<PAGE>
(ICON)
Prudential
Global
Genesis
Fund, Inc.
ANNUAL
REPORT
May 31, 1997
(LOGO)
<PAGE>
Prudential Global Genesis Fund, Inc.
Performance At A Glance.
Although small company stocks around the
world
performed well over
the last half year, and historically do
outperform
those of larger
companies, these stocks grew grudgingly
over the
12 months ended
May 31, 1997. Still, your Prudential
Global
Genesis Fund fared
better than most, handily beating the
Lipper
Global Small
Company Fund Average. We benefited from
our stock
selection
in Europe and the U.S. -- the two
regions of the
world where
we had our largest holdings and where
stocks
performed the
best.
<TABLE>
<CAPTION>
One
Three Five Since
Year
Years Years Inception2
<C> <S>
Cumulative Class A
6.7%
25.2% 90.4% 93.6%
Total Class B
5.8
22.2 83.1 145.9
Returns1 Class C
5.8
N/A N/A 20.8
As of 5/31/97 Class Z
N/A
N/A N/A 13.9
Lipper Global
Small Co. Fund
Avg3 4.02
44.03 75.8 ***
</TABLE>
<TABLE>
<CAPTION>
One
Three
Five Since
Year
Years
Years Inception2
<C> <S> <C>
<C>
<C> <C>
Average Class A 6.3%
7.3%
13.9% 8.9%
Annual Class B 5.9
7.4
14.1 10.3
Total Class C 9.9
N/A
N/A 7.6
Returns1
As of 6/30/97
</TABLE>
Past performance is not indicative of
future
results. Principal
and investment return will fluctuate so
that an
investor's shares,
when redeemed, may be worth more or less
than
their original cost.
1Source: Prudential Investments Fund
Management
and Lipper
Analytical Services. The cumulative
total returns
do not
take into account sales charges. The
average
annual returns
do take into account applicable sales
charges. The
Fund
charges a maximum front-end sales load
of 5% for
Class A
shares and a declining contingent
deferred sales
charge
(CDSC) of 5%, 4%, 3%, 2%, 1% and 1% for
six years,
for
Class B shares. Class C shares have a 1%
CDSC for
one year.
Class B shares will automatically
convert to Class
A shares
on a quarterly basis, approximately
seven years
after purchase.
Class Z shares are not subject to a
sales charge
or distribution
fee. Since Class Z shares have been in
existence
less than one
year average annual total returns are
not
presented.
2Inception dates: 1/22/90 Class A;
1/29/88 Class
B;
8/1/94 Class C and 9/13/96 Class Z.
3Lipper average returns are 28 funds for
one year,
15 funds
for three years, and nine funds for
five years.
*** Lipper Since Inceptions returns are:
Class A,
113.6% for
five funds; Class B, 179.7% for three
funds; Class
C, 35.7%
for 17 funds and Class Z, 6.5% for 28
funds.
How Investments Compared.
(As of 5/31/97)
(GRAPH)
Source: Lipper Analytical Services.
Financial
markets change, so
a mutual fund's past performance should
never be
used to predict
future results. The risks to each of the
investments listed above
are different -- we provide 12-month
total returns
for several
Lipper mutual fund categories to show
you that
reaching for
higher returns means tolerating more
risk. The
greater the
risk, the larger the potential reward or
loss. In
addition,
we've included historical 20-year
average annual
returns.
These returns assume the reinvestment of
dividends.
U.S. Growth Funds will fluctuate a great
deal.
Investors have
received higher historical total returns
from
stocks than from
most other investments. Smaller
capitalization
stocks offer
greater potential for long-term growth
but may be
more
volatile than larger capitalization
stocks.
General Bond Funds provide more income
than stock
funds,
which can help smooth out their total
returns year
by year.
But their prices still fluctuate
(sometimes
significantly)
and their returns have been historically
lower
than those
of stock funds.
General Municipal Debt Funds invest in
bonds
issued by
state governments, state agencies and/or
municipalities.
This investment provides income that is
usually
exempt
from federal and state income taxes.
Money Market Funds attempt to preserve a
constant
share
value; they don't fluctuate much in
price but,
historically,
their returns have been generally among
the lowest
of the
major investment categories.
<PAGE>
Steve Auth, Fund Manager
(PHOTO)
Portfolio Manager's
Report
The Prudential Global Genesis Fund seeks
to
achieve long-term
growth of capital by primarily investing
in common
stocks and
other equity securities of smaller
foreign and
U.S. companies.
The Fund is subject to all the risks
associated
with foreign
investing, including currency, political
and
social risks,
and potential illiquidity. There can be
no
assurance that
the Fund will achieve its investment
goal.
Our World Class Teams.
Steve Auth and his regional investment
teams spend
most of their time visiting small,
growing
companies
around the world. They follow these
stocks
closely,
utilizing a consistent investment
discipline to
keep
the Fund invested in those stocks which,
based on
their analysis, have the most
appreciation
potential
in the months ahead.
Strategy Session.
Our two largest regional holdings remain
the
United States, which
we increased significantly to 43% of
total
investments as of May
31, 1997 from 31% a year earlier and
Continental
Europe, which
we shaved to 16% of total investments
from 19% a
year earlier.
Portfolio Breakdown.
Expressed as a percentage of
total investments as of 5/31/97.
(PIE CHART)
U.S. stocks make up about 55% of the
world's
small cap market
capitalization, so we expect to
typically invest
between 35%
and 65% of the Fund in the U.S. We
believe that
these stocks
are significantly undervalued when
compared with
larger U.S.
companies. As large company stock prices
generally
remain at
record levels, we expect that investors
will begin
moving
into smaller stocks.
In Europe, we continue to favor
companies in new,
growing
industries and those in the early stages
of
corporate
restructuring. Two of our strongest
performers
since November
were in the latter category, and we
continue to
have substantial
positions in both, expecting more
restructuring-
driven earnings.
However, we have cut back overall
because of the
market's strong
performance since November and concerns
about the
new government
in France, with its potentially negative
impact on
the outlook
for a unified European currency.
We are holding 16% of the Fund in
Southeast Asia,
down slightly
over the last year, and nearly tripled
our
holdings in Japan,
to 11% of total investments. Both
regions have
trailed the
world's equity markets in performance
recently,
but we are
expecting improvement over the rest of
1997. Japan
continues
to undergo a wrenching restructuring,
but small
company stocks
there were one of the best performing
stock groups
in the world
in the second quarter. Despite weak
regional
performance, we
did very well with a number of our
holdings in
Hong Kong.
<PAGE>
What Went Well.
U.S. Stocks
Worked Nicely.
Our U.S. stocks worked nicely for us,
gaining 11%
over the
12-month reporting period. We
capitalized on the
technology
sell-off early in the first quarter of
1997 by
increasing our
holdings in a number of companies with
solid
franchises and
very attractive fundamentals.
Big winners of the past six months
included: Asyst
Technologies,
a maker of mini-clean room environments
for
semiconductor labs;
Hadco, a maker of multi-layered PCB
boards used in
computer and
telecommunications products; and Etec,
the
dominant U.S.
supplier of electronic photo mask making
equipment.
