NOMURA PACIFIC BASIN FUND INC, N-30D, 2000-07-07

NOMURA PACIFIC BASIN FUND INC
N-30D, 2000-07-07

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NOMURA PACIFIC BASIN FUND, INC.

[LOGO]

May 18, 2000

To Our Shareholders:

We present the Annual Report of the Pacific Basin Portfolio (the "Fund"),
a series of Nomura Pacific Basin Fund, Inc. (the "Corporation") for the fiscal
year ended March 31, 2000.

The Net Asset Value per Share ("NAV") of the Fund's share classes as of
March 31, 2000 were: Class A $17.09, Class B $17.04, and Class Z $17.11.

The NAV of the Fund's Class A, B, and Z shares decreased by 1.2%, 1.4%,
and 1.2%, respectively, for the quarter ended March 31, 2000, based on the
change in share prices. The NAV of the Fund's Class Z shares increased by 47.1
% for the year ended March 31, 2000. The NAV of the Fund's Class A shares and
Class B shares increased by 22.5% and 22.2%, for the period August 2, 1999
(commencement of the class share offering) to March 31, 2000, respectively,
based on the changes in share prices. The net assets of the Fund aggregated
$18,703,056 and the total number of shares outstanding was 1,093,231 as of
March 31, 2000.

The average annual total return of the Fund's Class Z shares for the
five-year and ten-year periods ended March 31, 2000 and since inception (July
8, 1985) were 5.8%, 6.6%, and 13.1 %, respectively. Total return consists of
changes in the NAV and the reinvestment of dividends and capital gains
distributions. This performance information represents past performance, and
investment return and principal value of an investment in the Fund will
fluctuate so that, when redeemed, it may be worth more or less than the
original cost. Changes in currency rates have for certain periods influenced
the Fund's past performance. (Please refer to the Fund Highlights for
additional performance data.)

The United States dollar-based return of the Pacific Basin, as measured
by the Morgan Stanley Capital International Index (the "MSCI") (an unmanaged
index), declined by 0.4% and increased by 45.2% for the quarter and the year
ended March 31, 2000, respectively. The Fund's Class Z shares underperformed
the MSCI Index by 0.8 percentage points for the quarter and outperformed the
MSCI Index by 1.9 percentage points for the year ended March 31, 2000. The
underperformance was attributable to underweighted country allocation in
Malaysia and Singapore, offset by positive stock selection in Japan's export
and technology companies and Australia's Financial sector.

The foreign exchange rate of the Japanese yen ("Yen") at March 31, 2000
was 102.665 Yen to one U.S. dollar. The Yen depreciated by 0.5% and
appreciated by 15.3% against the U.S. dollar for the quarter and the year
ended March 31, 2000, respectively.

The NAV of the Fund's share classes as of May 17, 2000 were Class A
shares $15.51, Class B shares $15.45, and Class Z shares $15.51.

The Portfolio

The Fund remained underweight in Australia and Hong Kong. These two stock
markets have historically exhibited high correlation with the U.S. markets.
Increased volatility in the U.S. financial markets is expected to limit
increases in these markets. Hong Kong, for example, pegs its currency to the
U.S. dollar, meaning that changes in U.S. monetary policy are directly
reflected in the economic system of Hong Kong. Australia is tightening its
monetary policy, due to its strong domestic economy and a gradual emergence of
inflationary pressure. Meanwhile, the Fund continues to favor Singapore. The
country weathered the Southeast Asian financial crisis relatively unscathed,
helped by its strong economic fundamentals, and was among the first countries
to recover from the economic downturn. Valuations in the Singapore stock
market were also attractive, while other Southeast Asian markets had already
reached the high end of their historical valuation ranges.

The Stock Market

The stock markets in the Pacific Basin consolidated during the quarter
ended March 31, 2000, amid concerns surrounding the state of the U.S. stock
market, and uncertain political developments within the region. The Federal
Reserve continued to increase short-term interest rates through February and
March, pushing the Federal Funds rate to 6%, and the U.S. stock market reacted
with volatile trading throughout the quarter. The NASDAQ Composite Index
remained strong in January and February and the Dow Jones Industrial Average
declined. Towards the end of the quarter, however, the NASDAQ underwent a
substantial correction as the Technology sector, especially Internet shares,
suffered a setback.

Conditions in the U.S. had a significant impact on Southeast Asian stock
markets, as investors in the region shifted their focus toward the "New
Economy" shares, including the telecommunication and internet- related stocks.

Despite worries over the slow pace of economic recovery in Japan, as
demonstrated by the negative fourth quarter gross domestic product ("GDP")
figure, investors were apparently encouraged by the more positive signs
indicating a recovery in Corporate sector capital spending. The Nikkei Average
Index (a price-weighted index of 225 leading stocks on the Tokyo Stock
Exchange) has risen 7.4% since the beginning of this year to exceed the 20,300
Yen level for the first time in four years. The outperforming sectors in the
Tokyo stock market included some of last year's losers, such as Pulp and
Paper, Chemicals, and the Engineering related sectors. Pharmaceuticals and
Securities Companies posted the most impressive gains. By contrast, the star
performers of 1999 suffered major setbacks periodically during the first
quarter, with Electronics, Software, and Communication stocks all lagging. A
return to a more value orientated market was accompanied by renewed emphasis
on the prospects of a short-term earnings recovery, in contrast to the
somewhat overoptimistic long term earnings projections for many of the
Telephone, Media and Technology ("TMT") stocks.

Meanwhile, the Taiwan presidential election stole the spotlight on the
local investment scene during February and March. The poll ended 50 years of
Nationalist Party (KMT) rule, and the election of the new president, Mr. Chen
Shui Bian, is seen as a clear rebuff to the Chinese government. Nevertheless,
Mr. Chen has stated that he would not declare independence, while China now
appears willing to engage in talks with Taiwan. Although there remains some
risk of further antagonism, differences over the "one China principle" now
appear to be somehow reconciled, as both sides are keenly aware of the
inevitable negative outcome of continued conflict. Under these circumstances,
after a period of substantial volatility, the investment environment in Taiwan
improved.

Japan

The TOPIX, consisting of all companies listed on the TSE First Section,
ended the first quarter almost flat. The out-performing sectors included some
of last year's losers, such as Pulp and Paper, Chemicals, and the Engineering
related sectors. By contrast, the star performers of 1999 suffered major
setbacks during the first quarter, with Electronics, Software, and
Communication stocks all lagging behind.

An early correction had a particularly strong impact on the technology
stocks as investors shifted their attention back towards the under-performers,
including Pharmaceuticals, Warehousing, and Real Estate that still offered
reasonable value. The investment pendulum later swung back towards Technology,
helping to push the TOPIX to its highest close since 1992. Stock market
concentration continued as Tokyo followed the trend set by the U.S. NASDAQ
market. Fresh retail funds from the launch of some large domestic investment
trusts also contributed to the uneven but buoyant trend.

Expectations of higher interest rates hit U.S. TMT sectors through March,
which also hurt Japanese Internet related stocks throughout this period. Other
Technology sectors, and even some traditional industries, managed to de-couple
from the U.S. lead. A return to value orientation was accompanied by a renewed
emphasis on the prospects for a short-term earnings recovery, in contrast to
the somewhat overoptimistic long-term earnings projections for many of the TMT
stocks.

The Fund believes that the market concentration in large capitalization
communication/internet stocks has peaked. Many companies that were sold off
over the past year have now started to restructure, and will therefore offer
the most attractive investment opportunities. Corporate restructuring and a
clear focus on shareholder value will remain the Fund's primary stock
selection criteria.

Australia

Australian stocks declined 0.1 % in March, and edged 0.6% lower for the
quarter. Banks outperformed Resources at the beginning of the quarter but
underperformed by 5.9 percentage points in March. Technology stocks gained,
but the narrowness of the rally, led by News Corp, came at the expense of "old
economy" stocks resulting in a sharp performance divergence between the two.

Ten-year bond yields ended March at 6.36%, a spread of 36 basis points
over U.S. Treasuries. There was further anecdotal evidence of slower economic
activity following relatively weaker February retail sales growth, of (0.2%)
(month over month). Consumer and business confidence surveys and fourth
quarter GDP (1 % quarter over quarter) were both below expectations. However,
the Reserve Bank Australia ("RBA"), warning against underestimating economic
growth, raised the prospect of higher official rates. The currency ended down
at $0.6071, in anticipation of slower growth.

