<PAGE>
The Asia Pacific
Fund, Inc.
- -------------------------------------------------------------------
Semi-Annual Report
September 30, 1999
<PAGE>
- --------------------------------------------------------------------------------
The Asia Pacific Fund, Inc.
As of September 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
OUR NEW TOLL-FREE LINE:
1-888-4-ASIA-PAC
For further information on the Fund, please call. In addition, the Fund makes
available monthly portfolio information. If you would like to receive this
information please call the toll-free number indicated above.
Statistics
- -------------------------------------------
Total Net Assets $211,781,231
Shares Outstanding 18,930,333
Net Asset Value 11.19
Equity 98.7%(a)
Repurchase Agreements 1.3%(a)
Total Returns (US Dollar terms)
- -------------------------------------------------
Market
Period Price(b) NAV(c)
3 months ended 9/30/99 (8.3)% (4.1)%
6 months ended 9/30/99 27.4% 30.2%
9 months ended 9/30/99 34.2% 37.1%
1 Year ended 9/30/99 81.2% 68.0%
3 Years ended 9/30/99 (19.3)% (14.7)%
5 Years ended 9/30/99 (41.3)% (19.7)%
10 Years ended 9/30/99 44.1% 92.5%
Since inception 129.1% 206.5%
Since inception
(annualized) 6.89% 9.4%
Other Information
- ------------------------------------------------
Ticker Symbol APB
Primary Exchange NYSE
Dividend Repurchase Program Yes
- ------------------------------------------------
Footnote section
(a) Expressed as a percentage of total
investments.
(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.
(c) This information represents the historical
net asset value per share performance of The
Asia Pacific Fund, Inc. 'Net asset value per
share performance' has been computed by the
Investment Manager and, because it does not
reflect market price, is not the same as
'total investment return.'
Portfolio Characteristics
(As of September 30, 1999)
- -----------------------------------------------------
Top Ten Long-Term Holdings
(% of Total Long-Term Investments)
- -----------------------------------------------------
Hutchison Whampoa, Ltd. 7.14%
Samsung Electronics Co. 6.77%
Taiwan Semiconductor Manufacturing Co. 4.38%
Hong Kong Telecommunications, Ltd. 3.95%
Cheung Kong Holdings, Ltd. 3.26%
Korea Electric Power Corp. 3.03%
DBS Group Holdings, Ltd. 2.89%
China Telecom, Ltd. 2.68%
Formosa Plastic Corp. 2.58%
Hang Seng Bank, Ltd. 2.54%
- -------------------------------------------------------
Long-Term Country Weightings
(% of Total Long-Term Investments)
- -------------------------------------------------------
(PIE CHART)
Hong Kong 31.54% Malaysia 2.86%
Taiwan 22.48% Thailand 2.64%
South Korea 21.81% Indonesia 2.24%
Singapore 14.26% The Philippines 2.17%
- -----------------------------------------------------
Sector Breakdown: Top Ten Industries
(% of Total Long-Term Investments)
- -----------------------------------------------------
Electronics 18.29%
Banking 15.45%
Telecommunications 12.91%
Conglomerate 8.33%
Utilities 6.81%
Real Estate - Developers 6.10%
Chemicals 4.78%
Iron & Steel 3.56%
Insurance 3.35%
Food & Beverage 2.54%
1
<PAGE>
- --------------------------------------------------------------------------------
REPORT OF THE INVESTMENT MANAGER
For the period from March 31, 1999 to September 30, 1999
- --------------------------------------------------------------------------------
PERFORMANCE
During the last six months the Fund's net asset value (NAV) per share
increased by US$2.59 from US$8.60 to US$11.19. In percentage terms the Fund's
total return performance was 30.2%. This compares with its relevant benchmark
index return, the MSCI Combined Far East Free Ex-Japan index of 24.0%. The
Fund's outperformance of 6.2% was largely due to stock selection rather than
asset allocation.
