(R)
The First Australia
Prime Income
Fund, Inc.
- ------------------------------------------------------------
- -------
Semi-Annual Report
April 30, 1996
Highlights
- -----------------------------------------
- - The Fund's total investment return based on NAV was 8.2%
over the past six
months and 20.4% over the past twelve months (assuming
reinvestment of
dividends and distributions).
- - The Fund's total investment return based on share price
was 19.9% over the
past twelve months (assuming reinvestment of dividends and
distributions).
- - Cash distribution rate of 10.4% over past twelve months.
<PAGE>
LETTER TO SHAREHOLDERS
June 13, 1996
Dear Shareholder,
We are pleased to present this Semi-Annual Report which
covers the activities
of The First Australia Prime Income Fund, Inc. for the six
months ended April
30, 1996. Included in this report is a review of the
Australian and New Zealand
economies and investment markets, along with an overview of
the Fund's
investments, prepared by the Investment Manager, EquitiLink
International
Management Limited.
The Fund completed a one for five rights offering in May,
which resulted in
primary and over-subscription requests totalling
approximately 213% of the new
shares offered; 38,911,951 shares representing 125% of
primary shares offered
were accepted which generated net proceeds to the Fund of
approximately US$300
million.
Investment Performance
Assuming reinvestment of dividends and distributions, the
Fund's Net Asset
Value (NAV) total investment return was 8.2% over the past
six months and 20.4%
over the past twelve months ended April 30, 1996. The Fund's
total investment
return based on share price, again assuming reinvestment of
dividends and
distributions, was -3.5% over the past six months and 19.9%
over the past twelve
months ended April 30, 1996.
Dividends and distributions over the past twelve months
totalled US$0.89 per
share. Based upon the share price of $8.5625 at April 30,
1996, the cash
distribution rate over the past twelve months was 10.4%.
Since all dividends and
distributions are paid after the deduction of Australian and
New Zealand
withholding taxes, the effective yield is higher for those
US investors who are
able to claim a tax credit. The Board's policy is to
facilitate payment of a
stable monthly distribution out of current income and sup