European Successes.
We also did well in Europe, where Le
Carbon
Lorraine, a French
industrial systems manufacturer, and
Mikron
Holdings, a Swiss
machine tool maker, contributed
significantly to
results, as
major asset sales and cost cutting led
to
earnings that far
exceeded expectations. Baan, a Dutch
computer
services/software
company, and Kuoni Reisen, a Swiss tour
business
operator, were
newly emerging growth companies that
performed
well.
Hong Kong Industrials.
The Fund has holdings in several small
industrial
companies
in Hong Kong that provide products to
labor-
intensive industries
moving into China, or that operate labor-
intensive
factories
producing goods for global export. Among
the
latter, Wong's,
a maker of PCB boards, was one of
several good
performers for
us during the past six months.
And Not So Well.
After we nearly tripled our holdings in
Japan,
stocks there
hit yet another down draft, dragging
many small
cap companies
down. Yet, as noted earlier, the stocks
later
rallied significantly.
We remain firm in our commitment to
maintain our
Japanese holdings.
Newly emerging companies in Japan can
potentially
grow much faster
than some of the country's large
industrial firms,
yet in many cases
are trading at substantial discounts to
the
broader market.
Five Largest
Holdings.
1.5% Quanex Corp.
Steels & Metals (U.S.)
1.5% Scientific Games
Holdings Corp.
Miscellaneous (U.S.)
1.5% Allied Products Corp.
Diversified Industries (U.S.)
1.4% Wolverine Tube, Inc.
Steels & Metals (U.S.)
1.4% Wyle Electronics
Electronics (U.S.)
Expressed as a percentage of total
investments as of 5/31/97.
Looking Ahead.
We believe that the Fund's positive
performance
over the
most recent six months ending May 31,
1997 will
carry forward
through the remainder of 1997 and
beyond. With
U.S. large company
stocks trading at prices near 20 times
earnings,
and earnings
growth likely to slow as operating
margin
improvements grow
more difficult to attain, we think there
are
better places
to look for returns. We believe the Fund
is
positioned to
benefit from its primary focus on U.S.
and
international
small company stocks as investment
alternatives.
And we
also believe that the Fund's holdings
have
significantly
better earnings growth potential in what
will
otherwise
be a slow-growth world.
1
<PAGE>
President's Letter
July 22, 1997
(PHOTO)
Dear Shareholder:
With the midpoint of 1997 behind us, I'm
pleased
to report that
the recent news from the financial
markets has
been decidedly
upbeat. The Dow Jones Industrial Average
has
gained more than
20% through the end of June, while lower
long-term
interest
rates have made bonds an attractive
investment.
This stands in contrast to April when
the Dow fell
10% from a
record high on fears of higher interest
rates and
surging
inflation. Interest rates have since
fallen as the
economy
slowed and the Dow has reached several
new highs.
The market swings we've seen this year
illustrate
the
importance of "staying the course" to
your
financial
goal. We realize that maintaining
investment
discipline
when faced with market uncertainty isn't
easy.
Here are
some thoughts that may help:
- -- Keep Your Expectations Realistic.
The best
investors
know that financial markets rise and
fall -- and
so too,
will the value of their investments.
Over time,
however,
stocks have been shown to produce very
attractive
returns
that were well ahead of inflation. And
where
income is
the primary goal, bonds have also
provided
attractive returns.
- -- Remember Your Time Horizon. If your
investment
goals are
long term (several years or more), so
should your
time horizon.
During this period, it's not unusual for
stocks
and bonds to
experience several periods of market
uncertainty.
- -- We're On Your Side. Your Prudential
Securities
Financial
Advisor or Pruco Securities Registered
Representative can help
you understand what's happening in the
financial
markets.
They can assist you in making informed
decisions
based upon a
thorough knowledge of your financial
needs and
long-term
goals. Call him or her today.
Thank you for your continued confidence
in
Prudential mutual
funds. We'll do everything we can to
keep you
informed and
to earn your trust.
Sincerely,
Brian M. Storms President,
Prudential Mutual Funds & Annuities
2
<PAGE>
Portfolio of Investments
as of May 31, 1997
PRUDENTIAL
GLOBAL GENESIS FUND, INC.
- ----------------------------------------
- ----------
- ----------
- ----------------------------------------
- ----------
- ----------
<TABLE>
<CAPTION>
Value
Shares Description
(Note 1)
<C> <S>
<C>
------------------------------------
- ----------
- -----------
LONG-TERM INVESTMENTS--87.2%
COMMON STOCKS--85.3%
------------------------------------
- ----------
- -----------
Australia--0.9%
270,300 Burswood Property Trust
(Leisure & Tourism)
$ 329,057
320,150 Goodman Fielder, Ltd. (Food
Processing)
414,103
70,000 Publishing & Broadcasting,
Ltd.
(Broadcasting &
Publishing)
371,224
174,500 Reinsurance Australia Corp.
(Financial Services)
550,997
- -------------
1,665,381
- ----------------------------------------
- ----------
- ----------
Belgium--0.2%
873 Deceuninck Plastics
Industries N.V.
(Building Materials &
Components)
169,100
4,344 Neuhaus* (Manufacturing)
264,028
- -------------
433,128
- ----------------------------------------
- ----------
- ----------
Canada--1.3%
32,200 International Verifact,
Inc.*
(Computers)
178,808
50,600 Laurentian Bank of Canada
(Banking)
947,924
127,800 Le Groupe Videotron, Ltd.
(Telecommunications)
1,039,326
19,700 LGS Group, Inc. (Computer
Software
& Services)
128,024
- -------------
2,294,082
- ----------------------------------------
- ----------
- ----------
Denmark--0.1%
644 Falck A/S
(Security/Investigation
Services)
176,483
- ----------------------------------------
- ----------
- ----------
Finland--0.2%
33,788 YIT-Yhtyma OY (Building &
Construction)
446,323
Federal Republic of Germany--1.4%
5,876 Adidas AG (Recreation &
Other
Consumer Goods)
$ 617,057
1,082 Buderus AG (Machinery &
Engineering)
551,944
10,622 Pfandbriefbank Hypothek
(Banking)
625,923
3,999 Schwarz Pharma AG
(Pharmaceuticals)
297,785
3,018 SGL Carbon (Industrial
Components)
437,084
- -------------
2,529,793
- ----------------------------------------
- ----------
- ----------
France--1.9%
35,420 Activcard*
(Security/Investigation
Services)
185,955
2,560 Electronique D2 S.A.
(Computers)
353,291
3,178 GFI Industries S.A.
(Machinery &
Engineering)
449,610
325 Grande Paroisse S.A.
(Fertilizer)
24,084
3,395 Le Carbone Lorraine
(Industrial
Materials)
789,713
27,529 Lectra Systemes* (Computer
Software
& Services)
102,504
8,338 Legris Industries S.A.