The strong gains made by the Asian markets in the second quarter of the
calendar year (33.7% as measured by the Fund's benchmark MSCI Combined Far East
Free Ex Japan index) were partially eroded in the third quarter (-8.5%). The
ASEAN markets during the period once again demonstrated their extreme
volatility, making long-term stock investment decisions difficult to execute.
Here a 'buy-on-weakness' discipline for selected countries was executed. Asia's
four largest markets in terms of market capitalisation (Hong Kong, Korea, Taiwan
and Singapore, respectively) were considerably less volatile, with Singapore and
Korea performing particularly well.
Local Currencies vs. the U.S. Dollar
<TABLE>
<CAPTION>
31/03/99 -
30/09/99
Currency Change
US$/local rate 31/03/99 30/06/99 30/09/99 %
- ---------------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
North Asia
Hong Kong Dollar 7.749 7.759 7.768 -0.2
Korean Won 1,227 1,158 1,217 0.8
New Taiwan
Dollar 33.1 32.3 31.8 4.1
ASEAN
Indonesian
Rupiah 8,715 6,663 8,320 4.7
Malaysian
Ringgit 3.8 3.8 3.8 0.0
Philippine Peso 38.8 38.1 40.9 -5.1
Singaporean
Dollar 1.73 1.70 1.70 1.8
Thai Baht 37.6 36.9 40.9 -8.1
South Asia
Indian Rupee 42.4 43.4 43.6 -2.8
</TABLE>
Stock Market Performance
March 31, 1999 to September 30, 1999
<TABLE>
<CAPTION>
31/03/99 30/06/99 31/03/99
-30/06/99 -30/09/99 -30/09/99
Market Market Market
Change % Change % Change %
Country - Index US$ US$ US$
- ------------------------- --------- --------- ---------
<S> <C> <C> <C>
North Asia
MSCI Hong Kong 22.6 -6.78 14.0
MSCI Korea 55.1 -5.06 48.5
MSCI Taiwan 23.9 -9.55 16.8
ASEAN
MSCI Indonesia Free 75.1 -21.43 42.8
MSCI Malaysia Free 71.0 -17.92 65.2
MSCI Philippines Free 19.0 -18.02 -7.6
MSCI Singapore Free 31.7 -3.99 28.5
MSCI Thailand Free 58.1 -24.61 9.4
South Asia
MSCI India 9.7 21.32 29.5
Regional
MSCI Combined Far East
Free
Ex Japan 33.7 -8.48 23.1
</TABLE>
* Source: Datastream
COUNTRY ALLOCATION
<TABLE>
<CAPTION>
31/03/99 30/06/99 30/09/99
Country (%) (%) (%)
- ---------------------- ---------- ---------- -----------
<S> <C> <C> <C>
North Asia 67.2 72.4 74.8
Hong Kong 35.2 31.9 31.1
Korea 16.4 22.3 21.6
Taiwan 15.6 18.2 22.1
ASEAN 27.0 25.6 23.7
Indonesia 1.5 1.9 2.2
Philippines 4.7 2.7 2.2
Malaysia 3.1 3.2 3.1
Singapore 15.6 15.4 13.9
Thailand 2.1 2.4 2.3
South Asia
India 3.9 1.3 --
Cash 1.9 0.7 1.5
</TABLE>
ASSET ALLOCATION
The guiding principle for asset allocation has remained risk-adjusted
returns. For that reason, the
2
<PAGE>
larger, more financially and economically stable markets have remained the
preferred investment areas as long as the corporate (micro) analysis supports
the top down (macro) view. Therefore, North Asia has remained preferred over
ASEAN. Within North Asia, exposure to Hong Kong was reduced in the second
quarter, while exposure to Korea and, to a lesser extent, Taiwan, was increased.
