Fund from
purchasing the securities of any issuer pursuant to the exercise of subscription
rights distributed to the Fund by the issuer, except that no such purchase may
be made if as a result the Fund will no longer be a diversified investment
company as defined in the Investment Company Act of 1940 or fail to meet the
diversification requirements of the Internal Revenue Code of 1986, as amended.

SPECIAL CONSIDERATIONS AND RISKS

Investing on an international basis involves certain considerations and
risks which are not typically associated with investing in United States
securities. Since the Fund will invest in securities denominated or quoted in
currencies other than the United States dollar, changes in foreign currency
exchange rates will affect the values of the Fund's portfolio securities and the
unrealized appreciation or depreciation of investments. Foreign corporations are
not generally subject to uniform accounting, auditing and financial reporting
standards, or to practices and
7

<PAGE>
requirements comparable to those applicable to United States corporations.
There may also be less government supervision and regulation of foreign
securities exchanges, brokers and listed companies than exists in the United
States. In addition, there may be the possibility of expropriation of assets,
confiscatory taxation, political, economic or social instability or diplomatic
developments which could affect assets of the Fund held in foreign countries.
Moreover, certain foreign economies may also differ adversely from the United
States economy in such respects as growth of gross national product, rate of
inflation, capital reinvestment, resource self-sufficiency and balance of
payments position.

Many of the securities held by the Fund will not be registered with the
Securities and Exchange Commission nor will the issuers thereof be subject to
the reporting requirements of such agency. Accordingly, there may be less
publicly available information about foreign companies and governments compared
to reports and ratings published about United States companies. Although many
foreign financial markets have grown in volume of trading activity, securities
of some foreign companies are less liquid and their prices more volatile than
securities of comparable United States companies. Brokerage commissions and
other transaction costs on foreign securities exchanges are generally higher
than in the United States. Foreign markets also have different clearance and
settlement procedures, and in certain markets there have been periods when
settlements have been unable to keep pace with the volume of securities
transactions. The inability to make intended purchases or dispositions of
securities due to settlement problems could result in losses to the Fund.

The Fund has authority to deal in forward foreign exchange contracts
between currencies of the different countries in which it will invest as a hedge
against possible variations in the foreign exchange rates between these
currencies. This is accomplished through contractual agreements to purchase or
sell a specified currency at a specified future date (up to one year) and price
set at the time of the contract. The Fund's dealings in forward foreign exchange
will be limited to hedging involving either specific transactions or portfolio
positions. Transaction hedging is the purchase or sale of forward foreign
currency with respect to specific receivables or payables of the Fund arising
from the purchase and sale of its portfolio securities, the sale and redemption
of shares of the Fund or the payment of dividends and distributions by the Fund.
Position hedging is the sale of forward foreign currency with respect to
portfolio security positions. The Fund will not speculate in forward foreign
exchange. Hedging against a decline in the value of a currency does not
eliminate fluctuations in the prices of portfolio securities or prevent losses
if the prices of such securities decline, and it precludes the opportunity for
gain if the value of the hedged currency should rise. Risks associated with
transactions in forward foreign exchange contracts are discussed more fully in
the Statement of Additional Information.

The Fund may from time to time lend securities from its portfolio, with a
market value not exceeding 10% of its total assets at the time of the loan, to
banks, brokers and other financial institutions and receive collateral in cash
or securities issued or guaranteed by the United States Government or its
instrumentalities which will be maintained at all times in an amount equal to at
least 100% of the current market value of the loaned securities. During the
period of such a loan, the Fund will receive income on both the loaned
securities and the collateral or on the investment of any cash received as
collateral and thereby increase its yield. With respect to the lending of
portfolio securities, there is the risk of failure by the borrower to return the
securities involved in such transactions, in which event the Fund may incur a
loss.

The operating expense ratio of the Fund can be expected to be higher than
that of an investment company investing exclusively in domestic securities since
the expenses of the Fund, such as custodial costs and advisory fees, are higher.

<PAGE>
MANAGEMENT OF THE FUND
- --------------------------------------------------------------------------------

BOARD OF DIRECTORS

The Board of Directors of the Fund consists of six individuals, four of
whom are not "interested persons" of the Fund as defined in the Investment
Company Act of 1940. The Directors of the Fund are responsible for the overall
supervision of the Fund and perform the various duties imposed on the directors
of investment companies under the Investment Company Act of 1940. The Directors
of the Fund are also directors of Jakarta Growth Fund, Inc., Japan OTC Equity
Fund, Inc. and Korea Equity Fund, Inc., closed-end, non-diversified investment
companies also managed by the Manager and advised by Nomura Investment
Management Co., Ltd.

The Directors of the Fund are as follows:

WILLIAM G. BARKER, JR.--Consultant to the television industry since 1991.
Senior Vice President and Chief Financial Officer of The CBS/Fox Company from
1982 to 1991.

GEORGE H. CHITTENDEN--Director of Bank Audi (USA).

IWAO KOMATSU--President of the Manager since 1995 and Director since 1994.
Managing Director of Nomura Investment Management Co., Ltd. from 1990 to 1996
and Director from 1987 to 1990.

CHOR WENG TAN--Managing Director for Education, The American Society of
Mechanical Engineering since 1991; Dean, School of Engineering, The Cooper Union
from 1975 to 1987. Director of Tround International, Inc.

ARTHUR R. TAYLOR--President of Muhlenberg College since 1992. Dean of the
Faculty of Business of Fordham University from 1985 to 1992. Chairman of Arthur
R. Taylor & Co. (investment firm). Director of Pitney Bowes Inc. and Louisiana
Land & Exploration Company.

JOHN F. WALLACE--Senior Vice President of the Manager since 1981, Secretary
since 1976, Treasurer since 1984 and Director since 1986. Senior Vice President
of Nomura Securities International, Inc. since 1978.

MANAGEMENT AND INVESTMENT ADVISORY ARRANGEMENTS

Nomura Capital Management, Inc. (the "Manager") acts as the management
company for the Fund. The Manager, a New York corporation with its office
located at 180 Maiden Lane, New York, New York 10038, is a wholly-owned
subsidiary of Nomura Investment Management Co., Ltd. The Manager also provides
global investment advisory services, primarily with respect to Japanese and
other Pacific Basin securities, for United States institutional clients. The
Manager also acts as one of the investment advisers to eight other investment
companies, three of which are registered investment companies.

Under its management agreement with the Fund (the "Management Agreement"),
the Manager agrees to provide, or arrange for the provision of, investment
advisory and management services to the Fund, subject to the oversight and
supervision of the Board of Directors of the Fund. In addition to the management
of the Fund's portfolio in accordance with the Fund's investment policies and
the responsibility for making decisions to buy, sell or hold particular
securities, the Manager is obligated to perform, or arrange for the performance
of, the administrative and management services necessary for the operation of
the Fund. The Manager is also obligated to provide all the office space,
facilities, equipment and personnel necessary to perform its duties thereunder.

<PAGE>
Pursuant to the Management Agreement, the Manager has retained Nomura
Investment Management Co., Ltd. ("NIMCO") and Nomura Capital Management
(Singapore) Limited ("NCM-Singapore") to act as investment advisers for the Fund
and Nomura Securities International, Inc. ("NSI") to provide administrative
services for the Fund. NIMCO and NCM-Singapore are referred to together as the
"Investment Advisers".

Investment Advisory Agreements. Pursuant to the Investment Advisory
Agreement between the Manager and NIMCO, NIMCO has agreed to furnish the Manager
with advice as to the allocation of the Fund's assets among various Pacific
Basin markets in which the Fund may invest. NIMCO will also provide economic
research, securities analysis and investment recommendations and will review and
render investment advice with respect to issuers of securities domiciled or
based in Japan and certain other Pacific Basin countries. NIMCO will not be
responsible for the actual portfolio decisions of the Fund. NIMCO, a Japanese
corporation with its principal office located at 1-12-11, Nihonbashi, Chuo-ku,
Tokyo 103, Japan provides investment advisory services for Japanese and
international clients. NIMCO, together with its affiliates, had $33 billion in
assets under management as of March 31, 1996. NIMCO is a subsidiary of Nomura
Research Institute ("NRI") and an affiliate of The Nomura Securities Co., Ltd.
("Nomura"), the largest securities firm in Japan. NRI is a diversified research
organization which undertakes business consulting, economic and social research,
investment research and other projects for a variety of Japanese and
international clients.

Pursuant to the Investment Advisory Agreement between the Manager and
NCM-Singapore, NCM-Singapore has agreed to furnish the Manager with economic
research, securities analysis and investment recommendations with respect to
securities of companies domiciled or based in Pacific Basin countries other than
Japan. NCM-Singapore will not be responsible for the actual portfolio decisions
of the Fund. NCM-Singapore, a Singapore corporation with its principal office
located at 6 Battery Road, Singapore 049909, provides investment advisory
services relating to Pacific Basin securities to institutional clients,
including pension and profit sharing plans. NCM-Singapore is a wholly-owned
subsidiary of NIMCO.

Mr. Iwao Komatsu, President of the Fund and President of the Manager, is
primarily responsible for the day-to-day management of the portfolio of the
Fund. Mr. Komatsu has held such responsibilities for the Fund since 1995 and has
served as President of the Manager since 1995.

Administrative Agreement. The Administrative Agreement between the Manager
and NSI obligates NSI to assist the Manager in administering shareholder
accounts and handling shareholder relations at its expense on behalf of the
Manager. NSI, a New York corporation with its principal office located at 2
World Financial Center, New York, New York 10281, is a registered broker-dealer
under the Securities Exchange Act of 1934 and is a wholly-owned subsidiary of
Nomura Holding America Inc., a Delaware corporation that is a subsidiary of
Nomura.

Compensation and Expenses. As compensation for its services to the Fund,
the Manager will receive a monthly fee, computed daily, at the annual rate of
0.75 of 1% of the value of the Fund's average daily net assets. This fee is
higher than that paid by many investment companies. For the year ended March 31,
1996, the Fund paid or accrued fees to the Manager of $307,917. At June 30,
1996, the net assets of the Fund aggregated approximately $33 million. At this
net asset level, the annual management fee would be approximately $248,000. For
services performed under the Investment Advisory Agreements and the
Administrative Agreement, NIMCO, NCM-Singapore and NSI will receive monthly fees
from the Manager at the annual rates of 0.26125 of 1%, 0.0275 of 1% and 0.10 of
1%, respectively, of the average daily net assets of the Fund. For the year
ended March 31, 1996, NIMCO, NCM-Singapore and NSI received $106,591, $11,220
and $40,800, respectively, from the Manager. As set forth under "Purchase of
Shares -- Distribution Plan", the Fund has adopted a Distribution Plan which
authorizes NSI to utilize its administrative compensation for distribution
activities.

The Fund pays certain expenses incurred in its operations, including, among
other things, the management fee, legal and audit fees, unaffiliated directors'
fees and expenses, custodian and transfer agency fees, costs of issuing and
10

<PAGE>
redeeming shares and certain of the costs of printing proxies, shareholder
reports, prospectuses and statements of additional information. For the year
ended March 31, 1996, the ratio of expenses to average daily net assets was
1.78%.

PURCHASE OF SHARES
- --------------------------------------------------------------------------------

The Fund's shares may be purchased as described below at a public offering
price equal to the net asset value next determined after receipt of the purchase
order by NSI or the Fund's transfer agent, State Street Bank and Trust Company
(the "Transfer Agent"), without a sales charge. If purchase orders are not
received by NSI or the Transfer Agent prior to 4:00 p.m., New York time, such
orders will be deemed received on the next business day. The Fund has
established a minimum initial investment of $1,000. There is no minimum
subsequent investment. Any order may be rejected by NSI or the Fund.

THROUGH SECURITIES BROKERS AND DEALERS

NSI is the principal underwriter of the Fund's shares. Shares may be
purchased directly from NSI, or from securities brokers and dealers which have
entered into agreements with NSI. Such securities firms may impose a charge to
the investor for their services. Such fees and services may vary in amount among
securities brokers and dealers, who may impose higher initial or subsequent
investment requirements than those established by the Fund.

Order numbers are assigned to telephone purchase orders in order to
distinguish payment for those purchase orders from mail purchase orders. If a
securities broker or dealer who utilizes the telephone purchase order service
fails to include the order number on the payment for such purchase order, the
securities broker or dealer should be aware that the Fund may treat this as a
separate and additional purchase order. If such an event occurs, resulting from
the securities broker's or dealer's failure to include the order number assigned
to the purchase order, the securities broker's or dealer's account will be
charged for any loss incurred from the cancellation of the purchase order. In
the event the securities broker's or dealer's account balance is insufficient to
cover the loss, the Manager will reimburse the Fund for the difference.

BY MAIL

Shares of the Fund may be purchased at the per share net asset value by
sending a completed purchase order to the Transfer Agent, State Street Bank and
Trust Company, accompanied by a check payable to Nomura Pacific Basin Fund, Inc.
in payment for shares. Purchase orders sent to the Fund will be forwarded to the
Transfer Agent, and will not be effective until received by the Transfer Agent.
Subsequent purchases by mail (no minimum) may be made by sending to the Transfer
Agent the stub from the shareholder statement with the shareholder's full name
and account number along with a check payable to Nomura Pacific Basin Fund, Inc.
The Fund will not accept mail orders without payment enclosed, nor will the Fund
accept a conditional purchase order.

BY TELEPHONE (ONLY FOR INVESTORS WHO HAVE MADE A WRITTEN ELECTION TO DO
SO -- SEE "GENERAL" BELOW)

Subsequent investments may be made by telephone (only for accounts coded
for ACH purchases) by calling the Transfer Agent at (800) 680-1836. Telephone
purchase orders from existing shareholders may be placed in a minimum amount of
$1,000 or such lower amount as may be established by the Board of Directors.
Telephone orders will be taken in dollar amounts only, for full and fractional
shares. If there are insufficient funds in the shareholder's bank account, the
transaction will be canceled and the shareholder will be responsible for any
loss the Fund incurs. The Fund may redeem shares from an existing shareholder
account as reimbursement for any loss
11

<PAGE>
incurred. The Fund may prohibit or restrict all future purchases in the Fund in
the event of non-payment of such shares. For assistance, shareholders should
call the Transfer Agent at (800) 680-1836.

Accuracy of Investor Account Information. The Fund will employ reasonable
procedures to confirm that instructions communicated by telephone are genuine.
Such procedures may include, among others, requiring some form of personal
identification prior to acting upon telephonic instructions, providing written
confirmations of all such transactions, and/or tape recording all telephonic
instructions. ASSUMING PROCEDURES SUCH AS THE ABOVE HAVE BEEN FOLLOWED, NEITHER
STATE STREET BANK AND TRUST COMPANY, THE FUND'S TRANSFER AGENT, NOR THE FUND
WILL BE LIABLE FOR ANY LOSS, COST, OR EXPENSE FOR ACTING UPON AN INVESTOR'S
TELEPHONE INSTRUCTIONS. THE FUND SHALL HAVE AUTHORITY, AS THE INVESTOR'S AGENT,
TO REDEEM SHARES IN THE INVESTOR'S ACCOUNT TO COVER ANY SUCH LOSS. As a result
of this policy, the investor will bear the risk of any loss unless the Fund has
failed to follow procedures such as the above.

BY BANK WIRE

Shares of the Fund may be purchased by domestic or overseas bank wire. The
wire order must contain registration instructions (i.e. full name of account
registration and the account number). For new accounts, a completed application
must be forwarded, via facsimile mail, to the Transfer Agent at (617) 774-2796.
Upon transmission of the application, the investor must contact the Transfer
Agent to obtain an account number and pertinent wire instructions. Shareholders
opening an account must telephone in advance to obtain a new account number. The
name of the Fund must appear on the wire for proper credit. The investor must
have the bank wire transmitted to the Transfer Agent, State Street Bank and
Trust Company, ABA No. 011000028, for credit to Boston Financial Data Services,
Inc. A/C No. 99029944 further credit (Nomura/Shareholder's Account Number and
name). Wires received by the Transfer Agent will be executed at the Fund's net
asset value per share as next determined after receipt of the wired funds.
(The tax identification number will not be certified until an original Form W-9
is received by the Transfer Agent.) For assistance the shareholder should call
the Transfer Agent at (800) 680-1836.

