THE SPAIN FUND
ALLIANCE CAPITAL
SEMI-ANNUAL REPORT
MAY 31, 1998
LETTER TO SHAREHOLDERS THE SPAIN FUND
_______________________________________________________________________________
July 27, 1998
Dear Shareholder:
This semi-annual report provides an update of The Spain Fund's performance and
market activity for the period ended May 31, 1998.
INVESTMENT RESULTS
The following table shows how your Fund compared to its benchmark, the Madrid
General Index, for the three, six and 12-month periods ended May 31, 1998. Your
Fund outperformed its benchmark for the three, six and 12-month periods ended
May 31, 1998 due to a focus on consumer stocks which performed well and an
underweighting in utility stocks relative to the benchmark.
INVESTMENT RESULTS*
Periods Ended May 31, 1998
TOTAL RETURNS
3 MONTHS 6 MONTHS 12 MONTHS
---------- ---------- ----------
THE SPAIN FUND 18.98% 48.48% 65.64%
MADRID GENERAL INDEX 15.50% 43.96% 55.80%
* THE FUND'S INVESTMENT RESULTS ARE CUMULATIVE TOTAL RETURNS FOR THE PERIOD
AND ARE BASED ON THE NET ASSET VALUE AS OF MAY 31, 1998. ALL FEES AND EXPENSES
RELATED TO THE OPERATION OF THE FUND HAVE BEEN DEDUCTED. RETURNS FOR THE FUND
INCLUDE THE REINVESTMENT OF ANY DISTRIBUTIONS PAID DURING THE PERIOD. PAST
PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
THE MADRID GENERAL INDEX COMPRISES 120 STOCKS AND REPRESENTS SLIGHTLY MORE
THAN 92% OF TOTAL MARKET CAPITALIZATION (EXCLUDING FOREIGN STOCKS). THE INDEX
IS DOMINATED BY BANKS, UTILITIES AND COMMUNICATIONS COMPANIES, WHICH TOGETHER
ACCOUNT FOR 70% OF THE INDEX CAPITALIZATION. THE INDEX IS UNMANAGED AND
REFLECTS NO FEES OR EXPENSES. AN INVESTOR CANNOT INVEST DIRECTLY IN THE INDEX.
ECONOMIC REVIEW
Following a strong start to the year, the Spanish stock market has moved
sideways in recent months as investors have had a lot of new paper to absorb as
new initial public offerings and privatizations have come to the market.
Fundamental growth trends, however, remain strong. The Gross Domestic Product
rose by 3.7% over the first quarter of the year, and we still consider an
annual rate of just under 4% to be attainable in 1998.
Private consumption and investment has continued to form the basis for this
improved growth outlook as spending on both capital goods and construction has
risen rapidly. Exports have also continued to perform well, although the strong
domestic demand background has meant that Spain's trade deficit has continued
to widen over the first half of the year.
Consumer prices remain well under control. The year-on-year rate for May
reached 2%, still marginally above the continental European average, but well
within the divergence span required for European Monetary Union. There are few
signs of any price pressures building and industrial producer prices remain
very weak.
In this environment, earnings estimates for Spanish companies continue to rise.
We expect profits growth of more than 15% in 1998 and a similar number for
1999. Consequently, Spain remains one of the higher growth areas in Europe.
Short-term interest rates have continued to decline marginally towards the
European convergence point of 3.5%-4% and currently stand at only 25 basis
points above the top end of this range. At the same time, long bond yields have
been stable at around the 5% level, roughly in-line with the European average.
Consequently, we do not anticipate significant further declines in the cost of
money, and further progress for the equity market will depend primarily on
earnings and dividend growth.
The Spanish stock market has a prospective price to earnings multiple of more
than 20 times earnings for 1998. Even though a lot of the positive aspects of
the economy have already been priced into the market, financial flows from
mutual funds continue to be strong. In recent months, the rate of growth in
total flows to mutual funds has declined somewhat, however, the proportion of
assets devoted to equity mutual funds has continued to increase. In a scenario
where growth remains strong, we continue to feel that the Spanish stock market
has further upside potential.