Exposure to Taiwan was significantly increased in the third quarter. Within the
ASEAN markets, profits were taken in the Philippines in the second quarter, as
they were in India (in the latter part of this period). There were a number of
small changes made to the ASEAN weighting in the third quarter: some profits
were taken in Singapore, with the money raised partially reinvested in Indonesia
and Thailand, at a time when those markets were weak. Finally, the Fund's
non-index exposure to India was sold out during this period.
RECENT SECTOR & STOCK STRATEGY
Sector and stock selection over this period have been significant
contributors to the Fund's performance. The sector strategy was largely
maintained throughout the period, although the Fund's exposure to cyclical
companies was marginally increased. The sectors that have the largest overweight
positions include technology, telecommunications and steels; the largest
underweight positions include real estate and financial services.
OUTLOOK
The Asian markets are currently undergoing a period of consolidation. This
state is much needed after their rapid recovery from the lows of the autumn of
1998 and from which many have rebounded over 100%. They need to digest the
implications of the region's economic recovery and are moving from their
liquidity-driven phase to an earnings-driven one. In the end-June Quarterly
Report your Manager forecast that significant equity issuance would impact the
region and that in some countries this would have negative implications for
those particular markets. Asia is now in the midst of that process, but once it
is completed, the region will emerge stronger and better able to compete in the
global arena.
The major question most investors are asking themselves about the Asia
Pacific region is the extent to which it can decouple from events on Wall
Street. The relative bull market for Asia is clear: it is under-owned, it is
undervalued and it is overlooked. Also, events unfolding in Japan appear to be
extremely positive for Asia and this could lead international investors to
refocus on the region. However, if events were to turn sour in the USA, then the
Asian markets, along with all the other global equity markets, would not be able
to extricate themselves unscathed.
Going forward, your Manager is now more positive on the outlook for the Asia
Pacific region after its recent correction. A focussed approach towards stock
selection, along with the changes that have made these markets more shareholder
friendly, should help cultivate an attractive investment environment for
long-term investors.
James Squire
Baring Asset Management (Asia) Limited
Hong Kong
November 5, 1999
3
<PAGE>
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THE ASIA PACIFIC FUND, INC.
Portfolio of Investments
September 30, 1999
(Unaudited)
<TABLE>
<CAPTION>
- -------------------------------------------------------
Value
Shares Description (Note 1)
<CAPTION>
- -------------------------------------------------------
<C> <S> <C>
EQUITIES--98.3%
Hong Kong--31.0%
1,700,000 Axa China Region, Ltd. ..... $ 1,116,153
(Insurance)
907,400 Bank of East Asia, Ltd. .... 1,968,355
(Banking)
814,000 Cheung Kong Holdings, Ltd.
Ltd. ..................... 6,785,298
(Real Estate-Developers)
509,000 China Light & Power Co., Ltd. 2,391,748
(Utilities)
1,812,000 China Telecom, Ltd. (a) .... 5,586,869
(Telecommunications)
500,000 Hang Seng Bank, Ltd. ....... 5,294,326
(Banking)
2,276,110 Hong Kong and China Gas
Co., Ltd. ................ 3,062,064
(Utilities)
500,000 Hong Kong Electric Holdings, 1,551,286
Ltd. .