GENERAL

After an initial investment, a shareholder may participate in the telephone
purchase and redemption service only by making a written election to do so. The
election may be on the initial application form or by writing to the Fund, with
the shareholder's signature guaranteed. A shareholder who wants to change any
telephone service option previously elected may do so by filing with Fund a
letter with instructions.

All purchases made by check should be in U.S. dollars and made payable to
Nomura Pacific Basin Fund, Inc., or State Street Bank and Trust Company. Third
party checks which are payable to an existing shareholder of Nomura Pacific
Basin Fund, Inc. and endorsed over to the Fund or State Street Bank and Trust
Company will not be accepted. When purchases are made by check or periodic
automatic investment, redemptions will not be allowed until the investment being
redeemed has been in the account for 15 business days.

If payment for any purchase order is not received by the Fund or the
Transfer Agent, as specified herein, or if the investor's check is not honored
upon presentment, the order is subject to cancellation by the Fund, and the
purchaser's existing account with the Fund immediately will be charged for any
loss incurred.

Each subscriber will be sent a Confirmation Advice in lieu of a stock
certificate reflecting full and fractional shares purchased, unless a stock
certificate is specifically requested in writing by all registered owners of
such shares with their signatures guaranteed. It is recommended to all
shareholders that a stock certificate not be requested unless needed for a
specific purpose. This eliminates the trouble and expense of safeguarding the
stock certificates and the cost of a lost instrument bond in the event of loss
or destruction.

<PAGE>
The Fund reserves the right to discontinue the acceptance of telephone
orders, without notice, and to waive minimum purchase requirements at its
discretion. The Fund may also decline to accept any purchase when, in its
judgment, acceptance would not be to the advantage or in the best interests of
existing shareholders and may, on a case-by-case basis, prohibit or restrict
purchase of its shares by an investor whose activity it deems excessive.

A new account application can be obtained by calling (800) 833-0018.

Distribution Plan. The Fund has adopted a Distribution Plan pursuant to
Rule 12b-1 under the Investment Company Act which authorizes NSI to utilize its
administrative fee to finance sales and promotional activities. These activities
and services relate to the sale, promotion and marketing of shares of the Fund,
and the Plan permits NSI to compensate salesmen and dealers who sell shares of
the Fund.

REDEMPTION OF SHARES
- --------------------------------------------------------------------------------

Shares of the Fund may be redeemed at any time for cash at the net asset
value per share next determined after the request for redemption is received in
proper form by the Transfer Agent.

BY MAIL

A shareholder wishing to redeem shares by mail may do so by tendering the
shares directly to the Transfer Agent, State Street Bank and Trust Company, P.O.
Box 8500, Boston, Massachusetts 02266-8500. If shares are held in
non-certificate form, a written request for redemption signed by the
shareholder(s) exactly as the account is registered is required. If certificates
are held by the shareholder(s), the certificates, signed in the name(s) shown on
the face of the certificates, must be returned in order to be redeemed. The
certificates may be signed either on their reverse side or on a separate stock
power. Any signature appearing on a redemption request, share certificate or
stock power must be guaranteed by an "eligible guarantor institution" as such
term is defined in Rule 17Ad-15 under the Securities Exchange Act of 1934, the
existence and validity of which may be verified by the Transfer Agent through
the use of industry publications. Additional documentation may be required for
redemptions made by corporations, executors, administrators, trustees or
guardians. Redemption payments will be mailed within seven days of receipt of a
redemption request in proper form by the Transfer Agent.

If the Fund is requested to redeem shares for which it has not yet received
good payment, the Fund may delay or cause to be delayed the mailing of a
redemption check until it has assured itself that good payment (e.g., cash or
certified check drawn on a United States bank) has been collected for the
purchase of the shares. In the case of purchases by check, it may take up to 10
days to ascertain whether good payment has been received.

BY TELEPHONE

In order to utilize the procedure for redemption by telephone, a
shareholder previously must have elected this procedure in writing, the
shareholder's account must have been opened previously by the shareholder and be
reflected as such in the computer records of the Transfer Agent, the stock
certificate for shares being redeemed must be held by the Transfer Agent, and
the redemption proceeds must be transmitted directly to the shareholder's
predesignated account at a domestic bank. A shareholder may elect at any time to
use the telephone redemption service. Redemption requests must be received by
the Transfer Agent prior to 4:00 p.m., New York time, on any business day. For
assistance the shareholder should call the Transfer Agent at (800) 680-1836.

When utilizing the telephone redemption service, the shareholder must give
the full name, number of shares to be redeemed and account number or the
redemption request will not be processed.

Shareholders should understand that with the telephone redemption option,
they may be giving up a measure of security that they might otherwise have if
they were to redeem their shares in writing. The Fund will employ
13

<PAGE>
procedures it considers reasonable to confirm that redemption instructions
communicated by telephone are genuine. Assuming that the Fund's procedures are
followed, neither the Fund nor the Transfer Agent will be liable for any loss or
expenses resulting from acting on telephonic redemption instructions. In
addition, interruptions in telephone service may mean that a shareholder will be
unable to effect a redemption by telephone when desired.

The Fund reserves the right to change or discontinue without prior notice
telephone service for redemption requests.

REPURCHASE

The Fund will also repurchase shares which are presented by wire or
telephone from a shareholder's listed securities dealer. The repurchase price is
the net asset value per share next determined after the repurchase order is
received. These repurchase arrangements are for the convenience of shareholders
and do not involve a charge by the Fund; however, securities dealers may impose
a charge on the shareholder for transmitting the notice of repurchase to the
Fund. Repurchase orders received by dealers prior to the close of business on
the New York Stock Exchange on the day received will be priced at the net asset
value next computed after receipt of the order by the dealer. It is the
responsibility of dealers to transmit such repurchase requests to NSI or the
Transfer Agent not later than 4:00 p.m., New York time, in order to obtain that
day's applicable redemption price.

DIVIDENDS, DISTRIBUTIONS AND TAXES
- --------------------------------------------------------------------------------

It is the Fund's intention to distribute substantially all of its net
investment income, if any, in dividend payments declared twice annually. All net
realized long-term or short-term capital gains, if any, will be distributed to
the Fund's shareholders at least annually. Dividends and distributions will be
automatically reinvested in shares of the Fund at net asset value, without a
sales charge, unless the shareholder elects in writing to receive any such
dividends or distributions, or both, in cash. Dividends and distributions are
taxable to shareholders as discussed below whether they are reinvested in shares
of the Fund or received in cash.

The Fund intends to continue to qualify for the special tax treatment
afforded regulated investment companies ("RICs") under the Internal Revenue Code
of 1986, as amended (the "Code"). If it so qualifies, the Fund (but not its
shareholders) will not be subject to Federal income tax on the part of its net
ordinary income and net realized capital gains which it distributes to
shareholders. The Fund intends to distribute substantially all of such income.

Dividends paid by the Fund from its ordinary income or from an excess of
net short-term capital gains over net long-term capital losses (together,
referred to hereinafter as "ordinary income dividends") are taxable to
shareholders as ordinary income. Distributions made from an excess of net
long-term capital gains over net short-term capital losses ("capital gain
dividends") are taxable to shareholders as long-term capital gains, regardless
of the length of time the shareholder has owned Fund shares. Any loss upon the
sale of Fund shares held for six months or less, however, will be treated as
long-term capital loss to the extent of any capital gain dividends received by
the shareholder. Distributions in excess of the Fund's earnings and profits will
first reduce the adjusted tax basis of a holder's shares, and after such
adjusted tax basis is reduced to zero, will constitute capital gains to such
holder (assuming the shares are held as a capital asset).

Dividends are taxable to shareholders even though they are reinvested in
additional shares of the Fund. Not later than 60 days after the close of its
taxable year, the Fund will provide its shareholders with a written notice
designating the amounts of any ordinary income dividends or capital gain
dividends. Distributions by the Fund, whether from ordinary income or capital
gains, generally will not be eligible for the dividends received deduction
allowed to corporations under the Code. If the Fund pays a dividend in January
which was declared in October, November or December of the previous year to
shareholders of record on a specified date in one of such months,
14

<PAGE>
then such dividend will be treated for tax purposes as being paid by the Fund
and received by its shareholders on December 31 of the year in which the
dividend was declared.

Ordinary income dividends paid to shareholders who are nonresident aliens
or foreign entities will be subject to a 30% United States withholding tax under
existing provisions of the Code applicable to foreign individuals and entities
unless a reduced rate of withholding or a withholding exemption is provided
under applicable treaty law. Nonresident shareholders are urged to consult their
own tax advisers concerning the applicability of the United States withholding
tax.

Dividends and interest received by the Fund may give rise to withholding
and other taxes imposed by foreign countries. Tax conventions between certain
countries and the United States may reduce or eliminate such taxes. Shareholders
may be able to claim United States foreign tax credits with respect to such
taxes, subject to certain conditions and limitations contained in the Code. For
example, certain retirement accounts cannot claim foreign tax credits on
investments in foreign securities held in the Fund. If more than 50% in value of
the Fund's total assets at the close of its taxable year consists of securities
of foreign corporations, the Fund will be eligible and may file an election with
the Internal Revenue Service pursuant to which shareholders of the Fund will be
required to include their proportionate shares of such withholding taxes in
their United States income tax returns as gross income, treat such proportionate
shares as taxes paid by them, and deduct such proportionate shares in computing
their taxable incomes or, alternatively, use them as foreign tax credits against
their United States income taxes. No deductions for foreign taxes, however, may
be claimed by noncorporate shareholders who do not itemize deductions. A
shareholder that is a nonresident alien individual or a foreign corporation may
be subject to United States withholding tax on the income resulting from the
Fund's election described in this paragraph but may not be able to claim a
credit or deduction against such United States tax for the foreign taxes treated
as having been paid by such shareholder. The Fund will report annually to its
shareholders the amount per share of such withholding taxes.

Under certain provisions of the Code, some shareholders may be subject to a
31% withholding tax on ordinary income dividends, capital gain dividends and
redemption payments ("backup withholding"). Generally, shareholders subject to
backup withholding will be those for whom no certified taxpayer identification
number is on file with the Fund or who, to the Fund's knowledge, have furnished
an incorrect number. When establishing an account, an investor must certify
under penalty of perjury that such number is correct and that such investor is
not otherwise subject to backup withholding.

The Fund may invest up to 10% of its total assets in securities of
closed-end investment companies. If the Fund purchases shares of an investment
company (or similar investment entity) organized under foreign law, the Fund
will be treated as owning shares in a passive foreign investment company
("PFIC") for U.S. Federal income tax purposes. The Fund may be subject to U.S.
Federal income tax, and an additional tax in the nature of interest (the
"interest charge"), on a portion of the distributions from such a company and on
gain from the disposition of the shares of such a company (collectively referred
to as "excess distributions"), even if such excess distributions are paid by the
Fund as a dividend to its shareholders. The Fund may be eligible to make an
election with respect to certain PFICs in which it owns shares that will allow
it to avoid the taxes on excess distributions. However, such election may cause
the Fund to recognize income in a particular year in excess of the distributions
received from such PFICs. Alternatively, under proposed regulations the Fund
would be able to elect to "mark-to-market" at the end of each taxable year all
shares that it holds in PFICs. If it made this election, the Fund would
recognize as ordinary income any increase in the value of such shares over their
adjusted tax basis. Unrealized losses, however, would not be recognized. By
making the mark-to-market election, the Fund could avoid imposition of the
interest charge with respect to its distributions from PFICs, but in any
particular year might be required to recognize income in excess of the
distributions it received from PFICs and its proceeds from dispositions of PFIC
stock.

<PAGE>
Under Code Section 988, foreign currency gains or losses from certain debt
instruments, from certain forward contracts, from futures contracts that are not
"regulated futures contracts" and from unlisted options will generally be
treated as ordinary income or loss. Such Code Section 988 gains or losses will
generally increase or decrease the amount of the Fund's investment company
taxable income available to be distributed to shareholders as ordinary income.
Additionally, if Code Section 988 losses exceed other investment company taxable
income during a taxable year, the Fund would not be able to make any ordinary
income dividend distributions, and all or a portion of distributions made before
the losses were realized but in the same taxable year would be recharacterized
as a return of capital to shareholders, thereby reducing the basis of each
shareholder's Fund shares and resulting in a capital gain for any shareholder
who received a distribution greater than such shareholder's basis in Fund shares
(assuming the shares were held as a capital asset).

A loss realized on a sale of shares of the Fund will be disallowed if other
Fund shares are acquired (whether through the automatic reinvestment of
dividends or otherwise) within a 61-day period beginning 30 days before and
ending 30 days after the date that the shares are disposed of. In such a case,
the basis of the shares acquired will be adjusted to reflect the disallowed
loss.

The foregoing is a general and abbreviated summary of the applicable
provisions of the Code and Treasury regulations presently in effect. For the
complete provisions, reference should be made to the pertinent Code sections and
the Treasury regulations promulgated thereunder. The Code and the Treasury
regulations are subject to change by legislative, judicial or administrative
action either prospectively or retroactively.

Ordinary income and capital gain dividends may also be subject to state and
local taxes.

Certain states exempt from state income taxation dividends paid by RICs
which are derived from interest on United States Government obligations. State
law varies as to whether dividend income attributable to United States
Government obligations is exempt from state income tax.

Shareholders are urged to consult their tax advisers regarding specific
questions as to Federal, foreign, state or local taxes. Foreign investors should
consider applicable foreign taxes in their evaluation of an investment in the
Fund.

ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------

DETERMINATION OF NET ASSET VALUE

The Fund's net asset value per share is determined once daily after the
close of business on the New York Stock Exchange (generally, 4:00 P.M., New York
time), on each day during which the New York Stock Exchange is open for trading.

The Fund's net asset value per share is computed by dividing the sum of the
market value of the securities held by the Fund plus any cash and other assets
(including interest and dividends accrued but not yet received) minus all
liabilities (including accrued expenses) by the total number of shares
outstanding at such time, rounded to the nearest cent. Expenses, including the
management fee payable to the Manager, are accrued daily.

<PAGE>
of the current value of the securities. Securities traded in the
over-the-counter market are valued at the last available bid price in such
market prior to the time of valuation. Any assets or liabilities expressed in
terms of foreign currencies are translated into United States dollars at the
prevailing market rates quoted by State Street Bank and Trust Company at the
time.

Securities and assets for which market quotations are not readily available
will be valued at fair value as determined in good faith by or under the
direction of the Board of Directors of the Fund. Such valuations and procedures
will be reviewed periodically by the Directors.

PORTFOLIO TRANSACTIONS AND BROKERAGE

In executing portfolio transactions, the Manager will seek to obtain the
best net results for the Fund, taking into account such factors as price
(including the applicable brokerage commission or dealer spread), size of order,
difficulty of execution and operational facilities of the firm involved and the
firm's risk in positioning a block of securities. While the Manager will
generally seek reasonably competitive commission rates, the Fund will not
necessarily pay the lowest commission or spread available. The Fund has no
obligation to deal with any broker or group of brokers in the execution of
transactions in portfolio securities. The Fund contemplates that, consistent
with its policy of obtaining best net results, brokerage transactions may be
conducted through Nomura and other affiliates of the Manager, and the amount of
such transactions may be significant. Fixed commissions are charged on the
securities exchanges of Japan and certain other Pacific Basin countries. Such
fixed commissions are generally higher than negotiated commissions on comparable
United States transactions. For the year ended March 31, 1996, Nomura and its
affiliates earned $43,176 of the aggregate commissions of $216,677 incurred by
the Fund.

SHAREHOLDER SERVICES

The Fund offers a number of shareholder services and investment plans
designed to facilitate investment in its shares. Full details as to each of such
services can be obtained from the Fund or NSI.

Investment Account. An Investment Account is established by the Transfer
Agent for each shareholder. The shareholder will receive statements with respect
to share transactions showing the activity in the shareholder's Investment
Account since the beginning of the year. Share certificates for full shares will
be issued without charge upon the request of the shareholder to the Transfer
Agent.