1
THE SPAIN FUND
_______________________________________________________________________________
FUND STRATEGY
Your Fund's strategy continues to focus on growth companies which we feel will
outperform the market as investors look for capital gains to compensate for
their decline in interest income from the bond and cash markets. We have,
however, further increased the economic sensitivity of the portfolio by
purchases of Aceralia Corp. Siderurgica, SA, the largest Spanish steel company,
which trades at a significant discount to its European competitors. We have
also further increased exposure to Spain's real estate market through recent
purchases of Prima and Urbis where we feel there will be a strong increase in
rental growth over the next few years as the economy continues to expand. These
additions are new to the Fund's portfolio and are not reflected in the Fund's
Portfolio of Investments for the period ended May 31, 1998 found on pages 4 and
5.
We thank you for your continued interest in The Spain Fund and look forward to
reporting to you again on market activity and the Fund's investment results in
the future.
Sincerely,
Dave H. Williams
Chairman and President
Mark H. Breedon
Vice President
2
TEN LARGEST HOLDINGS
MAY 31, 1998 (UNAUDITED) THE SPAIN FUND
_______________________________________________________________________________
COMPANY U.S. $ VALUE PERCENT OF NET ASSETS
- -------------------------------------------------------------------------------
Telefonica de Espana, SA $ 29,311,091 12.8%
Banco Bilbao Vizcaya 25,105,088 10.9
Repsol, SA 17,631,496 7.7
Endesa, SA 17,076,672 7.4
Banco Santander 14,538,003 6.3
Iberdrola, SA 11,496,877 5.0
Telepizza, SA 10,346,780 4.5
Aldeasa, SA 9,782,354 4.2
Tabacalera, SA Series A 8,959,298 3.9
Gas Natural SDG, SA 7,040,509 3.1
$151,288,168 65.8%
3
PORTFOLIO OF INVESTMENTS
MAY 31, 1998 (UNAUDITED) THE SPAIN FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------
COMMON STOCKS-96.7%
UTILITIES-30.0%
ELECTRIC & GAS-17.3%
Electricas Reunidas de Zaragoza, SA 92,641 $ 4,064,732
Endesa, SA 713,000 17,076,672
Gas Natural SDG, SA 103,000 7,040,509
Iberdrola, SA 697,000 11,496,877
------------
39,678,790
TELEPHONE-12.7%
Telefonica de Espana, SA 656,200 29,311,091
------------
68,989,881
FINANCIAL SERVICES-29.8%
BANKING-22.8%
Banco Bilbao Vizcaya (a) 500,000 25,105,088
Banco de Castilla 1,500 1,949,686
Banco Intercontinental Espanol 66,000 4,332,854
Banco Popular Espanol, SA 80,300 6,368,352
Banco Santander 288,784 14,538,003
------------
52,293,983
INSURANCE-1.5%
Catalana Occidente, SA 47,054 3,359,162
REAL ESTATE-5.5%
Inmobilaria Metropolitana Vasco-Central, SA 73,700 4,376,401
Inmobiliaria Urbis, SA 210,000 2,951,250
Vallehermoso, SA 141,000 5,414,385
------------
12,742,036
------------
68,395,181
CONSUMER STAPLES-10.7%
FOOD-6.8%
Telepizza, SA (b) 1,028,320 10,346,780
Viscofan Envolturas Celulosicas 113,503 5,242,186
------------
15,588,966
TOBACCO-3.9%
Tabacalera, SA Series A 415,895 8,959,298
------------
24,548,264
CONSUMER SERVICES-8.0%
PRINTING & PUBLISHING-0.7%
Unidad Editorial, SA
Series A (b)(c) 1,511,470 1,595,609
RESTAURANTS & LODGING-1.8%
Sol Melia, SA 90,000 4,174,504
RETAIL-5.5%
Aldeasa, SA 252,150 9,782,354
Centros Comerciales Pryca, SA 159,000 2,911,168
------------
12,693,522
------------
18,463,635
ENERGY-7.7%
OIL-7.7%
Repsol, SA 317,373 17,631,496
CAPITAL GOODS-4.1%
ENGINEERING & CONSTRUCTION-4.1%
Fomento de Construcciones Y Contratas, SA 91,632 4,637,134
Grupo Acciona, SA 18,500 4,760,399
------------
