<PAGE> 1
- --------------------------------------------------------------------------------
LETTER TO SHAREHOLDERS
- --------------------------------------------------------------------------------
November 4, 1996
Dear Fellow Shareholders,
The world's equity markets experienced sharp declines from mid June through
July 1996 brought on by fears of higher interest rates and creeping inflation
concerns. However, a measure of stability returned before the summer ended, and
the Financial Times (FT) World Index was able to post a 0.86% gain for the
quarter ended September 30, 1996. Clemente Global Growth Fund, Inc. had a net
asset value (NAV) of $10.82, down 2.41% for the quarter. For the nine months
ended September 30, 1996, the Fund's NAV was up 2.75%.
INVESTMENT STRATEGY
Despite weak economies and occasional currency jitters, Europe turned in
the best quarterly performance among international markets, up 3.2% in U.S.
dollars, followed by a 2.9% gain in North America. Japan declined 5.8% because
of political uncertainty and an elusive corporate earnings recovery. Given
overheating economies and political concerns, the Asia/Pacific region produced a
meager 1.1% return, and that was largely the result of strong performances in
Hong Kong (+8.0%), New Zealand (6.7%) and Australia (2.7%). The emerging markets
of Asia were down 5.5%, while Latin America's emerging markets were flat
overall, with the help of good gains in Venezuela and Brazil.
Throughout the third quarter of 1996, we implemented an investment strategy
that overweighted Europe and Latin America and market weighted Japan. In Europe,
the Scandinavian markets represented the best value: political and economic
stability and Gross Domestic Product (GDP) growth above the European average
supported our view on market rerating. In Finland, Europe's cheapest market, we
purchased NESTE OY, the country's largest market capitalization company
specializing in oil refining and exploration, and a candidate for further
privatization, and VALMET, a multinational group which excels in engineering and
enjoys a 35% market share in paper machinery. We invested in two Norwegian
companies: SCHIBSTED, the country's dominant publishing, media and cable
company, and SMEDVIG, an integrated industrial offshore company with oil rigs
operating in the North Sea and Southeast Asia. TRYGG-HANSA, a Swedish
investment, is a leading insurance company and a beneficiary of the growing
savings and pension fund flows in the country. Other favorite European markets
include Ireland, where economic growth is in excess of 6%, and Germany, with its
economic rebound, declining interest rates and somewhat more competitive
currency. Our investments in Ireland, BANK OF IRELAND, INDEPENDENT NEWSPAPERS
and CRH, are core portfolio holdings, while the new German holdings included
some very exciting emerging growth companies, such as FRESENIUS, which will
become the world's largest manufacturer of dialysis products after its merger
with National Medical Care, and SGL CARBON, a leading company in specialty
chemicals.
In emerging markets, we continue to overweight Latin America, particularly
Brazil and Mexico, on the back of continued fiscal and economic reform. We
expect good performances from the quality Brazilian names in our portfolio:
TELEBRAS, the country's dominant telephone company, with an annual growth rate
of 20%; the utility companies CEMIG and GLOBEX; COMPANHIA VALE DO RIO DOCE
(CVRD), a vast mining industrial complex with a leading position in world iron
ore; and BANCO BRADESCO, Brazil's premier financial institution. Our Mexican
investments in GRUPO CEMENTOS DE CHIHUAHUA, a domestic cement producer, and
CORPORACION INTERAMERICANA DE ENTRETENIMIENTO, a Latin America version of
Ticketmaster, are enjoying sustainable earnings growth. By contrast, we have
underweighted Asia since the current
1
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market environment is characterized by slower growth, dampened liquidity flows,
and a moderately weaker earnings environment; the exceptions are Hong Kong and
the Philippines, where economic and earnings growth is accelerating. Our
infrastructure theme is reflected in Philippine investments, namely, SOUTHEAST
ASIA CEMENT (SEACEM), a blue chip cement company, and ENGINEERING EQUIPMENT INC.
(EEI CORPORATION), a dominant construction company, and in the Hong Kong holding
of, CHEUNG KONG INFRASTRUCTURE.
Our scenario for Japan hinges on economic recovery through 1997, attractive
valuations relative to bonds, and still ample liquidity. Coming domestic
strength will be reflected in autos (hence our investment in HONDA MOTOR), and
in other consumer related companies, such as SHISEIDO, a global cosmetics
company, and EISAI, a defensive pharmaceutical company. In the technology area,
our investments are represented by TDK, CANON and NAMCO.