Reinvestment of Dividends and Capital Gains Distributions. Unless specific
instructions to the contrary are given as to the method of payment of dividends
and capital gains distributions, dividends and distributions will automatically
be reinvested in additional shares of the Fund. Such reinvestments will be at
the net asset value of shares of the Fund, without sales charge, as of the close
of business on the ex-dividend date of the dividend or distribution.
Shareholders may elect in writing to receive either their income dividends or
gains distributions, or both, in cash, in which event payment will be mailed on
the payment date.

Shareholders may, at any time, notify the Transfer Agent in writing that
they no longer wish to have their dividends and/or distributions reinvested in
shares of the Fund or vice versa, and commencing ten days after the receipt by
the Transfer Agent of such notice, those instructions will be effected.

Retirement Plans. Shares of the Fund may be purchased in connection with
individual retirement accounts. Copies of plans to establish such accounts are
available from First Trust Corporation (800) 525-2124.

Capital gains and ordinary income received in retirement plans are
generally exempt from federal taxation until distributed from the plans.
However, as described under "Dividends, Distributions and Taxes", there may be
foreign withholding taxes on dividends and interest received on portfolio
securities which shareholders of the Fund can offset either by claiming a
deduction, or, as the alternative, use as a foreign tax credit against their
United States
17

<PAGE>
income taxes. However, because the retirement plans are exempt from United
States income taxes, participants in such plans will not be able to offset such
withholding taxes. Investors considering participation in any such plan should
review specific tax laws relating thereto and should consult their attorneys or
tax advisers with respect to the establishment and maintenance of any such plan.

ORGANIZATION OF THE FUND

The Fund was incorporated under Maryland law on March 14, 1985. It is a
diversified open-end investment company. All shares of Common Stock are of the
same class. Shareholders are entitled to one vote for each full share held and
fractional votes for fractional shares held and will vote on the election of
Directors and any other matter submitted to a shareholder vote. Shares issued
are fully paid and non-assessable and have no preemptive or conversion rights.
Upon liquidation of the Fund, shareholders are entitled to share pro rata in the
net assets of the Fund available for distribution to shareholders.

PERFORMANCE DATA

The Fund may from time to time include its average annual total return in
advertisements or information furnished to present or prospective shareholders.
Total return figures are based on the Fund's historical performance and are not
intended to indicate future performance. Average annual total return is
determined in accordance with a formula specified by the Securities and Exchange
Commission.

Average annual total return quotations for the specified period will be
computed by finding the average annual compounded rates of return (based upon
net investment income and any capital gains or losses on portfolio investments
over such periods) that would equate the initial amount invested to the
redeemable value of such investment at the end of each period. Average annual
total return will be computed assuming all dividends and distributions are
reinvested and taking into account all applicable recurring and nonrecurring
expenses.

The Fund's average annual total return will vary depending upon market
conditions, the securities comprising the Fund's portfolio, the Fund's operating
expenses, changes in foreign currency exchange rates and the amount of net
capital gains or losses realized by the Fund during the period. An investment in
the Fund will fluctuate, and an investor's shares, when redeemed, may be worth
more or less than their original cost.

On occasion, the Fund may compare its average annual total return to
various indices, including those comprised of Pacific Basin securities, and to
performance data published by various sources, including that published by
Lipper Analytical Services, Inc. As with other performance data, performance
comparisons should not be considered representative of the Fund's relative
performance for any future period.

SHAREHOLDER INQUIRIES

Shareholder inquiries may be addressed to the Fund at the address or
telephone number set forth on the cover page of this Prospectus.

<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]

<PAGE>

- --------------------------------------------------------------
- --------------------------------------------------------------

MANAGER

Nomura Capital Management, Inc.
180 Maiden Lane
New York, New York 10038-4936

INVESTMENT ADVISERS

Nomura Investment Management Co., Ltd.
1-12-11, Nihonbashi, Chuo-ku,
Tokyo 103, Japan

Nomura Capital Management
(Singapore) Limited
6 Battery Road
Singapore 049909

DISTRIBUTOR

Nomura Securities International, Inc.
2 World Financial Center
New York, New York 10281-1198

CUSTODIAN AND TRANSFER AGENT

State Street Bank and Trust Company
P.O. Box 8500
North Quincy, Massachusetts 02171-8500

COUNSEL

Brown & Wood LLP
One World Trade Center
New York, New York 10048-0557

INDEPENDENT ACCOUNTANTS

Price Waterhouse LLP
1177 Avenue of the Americas
New York, New York 10036-2798

Nomura Pacific Basin
Fund, Inc.

[LOGO]

Prospectus

July 29, 1996

- --------------------------------------------------------------
- --------------------------------------------------------------

<PAGE>
STATEMENT OF ADDITIONAL INFORMATION

Nomura Pacific Basin Fund, Inc.
180 Maiden Lane, New York, New York 10038 [LOGO]
(Telephone: (1-800) 833-0018)

- --------------------------------------------------------------------------------

Nomura Pacific Basin Fund, Inc. (the "Fund") is a no-load, open-end
diversified management investment company seeking long-term capital appreciation
primarily through investments in equity securities of corporations domiciled in
Japan and other Far Eastern and Western Pacific ("Pacific Basin") countries.
Nomura Capital Management, Inc. acts as the Manager for the Fund. Nomura
Investment Management Co., Ltd. and Nomura Capital Management (Singapore)
Limited act as the Investment Advisers for the Fund. The Manager and the
Investment Advisers are affiliated with The Nomura Securities Co., Ltd.

- --------------------------------------------------------------------------------

THIS STATEMENT OF ADDITIONAL INFORMATION OF THE FUND IS NOT A PROSPECTUS
AND SHOULD BE READ IN CONJUNCTION WITH THE PROSPECTUS OF THE FUND, BEARING THE
SAME DATE AS THIS STATEMENT OF ADDITIONAL INFORMATION, WHICH HAS BEEN FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION AND IS AVAILABLE WITHOUT CHARGE UPON
REQUEST BY CALLING OR WRITING THE FUND. THIS STATEMENT OF ADDITIONAL INFORMATION
HAS BEEN INCORPORATED BY REFERENCE INTO THE PROSPECTUS.

July 29, 1996

<PAGE>
INVESTMENT OBJECTIVE AND POLICIES
- --------------------------------------------------------------------------------

The investment objective of the Fund is to seek long-term capital
appreciation primarily through investments in equity securities of corporations
domiciled in Japan and other Pacific Basin countries. Reference is made to
"Investment Objective and Policies" in the Prospectus for a discussion of the
investment objective and policies of the Fund.

While it is the policy of the Fund generally not to engage in trading for
short-term gains, the Manager, subject to the overall supervision of the Board
of Directors, will effect portfolio transactions without regard to holding
periods, if, in its judgment, such transactions are advisable in light of a
change in circumstances of a particular company or within a particular industry
or in general market, economic or political conditions of a particular country.
As a result of the investment policies of the Fund, under certain market
conditions the Fund's portfolio turnover may be higher than that of other
investment companies; however, it is impossible to predict portfolio turnover
rates. For Federal income tax purposes, however, the Fund is subject to the
requirement that less than 30% of the Fund's gross income be derived from the
sale or other disposition of securities held for less than three months. The
portfolio turnover rate is calculated by dividing the lesser of the Fund's
annual proceeds from sales or cost of purchases of portfolio securities
(exclusive of purchases or sales of United States Government securities and of
all other securities whose maturities at the time of acquisition were one year
or less) by the monthly average market value of the securities in the portfolio
during the year. The rates of portfolio turnover for the years ended March 31,
1994, March 31, 1995 and March 31, 1996 were 76%, 49% and 45%, respectively. The
portfolio turnover rate in fiscal year 1994 was higher than in fiscal years 1995
and 1996 due primarily to changes in portfolio composition effected in 1994 to
respond to changing market conditions and to adjust the Fund's country
allocation strategy.

As indicated in the Prospectus, the Fund may invest in shares of investment
companies organized to invest in certain countries in which it would not be
practicable for the Fund itself to invest because of limitations on foreign
investment. Under the Investment Company Act of 1940, the Fund may not own more
than 3% of the outstanding voting stock of an investment company or invest more
than 10% of the Fund's total assets in the securities of investment companies.
These investments are also subject to the Fund's investment restrictions set
forth below.

Generally, the foreign exchange transactions of the Fund will be conducted
on a spot, i.e., cash basis, at the spot rate for purchasing or selling currency
prevailing in the foreign exchange market. This rate under normal market
conditions differs from the prevailing exchange rate in an amount generally less
than 0.15 of 1% due to the costs of converting from one currency to another.
However, the Fund has authority to deal in forward foreign exchange contracts
between currencies of the different countries in which it will invest as a hedge
against possible variations in the foreign exchange rates between these
currencies. This is accomplished through contractual agreements to purchase or
sell a specified currency at a specified future date and price set at the time
of the contract. The Fund's dealings in forward foreign exchange will be limited
to hedging involving either specific transactions or portfolio positions.
Transaction hedging is the purchase or sale of forward foreign currency with
respect to specific receivables or payables of the Fund arising from the
purchase and sale of its portfolio securities, the sale and redemption of shares
of the Fund or the payment of dividends and distributions by the Fund. Position
hedging is the sale of forward foreign currency with respect to portfolio
security positions denominated or quoted in such foreign currency. The Fund will
not speculate in forward foreign exchange. The Fund may not position hedge with
respect to the currency of a particular country to an extent greater than the
aggregate market value (at the time of making such sale) of the securities held
in its portfolio denominated or quoted in that particular foreign currency. If
the Fund enters into a position hedging transaction, its custodian bank will
place cash or liquid equity or debt securities in a separate account of the Fund
in an amount equal to the
2

<PAGE>
value of the Fund's total assets committed to the consummation of such forward
contract. If the value of the securities placed in the separate account
declines, additional cash or securities will be placed in the account so that
the value of the account will equal the amount of the Fund's commitment with
respect to such contracts. Alternatively, no such segregation of funds need be
made when the Fund "covers" its open positions. The position is considered
"covered" if the Fund holds securities denominated in the currency underlying
the forward contract having a value equal to or greater than the Fund's
obligation under the forward contract. The Fund will not attempt to hedge all of
its foreign portfolio positions and will enter into such transactions only to
the extent, if any, deemed appropriate by the Fund's management. The Fund will
not enter into a forward contract with a term of more than one year.

Hedging against a decline in the value of a currency does not eliminate
fluctuations in the prices of portfolio securities or prevent losses if the
prices of such securities decline, and it precludes the opportunity for gain if
the value of the hedged currency should rise. Moreover, it may not be possible
for the Fund to hedge against a devaluation that is so generally anticipated
that the Fund is not able to contract to sell the currency at a price above the
devaluation level it anticipates. The cost to the Fund of engaging in foreign
currency transactions varies with such factors as the currency involved, the
length of the contract period and the market conditions then prevailing. Since
transactions in foreign currency exchange are usually conducted on a principal
basis, no fees or commissions are involved.

The Fund's ability and decisions to purchase or sell portfolio securities
may be affected by laws or regulations relating to the convertibility and
repatriation of assets. Because the shares of the Fund are redeemable on a daily
basis in United States dollars, the Fund intends to manage its portfolio so as
to give reasonable assurance that it will be able to obtain United States
dollars to the extent necessary to meet anticipated redemptions. Under present
conditions, it is not believed that these considerations will have any
significant effect on its portfolio strategy.

The United States Government has from time to time in the past imposed
restrictions, through taxation and otherwise, on foreign investments by United
States investors such as the Fund. If such restrictions should be reinstated, it
might become necessary for the Fund to invest all or substantially all of its
assets in United States securities. In such event, the Fund would review its
investment objective and investment policies to determine whether changes are
appropriate. If changes in the Fund's fundamental policies were deemed
appropriate, they would be submitted to shareholders for their consideration.

INVESTMENT RESTRICTIONS

In addition to the investment restrictions set forth in the Prospectus, the
Fund has adopted the following restrictions and policies relating to the
investment of its assets and its activities, which are fundamental policies and
may not be changed without the approval of the holders of the majority of the
Fund's outstanding voting securities (which for this purpose and under the
Investment Company Act of 1940 means the lesser of (i) 67% of the shares
represented at a meeting at which more than 50% of the outstanding shares are
represented or (ii) more than 50% of the outstanding shares). The Fund may not:

1. Make investments for the purpose of exercising control of management.

2. Purchase securities of other investment companies, except in connection
with a merger, consolidation, acquisition or reorganization, or by purchase in
the open market of securities of closed-end investment companies where no
underwriter or dealer's commission or profit, other than customary broker's
commission, is involved and only if immediately thereafter not more than 10% of
the Fund's total assets, taken at market value, would be invested in such
securities.

<PAGE>
3. Purchase or sell real estate; provided that the Fund may invest in
securities secured by real estate or interests therein or issued by companies
which invest in real estate or interest therein.

4. Purchase or sell commodities or commodity contracts, provided that this
restriction shall not be deemed to prohibit forward foreign exchange
transactions.

5. Purchase any security on margin, except that the Fund may obtain such
short-term credit as may be necessary for the clearance of purchases and sales
of portfolio securities, or make short sales of securities or maintain a short
position.

6. Make loans to other persons (except as provided in (7) below); provided
that for purposes of this restriction the acquisition of bonds, debentures, or
other corporate debt securities and investment in government obligations,
short-term commercial paper, certificates of deposit, bankers' acceptances and
repurchase agreements shall not be deemed to be the making of a loan.

7. Lend its portfolio securities in excess of 10% of its total assets,
taken at market value. Any such loans shall be made in accordance with the
guidelines set forth below.

8. Borrow amounts in excess of 10% of its total assets, taken at market
value. Any such borrowings shall be made only from banks as a temporary measure
for extraordinary or emergency purposes such as the redemption of Fund shares.
The Fund will not purchase securities while borrowings are outstanding except to
exercise prior commitments or to exercise subscription rights.

9. Mortgage, pledge, hypothecate or in any manner transfer (except as
provided in (7) above), as security for indebtedness, any securities owned or
held by the Fund except as may be necessary in connection with borrowings
mentioned in (8) above, and then such mortgaging, pledging or hypothecating may
not exceed 10% of the Fund's total assets, taken at market value.

10. Invest in securities which cannot be readily resold because of legal or
contractual restrictions or which are not otherwise readily marketable if,
regarding all such securities, more than 5% of its total assets, taken at market
value, would be invested in such securities.

11. Underwrite securities of issuers except insofar as the Fund may be
deemed an underwriter under the Securities Act of 1933 in selling its portfolio
securities.

12. Write, purchase or sell puts, calls or combinations thereof.

13. Purchase or sell interests in oil, gas or other mineral exploration or
development programs.

14. Invest in securities of issuers having a record, together with
predecessors, of less than three years of continuous operations if more than 5%
of its total assets, taken at market value, would be invested in such
securities.

Subject to investment restriction (7) above, the Fund may from time to time
lend securities from its portfolio to brokers, dealers and financial
institutions such as banks and trust companies and receive collateral in cash or
securities issued or guaranteed by the United States Government or its
instrumentalities which will be maintained in an amount equal to at least 100%
of the current market value of the loaned securities. Such cash will be invested
in short-term securities, which will increase the current income of the Fund.
Such loans will not be for more than 30 days and will be terminable at any time.
The Fund will have the right to regain record ownership of loaned securities to
exercise beneficial rights such as voting rights, subscription rights and rights
to dividends, interest or other distributions. The Fund may pay reasonable fees
to persons affiliated with the Fund for services in arranging such loans. With
respect to the lending of portfolio securities, there is the risk of failure by
the borrower to return the securities involved in such transactions.

<PAGE>
Because of the affiliation of Nomura Securities International, Inc.
("NSI"), the Fund's distributor, with the Fund, the Fund is prohibited from
engaging in certain transactions with such company or its affiliates except for
brokerage transactions permitted under the Investment Company Act of 1940
involving only usual and customary commissions or transactions pursuant to an
exemptive order under the Investment Company Act of 1940. See "Portfolio
Transactions and Brokerage". Without such an exemptive order, the Fund is
prohibited from engaging in portfolio transactions with NSI or its affiliates
acting as principal and from purchasing securities in public offerings which are
not registered under the Securities Act of 1933 in which such company or any of
its affiliates participate as an underwriter or dealer.