(Industrial
Machinery)
361,849
5,609 Sidel S.A. (Industrial
Machinery)
394,335
4,514 Societe Technip (Mutli-
Industry)
464,666
5,071 Worms et Compagnie
(Financial
Services)
303,695
- -------------
3,429,702
- ----------------------------------------
- ----------
- ----------
Hong Kong--7.3%
650,000 ASM Pacific Technology,
Ltd.
(Machinery &
Engineering)
436,213
50,000 Cheung Kong (Holdings),
Ltd. (Real
Estate)
511,389
98,000 China Resources
Enterprises*
(Conglomerate)
344,015
21,000 Dao Heng Bank Group, Ltd.
(Banking)
107,595
</TABLE>
- ----------------------------------------
- ----------
- ------------------------------
---
- --
See Notes to Financial Statements. 3
<PAGE>
Portfolio of Investments as
of May 31, 1997
PRUDENTIAL
GLOBAL GENESIS FUND, INC.
- ----------------------------------------
- ----------
- ----------
<TABLE>
<CAPTION>
Value
Shares Description
(Note 1)
<C> <S>
<C>
------------------------------------
- ----------
- -----------
Hong Kong (cont'd.)
840,000 Esprit Asia Holdings, Ltd.
(Retail)
$ 458,024
1,338,400 First Sign International
Holdings,
Ltd. (Textiles)
281,466
37,000 Henderson Land Development
Co., Ltd
(Real Estate)
360,521
1,686,000 Hon Kwok Land Investment,
Ltd.
(Real Estate)
592,934
93,000 Hong Kong & Shanghai
Hotels, Ltd.
(Leisure & Tourism)
144,028
123,500 Hongkong Electric Holdings
(Energy
Sources)
444,686
8,400 HSBC Holdings PLC
(Financial
Services)
254,759
104,000 Hysan Development Co., Ltd.
(Real
Estate)
346,957
1,350,000 Innovative International
Holdings,
Ltd. (Electrical &
Electronics)
753,533
920,000 International Bank Of Asia
(Banking)
670,840
738,000 JCG Holdings, Ltd.
(Financial
Services)
590,514
6,032 Ka Wah Bank, Ltd.*
(Rights) expiring
7/17/99
(Banking)
1,966
2,902,000 KingBoard Chemical
Holdings, Ltd.
(Electronic Components)
889,495
464,000 Li & Fung, Ltd. (Consumer
Products)
461,096
2,350,000 Lung Kee (Bermuda)
Holdings, Ltd.
(Industrial Components)
773,376
330,000 National Mutual Asia, Ltd.
(Insurance)
359,876
412,000 QPL International Holdings,
Ltd.*
(Electronic Components)
332,322
1,000,000 Regal Hotels International
(Leisure
& Tourism)
316,190
8,000 Sun Hung Kai Properties,
Ltd. (Real
Estate)
98,342
34,500 Swire Pacific, Ltd.
(Conglomerate)
289,411
280,000 Union Bank of Hong Kong,
Ltd.
(Banking)
625,153
1,213,000 Universal Appliances, Ltd.*
(Consumer Products)
83,312
472,500 Varitronix International,
Ltd.
(Electronic Components)
862,861
67,000 Wharf (Holdings) Ltd. (Real
Estate)
300,045
124,000 Wing Hang Bank, Ltd.
(Banking)
590,514
1,697,000 Wong's International
Holdings, Ltd.
(Electronic Components)
$ 750,110
339,400 Wong's International
Holdings, Ltd.
(Warrants) expiring
5/31/00
(Electronic Components)
- --
- -------------
13,031,543
- ----------------------------------------
- ----------
- ----------
Indonesia--0.7%
44,000 Bank Tiara Asia (Banking)
53,339
159,500 Budi Acid Jaya (Chemicals)
192,534
64,000 Citra Marga Nusadh
(Transportation
- Road)
63,777
86,000 Darya Varia Laboratoria
(Pharmaceuticals)
111,321
52,000 Indo Rama Synthetics
(India), Ltd.
(Textiles)
43,805
120,000 Lippo Bank (Banking)
120,814
99,000 London Sumatra*
(Food Manufacturing)
266,468
150,500 Semen Cibinong (Building
Materials
& Components)
375,709
- -------------
1,227,767
- ----------------------------------------
- ----------
- ----------
Ireland--0.7%
374,800 Fyffes PLC (Food/Drug
Retail)
546,929
48,875 Greencore Group PLC (Foods)
252,428
15,257 Irish Life PLC (Insurance)
78,299
310,890 Waterford Wedgewood PLC
(Merchandising)
402,694
- -------------
1,280,350
- ----------------------------------------
- ----------
- ----------
Japan--10.4%
800 ADO Electronic Industrial
Co., Ltd.
(Electronic Components)
18,589
10,520 Advantest Corp. (Electronic
Components &
Instruments)
717,026
22,200 Create Medic Co. (Health
Care)
229,260
12,000 Daiseki Co., Ltd.
(Commercial
Services)
233,391
61,000 Daiwa Industries, Ltd.
(Manufacturing)
523,907
48,000 Descente, Ltd. (Apparel)
229,260
15,800 Doutor Coffee Co., Ltd.
(Restaurants)
584,682
53,000 Fujikura Rubber (Rubber)
260,895
54,000 Furusato Industries
(Building
Materials & Components)
557,659
</TABLE>
- ----------------------------------------
- ----------
- ------------------------------
---
- --
See Notes to Financial Statements. 4
<PAGE>
Portfolio of Investments as
of May 31, 1997
PRUDENTIAL GLOBAL GENESIS FUND, INC.
- ----------------------------------------
- ----------
- ----------
<TABLE>
<CAPTION>
Value
Shares Description
(Note 1)
<C> <S>
<C>
------------------------------------
- ----------
- -----------
Japan (cont'd.)
19,300 Geomatec Co. (Electronic
Components)
$ 443,468
11,000 H.I.S. Co., Ltd. (Leisure &
Tourism)
558,520
39,000 Ibiden Co., Ltd.
(Electronic
Components)
594,062
28,000 Ito En, Ltd. (Beverages)
578,313
29,000 Japan Asia Investment Co.,
Ltd.
(Financial Services)
194,664
45,800 Jonathans Co., Ltd.
(Restaurants)
605,017
17,000 Kaga Electronics
(Electronic
Components)
188,882
15,000 Kimoto Co., Ltd.
(Miscellaneous)
193,632
29,000 King Jim (Office Equipment
&
Supplies)
554,045
7,000 Komatsu Wall Industry
(Office
Equipment & Supplies)
109,940
15,900 Matsumotokiyoshi (Retail)
630,800
57,000 Meiden Engineering Co.
(Engineering
& Equipment)
529,776
880 Ministop Co., Ltd.
(Food/Drug
Retail)
28,021
20,000 Mirai Industry Co., Ltd.
(Miscellaneous)
416,523
21,900 Misumi Corp. (Industrial
Components)
508,864
11,800 Mitsui High-Tec (Industrial
Components)
279,260
28,000 Nagawa Co., Ltd.
(Construction &
Housing)
226,506
40,000 Namura Shipbuilding
(Construction)
195,181
15,800 Nemic-Lambda K.K.
