The Asia Pacific Fund, Inc.
SEMI ANNUAL REPORT
September 30, 1995
<PAGE>
REPORT OF THE INVESTMENT MANAGER
OVERVIEW
The evidence from recent economic reports is that, with the exception of
Singapore, most Asian economies are growing more strongly than expected. Export
growth is robust and foreign direct investment has been very buoyant, in part
reflecting the strong Yen and Japanese manufacturers' need to reduce costs by
relocating low-end production to South East Asia. The associated capital
equipment requirements are boosting imports so that trade accounts continue to
deteriorate, albeit for the best of reasons. Currencies have stabilized after
the nervousness associated with Mexico earlier in the year. Renewed foreign
interest has been responsible for strong moves in equities led by Hong Kong and
Korea, while politics has stymied performance in Taiwan and the Indian
sub-continent.
PERFORMANCE
The Fund's net asset value per share was $13.55 at March 31, 1995 and $14.37
at September 30, 1995. The New York Stock Exchange prices for these dates were
$14.125 and $13.25, respectively. The net asset value per share appreciated by
6.1% over this six-month period.
COUNTRY ALLOCATION
During the period the Manager maintained substantial weightings in Hong Kong
and Korea. Exposure to Singapore was reduced in view of increased unit labor
costs, currency strength and decreasing regional competitiveness. The Malaysian
weighting remained light in a regional context as continued concerns over the
current account deficit, inflation and the uncertainty surrounding
infrastructure development weighed upon the market outlook.
Hong Kong
The market rose 10.6% during the period, regaining momentum in July when the
Federal Funds rate in the United States was cut by 25 basis points to 5.75%.
One of the more negative economic releases, which dampened market performance
during the period, was the government's downward revision of the GDP growth
forecast for 1995 to 5.0% from 5.5%. The government cited sluggish consumer
spending, slower private sector building and construction activity and reduced
property trading as the major reasons for the revision.
Slow retail activity has again affected employment in Hong Kong, with
unemployment hitting an 11-year high in August. Figures released showed that
3.5% of the three million strong workforce were out of work in the three months
to August, up from 3.2% recorded in May to July. The increased joblessness
continues to occur in the manufacturing and retail trades and restaurant, hotel
and transport sectors.
The first poll for a fully elected Legislative Council was held on September
17 and voter turnout figures were moderate: only 36% of an electorate of 2.57
million cast their ballots. The results of the elections, as predicted by the
exit polls, saw the pro-democratic politicians winning a decisive victory, while
the pro-China candidates performed worse than expected. Although the newly
elected legislature may reflect the aspirations of a reformist minded liberal
faction, the question is whether it will have any effective role in the run-up
to 1997. China condemned the Legislative Council elections as unfair and
unreasonable, insisting that the results would not alter its decision to
dismantle the body after 1997.
Corporate interim results were generally in-line, if not above market
expectations. Growth was particularly strong at banks and conglomerates. HSBC's
net profit, for example, increased by 28% from last year and Hutchison's by 20%
from last year. Companies have reported average earnings per share growth of
28%. The portfolio benefited from its exposure to the real estate sector where
New World Development, Cheung Kong and Sun Hung Kai added to performance.
1
<PAGE>
India
The market recovered tentatively from 3260 on the BSE 30 Index to close the
period at 3500. There was a great deal of speculation as to the possible
resumption of forward trading. Nevertheless, this movement in the
market masked the slide of the currency, which left the U.S. Dollar investor
flat. The exchange rate of Rupees to the U.S. dollar fell from Rs. 31.6 to Rs.
34. Domestic investors continued to be pessimistic, but foreigners were net
buyers until the currency became threatened. It then became apparent that the
currency would continue to be carefully managed, only at a lower rate.
The main change of the period took place in April, shortly after the budget.
The combination of tight monetary policy with lax government spending resulted
in tremendous upward pressure on interest rates. One-year Treasury bills soon
reached 13%, which was perceived as the maximum that industry could tolerate.
Thereafter, the Reserve Bank of India changed its policy and began to expand
credit to the central government. This is slowly feeding into money supply
growth. It will obviously be some time before this impacts inflation, although
the Manager has seen a small pick-up from the nadir of 7.5%.
The real economy has remained consistently strong, with real growth likely
to
be at least 5.5% and earnings growth likely to be in excess of 25% during the
year through March 1996. A great deal is being added to capacities, as shown by
surging imports, the majority of which are capital goods. This bodes well for
future profit margins as the Manager is confident that demand will remain
strong.
The portfolio lost out mainly due to the poor performance and slight currency
devaluation of stocks like Garden Silk Mills, Indo Rama Synthetics, RPG Telecom
and Mahanajar Telephone Networks.
Indonesia
Although the period saw the fiftieth anniversary of the country's
independence, the stock market seemed not to celebrate: many local investors
cashed out of the market ahead of several initial public offerings (IPOs) due
for listing on the stock exchange later this year. On the list of the upcoming
IPOs were PT Tambank Timah, the flagship state-owned tin mining company and PT
Telkom, the domestic telephone operator.
The string of first-half corporate results released was generally positive,
the most impressive coming from the petrochemical, pulp and paper and consumer
sectors. The portfolio exposure to the consumer stock, Modern Photo Film, was
rewarding, with the equity rising 40%, while Indo Rama, in the textile sector,
rose 15%. Weightings in the cable and timber sectors did not do as well.
On the trade front, an increase in imports in June pushed the trade balance
into a monthly deficit, of $205 million, for the first time since 1991. June
imports saw growth of 46% year-on-year, of which a significant portion was
related to food, especially rice and sugar. The strong import growth reflected
the continuous strength in the economy, which threatens to overheat. The central
bank has also indicated that the current account deficit for the present fiscal
year will exceed its previous forecast of $4.1 billion. The current account
deficit is being widened by surging imports which are due to high growth in
non-oil and gas imports. An implication of this is that interest rates will most
likely remain firm in the short-term.
Korea
The 3% increase in the foreign ownership ceiling from 12% to 15% at the start
of July ended the market's extended period of consolidation. Net inflow of more
than $1.0 billion from foreign buying, as well as liquidity improving further
on
expectations of a soft landing, evidenced by the deceleration in facilities
investment growth, sharply improved market sentiment and led to buying. The
Korean stock market was one of the best performing markets in the Pacific region
during the period. Much of the gain came during September, when the Ministry of
Finance and the President overruled opposition from the ruling party and decided
to tax financial income, such as interest income, from certificates of deposit,
corporate paper, bonds and promissory notes, as initially outlined in the
soon-to-be implemented global taxation system. The government is upholding its
tax reforms and ruling out any special exceptions. This means that the stock
market is better positioned as a tax
2
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<PAGE>
haven, since capital gains from stock holdings will not be taxed.