The Board of Directors has established the policy that the Fund will not
purchase or retain the securities of any issuer if individual officers and
directors of the Fund, Nomura Capital Management, Inc. (the "Manager"), Nomura
Investment Management Co., Ltd., Nomura Capital Management (Singapore) Ltd. (the
"Investment Advisers") or NSI who individually own beneficially more than
one-half of 1% of the securities of such issuer own in the aggregate more than
5% of the securities of such issuer. Portfolio securities of the Fund may not be
purchased from, sold or loaned to The Nomura Securities Co., Ltd. ("Nomura") or
its affiliates or any of their directors, officers or employees, acting as
principal.

The Fund has adopted a policy pursuant to which it will not invest in
warrants if, at any time of acquisition, its investment in warrants, valued at
the lower of cost of market value, would exceed 5% of the Fund's net assets;
included within such limitation, but not to exceed 2% of the Fund's net assets,
are warrants which are not listed on the New York or American Stock Exchanges.
For purposes of this policy, warrants acquired by the Fund in units or attached
to securities may be deemed to be without value. This policy may be amended
without the approval of the Fund's shareholders.

The investment restrictions set forth in the Prospectus contain an
exception to limitations on the Fund's aggregate investment in a single issuer
or single industry that permits the Fund to purchase securities pursuant to the
exercise of subscription rights, subject to the condition that such purchase
will not result in the Fund ceasing to be a diversified investment company
within the meaning of the Investment Company Act of 1940 or in a failure to meet
certain diversification requirements of the Internal Revenue Code of 1986, as
amended. Corporations in Pacific Basin countries frequently issue additional
capital stock by means of subscription rights offerings to existing shareholders
at a price substantially below the market price of the shares. The failure to
exercise such rights would result in the Fund's interest in the issuing company
being diluted. The market for such rights is not well developed and,
accordingly, the Fund may not always realize full value on the sale of rights.
Therefore, the exception applies in cases where the limits set forth in the
investment restrictions in the Prospectus would otherwise be exceeded by
exercising rights or have already been exceeded as a result of fluctuations in
the market value of the Fund's portfolio securities with the result that the
Fund would otherwise be forced either to sell securities at a time when it might
not otherwise have done so or to forego exercising the rights.

MANAGEMENT OF THE FUND
- --------------------------------------------------------------------------------

DIRECTORS AND OFFICERS

The Directors and principal executive officers of the Fund, their ages and
their principal occupations for at least the last five years are set forth
below. Unless otherwise noted, the address of each Director and officer is 180
Maiden Lane, New York, New York 10038.

WILLIAM G. BARKER, JR. (63)--Director(2)--111 Parsonage Road, Greenwich,
Connecticut 06830. Consultant to the television industry since 1991. Senior Vice
President and Chief Financial Officer of The CBS/Fox Company from 1982 to 1991.

<PAGE>
GEORGE H. CHITTENDEN (79)--Director(2)--155 Buffalo Bay, Neck Road,
Madison, Connecticut 06443. Director of Bank Audi (USA).

CHOR WENG TAN (60)--Director(2)--345 East 47th Street, New York, New York
10017. Managing Director for Education, The American Society of Mechanical
Engineering, since 1991. Professor, School of Engineering, The Cooper Union from
1963 to 1991. Dean, School of Engineering, The Cooper Union from 1975 to 1987,
Executive Officer, The Cooper Union Research Foundation from 1976 to 1987.
Program Director, Presidential Young Investigator Awards of National Science
Foundation from 1987 to 1989. Director of Tround International, Inc.

ARTHUR R. TAYLOR (61)--Director(2)--2400 Chew Street, Allentown,
Pennsylvania 18104. President of Muhlenberg College since 1992. Dean of the
Faculty of Business of Fordham University from 1985 to 1992. Chairman of Arthur
R. Taylor & Co. (investment firm). Director of Pitney Bowes Inc. and Louisiana
Land & Exploration Company.

IWAO KOMATSU (59)--President and Director(1)(2)-- President of the Manager
since 1995 and Director since 1994. Managing Director of Nomura Investment
Management Co., Ltd. ("NIMCO") from 1990 to 1996 and Director from 1987 to 1990.
Managing Director of Nomura Capital Management (U.K.) Ltd. from 1990 to 1993,
Director since 1994.

JOHN F. WALLACE (67)--Secretary, Treasurer and Director(1)(2)--Senior Vice
President of the Manager since 1981, Secretary since 1976, Treasurer since 1984
and Director since 1986. Senior Vice President of NSI since 1978, Secretary from
1977 to 1991 and Director from 1983 to 1991.

MITSUTOYO KOHNO (47)--Vice President(1)(2)--Director of the Manager since
1994, Senior Vice President since 1991 and Vice President from 1989 to 1991.
- ---------------

(1) "Interested person", as defined in the Investment Company Act of 1940, of
the Fund.

(2) Such Director or officer is a director or officer of one or more other
investment companies for which the Manager or the Investment Advisers act as
investment advisers.

The Fund pays fees to each Director not affiliated with the Manager an
annual fee of $5,000 plus $500 per meeting attended, together with such
Director's actual out-of-pocket expenses related to attendance at such meetings.
Fees and out-of-pocket expenses paid to unaffiliated Directors aggregated
$33,896 for the year ended March 31, 1996. The Fund's audit committee consists
of all of the non-affiliated Directors. At June 30, 1996, the Directors and
officers of the Fund as a group owned an aggregate of less than 1% of the
outstanding shares of the Fund.

The following table sets forth for the periods indicated compensation paid
by the Fund to its Directors and the aggregate compensation paid by all
investment companies managed by NCM or advised by NIMCO to the Directors:

<TABLE>
<CAPTION>
PENSION OR
RETIREMENT
BENEFITS ACCRUED AS TOTAL COMPENSATION
AGGREGATE PART OF FROM FUND COMPLEX
COMPENSATION FUND EXPENSES FOR PAID TO DIRECTORS
FROM FUND FOR ITS DURING THE CALENDAR
ITS FISCAL YEAR ENDED FISCAL YEAR ENDED YEAR ENDED DECEMBER
NAME OF DIRECTOR MARCH 31, 1996 MARCH 31, 1996 31, 1995*
- ------------------------- --------------------- ------------------- -------------------
<S> <C> <C> <C>
William G. Barker, Jr.... $ 7,000 None $28,500
George H. Chittenden..... $ 7,000 None $28,500
Iwao Komatsu............. -- None --
Chor Weng Tan............ $ 7,000 None $28,500
Arthur R. Taylor......... $ 7,000 None $28,500
John F. Wallace.......... -- None --
<FN>

- ---------------
* In addition to the Fund the "Fund Complex" included Jakarta Growth Fund, Inc.,
Japan OTC Equity Fund, Inc. and Korea Equity Fund, Inc.
</TABLE>

<PAGE>
MANAGEMENT AND INVESTMENT ADVISORY ARRANGEMENTS

Reference is made to "Management of the Fund--Management and Investment
Advisory Arrangements", in the Prospectus for certain information concerning the
management and advisory arrangements of the Fund.

Securities held by the Fund may also be held by other funds or other
investment advisory clients for which the Manager, the Investment Advisers or
their affiliates act as an adviser. Because of different investment objectives
or other factors, a particular security may be bought for one or more clients
when one or more clients are selling the same security. If purchases or sales of
securities by the Manager or an Investment Adviser for the Fund and other funds
for which they act as investment adviser or for their other advisory clients are
to be made at or about the same time, such transactions will be made, insofar as
feasible, for the respective funds and clients in a manner deemed equitable to
all. To the extent that transactions on behalf of more than one client of the
Manager, the Investment Advisers or their affiliates during the same period may
increase the demand for securities being purchased or the supply of securities
being sold, there may be an adverse effect on price.

As discussed under "Management of the Fund--Management and Investment
Advisory Arrangements" in the Prospectus, the Manager receives as compensation
for its services to the Fund monthly compensation at the annual rate of 0.75 of
1% of the average daily net assets of the Fund. For the years ended March 31,
1994, March 31, 1995 and March 31, 1996, the Fund paid or accrued fees to the
Manager of $401,230, $430,670 and $307,917, respectively. For such years, the
Manager paid fees of $150,522, $150,017 and $106,591, respectively, to NIMCO,
fees of $15,844, $15,791 and $11,220, respectively, to Nomura Capital Management
(Singapore) Limited ("NCM-Singapore") and fees of $57,616, $57,423 and $40,800,
respectively, to NSI. As set forth under "Purchase of Shares--Distribution
Plan", the Fund has adopted a Distribution Plan which authorizes NSI to utilize
its administrative compensation for distribution activities.

One state in which shares of the Fund are qualified for sale imposes
limitations on the expenses of the Fund. Under these limitations, the Manager is
required to reimburse the Fund in any amount necessary to prevent the aggregate
ordinary operating expenses (excluding taxes, brokerage fees and commissions and
extraordinary charges such as litigation costs) from exceeding in any fiscal
year 2.5% of the Fund's first $30 million of average daily net assets, 2.0% of
the next $70 million of average daily net assets and 1.5% of the remaining
average daily net assets. No reimbursement to the Fund was required under this
limitation for the year ended March 31, 1996.

The Management Agreement obligates the Manager to provide, or arrange for
the provision of, investment advisory services and to pay all compensation of
and furnish office space for officers and employees of the Fund, as well as to
pay the fees of all Directors of the Fund who are affiliated persons of the
Manager or any of its affiliates. The Fund pays all other expenses incurred in
its operation, including, among other things, taxes; expenses for legal, tax and
auditing services; costs of printing proxies, stock certificates, shareholder
reports, prospectuses and statements of additional information (except to the
extent paid by NSI); charges of the custodian, sub-custodians and transfer
agent; expenses of redemption of shares; Securities and Exchange Commission
fees; expenses of registering the shares under Federal, state or foreign laws;
fees and expenses of unaffiliated Directors; accounting and pricing costs
(including the daily calculation of net asset value); insurance; interest;
brokerage costs; litigation and other extraordinary or non-recurring expenses;
and other expenses properly payable by the Fund. As required by the Fund's
Distribution Agreement, NSI will pay the promotional expenses of the Fund
incurred in connection with the offering of shares of the Fund. See "Purchase of
Shares--Distribution Agreement".

Duration and Termination. Unless earlier terminated as described below, the
Management Agreement, Investment Advisory Agreements and Administrative
Agreement will remain in effect from year to year if approved annually (a) by
the Directors of the Fund or by a majority of the outstanding shares of the Fund
and (b) by a majority of the Directors who are not parties to such contracts or
interested persons (as defined in the
7

<PAGE>
Investment Company Act of 1940) of any such party. Such contracts are not
assignable and may be terminated without penalty on 60 days' written notice at
the option of either party thereto or by the vote of the shareholders of the
Fund.

PURCHASE OF SHARES
- --------------------------------------------------------------------------------

Reference is made to "Purchase of Shares" in the Prospectus for certain
information as to the purchase of Fund shares.

The Fund's shares may be purchased at a public offering price equal to the
net asset value next determined after receipt of the purchase order by NSI or
the Fund's transfer agent, State Street Bank and Trust Company (the "Transfer
Agent"), without a sales charge. If purchase orders are not received by NSI or
the Transfer Agent prior to 4:00 p.m., New York time, such orders will be deemed
received on the next business day. The Fund has established a minimum initial
investment of $1,000. There is no minimum subsequent investment. Any order may
be rejected by NSI or the Fund.

DISTRIBUTION AGREEMENT

The Fund has entered into a Distribution Agreement with NSI. Such agreement
obligates NSI to pay certain expenses in connection with the offering of the
shares of the Fund. After the prospectus, statement of additional information
and periodic reports have been prepared and set in type, NSI pays for the
printing and distribution of copies thereof used in connection with the offering
to dealers and prospective investors. NSI also pays for other supplementary
sales literature and advertising costs.

The Distribution Agreement referred to above is subject to the same renewal
requirements and termination provisions as the agreements described under
"Management of the Fund--Management and Investment Advisory Arrangements".

DISTRIBUTION PLAN

The Fund has adopted a distribution plan (the "Distribution Plan") in
compliance with Rule 12b-1 under the Investment Company Act of 1940 which
authorizes NSI to utilize its administrative fee to finance sales and
promotional activities. These activities and services relate to the sale,
promotion and marketing of shares of the Fund, and the Distribution Plan permits
NSI to compensate salesmen and dealers who sell shares of the Fund.

The use of the administrative fee for distribution purposes is subject to
the provisions of Rule 12b-1 under the Investment Company Act of 1940. Among
other things, the Distribution Plan provides that NSI shall provide and the
Directors of the Fund shall review quarterly reports of the distribution
expenses and the purpose of such expenditures made by NSI. The Distribution Plan
further provides that, so long as the Distribution Plan remains in effect, the
selection and nomination of Directors of the Fund who are not "interested
persons" of the Fund as defined in the Investment Company Act of 1940
("Independent Directors") shall be committed to the discretion of the
Independent Directors then in office. In approving the Distribution Plan in
accordance with Rule 12b-1, the Independent Directors concluded that there is a
reasonable likelihood that the plan will benefit the Fund and its shareholders
by providing NSI with alternative methods of financing sales and promotional
activities. The Distribution Plan can be terminated at any time, without
penalty, by the vote of a majority of the Independent Directors or by the vote
of the holders of a majority of the outstanding voting securities of the Fund.
Rule 12b-1 further requires that the Fund preserve copies of the Distribution
Plan and any report made pursuant to such plan for a period of not less than six
years from the date of such plan or report, the first two years in an easily
accessible place.

<PAGE>
REDEMPTION OF SHARES
- --------------------------------------------------------------------------------

Reference is made to "Redemption of Shares" in the Prospectus for certain
information as to the redemption and repurchase of Fund shares.

The right to redeem shares or receive payment with respect to any
redemption of shares may be suspended by the Fund for a period of up to seven
days. Suspensions of more than seven days may not be made except (1) for any
period (a) during which the New York Stock Exchange is closed other than
customary weekend and holiday closings or (b) during which trading on the New
York Stock Exchange is restricted; (2) for any period during which an emergency
exists as a result of which (a) disposal by the Fund of securities owned by it
is not reasonably practicable or (b) it is not reasonably practicable for the
Fund fairly to determine the value of its net assets; or (3) for such other
periods as the Securities and Exchange Commission may by order permit for the
protection of security holders of the Fund. The conditions under which (i)
trading shall be deemed to be restricted and (ii) an emergency shall be deemed
to exist within the meaning of clause (2) above will be determined pursuant to
the applicable rules and regulations of the Securities and Exchange Commission.

The value of shares at the time of redemption or repurchase may be more or
less than the shareholders' cost, depending on the market value of the
securities held by the Fund at such time.

PORTFOLIO TRANSACTIONS AND BROKERAGE
- --------------------------------------------------------------------------------

Subject to policies established by the Board of Directors of the Fund, the
Manager is primarily responsible for the execution of the Fund's portfolio
transactions and the allocation of the brokerage. In executing such
transactions, the Manager will seek to obtain the best net results for the Fund,
taking into account such factors as price (including the applicable brokerage
commission or dealer spread), size of order, difficulty of execution and
operational facilities of the firm involved and the firm's risk in positioning a
block of securities. While the Manager generally seeks reasonably competitive
commission rates, the Fund does not necessarily pay the lowest commission or
spread available. The Fund has no obligation to deal with any broker or group of
brokers in execution of transactions in portfolio securities. The Fund
contemplates that, consistent with the above policy of obtaining the best net
results, brokerage transactions may be conducted through Nomura and its
affiliates, and the amount of such transactions may be significant. Subject to
obtaining the best net results for the Fund, brokers who provide supplemental
investment research to the Manager may receive orders for transactions by the
Fund. Information so received, which includes research reports as to particular
industries and corporations, will be in addition to and not in lieu of the
services required to be performed by the Manager under its agreement with the
Fund, and the expenses of the Manager will not necessarily be reduced as a
result of the receipt of such supplemental information. It is possible that
certain of the supplementary investment research so received will primarily
benefit one or more other investment companies or other accounts for which
investment discretion is exercised. Conversely, the Fund may be the primary
beneficiary of the research or services received as a result of portfolio
transactions effected for such other accounts or investment companies.