(Utilities)
3,753,600 Hong Kong Telecommunications,
Ltd. ..................... 8,239,050
(Telecommunications)
735,000 Hongkong Land Holdings, Ltd. 962,850
(Real Estate-Developers)
373,400 HSBC Holdings Plc. ......... 4,278,279
(Banking)
1,600,000 Hutchison Whampoa, Ltd. .... 14,882,044
(Conglomerate)
520,000 Johnson Electric Holdings,
Ltd. ...................... 2,523,768
(Manufacturing)
788,000 Li & Fung Ltd. ............. 2,383,959
(Distribution/Wholesalers)
4,000,000 Shanghai Petrochemical ..... 885,714
(Chemicals)
500,000 Sun Hung Kai Properties, Ltd. 3,813,846
------------
(Real Estate-Developers)
65,725,609
------------
India
50 Larsen & Toubro, Ltd. ...... 419
(Diversified Operations) ------------
Indonesia--2.2%
5,967,500 PT Bank Pan Indonesia Tbk ... 768,271
(Banking)
<CAPTION>
- -------------------------------------------------------
Value
Shares Description (Note 1)
- -------------------------------------------------------
<C> <S> <C>
734,500 PT Gudang Garam Tbk ........ $ 1,482,195
(Tobacco)
69,700 PT Indonesia Satellite Tbk
(ADR) .................... 919,169
(Telecommunications)
2,201,000 PT Tambang Timah Tbk ....... 1,489,299
(Mining) ------------
4,658,934
------------
Malaysia--2.8%
330,000 Malayan Banking Berhad ..... 1,024,737
(Banking)
225,000 Rothmans of Pall Mall Berhad. 1,373,684
(Tobacco)
1,035,000 Tanjong Co., Ltd. .......... 2,178,947
(Gaming)
531,500 Telekom Malaysia Berhad .... 1,377,704
(Telecommunications) ------------
5,955,072
------------
The Philippines--2.2%
302,308 Manila Electric Co. 'B' .... 872,184
(Utilities)
81,250 Philippine Long Distance
Telephone Co. (ADR) ...... 1,757,031
(Telecommunications)
8,082,580 San Miguel Corp. 'B' ....... 1,903,222
(Food & Beverage) ------------
4,532,437
------------
Singapore--13.9%
242,000 City Developments, Ltd. .... 1,230,991
(Real Estate-Developers)
538,469 DBS Group Holdings, Ltd. ... 6,016,414
(Banking)
881,000 Keppel Corp., Ltd. ......... 2,569,691
(Conglomerate)
400,000 Natsteel Electronics, Ltd. .. 1,493,678
(Electronics)
509,600 Overseas-Chinese Banking
Corp., Ltd. .............. 3,955,731
(Banking)
</TABLE>
See Notes to Financial Statements.
4
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------
Value
Shares Description (Note 1)
- -------------------------------------------------------
<C> <S> <C>
Singapore (continued)
503,000 Singapore Airlines, Ltd. ... $ 4,910,203
(Airlines)
252,198 Singapore Press Holdings,
Ltd. ..................... 3,974,658
(Printing & Publishing)
1,254,577 Singapore Technologies
Engineering, Ltd. ........ 1,600,960
(Engineering &
Construction)
2,040,000 Singapore Telecommunications, 3,718,906
Ltd. ..................... ------------
(Telecommunications)
29,471,232
------------
South Korea--21.5%
275,880 Hankook Synthetics, Inc. ... 773,326
(Manufacturing)
208,900 Hyundai Motor Co., Ltd.
(ADR) .................... 1,953,215
(Automobiles)
19,080 Keum Kang, Ltd. ............ 1,035,166
(Building & Construction)
308,400 Kook Min Bank .............. 3,866,091
(Banking)
191,830 Korea Electric Power Corp. .. 6,307,604
(Utilities)
33,720 Korea Telecom Corp. (ADR) ... 1,727,324
(Telecommunications)
129,710 L.G. Chemicals, Ltd. ....... 3,763,882
(Chemicals)
41,050 Pohang Iron & Steel Co. .... 4,606,104
(Iron & Steel)
5,613 S1 Corp. ................... 943,575
(Security/Investigation
Services)
38,230 Samsung Display Devices Co. . 2,168,409
(Electronics)
87,178 Samsung Electronics Co. .... 14,117,605
(Electronics)
69,610 Samsung Fire & Marine
Insurance ................ 3,067,074
(Insurance)
1,229 SK Telecom Co., Ltd. ....... 1,136,560
(Telecommunications) ------------
45,465,935
------------
<CAPTION>
- -------------------------------------------------------
Value
Shares Description (Note 1)
- -------------------------------------------------------
<C> <S> <C>
Taiwan--22.1%
489,223 Asustek Computer, Inc.(a) ... $ 4,869,117
(Computer Products)
1,084,910 Cathay Life Insurance Co.,