CPI inflation showed further signs of stabilizing, rising only 4.7% from last
September compared to the 6.5% recorded in September 1994. Lower agricultural
food prices continue to provide the basis for stability, with floods in August
having a minimal effect on September prices. Consequently, with the government
unlikely to pursue a tightening in monetary policy, interest rates continue to
trend downwards to a low of 12.5% versus 14.7% at the start of the period.
The technology sector remained strong with Samsung Electronics rising 43%
during the period, reflecting global strength in the semiconductor market. KEPCO
continued to perform strongly on the back of strong earnings and potential entry
into telecommunications.
Malaysia
The Malaysian market registered an unimpressive performance in the period,
dropping 1% as economic figures rekindled fears of overheating in the economy.
There was a gain of 3.3% in July, which was then pulled down by the 4.3% plunge
in August, the second biggest monthly fall this year after the sell-off
initiated by the Mexican Peso crisis in January. Corporate interim earnings
results have been dull in a market dampened by worries over interest rates and
fears of excessive spending.
Bank Negara Malaysia, however, did announce good news for the banking sector
in its decision to change the Base Lending Rate (BLR) formula after a meeting
with commercial and merchant banks. The proposed new BLR formula will be more
closely linked to changes in the interbank rate and is aimed at encouraging
banking efficiency and competitiveness. Investors were expecting Bank Negara to
announce measures to tighten consumer credit: surprisingly, it did not do so,
although it did warn commercial banks to exercise restraint in issuing new
credit cards and to avoid excessive lending to high-end property buyers, so as
to allow adequate financing access to be given to the medium and low cost
buyers.
Meanwhile, loan growth of over 25% for June reflects much stronger underlying
consumption growth and inflation, on an annualized basis, has edged up to 3.6%
in August, compared with 3.5% in July. In the first eight months of the year,
inflation went up to 3.5%, but this is still lower than the 3.8% posted in the
same period last year.
The property and banking sectors, represented in the portfolio by Land and
General and Malayan Banking, performed better than the market as a whole,
reflecting sector economic trends. However, consumer stocks, such as Genting and
Resorts World, were weak.
Pakistan
Although the market closed the period unchanged compared with March 31, 1995,
there was a great deal of movement in the interim. Initially, until mid-May, the
unrepresented ethnic majority in Karachi (MQM) continued to call for strikes and
there were worries about the government's partial abandonment of the
International Monetary Fund's (IMF) program. The market then had four strong
months when a deal between the MQM and the government seemed more likely and
when investors, particularly domestically, became more sanguine about the
economy. The market subsequently focused again on long-term economic problems
and foreigners became more skeptical about overall prospects. Indeed, foreigners
had ear-marked over $100 million for Pakistan funds towards the beginning of the
year, but in many cases this failed to materialize.
Sentiment was also dampened by inflation, which has been creeping up again
as
the government fails to control spending. The Manager is concerned about foreign
exchange reserves which have shrunk from an average of three months' worth of
imports to barely six weeks' worth. This is a result of the trade deficit which
has increased 73% from last year.
The government seems increasingly unable to juggle all macro-economic
variables at the same time. The main reason behind its postponement of the
Structural Adjustment Program is the budget deficit. Privatization proceeds are
behind schedule and there has been a shortfall in tax revenues.
3
<PAGE>
<PAGE>
The Philippines
The overall mood is tentative, as the Philippine stock market underwent a
period of consolidation in the third calendar quarter, in contrast with the
strong surge recorded in the second calendar quarter. In particular, the latest
round of disappointing economic data and flat corporate earnings has caused
foreign investors to reduce their exposure to the market. Earnings
disappointments in the first half of the year, reported by large market
capitalization stocks, discouraged buying sentiment. On the other hand,
property developers and second tier stocks posted strong earnings growth.
Market activity at the beginning of the quarter was dominated by the spate
of
IPOs which siphoned off the market's liquidity in the first two weeks of July,
as was evident from a decline in market turnover. The IPO-related foreign
capital sent foreign reserves surging by $800 million in July alone. This influx
of capital will help to fill the system to the level of the newly raised
monetary ceilings agreed by the IMF. But the IPO activity does not end there,
because the Philippines Stock Exchange hopes to raise more funds to finance
economic development by encouraging the country's top 1,000 corporations to go
public. In addition, the government, in an effort to boost the domestic capital
market, has announced that all government bonds and treasury bills will be
listed on the Philippines Stock Exchange by February as, eventually, will
corporate bonds.
The balance of payments swung into a surplus of $1.02 billion in August,
compared with a deficit of $198 million in May and was an improvement of $45
million on July's surplus of $975 million. The deficit to surplus turnaround was
partly attributable to the strong growth of exports; inflows of portfolio and
direct investment following the relatively peaceful May Congressional elections;
and a bond flotation of state-owned National Power Corp.
Within the portfolio, the utility sector (Manila Electric Co.) has performed
well while the shipyards and consumer plays underperformed the market.
Singapore
There was slightly more interest in the Singapore market than in the previous
period. Trading was mostly concentrated on small, speculative issues that have
generated most of the attention, which was also directed to potential takeover
targets for Indonesian groups. One of the reasons for the flat activity in the
period was the generally disappointing batch of corporate results. Banks'
results were largely in line with expectations while shipyards reported falls
in
earnings, having been under pressure from competitive industry conditions. On
the other hand, property companies, which have shown the strongest profit growth
of the major sectors, are delaying recognition of profits.
The Singapore Tourist Board has adopted a more pessimistic outlook for
tourism. It revised down its forecast for visitor arrivals in 1995 from 5-7% to
3-5%. The new forecast is more in line with tourism increases year-to-date to
July, of 3.4% compared to the prior year.
Unit labor costs are rising and have done so for two consecutive quarters.
They rose 4.1% in the second quarter, barely changed from the first quarter
increase. Wage costs (+7.7%) have been rising faster than productivity (+3.6%),
partly as a result of slowing growth in output. Despite rising wage costs,
though, inflation has been steadily declining over the past months. In August,
CPI inflation was up 1.4% year-on-year compared with 1.5% year-on-year in July.
Another economic indicator which exhibited a slowdown was loan growth. In July,
it was up 21.3% year-on-year compared with 21.6% year-on-year in June.
The portfolio in Singapore is exposed to the banking, consumer and property
sectors and performed in line with the market.
Taiwan
The Taiwanese market was the worst performing market in Asia during the
period due to political friction with mainland China. It was apparent that
politics was investors' dominant concern, as even the government's decision to
raise the foreign investment ceiling in stocks to 15% from 12%; to cut banks'
reserve requirements; and to increase local banks' limit in respect of stock
market investments to 15% of total assets from 10% failed to improve sentiment.
4
<PAGE>
<PAGE>
The tight liquidity seen during the second quarter and at the start of the
third quarter has paid off, as there are signs of a slowdown in the inflation
rate. August CPI rose 1.71% from last year, the lowest rise since October 1993.