In seeking to obtain the best net results for the Fund's portfolio
transactions, the Manager may aggregate orders for the purchase or sale of
securities on behalf of the Fund with those of the Manager's other clients.
Under procedures governing such transactions, the Manager will determine in
advance its proposed allocation of transactions among client accounts. At the
end of each day, each client account participating in an aggregated order will
participate at the average share price for all of the transactions of the
Manager's clients that day, with transaction costs allocated pro rata on the
basis of the client's participation in the transaction. If an aggregated order
is not executed in its entirety on a given day, securities purchased or sold on
that day will be allocated to clients on a pro rata basis.

<PAGE>
The Fund anticipates that its brokerage transactions involving securities
of companies domiciled in Pacific Basin countries will be conducted primarily on
the principal stock exchanges of such countries. Fixed commissions are charged
on the securities exchanges of Japan and certain other Pacific Basin countries.
Such fixed commissions are generally higher than negotiated commissions on
United States transactions. Generally, the supervision and regulation of foreign
stock exchanges and brokers differ from, and in some countries may be less than,
the supervision and regulation of exchanges and brokers in the United States.

Foreign equity securities may be held by the Fund either directly or in the
form of American Depositary Receipts (ADRs), European Depositary Receipts
(EDRs), Global Depositary Receipts (GDRs) or other securities convertible into
foreign equity securities. ADRs and EDRs may be listed on stock exchanges or
traded in over-the-counter markets in the United States or Europe, as the case
may be. ADRs, like other securities traded in the United States, will be subject
to negotiated commission rates.

The Fund may invest in securities traded in over-the-counter markets and
intends to deal directly with the dealers who make markets in the securities
involved except in those circumstances where better prices and execution are
available elsewhere. Under the Investment Company Act of 1940, persons
affiliated with the Fund are prohibited from dealing with the Fund as principal
in the purchase and sale of securities. Since transactions in the
over-the-counter market usually involve transactions with dealers acting as
principal for their own account, the Fund will not deal with affiliated persons,
including Nomura and its affiliates, in connection with such transactions. See
"Investment Objective and Policies--Investment Restrictions".

For the year ended March 31, 1994, the Fund incurred brokerage commissions
of $348,890. Nomura and its affiliates earned $55,358 or 15.9% of such amount
for effecting transactions involving 12.2% of the transactions in which the Fund
incurred brokerage commissions. For the year ended March 31, 1995, the Fund
incurred brokerage commissions of $286,325. Nomura and its affiliates earned
$93,939, or 32.8% of such amount for effecting transactions involving 21.0% of
the transactions in which the Fund incurred brokerage commissions. For the year
ended March 31, 1996, the Fund incurred brokerage commissions of $216,677.
Nomura and its affiliates earned $43,176, or 19.9% of such amount for effecting
transactions involving 14.5% of the transactions in which the Fund incurred
brokerage commissions.

The Board of Directors will from time to time consider the possibilities of
seeking to recapture for the benefit of the Fund brokerage commissions and other
expenses of possible portfolio transactions by conducting portfolio transactions
through affiliated entities. For example, brokerage commissions received by
affiliated brokers could be offset against the management fee paid by the Fund.

Section 11(a) of the Securities Exchange Act of 1934 generally prohibits
members of United States national securities exchanges from executing exchange
transactions for their affiliates and institutional accounts which they manage
unless the member (i) has obtained prior express authorization from the account
to effect such transactions, (ii) at least annually furnishes the account with a
statement disclosing the aggregate compensation received by the member in
effecting such transactions, and (iii) complies with any rules the Securities
and Exchange Commission has prescribed with respect to the requirements of
clauses (i) and (ii). To the extent Section 11(a) would apply to NSI acting as a
broker for the Fund in any of its portfolio transactions executed on any such
securities exchange of which it is a member, appropriate consents have been
obtained from the Fund, and annual statements as to aggregate compensation will
be provided to the Fund.

DETERMINATION OF NET ASSET VALUE
- --------------------------------------------------------------------------------

<PAGE>
The Fund's net asset value per share is computed by dividing the sum of the
market value of the securities held by the Fund plus any cash and other assets
(including interest and dividends accrued but not yet received) minus all
liabilities (including accrued expenses) by the total number of shares
outstanding at such time, rounded to the nearest cent. Expenses, including the
management fee payable to the Manager, are accrued daily.

Portfolio securities, including ADR's or EDR's which are traded on stock
exchanges, are valued at the last sale price (regular way) on the exchange on
which such securities are traded, as of the close of business on the day the
securities are being valued or, lacking any sales, at the last available bid
price. In cases where securities are traded on more than one exchange, the
securities are valued on the exchange designated by or under the authority of
the Directors as the primary market. During periods when one or more securities
exchanges are closed for holidays and the New York Stock Exchange is open,
securities traded on such exchanges will be valued on the basis of their last
sale price on the relevant exchange unless management of the Fund believes that
such prices are not representative of the current value of the securities.
Securities traded in the over-the-counter market are valued at the last
available bid price in such market prior to the time of valuation. Any assets or
liabilities expressed in terms of foreign currencies are translated into United
States dollars at the prevailing market rates quoted by State Street Bank and
Trust Company at the time.

SHAREHOLDER SERVICES
- --------------------------------------------------------------------------------

The Fund offers a number of shareholder services described below which are
designed to facilitate investment in its shares. Full details as to each of such
services and copies of the various plans described below can be obtained from
the Fund or NSI.

INVESTMENT ACCOUNTS

Each shareholder whose account is maintained at the Transfer Agent has an
Investment Account and will receive statements from the Transfer Agent after
each dividend payment and capital gains distribution showing the cumulative
activity in the account since the beginning of the year.

Share certificates are issued only for full shares and only upon the
request of the shareholder. Issuance of certificates representing all or only
part of the full shares in an Investment Account may be requested by a
shareholder directly from the Transfer Agent.

REINVESTMENT OF DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS

Unless specific instructions to the contrary are given as to method of
payment of dividends and capital gains distributions, dividends and
distributions will automatically be reinvested in additional shares of the Fund.
Such reinvestment will be at the net asset value of shares of the Fund, without
sales charge, as of the close of business on the ex-dividend date of the
dividend or distribution. Shareholders may elect in writing to receive either
their ordinary income dividends or capital gains distributions, or both, in
cash, in which event payment will be mailed on the payment date.

<PAGE>
RETIREMENT PLANS

Shares of the Fund may be purchased in connection with individual
retirement accounts. Copies of plans to establish such accounts are available
from First Trust Corporation (800) 525-2124.

Capital gains and income received in each of the plans referred to above
are generally exempt from Federal taxation until distributed from the plans.
However, as described under "Dividends, Distributions and Taxes", there are
withholding taxes on dividends and interest received on portfolio securities
which shareholders of the Fund can offset either by claiming a deduction
therefor, or, as an alternative, use as a foreign tax credit against their
United States income taxes. However, because the retirement plans are exempt
from United States income taxes, participants in such plans will not be able to
offset such withholding taxes. Investors considering participation in any such
plan should review specific tax laws relating thereto and should consult their
attorneys or tax advisers with respect to the establishment and maintenance of
any such plan.

DIVIDENDS, DISTRIBUTIONS AND TAXES
- --------------------------------------------------------------------------------

It is the Fund's intention to distribute substantially all of its net
investment income, if any, in dividend payments declared twice annually. All net
realized long-term or short-term capital gains, if any, will be distributed to
the Fund's shareholders at least annually. Dividends and distributions may be
automatically reinvested in shares of the Fund at net asset value without sales
charge. Shareholders may elect in writing to receive any such dividends or
distributions, or both, in cash. Dividends and distributions are taxable to
shareholders as discussed below whether they are reinvested in shares of the
Fund or received in cash.

Dividends paid by the Fund from its ordinary income or from an excess of
net short-term capital gains over net long-term capital losses (together
referred to hereinafter as "ordinary income dividends") are taxable to
shareholders as ordinary income. Distributions made from an excess of net
long-term capital gains over net short-term capital losses ("capital gain
dividends") are taxable to shareholders as long-term capital gains, regardless
of the length of time the shareholder has owned Fund shares. Any loss upon the
sale of Fund shares held for six months or less, however, will be treated as
long-term capital loss to the extent of any long-term capital gain dividends
received by the shareholder. Distributions in excess of the Fund's earnings and
profits will first reduce the adjusted tax basis of a holder's shares, and after
such adjusted tax basis is reduced to zero, will constitute capital gains to
such holder (assuming the shares are held as a capital asset).

Ordinary income dividends paid by the Fund to shareholders who are
nonresident aliens or foreign entities will be subject to a 30% United States
withholding tax under existing provisions of the Code applicable to foreign
individuals and entities unless a reduced rate of withholding or a withholding
exemption is provided
12

<PAGE>
under applicable treaty law. Nonresident shareholders are urged to consult their
own tax advisers concerning the applicability of the United States withholding
tax.

Dividends and interest received by the Fund may give rise to withholding
and other taxes imposed by foreign countries. Tax conventions between certain
countries and the United States may reduce or eliminate such taxes. Shareholders
may be able to claim United States foreign tax credits with respect to such
taxes, subject to certain conditions and limitations contained in the Code. For
example, certain retirement accounts cannot claim foreign tax credits on
investments in foreign securities held in the Fund. If more than 50% in value of
the Fund's total assets at the close of its taxable year consists of securities
of foreign corporations, the Fund will be eligible and may file an
election with the Internal Revenue Service pursuant to which shareholders of the
Fund will be required to include their proportionate shares of such withholding
taxes in their United States income tax returns as gross income, treat such
proportionate shares as taxes paid by them, and deduct such proportionate shares
in computing their taxable incomes or, alternatively, use them as foreign tax
credits against their United States income taxes. No deductions for foreign
taxes, however, may be claimed by noncorporate shareholders who do not itemize
deductions. A shareholder that is a nonresident alien individual or a foreign
corporation may be subject to United States withholding tax on the income
resulting from the Fund's election described in this paragraph but may not be
able to claim a credit or deduction against such United States tax for the
foreign taxes treated as having been paid by such shareholder. The Fund will
report annually to its shareholders the amount per share of such withholding
taxes.

The Code requires a RIC to pay a nondeductible 4% excise tax to the extent
the Fund does not distribute, during each calendar year, the sum of 98% of its
ordinary income, determined on a calendar year basis, and 98% of its capital
gains, determined, in general, on an October 31 year end, plus certain
undistributed amounts from previous years. While the Fund intends to distribute
its income and capital gains in the manner necessary to minimize imposition of
the 4% excise tax, there can be no assurance that a sufficient amount of the
Fund's taxable income and capital gains will be distributed to avoid entirely
the imposition of the tax. In such event, the Fund will be liable for the tax
only on the amount by which it does not meet the foregoing distribution
requirements.

<PAGE>
election may cause the Fund to recognize income in a particular year in excess
of the distributions received from such PFICs. Alternatively, under proposed
regulations the Fund would be able to elect to "mark-to-market" at the end of
each taxable year all shares that it holds in PFICs. If it made this election,
the Fund would recognize as ordinary income any increase in the value of such
shares. Unrealized losses, however, would not be recognized. By making the
mark-to-market election, the Fund could avoid imposition of the interest charge
with respect to its distributions from PFICs, but in any particular year might
be required to recognize income in excess of the distributions it received from
PFICs and its proceeds from dispositions of PFIC stock.

Any dividends paid shortly after a purchase of Fund shares by an investor
may have the effect of reducing the per share net asset value of the investor's
shares by the per share amount of the dividends. Furthermore, such dividends,
although in effect a return of capital, are subject to Federal income taxes.
Therefore, prior to purchasing shares of the Fund, the investor should carefully
consider the impact of dividends, including capital gain dividends, which are
expected to be or have been announced.

SPECIAL RULES FOR CERTAIN FOREIGN CURRENCY TRANSACTIONS

In general, gains from foreign currencies and from foreign currency
options, foreign currency futures and forward foreign exchange contracts
relating to investments in stock, securities or foreign currencies will be
qualifying income for purposes of determining whether the Fund qualifies as a
RIC. It is currently unclear, however, who will be treated as the issuer of a
foreign currency instrument or how foreign currency options, futures and forward
foreign currency contracts will be valued for purposes of the RIC
diversification requirements applicable to the Fund.

Under Code Section 988, special rules are provided for certain transactions
in a foreign currency other than the taxpayer's functional currency (i.e.,
unless certain special rules apply, currencies other than the United States
dollar). In general, foreign currency gains or losses from certain debt
instruments, from certain forward contracts, from futures contracts that are not
"regulated futures contracts" and from unlisted options will be treated as
ordinary income or loss under Code Section 988. In certain circumstances, the
Fund may elect capital gain or loss treatment for such transactions. In general,
however, such Code Section 988 gains or losses will increase or decrease the
amount of the Fund's investment company taxable income available to be
distributed to shareholders as ordinary income. Additionally, if Code Section
988 losses exceed other investment company taxable income during a taxable year,
the Fund would not be able to make any ordinary income dividend distributions,
and all or a portion of distributions made before the losses were realized but
in the same taxable year would be recharacterized as a return of capital to
shareholders, thereby reducing the basis of each shareholder's Fund shares and
resulting in a capital gain for any shareholder who received a distribution
greater than such shareholder's basis in Fund shares (assuming the shares were
held as a capital asset). These rules, however, will not apply to certain
transactions entered into by the Fund solely to reduce the risk of currency
fluctuations with respect to its investments.

The Fund may effect forward foreign exchange transactions that are subject
to the provisions of Code Section 1256. Such forward foreign exchange contracts
that are "Section 1256 contracts" will be "marked to market" for Federal income
tax purposes at the end of each taxable year, i.e., each forward foreign
exchange contract will be treated as sold for its fair market value on the last
day of the taxable year. In general, if the Fund is eligible to make and does
make a special election, gain or loss from transactions in such forward foreign
exchange contracts will be 60% long-term and 40% short-term capital gain or
loss. Application of these rules to Section 1256 contracts held by the Fund may
alter the timing and character of distributions to shareholders. The
mark-to-market rules outlined above, however, will not apply to certain
transactions entered into by the Fund solely to reduce the risk of changes in
price or interest rates with respect to its investments.

<PAGE>
Code Section 1092, which applies to certain "straddles," may affect the
taxation of the Fund's sales of securities and transactions in forward foreign
exchange contracts. Under Section 1092, the Fund may be required to postpone
recognition for tax purposes of losses incurred in certain sales of securities
and certain closing transactions in forward foreign exchange contracts.

One of the requirements for qualification as a RIC is that less than 30% of
the Fund's gross income be derived from gains from the sale or other disposition
of securities held for less than three months. Accordingly, the Fund may be
restricted in effecting closing transactions within three months after entering
into a forward foreign exchange contract.

The foregoing is a general and abbreviated summary of the applicable
provisions of the Code and Treasury Regulations presently in effect. For the
complete provisions, reference should be made to the pertinent Code sections and
the Treasury Regulations promulgated thereunder. The Code and the Treasury
Regulations are subject to change by legislative, judicial or administrative
action either prospectively or retroactively.

Ordinary income and capital gain dividends may also be subject to state and
local taxes.

Shareholders are urged to consult their own tax advisers regarding specific
questions as to Federal, foreign, state or local taxes. Foreign investors also
should consider applicable foreign taxes in their evaluation of an investment in
the Fund.

GENERAL INFORMATION
- --------------------------------------------------------------------------------

DESCRIPTION OF SHARES

The Fund was incorporated under Maryland law on March 14, 1985. It has an
authorized capital of 200,000,000 shares of Common Stock, par value of $0.10 per
share. All shares are of the same class. Shareholders are entitled to one vote
for each full share held and fractional votes for fractional shares held and
will vote on the election of Directors and any other matter submitted to a
shareholder vote. Voting rights for Directors are not cumulative. Shares issued
are fully paid and nonassessable and have no preemptive or conversion rights.
Redemption rights are discussed elsewhere herein and in the Prospectus. Each
share is entitled to participate equally in dividends and distributions declared
by the Fund and in the net assets of the Fund upon liquidation or dissolution
after satisfaction of outstanding liabilities.