(Electronic
Components &
Instruments)
443,270
19,000 NGK Spark Plug (Automotive
Parts)
206,024
32,500 Nichiha (Building Materials
&
Components)
531,411
10,000 Nichii Gakkan Co. (Health
Care
Services)
533,563
29,000 Nichizo Tech, Inc.
(Engineering &
Construction)
199,656
68,250 Nippon Denwa Shisetsu
(Engineering
& Equipment)
582,063
45,000 Nireco Co., Ltd.
(Electronic
Components)
408,563
90 Nissen* (Merchandising)
364
10,000 Nitori Co. (Retail)
134,251
59,000 NOK (Automotive Components)
410,766
15,100 Oiles Corp. (Industrial
Components)
454,819
7,570 Paris Miki, Inc. (Retail)
$ 280,129
47,200 Pigeon Corp. (Consumer
Goods)
572,737
7,000 Plenus Co., Ltd. (Retail)
277,108
8,400 Ryohin Keikaku Co., Ltd.
(Retail)
636,867
12,472 Sato Corp. (Manufacturing)
210,371
600 Seijo Corp. (Retail)
7,849
10,000 Sekiwa Real Estate (Real
Estate)
72,289
6,000 Shimamura Co., Ltd.
(Retail)
211,704
12,300 Square Co., Ltd. (Computer
Software
& Services)
571,601
27,000 SRL, Inc. (Health Care)
420,568
17,000 Terumo Corp. (Health Care)
299,914
34,000 Trancom Co., Ltd.
(Transportation -
Road & Rail)
196,041
23,000 Tsuchiya Home Co.
(Construction &
Housing)
201,893
37,000 UP, Inc (Education Sector)
206,971
8,000 Zenrin Co., Ltd.
(Electronic
Components)
402,754
- -------------
18,663,689
- ----------------------------------------
- ----------
- ----------
Malaysia--2.6%
8,000 ACP Industries Berhad
(Building
Materials & Components)
33,093
23,000 Antah Holdings Berhad
(Diversified
Industries)
31,484
190,000 Arab-Malaysian Finance
Berhad
(Financial Services)
430,959
31,000 Cycle & Carriage Bintang
Berhad
(Automotive
Distribution)
206,009
37,000 Fraser & Neave Holdings
Berhad
(Glass Products)
179,626
94,000 Hock Hua Bank Berhad
(Banking)
362,833
189,000 IOI Properties Berhad (Real
Estate)
436,212
223,000 Larut Consolidated Berhad
(Real
Estate)
252,905
249,000 Leader Universal Holdings
Berhad
(Industrial Components)
540,012
116,000 Magnum Corp. Berhad
(Gaming)
192,949
40,000 MBF Capital Berhad
(Financial
Services)
85,157
3,000 MBM Resources Berhad
(Automotive
Distribution)
6,984
</TABLE>
- ----------------------------------------
- ----------
- ------------------------------
---
- --
See Notes to Financial Statements. 5
<PAGE>
Portfolio of Investments as
of May 31, 1997
PRUDENTIAL
GLOBAL GENESIS FUND, INC.
- ----------------------------------------
- ----------
- ----------
<TABLE>
<CAPTION>
Value
Shares Description
(Note 1)
<C> <S>
<C>
------------------------------------
- ----------
- -----------
Malaysia (cont'd.)
186,000 Metacorp Berhad
(Construction)
$ 481,098
328,000 Metroplex Berhad (Gaming)
357,628
155,000 Nylex (Malaysia) Berhad
(Industrial
Components)
275,090
135,000 Public Bank Berhad
(Banking)
211,659
61,000 Resorts World Berhad
(Leisure &
Tourism)
203,900
36,000 Road Builder (M) Holdings
Berhad
(Construction)
177,636
10,000 Tongkah Holdings Berhad*
(Diversified Industries)
17,350
27,000 UMW Holdings Berhad
(Automotive
Manufacturing/Distribution)
138,599
- -------------
4,621,183
- ----------------------------------------
- ----------
- ----------
Netherlands--2.4%
8,950 Baan Company N.V.*
(Technology)
539,237
10,605 Cap Gemini N.V. (Computer
Software
& Services)
373,104
12,432 Getronics N.V. (Technology)
424,422
4,992 Hagemeyer N.V. (Wholesale &
International Trade)
245,359
112 Hunter Douglas N.V. (Home
Improvements)
9,895
10,616 Internatio-Muller N.V.
(Engineering
& Equipment)
341,952
10,410 Koninklijke BAM Groep N.V.
(Building &
Construction)
642,961
13,199 Twentsche Kabel Holdings
N.V.
(Diversified Industries)
698,269
19,094 Ver Ned Uitgevers N.V.
(Broadcasting,
Publishing &
Advertising)
431,919
5,612 Volker Stevin-CVA* (Housing
Construction)
647,898
- -------------
4,355,016
- ----------------------------------------
- ----------
- ----------
New Zealand--0.3%
1,300,000 Affco Holdings, Ltd. (Food
&
Household Products)
492,900
Norway--1.0%
60,332 Ark ASA (Data Processing &
Reproduction)
$ 504,045
45,840 Ask ASA* (Electrical
Equipment)
733,759
21,756 Merkantildata ASA
(Technology)
430,727
10,905 Sondenfjedske N D (Oil
Services)
121,898
- -------------
1,790,429
- ----------------------------------------
- ----------
- ----------
The Philippines--0.4%
520,400 C & P Homes, Inc. (Real
Estate)
197,308
1,558,200 Filinvest Land, Inc.* (Real
Estate)
354,472
186,700 Marsman & Co., Inc.*
(Wholesale
Distribution)
43,180
11,780 Philippine Commercial
International
Bank (Banking)
115,009
8,000 Robinson's Land Corp.*
(Real
Estate)
1,031
- -------------
711,000
- ----------------------------------------
- ----------
- ----------
Portugal--0.4%
17,200 Portugal Telecom S.A.
(Telecommunications)
660,412
- ----------------------------------------
- ----------
- ----------
Singapore--1.1%
99,000 ACMA, Ltd. (Electronic
Equipment)
177,169
10,000 Amtek Engineering, Ltd.
(Manufacturing)
17,267
26,000 City Developments ADR*
(Real
Estate)
241,733
203,000 Courts (Singapore), Ltd.
(Retail)
269,626
13,000 DBS Land, Ltd. (Real
Estate)
45,439
28,000 Elec & Eltek International
Co.,
Ltd. (Electronics)
165,200
46,000 GP Batteries International,
Ltd.
(Electrical Goods)
152,422
155,000 Informatics Holdings, Ltd.
(Computer/Business
Training)
83,974
</TABLE>
- ----------------------------------------
- ----------
- ------------------------------
---
- --
See Notes to Financial Statements. 6
<PAGE>
Portfolio of Investments as
of May 31, 1997
PRUDENTIAL
GLOBAL GENESIS FUND, INC.
- ----------------------------------------
- ----------
- ----------
<TABLE>
<CAPTION>
Value
Shares Description
(Note 1)
<C> <S>
<C>
------------------------------------
- ----------
- -----------
Singapore (cont'd.)
