<PAGE>
THE MALAYSIA FUND, INC.
---------------------------------------------
OFFICERS AND DIRECTORS
Richard A. Debs Sidney M. Robbins
CHAIRMAN OF THE BOARD DIRECTOR
OF DIRECTORS James W. Grisham
Warren J. Olsen VICE PRESIDENT
PRESIDENT AND DIRECTOR Harold J. Schaaff, Jr.
R. Michael Barth VICE PRESIDENT
DIRECTOR Joseph P. Stadler
Peter J. Chase VICE PRESIDENT
DIRECTOR Valerie Y. Lewis
Dato Azlan Hashim SECRETARY
DIRECTOR Hilary D. Toole
Graham E. Jones ASSISTANT SECRETARY
DIRECTOR James R. Rooney
Dato Malek Merican TREASURER
DIRECTOR Timothy F. Osborne
William G. Morton, Jr. ASSISTANT TREASURER
DIRECTOR
---------------------------------------------
U.S. INVESTMENT ADVISER
Morgan Stanley Asset Management Inc.
1221 Avenue of the Americas
New York, New York 10020
---------------------------------------------------------
MALAYSIAN INVESTMENT ADVISER
Arab-Malaysian Consultant Sdn Bhd
21st-29th Floors, Bangurian Arab-Malaysian
Jalan Raja Chulan, 5200 Kuala Lumpur, Malaysia
---------------------------------------------------------
ADMINISTRATOR
The United States Trust Company of New York
73 Tremont Street
Boston, Massachusetts 02108
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CUSTODIANS
Morgan Stanley Trust Company (International)
One Pierrepont Plaza
Brooklyn, New York 11201
The United States Trust Company of New York (Domestic)
770 Broadway
New York, New York 10003
---------------------------------------------------------
SHAREHOLDER SERVICING AGENT
The First National Bank of Boston
Investor Relations Department
P.O. Box 644, Mail Stop 45-02-09
Boston, Massachusetts 02102-0644
(617) 575-2900
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LEGAL COUNSEL
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
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INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
1177 Avenue of the Americas
New York, New York 10036
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---------
THE
MALAYSIA FUND,
INC.
---------
FIRST QUARTER REPORT
MARCH 31, 1995
MORGAN STANLEY ASSET MANAGEMENT INC.
INVESTMENT ADVISER
<PAGE>
LETTER TO SHAREHOLDERS
- - --------
Despite initial setbacks caused by the Mexican crisis, the Barings debacle and
the turmoil in the world's major currencies; the Malaysian stockmarket managed
to record a marginal gain of 2.27% during the first quarter of 1995. Investor
sentiment was boosted by stability in US interest rates and strong earnings
reports by Malaysian companies.
During the quarter, the Fund slightly outperformed the broad Malaysian equity
market, as the Fund's net asset value per share increased 2.64%. The Fund's
stock price on the New York Stock Exchange declined 1.44% during the quarter to
$17 1/8 at March 31, a 10.2% discount to the underlying net asset value.
Malaysia's strong economy continues to propel Malaysia's equity market through a
difficult period. In 1994, the Malaysian economy recorded its seventh
consecutive year of 8% plus economic growth, with real GDP growth of 8.7%. This
growth was driven primarily by the manufacturing and construction sectors, and
given the continued influx of direct foreign investments and a heavy pipeline of
infrastructure projects, the manufacturing and construction sectors should
remain the engines of growth in 1995. Bank Negara, Malaysia's central bank, is
forecasting growth to accelerate slightly in 1995 for real GDP growth of 8.9%
for the year. This eighth consecutive year of plus 8% growth is forecast with
inflation remaining well below 5%, in about the 4% range.
Coupled with this continuing economic success story are reasonable market
valuations of around 19x prospective 1995 earnings. Our portfolio managers
believe that this scenario limits downside risk in the Malaysian equity market
and they believe that with most of the negative news already discounted by the
market, the Fund is well positioned to take advantage of any surprises on the
upside.
Sincerely,
[SIGNATURE]
Richard A. Debs
CHAIRMAN
April 28, 1995
2
<PAGE>
INVESTMENTS (UNAUDITED)
- - ---------
MARCH 31, 1995
<TABLE>
<CAPTION>
VALUE
SHARES (000)
<S> <C> <C>
- - ---------------------------------------------------------
- - ------------
MALAYSIAN COMMON STOCKS (96.9%)
(Unless otherwise noted)
- - ----------------------------------------------------------
- - -------------
AUTOMOBILES (6.8%)
Cycle & Carriage Bintang Bhd 1,480,000 U.S.$ 6,024
Edaran Otomobil Nasional Bhd 715,000 5,227
UMW Holdings Bhd 566,666 1,388
UMW Holdings Bhd (Warrants) 66,666 15
------------
12,654
------------
- - ----------------------------------------------------------
- - -------------
BANKING (15.5%)
Development & Commercial Bank
Bhd 1,500,000 3,675
Development & Commercial Bank
Bhd (Warrants) 425,000 302
Hong Leong Credit Bhd 1,365,199 5,827
Malayan Banking Bhd 2,354,100 15,908
Public Bank Bhd (Foreign) 1,696,333 2,963
------------
28,675
------------
- - ----------------------------------------------------------
- - -------------
BEVERAGES & TOBACCO (4.4%)
Rothmans of Pall Mall
(Malaysia) Bhd 1,225,000 8,230
------------
- - ----------------------------------------------------------
- - -------------
BUILDING MATERIALS & COMPONENTS (1.4%)
Hong Leong Industries Bhd 494,000 2,538
------------
- - ----------------------------------------------------------
- - -------------
CONSTRUCTION & HOUSING (12.2%)
Ekran Bhd 202,000 726
Promet Bhd 5,100,000 4,958
TH Loy Industries (Malaysia)
Bhd 916,500 3,604
United Engineers, Ltd. 2,268,000 13,265
------------
22,553
------------
- - ----------------------------------------------------------
- - -------------
ELECTRICAL & ELECTRONICS (0.8%)
Malaysian Pacific Industries
Bhd 749,000 1,510
------------
- - ----------------------------------------------------------
- - -------------
FOREST PRODUCTS & PAPER (2.5%)
Aokam Perdana Bhd 811,400 4,553
------------
- - ----------------------------------------------------------
- - -------------
GOLD MINES (0.1%)
Odin Mining & Investment Co.