The reporting season was generally positive and lower bond yields remain
supportive, but this has yet to underpin support for market-wide
outperformance. The flattening yield curve also has yet to benefit the banks.
However, interest in financial stocks may be boosted by possible corporate
activity following Commonwealth Bank's bid for Colonial (CGH).

The stock market is fairly valued. There are signs of increasing
selectivity towards Technology stocks, and traditional stocks stand to benefit
given greater inherent value within these sectors. However, sustained market
out-performance is unlikely, as it approaches its upper trading range even as
old economy stocks come into focus. The stock market remains captive to the
U.S. interest rate cycle, with negative implications for the Australian
dollar.

Hong Kong

Interest rate sensitivity has weakened, given the reduced importance of
the Property sector. The Hang Seng Index ("HSI") was resilient during the
first quarter despite lingering fears of a U.S. interest rate hike, but there
was substantial divergence among stocks. Only six out of thirty-three HSI
components made gains, and all were participants in the "New Economy".
Enthusiasm for internet-technology ("IT") and semiconductor related non-index
stocks remained, but interest in newly listed 'dot-com' stocks dissipated.

A symbol of Hong Kong's transformation into the regional IT hub was
Pacific Century Cyberworks Cable and Wireless HKT Ltd. ("PCCW") acquisition of
Hong Kong Telecommunications, Ltd., the most profitable and respected company
in the group. PCCW is expected to be ranked third, after Hong Kong & Shanghai
Banking Corp. and China Telecommunications, and will be a candidate for HSI
and MSCI Index inclusion.

Macroeconomic recovery is illustrated by strong export growth and
recovering retail sales. Hong Kong's GDP is likely to increase by more than 4%
in 2000. However, deflation in residential rents continues. High real interest
rates will weigh on residential property prices for now even if banks offer
attractive mortgages. Prices could recover if the U.S. stops raising interest
rates further, ahead of the presidential election. Office rents are
recovering, as "New Economy" enterprises multiply. This quick adjustment
leaves the unemployment rate at a relatively high level with a mismatch
between skilled engineers and other white-collar workers.

U.S. interest rates, MSCI policy changes (the inclusion of Malaysia and
Chinese stocks will automatically reduce Hong Kong's weighting), a NASDAQ
correction, and the Taiwan issue are likely to put pressure on the stock
market in the second quarter. Nonetheless, monetary stability and a Chinese
economic recovery should help limit the downside risk of the HSI.

Malaysia

The Malaysian stock market extended its rally by approximately 20% in the
first quarter. Although it breached the 1000 psychological resistance level in
mid-February on strong liquidity, the Kuala Lampur Composite Index ("KLCI")
closed at 974.38 on March 31, 2000. A mixed reporting season included
disappointments from large capitalization stocks like Telekom Malaysia Berhad,
which reported a sharp decline in earnings on losses from its mobile
operations. Others like Genting Berhad, United Engineers Berhad, and Malaysia
Airlines revealed unexciting fiscal year 1999 results as well. Some foreign
brokers are reducing earnings forecasts for this year, although the revision
is expected to be modest. A possible reduction in brokerage fees also
unsettled the stock market, while external uncertainty is keeping foreign
investors sidelined.

UMNO elections in May are unlikely to be a surprise, as both the Prime
Minister and Deputy Prime Minister look set to secure the top two posts within
the party.

Growth momentum remained largely intact as strong demand for electronics
and semiconductors added to January's trade surplus of 4.5 billion Malaysian
Ringitt, up 4.5% year over year, with a strong 26% rise in the January
Industrial Production Index. Malaysia is also a net beneficiary of higher oil
prices.

Malaysia's stock market could be underpinned by inclusion in the MSCI
index in May, favorable economic growth, improving business and consumer
confidence, perceived immunity to higher U.S. interest rates, and a strong
competitive advantage resulting from its Malaysian ringgit peg at 3.80 per
U.S. Dollar.

New Zealand

The New Zealand stock market increased 2.9% in March but declined 6.9%
during the quarter. Corporate news was generally positive. Media stocks
enjoyed strong support as Telecommunications Corp. of New Zealand ("TNZ") took
a 5.8% stake in Independent Newspapers, which also lifted Sky Network
Television. TNZ also benefited from the strong increase in AAPT, Ltd. Air New
Zealand ("AIRVB') increased as Qantas showed interest in forming an alliance,
which also supported Brierley Investments ("BRY"). The Fletcher Group (ex
Energy) weakened, pending an announcement on Fletcher Paper Corp's ("FLC")
restructuring.

Economic growth of 2.2% for the December quarter was twice the rate
expected, and lifted bond yields and the currency (10-year yields closed at
6.96%, and currency at $0.4965). The 10-year Treasury yield spread widened to
96 basis points. The currency also benefited from S&P's affirmation of the
country's credit rating despite fears surrounding the current account deficit
reaching 8% of GDP.

Although the GDP deflator remained soft and first quarter growth may
unwind, given some one-time factors during the fourth quarter, the Reserve
Board of New Zealand ("RBNZ") is likely to remain aggressive given its view on
the closing output gap. The stock market has factored in further interest rate
increases.

Macroeconomic conditions remain supportive, but the stock market is
expensive given current bond yields. The March rally was driven by good
corporate news, highlighted by FLC's restructuring, but has come from
depressed levels. The issue remains a struggle between earnings and
valuations, and gains from here will be selective, particularly if the RBNZ
raises interest rates. For the stock market to sustain gains, overseas
interest must follow through. In this regard, the stronger New Zealand dollar
is positive.

Singapore

The Straits Times Index declined 14% during the first quarter with
Property and Bank stocks bearing the brunt. A lack of interest in
non-technology sectors and increased competition for regional portfolio funds
dictated market activity. Although electronics and IT stocks fared well, they
too surrendered to profit taking. Resolution of the Central Limit Order Book
("CLOB") issue approaches but will not influence short-term sentiment.

Corporate results beat expectations, leading to a slight upward revision
for fiscal year 2000 earnings. Investor response was muted, suggesting that
most of the news was well discounted. January's disappointing 7.6% increase in
non-oil domestic exports damaged sentiment. Growth of 18.8% in February
supported the Fund's belief that January had been undermined by Y2K factors
and the possible effect of transfer pricing between-Singapore and Malaysia.

Without a catalyst to broaden investor interest, even the recent
acquisitions by Natsteel Electronics Ltd. of NEC Corp. and 3Com plants had
little impact. The good response to certain property launches was largely
ignored. Better trade statistics could help, but the focus is likely to remain
on export-related sectors. The relative strength of the Singapore dollar is
cutting into the export market to the U.S., making the currency outlook
central to export growth prospects. Monetary bias remains loose, but capacity
utilization in certain sectors is tightening. Portfolio outflows following the
MSCI reweighting of Taiwan and China, and the inclusion of Malaysia by May
have already generated blue chip selling, which could be exacerbated by the
inclusion in MSCI of more technology stocks. Otherwise, market valuations
appear reasonable.

South Korea

The Korea Composite Stock Price Index ("KOSPI") declined 16% during the
first quarter. Retail investors' enthusiasm for IT stocks caused a massive
asset shift from the main board to the KOSDAQ. The trade deficit raised
concerns over capital flows and inflation, and the Bank of Korea's unexpected
rate increase was regarded as shift towards a tight monetary policy. Expiring
investment trust units ("ITC") are accelerating the sell-off, while the stock
market needs time to absorb the large cash raising from November and December.
After renewing its historical high in early March, the KOSDAQ declined by over
30% following the NASDAQ's correction.

Without major redemptions of bond-type ITCs after February 8, when Daewoo
Corp. related investors were guaranteed a refund of 95% of face value, the
Bank of Korea took the opportunity to take proactive measures to combat rising
inflationary pressures from oil prices and strong domestic demand by raising
its overnight call rate by 25 basis points to 5.0%. However, inflationary
pressure may be overstated given the recent oil price decline, while much of
the import growth is in raw materials, which will be re-exported, leaving
little impact on domestic inflation. Nevertheless, raising short-term rates is
the only solution for Bank of Korea, after publicly pledging to flatten the
yield curve and maintain inflation within a 1.5% to 3.1 % range. Although
economically prudent, short-term interest rate pressure may cap the stock
market for now.