402,000 Singapore Finance, Ltd.
(Financial
Services)
$ 581,713
334,000 Uraco Holdings, Ltd.
(Computer
Components)
193,792
- -------------
1,928,335
- ----------------------------------------
- ----------
- ----------
South Korea--0.0%
4,702 Kookmin Bank (Banking)
68,038
- ----------------------------------------
- ----------
- ----------
Spain--0.8%
1,659 Abengoa S.A.* (Building &
Construction)
76,286
1,117 Miquel Y Costas & Miquel
S.A.
(Paper)
49,894
16,380 Pescanova S.A. (Food &
Household
Products)
222,899
23,545 Tableros de Fibras S.A.
(Paper &
Forest Products)
286,975
23,480 Tavex Algodonera S.A.*
(Textiles)
283,744
11,654 Vidrala S.A. (Glass
Products)
490,695
- -------------
1,410,493
- ----------------------------------------
- ----------
- ----------
Sweden--0.6%
17,352 Esselte AB (Office
Equipment &
Supplies)
410,287
27,330 Nobel Biocare AB (Medical
Products)
317,811
21,994 OEM International AB
(Electronic
Components)
338,173
- -------------
1,066,271
- ----------------------------------------
- ----------
- ----------
Switzerland--3.2%
6,444 Agie Charmilles Holding AG*
(Machinery)
636,191
685 Ascom Holding AG*
(Telecommunications)
833,344
355 Gurit-Heberlein AG
(Manufacturing)
1,105,449
2,100 Kardex AG (Storage Systems)
649,469
127 Kuoni Reisen AG (Leisure &
Tourism)
422,435
7,203 Mikron Holding AG*
(Machinery)
1,248,928
281 SIG PLC AG (Building
Materials &
Components)
845,188
- -------------
5,741,004
Thailand--0.6%
105,300 Industrial Finance Corp. of
Thailand (Financial
Services)
$ 194,726
6,400 Precious Shipping Public
Co., Ltd.
(Transportation)
19,296
400 Siam Commercial Bank Public
Co.,
Ltd. (Banking)
2,123
30,400 Siam General Factoring
Public Co.,
Ltd. (Finance)
15,887
50,500 Srithai Superware Public
Co., Ltd.
(Household Products)
168,503
52,200 Thai Farmers Bank, Ltd.
(Banking)
256,016
198,000 Thai Military Bank Public
Co., Ltd.
(Banking)
240,784
134,320 Thai Storage Battery Public
Co.,
Ltd. PLC (Automotive
Parts)
134,995
- -------------
1,032,330
- ----------------------------------------
- ----------
- ----------
United Kingdom--8.7%
337,190 Aegis Group PLC (Media)
323,424
1,269,300 Albert Fisher Group PLC
(Food
Processing)
801,247
233,900 Astec (BSR) PLC (Electrical
&
Electronics)
561,835
115,439 Cadcentre Group PLC*
(Computers)
435,333
40,368 Carpetright PLC (Retail)
301,155
12,883 CMG PLC (Technology)
252,421
169,300 Datrontech Group PLC
(Electronic
Components)
416,380
72,742 Domino Printing Sciences
PLC
(Office Equipment &
Supplies)
423,404
283,638 Firstbus PLC
(Transportation - Road
& Rail)
939,414
150,857 FKI PLC (Manufacturing)
440,278
103,107 Goldsmiths Group PLC
(Retail)
557,038
77,630 Headlam Group PLC
(Distribution/
Wholesalers)
395,851
86,185 Henlys Group PLC (Machinery
&
Engineering)
669,810
77,748 Invesco PLC* (Finance)
427,047
51,121 Johnston Press PLC
(Publishing)
146,683
186,735 Kwik-Fit Holdings PLC
(Retail)
777,680
</TABLE>
- ----------------------------------------
- ----------
- ------------------------------
---
- --
See Notes to Financial Statements. 7
<PAGE>
Portfolio of Investments
as of May 31, 1997 PRUDENTIAL
GLOBAL GENESIS
FUND, INC.
- ----------------------------------------
- ----------
- ----------
<TABLE>
<CAPTION>
Value
Shares Description
(Note 1)
<C> <S>
<C>
------------------------------------
- ----------
- -----------
United Kingdom (cont'd.)
222,700 Limelight Group PLC*
(Housing)
$ 211,782
151,481 M.A.I.D. PLC* (Computer
Services)
471,903
233,230 Mayflower Corp. PLC
(Automobiles &
Trucks)
565,962
130,425 Medeva PLC
(Pharmaceuticals)
585,939
112,070 Morgan Crucible Co. PLC
(Diversified Industries)
839,744
254,050 Mowlem (John) & Co. PLC
(Construction)
554,003
53,155 National Express Group PLC
(Transportation)
446,227
54,953 Partco Group PLC
(Automotive)
293,281
488,500 Peek PLC (Electronics)
352,418
42,075 Powerscreen International
PLC
(Machinery &
Engineering)
432,547
72,964 Regent Inns PLC (Leisure &
Tourism)
393,592
40,536 Sage Group PLC (The)
(Accounting
Software)
432,012
92,200 Serco Group PLC (Business &
Public
Services)
1,069,544
100,381 UniChem PLC
(Pharmaceuticals)
434,507
136,609 Wescol Group PLC (Machinery
&
Engineering)
111,993
144,900 Westminster Healthcare
Holdings PLC
(Health Care Services)
582,071
- -------------
15,646,525
- ----------------------------------------
- ----------
- ----------
United States--38.1%
57,900 ABT Building Products
Corp.*
(Building Materials &
Components)
1,447,500
66,500 Actel Corp.* (Technology)
1,396,500
24,000 Aetrium, Inc.* (Electronic
Components)
414,000
51,700 Allied Holdings, Inc.*
(Trucking &
Shipping)
517,000
73,800 Allied Products Corp.
(Machinery &
Engineering)
2,398,500
67,700 Alternative Resources
Corp.* (Human
Resources)
1,252,450
91,200 Altron, Inc.* (Electrical &
Electronics)
1,516,200
18,300 Alyn Corp.* (Materials
Processing)
196,725
9,100 American Homestar Corp.*
(Home
Builder)
$ 182,000
32,800 Apria Healthcare Group,
Inc.*
(Health Care)
590,400
17,900 Asyst Technologies, Inc.*
(Technology)
720,475
63,200 Beazer Homes USA, Inc.*
(Construction & Housing)
971,700
83,000 Belmont Homes, Inc.*
(Manufacturing/Housing)
653,625
1,200 Benchmark Electronics,
Inc.*
(Engineering &
Manufacturing)
42,150
54,000 Bertucci's, Inc.*
(Restaurants)
324,000
30,900 BJ Services Co.* (Oil
Services)
1,707,225
20,400 Black Box Corp.* (Computer
Software
& Services)
719,100
46,400 Borders Group, Inc. *
(Retail)
1,009,200
16,400 Brooks Automation, Inc.*
(Electrical Goods)
282,900
25,690 Business Objects S.A.
(ADR)*
(Computer Software &
Services)
247,266
22,300 Carter-Wallace, Inc.