9,397,533
CONSUMER MANUFACTURING-3.0%
BUILDING & RELATED-2.0%
Portland Valderrivas, SA 36,458 4,596,853
MISCELLANEOUS-1.0%
Aceralia Corp. Siderurgica, SA 170,000 2,456,406
------------
7,053,259
BASIC INDUSTRIES-2.5%
MINING AND METALS-0.8%
Acerinox, SA 12,000 1,785,397
PAPER PRODUCTS-1.7%
Empresa Nacional de Celulosas, SA 181,186 3,849,352
------------
5,634,749
4
PORTFOLIO OF INVESTMENTS (CONTINUED) THE SPAIN FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------
HEALTHCARE-0.9%
PHARMACEUTICALS-0.9%
Fabrica Espanol de Productos Quimicos y
Farmaceuticos, SA 30,882 $ 1,907,165
New E Shares 3,088 187,444
-------------
2,094,609
Total Common Stocks
(cost $124,869,151) 222,208,607
PRINCIPAL
AMOUNT
COMPANY (000) U.S. $ VALUE
- -------------------------------------------------------------------------
TIME DEPOSIT-0.1%
Banque Nationale de Paris
5.625%, 6/01/98
(cost $200,000) $200 $ 200,000
TOTAL INVESTMENTS-96.8%
(cost $125,069,151) 222,408,607
Other assets less liabilities-3.2% 7,354,035
NET ASSETS-100% $229,762,642
(a) Security represents investment in an affiliate.
(b) Non-income producing security.
(c) Restricted and illiquid security, valued at fair value. (See Notes A and E)
See notes to financial statements.
5
STATEMENT OF ASSETS AND LIABILITIES
MAY 31, 1998 (UNAUDITED) THE SPAIN FUND
_______________________________________________________________________________
ASSETS
Investments in securities, at value (cost $125,069,151) $222,408,607
Foreign cash, at value (cost $5,861,007) 5,848,723
Cash 90,407
Receivable for investment securities sold 2,000,306
Foreign taxes receivable 155,140
Interest receivable and other assets 34,484
Total assets 230,537,667
LIABILITIES
Payable for investment securities purchased 200,000
Management fee payable 185,897
Accrued expenses 389,128
Total liabilities 775,025
NET ASSETS $229,762,642
COMPOSITION OF NET ASSETS
Capital stock, at par $ 100,267
Additional paid-in capital 106,918,079
Distributions in excess of net investment income (3,999,603)
Accumulated net realized gain on investments and
foreign currency transactions 29,414,650
Net unrealized appreciation on investments and foreign
currency denominated assets and liabilities 97,329,249
$229,762,642
NET ASSET VALUE PER SHARE (based on 10,026,746 shares outstanding) $22.91
See notes to financial statements.
6
STATEMENT OF OPERATIONS
SIX MONTHS ENDED MAY 31, 1998 (UNAUDITED) THE SPAIN FUND
_______________________________________________________________________________
INVESTMENT INCOME
Dividends - unaffiliated issuers
(net of foreign taxes withheld of $245,144) $1,369,353
Dividends - affiliated issuer
(net of foreign taxes withheld of $27,200) 154,132
Interest 34,355 $1,557,840
EXPENSES
Management fee 973,121
Custodian 206,337
Audit and legal 65,530
Directors' fees and expenses 54,957
Transfer agency 41,720
Printing 18,716
Registration 11,277
Miscellaneous 3,624
Total expenses 1,375,282
Net investment income 182,558
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY TRANSACTIONS
Net realized gain on investment transactions
- unaffiliated issuers 29,463,736
Net realized gain on investment transactions
- affiliated issuers 770,429
Net realized loss on foreign currency transactions (530,897)
Net change in unrealized appreciation of:
Investments 43,736,131
Foreign currency denominated assets and liabilities 118,086
Net gain on investments and foreign currency transactions 73,557,485
NET INCREASE IN NET ASSETS FROM OPERATIONS $73,740,043
See notes to financial statements.