OUTLOOK: WHAT NEXT
For the balance of the year, the generally benign global story is likely to
continue, with fast-moving economies slowing to more sustainable levels, and
sluggish economies picking up momentum. OECD economies will experience 2.3%
growth on average in 1996, and 2.5% in 1997. Latin America seems set for gains
of 2.5%-3.0% this year and over 4.5% the next, while Asia again leads the way
with real GDP growth of 7.5%-8.0% this year and about 8.0% in 1997.
As we wind up the second half of 1996 and approach the new year 1997, we
are confident that the Fund's investment portfolio is structured appropriately
with world-class companies poised for performance over the next year's horizon.
Sincerely yours,
/s/ LILIA C. CLEMENTE /s/ LEOPOLDO M. CLEMENTE, JR.
Lilia C. Clemente Leopoldo M. Clemente, Jr.
Chairman President
2
<PAGE> 3
- -----------------------------------------------------
CLEMENTE GLOBAL GROWTH FUND, INC.
PORTFOLIO OF INVESTMENTS (UNAUDITED)
SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
- -----------------------------------------------------
SHARES/PRINCIPAL
AMOUNT DESCRIPTION VALUE
- -----------------------------------------------------
<S> <C>
FAR EAST--34.8%
HONG KONG--2.5%
Common Stock--2.5%
380,000 *Cheung Kong
Infrastructure Holdings,
Ltd. ................... $ 626,536
(Building--heavy
construction)
3,726,000 Shanghai Petrochemical
Co., Ltd. .............. 987,754
(Chemicals- synthetic
fibers, resins &
plastics)
Total Common
Stock/Holdings-- ------------
Hong Kong............... 1,614,290
------------
JAPAN--22.8%
Common Stock--20.8%
75,000 Canon Inc. ............... 1,474,814
(Office automation &
equipment)
134 DDI Corp. ................ 1,084,080
(Telecommunications)
50,000 Honda Motor Co. .......... 1,257,071
(Auto-maker)
164,000 Mitsubishi Heavy
Industries, Ltd. ....... 1,335,620
(Aerospace/defense)
106,000 Mitsui Fudosan Co. ....... 1,408,638
(Real estate development)
34,300 Namco, Ltd. .............. 1,121,056
(Leisure products--
commercial-use game
equipment makers)
54,000 Nomura Securities Co. .... 993,984
(Financial services)
43,000 Sankyo Co., Ltd. ......... 1,100,386
(Pharmaceuticals)
87,000 Shiseido Co., Ltd. ....... 1,046,781
(Cosmetics--personal care)
122,000 Sumitomo Marine & Fire
Insurance Co. .......... 961,803
(Property/casualty
insurance)
24,000 TDK Corp. ................ $ 1,493,400
(Electronics--manufacturer
of magnetic tapes,
floppy discs & optical
discs)
Total Common Stock-- ------------
Japan................... 13,277,633
------------
Warrants--2.0%
142,500 *Morgan Stanley Group
Nikkei 225 Call Warrant
due 8/15/97 (strike
level Y18,158.73) (a)... 1,282,500
------------
Total Warrants--
Japan................... 1,282,500
------------
Total Holdings--Japan..... 14,560,133
------------
KOREA--1.8%
Common Stock--1.8%
19,000 Samsung Display Devices
Co. .................... 1,180,739
(Electrical equipment--
cathode ray tubes)
Total Common
Stock/Holdings-- ------------
Korea................... 1,180,739
------------
MALAYSIA--1.3%
Common Stock--1.3%
210,000 Petronas Gas Berhad....... 854,646
(Oil/natural gas producer
& transporter)
Total Common Stock/ ------------
Holdings--Malaysia...... 854,646
------------
PHILIPPINES--4.6%
Common Stock--4.6%
20,228,000 Engineering & Equipment
Corp. .................. 1,495,344
(Builder of large-scale
industrial plant
facilities)
1,760,000 Petron Corp............... 637,122
(Petroleum refiner &
distributor)
</TABLE>
3
<PAGE> 4
- -----------------------------------------------------