NSI provided the initial capital for the Fund by purchasing 10,000 shares
for $100,000. Such shares were acquired for investment and can only be disposed
of by redemption.

INDEPENDENT ACCOUNTANTS

Price Waterhouse LLP has been selected as the independent accountants of
the Fund. The independent accountants audit the annual financial statements of
the Fund and provide tax accounting services to the Fund.

CUSTODIAN AND TRANSFER AGENT

State Street Bank and Trust Company (the "Custodian" or the "Transfer
Agent") acts as custodian of the Fund's assets and as its transfer agent. The
Custodian, under its contract with the Fund, is authorized to establish separate
accounts in foreign currencies and to cause securities of the Fund to be held in
separate accounts with sub-custodians outside of the United States. The
sub-custodians include certain foreign banks. The Custodian and sub-custodians
are responsible for safeguarding the Fund's cash and securities, handling the
receipt and
15

<PAGE>
delivery of securities and collecting dividends on the Fund's investments. The
Transfer Agent is responsible for the issuance, transfer and redemption of
shares and the opening, maintenance and servicing of shareholder accounts.

LEGAL COUNSEL

Brown & Wood LLP, New York, New York, is counsel for the Fund.

PERFORMANCE DATA

Set forth below is the Fund's average annual total return information for
the periods indicated:

<TABLE>
<CAPTION>
JULY 8,
ONE YEAR FIVE YEARS TEN YEARS 1985(A)
ENDED ENDED ENDED TO
MARCH 31, 1996 MARCH 31, 1996 MARCH 31, 1996 MARCH 31, 1996
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Average Annual Total Return(b)... 13.7% 7.3% 13.0% 16.7%
<FN>

- ---------------
(a) Commencement of operations.
(b) Average annual total return quotations for the specified periods are
computed by finding the average annual compounded rates of return (based
upon net investment income and any capital gains or losses on portfolio
investments over such periods) that would equate the initial amount invested
to the redeemable value of such investment at the end of each period.
Average annual total return is computed assuming all dividends and
distributions are reinvested and taking into account all applicable
recurring and nonrecurring expenses. Changes in foreign currency exchange
rates favorably affected the Fund's performance for certain of the specified
periods. The Fund's average annual total return will vary depending upon
market conditions, the securities comprising the Fund's portfolio, the
Fund's operating expenses, changes in foreign currency exchange rates and
the amount of net capital gains or losses realized by the Fund during this
period. An investment in the Fund will fluctuate and an investor's shares,
when redeemed, may be worth more or less than their original cost. On
occasion, the Fund may compare its average annual total return to various
indices, including those comprised of Pacific Basin securities.
</TABLE>

REPORTS TO SHAREHOLDERS

The fiscal year of the Fund ends on March 31 of each year. The Fund sends
to its shareholders at least semi-annually reports showing the Fund's portfolio
and other information. An annual report, containing financial statements
together with the report of independent accountants, is sent to shareholders
each year. After the end of each calendar year, the shareholders will receive
Federal income tax information regarding any dividends and capital gains
distributions.
------------------------

To the knowledge of the Fund, no person or entity owned beneficially 5% or
more of the Fund's Common Stock on June 30, 1996.

The Prospectus and this Statement of Additional Information do not contain
all of the information set forth in the Registration Statement and the exhibits
relating thereto, which the Fund has filed with the Securities and Exchange
Commission, Washington, D.C., under the Securities Act of 1933 and the
Investment Company Act of 1940, to which reference is hereby made.

<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Shareholders
of Nomura Pacific Basin Fund, Inc.

In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Nomura Pacific Basin Fund, Inc.
(the "Fund") at March 31, 1996, the results of its operations for the year then
ended, the changes in its net assets for each of the two years in the period
then ended and the financial highlights for each of the ten years in the period
then ended, in conformity with generally accepted accounting principles. These
financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with generally accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits, which included confirmation of securities at March
31, 1996 by correspondence with the custodian and brokers, provide a reasonable
basis for the opinion expressed above.

PRICE WATERHOUSE LLP
1177 Avenue of the Americas
New York, New York 10036
May 15, 1996

<PAGE>
NOMURA PACIFIC BASIN FUND, INC.
SCHEDULE OF INVESTMENTS*
MARCH 31, 1996

<TABLE>
<CAPTION>
% OF
MARKET NET
SHARES COST VALUE ASSETS
---------- ----------- ----------- ------
<S> <C> <C> <C> <C>
JAPANESE EQUITY SECURITIES
BANKING AND INSURANCE
Mitsui Marine & Fire Insurance Co., Ltd............ 27,000 $ 221,545 $ 203,431 0.6
Non-life insurance
The Mitsubishi Bank, Ltd........................... 30,450 686,774 643,300 1.9
City bank
The Sanwa Bank, Ltd................................ 30,000 646,384 602,945 1.8
City bank
The Sumitomo Bank Ltd.............................. 11,000 211,183 222,108 0.6
City bank
Tokio Marine & Fire Insurance Co., Ltd............. 38,000 427,754 493,760 1.5
----------- ----------- ------
Non-life insurance
Total Banking and Insurance........................ 2,193,640 2,165,544 6.4
----------- ----------- ------
CHEMICALS/PHARMACEUTICALS
Daiichi Pharmaceutical Co., Ltd.................... 9,000 144,784 141,342 0.4
Ethical drugs
Mitsubishi Chemical Corp........................... 83,000 404,821 438,374 1.3
Chemicals
Taisho Pharmaceutical Co., Ltd..................... 21,000 411,187 431,877 1.3
Over-the-counter drugs
----------- ----------- ------
Total Chemicals/Pharmaceuticals.................... 960,792 1,011,593 3.0
----------- ----------- ------
COMMERCE
Ito-Yokado Co., Ltd................................ 5,000 244,917 296,798 0.9
Supermarket operator
Mitsui & Co., Ltd.................................. 59,000 462,874 534,433 1.6
General trader
Sangetsu Co., Ltd.................................. 10,000 285,182 241,178 0.7
----------- ----------- ------
Wall interiors and carpets
Total Commerce..................................... 992,973 1,072,409 3.2
----------- ----------- ------
CONSTRUCTION
National House Industrial Co., Ltd................. 14,000 241,086 238,187 0.7
Housing materials
Nippon Koei Co..................................... 9,900 92,113 87,455 0.3
Engineering consultants
Shimizu Corp....................................... 38,000 380,325 415,611 1.2
Residential construction
Yokogawa Bridge Corp............................... 12,000 182,063 172,751 0.5
----------- ----------- ------
Bridge construction
Total Construction................................. 895,587 914,004 2.7
----------- ----------- ------
</TABLE>

See notes to financial statements

<PAGE>
NOMURA PACIFIC BASIN FUND, INC.
SCHEDULE OF INVESTMENTS--(CONTINUED)*
MARCH 31, 1996

<TABLE>
<CAPTION>
% OF
MARKET NET
SHARES COST VALUE ASSETS
---------- ----------- ----------- ------
<S> <C> <C> <C> <C>
CONSUMER PRODUCTS
Bandai Co., Ltd.................................... 6,000 $ 227,433 $ 229,960 0.7
----------- ----------- ------
Toys
CONSUMER ELECTRONICS AND PARTS
Sharp Corp......................................... 26,000 456,631 415,611 1.2
Consumer electronics and office
automation equipment
Sony Corp.......................................... 6,800 332,811 406,188 1.2
Consumer electronics
TDK Corporation.................................... 8,000 350,478 412,059 1.2
----------- ----------- ------
Magnetic tapes
Total Consumer Electronics and Parts............... 1,139,920 1,233,858 3.6
----------- ----------- ------
ELECTRICAL/ELECTRONICS
Fukuda Denshi Co................................... 7,000 179,275 174,714 0.5
Medical electronic equipment
KTK Telecommunications Engineering Co., Ltd........ 16,000 145,177 154,055 0.5
Telephone installations
Hitachi, Ltd....................................... 29,000 310,624 281,935 0.8
Communications and electronic equipment
Kinden Corp........................................ 22,000 349,422 331,105 1.0
Electrical engineering
Kyocera Corp....................................... 4,000 291,062 271,465 0.8
Ceramics
Matsushita Electric Works, Ltd..................... 16,000 172,769 172,003 0.5
Building and lighting equipment
Nippondenso Co., Ltd............................... 11,000 210,363 222,108 0.7
Electronic automotive parts
Secom Co., Ltd..................................... 3,000 181,629 196,027 0.6
Electronic security systems
Sumitomo Electric Industries, Ltd.................. 34,000 458,849 457,677 1.3
Electric wires and cables
Tokyo Electron, Ltd................................ 7,000 272,723 238,841 0.7
----------- ----------- ------
Electric wires and cables
Total Electrical/Electronics....................... 2,571,893 2,499,930 7.4
----------- ----------- ------
ELECTRICAL MACHINERY
Futaba Corp........................................ 6,000 252,771 271,465 0.8
Fluorescent indicator tubes
Fujitsu Ltd........................................ 25,000 278,060 230,661 0.7
Computers
Minebea Co., Ltd................................... 24,000 188,729 205,282 0.6
Bearings and electronic motors
Okuma Corp......................................... 24,000 224,912 271,465 0.8
Machine tools
</TABLE>

See notes to financial statements

<PAGE>
NOMURA PACIFIC BASIN FUND, INC.
SCHEDULE OF INVESTMENTS--(CONTINUED)*
MARCH 31, 1996

<TABLE>
<CAPTION>
% OF
MARKET NET
SHARES COST VALUE ASSETS
---------- ----------- ----------- ------
<S> <C> <C> <C> <C>
Omron Corp......................................... 16,000 $ 365,893 $ 354,475 1.0
----------- ----------- ------
Control systems
Total Electrical Machinery......................... 1,310,365 1,333,348 3.9
----------- ----------- ------
IRON AND STEEL
Nisshin Steel Co., Ltd............................. 35,000 164,786 139,706 0.4
----------- ----------- ------
Blast furnace steelmaker
MISCELLANEOUS MANUFACTURING
Kokuyo Co., Ltd.................................... 12,000 277,367 327,553 1.0
Paper products
Komatsu Ltd........................................ 31,000 275,274 276,167 0.8
Construction machinery
NGK Insulators, Ltd................................ 45,000 430,791 483,758 1.4
----------- ----------- ------
Insulators
Total Miscellanous Manufacturing................... 983,432 1,087,478 3.2
----------- ----------- ------
MOTOR VEHICLES
Suzuki Motor Corp.................................. 23,000 148,795 283,805 0.8
Minicars and motorcycles
Mitsubishi Motors Corp............................. 8,000 67,989 68,352 0.2
----------- ----------- ------
Automobiles
Total Motor Vehicles............................... 216,784 352,157 1.0
----------- ----------- ------
NON-FERROUS METALS
Furukawa Co., Ltd.................................. 37,000 209,476 193,690 0.6
Machinery and copper ingots
Sumitomo Metal Mining Co., Ltd..................... 20,000 162,234 192,568 0.6
----------- ----------- ------
Copper, gold and nickel mining
Total Non-Ferrous Metals........................... 371,710 386,258 1.2
----------- ----------- ------
OIL AND GAS
Mitsubishi Oil Co., Ltd............................ 26,000 255,807 218,986 0.6
----------- ----------- ------
Oil refining
OTHER PRODUCTS
Taikisha Ltd....................................... 10,000 175,488 180,416 0.5
----------- ----------- ------
Automobile paint finishing systems
PRECISION MACHINERY
Canon, Inc......................................... 31,000 409,062 591,166 1.7
Visual image and information equipment
Hoya Corp.......................................... 9,000 218,776 309,605 0.9
----------- ----------- ------
Optical glass for semiconductors
Total Precision Machinery.......................... 627,838 900,771 2.6
----------- ----------- ------
RETAIL STORES/FOOD SERVICES
Circle K Japan Co., Ltd............................ 7,200 232,153 288,067 0.9
Convenience stores
</TABLE>

See notes to financial statements

<PAGE>
NOMURA PACIFIC BASIN FUND, INC.
SCHEDULE OF INVESTMENTS--(CONTINUED)*
MARCH 31, 1996

<TABLE>
<CAPTION>
% OF
MARKET NET
SHARES COST VALUE ASSETS
---------- ----------- ----------- ------
<S> <C> <C> <C> <C>
RETAIL STORES/FOOD SERVICES (CONTINUED)
Kirin Brewery Co., Ltd............................. 26,000 $ 400,770 $ 332,975 1.0
Beer and beverages
Xebio Co., Ltd..................................... 9,400 330,171 320,729 0.9
----------- ----------- ------
Menswear
Total Retail Stores/Food Service................... 963,094 941,771 2.8
----------- ----------- ------
SECURITIES
Daiwa Securities Co., Ltd.......................... 40,000 513,486 609,488 1.8
----------- ----------- ------
Investment securities
SERVICES
Hitachi Software Engineering Co., Ltd.............. 8,000 223,333 192,195 0.6
Computer software
Mitsubishi Warehouse Transportation Co., Ltd....... 14,000 238,814 234,260 0.7
----------- ----------- ------
Commercial storage
Total Services..................................... 462,147 426,455 1.3
----------- ----------- ------
SHIPBUILDING
Mitsubishi Heavy Industries, Ltd................... 52,000 359,456 449,152 1.3
----------- ----------- ------
Shipbuilding and heavy machinery
TEXTILES
Japan Wool Textile Co., Ltd........................ 15,000 132,859 137,415 0.4
Woolen textiles manufacturer
Nagaileben Co., Ltd................................ 3,000 96,309 106,567 0.3
Medical wear
Toray Industries, Inc.............................. 59,000 400,055 381,659 1.1
----------- ----------- ------
Synthetic fibers
Total Textiles..................................... 629,223 625,641 1.8
----------- ----------- ------
TRANSPORTATION
Yamato Transport Co., Ltd.......................... 27,000 310,345 320,542 0.9
----------- ----------- ------
Parcel delivery service
UTILITIES
Osaka Gas Co., Ltd................................. 77,000 276,560 278,560 0.8
Gas supplier
Tohoku Electric Power Co., Inc..................... 9,000 196,826 208,647 0.6
----------- ----------- ------
Power supplier
Total Utilities.................................... 473,386 487,207 1.4
----------- ----------- ------
WAREHOUSE
Yokohama Reito Co., Ltd............................ 12,000 153,051 154,803 0.5
----------- ----------- ------
Cold storage warehouse
TOTAL INVESTMENTS IN JAPANESE
EQUITY SECURITIES 16,952,636 17,741,477 52.2
----------- ----------- ------
</TABLE>

See notes to financial statements

<PAGE>
NOMURA PACIFIC BASIN FUND, INC.
SCHEDULE OF INVESTMENTS--(CONTINUED)*
MARCH 31, 1996

<TABLE>
<CAPTION>
% OF
MARKET NET
SHARES COST VALUE ASSETS
---------- ----------- ----------- ------
<S> <C> <C> <C> <C>
AUSTRALIAN EQUITY SECURITIES
BANKING
National Australia Bank, Ltd....................... 75,000 $ 505,191 $ 668,125 2.0
----------- ----------- ------
Commercial bank
BUILDING MATERIALS
Boral, Ltd......................................... 137,000 365,519 358,639 1.1
----------- ----------- ------
Building materials
FINANCIALS
Lend Lease Corp.................................... 27,000 363,220 390,748 1.1
----------- ----------- ------
Insurance and financial services
FOOD AND BEVERAGE
Coca-Cola Amatil, Ltd.............................. 18,000 139,381 181,168 0.5
----------- ----------- ------
Bottler and distributor of Coca-Cola products
MINING
Newcrest Mining, Ltd............................... 22,000 99,470 98,335 0.3
----------- ----------- ------
Gold mining and other precious metals
NON-FERROUS METALS
The Broken Hill Proprietary Co., Ltd............... 53,000 546,514 754,599 2.2
Oil, minerals and steel
Western Mining Corp. Holdings, Ltd................. 41,000 229,189 271,048 0.8
----------- ----------- ------
Mineral and petroleum products
Total Non-Ferrous Metals........................... 775,703 1,025,647 3.0
----------- ----------- ------
PUBLISHING/PRINTING
News Corporation, Ltd.............................. 50,000 226,490 292,647 0.9
----------- ----------- ------
International media
RESOURCES
CRA Ltd............................................ 13,000 165,885 194,538 0.6
CRA Ltd. New Shares................................ 975 12,448 14,590 0.0
----------- ----------- ------
Integrated resources
Total Resources.................................... 178,333 209,128 0.6
----------- ----------- ------
TRANSPORTATION
TNT Ltd............................................ 100,000 165,590 123,466 0.4
----------- ----------- ------
Freight transportation
TOTAL INVESTMENTS IN AUSTRALIAN
EQUITY SECURITIES................................ 2,818,897 3,347,903 9.9
----------- ----------- ------
HONG KONG EQUITY SECURITIES
BANKING
Hong Kong Shanghai Banking Corp.................... 39,200 424,062 587,949 1.7
----------- ----------- ------
Worldwide banking
</TABLE>