Economic growth is even healthier than last year, judging from the
consolidation of industrial production growth and employment recovery. Weaker
retail sales growth over recent months has eased fears of over-heating. The
coming general election is unlikely to disturb the stock market, considering
all parties are expected to maintain economic policy continuity.

Taiwan

The Taiwan stock market experienced a volatile first quarter. After
surging past the key 10,000 level when the stock market re-opened following
the Chinese New Year holidays, the presidential election victory of the
pro-independence Democratic Progressive Party's ("DPP") candidate, Chen
Shui-Bian, forced the market down to a low of around 8,500. A rebound to 9,855
at the close of the quarter followed purchases by the support fund and a less
aggressive response from China than originally feared. Market sentiment
improved after Mr. Chen toned down his stance on independence and the
parliament approved direct links between its offshore islands (Kinmen, Matsu
and Penghu) and mainland China.

Poor election results on March 18 sent the ruling KMT party into disarray
and led to the forced resignation of its leader, President Lee Teng Hui. On
the other hand, second place James Soong's strong showing in the election has
prompted him to set up a new political party.

Weak export growth in February was due to the timing of week long Chinese
New Year holidays. However, strong March sales growth from electronics and
semiconductor companies indicates stronger exports in March. A pre-emptive
12.5 basis point increase in the discount rate is unlikely to result in
matching increases by the local banks given the abundant liquidity.

Mr. Chen's victory could renew tension with China, and market volatility
is likely ahead of the inauguration on May 20. However, the new administration
is widely expected to introduce reforms eradicating "black money" politics and
promoting a cleaner government. The economy is sound and corporate earnings
remain robust. The China issue aside, market weakness offers a good
opportunity to accumulate.

Investment Strategy

1) The Fund will remain underweight in the Japanese stock market, as
short-term stock prices have discounted most of the improvement in
earnings, although the Fund believes downside risk is limited by
expectations of ample liquidity.

2) The principal strategies within the Japanese stock portfolio are to
maintain the overweight position in Technology stocks while
remaining underweight in Financials. Many of these Japanese
technology companies are competitive in the global markets, and are
not particularly expensive from a valuation perspective. They will
benefit further from the rapid diffusion of personal computers,
mobile communications, and other new technologies. Bank valuations
are no longer demanding, but the liquidation of cross shareholdings
could undermine the sector's performance over the coming months.

3) The Fund will maintain its over-exposure to the South Korean market
and intends to increase gradually the weight of Taiwan.

4) The Fund will remain overweight in Singapore, in view of the
market's attractive relative to valuation.

5) The Fund will keep an underweight position in Hong Kong, due to
demanding valuations.

Change in Control of Investment Advisor

The Nomura Securities Co., Ltd. has increased its ownership position in
Nomura Asset Management Co., Ltd. ("NAM"), the Fund's Investment Advisor, from
4.9% to a majority ownership position (approximately 73.8% as of March 31,
2000), with the ultimate goal of acquiring 100% ownership. In addition, NAM
has increased its ownership of Nomura Asset Management U.S.A. Inc. ("NAM
-U.S.A.") from 88% to 100% by acquiring the remaining shares from Nomura
Research Institute Ltd. After the change, NAM and NAM-U.S.A. will continue to
maintain their management and business autonomy.

We appreciate your continuing support of your Fund.

Sincerely,

/s/ Nobuo Katayama
Nobuo Katayama
President

SHAREHOLDERS ACCOUNT INFORMATION

Shareholders whose accounts are held in their own name may contact the Fund's
transfer agent, State Street Bank and Trust Company at (800) 680-1836 for
information concerning their accounts.

Nomura Asset Management Co., Ltd. ("NAM") provides investment
recommendations to Nomura Asset Management U.S.A. Inc. ("NAM-U.S.A."), the
Manager of the Fund. Mr. Nobuo Katayama, President of the Fund and President
of NAM-U.S.A., is primarily responsible for the day-to-day management of the
Fund's portfolio. Mr. Katayama has held such responsibilities for the Fund and
has served as President of NAM-U.S.A. since 1999.

INTERNET WEBSITE

NAM-U.S.A. (the "Manager") has established an Internet website which highlights
the Manager's history, its investment philosophy and process and products,
which includes the Fund. The Internet web address is www.nomura-asset.com. We
invite you to view the Internet website.

<PAGE>

NOMURA PACIFIC BASIN FUND, INC.
PACIFIC BASIN PORTFOLIO
FUND HIGHLIGHTS-MARCH 31, 2000
(Unaudited)

<S> <C> <C> <C> <C>
KEY STATISTICS
Net Assets ........................................ $18,703,056
Net Asset Value per Share Class A................ $17.09
Class B................ $17.04
Class Z................ $17.11

PERFORMANCE COMPARISON CHART AND TABLE
Average Annual Total Return:* Class A Class B Class Z
------- ------- -------
Year Ended 3/31/00 ................................................... N/A N/A 47.1%
Five Years Ended 3/31/00 ............................................. N/A N/A 5.8%
Ten Years Ended 3/31/00 .............................................. N/A N/A 6.6%
Since Inception (8/2/99 to 3/31/00) .................................. 22.5% 22.2% N/A
Since Inception (7/8/85 to 3/31/00) .................................. N/A N/A 13.1%
Cumulative Total Return:*
Five Years Ended 3/31/00.............................................. N/A N/A 32.5%
Ten Years Ended 3/31/00 .............................................. N/A N/A 89.6%
Since Inception (8/2/99 to 3/31/00) .................................. 22.5% 22.2% N/A
Since Inception (7/8/85 to 3/31/00) .................................. N/A N/A 522.4%

</TABLE>

* Performance data quoted above represents past performance, and the investment
return and principal value of an investment in the Fund will fluctuate so
that, when redeemed, it may be worth more or less than the original cost.
Changes in currency rates have influenced the Fund's performance for certain
of the specified periods. Expense reimbursement is in effect, and without
such reimbursement performance would have been lower.

This chart is intended to compare the performance results of a hypothetical
$10,000 investment in Pacific Basin Portfolio Class Z shares since the Fund's
inception on July 8, 1985 to a $10,000 investment made in the Morgan Stanley
Capital International Pacific Basin Index ("MSCI Pacific Basin Index") for
the same period. The performance of the MSCI Pacific Basin Index does not
reflect brokerage commissions and other expenses that would be incurred to
acquire and manage a comparable portfolio of securities.

History of $10,000 Investment in Class Z Shares Assuming Reinvestment of
Capital Gain and Income
Distributions Versus the MSCI Pacific Basin Index.

A line graph depicting the growth of an investment in the Fund's Class Z
Shares compared to growth of an investment in the MSCI Pacific Basin Index.
Beginning and ending values are:

6/30/85 3/31/00

Nomura Pacific Basin Fund, Inc. Class A $10,000 $62,224
MSCI Pacific Basin Index $10,000 $48,966

Performance data represents past performance and assumes that all dividends
and distributions are invested in additional shares. Past performance is not
predictive of future performance. Expense reimbursement is in effect, and
without such reimbursement performance would have been lower.

The MSCI Pacific Basin Index is an arithmetical average weighted by market
value of the performance of some 419 securities listed on the principal stock
exchanges of Australia, Hong Kong, Japan, New Zealand and Singapore. The
combined market capitalization represents about 60% of the average market
value of the stock exchanges of the above five countries. The performance data
of the Index included dividends reinvested.

This chart is intended to compare the performance results of a hypothetical
$10,000 investment in Pacific Basin Portfolio Class A shares since the Class's
inception on August 2, 1999 to a $10,000 investment made in the Morgan Stanley
Capital International Pacific Basin Index ("MSCI Pacific Basin Index") for the
same period. The performance of the MSCI Pacific Basin Index does not reflect
brokerage commissions and other expenses that would be incurred to acquire and
manage a comparable portfolio of securities.

<PAGE>

History of $10,000 Investment in Class A Shares Assuming Reinvestment of
Capital Gain and Income Distributions Versus the MSCI Pacific Basin Index.