(Medical
Products)
370,738
43,600 Claires Stores, Inc.
(Retail)
839,300
26,300 Cleveland-Cliffs, Inc.
(Mining)
1,111,175
24,200 Coherent, Inc.* (Health
Care)
1,058,750
88,900 Compdent Corp.* (Health
Care
Services)
1,611,312
51,400 Crop Growers Corp.*
(Insurance)
501,150
34,800 D.R.Horton, Inc.
(Construction &
Housing)
334,950
62,400 Day Runner, Inc.* (Consumer
Goods)
1,723,800
40,786 Dr. Solomon's Group PLC
(ADR)*
(Computer Software &
Services)
825,916
38,600 Etec Systems, Inc.*
(Electronic
Components)
1,717,700
36,000 Financial Security
Assurance
Holdings, Ltd.
(Financial
Services)
1,300,500
21,300 Gainsco, Inc. (Financial
Services)
175,725
97,600 Galoob Toys, Inc.*
(Leisure)
1,756,800
4,200 GaSonics International
Corp.*
(Electronic Equipment)
49,875
6,800 General Scanning, Inc.*
(Industrial
Components)
90,950
18,000 Greenfield Industries, Inc.
(Industrial Components)
468,000
</TABLE>
- ----------------------------------------
- ----------
- ------------------------------
---
- --
See Notes to Financial Statements. 8
<PAGE>
Portfolio of Investments
as of May 31, 1997
PRUDENTIAL
GLOBAL GENESIS FUND, INC.
- ----------------------------------------
- ----------
- ----------
<TABLE>
<CAPTION>
Value
Shares Description
(Note 1)
<C> <S>
<C>
------------------------------------
- ----------
- -----------
United States (cont'd.)
32,300 GTECH Holdings Corp.*
(Consumer
Goods & Services)
$ 1,061,862
12,000 Hadco Corp.* (Computers)
720,750
13,800 Holophane Corp.*
(Electrical
Equipment)
293,250
5,400 Hutchinson Technology,
Inc.*
(Computer Components)
148,500
82,800 In Focus Systems, Inc.*
(Technology)
2,152,800
88,900 Insituform Technologies*
(Engineering &
Construction)
533,400
40,900 Invacare Corp. (Health
Care)
879,350
46,500 Invivo Corp.* (Health Care)
453,375
115,700 Landec Corp.* (Chemicals)
636,350
12,950 Lindsay Manufacturing Co.
(Manufacturing)
466,200
12,400 Medusa Corp. (Building
Materials &
Components)
478,950
57,300 Network General Corp.*
(Computer
Software & Services)
1,052,887
10,800 Novellus Systems, Inc.*
(Electronic
Components)
884,250
6,700 O'Reilly Automotive, Inc.*
(Automotive Parts)
242,875
14,300 Pairgain Technologies,
Inc.*
(Telecommunications)
298,513
18,500 Panavision, Inc.*
(Miscellaneous)
309,875
9,600 Park Electrochemical Corp.
(Electronic Components)
241,200
53,000 Patterson Dental Co.*
(Health Care)
1,828,500
14,400 Picturetel Corp.*
(Telecommunications)
181,800
8,800 Primark Corp.* (Computer
Software &
Services)
209,000
92,100 Quanex Corp. (Steel &
Metals)
2,509,725
12,650 Raymond James Financial,
Inc.
(Financial Services)
347,875
66,600 Reptron Electronics, Inc.*
(Electronic Components)
1,381,950
13,700 Res-Care, Inc.* (Health
Care)
272,288
21,400 Resmed, Inc.* (Health Care)
449,400
64,200 Rotech Med Corp.* (Health
Care)
1,083,375
14,600 Rowan Companies, Inc.* (Oil
& Gas
Services)
$ 337,625
99,400 Scientific Games Holdings
Corp.*
(Consumer Goods)
2,435,300
9,600 Sequent Computer Systems,
Inc.*
(Computers)
162,000
54,900 Smartflex Systems, Inc.*
(Electronic Components)
789,188
15,300 Strattec Security Corp.*
(Automotive Components)
279,225
105,300 Summit Care Corp.* (Health
Care)
1,263,600
5,900 Sunglass Hut Intl., Inc.*
(Retail)
40,009
26,600 Teltrend, Inc.*
(Telecommunications)
445,550
84,700 The Learning Company*
(Computer
Software & Services)
603,488
20,600 Toll Brothers, Inc.*
(Construction
& Housing)
375,950
33,800 Triangle Pacific Corp.*
(Building
Materials & Components)
1,009,775
86,900 U.S. Office Products Co.*
(Office
Equipment & Supplies)
2,150,775
38,000 United Dental Care, Inc.*
(Health
Care)
646,000
25,900 Valmont Industries (Steel &
Metals)
1,087,800
66,200 Vanguard Cellular Systems,
Inc.*
(Telecommunications)
868,875
48,200 Vital Signs, Inc. (Health
Care)
957,975
8,600 Walbro Corp. (Automotive
Components)
172,000
29,500 Western National Corp.
(Insurance)
770,688
76,100 Wolverine Tube, Inc.*
(Steel &
Metals)
2,235,437
59,900 Wyle Electronics
(Industrial
Electronics)
2,216,300
- -------------
68,491,417
- -------------
Total common stocks
(cost US$147,970,344)
153,193,594
- -------------
PREFERRED STOCKS--1.9%
- ----------------------------------------
- ----------
- ----------
Australia--0.1%
126,000 Sydney Harbour Casino
Holdings,
Ltd.* (Leisure &
Tourism)
205,063
</TABLE>
- ----------------------------------------
- ----------
- ------------------------------
---
- --
See Notes to Financial Statements. 9
<PAGE>
PRUDENTIAL GLOBAL GENESIS FUND, INC.
Portfolio of Investments as of May 31,
1997
- ----------------------------------------
- ----------
- ----------
<TABLE>
<CAPTION>
Value
Shares Description
(Note 1)
<C> <S>
<C>
-----------------------------------
- ----------
- ---------------
Federal Republic of Germany--1.3%
4,530 Fresenius AG (Health Care)
$ 1,004,011
503 Fresenius AG-RFD (Health
Care)
109,418
23,148 Moebel Walther AG (Retail)
1,248,675
- -------------
2,362,104
- ----------------------------------------
- ----------
- ----------
Netherlands--0.5%
17,300 Ballast Nedam N.V.
(Building &
Construction)
794,397
- -------------
Total preferred stocks
(cost US$3,567,245)
3,361,564
- -------------
Total long-term investments
(cost US$151,537,589)
156,555,158
- -------------
Principal
Amount
(000)
- ----------
SHORT-TERM INVESTMENTS--3.6%
------------------------------------
- ----------
- --------------
Repurchase Agreements
United States--3.6%
US$6,531 Joint Repurchase Agreement
Account,
5.530%, 6/02/97
(cost US$6,531,000; Note
5)
6,531,000
- -------------
- ----------------------------------------
- ----------
- ----------
Total Investments--90.8%
(cost US$158,068,589; Note
4)
163,086,158
Other assets in excess of
liabilities--9.2%
16,489,711
- -------------
Net Assets--100%
$ 179,575,869
- -------------
- -------------
- ---------------
* Non-income producing security.