Ltd. ..................... 2,801,972
(Insurance)
3,494,200 China Steel Corp. .......... 2,839,381
(Iron & Steel)
220,000 Formosa Growth Fund (a) .... 4,807,000
(Diversified Funds)
2,779,240 Formosa Plastic Corp. ...... 5,383,410
(Chemicals)
520,600 Hon Hai Precision Industry
Co., Ltd. ................ 3,410,545
(Electronics)
1,211,152 President Chain Store Corp. . 3,433,187
(Food Retail)
2,168,860 Taiwan Semiconductor
Manufacturing Co. (a) .... 9,119,459
(Electronics)
1,450,000 United Microelectronics
Corp., Ltd. .............. 3,379,528
(Electronics)
2,759,680 United World Chinese
Commercial Bank (a) ...... 3,346,384
(Banking)
1,984,000 Winbond Electronics Corp. ... 3,468,094
(Electronics) ------------
46,858,077
------------
Thailand--2.6%
220,000 Advanced Info Services PCL
(a) ....................... 2,512,138
(Telecommunications)
149,000 BEC World PCL .............. 807,076
(Television & Communication
Equipment)
260,000 Hana Microelectronics PCL(a) . 856,411
(Electronics)
1,130,000 Thai Farmers Bank PCL ...... 1,330,304
(Banking) ------------
5,505,929
------------
Total equities
(cost $156,238,118)........ 208,173,644
------------
</TABLE>
See Notes to Financial Statements.
5
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------
Principal
Amount Value
(000) Description (Note 1)
- -------------------------------------------------------
<C> <S> <C>
SHORT-TERM INVESTMENTS--1.3%
Repurchase Agreements
$ 2,736 State Street Bank & Trust
Company, 3.25%, dated
9/30/99, due 10/1/99 in the
amount of $2,736,247 (cost
$2,736,000; collateralized
by $2,705,000 U.S. Treasury
Bonds, 6.50% due 11/15/26,
approximate value of
collateral including
accrued
interest-$2,793,756)....... $ 2,736,000
------------
Total Investments--99.6%
(cost $158,974,118; Note
3)......................... 210,909,644
Other assets in excess of
liabilities--0.4%.......... 871,587
------------
Net Assets--100%............. $211,781,231
------------
------------
</TABLE>
- ---------------
(a) Non-income producing security.
ADR--American Depository Receipt
- ----------------------------------------------------------
THE ASIA PACIFIC FUND, INC.
Statement of Assets and Liabilities
September 30, 1999
(Unaudited)
- ----------------------------------------------------------
<TABLE>
<CAPTION>
Assets
<S> <C>
Investments, at value (cost
$158,974,118)........................ $210,909,644
Cash, including foreign currency
(cost $1,279,554).................... 1,388,140
Receivable for investments sold........ 1,502,712
Dividends and interest recievable...... 205,008
Other assets........................... 48,534
------------
Total assets......................... 214,054,038
------------
Liabilities
Payable for investments purchased...... 1,792,289
Deferred Thailand capital gains tax
liability............................ 226,371
Investment management fee payable...... 154,437
Administration fee payable............. 46,325
Accrued expenses and other
liabilities.......................... 35,949
Foreign withholding taxes payable...... 17,436
------------
Total liabilities.................... 2,272,807
------------
Net Assets............................. $211,781,231
------------
------------
Net assets comprised:
Common stock, at par................. $ 189,303
Paid-in capital in excess of par..... 220,662,833
------------
220,852,136
Distributions in excess of net
investment income.................... (1,892,234)
Accumulated net realized losses on
investments and foreign currency
transactions......................... (58,995,977)
Net unrealized appreciation on
investments and foreign currencies... 51,817,306
------------
Net Assets, September 30, 1999......... $211,781,231
------------
------------
Net Asset Value per share:
($211,781,231 3 18,930,333 shares of
common stock issued and
outstanding)......................... $11.19
------------
------------
</TABLE>
See Notes to Financial Statements. See Notes to Financial Statements.