7
STATEMENT OF CHANGES IN NET ASSETS THE SPAIN FUND
_______________________________________________________________________________
SIX MONTHS ENDED YEAR ENDED
MAY 31, 1998 NOVEMBER 30,
(UNAUDITED) 1997
------------- -------------
INCREASE IN NET ASSETS FROM OPERATIONS
Net investment income $ 182,558 $ 609,675
Net realized gain on investments and foreign
currency transactions 29,703,268 26,499,502
Net change in unrealized appreciation of
investments and foreign currency
denominated assets and liabilities 43,854,217 23,794,037
Net increase in net assets from operations 73,740,043 50,903,214
DIVIDENDS ANDDISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (8,302,145) (1,554,135)
Net realized gain on investment and foreign
currency transactions (19,532,101) -0-
Total increase 45,905,797 49,349,079
NET ASSETS
Beginning of year 183,856,845 134,507,766
End of period $229,762,642 $183,856,845
See notes to financial statements.
8
NOTES TO FINANCIAL STATEMENTS
MAY 31, 1998 (UNAUDITED) THE SPAIN FUND
_______________________________________________________________________________
NOTE A: SIGNIFICANT ACCOUNTING POLICIES
The Spain Fund, Inc. (the "Fund") was incorporated in the state of Maryland on
June 30, 1987 as a non-diversified, closed-end management investment company.
The financial statements have been prepared in conformity with generally
accepted accounting principles which require management to make certain
estimates and assumptions that affect the reported amounts of assets and
liabilities in the financial statements and amounts of income and expenses
during the reporting period. Actual results could differ from those estimates.
The following is a summary of significant accounting policies followed by the
Fund.
1. SECURITY VALUATION
Portfolio securities traded on a national securities exchange or on a foreign
securities exchange (other than foreign securities exchanges whose operations
are similar to those of the United States over-the-counter market) are
generally valued at the last reported sales price or if no sale occurred, at
the mean of the closing bid and asked prices on that day. Readily marketable
securities traded in the over-the-counter market, securities listed on a
foreign securities exchange whose operations are similar to the U.S.
over-the-counter market, and securities listed on a national securities
exchange whose primary market is believed to be over-the-counter, are valued at
the mean of the current bid and asked prices. U.S. government and fixed income
securities which mature in 60 days or less are valued at amortized cost, unless
this method does not represent fair value. Securities for which current market
quotations are not readily available are valued at their fair value as
determined in good faith by, or in accordance with procedures adopted by, the
Board of Directors. Fixed income securities may be valued on the basis of
prices obtained from a pricing service when such prices are believed to reflect
the fair market value of such securities.
2. CURRENCY TRANSLATION
Assets and liabilities denominated in Spanish pesetas are translated into U.S.
dollars at the mean of the quoted bid and asked price of the peseta against the
U.S. dollar. Purchases and sales of portfolio securities are translated at the
rates of exchange prevailing when such securities were acquired or sold. Income
and expenses are translated at rates of exchange prevailing when accrued. Net
realized gains and losses on foreign currency transactions represent net
foreign exchange gains and losses from holding of foreign currencies, currency
gains or losses realized between the trade and settlement dates on security
transactions, forward exchange currency contracts 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
unrealized currency gains and losses from valuing foreign currency denominated
assets and liabilities at period end exchange rates are reflected as a
component of net unrealized appreciation of investments and foreign currency
denominated assets and liabilities.