Ltd. 251,500 112
------------
- - ----------------------------------------------------------
- - -------------
LEISURE & TOURISM (15.6%)
Genting Bhd 1,974,000 17,786
Resorts World Bhd 2,106,666 10,906
Tanjong plc 95,000 280
------------
28,972
------------
</TABLE>
- - -----------------------------------------------------------------
- - -------------
<TABLE>
<CAPTION>
VALUE
SHARES (000)
<S> <C> <C>
- - ---------------------------------------------------------
- - ------------
MACHINERY & ENGINEERING (1.0%)
Pilecon Engineering Bhd 1,424,000 U.S.$ 1,688
Pilecon Engineering Bhd
(Warrants), expiring 7/6/99 166,666 81
------------
1,769
------------
- - ----------------------------------------------------------
- - -------------
MULTI-INDUSTRY (11.4%)
Lingui Developments Bhd 1,368,332 3,190
Malaysian Resources Corp 1,190,000 2,210
Renong Bhd 5,220,000 8,086
Sime Darby Bhd 3,044,400 7,580
------------
21,066
------------
- - ----------------------------------------------------------
- - -------------
REAL ESTATE (2.9%)
Daiman Development Bhd 914,000 1,069
Land & General Bhd 553,000 1,694
Shah Alam Properties Bhd 658,000 1,365
Tan & Tan Development Bhd 1,120,000 1,319
------------
5,447
------------
- - ----------------------------------------------------------
- - -------------
TELECOMMUNICATIONS (11.9%)
Technology Resources Industries
Bhd 1,335,000 3,825
Telekom Malaysia Bhd 1,798,000 12,434
Time Engineering Bhd 1,791,000 4,176
Uniphone Telecommunications Bhd 782,000 1,310
Uniphone Telecommunications Bhd
(Warrants), expiring 9/7/99 587,000 329
------------
22,074
------------
- - ----------------------------------------------------------
- - -------------
TRANSPORTATION - AIRLINES (2.8%)
Malaysia Airline System Bhd 1,146,000 3,782
Malaysian Helicopter 794,000 1,406
------------
5,188
------------
- - ----------------------------------------------------------
- - -------------
TRANSPORTATION - SHIPPING (2.2%)
Malaysian International
Shipping Bhd (Foreign) 1,432,000 4,131
------------
- - ----------------------------------------------------------
- - -------------
UTILITIES - ELECTRICAL & GAS (5.4%)
Tenaga Nasional Bhd 2,448,000 10,061
------------
- - ----------------------------------------------------------
- - -------------
TOTAL MALAYSIAN COMMON STOCKS
(Cost U.S. $116,264) 179,533
------------
- - ----------------------------------------------------------
- - -------------
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE
(000) (000)
<S> <C> <C>
- - ---------------------------------------------------------
- - ------------
SHORT TERM INVESTMENT (0.3%)
- - ---------------------------------------------------------
- - ------------
REPURCHASE AGREEMENT
U.S. Trust, 6.00%, dated
3/31/95, due 4/3/95, to be
repurchased at U.S.$511,
collateralized by U.S.$500
Government National Mortgage
Association 9.50% to 10.00%,
due 10/15/09 to 12/15/09,
valued at U.S.$ 539 (Cost
U.S.$511) U.S.$ 511 U.S.$ 511
-----------
- - ---------------------------------------------------------
- - -------------
FOREIGN CURRENCY ON DEPOSIT WITH CUSTODIAN (2.6%)
(Interest Bearing Demand Account)
Malaysian Ringgit
(Cost U.S. $4,900) MYR 12,486 4,934
-----------
</TABLE>
<TABLE>
<S> <C> <C>
- - ---------------------------------------------------------
- - ------------
TOTAL INVESTMENTS (99.8%)
(Cost U.S. $121,675) 184,978
-----------
- - ---------------------------------------------------------
- - -------------
</TABLE>
<TABLE>
<CAPTION>
AMOUNT VALUE
(000) (000)
<S> <C> <C>
- - ---------------------------------------------------------
- - ------------
OTHER ASSETS AND LIABILITIES (0.2%)
Other Assets U.S.$2,154
Liabilities (1,816) U.S.$ 338
--------- ------------
- - ----------------------------------------------------------
- - -------------
NET ASSETS (100%)
Applicable to 9,722,148 issued and
outstanding U.S. $.01 par value shares
(20,000,000 shares authorized) U.S.$185,316
------------
- - ----------------------------------------------------------
- - -------------
NET ASSET VALUE PER SHARE U.S.$ 19.06
------------
- - ----------------------------------------------------------
- - -------------
</TABLE>
4