This brings the average inflation rate for the January-August period to 3.87%
against the government's full year target of 3.94%. The central bank, in an
attempt to boost the stagnant construction industry and help
speed up the recovery in the island's precarious financial market, cut
commercial banks' reserve requirements by an average of 0.63%.
On the trade front, the trade surplus widened to $967 million in August
compared with $847 million in the same period last year. With exports rising 24%
from last year to $72.4 billion over the first eight months of 1995, and export
orders enjoying double-digit growth for eleven consecutive months, real GDP is
expected to come in at around 6.9% in 1995.
In the coming months, the market is expected to continue to be overshadowed
by politics, particularly ahead of the local yuan elections in December and the
presidential election in March 1996, in which President Lee has announced his
decision to bid for a second term of office. The likelihood of further monetary
easing - although not too aggressive, in order to protect the New Taiwan Dollar
- - -ahead of the presidential elections, together with the government's resolve to
boost the market, should be able to produce a short-term rally from oversold
levels. The long-term potential depends on the government's policy towards
resolving the problems of the floundering property and banking sectors.
Thailand
The Thai stock market was unnerved during the period as worries about
inflation and a widening current account deficit continued to cast gloom. The
SET Index fell, due to general disappointment with the new cabinet, augmented
by
uninspiring interim corporate results. A dispute between the government and
union leaders of the Electricity Generating Authority of Thailand, over changes
of the state-run firm's executive board, was one of the negative factors which
unsettled the market.
Interim corporate results have been mixed. Distinctly poor results have come
from a few of the fixed telephone line operators, while major banks have
reported solid earnings growth. Banks' earnings growth is expected to slow in
the second half given that the Bank of Thailand will continue to limit credit
expansion by ordering major commercial banks to reduce their loan-to-deposit
ratio; tighten control over Bangkok International Banking Facility (BIBF)
lending; and clamp down on non-resident Baht deposit accounts. As evidence of
this, new loans granted by offshore banking units under the BIBF totalled
BT857.1 billion in July, up only 4.6% compared with growth of 16.7% in June. The
Bank of Thailand confirmed that the slowdown was due mainly to the central
bank's tight monetary policies.
Strong performance from Siam Commercial Bank and Bank of Ayudhya was
reflected in the Fund's portfolio while the real estate, construction (Siam
Cement) and shipping sectors detracted from returns.
OUTLOOK
Over the last few weeks there has been a raft of statistics from the United
States indicating weaker conditions. This may simply reflect a short-term
inventory correction but, even those who see further tightening, are pushing the
timing back. While there may be no rate cuts, the Manager does not expect to
hear much talk of increases for the remainder of the year, and that is a long
time in the fast-reacting Asian markets.
Singapore has been a great safe haven but the time for that is now past. The
first-quarter slowdown and increase in unit labor and business costs may be the
beginnings of something bigger. The Manager has noted comments from large
multi-national firms about the increasing costs of doing business in Singapore,
which is getting expensive, as any vistor will find out very quickly. Compared
with Hong Kong, where competitiveness has been sustained by migration of
manufacturing, the relative picture has changed a lot over the last twelve
months. The valuation is not excessive but earnings expectations may yet prove
to be too optimistic. The Fund has reduced its investment here.
The improving background to Hong Kong bodes well. In China, the economy
appears to be settling, and the inflation numbers have been coming down. The
anniversary of the Tiananmen Square incident on June 4 passed
5
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<PAGE>
quietly and Jiang Zhemin has strengthened his position ahead of the succession.
China's slowdown is not over yet but both it and, in consequence, Hong Kong
are at a later stage in their cycles than most. In Hong Kong residential
property is once more attracting good demand but earnings expectations
remain subdued. Despite this, valuation is reasonable and the Manager is
optimistic about the Fund's exposure.
In the absence of a recession in the United States, which the Manager does
not expect to happen, the profit potential for Korea is still excellent but
valuation is depressed. The problem remains liquidity, with the dominant local
investors holding back for fear of further tightening by the Bank of Korea. The
money numbers are not indicating any pre-election cash splurge, so there is no
reason to expect any big mopping up operation afterwards; and the continuing
base effects which originated in the pre-``real names'' loosening in 1993 should
lead to an easier stance by the calendar year-end. This market still has
considerable potential.
The importance of foreign investment flows to the Asia Pacific region has
been demonstrated clearly by the surge in May and the lack of follow-through in
June, as strong stock market conditions in the United States refocused attention
on the local front. This may also indicate a shortage of domestic liquidity in
Asia as the demands of the real economies squeeze out those in the financial
sector, or it may simply be that the under-valuation has now been corrected in
most places. However, cyclical factors do not argue for multiple expansion at
this stage (except possibly for Hong Kong and Korea), so the scope for returns
over the next twelve months is now largely confined to the prospect for earnings
growth.
Baring International Investment (Far East) Limited
Hong Kong
November 17, 1995
6
<PAGE>
<PAGE>
- - ----------------------------------------------------------
THE ASIA PACIFIC FUND, INC.
Portfolio of Investments
September 30, 1995
(Unaudited)
<TABLE>
<CAPTION>
- - ---------------------------------------------------------
Value
Shares Description (Note 1)
- - ---------------------------------------------------------
<C> <S> <C>
LONG-TERM INVESTMENTS--77.0%
Common Stocks--73.1%
Hong Kong--31.0%
2,086,000 Cheung Kong Holdings, Ltd. $ 11,358,805
...........................
(Real Estate - Developers)
663,000 China Light & Power Co., Ltd. 3,430,124
...........................
(Utilities)
3,100,000 Guangdong Investment, Ltd. 1,854,427
...........................
(Conglomerate)
859,000 Henderson Land Development 5,188,553
...........................
(Real Estate - Developers)
1,851,200 HKR International, Ltd. ..... 1,568,306
(Real Estate - Developers)
2,728,000 Hong Kong Telecommunications, 4,957,434
Ltd. .......................
(Telecommunications)
886,600 HSBC Holdings Plc. .......... 12,327,427
(Banking)
2,387,000 Hutchinson Whampoa, Ltd. .... 12,936,080
(Conglomerate)
730,000 Hysan Development Co., Ltd. 1,751,471
...........................
(Real Estate - Landlords)
426,000 Jardine Matheson Holdings, 2,875,500
Ltd. ......................
(Conglomerate)
1,520,000 JCG Holdings, Ltd. .......... 1,130,440
(Financial Services)
2,415,000 New World Development Co., 9,526,935
Ltd. ......................
(Real Estate - Developers)
1,228,000 Sun Hung Kai Properties, Ltd. 9,966,630
...........................
(Real Estate - Landlords)
357,000 Swire-Pacific, Ltd. ``A'' ... 2,828,203
(Conglomerate)
601,000 Television Broadcasts, Ltd. 2,417,526
........................... ------------
(Leisure)
84,117,861
------------
India--2.1%
5,200 Bajaj Auto, Ltd. ............ 126,404
(Automobiles)
5,300 Bombay Suburban Electric 20,277
Supply ....................