The exchange rate for the Spanish Peseta at May 31, 1998 was 151.563 ESP to
U.S. $1.00.
3. TAXES
It is the Fund's policy to meet the requirements of the U.S. Internal Revenue
Code applicable to regulated investment companies and to distribute all of its
investment company taxable income and net realized gains, if any, to its
shareholders. Therefore, no provisions for federal income or excise taxes are
required. Withholding taxes on foreign interest and dividends have been
provided for in accordance with the Spanish tax rates.
4. INVESTMENT INCOME AND INVESTMENT TRANSACTIONS
Dividend income is recorded on the ex-dividend date or as soon as the Fund is
informed of the dividend. Interest income is accrued daily. Investment
transactions are accounted for on the date securities are purchased or sold.
Realized gains and losses from security and currency transactions are
calculated on the identified cost basis.
5. DIVIDENDS AND DISTRIBUTIONS
Dividends and distributions to shareholders are recorded on the ex-dividend
date. Income dividends and capital gain distributions are determined in
accordance with tax regulations, which may differ from generally accepted
accounting principles. To the extent these differences are permanent, such
amounts are reclassified within the capital accounts based on their federal tax
treatment; temporary differences, do not require such reclassification.
9
NOTES TO FINANCIAL STATEMENTS (CONTINUED) THE SPAIN FUND
_______________________________________________________________________________
NOTE B: MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Under an Investment Management and Administration Agreement, the Fund pays
Alliance Capital Management L.P. (the "Investment Manager") a fee, calculated
weekly and paid monthly, at an annualized rate of 1.10% of the average weekly
net assets up to $50 million, 1.00% of the Fund's average weekly net assets on
the next $50 million, and .90% of the Fund's average weekly net assets over
$100 million.
The Fund and the Investment Manager have entered into a Sub-Advisory Agreement
with Privanza Banco Personal, S.A. (the "Sub-Adviser"). Under this agreement
the Sub-Adviser receives a fee at the annual rate of .25 of 1% of the Fund's
average weekly net assets. All amounts paid to the Sub-Adviser are payable by
the Investment Manager from its fee. An officer of the Fund is a director of
the Sub-Adviser.
Under the terms of a Shareholder Inquiry Agency Agreement with Alliance Fund
Services, Inc. ("AFS"), an affiliate of the Investment Manager, the Fund
reimburses AFS for costs relating to servicing phone inquiries for the Fund.
The Fund reimbursed AFS $700 during the six months ended May 31, 1998.
Banco Bilbao Vizcaya, an affiliate of the Sub-Adviser, serves as subcustodian
of the Fund. Fees paid to the sub-custodian are payable by the custodian from
its fee. For the six months ended May 31, 1998, the Fund earned $21,631 of
interest income on cash balances maintained at the subcustodian.
Brokerage commissions paid on investment transactions for the six months ended
May 31, 1998 amounted to $370,593 none of which was paid to Banco Bilbao
Vizcaya.
NOTE C: INVESTMENT TRANSACTIONS
Purchases and sales of investment securities (excluding short-term investments
and U.S. government securities) aggregated $45,981,024 and $73,597,417,
respectively, for the six months ended May 31, 1998. There were no purchases or
sales of U.S. government or government agency obligations for the six months
ended May 31, 1998.
At May 31, 1998, the cost of investments for federal income tax purposes was
the same as the cost for federal income tax purposes. Accordingly, gross
unrealized appreciation of investments was $104,873,212 and gross unrealized
depreciation of investments was $7,533,756 resulting in net unrealized
appreciation of $97,339,456 (excluding foreign currency transactions).