A line graph depicting the growth of an investment in the Fund's Class A
Shares compared to growth of an investment in the MSCI Pacific Basin Index.
Beginning and ending values are:

8/2/99 3/31/00

Nomura Pacific Basin Fund, Inc. Class B $10,000 $11,600
MSCI Pacific Basin Index $10,000 $11,986

Assuming maximum sales charge, transaction costs and other operating expenses,
including advisory fees.

This chart is intended to compare the performance results of a hypothetical
$10 000 investment in Pacific Basin Portfolio Class B shares since the Class's
inception on August 2, 1999 to a $10,000 investment made in the Morgan Stanley
Capital International Pacific Basin Index ("MSCI Pacific Basin Index") for the
same period. The performance of the MSCI Pacific Basin Index does not reflect
brokerage commissions and other expenses that would be incurred to acquire and
manage a comparable portfolio of securities.

History of $10,000 Investment in Class B Shares Assuming Reinvestment of
Capital Gain and Income Distributions Versus the MSCI Pacific Basin Index.

A line graph depicting the growth of an investment in the Fund's Class B
Shares compared to growth of an investment in the MSCI Pacific Basin Index.
Beginning and ending values are:

8/2/99 3/31/00

Nomura Pacific Basin Fund, Inc. $10,000 $12,215
MSCI Pacific Basin Index $10,000 $11,986

<PAGE>

NOMURA PACIFIC BASIN FUND, INC.
PACIFIC BASIN PORTFOLIO
FUND HIGHLIGHTS-(Continued)
MARCH 31, 2000
(Unaudited)

GEOGRAPHICAL ALLOCATION:
% of Net Assets
-----------------------------------------
Cash and % of
Equities Cash Equivalents Total MSCI Index+
-------- ---------------- ----- -----------
<S> <C> <C> <C> <C>
Japan ....................................... 72.4 -- 72.4 83.3
Australia ................................... 5.5 -- 5.5 6.8
Hong Kong ................................... 6.8 -- 6.8 7.0
Malaysia .................................... 0.5 -- 0.5 --
New Zealand ................................. 0.3 -- 0.3 0.4
Singapore ................................... 4.4 -- 4.4 2.5
South Korea ................................. 3.5 -- 3.5 --
Taiwan ...................................... 1.8 -- 1.8 --
United States ............................... -- 4.7 4.7 --
---- ---- ----- -----
Total Investments ........................... 95.2 4.7 99.9 100.0
Other Assets Less Liabilities, Net .......... 0.1 --
----- -----
Total ................................... 100.0 100.0
===== =====

</TABLE>

-----------------
+ Source: Morgan Stanley Capital International Pacific Basin Index (an
unmanaged index).

INDUSTRY DIVERSIFICATION
% of
Net Assets
----------
Japanese Securities
Electrical Machinery.................. 11.6
Electrical and Electronics............ 8.8
Consumer Electronics and Parts........ 8.0
Telecommunications.................... 6.6
Chemicals and Pharmaceuticals......... 5.2
Motor Vehicles........................ 5.1
Retail................................ 4.7
Banking and Insurance................. 4.4
Information and Software.............. 3.3
Wholesale............................. 2.7
Financials............................ 2.5
Non-Ferrous Metals.................... 2.5
Precision Machinery................... 1.7
Miscellaneous Manufacturing........... 1.3
Textiles and Apparel.................. 1.2
Iron and Steel........................ 1.0
Real Estate........................... 1.0
Commerce.............................. 0.8
Australian Securities
Publishing and Printing............... 1.1
Telecommunications.................... 0.9
Banking............................... 0.8
Non-Ferrous Metals.................... 0.8
Financials............................ 0.6
Miscellaneous Manufacturing........... 0.5
Transportation........................ 0.5
Oil and Gas........................... 0.3
Hong Kong Securities
Conglomerate.......................... 2.4
Real Estate........................... 1.7
Telecommunications.................... 1.0
Utilities............................. 0.7
Banking............................... 0.6
Electrical and Electronics............ 0.4
Malaysian Securities
Banking............................... 0.2
Utilities............................. 0.2
Telecommunications.................... 0.1
New Zealand Securities
Telecommunications.................... 0.3
Singapore Securities
Banking............................... 1.9
Electrical and Electronics............ 0.6
Airlines.............................. 0.6
Publishing and Printing............... 0.5
Real Estate........................... 0.4
Telecommunications.................... 0.3
Transportation........................ 0.1
South Korean Securities
Consumer Electronics.................. 2.4
Telecommunications.................... 1.1
Taiwanese Securities
Electrical and Electronics............ 1.8

<PAGE>

NOMURA PACIFIC BASIN FUND, INC.
PACIFIC BASIN PORTFOLIO
FUND HIGHLIGHTS-(Continued)
MARCH 31, 2000

TEN LARGEST EQUITY HOLDINGS BY MARKET VALUE:

Market % of
Security Value Net Assets
-------- ------- -----------
<S> <C> <C>
AdvantestCorp ............................................. $742,853 4.0
NTT Mobile Communications Network, Inc. ................... 697,122 3.7
Sony Corp. ................................................ 651,926 3.5
Mitsubishi Electric Corp. ................................. 603,438 3.2
Taiyo Yuden Co., Ltd. ..................................... 581,211 3.1
Toyota Motor Corp. ........................................ 575,367 3.1
Nippon Telegraph and Telephone Corp. ...................... 539,814 2.9
NEC Corporation ........................................... 531 243 2.8
Rohm Company .............................................. 486,826 2.6
Mitsui Mining & Smelting Co., Ltd. ........................ 457,313 2.5

</TABLE>

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 the Pacific Basin
Portfolio (a series of the Nomura Pacific Basin Fund, Inc.) (the "Fund") at
March 31, 2000, 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 periods indicated, in conformity
with accounting principles generally accepted in the United States. 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 auditing standards generally accepted in the United States,
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, 2000 by
correspondence with the custodian, provide a reasonable basis for the opinion
expressed above.

PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, New York 10036
May 18, 2000

<PAGE>

NOMURA PACIFIC BASIN FUND, INC.
PACIFIC BASIN PORTFOLIO
SCHEDULE OF INVESTMENTS*
MARCH 31, 2000

% of
Market Net
Shares Cost Value Assets
------ ---- ------ ------
<S> <C> <C> <C> <C>
JAPANESE EQUITY SECURITIES

Banking and Insurance
The Bank of Tokyo-Mitsubishi, Ltd. ............................... 450 $ 6,915 $ 6,430 0.0
Commercial bank
The Dai-ichi Kangyo Bank, Ltd. ................................... 29,000 219,481 270,044 1.4
City bank
The Industrial Bank of Japan, Ltd. ............................... 26,000 209,016 237,549 1.3
Long term credit bank
The Sanwa Bank, Ltd. ............................................. 17,000 164,909 176,847 0.9
City bank
The Suruga Bank, Ltd. ............................................ 10,000 73,191 145,132 0.8
--------- -------- ----
Commercial bank
Total Banking and Insurance ..................................... 673,512 836,002 4.4
--------- -------- ----

Chemicals and Pharmaceuticals
Fuji Photo Film Co., Ltd. ........................................ 7,000 265,278 308,187 1.7
Photo film
Shin-Etsu Chemical Co., Ltd. ..................................... 5,000 173,558 303,414 1.6
Synthetic resins
Takeda Chemical Industries, Ltd. ................................. 5,000 159,843 355,525 1.9
--------- -------- ----
Pharmaceuticals
Total Chemicals and Pharmaceuticals .............................. 598,679 967,126 5.2
--------- -------- ----
Commerce
Ito-Yokado Co., Ltd. ............................................. 2,000 115,988 142,989 0.8
--------- -------- ----
Supermarkets