6
<PAGE>
- ----------------------------------------------------------
THE ASIA PACIFIC FUND, INC.
Statement of Operations
Six Months Ended September 30, 1999
(Unaudited)
- ----------------------------------------------------------
<TABLE>
<CAPTION>
Net Investment Income
<S> <C>
Income
Dividends (net of foreign withholding
taxes of $219,715)................. $ 1,881,895
Interest............................. 22,864
------------
Total income....................... 1,904,759
------------
Expenses
Investment management fee............ 872,326
Administration fee................... 257,974
Custodian's fees and expenses........ 172,000
Reports to shareholders.............. 103,000
Insurance............................ 59,000
Legal fees and expenses.............. 59,000
Directors' fees...................... 41,000
Transfer agent's fees and expenses... 22,000
Audit fees and expenses.............. 21,000
Miscellaneous........................ 89,595
------------
Total expenses................... 1,696,895
------------
Net investment income................ 207,864
------------
Realized and Unrealized Gain (Loss) on
Investments and Foreign Currency
Transactions
Net realized gain on:
Investment transactions (net of
Thailand capital gains taxes of
$319).............................. 13,638,653
Foreign currency transactions........ 482,193
------------
14,120,846
------------
Net change in unrealized appreciation
(depreciation) on:
Investments (net of change in
deferred Thailand capital gains
taxes of $156,046)................. 34,958,751
Foreign currencies................... (225,162)
------------
34,733,589
------------
Net gain on investments and foreign
currencies........................... 48,854,435
------------
Net Increase in Net Assets
Resulting From Operations.............. $ 49,062,299
------------
------------
</TABLE>
- ----------------------------------------------------------
THE ASIA PACIFIC FUND, INC.
Statement of Changes in Net Assets
(Unaudited)
- ----------------------------------------------------------
<TABLE>
<CAPTION>
Six Months
Ended Year Ended
Increase (Decrease) September 30, March 31,
in Net Assets 1999 1999
------------- ------------
<S> <C> <C>
Operations
Net investment
income............... $ 207,864 $ 1,133,219
Net realized gain
(loss) on investments
and foreign currency
transactions......... 14,120,846 (29,609,507)
Net change in
unrealized
appreciation
(depreciation) on
investments and
foreign currencies... 34,733,589 17,990,272
------------- ------------
Net increase (decrease)
in net assets
resulting from
operations........... 49,062,299 (10,486,016)
Dividends to shareholders
from net investment
income................. -- (813,989)
------------- ------------
Total increase
(decrease)............. 49,062,299 (11,300,005)
Net Assets
Beginning of period...... 162,718,932 174,018,937
------------- ------------
End of period............ $ 211,781,231 $162,718,932
------------- ------------
------------- ------------
</TABLE>
See Notes to Financial Statements. See Notes to Financial Statements.
7
<PAGE>
- ----------------------------------------------------------
THE ASIA PACIFIC FUND, INC.
Notes to Financial Statements
(Unaudited)
- ----------------------------------------------------------
The Asia Pacific Fund, Inc. (the 'Fund') is 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.
Note 1. Accounting The following is a summary
Policies 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 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. Accordingly, these realized foreign currency
gains(losses) are included in the reported net realized gains(losses) on
investment transactions.
Net realized gains(losses) on foreign currency transactions 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 Net 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. Expenses are recorded on the accrual basis
which may require the use of certain estimates by management.
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.
8
<PAGE>
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, 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 distributions in excess of net investment income
and increase accumulated net realized losses on investments and foreign currency
transactions by $482,193 for differences in the treatment for book and tax
purposes of certain transactions involving foreign securities, currencies and
withholding taxes. Net investment income, net realized gains and net assets were
not affected by this change.