CLEMENTE GLOBAL GROWTH FUND, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
- -----------------------------------------------------
SHARES/PRINCIPAL
AMOUNT DESCRIPTION VALUE
- -----------------------------------------------------
<S> <C>
FAR EAST (CONTINUED)
PHILIPPINES (CONTINUED)
Common Stock (continued)
6,613,000 *Southeast Asia Cement
Holdings Co. ........... $ 781,172
(Construction)
Total Common
Stock/Holdings-- ------------
Philippines............. 2,913,638
------------
THAILAND--1.8%
Common Stock--1.8%
29,000 Siam Cement Co., Ltd.--
Foreign Registered...... 1,181,904
(Building materials)
Total Common
Stock/Holdings-- ------------
Thailand................ 1,181,904
------------
TOTAL HOLDINGS--FAR EAST
(cost $21,732,138)...... 22,305,350
------------
AFRICA--2.4%
SOUTH AFRICA--2.4%
Common Stock--2.4%
49,750 DeBeers Centenary Linked
Units................... 1,546,973
(Mining, exploration,
trading & production of
diamonds)
Total Common
Stock/Holdings-- ------------
South Africa............ 1,546,973
------------
TOTAL HOLDINGS--AFRICA
(cost $1,605,480)....... 1,546,973
------------
EUROPE--28.7%
FINLAND--3.1%
Common Stock--3.1%
46,180 Neste Oy.................. 939,624
(Oil & chemical
manufacturer)
62,690 Valmet Corp............... $ 1,032,786
(Multinational--forest
products/paper, marine
gears & automobile
assembly)
Total Common
Stock/Holdings-- ------------
Finland................. 1,972,410
------------
FRANCE--2.4%
Common Stock--2.4%
1,700 Salomon S.A............... 1,509,684
(Leisure products--
manufacturer &
distributor of winter
sports equipment)
Total Common
Stock/Holdings-- ------------
France.................. 1,509,684
------------
GERMANY--5.5%
Common Stock--4.0%
118,730 Fag Kugelfischer Georg
Schaefer................ $ 1,623,292
(Manufacturer of bearing
products & industrial
engineering)
8,200 SGL Carbon A.G. .......... 957,115
(Chemicals--graphite
electrodes)
Total Common Stock-- ------------
Germany................. 2,580,407
------------
Preferred Stock--1.5%
5,130 Fresenius A.G. ........... 952,330
(Drug delivery systems)
Total Preferred Stock-- ------------
Germany................. 952,330
------------
Total Holdings--Germany... 3,532,737
------------
</TABLE>
4
<PAGE> 5
- -----------------------------------------------------
CLEMENTE GLOBAL GROWTH FUND, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
- -----------------------------------------------------
SHARES/PRINCIPAL
AMOUNT DESCRIPTION VALUE
- -----------------------------------------------------
<S> <C>
EUROPE (CONTINUED)
IRELAND--5.0%
Common Stock--5.0%
145,650 Bank of Ireland Group..... $ 1,147,632
(Commercial bank)
69,000 CRH plc................... 703,907
(Building & construction
products)
254,163 Independent Newspapers
plc..................... 1,322,887
(Newspaper publishing,
cable TV & advertising)
Total Common
Stock/Holdings-- ------------
Ireland................. 3,174,426
------------
NETHERLANDS--3.6%
Common Stock--3.6%
12,000 Oce-Van Der Grinten
N.V. ................... 1,311,732
(Office/business
equipment)
50,000 VNU-Ver Ned Uitgev Ver
Bezit................... 979,647
(Publishing & printing)
Total Common
Stock/Holdings-- ------------
Netherlands............. 2,291,379
------------
NORWAY--3.3%
Common Stock--3.3%
70,900 Schibsted ASA............. 1,035,753
(Publishing--newspapers)
41,300 Smedvig ASA A............. 851,023
(Industrial offshore oil
co.)
10,325 *Smedvig ASA B............ 191,321
(Industrial offshore oil
co.)