Consumer Electronics and Parts
Sony Corp. ....................................................... 4,600 160,574 651,926 3.5
Consumer electronics
Taiyo Yuden Co., Ltd. ............................................ 9,000 96,345 581,211 3.1
Ceramic capacitors
TDK Corporation .................................................. 2,000 102,747 272,342 1.4
Magnetic tapes
--------- --------- ----
Total Consumer Electronics and Parts ............................. 359,666 1,505,479 8.0
--------- --------- ----
Electrical and Electronics
Advantest Corp. .................................................. 3,500 308,075 742,853 4.0
Semiconductor testing equipment
Rohm Company ..................................................... 1,400 192,249 486,826 2.6
Custom integrated circuits
Tokyo Electron, Ltd. ............................................. 2,800 152,588 422,734 2.2
--------- --------- ----
Electric wires and cables
Total Electrical and Electronics ................................. 652,912 1,652,413 8.8
--------- --------- ----
Electrical Machinery
Fujitsu Ltd. ..................................................... 14,000 215,178 429,553 2.3
Computers
Minebea Co.,Ltd. ................................................. 18,000 186,797 239,322 1.3
Miniature bearings

See notes to financial statements

</TABLE>

<PAGE>

NOMURA PACIFIC BASIN FUND, INC.
PACIFIC BASIN PORTFOLIO
SCHEDULE OF INVESTMENTS*-(Continued)
MARCH 31, 2000

% of
Market Net
Shares Cost Value Assets
------ ---- ------ ------
<S> <C> <C> <C> <C>
Mitsubishi Electric Corp. ........................................ 64,000 $ 360,374 $ 603,438 3.2
Defense electronics
NEC Corporation .................................................. 18,000 231,755 531,243 2.8
Computers, telecommunication devices, electric
appliances and circuit boards
Omron Corp. ...................................................... 13,000 382,554 369,746 2.0
--------- --------- ----
Control systems
Total Electrical Machinery ....................................... 1,376,658 2,173,302 11.6
--------- --------- ----
Financials
Daiwa Securities Co., Ltd. ....................................... 16,000 270,302 300,784 1.6
Investment securities
Shinki Co., Ltd. ................................................. 7,000 198,411 171,821 0.9
--------- --------- ----
Consumer financing services
Total Financials ................................................. 468,713 472,605 2.5
--------- --------- ----
Information and Software
Fuji Soft ABC, Inc. .............................................. 5,400 255,844 368,188 1.9
Computer systems development
Softbank Corp. ................................................... 300 392,566 267,374 1.4
--------- --------- ----
Computer and network software
Total Information and Software. .................................. 648,410 635,562 3.3
--------- --------- ----
Iron and Steel
Nippon Steel Corp. ............................................... 75,000 140,822 178,980 1.0
--------- --------- ----
Steelmaker

Miscellaneous Manufacturing
Nippon Paper Industries Co., Ltd. ................................ 34,000 177,177 244,075 1.3
--------- --------- ----
Paper products

Motor Vehicles
Honda Motor Co., Ltd. ............................................ 9,000 290,035 371,694 2.0
Motorcycles, automobiles and power products
Toyota Motor Corp................................................. 11,000 309,973 575,367 3.1
--------- --------- ----
Automobiles
Total Motor Vehicles. ............................................ 600,008 947,061 5.1
--------- --------- ----
Non-Ferrous Metals
Mitsui Mining & Smelting Co., Ltd. ............................... 75,000 404,292 457,313 2.5
--------- --------- ----
Oil, coal, and building materials

Precision Machinery
Amada Co., Ltd. .................................................. 39,000 277,784 315,297 1.7
--------- --------- ----
Metal cutting, forming and pressing

Real Estate
Mitsubishi Estate Co., Ltd. ....................................... 17,000 173,639 184,299 1.0
--------- --------- ----
Real estate development

See notes to financial statements

</TABLE>

<PAGE>

NOMURA PACIFIC BASIN FUND, INC.
PACIFIC BASIN PORTFOLIO
SCHEDULE OF INVESTMENTS*-(Continued)
MARCH 31, 2000

% of
Market Net
Shares Cost Value Assets
------ ---- ------ ------
<S> <C> <C> <C> <C>
Retail
Marui Co., Ltd. .................................................. 13,000 $ 212,565 $ 235,144 1.3
Department store
Ryohin Keikaku Co., Ltd........................................... 2,300 365,337 416,695 2.2
Clothes, sundry goods, and foods
Saizeriya Co., Ltd................................................ 3,000 279,402 219,159 1.2
---------- ---------- ----
Italian restaurant chain
Total Retail ..................................................... 857,304 870,998 4.7
---------- ---------- ----
Telecommunications
Nippon Telegraph and Telephone Corp. ............................. 34 319,748 539,814 2.9
Telecommunications
NTT Mobile Communications Network, Inc. .......................... 17 187,580 697,122 3.7
---------- ---------- ----
Mobile telephone network operator
Total Telecommunications ......................................... 507,328 1,236,936 6.6
---------- ---------- ----
Textiles and Apparel
World Co., Ltd. .................................................. 2,850 198,291 219,306 1.2
---------- ---------- ----
Fashion apparel

Wholesale
ArcLand Sakamoto Co., Ltd. ...................................... 16,000 129,200 194,808 1.1
Home appliances
Hakuto Co., Ltd. ................................................ 8,500 138,132 307,164 1.6
---------- ---------- ----
Electric parts
Total Wholesale ................................................. 267,332 501,972 2.7
---------- ---------- ----

TOTAL INVESTMENTS IN JAPANESE EQUITY SECURITIES 8,448,515 13,541,715 72.4
---------- ---------- ----

AUSTRALIAN EQUITY SECURITIES
Banking
National Australia Bank, Ltd. ................................... 11,223 155,047 144,179 0.8
---------- ---------- ----
Commercial bank

Financials
Colonial, Ltd. .................................................. 23,000 80,283 105,620 0.6
---------- ---------- ----
Financial services

Miscellaneous Manufacturing
Smorgon Steel Group, Ltd. ....................................... 35,000 52,084 32,693 0.2
Galvanized wire, reinforced steel, and steel welded mesh
Tabcorp Holdings, Ltd. .......................................... 9,000 61,559 50,495 0.3
---------- ---------- ----
Computer software components and games
Total Miscellaneous Manufacturing ............................... 113,643 83,188 0.5
---------- ---------- ----

Non-Ferrous Metals
The Broken Hill Proprietary Co., Ltd. ........................... 14,215 150,221 153,836 0.8
---------- ---------- ----
Minerals exploration and production

See notes to financial statements
</TABLE>

<PAGE>

NOMURA PACIFIC BASIN FUND, INC.
PACIFIC BASIN PORTFOLIO
SCHEDULE OF INVESTMENTS*- (Continued)
MARCH 31, 2000

% of
Market Net
Shares Cost Value Assets
------ ---- ----- ------
<S> <C> <C> <C> <C>
Oil and Gas

Australian Gas & Light Co., Ltd......................................... 13,329 $ 77,383 $ 64,273 0.3
Distribution of natural gas and oil ------------ ---------- -----

Publishing and Printing

News Corporation, Ltd................................................... 15,000 112,043 209,442 1.1
International media ------------ ---------- -----

Telecommunications

Telstra Corporation, Ltd................................................ 37,278 157,845 162,495 0.9
Domestic and international telecommunications ------------ ---------- -----

Transportation

Brambles Industries, Ltd................................................ 3,500 72,971 88,951 0.5
Railroad car rentals ------------ ---------- -----
TOTAL INVESTMENTS IN AUSTRALIAN EQUITY SECURITIES 919,436 1,011,984 5.5
------------ ---------- -----

HONG KONG EQUITY SECURITIES

Banking

Hong Kong & Shanghai Banking Corp....................................... 10,200 52,010 119,206 0.6
International bank ------------ ---------- -----

Conglomerate

Hutchison Whampoa, Ltd.................................................. 25,000 175,165 451,098 2.4
Property and shipping related services ------------ ---------- -----

Electrical and Electronics

Johnson Electric Holdings, Ltd.......................................... 10,000 25,207 68,387 0.4
Micromotors used in automobile components ------------ ---------- -----

Real Estate

Cheung Kong Holdings, Ltd............................................... 13,000 126,111 194,502 1.0
Property development
Sun Hung Kai Properties, Ltd............................................ 14,000 134,977 122,712 0.7
Property development ------------ ---------- -----
Total Real Estate....................................................... 261,088 317,214 1.7
------------ ---------- -----