See notes to financial statements

<PAGE>
NOMURA PACIFIC BASIN FUND, INC.
SCHEDULE OF INVESTMENTS--(CONTINUED)*
MARCH 31, 1996

<TABLE>
<CAPTION>
% OF
MARKET NET
SHARES COST VALUE ASSETS
---------- ----------- ----------- ------
<S> <C> <C> <C> <C>
CONGLOMERATE
Hutchinson Whampoa, Ltd............................ 100,000 $ 337,704 $ 630,980 1.9
Property and shipping related services
Sinocan Holdings, Ltd.............................. 600,000 124,054 226,920 0.6
----------- ----------- ------
Property and investments
Total Conglomerate................................. 461,758 857,900 2.5
----------- ----------- ------
REAL ESTATE
Sun Hung Kai Properties, Ltd....................... 88,500 458,345 806,730 2.4
----------- ----------- ------
Real estate developer
UTILITIES
Hong Kong Electric................................. 50,000 108,147 162,594 0.5
Power supplier
Hong Kong Telecommunications, Ltd.................. 140,000 279,945 279,674 0.8
----------- ----------- ------
Local and international telecommunications
Total Utilities.................................... 388,092 442,268 1.3
----------- ----------- ------
TOTAL INVESTMENTS IN HONG KONG
EQUITY SECURITIES................................ 1,732,257 2,694,847 7.9
----------- ----------- ------
INDONESIAN EQUITY SECURITIES
BANKING
Bank International Indonesia....................... 99,700 415,709 420,036 1.2
----------- ----------- ------
Commercial and foreign exchange
CONGLOMERATE
Astra International................................ 110,000 208,434 157,613 0.5
----------- ----------- ------
Automobile distribution, agribusiness
and electronics
CONSUMER GOODS
H.M. Sampoerna..................................... 26,500 142,691 276,845 0.8
----------- ----------- ------
Cigarettes
FOOD AND BEVERAGE
IndoFood Sukses Makmur............................. 60,000 231,659 280,368 0.8
----------- ----------- ------
Food processor
UTILITIES
Indonesian Satellite Corporation (INDOSAT)......... 65,000 224,342 223,107 0.7
----------- ----------- ------
International telecommunications
TOTAL INVESTMENTS IN INDONESIAN
EQUITY SECURITIES................................ 1,222,835 1,357,969 4.0
----------- ----------- ------
</TABLE>

See notes to financial statements

<PAGE>
NOMURA PACIFIC BASIN FUND, INC.
SCHEDULE OF INVESTMENTS--(CONTINUED)*
MARCH 31, 1996

<TABLE>
<CAPTION>
% OF
MARKET NET
SHARES COST VALUE ASSETS
---------- ----------- ----------- ------
<S> <C> <C> <C> <C>
MALAYSIAN EQUITY SECURITIES
AUTOMOTIVE
Perusahaan Otomobil Nasional....................... 75,000 $ 236,816 $ 334,980 1.0
Automobile assembly
United Engineers (Malaysia)........................ 55,000 325,496 380,435 1.1
----------- ----------- ------
Automobile assembly
Total Automotive................................... 562,312 715,415 2.1
----------- ----------- ------
CONSTRUCTION
Road Builder Holdings Berhad....................... 80,000 218,140 306,719 0.9
----------- ----------- ------
Road construction
CONGLOMERATE
Land and General Holdings Berhad................... 130,000 312,935 344,269 1.0
----------- ----------- ------
Property, timber, oil and gas services
and financial services
FINANCIALS
Commerce Asset Holdings Berhad..................... 80,000 188,334 458,498 1.3
----------- ----------- ------
Banking, brokerage and leasing
REAL ESTATE
Berjaya Sports Toto Berhad......................... 190,000 327,423 570,751 1.7
----------- ----------- ------
Property development
UTILITIES
Technology Resources Industries Berhad............. 120,000 524,413 431,621 1.3
----------- ----------- ------
Mobile telephones
TOTAL INVESTMENTS IN MALAYSIAN
EQUITY SECURITIES................................ 2,133,557 2,827,273 8.3
----------- ----------- ------
NEW ZEALAND EQUITY SECURITIES
FOREST PRODUCTS AND PAPER
Carter Holt Harvey................................. 63,000 117,909 139,037 0.4
----------- ----------- ------
Paper and wood products
UTILITIES
Telecommunications Corp. of New Zealand............ 60,000 170,784 269,736 0.8
----------- ----------- ------
Telecommunications
TOTAL INVESTMENTS IN NEW ZEALAND
EQUITY SECURITIES................................ 288,693 408,773 1.2
----------- ----------- ------
</TABLE>

See notes to financial statements

<PAGE>
NOMURA PACIFIC BASIN FUND, INC.
SCHEDULE OF INVESTMENTS--(CONTINUED)*
MARCH 31, 1996

<TABLE>
<CAPTION>
% OF
MARKET NET
SHARES COST VALUE ASSETS
---------- ----------- ----------- ------
<S> <C> <C> <C> <C>
PHILIPPINE EQUITY SECURITIES
BANKING
Metropolitan Bank & Trust Co....................... 4,129 $ 63,223 $ 102,515 0.3
----------- ----------- ------
Commercial bank
CEMENT
Bacnotan Cement Co................................. 20,000 23,291 13,369 0.0
----------- ----------- ------
Cement producer
CONGLOMERATE
Ayala Corp......................................... 80,000 79,263 116,119 0.3
Property, food, banking, insurance,
electronics and telecommunications
San Miguel Corp.................................... 15,000 58,208 50,420 0.2
----------- ----------- ------
Food processor
Total Conglomerate................................. 137,471 166,539 0.5
----------- ----------- ------
INDUSTRIAL
Petron Corporation................................. 180,000 120,203 77,349 0.2
----------- ----------- ------
Petroleum refining and marketing
REAL ESTATE
SM Prime Holdings Inc.............................. 200,000 43,958 59,588 0.2
----------- ----------- ------
Shopping malls
UTILITIES
Manila Electric Co................................. 10,000 85,405 88,235 0.3
Power supplier
Philippine Long Distance Telephone Co.............. 2,000 118,813 108,480 0.3
----------- ----------- ------
International communications
Total Utilities.................................... 204,218 196,715 0.6
----------- ----------- ------
TOTAL INVESTMENTS IN PHILIPPINE
EQUITY SECURITIES................................ 592,364 616,075 1.8
----------- ----------- ------
SINGAPORE EQUITY SECURITIES
BANKING
Development Bank of Singapore, Ltd................. 52,250 $ 308,531 642,129 1.9
International bank
Overseas Chinese Bank, Ltd......................... 20,000 190,484 268,523 0.8
----------- ----------- ------
Commercial bank
Total Banking...................................... 499,015 910,652 2.7
----------- ----------- ------
</TABLE>

See notes to financial statements

<PAGE>
NOMURA PACIFIC BASIN FUND, INC.
SCHEDULE OF INVESTMENTS--(CONTINUED)*
MARCH 31, 1996

<TABLE>
<CAPTION>
% OF
MARKET NET
SHARES COST VALUE ASSETS
---------- ----------- ----------- ------
<S> <C> <C> <C> <C>
CONGLOMERATE
Keppel Corp., Ltd.................................. 50,000 $ 244,774 $ 454,643 1.3
----------- ----------- ------
Shipyards, rigbuilding, shipping, properties,
financial services and engineering
OIL AND GAS
Singapore Petroleum Co., Ltd....................... 180,000 358,405 251,261 0.7
----------- ----------- ------
Oil refining
REAL ESTATE
DBS Land, Ltd...................................... 150,000 392,868 575,407 1.7
----------- ----------- ------
Office and residential properties
RETAIL STORES
Metro Holdings, Ltd................................ 48,000 137,677 187,540 0.6
----------- ----------- ------
Department store chain
TRANSPORTATION
Hai Sun Hup Group, Ltd............................. 200,000 166,187 144,917 0.4
----------- ----------- ------
Shipping
TOTAL INVESTMENTS IN SINGAPORE
EQUITY SECURITIES................................ 1,798,926 2,524,420 7.4
----------- ----------- ------
SOUTH KOREAN EQUITY SECURITIES
BANKING
Daegu Bank, Ltd.................................... 12,181 165,794 191,533 0.6
----------- ----------- ------
Regional bank
ELECTRONICS
Samsung Electronics Co............................. 1,340 178,898 157,597 0.5
----------- ----------- ------
Consumer electronics, computers and
telecommunications
MACHINERY
Daewoo Heavy Industries, Ltd....................... 12,611 153,793 124,135 0.3
----------- ----------- ------
Construction equipment and aircraft parts
NON-FERROUS METALS
Korea Zinc Co...................................... 7,000 130,958 153,915 0.4
----------- ----------- ------
Zinc ingots
UTILITIES
Korea Electric Power Corp.......................... 4,000 98,476 155,960 0.5
----------- ----------- ------
Power supplier
TOTAL INVESTMENTS IN SOUTH KOREAN
EQUITY SECURITIES................................ 727,919 783,140 2.3
----------- ----------- ------
</TABLE>

See notes to financial statements

<PAGE>
NOMURA PACIFIC BASIN FUND, INC.
SCHEDULE OF INVESTMENTS--(CONTINUED)*
MARCH 31, 1996

<TABLE>
<CAPTION>
% OF
MARKET NET
SHARES COST VALUE ASSETS
---------- ----------- ----------- ------
<S> <C> <C> <C> <C>
THAILAND EQUITY SECURITIES
BANKING
Bangkok Bank, Ltd.................................. 35,000 $ 280,486 $ 471,324 1.4
Commercial bank
Siam City Bank Plc................................. 130,000 178,411 162,191 0.5
----------- ----------- ------
Commercial bank
Total Banking...................................... 458,897 633,515 1.9
----------- ----------- ------
CEMENT AND CONCRETE PRODUCTS
Siam Cement........................................ 3,000 172,747 154,468 0.4
----------- ----------- ------
Cement
TOTAL INVESTMENTS IN THAILAND
EQUITY SECURITIES................................ 631,644 787,983 2.3
----------- ----------- ------
TOTAL INVESTMENTS IN EQUITY SECURITIES............. 28,899,728 33,089,860 97.3
----------- ----------- ------
</TABLE>

<TABLE>
<CAPTION>
% OF
MARKET NET
PRINCIPAL AMOUNT COST VALUE ASSETS
---------------- ----------- ----------- ------
<S> <C> <C> <C> <C>
INVESTMENTS IN FOREIGN CURRENCIES
AUSTRALIAN DOLLAR
Standard Chartered Bank, non-interest bearing
call account................................ AUD. 13,390 $ 10,461 $ 10,463 0.1
JAPANESE YEN
The Sumitomo Bank & Trust Co., Ltd., interest
bearing call account 3.16% due on demand.... JPY. 11,362,281 106,384 106,214 0.3
NEW ZEALAND DOLLAR
ANZ Banking Group Ltd., non-interest bearing
call account................................ NZD. 118 79 80 0.0
SOUTH KOREAN WON
Standard Chartered Bank, non-interest bearing
call account................................ KRW. 2,922,500 3,738 3,736 0.0
----------- ----------- ------
TOTAL INVESTMENTS IN FOREIGN CURRENCIES....... 120,662 120,493 0.4
----------- ----------- ------
</TABLE>

See notes to financial statements

<PAGE>
NOMURA PACIFIC BASIN FUND, INC.
SCHEDULE OF INVESTMENTS*--(CONTINUED)
MARCH 31, 1996

<TABLE>
<CAPTION>
% OF
MARKET NET
PRINCIPAL AMOUNT COST VALUE ASSETS
---------------- ----------- ----------- ------
<S> <C> <C> <C> <C>
INVESTMENTS IN SHORT-TERM SECURITIES
EURO-DOLLAR TIME DEPOSIT
State Street Bank and Trust Company 2.75% due
4/1/96...................................... $764,108 764,108 764,108 2.2
----------- ----------- ------
TOTAL INVESTMENTS IN SHORT-TERM SECURITIES.... 764,108 764,108 2.2
----------- ----------- ------
TOTAL INVESTMENTS............................. 29,784,498 33,974,461 99.9
----------- ----------- ------
OTHER ASSETS LESS LIABILITIES................. (110,302) 48,026 0.1
----------- ----------- ------
NET ASSETS.................................... $29,674,196 $34,022,487 100.0
----------- ----------- ------
----------- ----------- ------
<FN>
- ---------------

* The description following each investment is unaudited and not covered by the
Report of Independent Accountants.

</TABLE>

FORWARD FOREIGN CURRENCY CONTRACT

<TABLE>
<CAPTION>
COST DELIVERY MATURITY UNREALIZED
(LOCAL CURRENCY) VALUE DATE APPRECIATION
---------------- ---------- -------- ------------
<S> <C> <C> <C> <C>
U.S. Dollars-Long Contract..................... JPY177,669,000 $1,800,000 5/28/96 $125,399
U.S. Dollars-Long Contract..................... JPY185,022,000 $1,800,000 9/05/96 $ 33,240
</TABLE>

PORTFOLIO SECURITIES AND FOREIGN CURRENCY HOLDINGS WERE TRANSLATED AT THE
FOLLOWING EXCHANGE RATES AS OF MARCH 31, 1996

<TABLE>
<S> <C> <C> <C>
Japanese Yen JPY. 106.98 = $1.00
Australian Dollars AUD. 1.2797 = $1.00
Hong Kong Dollars HKD. 7.7340 = $1.00
Indonesian Rupiah IDR. 2,338.00 = $1.00
Malaysian Ringgits MYR. 2.5300 = $1.00
New Zealand Dollars NZD. 1.4681 = $1.00
Philippine Pesos PHP. 26.18 = $1.00
Singapore Dollars SGD. 1.4077 = $1.00
South Korean Won KRW. 782.25 = $1.00
Thailand Bahts THB. 25.2480 = $1.00
</TABLE>

See notes to financial statements

<PAGE>
NOMURA PACIFIC BASIN FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
MARCH 31, 1996

<TABLE>

<S> <C>
ASSETS:
Investments in securities, at market value (cost--$28,899,728).............. $33,089,860
Investments in foreign currencies, at market value (cost--$120,662)......... 120,493
Investments in short-term securities, at market value (cost--$764,108)...... 764,108
Receivable for investments sold............................................. 218,912
Receivable for capital stock sold........................................... 1,120
Unrealized appreciation on foreign forward currency contracts............... 158,639
Receivable for dividends and interest, net of withholding taxes............. 91,863
Other assets................................................................ 781
-----------
Total Assets............................................................ 34,445,776
-----------

LIABILITIES:

Payable for investments purchased........................................... 229,322
Payable for capital stock redeemed.......................................... 65,755
Accrued management fee...................................................... 29,424
Other accrued expenses...................................................... 98,788
-----------
Total Liabilities....................................................... 423,289
-----------

NET ASSETS:

Capital stock (par value of 2,060,082 shares of capital stock outstanding,
authorized 200,000,000, par value $0.10 each)............................. 206,008
Paid-in capital............................................................. 28,539,380
Accumulated net realized gain on investments and foreign
currency transactions..................................................... 1,130,802
Unrealized net appreciation on investments and foreign exchange............. 4,348,291
Accumulated net investment loss............................................. (201,994)
-----------
Net Assets.............................................................. $34,022,487
-----------
-----------
Net asset value, redemption price and offering price per share.............. $ 16.52
-----------
-----------
</TABLE>

See notes to financial statements

<PAGE>
NOMURA PACIFIC BASIN FUND, INC.
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED MARCH 31, 1996

<TABLE>
<S> <C> <C>
INCOME:
Dividend income (less $63,390 withholding taxes)..................... $ 528,303
Interest income...................................................... 48,776
-----------
Total Income............................................. $ 577,079
EXPENSES:
Management fee....................................................... 307,917
Custodian fees....................................................... 134,526
Auditing and tax reporting fees...................................... 63,487
Shareholder reports.................................................. 45,819
Transfer agency fee.................................................. 44,823
Legal fees........................................................... 34,862
Directors' fees and expenses......................................... 34,515
Registration fees.................................................... 14,900
Insurance............................................................ 2,328
Miscellaneous........................................................ 2,714
-----------
Total Expenses........................................... 685,891
-----------
INVESTMENT INCOME (LOSS)--NET........................................ (108,812)
-----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCIES:
Realized gain on investments and foreign currency transactions:
Realized gain on investments--net.................................... 301,055
Realized gain on foreign exchange--net............................... 1,636,874
-----------
Realized gain on investments and foreign exchange--net............... 1,937,929
Change in unrealized depreciation on translation of investments,
foreign
currencies and other assets and liabilities denominated in
foreign currencies--net............................................ (5,594,289)
Change in unrealized appreciation on investments..................... 8,910,431
-----------
Net realized and unrealized gain on investments
and foreign exchange............................................... 5,254,071
-----------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS.................................................... $ 5,145,259
-----------
-----------
</TABLE>

See notes to financial statements

<PAGE>
NOMURA PACIFIC BASIN FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
FOR THE YEAR ENDED
MARCH 31,
1996 1995
-------------- --------------
<S> <C> <C>

FROM INVESTMENT ACTIVITIES:

Net investment loss............................................. $ (108,812) $ (36,804)
Net realized gain (loss) on investments......................... 301,055 (976,058)
Net realized gain on foreign exchange........................... 1,636,874 4,815,701
Change in unrealized appreciation (depreciation) on investments
and foreign exchange.......................................... 3,316,142 (6,600,484)
-------------- --------------
Increase (decrease) in net assets derived
from investment activities.................................... 5,145,259 (2,797,645)
-------------- --------------

FROM CAPITAL SHARE TRANSACTIONS:

Proceeds from continuous offering............................... 5,902,737 10,781,278
Net asset value of shares issued to shareholders on reinvestment
of dividends and distributions................................ 1,084,722 6,150,041
Cost of shares redeemed......................................... (19,461,493) (19,411,059)
-------------- --------------
Decrease in net assets derived from capital share
transactions.................................................. (12,474,034) (2,479,740)
-------------- --------------

FROM DISTRIBUTIONS TO SHAREHOLDERS:

Realized gain on investments and foreign exchange............... (1,332,752) (7,098,276)
-------------- --------------
Net decrease in net assets...................................... (8,661,527) (12,375,661)
-------------- --------------

NET ASSETS:

Beginning of year............................................... 42,684,014 55,059,675
-------------- --------------
End of year..................................................... $ 34,022,487 $ 42,684,014
-------------- --------------
-------------- --------------

SHARE ACTIVITY:

Shares issued on continuous offering............................ 371,069 633,120
Shares issued to shareholders on reinvestment of net investment
income and realized gain on investments....................... 68,871 371,713
Shares redeemed during the year................................. (1,211,801) (1,219,764)
-------------- --------------
Net shares redeemed during the year............................. (771,861) (214,931)
Shares outstanding at beginning of year......................... 2,831,943 3,046,874
-------------- --------------
Shares outstanding at end of year............................... 2,060,082 2,831,943
-------------- --------------
-------------- --------------
</TABLE>

See notes to financial statements

<PAGE>
NOMURA PACIFIC BASIN FUND, INC.
NOTES TO FINANCIAL STATEMENTS

1. SIGNIFICANT ACCOUNTING POLICIES

Nomura Pacific Basin Fund, Inc. (the Fund), is registered under the
Investment Company Act of 1940 as a diversified, open-end management investment
company. The Fund was incorporated in Maryland on March 14, 1985 and investment
operations commenced on July 8, 1985. The following is a summary of significant
accounting policies followed by the Fund.

(a) Valuation of Securities--Investments traded on stock exchanges are
valued at the last sale price on the primary exchange on which such securities
are traded, as of the close of business on the day the securities are being
valued or, lacking any sales, at the last available bid price. Securities traded
in the over-the-counter market are valued at the last available bid price.
Securities for which market quotations are not readily available and restricted
securities are valued in good faith at fair value using methods determined by
the Board of Directors. In determining fair value, consideration is given to
cost, operating and other financial data. Short-term debt securities which
mature in 60 days or less are valued at amortized cost if their original
maturity at the date of purchase was 60 days or less, or by amortizing their
value on the 61st day prior to maturity if their term to maturity at the date of
purchase exceeded 60 days. Securities and assets, including futures contracts
and related options, are stated at market value or otherwise at fair value as
determined in good faith by or under the direction of the Board of Directors of
the Fund.

(b) Foreign Currency Transactions--Transactions denominated in foreign
currencies are recorded in the Fund's records at the current prevailing rate at
the time of the transaction. Asset and liability accounts that are denominated
in the foreign currency are adjusted to reflect the current exchange rate at the
end of the period. Transaction gains or losses resulting from changes in the
exchange rate during the reporting period or upon settlement of foreign currency
transactions are included in operations for the current period.

The net assets of the Fund are presented at the exchange rate and market
values at the end of the period. The Fund isolates that portion of the change in
unrealized appreciation (depreciation) included in the statement of operations
arising as a result of changes in foreign currencies at March 31, 1996 on
investments and other assets and liabilities. Net realized foreign exchange
gains or losses arising from sales of portfolio securities, sales and maturities
of short-term securities, currency gains or losses realized between the trade
and settlement dates on securities transactions, the difference between the
amounts of dividends, interest, and foreign withholding taxes recorded on the
Fund's books, and the U.S. dollar equivalent of the amounts actually received or
paid.

(c) Financial Instruments with Off-Balance Sheet Risk--At March 31, 1996,
the Fund had outstanding two forward foreign currency exchange contracts
("forward contracts") in order to hedge against changes in the Japanese exchange
rate. The forward contracts involve elements of market risk in excess of the
amounts reflected in the Statement of Assets and Liabilities. The Fund bears the
risk of an unfavorable change in the foreign exchange rate underlying the
forward contracts. Risks may arise as a result of the potential inability of the
counterparty to meet the terms of the contract.

(d) Security Transactions, Investment Income, Distributions to
Shareholders--Security transactions are accounted for on the trade date.
Dividend income is recorded on the ex-dividend date and interest is recorded on
the accrual basis. Realized gains and losses on the sale of investments are
calculated on the identified cost basis.

Dividends from net investment income and distributions from net realized
gains, if any, are paid semi-annually.

Distributions from net investment income and net realized gains are
determined in accordance with federal income tax regulations, which may differ
from generally accepted accounting principles. To the extent these
32

<PAGE>
"book/tax" differences are permanent in nature (i.e., that they result from
other than timing of recognition-- "temporary"), such accounts are reclassified
within the capital accounts based on their federal tax-basis treatment;
temporary differences do not require reclassification. Dividends and
distributions which exceed net investment income or net realized gains for
financial reporting purposes, but not for tax purposes, are reported as
distributions in excess of net investment income.

(e) Capital Account Reclassification--For the year ended March 31, 1996,
the Fund's paid-in-capital was increased by $22,097 with an increase to
accumulated net realized gain of $85,088 and an offsetting decrease in
accumulated net investment income of $107,185. This adjustment was primarily the
result of a net operating loss and the reclassification of foreign currency
gains and losses.

(f) Income Taxes--A provision for United States income taxes has not been
made since it is the intention of the Fund to continue to qualify as a regulated
investment company under the Internal Revenue Code and to distribute within the
allowable time limit all taxable income to its shareholders.

Under the applicable foreign tax laws, a withholding tax may be imposed on
gross sales proceeds on the disposition of equity securities, interest,
dividends and realized gains at various rates; such withholding taxes are
reflected as a reduction of the related income or realized gain.

(g) Use of Estimates in Financial Statement Preparation--The preparation of
financial statements in accordance with generally accepted accounting principles
requires management to make estimates and assumptions that affect the reported
amounts and disclosures in the financial statements. Actual results could differ
from these estimates.

2. MANAGEMENT AGREEMENT AND TRANSACTIONS WITH AFFILIATED PERSONS

Nomura Capital Management, Inc. (the Manager) acts as the Manager of the
Fund pursuant to a management agreement. Under the agreement, the Manager
provides all office space, facilities and personnel necessary to perform its
duties. Pursuant to such management agreement, the Manager has retained its
parent company, Nomura Investment Management Co., Ltd. (NIMCO) and Nomura
Capital Management (Singapore) Ltd. (NCM-Singapore) to act as investment
advisers for the Fund and Nomura Securities International, Inc. (NSI) to provide
administrative services to the Fund.

As compensation for its services to the Fund, the Manager receives a
monthly fee computed daily, at the annual rate of .75 of 1% of the Fund's
average daily net assets. For services performed, NIMCO, NCM-Singapore and NSI
receive a monthly fee from the Manager at the annual rates of .26125 of 1%,
.0275 of 1% and .10 of 1%, respectively, of the average daily net assets of the
Fund. Under the Management Agreement, the Fund paid or accrued fees to the
Manager of $307,917 for the year ended March 31, 1996. For the year ended March
31, 1996, the Manager informed the Fund that NIMCO, NCM-Singapore and NSI
received fees of $106,591, $11,220 and $40,800, respectively, from the Manager.
At March 31, 1996, the fee payable to the Manager, by the Fund was $29,424.

One state in which shares of the Fund are qualified for sale imposes
limitations on the expenses of the Fund. Under this limitation the Manager is
required to reimburse the Fund in any amount necessary to prevent the aggregate
ordinary operating expenses (excluding taxes, brokerage fees and commissions and
extraordinary charges such as litigation costs) from exceeding in any fiscal
year 2.5% of the Fund's first $30 million of average net assets, 2.0% of the
next $70 million of average net assets and 1.5% of the remaining average net
assets. No reimbursement to the Fund was required under this limitation for the
year ended March 31, 1996.

Certain officers and/or directors of the Fund are officers and/or directors
of the Manager and/or NSI. The Nomura Securities Co., Ltd., parent of NSI and
the Manager's indirect parent, earned $43,176 in commissions
33

<PAGE>
on execution of portfolio security transactions for the year ended March 31,
1996. The Fund pays fees to each Director not affiliated with the Manager and/or
NSI an annual fee of $5,000 plus $500 per meeting attended, together with such
Director's actual expenses related to attendance at meetings. Such fees and
expenses for the unaffiliated Directors aggregated $33,896 for the year ended
March 31, 1996.

3. PURCHASES AND SALES OF INVESTMENTS

Purchases and sales of investments for the year ended March 31, 1996,
exclusive of investments in foreign currencies and short-term securities, were
$16,735,977 and $26,756,213, respectively.

As of March 31, 1996, net unrealized appreciation on investments, exclusive
of investments in foreign currencies and short-term securities, for Federal
income tax purposes was $4,079,466 of which $5,181,128 related to appreciated
securities and $1,101,662 related to depreciated securities. The aggregate cost
of investments, exclusive of investments in foreign currencies and short-term
securities, at March 31, 1996 for Federal income tax purposes was $29,010,394.

<PAGE>
NOMURA PACIFIC BASIN FUND, INC.

FINANCIAL HIGHLIGHTS

Selected per share data and ratios for a share of common stock outstanding
throughout each period:

<TABLE>
<CAPTION>
FOR THE YEAR ENDED MARCH 31
---------------------------------------------------------------------------------------------------------
1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
------ ------ ------ ------ ------ ------ ------ ------ ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of
period.............. $15.07 $18.07 $14.33 $12.49 $15.19 $15.36 $19.15 $20.59 $24.20 $15.68
------ ------ ------ ------ ------ ------ ------ ------ ------ -------
Income from investment
operations:
Net investment
income (loss)..... (0.04)+ (0.01)+ (0.01)+ --+ --+ 0.04 0.08 0.03 0.06+ 0.03+
Net realized and
unrealized gain
(loss) on
investments and
foreign
currencies........ 2.07+ (0.74)+ 4.03+ 1.87+ (1.84)+ 2.53 0.20 (0.21) 6.87+ 8.85+
------ ------ ------ ------ ------ ------ ------ ------ ------ -------
Total from
investment
operations........ 2.03+ (0.75)+ 4.02+ 1.87+ (1.84)+ 2.57 0.28 (0.18) 6.93+ 8.88+
Distributions to
shareholders from:
Net investment
income............ -- -- (0.05) (0.02) (0.01) (0.04) (0.10) (0.05) (0.08) --
Net realized capital
gains............. (0.58) (2.25) (0.21) (0.01) (0.85) (2.70) (3.97) (1.21) (10.46) (0.36)
In excess of net
investment
income............ -- -- (0.02) -- -- -- -- -- -- --
------ ------ ------ ------ ------ ------ ------ ------ ------ -------
Total distributions... (0.58) (2.25) (0.28) (0.03) (0.86) (2.74) (4.07) (1.26) (10.54) (0.36)
------ ------ ------ ------ ------ ------ ------ ------ ------ -------
Net asset value, end
of period........... $16.52 $15.07 $18.07 $14.33 $12.49 $15.19 $15.36 $19.15 $20.59 $24.20
------ ------ ------ ------ ------ ------ ------ ------ ------ -------
------ ------ ------ ------ ------ ------ ------ ------ ------ -------
Total investment
return.............. 13.7% (4.2%) 28.2% 15.0% (12.9%) 17.4% (1.7%) (0.9%) 35.3% 57.6%
Ratio to average net
assets/ supplemental
data:
Net assets, end of
period
(in 000).......... $34,022 42,684 55,060 46,095 43,203 54,274 53,933 73,169 94,786 81,850
Operating
expenses.......... 1.78% 1.38% 1.39% 1.51% 1.46% 1.42% 1.32% 1.25% 1.22% 1.45%
Net investment
income............ (0.28%) (0.07%) (0.10%) 0.01% 0.00% 0.28% 0.40% 0.07% 0.28% 0.14%
Portfolio
turnover.......... 45% 49% 76% 55% 41% 76% 46% 37% 61% 46%
<FN>
- ---------------
+Based on average shares outstanding.
</TABLE>

<PAGE>
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TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
<S> <C>
Investment Objective and Policies.... 2
Investment Restrictions......... 3
Management of the Fund............... 5
Directors and Officers.......... 5
Management and Investment
Advisory Arrangements......... 7
Purchase of Shares................... 8
Distribution Agreement.......... 8
Distribution Plan............... 8
Redemption of Shares................. 9
Portfolio Transactions and
Brokerage............................ 9
Determination of Net Asset Value..... 10
Shareholder Services................. 11
Investment Accounts............. 11
Reinvestment of Dividends and
Capital Gains Distributions... 11
Retirement Plans................ 12
Dividends, Distributions and Taxes... 12
Special Rules for Certain
Foreign Currency Transactions... 14
General Information.................. 15
Description of Shares........... 15
Independent Accountants......... 15
Custodian and Transfer Agent.... 15
Legal Counsel................... 16
Performance Data................ 16
Reports to Shareholders......... 16
Report of Independent Accountants.... 17
Financial Statements................. 18
</TABLE>

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Nomura Pacific Basin
Fund, Inc.

[LOGO]

Statement of Additional
Information

July 29, 1996

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