ADR--American Depository Receipt.
</TABLE>
- ----------------------------------------
- ----------
- ------------------------------
---
- --
See Notes to Financial Statements.
10
<PAGE>
Statement of Assets and Liabilities
PRUDENTIAL GLOBAL GENESIS FUND, INC.
- ----------------------------------------
- ----------
- ------------------------------
<TABLE>
<S>
<C>
Assets
May 31, 1997
Investments, at value (cost
$158,068,589)...........................
..........
...............................
$163,086,158
Foreign currency, at value (cost
$6,684,606).............................
..........
..........................
6,666,717
Receivable for investments
sold....................................
..........
................................
9,422,542
Receivable for Fund shares
sold....................................
..........
................................
6,273,039
Forward currency contracts - net amount
receivable
from
counterparties..........................
..........
... 1,134,207
Dividends and interest
receivable..............................
..........
....................................
491,888
Other
assets..................................
..........
........................................
..........
... 3,228
- ------------
Total
assets..................................
..........
........................................
..........
187,077,779
- ------------
Liabilities
Payable for investments
purchased...............................
..........
...................................
6,056,703
Accrued expenses and other
liabilities.............................
..........
................................
604,445
Payable for Fund shares
reacquired..............................
..........
...................................
534,382
Management fee
payable.................................
..........
........................................
....
144,425
Distribution fee
payable.................................
..........
........................................
..
111,760
Withholding taxes
payable.................................
..........
........................................
.
50,195
- ------------
Total
liabilities.............................
..........
........................................
..........
7,501,910
- ------------
Net
Assets..................................
..........
........................................
..........
..... $179,575,869
- ------------
- ------------
Net assets were comprised of:
Common stock, at
par.....................................
..........
.......................................
$
87,465
Paid-in capital in excess of
par.....................................
..........
...........................
136,422,726
- ------------
136,510,191
Undistributed net investment
income..................................
..........
...........................
2,173,253
Accumulated net realized gain on
investments.............................
..........
.......................
34,771,177
Net unrealized appreciation on
investments and
foreign currency
translations............................
..
6,121,248
- ------------
Net assets, May 31,
1997....................................
..........
.......................................
$179,575,869
- ------------
- ------------
Class A:
Net asset value and redemption price
per share
($57,032,389 / 2,677,174 shares of
common
stock issued and
outstanding)............................
....
$21.30
Maximum sales charge (5% of offering
price)..................................
..........
................... 1.12
- ------------
Maximum offering price to
public..................................
..........
..............................
$22.42
- ------------
- ------------
Class B:
Net asset value, offering price and
redemption
price per share
($120,066,858 / 5,948,321 shares
of common
stock issued and
outstanding)............................
...
$20.18
- ------------
- ------------
Class C:
Net asset value, offering price and
redemption
price per share
($1,874,015 / 92,847 shares of
common stock
issued and
outstanding)............................
........
$20.18
- ------------
- ------------
Class Z:
Net asset value, offering price and
redemption
price per share
($602,607 / 28,168 shares of
common stock
issued and
outstanding)............................
..........
$21.39
- ------------
- ------------
</TABLE>
- ----------------------------------------
- ----------
- ------------------------------
---
- --
See Notes to Financial Statements.
11
<PAGE>
PRUDENTIAL GLOBAL GENESIS FUND, INC.
Statement of Operations
- ----------------------------------------
- ----------
- ----------
<TABLE>
<CAPTION>
Year Ended
Net Investment (Loss)
May 31, 1997
<S>
<C>
Income
Dividends (net of foreign withholding
taxes
of
$231,135).............................
$ 2,277,817
Interest (net of foreign withholding
taxes
of
$115).................................
299,600
- ------------
Total
income.............................
2,577,417
- ------------
Expenses
Management
fee..............................
1,827,270
Distribution fee--Class
A...................
118,909
Distribution fee--Class
B...................
1,330,732
Distribution fee--Class
C...................
19,580
Transfer agent's fees and
expenses..........
500,000
Custodian's fees and
expenses...............
300,000
Reports to
shareholders.....................
180,000
Registration
fees...........................
112,000
Audit fees and
expenses.....................
32,000
Legal fees and
expenses.....................
30,000
Directors' fees and
expenses................
25,000
Miscellaneous...........................
....
26,361
- ------------
Total
expenses...........................
4,501,852
- ------------
Net investment
(loss)..........................
(1,924,435)
- ------------
Realized and Unrealized Gain (Loss)
on Investments and Foreign
Currency Transactions
Net realized gain on:
Investment
transactions.....................
55,232,743
Foreign
currency............................
3,365,230
- ------------
58,597,973
- ------------
Net change in unrealized
appreciation/depreciation on:
Investments.............................
....
(47,989,420)
Foreign
currency............................
996,148
- ------------
(46,993,272)
- ------------
Net gain on investments and foreign
currencies
11,604,701
- ------------
Net Increase in Net Assets
Resulting from
Operations......................
$ 9,680,266
- ------------
- ------------
</TABLE>
PRUDENTIAL GLOBAL GENESIS FUND, INC.
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Increase (Decrease)
Year Ended
May 31,
in Net Assets
1997
1996
<S> <C>
<C>
Operations
Net investment (loss)......... $
(1,924,435)
$ (638,889)
Net realized gain (loss) on
investments and foreign
currency transactions......
58,597,973
(281,028)
Net change in unrealized
appreciation/depreciation
of investments and foreign
currencies.................
(46,993,272)
34,099,480
-----
- -------
- -------------
Net increase in net assets
resulting from
operations.................
9,680,266
33,179,563
-----
- -------
- -------------
Net equalization (credits).......
- --
(25,288)
-----
- -------
- -------------
Dividends to shareholders in
excess of net investment
income (Note 1)
Class A.......................
- --
(195,472)
Class B.......................
- --
(695,209)
Class C.......................
- --
(8,179)
Class Z.......................
- --
- --
-----
- -------
- -------------
- --
(898,860)
-----
- -------
- -------------
Distributions from net realized
gains on investment and
foreign currency transactions
Class A.......................
(3,934,145)
- --
Class B.......................
(11,301,405)
- --
Class C.......................
(157,024)
- --
Class Z.......................
(1,633)
- --
-----
- -------
- -------------
(15,394,207)
- --
-----
- -------
- -------------
Fund share transactions (Net of
share conversions) (Note 6)
Net proceeds from shares
subscribed.................
200,389,634
333,985,435
Net asset value of shares
issued to shareholders in
reinvestment of dividends
and distributions..........
14,337,461
827,626
Cost of shares reacquired.....
(234,621,333)
(360,913,268)
-----
- -------
- -------------
Net decrease in net assets
from Fund share
transactions...............
(19,894,238)
(26,100,207)
-----
- -------
- -------------
Total increase (decrease)........
(25,608,179)
6,155,208
Net Assets
Beginning of year................
205,184,048
199,028,840
-----
- -------
- -------------
End of year......................