(Utilities)
100,000 Crompton Greaves ............ 573,867
(Electrical Goods)
37,500 Essel Packaging ............. 232,857
(Packaging)
<CAPTION>
- - ---------------------------------------------------------
Value
Shares Description (Note 1)
- - ---------------------------------------------------------
<C> <S> <C>
50,600 Garden Silk Mills ........... $ 56,586
(Textiles)
26,000 Grasim Industries ........... 451,442
(Textiles)
100 Great Eastern Shipping ...... 160
(Shipping)
36,600 Gujarat Ambuja Cement ....... 282,201
(Cement)
25,000 Hindalco Industries ......... 718,068
(Aluminum)
51,500 Indo Rama Synthetics ........ 64,413
(Textiles)
100,000 Mahanajar Telephone Networks 467,922
...........................
(Telecommunications)
720,000 Modern Syntex ............... 911,124
(Textiles)
75,000 Nicholas Piramal ............ 593,732
(Pharmaceuticals)
100 Reliance Industries, Ltd. ... 806
(Textiles)
65,000 RPG Telecom ................. 143,467
(Telecommunications)
5,350 Scici ....................... 5,944
(Shipping)
166,800 State Bank of India ......... 1,079,929
(Banking) ------------
5,729,199
------------
Indonesia--3.7%
525,000 Duta Anggada Realty ......... 335,944
(Real Estate - Developers)
520,500 Great River Industries ...... 287,125
(Textiles)
2,795,520 Indah Kiat Paper & Pulp ..... 3,392,621
(Pulp & Paper)
291,700 Indo Rama Synthetics ........ 975,122
(Textiles)
590,000 Modern Photo Film ........... 3,384,819
(Leisure)
105,500 Semen Gresik ................ 297,970
(Building Materials)
154,000 Smarts ...................... 100,243
(Food & Household Products)
</TABLE>
See Notes to Financial Statements.
7
<PAGE>
<TABLE>
<CAPTION>
- - ---------------------------------------------------------
Value
Shares Description (Note 1)
- - ---------------------------------------------------------
<C> <S> <C>
Indonesia (cont'd.)
93,000 Sucaco Supreme Cable
Manufacturing Corp. ....... $ 250,353
(Cable Manufacturing)
117,000 Sumalindo Lestari Jaya ...... 105,847
(Timber)
352,000 Unggula/Indah Corp. ......... 291,262
(Chemicals)
472,500 Voksel Electric ............. 729,810
(Cable Manufacturing) ------------
10,151,116
------------
Korea--9.9%
6,555 Dongah Tire Co. ............. 422,380
(Chemicals)
1,948 DongKuk Steel Mill Co. ...... 53,505
(Iron & Steel)
81,767 Hanjin Heavy Industries Co. 1,341,141
...........................
(Machinery)
4,749 Hyundai Motor Service Co. ... 250,370
(Automobiles)
2,555 Keyang Electric Machinery Co. 94,125
...........................
(Machinery)
5,900 Korea Chemical Co. .......... 564,501
(Chemicals)
15,000 Korea Electric Power Corp. 564,306
...........................
(Utilities)
8,800 Mando Machinery Corp. ....... 532,674
(Automobiles)
88,000 Pohang Iron & Steel Co. ..... 7,594,897
(Iron & Steel)
10,893 Samsung Electro-Mechanics Co. 518,984
(New) ......................
(Electronics)
47,530 Samsung Electronics Co. ..... 10,239,801
(Electronics)
706 Samsung Electronics Co. (New, 150,262
Series 1) .................
(Electronics)
9,406 Samsung Electronics Co. (New, 2,014,172
Series 3) .................
(Electronics)
10,602 Sejin Co. ................... 222,198
(Machinery)
33,740 Tae Young Corp. ............. 2,305,845
(Construction) ------------
26,869,161
------------
Malaysia--7.2%
136,000 Genting Berhad .............. 1,175,075
(Conglomerate)
1,032,500 Land & General Berhad ....... 2,713,319
(Conglomerate)
<CAPTION>
- - ---------------------------------------------------------
Value
Shares Description (Note 1)
- - ---------------------------------------------------------
<C> <S> <C>
470,000 Malayan Banking Berhad ...... $ 3,798,925
(Banking)
1,060,000 Malaysian Mining Corp. Berhad 1,586,940
(Mining)
210,000 Resort World Berhad ......... 1,045,192
(Leisure)
1,155,000 Renong Berhad ............... 2,005,097
(Conglomerate)
425,000 Telekom Malaysia Berhad ..... 3,198,288
(Utilities)
722,000 Tenaga Nasional Berhad ...... 2,759,785
(Utilities)
220,000 United Engineers Malaysia 1,410,313
Berhad .................... ------------
(Construction)
19,692,934
------------
Pakistan--0.5%
206,250 DG Khan Cement .............. 304,286
(Construction)
3,050,000 Dhan Fibres ................. 1,045,100
(Textiles) ------------
1,349,386
------------
The Philippines--2.3%
878,064 Cebu Shipyards & Engineering
Works, Inc. ``B'' ......... 192,092
(Port Services)
135,828 Jardine Davies, Inc. ``B'' 755,903
(Conglomerate)
332,654 Keppel Philippines Shipyard, 153,209
Inc. ``B'' .................
(Shipyard)
237,573 Kepphill Shipyard, Inc. ..... 17,872
(Shipyard)
536,958 Manila Electric Company ``B'' 4,101,118
(Utilities)
283,139 San Miguel Corp. ``B'' ...... 999,762
(Beverages) ------------
6,219,956
------------
Singapore--3.7%
210,000 Development Bank of Singapore, 2,393,584
Ltd.
(Banking)
320,000 Keppel Corp., Ltd. .......... 2,566,664
(Conglomerate)
180,000 Oversea-Chinese Banking Corp., 2,038,978
Ltd.
(Banking)
345,600 United Overseas Bank, Ltd. 2,990,839
(Banking)
150 AM Steel Corp. .............. 129
(Iron & Steel) ------------
9,990,194
------------
</TABLE>
See Notes to Financial Statements.
8
<PAGE>
<TABLE>
<CAPTION>
- - ---------------------------------------------------------
Value
Shares Description (Note 1)
- - ---------------------------------------------------------
<C> <S> <C>
Taiwan--0.9%
23 Taipei Fund, Inc. ........... $ 1,782,500
(Diversified Funds)
23,750 Taiwan Fund, Inc. ........... 534,375
(Diversified Funds) ------------
2,316,875
------------
Thailand--11.8%
122,800 Ban Pu Coal Co., Ltd. ....... 2,841,005
(Mining and Power)
718,750 Bank of Ayudhya, Ltd. ....... 3,899,083
(Banking)
1,800,000 Kamrai Tawee Capital Fund ... 1,507,778
(Diversified Funds)
184,000 Land & House Public Co., Ltd. 2,891,743
(Real Estate - Developers)
218,939 Regional Container Lines Plc. 3,143,919
(Shipping)
370,000 Renown, Inc. ................ 2,140,008
(Misc. Material &
Commodities)
123,000 Siam Cement Co., Ltd. ....... 7,261,268
(Construction)
141,470 Siam Commercial Bank, Ltd. 1,591,326
(Banking)
772,670 Thai Farmers Bank, Ltd. ..... 6,718,870
(Banking) ------------
31,995,000
------------
Total common stocks
(cost $143,985,693)........... 198,431,682
------------
Units Warrants(a)--2.9%
- - ---------
Hong Kong--0.1%
370,240 HKR International, Ltd.