Telecommunications

Cable & Wireless HKT Ltd................................................ 44,800 90,059 117,372 0.6
Telecommunications
China Telecom (Hong Kong) Ltd.+......................................... 8,000 54,724 70,378 0.4
Cellular telecommunications ------------ ---------- -----
Total Telecommunications................................................ 144,783 187,750 1.0
------------ ---------- -----

Utilities

CLP Holdings, Ltd....................................................... 30,000 146,563 134,077 0.7
Generates and supplies electricity ------------ ---------- -----
TOTAL INVESTMENTS IN HONG KONG EQUITY SECURITIES........................ 804,816 1,277,732 6.8
------------ ---------- -----

See notes to financial statements
</TABLE>

<PAGE>

NOMURA PACIFIC BASIN FUND, INC.
PACIFIC BASIN PORTFOLIO
SCHEDULE OF INVESTMENTS*- (Continued)
MARCH 31, 2000

% of
Market Net
Shares Cost Value Assets
------ ---- ----- ------
<S> <C> <C> <C> <C>
MALAYSIAN EQUITY SECURITIES

Banking

Malayan Banking Berhad.................................................. 10,000 $ 20,273 $ 43,947 0.2
Banking and financial services ------------ ---------- -----

Telecommunications

Telekom Malaysia Berhad................................................. 5,000 14,628 20,526 0.1
Telecommunications ------------ ---------- -----

Utilities

Tenaga Nasional Berhad.................................................. 11,000 22,256 37,053 0.2
Power supplier ------------ ---------- -----
TOTAL INVESTMENTS IN MALAYSIAN EQUITY SECURITIES........................ 57,157 101,526 0.5
------------ ---------- -----

NEW ZEALAND EQUITY SECURITIES

Telecommunications

Telecommunications Corp. of New Zealand................................. 14,000 46,786 63,273 0.3
Telecommunications ------------ ---------- -----

TOTAL INVESTMENTS IN NEW ZEALAND EQUITY SECURITIES 46,786 63,273 0.3
------------ ---------- -----

SINGAPORE EQUITY SECURITIES

Airlines

Singapore Airlines...................................................... 12,000 112,629 112,163 0.6
International airline ------------ ---------- -----

Banking

DBS Group Holdings, Ltd................................................. 26,980 243,806 356,202 1.9
International bank ------------ ---------- -----

Electrical and Electronics

Natsteel Electronics Ltd................................................ 18,000 112,734 117,771 0.6
Electronic products ------------ ---------- -----

Publishing and Printing

Singapore Press Holdings, Ltd........................................... 5,600 88,212 89,309 0.5
Newspapers and magazines ------------ ---------- -----

Real Estate

DBS Land, Ltd........................................................... 55,000 84,824 71,650 0.4
Property investment and development ------------ ---------- -----

Telecommunications

Singapore Telecommunications, Ltd....................................... 39,000 65,601 55,591 0.3
Basic telecommunications and postal services ------------ ---------- -----

Transportation

Singapore Bus Services, Ltd............................................. 13,500 20,620 14,905 0.1
Public bus services ------------ ---------- -----

TOTAL INVESTMENTS IN SINGAPORE EQUITY SECURITIES........................ 728,426 817,591 4.4
------------ ---------- -----

See notes to financial statements
</TABLE>

<PAGE>

NOMURA PACIFIC BASIN FUND, INC.
PACIFIC BASIN PORTFOLIO
SCHEDULE OF INVESTMENTS*- (Continued)
MARCH 31, 2000

% of
Market Net
Shares Cost Value Assets
------ ---- ----- ------
<S> <C> <C> <C> <C>

SOUTH KOREAN EQUITY SECURITIES

Consumer Electronics

Samsung Electronics Co., Ltd............................................ 1,500 $ 264,308 $ 454,648 2.4
Consumer electronics, computers and telecommunications ------------ ---------- -----

Telecommunications

SK Telecom Co., Ltd..................................................... 60 217,637 195,431 1.1
Mobile telecommunications ------------ ---------- -----

TOTAL INVESTMENTS IN SOUTH KOREAN EQUITY
SECURITIES.......................................................... 481,945 650,079 3.5
------------ ---------- -----
TAIWANESE EQUITY SECURITIES

Electrical and Electronics
Taiwan Semiconductor Manufacturing Co., Ltd. ADR+....................... 6,000 351,789 342,000 1.8
Integrated ciruits ------------ ---------- -----
TOTAL INVESTMENTS IN TAIWANESE
EQUITY SECURITIES................................................... 351,789 342,000 1.8
------------ ---------- -----
TOTAL INVESTMENTS IN EQUITY SECURITIES.................................. $ 11,838,870 $ 17,805,900 95.2
------------ ---------- -----

See notes to financial statements

</TABLE>

<PAGE>

NOMURA PACIFIC BASIN FUND, INC.
PACIFIC BASIN PORTFOLIO
SCHEDULE OF INVESTMENTS*- (Continued)
MARCH 31, 2000

% of
Principal Market Net
Amount Cost Value Assets
--------- ---- ------ ------
<S> <C> <C> <C> <C>
INVESTMENTS IN FOREIGN CURRENCIES

Australian Dollar
Westpac Banking Corporation, Sydney non-interest
bearing call account AUD 4,105 $ 2,490 $ 2,490 0.0
------------ ------------ -----
Japanese Yen
The Fuji Bank Limited Tokyo non-interest
bearing call account JPY 28,900 282 282 0.0
------------ ------------ -----

TOTAL INVESTMENTS IN FOREIGN CURRENCIES 2,772 2,772 0.0
------------ ------------ -----

INVESTMENTS IN SHORT-TERM SECURITIES
State Street Bank and Trust Company, interest bearing
call account 5.75% due 4/3/00 $ 879,883 879,883 879,883 4.7
------------ ------------ -----
TOTAL INVESTMENTS IN SHORT-TERM SECURITIES 879,883 879,883 4.7
------------ ------------ -----

TOTAL INVESTMENTS 12,721,525 18,688,555 99.9
OTHER ASSETS LESS LIABILITIES, NET 6,865 14,501 0.1
------------ ------------ -----
NET ASSETS $ 12,728,390 $ 18,703,056 100.0
============ ============ =====
</TABLE>

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

* The description following each investment is unaudited and not covered by
the Report of Independent Accountants.
+ Non-income producing security.
ADR-American Depository Receipt.

Portfolio securities and foreign currency holdings
were translated at the following exchange rates
as of March 31, 2000.

Australian Dollar AUD. 1.649=$1.00
Hong Kong Dollar HKD. 7.787=$1.00
Japanese Yen JPY. 102.665=$1.00
Malaysian Ringgit MYR. 3.800=$1.00
New Zealand Dollar NZD. 2.016=$1.00
Singapore Dollar SGD. 1.712=$1.00
South Korean Won KRW. 1105.25=$1.00

See notes to financial statements
<PAGE>

NOMURA PACIFIC BASIN FUND, INC.
PACIFIC BASIN PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
MARCH 31, 2000

<S> <C>
ASSETS:

Investments in securities, at market value (cost - $11,838,870) ........................................ $ 17,805,900
Investments in short-term securities, at market value (cost-$879,883) .................................. 879,883
Investments in foreign currency, at market value (cost-$2,772) ......................................... 2,772
Receivable for capital stock shares sold ............................................................... 42,921
Receivable for investments sold ........................................................................ 214,300
Prepaid expenses ....................................................................................... 5,806
Receivable for dividends and interest, net of withholding taxes ........................................ 45,449
-----------
Total Assets .................................................................................. 18,997,031
-----------
LIABILITIES:

Payable for investments purchased ...................................................................... 119,467
Payable for capital stock shares purchased ............................................................. 5,547
Other accrued expenses ................................................................................. 168,961
-----------
Total Liabilities ............................................................................. 293,975
-----------

NET ASSETS:
Capital stock ( Class A shares-706 shares outstanding, ................................................. 71
authorized 50,000,000, par value $0.10 each)
Capital stock ( Class B shares-706 shares outstanding, ................................................. 71
authorized 50,000,000, par value $0.10 each)
Capital stock ( Class Z shares-1,091,819 shares outstanding, ........................................... 109,181
authorized 50,000,000, par value $0.10 each)
Paid-in capital ........................................................................................ 15,876,765
Accumulated net realized loss on investments and foreign currency transactions ......................... (3,253,732)
Unrealized net appreciation on investments and foreign exchange ........................................ 5,974,664
Accumulated net investment loss ........................................................................ (3,964)
-----------
Net Assets .................................................................................... $ 18,703,056
===========
</TABLE>