Total Common
Stock/Holdings-- ------------
Norway.................. 2,078,097
------------
59,000 Vallehermoso S.A. ........ $ 1,141,328
(Real estate)
Total Common
Stock/Holdings-- ------------
Spain................... 1,141,328
------------
SWEDEN--1.3%
Common Stock--1.3%
47,000 Trygg-Hansa AB, B......... $ 822,534
(Property/casualty
insurance)
Total Common
Stock/Holdings-- ------------
Sweden.................. 822,534
------------
UNITED KINGDOM--2.7%
Common Stock--2.7%
180,000 BAA plc................... 1,391,598
(Airport development &
maintenance)
30,000 CRH plc................... 304,706
(Building & construction
products)
Total Common
Stock/Holdings-- ------------
United Kingdom.......... 1,696,304
------------
TOTAL HOLDINGS--EUROPE
(cost $16,093,265)...... 18,218,899
------------
LATIN AMERICA--17.7%
BRAZIL--8.8%
Common Stock--7.0%
35,000 Companhia Energetica de
Minas Gerais--ADR....... 1,041,250
(Utilities--electric)
65,000 Companhia Vale do Rio
Doce--ADR............... 1,294,922
(Mining, rail
transportation & mineral
sales)
</TABLE>
5
<PAGE> 6
- -----------------------------------------------------
CLEMENTE GLOBAL GROWTH FUND, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
- -----------------------------------------------------
SHARES/PRINCIPAL
AMOUNT DESCRIPTION VALUE
- -----------------------------------------------------
<S> <C>
LATIN AMERICA (CONTINUED)
BRAZIL (CONTINUED)
Common Stock (continued)
27,000 Telecomunicacoes
Brasilerias S.A.--ADR... $ 2,119,500
(Telecommunications)
Total Common Stock-- ------------
Brazil.................. 4,455,672
------------
Preferred Stock--1.8%
135,000 Banco Bradesco S.A. ...... 1,151,132
(Financial services--
commercial bank)
Total Preferred Stock-- ------------
Brazil.................. 1,151,132
------------
Total Holdings--
Brazil.................. 5,606,804
------------
MEXICO--6.0%
Common Stock--6.0%
960,000 *Control Comercial
Mexicana S.A. de C.V.,
UBC..................... 947,645
(Retail--hypermarkets)
547,800 *Corporacion
Interamericana
Entretemiento S.A. ..... 1,350,421
(Entertainment--ticket
brokers)
500,000 Grupo Cementos Chihuahua
S.A. de C.V., B......... 636,858
(Building
materials/construction)
233,000 Hylsamex S.A.--BCP........ 870,234
(Iron/steel producer)
Total Common
Stock/Holdings-- ------------
Mexico.................. 3,805,158
------------
PERU--2.9%
Common Stock--2.9%
820,000 CPT Telefonica del Peru
S.A., B................. $ 1,855,129
(Telecommunications)
Total Common
Stock/Holdings-- ------------
Peru.................... 1,855,129
------------
TOTAL HOLDINGS--
LATIN AMERICA
(cost $10,276,922)...... 11,267,091
------------
NORTH AMERICA--19.4%
CANADA--5.0%
Common Stock--5.0%
47,400 Noranda Inc. ............. 969,229
(Metals--diversified)
19,400 *Newbridge Networks
Corp. .................. 1,234,325
(Telecommunications
equipment)
55,700 Power Corp. of Canada..... 977,408
(Diversified holding co.)
Total Common
Stock/Holdings-- ------------
Canada.................. 3,180,962
------------
UNITED STATES--14.4%
Common Stock--9.5%
23,000 Intel Corp. .............. 2,195,063
(Electronics--
semiconductors)
100,000 *Sunbase Asia, Inc. ...... 775,000
(Machinery--diversified)
34,000 Suntrust Banks, Inc. ..... 1,394,000
(Financial services--
commercial banks)
</TABLE>
6
<PAGE> 7
- -----------------------------------------------------
CLEMENTE GLOBAL GROWTH FUND, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
- -----------------------------------------------------
SHARES/PRINCIPAL
AMOUNT DESCRIPTION VALUE
- -----------------------------------------------------
<S> <C>
NORTH AMERICA (CONTINUED)
UNITED STATES (CONTINUED)
Common Stock (continued)
78,400 *Worldcom, Inc. .......... $ 1,675,800
(Utilities--
telecommunications)
Total Common Stock-- ------------
United States........... 6,039,863
------------
Short-Term Instruments--4.9%
$3,104,000 Brown Brothers Cayman
Islands Time Deposit,
5.3125% dated 9/30/1996,
due 10/01/1996.......... 3,104,000
------------
Total Short-Term
Instruments--
United States........... 3,104,000
------------
Total Holdings--
United States........... 9,143,863
------------
TOTAL HOLDINGS--NORTH
AMERICA
(cost $10,226,000)...... 12,324,825
------------
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------
VALUE
- -----------------------------------------------------
<S> <C> <C>
Total Investments
(Cost $59,933,805)**........ 103.0% $65,663,138
Other Assets Less
Liabilities................. (3.0)% (1,922,398)
-----------
Total Net Assets.............. 100.0% $63,740,740
===========
Net Asset Value Per Share..... $10.82
===========
</TABLE>
ADR American Depositary Receipts
* Non-Income Producing Security
(a) These warrants enable a holder to realize a
cash settlement value in U.S.$ equal to the
greater value of (i) 0 or (ii)
U.S.$1 x (spot Nikkei 225 Index--strike level)
----------------------------------------------
4 x (Yen/U.S.$1)
upon exercise of the warrants.