Note 2. Investment The Fund has a manage-
Management and ment agreement with Bar
Administration ing Asset Management
Agreements (Asia) Limited (the
'Investment Manager') and an administration
agreement with Prudential Investments Fund Management LLC (the 'Administrator').
The Investment Manager is an indirect, wholly owned subsidiary of ING Groep N.V.
The investment management fee is computed weekly and payable monthly: 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 the Fund's average weekly net assets.
The administration fee is also computed weekly and payable monthly. For the
period April 1, 1999 through September 30, 1999, the fee was calculated at an
annual rate of 0.25% of the Fund's average weekly net assets. Effective October
1, 1999, the administration fee will be reduced to an annual rate of 0.25% up to
$200 million and 0.20% in excess 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.
Note 3. Portfolio Purchases and sales of
Securities investment securities, other
than short-term investments, for the six months
ended September 30, 1999 aggregated $78,582,053 and $76,612,557, respectively.
The United States federal income tax basis of the Fund's investments at
September 30, 1999 was substantially the same as for financial reporting
purposes and, accordingly, net unrealized depreciation for federal income tax
purposes was $51,935,526 (gross unrealized appreciation--$57,084,706; gross
unrealized depreciation--$5,149,180).
For federal income tax purposes, the Fund has a capital loss carryforward as
of March 31, 1999 of approximately $66,456,200 which expires in 2007. In
addition, the Fund has elected to treat net currency and capital losses of
approximately $53,500 and $5,176,400, respectively, incurred in the five month
period ended March 31, 1999 as having been incurred in the current fiscal year.
Accordingly, no capital gains distribution is expected to be paid to
shareholders until net gains have been realized in excess of the aggregate of
such amounts.
Note 4. Borrowings The Fund has a credit
agreement with an unaffiliated bank. The borrowing
limitation under this agreement is $70,000,000. Drawings may be made for periods
of one, two or three months and interest is accrued daily and payable at the end
of the loan period. The Fund had no loans outstanding for the six months ended
September 30, 1999.
Note 5. Capital There are 30 million shares
of $0.01 par value common stock authorized.
9
<PAGE>
- --------------------------------------------------------------------------------
THE ASIA PACIFIC FUND, INC.
Financial Highlights
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months
Ended Year Ended March 31,
September 30, ------------------------------------------------------------
Per Share Operating Performance: 1999 1999 1998 1997 1996 1995
------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period...... $ 8.60 $ 9.19 $ 13.90 $ 14.87 $ 13.55 $ 16.29
------------- -------- -------- -------- -------- --------
Net investment income (loss).............. 0.01 0.06 0.12 0.06 0.05 --
Net realized and unrealized gain (loss) on
investments and foreign currency
transactions............................ 2.58 (0.61) (4.14) (0.53) 1.91 0.38
------------- -------- -------- -------- -------- --------
Total from investment operations.......... 2.59 (0.55) (4.02) (0.47) 1.96 0.38
------------- -------- -------- -------- -------- --------
Less dividends and distributions:
Dividends from net investment income...... -- (0.04) (0.12) -- (0.04) (0.02)
Distributions in excess of net investment
income.................................. -- -- (0.16) -- -- --
Distributions from realized gains on
investments and foreign currencies...... -- -- (0.41) (0.50) -- (3.10)
------------- -------- -------- -------- -------- --------
Total dividends and distributions......... -- (0.04) (0.69) (0.50) (0.04) (3.12)
------------- -------- -------- -------- -------- --------
Capital charge in respect of issuance of
shares.................................. -- -- -- -- (0.60) --