<TABLE>
<CAPTION>
Class A Class B Class Z
------- ------- -------
<S> <C> <C> <C>
Net assets applicable to each Class ......................................... $ 12,076 $ 12,036 $ 18,678,944
========== ========== ==============
Net asset value and redemption price per share outstanding .................. $ 17.09 $ 17.04 $ 17.11
Maximum sales charge (5.75% of offering price) .............................. 1.04 0.00 0.00
---------- ---------- --------------
Maximum offering price per share outstanding ................................ $ 18.13 $ 17.04$ 17.11
========== ========== ==============

See notes to financial statements

</TABLE>

<PAGE>

NOMURA PACIFIC BASIN FUND, INC.
PACIFIC BASIN PORTFOLIO
STATEMENT OF OPERATIONS

FOR THE YEAR ENDED MARCH 31, 2000

<S> <C> <C>
INCOME:

Dividend income (less $16,250 withholding taxes)..................................... $170,105
Interest income...................................................................... 39,034
---------
Total Income................................................................ $ 209,139
EXPENSES:
Management fee....................................................................... 123,471
Transfer agency fee.................................................................. 108,730
Custodian fee........................................................................ 88,037
Legal fees........................................................................... 77,298
Auditing and tax reporting fees...................................................... 50,004
Directors' fees and expenses......................................................... 45,222
Shareholder reports.................................................................. 41,272
Registration fees.................................................................... 20,118
Insurance............................................................................ 3,294
Distribution fees (Class B).......................................................... 60
Distribution fees (Class A).......................................................... 16
Miscellaneous........................................................................ 9,792
---------
Total Expenses.............................................................. 567,314
Expense reimbursement....................................................... (256,317)
--------
Net Expenses................................................................ 310,997
----------
NET INVESTMENT LOSS.................................................................. (101,858)
----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS AND FOREIGN CURRENCIES:
Realized gain on investments and foreign currency transactions:
Net realized gain on investments..................................................... 1,394,119
Net realized gain on foreign currency transactions................................... 215,825
----------
Net realized gain on investments and foreign currency transactions................... 1,609,944

Change in unrealized appreciation on translation of investments, foreign
currencies, other assets and liabilities denominated in foreign currencies........ 1,251,691
Change in net unrealized appreciation on investments................................. 3,344,352
-----------
Net realized and unrealized gain on investments and foreign currency transactions.... 6,205,987
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS................................. $6,104,129
==========

See notes to financial statements

</TABLE>

<PAGE>

NOMURA PACIFIC BASIN FUND, INC.
PACIFIC BASIN PORTFOLIO

STATEMENT OF CHANGES IN NET ASSETS

For the Year Ended
March 31,
---------------------------------
2000 1999
---- ----
<S> <C> <C>
FROM INVESTMENT ACTIVITIES:

Net investment loss............................................................. ($101,858) ($38,716)
Net realized gain/(loss) on investments......................................... 1,394,119 (406,874)
Net realized gain/(loss) on foreign currencies.................................. 215,825 (821,426)
Change in unrealized appreciation on investments and foreign currencies......... 4,596,043 2,256,686
------------ ----------
Increase in net assets derived from investment activities....................... 6,104,129 989,670
------------ ----------

FROM CAPITAL SHARE TRANSACTIONS:

Proceeds from continuous offering (Class A)..................................... 10,283 -
Proceeds from continuous offering (Class B)..................................... 10,283 -
Proceeds from continuous offering (Class Z)..................................... 5,910,712 819,459
Cost of shares redeemed (Class Z)............................................... (6,057,425) (2,819,804)
----------- ------------
Decrease in net assets derived from capital share transactions.................. (126,147) (2,000,345)
------------ ------------
Net increase/(decrease) in net assets........................................... 5,977,982 (1,010,675)
----------- ------------

NET ASSETS:

Beginning of year............................................................... 12,725,074 13,735,749
------------ ------------
End of year (including accumulated net investment loss of $3,964
in 2000 and $0 in 1999)...................................................... $18,703,056 $12,725,074
=========== ===========
</TABLE>

<TABLE>
<CAPTION>
SHARE ACTIVITY: Class A Class B Class Z Total Total
------- ------- ------- ----- -----
<S> <C> <C> <C> <C> <C>

Shares offered on continuous offering....... 706 706 403,890 405,302 80,343
Shares redeemed during the period........... - - 405,870 405,870 (280,750)
------ ------ ------- ------- ---------
Net shares subscribed (redeemed) during
the period............................... 706 706 (1,980) (568) (200,407)
Shares outstanding at beginning of year..... - - 1,093,799 1,093,799 1,294,206
------ ------ --------- --------- ---------
Shares outstanding at end of year........... 706 706 1,091,819 1,093,231 1,093,799
====== ====== ========= ========= =========
</TABLE>

See notes to financial statements
<PAGE>

NOMURA PACIFIC BASIN FUND, INC.
PACIFIC BASIN PORTFOLIO

NOTES TO FINANCIAL STATEMENTS

NOMURA PACIFIC
PACIFIC BASIN

NOTES TO FINANCIAL STATEMENTS

1. SIGNIFICANT ACCOUNTING POLICIES

Nomura Pacific Basin Fund, Inc. (the "Corporation") is a series company
currently offering one portfolio, the Pacific Basin Portfolio (the "Fund").
The investment objective of the Fund is to seek long-term capital appreciation
by primarily investing in equity securities of corporations domiciled in Far
Eastern or Western Pacific ("Pacific Basin") countries. The Corporation is
registered under the Investment Company Act of 1940 as a diversified, open-end
management investment company. The Corporation was incorporated in Maryland on
March 14, 1985. The Fund currently offers three classes of shares; Class A
shares, whose distribution commenced August 2, 1999 which are generally
offered at net asset value plus an initial sales charge and bear certain
expenses related to the shareholder services and distribution associated with
such shares. Class B shares, whose distribution commenced August 2, 1999, are
offered without an initial sales charge, although a declining contingent
deferred sales charge may be imposed on redemptions made within six years of
purchase. In addition, Class B shares bear certain expenses related to
shareholder services and distribution associated with such shares and may be
subject to lower shareholder services and distribution expenses when they are
converted to Class A shares after eight years. Class Z shares which are the
original no load shares of the Fund, whose distribution commenced July 8,
1985. Class Z shares are not subject to either an initial sales charge or
ongoing shareholder services and distribution expenses. Class Z shares are
only available to existing shareholders of the Fund on July 31, 1999, current
and retired Directors of the Fund and Directors and current and retired full
time employees of Nomura Asset Management U.S.A. Inc. The following is a
summary of significant accounting policies followed by the Fund.

(a) Valuation of Securities - Investments traded on the 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 other
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,
2000 on investments and other assets and liabilities. Net realized foreign
exchange gains or losses includes 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, and 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) 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 at least 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 "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.

(d) Capital Account Reclassification - For the year ended March 31, 2000,
the Fund's accumulated net investment loss and paid-in-capital were decreased
by $144,044 and $44,894, respectively, with an off-setting increase in
accumulated net realized loss of $99,150. This adjustment was primarily the
result of the reclassification of net foreign currency gains and losses, a net
operating loss, and the sale of investments in passive foreign investment
companies.

(e) 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.

(f) 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.

(g) Concentration of Risk - A significant portion of the Fund's net
assets consists of foreign securities which involve certain considerations and
risks not typically associated with investments in the United States. In
addition to the smaller size, lesser liquidity and greater volatility, the
foreign securities markets are less developed than the U.S. securities market
and there is often substantially less publicly available information about
foreign issuers than there is about U.S. issuers. Future economic and
political developments in foreign countries could adversely affect the
liquidity or value, or both, of securities in which the Fund is invested.
Further, the Fund may be exposed to currency devaluation and other exchange
rate fluctuations.