Expiring June 2000
@HKD10.00................... 125,704
------------
(Real Estate - Developers)
Singapore--2.7%
Keppel Corp., Ltd.
1,486,000 Expiring June 1997 @
Sing.$6.00.................. 5,907,198
(Conglomerate)
United Overseas Bank, Ltd.
440,940 Expiring June 1997 @ 1,721,816
Sing.$4.01 ................. ------------
(Banking)
7,629,014
------------
Taiwan--0.1%
Robert Fleming & Co., Ltd. -
Basket of Taiwan Fund
1,210,000 Expiring July 1996 @ US$ 133,100
3.01 ....................... ------------
(Diversified Funds)
<CAPTION>
- - ---------------------------------------------------------
Value
Shares Description (Note 1)
- - ---------------------------------------------------------
<C> <S> <C>
Total warrants
(cost $4,182,547)............. $ 7,887,818
------------
Rights(a)
India
3,350 Scici
Expiring December 1995...... --
------------
(Shipping)
Global Depository Receipt
Korea
563 Samsung Electronics Co. (New)
(cost $19,107).............. 39,552
------------
(Electronics)
Principal
Amount
(000) Convertible Bonds--1.0%
- - ---------
Hong Kong--0.2%
HKR International, Ltd.
HKD4,895 6.00%, 6/26/00.............. 512,244
------------
(Real Estate - Developers)
India--0.1%
Modern Syntex
INR160(b) 15.00%, 10/25/95
(convertible into 2 shares of
common stock per INR
principal
amount)..................... 282,519
------------
(Textiles)
Taiwan--0.7%
United Micro Electronics
US$ 1,140 1.25%, 6/8/04
(convertible into 547.3469
common shares per US$1,000
principal amount until
5/29/04).................... 1,938,000
------------
(Electronics)
Total convertible bonds
(cost $2,112,589)........... 2,732,763
------------
Total long-term investments
(cost $150,299,936)......... 209,091,815
------------
SHORT-TERM INVESTMENTS--23.2%
United States--23.2%
Commercial Paper--18.4%
Associates Corp. of North
America
10,000 6.40%, 10/2/95................ 10,000,000
Chevron Oil Finance Co.,
10,000 6.00%, 10/2/95................ 10,000,000
</TABLE>
See Notes to Financial Statements.
9
<PAGE>
<TABLE>
<CAPTION>
- - ---------------------------------------------------------
Principal
Amount Value
(000) Description (Note 1)
- - ---------------------------------------------------------
<C> <S> <C>
United States (cont'd.)
Commercial Paper (cont'd.)
Ford Motor Credit Corp.,
US$10,000 6.00%, 10/2/95................ $ 10,000,000
Household Finance Corp.,
10,000 6.10%, 10/2/95................ 10,000,000
Prudential Funding Corp.,
10,000 6.25%, 10/2/95................ 10,000,000
------------
Total commercial paper
(cost $50,000,000).......... 50,000,000
------------
Repurchase Agreement--4.8%
12,948 State Street Bank and Trust
Co., 5.25%, dated 9/29/95,
due 10/2/95 in the amount of
$12,953,665 (cost
$12,948,000); collateralized
by $11,655,000 U.S. Treasury
Bonds, 7.625% due 11/15/22,
value including accrued
interest--$13,581,198)...... 12,948,000
------------
Total short-term investments
(cost $62,948,000).......... 62,948,000
------------
Total investments--100.2%
(cost $213,247,936; Note
3).......................... 272,039,815
Liabilities in excess of
other assets--(0.2)%........ (513,260)
------------
Net Assets--100%.............. $271,526,555
------------
------------
</TABLE>
- - ---------------
(a) Non-income producing security.
(b) Fair valued security.
See Notes to Financial Statements.
10
<PAGE>
- - ----------------------------------------------------------
THE ASIA PACIFIC FUND, INC.
Statement of Assets and Liabilities
September 30, 1995
(Unaudited)
- - ----------------------------------------------------------
<TABLE>
<S> <C>
Assets
Investments, at value (cost
$213,247,936)........................ $272,039,815
Cash, including foreign currency (cost
$249,878)............................ 249,344
Dividends and interest receivable...... 452,031
Receivable for investments sold........ 114,845
Other assets........................... 1,376
------------
Total assets....................... 272,857,411
------------
Liabilities
Rights offering costs payable.......... 370,000
Deferred foreign capital gains tax
liability............................ 202,981
Investment management fee payable...... 155,145
Administration fee payable............. 46,578
Foreign withholding taxes payable...... 42,441
Accrued expenses and other
liabilities.......................... 513,711
------------
Total liabilities.................. 1,330,856
------------
Net Assets............................. $271,526,555
------------
------------
Net assets comprised:
Common stock, at par................. $ 189,004
Paid-in capital in excess of par..... 219,615,126
------------
219,804,130
Undistributed net investment income.... 243,080
Accumulated net realized losses on
investment transactions.............. (7,094,134)
Net unrealized appreciation on
investments and
foreign currencies................... 58,573,479
------------
Net assets, September 30, 1995......... $271,526,555
------------
------------
Net asset value per share
($271,526,555 / 18,900,389 shares of
common stock issued and
outstanding)......................... $14.37
------------
------------
</TABLE>
- - ----------------------------------------------------------
THE ASIA PACIFIC FUND, INC.
Statement of Operations
Six Months Ended September 30, 1995
(Unaudited)
- - ----------------------------------------------------------
<TABLE>
<S> <C>
Net Investment Income
Income
Dividends (net of foreign withholding
taxes of $150,385).................. $ 2,014,128
Interest (net of foreign withholding
taxes of $7,408).................... 173,818
-----------
Total income........................ 2,187,946
-----------
Expenses
Investment management fee............. 884,359
Custodian's fees and expenses......... 269,000
Administration fee.................... 261,974
Reports to shareholders............... 190,000
Directors' fees....................... 47,000
Legal fees and expenses............... 47,000
Transfer agent's fees and expenses.... 23,000
Audit fees............................ 19,000
Registration expense.................. 13,500
Miscellaneous......................... 41,130
-----------
Total expenses...................... 1,795,963
-----------
Net investment income................. 391,983
-----------
Realized and Unrealized Gain (Loss) on
Investments and Foreign Currency
Transactions
Net realized loss on:
Investment transactions (net of
foreign capital gains taxes of
$62,005)............................ (1,042,549)
Foreign currency transactions......... (75,883)
-----------
(1,118,432)
-----------
Net change in unrealized appreciation/depreciation on:
Investments (net of deferred foreign
capital gains taxes of $202,981).... 20,721,183
Foreign currencies.................... (49,069)
-----------
20,672,114
-----------
Net gain on investments and foreign
currencies............................ 19,553,682
-----------
Net Increase in Net Assets Resulting
From Operations......................... $19,945,665
-----------
-----------
</TABLE>
See Notes to Financial Statements. See Notes to Financial Statements.