------------- -------- -------- -------- -------- --------
Net asset value, end of period............ $ 11.19 $ 8.60 $ 9.19 $ 13.90 $ 14.87 $ 13.55
------------- -------- -------- -------- -------- --------
------------- -------- -------- -------- -------- --------
Market value, end of period............... $ 9.00 $ 7 1/16 $ 9.00 $ 11 1/2 $ 14 1/4 $ 14 1/8
------------- -------- -------- -------- -------- --------
------------- -------- -------- -------- -------- --------
Total investment return(a)................ 27.43% (21.02)% (16.07)% (16.18)% 1.16% (3.65)%
------------- -------- -------- -------- -------- --------
------------- -------- -------- -------- -------- --------
Ratios to Average Net Assets:
Expenses (including loan interest
expense)................................ 1.64%(c) 1.79% 1.56% 1.63% 1.58% 2.06%
Expenses (excluding loan interest
expense)................................ 1.64%(c) 1.79% 1.56% 1.57% 1.53% 1.72%
Net investment income..................... 0.20%(c) 0.80% 0.99% 0.43% 0.43% --
Supplemental Data:
Average net assets (000 omitted).......... $ 207,287 $141,079 $220,857 $275,702 $242,487 $214,527
Portfolio turnover rate................... 39% 64% 54% 43% 23% 48%
Net assets, end of period (000 omitted)... $ 211,781 $162,719 $174,019 $262,693 $281,057 $192,009
Total debt outstanding at end of period
(000 omitted)........................... -- -- -- -- $ 20,000 --
Asset coverage(b)......................... -- -- -- -- $ 15,053 --
</TABLE>
- ---------------
(a) 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.
(b) Per $1,000 of debt outstanding.
(c) Annualized.
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.
10
<PAGE>
Supplemental Proxy Information
The Annual Meeting of Shareholders of The Asia Pacific Fund, Inc. (the
'Fund') was held on Thursday, July 1, 1999 and adjourned to Thursday, July 29,
1999 at the offices of Sullivan & Cromwell, 125 Broad Street, New York, New
York. The meeting was held for the following purposes:
(1) To elect three Directors to serve as follows:
Director Class Term Expiring
- ---------------------------- ----- -------- --------
Olarn Chaipravat I 3 years 2002
Michael J. Downey I 3 years 2002
John A. Morrell I 3 years 2002
Directors whose term of office continued beyond this meeting are David J.
Brennan, Robert F. Gunia, David G.P. Scholfield, Douglas Tong Hsu and Robert
H. Burns.
(2) Approval of change in investment structure.
(3) To ratify the selection of Deloitte & Touche LLP as independent public
accountants for the fiscal year ending March 31, 2000.
(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>
Votes Votes Votes
Director/Matter For Against Withheld Abstentions
------------------------------------ ----------- --------- --------- -----------
<C> <S> <C> <C> <C> <C>
(1) Olarn Chaipravat 10,434,357 0 821,066 --
Michael J. Downey 10,602,739 0 652,684 --
John A. Morrell 10,483,704 0 771,719 --
(2) Approval of change in investment
restriction 7,154,789 1,796,354 2,103,084 201,195
(3) Ratification of Deloitte & Touche
LLP as independent accountants 11,022,820 88,021 144,582 --
</TABLE>
11
<PAGE>
Directors
Michael J. Downey, Chairman
David J. Brennan
Robert H. Burns
Olarn Chaipravat
Robert F. Gunia
John A. Morrell
Douglas Tong Hsu
David G. P. Scholfield
Officers
Ronald G. M. Watt, President
Robert F. Gunia, Vice President and Treasurer
Peter W. Fortner, Assistant Treasurer
Deborah A. Docs, Secretary
Vasso-Athene Spanos, Assistant Secretary
Investment Manager
Baring Asset Management (Asia) Limited
1901 Edinburgh Tower
15 Queen's Road Central
Hong Kong
Administrator
Prudential Investments Fund Management LLC
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
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, 1999
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.
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
For general information on the Fund, please call (toll-free) Dewe
Rogerson Inc., our shareholders' servicing agent toll-free at:
(888) 4-ASIA-PAC
The Fund's Web Site address is:
www.asiapacific.com
044901106