2. MANAGEMENT AGREEMENT AND TRANSACTIONS WITH AFFILIATED PERSONS

Nomura Asset Management U.S.A. 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 Asset Management Co., Ltd. ("NAM"), and
Nomura Asset Management Singapore Limited ("NAM Singapore") to act as
investment advisors for the Fund. On July 30, 1999, the Corporation terminated
its Distribution Agreement with Nomura Securities International, Inc. and
entered into a new Distribution Agreement with Funds Distributor, Inc.

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, NAM and NAM-Singapore
receive a monthly fee from the Manager at the annual rates of .26125 of 1%
and .0275 of 1%, respectively, of the average daily net assets of the Fund.
Under the Management Agreement, the Fund accrued fees to the Manager of
$123,471 for the year ended March 31, 2000 (see voluntary expense
reimbursement arrangement as described below). For the year ended March 31,
2000, the Manager informed the Fund that no payments were made to NAM and
NAM-Singapore, due to the voluntary expense reimbursement arrangement.

Effective August 2, 1999, the Manager has contractually agreed, through
the end of the Fund's fiscal year on March 31, 2000, to limit the annual
operating expenses (excluding taxes, brokerage fees and commissions and
extraordinary charges such as litigation costs) of each of the Fund's classes
as follows: Class A - 1.90%, Class B-2.65% and Class Z - 1.65% of average net
assets. For the period April 1, 1999 to August 1, 1999 the Manager agreed to
reimburse the Fund's Class Z shares (only Class share available for sale
during that period) in any amount necessary to prevent the ordinary operating
expenses from exceeding in any fiscal year 2.5% of the Class Z shares 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. Under the reimbursement
arrangement, the Fund has recorded expense reimbursement of $256,317 for the
year ended March 31, 2000. This voluntary reimbursement arrangement may be
terminated for subsequent fiscal years. Certain officers and/or directors of
the Fund are officers and/or directors of the Manager. The Nomura Securities
Co., Ltd., the Manager's indirect parent, earned $5,575 in commissions on the
execution of portfolio security transactions for the year ended March 31,
2000. 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 expenses related to attendance at meetings. Such fees and
expenses for the unaffiliated Directors aggregated $44,891 for the year ended
March 31, 2000.

Distribution fees - The Corporation on July 30, 1999 entered into a new
Distribution Agreement with Funds Distributor, Inc. (the "Distributor"). The
Corporation has adopted a Distribution Plan (the "Plan") in accordance with
the provisions of Rule 12b-1 under the Investment Company Act of 1940.

Pursuant to the Class A shares Plan, the Distributor receives a monthly
fee, at the annual rate of 0.25% of the average aggregate net asset value of
the Class A shares of the Fund outstanding during the month, which is an
expense of the Class A shares for distribution or other service activities as
designated by the Distributor.

Pursuant to the Class B shares Plan, the Distributor receives a monthly
distribution fee, which is an expense of Class B shares, at the annual rate of
0.75% of the average aggregate net asset value of the Class B shares of the
Fund outstanding during the month. The Plan provides that Class B shares of
the Fund also incur a service fee for ongoing shareholder servicing and
account maintenance, which is an expense of Class B shares, at the annual rate
of 0.25% of the average aggregate net asset value of Class B shares of the
Fund outstanding during the month.

3. PURCHASES AND SALES OF INVESTMENTS

Purchases and sales of investments for the year ended March 31, 2000,
exclusive of investments in foreign currencies and short term securities, were
$12,895,711 and $13,139,519, respectively.

As of March 31, 2000, net unrealized appreciation on investments,
exclusive of investments in foreign currencies and short-term securities, for
Federal income tax purposes was $5,962,253 of which $6,334,065 related to
appreciated securities and $371,812 related to depreciated securities. The
aggregate cost of investments, exclusive of investments in foreign currencies
and short-term securities, at March 31, 2000 for Federal income tax purposes
was $11,843,647. The Fund has a capital loss carryforward as of March 31, 2000
of $3,252,920 of which $475,623 expires March 31, 2006, $2,777,297 expires
March 31, 2007. The Fund utilized $1,431,915 of capital loss carryover in the
current year.

<PAGE>

NOMURA PACIFIC BASIN FUND, INC.
PACIFIC BASIN PORTFOLIO

FINANCIAL HIGHLIGHTS

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

August 2, 1999 (commence-
ment of Class share
offering) through Class Z shares
March 31, 2000 For the Year Ended March 31,
----------------------- ------------------------------------------------------------
Class A Class B
shares shares 2000 1999 1998 1997 1996
------ ------ ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period: .. $13.95 $13.95 $11.63 $10.61 $13.76 $16.52 $15.07
------ ------ ------ ------ ------ ------ ------

Income from investment operations:

Net Investment loss ................. (0.05)+ (0.14)+ (0.09)+ (0.03)+ (0.07)+ (0.14)+ (0.04)+
Net realized and unrealized gain
(loss) on investments and foreign
currencies .......................... 3.19+ 3.23+ 5.57+ 1.05+ (3.01)+ (0.87)+ 2.07+
------ ------ ------ ------ ------ ------ ------
Total from investment operations .... 3.14+ 3.09+ 5.48+ 1.02+ (3.08)+ (1.01)+ 2.03+
Distributions to shareholders from:
Net investment income ............... -- -- -- -- (0.04) (0.28) --
Net realized capital gains .......... -- -- -- -- (0.03) (1.47) (0.58)
------ ------ ------ ------ ------ ------ ------
Total distributions .................... -- -- -- -- (0.07) (1.75) (0.58)
------ ------ ------ ------ ------ ------ ------
Net asset value, end of period ......... $17.09 $17.04 $17.11 $11.63 $10.61 $13.76 $16.52
====== ====== ====== ====== ====== ====== ======
Total investment return ................ 22.5% 22.2% 47.1% 9.6% (22.4%) (6.9%) 13.7%
Ratio to average net assets/supplemental
data:
Net assets, end of period (000) ..... $12 $12 $18,679 $12,725 $13,736 $22,128 $34,022
Operating expenses, net of
reimbursement ...................... 1.80%* 2.27%* 1.89% 2.50% 2.49% 2.21% 1.78%
Total expenses ...................... 368.73%* 367.31%* 3.16% 3.35% 2.91% 2.21% 1.78%
Net investment loss ................. (0.49%) (1.32%) (0.62%) (0.33%) (0.55%) (0.87%) (0.28%)
Portfolio turnover .................. 83.0% 83.0% 83.0% 48% 45% 62% 45%
</TABLE>

--------------
+ Based on average shares outstanding.
* Annualized

<PAGE>

BOARD OF DIRECTORS
William G. Barker, Jr.
George H. Chittenden
Nobou Katayama
Chor Weng Tan
Arthur R. Taylor
John F. Wallace

OFFICERS NOMURA
Nobou Katayama, President Pacific Basin
Keisuke Haruguchi, Vice President Fund, Inc.
David G. Stoeffel, Vice President
John J. Boretti, Secretary and Treasurer
Terrence P. Brennan, Assistant Secretary and
Assistant Treasurer

MANAGER

Nomura Asset Management U.S.A. Inc.
180 Maiden Lane
New York, New York 10038-4936
Internet Address
www.nomura-asset.com

INVESTMENT ADVISERS
Nomura Asset Management Co., Ltd.
1-14, 2-chome, Nihonbashi, Chuo-ku
Tokyo 103-8260, Japan

Nomura Asset Management Singapore Limited
6 Battery Road
Singapore 049909

DISTRIBUTOR
Funds Distributor, Inc.
60 State Street
Boston, Massachusetts 02109
ANNUAL REPORT

CUSTODIAN AND SHAREHOLDER SERVICING AGENT
State Street Bank and Trust Company MARCH 31, 2000
P.O. Box 8500
North Quincy, Masachusetts 02171-8500

COUNSEL

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

INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
1177 Avenue of The Americas (LOGO)
New York, New York 10036-2798

NOMURA PACIFIC BASIN FUND, INC.
180 MAIDEN LANE
NEW YORK, NEW YORK 10038-4936

This Report, is not to be construed as an offering for the sale of
shares of Pacific Basin Portfolio a series company of Nomura Pacific
Basin Fund, Inc., or as a solicitation of an offer to buy any such
shares, unless accompanied by an effective prospectus setting forth
both details of the Fund and other material information.