11
<PAGE>
- - ----------------------------------------------------------
THE ASIA PACIFIC FUND, INC.
Statement of Changes
in Net Assets
(Unaudited)
- - ----------------------------------------------------------
<TABLE>
<CAPTION>
Increase (Decrease) in
Net Assets
<S> <C> <C>
Six Months
Ended Year Ended
September 30, March 31,
1995 1995
------------- ------------
Operations
Net investment income
(loss)................... $ 391,983 $ (4,589)
Net realized gain (loss) on
investment and foreign
currency transactions.... (1,118,432) 4,269,762
Net change in unrealized
appreciation on
investments and foreign
currencies............... 20,672,114 772,545
------------- ------------
Net increase in net assets
resulting from
operations............... 19,945,665 5,037,718
Dividends to shareholders
from net investment
income..................... -- (324,404)
Distributions to shareholders
from
realized gains on
investment and
foreign currency
transactions............... -- (43,454,408)
Net asset value of shares
issued to
shareholders in
reinvestment of
dividends and
distributions.............. -- 2,376,439
Increase in net assets from
issuance of shares pursuant
to rights offering......... 59,571,399 --
------------- ------------
Total increase
(decrease)............... 79,517,064 (36,364,655)
Net Assets
Beginning of period.......... 192,009,491 228,374,146
------------- ------------
End of period................ $ 271,526,555 $192,009,491
------------- ------------
------------- ------------
</TABLE>
- - ----------------------------------------------------------
THE ASIA PACIFIC FUND, INC.
Notes to Financial Statements
(Unaudited)
- - ----------------------------------------------------------
Note 1. Accounting The Asia Pacific Fund, Inc.
Policies (the ``Fund'') was incorporated
in Maryland on June 17, 1986, as a diversified,
closed-end, management investment company. The Fund's investment objective is
to
achieve long-term capital appreciation through investment primarily in equity
securities of companies in the Asia Pacific countries. The Fund had no
operations until April 21, 1987, when it sold 10,000 shares of common stock for
$100,000 to Austin Assets Ltd., an affiliate of Baring International Investment
(Far East) Limited (the ``Investment Manager''). Investment operations commenced
on May 4, 1987. The Investment Manager is an indirect, wholly-owned subsidiary
of Internationale Nederlanden Groep N.V.
The following is a summary of significant accounting policies followed by the
Fund in the preparation of its financial statements.
Securities Valuation: Investments are stated at value. Investments for which
market quotations are readily available are valued at the last reported sales
prices. If there is no sales price or reliable market quotation on the date of
valuation, then investments are valued at the last bid price quoted on such date
or at fair value as determined in good faith by or under the direction of the
Fund's Board of Directors.
Short-term securities which mature in more than 60 days are valued at current
market quotations. Short-term securities which mature in 60 days or less are
valued at amortized cost.
In connection with transactions in repurchase agreements with U.S. financial
institutions, it is the Fund's policy that its custodian take possession of the
underlying securities, the value of which exceeds the principal amount of the
repurchase transaction, including accrued interest. To the extent that any
repurchase transaction exceeds one business day, the value of the collateral is
marked-to-market on a daily basis to ensure the adequacy of the collateral. If
the seller defaults, and the value of the collateral declines or if bankruptcy
proceedings are commenced with respect to the seller of the security,
realization of the collateral by the Fund may be delayed or limited.
Foreign Currency Translation: The books and records of the Fund are maintained
in United States dollars. Foreign
See Notes to Financial Statements.
12
<PAGE>
<PAGE>
currency amounts are translated into United States dollars on the following
basis:
(i) market value of investment securities, other assets and liabilities--at
the closing rate of exchange.
(ii) purchases and sales of investment securities, income and expenses--at
the rate of exchange prevailing on the respective dates of such transactions.
Although the net assets of the Fund are presented at the foreign exchange
rates and market values at the close of the fiscal period, the Fund does not
isolate that portion of the results of operations arising as a result of changes
in the foreign exchange rates from the fluctuations arising from changes in the
market prices of securities held at fiscal period end. Similarly, the Fund does
not isolate the effect of changes in foreign exchange rates from the
fluctuations arising from changes in the market prices of portfolio securities
sold during the fiscal period.
Net realized losses on foreign currency transactions of $75,883 represent net
foreign exchange losses from sales and maturities of short-term securities,
holding of foreign currencies, currency gains or losses realized between the
trade and settlement dates on security transactions, and the difference between
the amounts of dividends, interest and foreign taxes recorded on the Fund's
books and the U.S. dollar equivalent amounts actually received or paid. Net
currency gains and losses from valuing foreign currency denominated assets,
other than investment securities, and liabilities at fiscal period end exchange
rates are reflected as a component of unrealized appreciation on investments and
foreign currencies.
Foreign security and currency transactions may involve certain considerations
and risks not typically associated with those of U.S. companies as a result of,
among other factors, the level of governmental supervision and regulation of
foreign securities markets and the possibility of political or economic
instability.
Security Transactions and Investment Income: Security transactions are recorded
on the trade date. Realized and unrealized gains and losses from security and
foreign currency transactions are calculated on the identified cost basis.
Dividend income is recorded on the ex-dividend date, and interest income is
recorded on an accrual basis.
Dividends and Distributions: Dividends from net investment income, if any, are
declared and paid at least annually. The Fund will distribute at least annually
any net capital gains in excess of net capital loss carryforwards. Dividends and
distributions are recorded on the ex-dividend date.
Income distributions and capital gain distributions are determined in
accordance with income tax regulations which may differ from generally accepted
accounting principles.
Taxes: It is the Fund's intention to continue to meet the requirements of the
U.S. Internal Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income to shareholders. Therefore, no federal
income tax provision is required.
Withholding taxes on foreign dividends and interest and capital gains have
been provided for in accordance with the Fund's understanding of the applicable
country's tax rules and rates.
Reclassification of Capital Accounts: The Fund accounts for and reports
distributions to shareholders in accordance with the American Institute of
Certified Public Accountants' Statement of Position 93-2: Determination,
Disclosure, and Financial Statement Presentation of Income, Capital Gain, and
Return of Capital Distributions by Investment Companies. The effect of applying
this statement was to decrease undistributed net investment income and increase
accumulated net realized losses on investment transactions by $75,883 for
differences in the treatment for book and tax purposes of certain transactions
involving foreign currencies. Net investment income, net realized gains and net
assets were not affected by this change.