FORWARD EXCHANGE CURRENCY CONTRACTS
The Fund enters into forward exchange currency contracts in order to hedge its
exposure to changes in foreign currency exchange rates on its foreign portfolio
holdings. A forward exchange currency contract is a commitment to purchase or
sell a foreign currency at a future date at a negotiated forward rate. The gain
or loss arising from the difference between the original contracts and the
closing of such contracts is included in net realized gains or losses on
foreign currency transactions. Fluctuations in the value of open forward
exchange currency contracts are recorded for financial reporting purposes as
unrealized gains or losses by the Fund. Risks may arise from the potential
inability of the counterparty to meet the terms of a contract and from
unanticipated movements in the value of a foreign currency relative to the U.S.
dollar. At May 31, 1998, the Fund had no outstanding forward foreign exchange
currency contracts.
NOTE D: CAPITAL STOCK
There are 100,000,000 shares of $.01 par value common stock authorized. At May
31, 1998, 10,026,746 shares were outstanding.
10
THE SPAIN FUND
_______________________________________________________________________________
NOTE E: RESTRICTED SECURITIES
DATE ACQUIRED COST
------------- ----------
Unidad Editorial S.A. Series A 12/12/89 $ 513,710
Unidad Editorial S.A. Series A 9/30/92 1,330,964
The securities shown above are restricted as to sale and have been valued at
fair value in accordance with the policy described in Note A.
The value of these securities at May 31, 1998 was $1,595,609, representing 0.7%
of net assets.
NOTE F: CONCENTRATION OF RISK
Investment in the Fund's shares requires consideration of certain factors that
are not typically associated with investments in U.S. equity securities such as
currency fluctuations, potential price volatility, lower liquidity and
concentration of the Spanish equities market and limitations on the
concentration of investment in the equity of securities of companies in certain
industry sectors. The possibility of political and economic instability of
government supervision and regulation of the market may further affect the
Fund's investments.
11
FINANCIAL HIGHLIGHTS THE SPAIN FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED NOVEMBER 30,
MAY 31,1998 ---------------------------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993
------------ ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year $18.34 $13.41 $10.47 $ 9.96 $9.49 $8.28
INCOME FROM INVESTMENT OPERATIONS
Net investment income .02 .06 .11 .09 .05 .10
Net realized and unrealized gain on
investment and foreign currency
transaction 7.33 5.03 2.86 .42 .88 1.29
Net increase in net asset value from
operations 7.35 5.09 2.97 .51 .93 1.39
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.83) (.16) (.03) -0- (.10) (.17)
Distributions in excess of net
investment income -0- -0- -0- -0- (.05) -0-
Distributions from net realized gain
on investments and foreign currency
transactions (1.95) -0- -0- -0- (.31) (.01)
Total dividends and distributions (2.78) (.16) (.03) -0- (.46) (.18)
Net asset value, end of period $22.91 $18.34 $13.41 $10.47 $9.96 $9.49
Market value, end of period $19.563 $15.875 $10.75 $ 8.625 $9.125 $9.625
TOTAL RETURN
Total investment return based on (a):
Market value 46.48% 49.59% 25.03% (5.48)% (1.29)% 17.31%
Net asset value 48.48% 38.54% 28.48% 5.12% 9.28% 16.99%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000's omitted) $229,763 $183,857 $134,508 $105,011 $99,886 $95,058
Ratio of expenses to average net assets 1.38%(b) 1.55% 1.73% 2.07% 2.09% 2.24%
Ratio of net investment income to
average net assets .18%(b) .38% .93% .89% .53% 1.10%
Portfolio turnover rate 47% 45% 44% 38% 22% 65%
Average commission rate paid (c) $.0835 $.0825 $.0618 -- -- --
</TABLE>
(a) Total investment return is calculated assuming a purchase of common stock
on the opening of the first day and a sale on the closing of the last business
day of each period reported. Dividends and distributions, if any, are assumed
for purposes of this calculation, to be reinvested at prices obtained under the
Fund's Dividend Reinvestment and Cash Purchase Plan. Generally, total
investment return based on net asset value will be higher than total investment
return based on market value in periods where there is an increase in the
discount or a decrease in the premium of the market value to the net asset
value from the beginning to the end of such years. Conversely, total investment
return based on net asset value will be lower than total investment return
based on market value in periods where there is a decrease in the discount or
an increase in the premium of the market value to the net asset value from the
beginning to the end of such years.