<TABLE>
<CAPTION>
**SUMMARY OF TOTAL
INVESTMENTS: COST VALUE
------------ ------------
<S> <C> <C>
Common Stock............... $ 53,992,759 $ 59,173,176
Preferred Stock............ 2,044,944 2,103,462
Warrants................... 792,102 1,282,500
Short-Term Instruments..... 3,104,000 3,104,000
------------ ------------
Total Investments.......... $ 59,933,805 $ 65,663,138
============ ============
</TABLE>
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<PAGE> 11
DIRECTORS AND OFFICERS
LILIA C. CLEMENTE, Chairman and
Director
LEOPOLDO M. CLEMENTE, JR.,
President and Director
ADRIAN C. CASSIDY, Director
THOMAS H. LENAGH, Director
+SAM NAKAGAMA, Director
+ROBERT B. OXNAM, Director
+G. PETER SCHIEFERDECKER, Director
BARON J.G.A. SIRTEMA VAN GROVESTINS,
Director
WILLIAM H. BOHNETT, Secretary
THOMAS J. PRAPAS, Treasurer
MARIA DISTEFANO,
Assistant Secretary
---------
+Members of Audit Committee
-----------------------------------
EXECUTIVE OFFICES--
152 W. 57th Street, New York, NY
10019 (For latest net asset value
and market data, please call
212-765-0700; regarding shareholder
inquiries, please call
1-800-937-5449)
INVESTMENT ADVISER--
Clemente Capital, Inc.
ADMINISTRATOR--
Furman Selz LLC
TRANSFER AGENT AND REGISTRAR--
American Stock Transfer & Trust
Company
CUSTODIAN--
Brown Brothers Harriman & Co.
LEGAL COUNSEL--
Fulbright & Jaworski L.L.P.
<PAGE> 12
- --------------------------------------------------------------------------------
SUMMARY OF GENERAL
INFORMATION
- --------------------------------------------------------------------------------
THE FUND
Clemente Global Growth Fund, Inc. is a closed-end investment company whose
shares trade on the New York Stock Exchange. The Fund seeks long-term capital
appreciation primarily through investment in small and medium sized equities
located throughout the world. The Fund is managed by Clemente Capital, Inc.
SHAREHOLDER INFORMATION
Daily market prices for the Fund's shares are published in the New York
Stock Exchange Composite Transactions section of most newspapers under the
designation "ClemGlb". The Fund's New York Stock Exchange trading symbol is
CLM. Net asset value (NAV) and market price information about Clemente Global
Growth Fund, Inc. shares are published each Monday in The Wall Street Journal,
The New York Times and in other newspapers. For general information visit us at
our web site www.clementecapital.com. For shareholder account inquiries call
1-800-937-5449.
DIVIDEND REINVESTMENT PLAN
Through its voluntary Dividend Reinvestment Plan, shareholders of Clemente
Global Growth Fund, Inc. may elect to receive dividends and capital gains
distributions in the form of additional shares of the Fund.
This report is transmitted to the shareholders of Clemente Global Growth 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.
Notice is hereby given in accordance with Section 23(c) of the Investment
Company Act of 1940 that the Fund may purchase at market prices from time to
time shares of its common stock in the open market.
[LOGO]
CLEMENTE GLOBAL
GROWTH FUND, INC.
QUARTERLY REPORT
SEPTEMBER 30, 1996