Note 2. Investment The Fund has a management
Management and agreement with the Invest-
Administration ment Manager and an
Agreements administration agreement
with Prudential Mutual Fund Management, Inc. (the
``Administrator'').
The investment management fee is computed weekly and payable monthly at the
following annual rates: 1.10% of the Fund's average weekly net assets up to $50
million, 0.90% of such assets between $50 million and $100 million and 0.70% of
such assets in excess of $100 million based upon average net assets at the end
of each week. The administration fee is also computed weekly and payable monthly
at an annual rate of 0.25% of the Fund's average weekly net assets.
Pursuant to the agreements, the Investment Manager provides continuous
supervision of the investment portfolio and the Administrator provides occupancy
and certain clerical and accounting services for the Fund. Both the Investment
Manager and the Administrator pay the cost of compensation of certain directors
and officers of the Fund. The Fund bears all other costs and expenses.
13
<PAGE>
Note 3. Portfolio Purchases and sales of invest-
Securities ment securities, other than
short-term investments, for the six months ended
September 30, 1995 aggregated $18,339,790 and $14,802,394, respectively.
The United States federal income tax basis of the Fund's investments at
September 30, 1995 was substantially the same as for financial reporting
purposes and, accordingly, net unrealized appreciation for federal income tax
purposes was $58,791,879 (gross unrealized appreciation--$67,669,973; gross
unrealized depreciation--$8,878,094).
The Fund will elect to treat net capital losses of approximately $6,052,000
incurred in the five month period ended March 31, 1995 as having occurred in the
current fiscal year.
Note 4. Capital There are 20 million shares of
$.01 par value common stock authorized. Of the
18,900,389 shares outstanding at September 30, 1995, Austin Assets Ltd. owned
16,357 shares.
During the six months ended September 30, 1995, the Fund issued 4,725,097
shares, in connection with a rights offering of the Fund's shares. In connection
with the rights offering, shareholders of record on August 21, 1995 were issued
one non-transferable right for each share of common stock owned, entitling
shareholders the opportunity to acquire one newly issued share of common stock
for every three rights held at a subscription price equal to 95% of the lower
of
(i) the average of the last reported sales prices of a share of the Fund's
common stock on the New York Stock Exchange on September 15, 1995 and the four
preceding business days or (ii) the net asset value per share as of the close
of
business on September 15, 1995. The shares issued pursuant to the rights
offering were issued at $13.18 per share (which was equal to 95% of the Fund's
net asset value on September 15, 1995). Estimated rights offering costs of
$370,000 ($0.02 per share) were charged to paid-in-capital in excess of par.
Soliciting and dealer-manager fees of $2,335,379 ($0.12 per share) were charged
against the proceeds of the subscription. Prudential Securities Incorporated,
an
affiliate of the Administrator, and its financial advisors earned approximately
$500,000 of the aforementioned commissions with respect to its participation in
the offering.
During the year ended March 31, 1995, the Fund issued 159,730 shares in
connection with the reinvestment of dividends and distributions.
Note 5. Quarterly Data
<TABLE>
<CAPTION>
Net realized
and
unrealized
Net increase (decrease)
gains (losses)
on in net assets
Net investment investments
resulting from
Quarterly Total income (loss) and foreign
currencies operations
period income Amount Per share Amount
Per share Amount Per share
<S> <C> <C> <C> <C>
<C> <C> <C>
- - --------------- ---------- -----------------------
- - -------------------------- --------------------------
April 1, 1993
to June 30,
1993 $1,833,682 $ 921,842 $ .08 $ 11,123,664
$ 1.00 $ 12,045,506 $ 1.08
July 1, 1993
to September
30, 1993 764,064 (166,500) (.01) 25,735,809
2.31 25,569,309 2.30
October 1, 1993
to December
31, 1993 691,631 (678,180) (.06) 101,700,878
8.58 101,022,698 8.52
January 1, 1994
to March 31,
1994 644,735 (717,812) (.06) (69,290,094)
(5.84) (70,007,906) (5.90)
April 1, 1994
to June 30,
1994 1,296,692 (7,383) -- 6,656,492
.48 6,649,109 .48
July 1, 1994
to September
30, 1994 1,161,786 119,771 .01 25,543,446
1.82 25,663,217 1.83
October 1, 1994
to December
31, 1994 936,914 (171,546) (.01) (22,268,958)
(1.58) (22,440,504) (1.59)
January 1, 1995
to March 31,
1995 1,011,920 54,569 -- (4,888,673)
(.34) (4,834,104) (.34)
April 1, 1995
to June 30,
1995 1,491,148 632,690 .05 15,445,469
1.09 16,078,159 1.14
July 1, 1995
to September
30, 1995 696,798 (240,707) (.02) 4,108,213
.28 3,867,506 .26
<CAPTION>
Dividends
and Share
Quarterly distributions price
period Amount Per share High Low
<S> <C> <C> <C> <C>
- - --------------- -------------------------- -------------
April 1, 1993
to June 30,
1993 $(13,775,425) $ (1.24) $18 5/8 $14 1/4
July 1, 1993
to September
30, 1993 -- -- 19 1/8 15 5/8
October 1, 1993
to December
31, 1993 (23,597,835) (2.06) 25 3/4 18 1/8
January 1, 1994
to March 31,
1994 -- -- 25 5/8 16 5/8
April 1, 1994
to June 30,
1994 (33,216,882) (2.37) 22 3/8 17
July 1, 1994
to September
30, 1994 -- -- 19 7/8 18 1/4
October 1, 1994
to December
31, 1994 (10,561,930) (.75) 18 3/4 13 1/8
January 1, 1995
to March 31,
1995 -- -- 15 12 1/8
April 1, 1995
to June 30,
1995 -- -- 17 7/8 13 3/4
July 1, 1995
to September
30, 1995 -- -- 17 13 1/8
</TABLE>
14
<PAGE>
- - -------------------------------------------------------------------------------
THE ASIA PACIFIC FUND, INC.