(b) Annualized
(c) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share for trades on which
commissions are charged. This amount includes commissions paid to foreign
brokers, which may materially affect the rate shown. Amounts paid in foreign
currencies have been converted into U.S. dollars using the prevailing exchange
rate on the date of the transaction.
12
THE SPAIN FUND
_______________________________________________________________________________
BOARD OF DIRECTORS
DAVE H. WILLIAMS, CHAIRMAN AND PRESIDENT
ANGEL CORCOSTEGUI (1)
H.R.H. PILAR DE BORBON Y BORBON (1)
INMACULADA DE HABSBURGO-LORENA (1)
ENRIQUE L. FEVRE
IGNACIO GOMEZ-ACEBO (1)
FRANCISCO GOMEZ ROLDAN (1)
JUAN MANUEL SAINZ DE VICUNA (1)
DR. REBA W. WILLIAMS
CARLOS DELCLAUX ZULUETA
OFFICERS
NORMAN S. BERGEL, VICE PRESIDENT
MARK H. BREEDON, VICE PRESIDENT
MARK D. GERSTEN, TREASURER & CHIEF FINANCIAL OFFICER
EDMUND P. BERGAN, JR., SECRETARY
VINCENT S. NOTO, CONTROLLER
CUSTODIAN
BROWN BROTHERS HARRIMAN & CO.
40 Water Street
Boston, MA 02109
LEGAL COUNSEL
SEWARD & KISSEL
One Battery Park Plaza
New York, NY 10004
INDEPENDENT ACCOUNTANTS
PRICE WATERHOUSE LLP
1177 Avenue of the Americas
New York, NY 10036-2798
DIVIDEND PAYING AGENT,
TRANSFER AGENT AND REGISTRAR
STATE STREET BANK & TRUST COMPANY
225 Franklin Street
Boston, MA 02110
(1) Member of the Audit Committee
The financial information included herein is taken from the records of the
Fund without audit by independent accountants who do not express an opinion
thereon.
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 on the open market.
This report, including the financial statements therein is transmitted to
the shareholders of The Spain Fund 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.
13
THE SPAIN FUND
Summary of General Information
INVESTMENT OBJECTIVE AND POLICIES
The investment objective of the Fund is to seek long-term capital appreciation
through investment primarily in the equity securities of Spanish companies.
SHAREHOLDER INFORMATION
Daily market prices for the Fund's shares are published in the New York Stock
Exchange Composite Transaction section of newspapers under the designation
SpainFd. The Fund's NYSE trading symbol is "SNF". Weekly comparative net asset
value (NAV) and market price information about the Fund is published each
Monday in THE WALL STREET JOURNAL, each Sunday in THE NEW YORK TIMES and each
Saturday in BARRON'S and other newspapers in a table called "Closed End Funds".
DIVIDEND REINVESTMENT AND CASH PURCHASE PLAN
A Dividend Reinvestment Plan is available to shareholders in the Fund, which
provides automatic reinvestment of dividends and capital gain distributions in
additional Fund shares. The Plan also allows you to make optional cash
investments in Fund shares through the Plan Agent. If you wish to participate
in the Plan and your shares are held in your name, simply complete and mail the
enrollment form in the brochure. If your shares are held in the name of your
brokerage firm, bank or other nominee, you should ask them whether or how you
can participate in the Plan.
For questions concerning shareholder account information, or if you would like
a brochure describing the Dividend Reinvestment Plan, please call State Street
Bank and Trust Company at 1-800-219-4218.
THE SPAIN FUND
1345 Avenue of the Americas
New York, New York 10105
ALLIANCE CAPITAL
R THESE REGISTERED SERVICE MARKS USED UNDER LICENSE FROM THE OWNER, ALLIANCE
CAPITAL MANAGEMENT L.P.
SPNSR