Financial Highlights
(Unaudited)
- - -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months
Ended
Year Ended March 31,
September 30,
- - --------------------------------------------------------
Per Share Operating Performance: 1995(d) 1995
1994 1993 1992 1991
------------- --------
-------- -------- -------- --------
<S> <C> <C>
<C> <C> <C> <C>
Net asset value, beginning of period............. $ 13.55 $ 16.29
$ 13.11 $ 13.23 $ 14.20 $ 15.71
------------- --------
-------- -------- -------- --------
Net investment income (loss)..................... 0.03 --
(0.05) 0.10 0.10 0.08
Net realized and unrealized gain (loss) on
investments and foreign currency
transactions................................... 1.41(a) 0.38
7.41(a) 1.83 1.40 (0.31)
------------- --------
-------- -------- -------- --------
Total from investment operations................. 1.44 0.38
7.36 1.93 1.50 (0.23)
------------- --------
-------- -------- -------- --------
Less dividends and distributions:
Dividends to shareholders from net investment
income....................................... -- (0.02)
-- (0.09) (0.13) (0.04)
Distributions to shareholders from realized
gains on
investments and foreign currencies........... -- (3.10)
(3.30) (1.65) (2.34) (1.24)
------------- --------
-------- -------- -------- --------
Total dividends and distributions................ -- (3.12)
(3.30) (1.74) (2.47) (1.28)
------------- --------
-------- -------- -------- --------
Capital charge in respect of issuance of
shares......................................... (0.62) --
(0.88) (0.31) -- --
------------- --------
-------- -------- -------- --------
Net asset value, end of period................... $ 14.37 $ 13.55
$ 16.29 $ 13.11 $ 13.23 $ 14.20
------------- --------
-------- -------- -------- --------
------------- --------
-------- -------- -------- --------
Market value, end of period...................... $ 13 1/4 $ 14 1/8
$ 17 3/4 $ 14 5/8 $ 15 1/2 $ 13 7/8
------------- --------
-------- -------- -------- --------
------------- --------
-------- -------- -------- --------
Total Investment Return(b):...................... (6.19)% (3.65)%
44.31% 5.68% 34.37% 11.07%
------------- --------
-------- -------- -------- --------
------------- --------
-------- -------- -------- --------
Ratios to Average Net Assets:
Expenses (including loan interest expense)....... 1.70% 2.06%
2.37% 2.57% 2.19% 2.13%
Expenses (excluding loan interest expense)....... 1.70% 1.72%
1.72% 1.93% 1.92% 1.85%
Net investment income (loss)..................... 0.37% --
(0.33)% 0.76% 0.70% 0.56%
Supplemental Data:
Average net assets (000 omitted)................. $ 211,310 $214,527
$193,116 $120,112 $119,552 $122,744
Portfolio turnover............................... 7% 48%
101% 105% 63% 37%
Net assets, end of period (000 omitted).......... $ 217,527 $192,009
$228,374 $145,647 $116,831 $124,878
Total debt outstanding at period end (000
omitted)....................................... -- --
$ 40,000 $ 26,000 $ 6,822 $ 3,487
Asset coverage(c)................................ -- --
$ 6,709 $ 6,602 $ 18,126 $ 36,813
</TABLE>
- - ---------------
(a) Due to the timing and magnitude of the rights offering, the amount reported
herein is not proportional to the aggregate value reported in the Statement
of Operations and of Changes in Net Assets and Note 5 to the financial
statements, as included herein.
(b) Total investment return is calculated assuming a purchase of common stock
at the current market value on the first day and a sale at the current
market value on the last day of each fiscal period reported. Dividends and
distributions are assumed, for purposes of this calculation, to be
reinvested at prices obtained under the Fund's dividend reinvestment plan.
These calculations do not include brokerage commissions. Total returns for
periods of less than a full year are not annualized.
(c) Per $1,000 of debt outstanding.
(d) Calculated based upon weighted average shares outstanding during the period.
Contained above is selected data for a share of common stock outstanding, total
investment return, ratios to average net assets and other supplemental data for
the periods indicated. This information has been determined based upon
information provided in the financial statements and market price data for the
Fund's shares.
See Notes to Financial Statements.
15
<PAGE>
Supplemental Proxy Information
The Annual Meeting of Shareholders of The Asia Pacific Fund, Inc. (the
``Fund'') was held on Thursday, June 22, 1995 at the offices of Prudential
Securities Incorporated, One Seaport Plaza, New York, New York. The meeting was
held for the following purposes:
(1) To elect four Directors to serve as follows:
Director Class Term Expiring
-------------------------- ----- -------- --------
Robert F. Gunia III 3 years 1998
Alfonso T. Yuchengco III 3 years 1998
David J. Brennan III 3 years 1998
Don G. Hoff III 3 years 1998
Directors whose term of office continued beyond this meeting are John
A.
Morrell, Michael J. Downey, Olarn Chaipravat, Robert H. Burns, Douglas
Tong Hsu and David G.P. Scholfield. Mr. Yuchengco subsequently resigned
from the Board of Directors.
(2) To approve the Investment Management Agreement between Baring
International Investment (Far East) Limited and the Fund.
(3) To ratify the selection of Deloitte & Touche LLP as independent public
accountants for the fiscal year ending March 31, 1996.
(4) To transact such other business as may properly come before the meeting
or any adjournment thereof.
The results of the proxy solicitation on the above matters were as
follows:
<TABLE>
<CAPTION>
Director/Matter Votes for Votes against Votes withheld
Abstentions
--------------------- ---------- -------------- ---------------
------------
<S> <C> <C> <C> <C>
<C>
(1) Robert F. Gunia 8,121,093 -- 130,073
--
Alfonso T. Yuchengco 8,116,516 -- 134,649
--
David J. Brennan 8,117,839 -- 133,326
--
Don G. Hoff 8,121,193 -- 129,973
--
(2) Management Agreement 7,863,846 181,011 206,307
--
(3) Deloitte & Touche LLP 8,124,265 40,212 --
86,688
(4) There was no other business voted upon at the Annual Meeting of
Shareholders.
</TABLE>
See Notes to Financial Statements.
16
<PAGE>
- - -------------------------------------------------------------------
- - -------------------------------------------------------------------
Directors
Don G. Hoff, Chairman
David J. Brennan
Robert H. Burns
Olarn Chaipravat
Michael J. Downey
Robert F. Gunia
John A. Morrell
Douglas Tong Hsu
David G. P. Scholfield
Officers
David G. P. Scholfield, President
David J. Brennan, Vice President
Robert F. Gunia, Vice President
Eugene S. Stark, Treasurer
Stephen M. Ungerman, Assistant Treasurer
S. Jane Rose, Secretary
Deborah A. Docs, Assistant Secretary
Investment Manager
Baring International Investment (Far East) Limited
1901 Edinburgh Tower
15 Queen's Road Central
Hong Kong
Administrator
Prudential Mutual Fund Management, Inc.
One Seaport Plaza
New York, New York 10292
Custodian and Transfer Agent
State Street Bank and Trust Company
One Heritage Drive
North Quincy, MA 02171
Independent Accountants
Deloitte & Touche LLP
Two World Financial Center
New York, NY 10281-1434
Legal Counsel
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
The accompanying financial statements as of September 30, 1995
were not audited and, accordingly, no opinion is expressed on them.
This report, including the financial statements herein, is
transmitted to the shareholders of The Asia Pacific Fund, Inc. for
their information. This is not a prospectus, circular or
representation intended for use in the purchase of shares of the
Fund or any securities mentioned in this report.
The Asia Pacific Fund, Inc.
One Seaport Plaza
New York, NY 10292
for information call toll free
(800) 451-6788
collect
(212) 214-5572
or for information
regarding net asset values
(212) 778-8838
044901106