$179,575,869
$ 205,184,048
-----
- -------
- -------------
-----
- -------
- -------------
</TABLE>
- ----------------------------------------
- ----------
- ------------------------------
---
- --
See Notes to Financial Statements.
12
<PAGE>
Notes to Financial Statements
PRUDENTIAL GLOBAL GENESIS FUND, INC.
- ----------------------------------------
- ----------
- ------------------------------
Prudential Global Genesis Fund, Inc.,
(the
'Fund'), is registered under the
Investment Company Act of 1940 as a
diversified,
open-end management investment
company. The Fund's investment objective
is long-
term growth of capital which it
seeks to achieve by investing primarily
in equity
securities of foreign and
domestic companies with market
capitalizations of
less than U.S. $1 billion, as
measured at time of purchase.
- ----------------------------------------
- ----------
- ----------
Note 1. Accounting Policies
The following is a summary of
significant
accounting policies followed by the
Fund in the preparation of its financial
statements.
Security Valuation: Securities traded on
an
exchange are valued at the last
reported sales price on the primary
exchange on
which they are traded.
Securities traded in the over-the-
counter market
(including securities listed on
exchanges for which a last sales price
is not
available) are valued at the
average of the last reported bid and
asked prices.
Securities for which market
quotations are not readily available,
including
restricted securities, are
valued at fair value as determined in
good faith
according to a pricing
procedure developed by the Investment
Adviser
under procedures established by
and under the general supervision 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 which
approximates market
value.
In connection with transactions in
repurchase
agreements with U.S. financial
institutions, it is the Fund's policy
that its
custodian or designated
subcustodians, as the case may be under
triparty
repurchase agreements, take
possession of the underlying collateral
securities, the value of which exceeds
the principal amount of the repurchase
transaction
including accrued interest.
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 U.S. dollars. Foreign currency
amounts are
translated into U.S. dollars on
the following basis:
(i) market value of investment
securities, other
assets and liabilities--at the
daily closing rates 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
using the foreign exchange
rates and market values at the close of
the fiscal
year, 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 the
fiscal
year 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 long-term portfolio
securities sold during the fiscal year.
Net realized gain on foreign currency
transactions
represents net foreign
exchange gains from disposition 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 unrealized
currency gains
and losses from valuing foreign
currency denominated assets and
liabilities (other
than investments) at fiscal
year end exchange rates are reflected as
a
component of net unrealized
appreciation on foreign currencies.
Foreign security and currency
transactions may
involve certain considerations
and risks not typically associated with
those of
domestic origin as a result of,
among other factors, the possibility of
political
and economic instability and
the level of governmental supervision
and the
regulation of foreign securities
markets.
Forward Currency Contracts: A forward
currency
contract is a commitment to
purchase or sell a foreign currency at a
future
date at a negotiated forward
rate. The Fund enters into forward
currency
contracts in order to hedge its
exposure to changes in foreign currency
exchange
rates on its foreign portfolio
holdings or on specific receivable and
payables
denominated in a foreign
currency. The contracts are valued daily
at
current exchange rates and any
unrealized gain or loss is included in
net
unrealized appreciation or
depreciation on investments. Gain or
loss is
realized on the settlement date of
the contract equal to the difference
between the
settlement value of the
original and renegotiated forward
contracts. This
gain or loss, if any, is
included in net realized gain (loss) on
foreign
currency transactions. Risks may
arise upon entering into these contracts
from the
potential inability of the
counterparties to meet the terms of
their
contracts.
Securities Transactions and Investment
Income:
Securities transactions are
recorded on the trade date. Realized
gains and
losses from investment and
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.
- ----------------------------------------
- ----------
- ------------------------------
---
- --
13
<PAGE>
Notes to Financial Statements
PRUDENTIAL GLOBAL GENESIS FUND, INC.
- ----------------------------------------
- ----------
- ------------------------------
Net investment income (other than
distribution
fees) and unrealized and realized
gains or losses are allocated daily to
each class
of shares of the Fund based
upon the relative proportion of net
assets of each
class at the beginning of the
day.
Equalization: Effective June 1, 1996,
the Fund
discontinued the accounting
practice of equalization. Equalization
is a
practice whereby a portion of the
proceeds from sales and costs of
repurchases of
capital shares, equivalent on a
per share basis to the amount of
distributable net
investment income on the date
of the transaction, is credited or
charged to
undistributed net investment
income. The balance of $79,740 of
undistributed
net investment income at May 31,
1996, resulting from equalization was
transferred
to paid-in capital in excess
of par. Such reclassification had no
effect on net
assets, results of
operations, or net asset value per
share.
Taxes: It is the Fund's policy to
continue to meet
the requirements of the
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 interest,
dividends
and (realized and unrealized)
capital gains have been provided for in
accordance
with the Fund's understanding
of the applicable country's tax rules
and rates.
In addition, certain countries
impose taxes on capital gains realized
on the sale
of portfolio securities, and
as such, taxes have been accrued on the
unrealized
gains on such securities.
Dividends and Distributions: The Fund
expects to
pay dividends of net investment
income and distributions of net realized
capital
gains, if any, at least
annually. 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. These differences are
primarily due to
differing treatments of wash
sales, passive investment companies, and
foreign
currencies transactions.
Reclassification of Capital Accounts:
The Fund
accounts and reports for
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 increase
undistributed net
investment income and decrease
accumulated net realized gain on
investments by
$4,963,924 for the year ended
May 31, 1997. Net realized gains and net
assets
were not affected by this
change.
Note 2. Agreements
The Fund has a management agreement with
Prudential Investments Fund Management
LLC ('PIFM'). Pursuant to this
agreement, PIFM has
responsibility for all
investment advisory services and
supervises the
subadvisor's performance of such
services. PIFM has entered into a
subadvisory
agreement with The Prudential
Investment Corporation ('PIC'); PIC
furnishes
investment advisory services in
connection with the management of the
Fund. PIFM
pays for the services of PIC,
the cost of compensation of officers of
the Fund,
occupancy and certain clerical
and bookkeeping costs of the Fund. The
Fund bears
all other costs and expenses.
The management fee paid PIFM is computed
daily and
payable monthly, at an annual
rate of 1% of the average daily net
assets of the
Fund.
The Fund has distribution agreements
with
Prudential Securities Incorporated
('PSI'), which acts as the distributor
of the
Class A, Class B, Class C and
Class Z shares of the Fund. The Fund
compensates
PSI for distributing and
servicing the Fund's Class A, Class B
and Class C
shares, pursuant to plans of
distribution, (the 'Class A, B and C
Plans')
regardless of expenses actually
incurred by them. The distribution fees
are
accrued daily and payable monthly.
No distribution or service fees are paid
to PSI as
distributor of the Class Z
shares of the Fund.
Pursuant to the Class A, B and C Plans,
the Fund
compensates PSI for its
distribution related activities at an
annual rate
of up to .30 of 1%, 1% and 1%
of the average daily net assets of the
Class A, B
and C shares, respectively.
Such expenses under the Plans were .25
of 1%, 1%
and 1% of the average daily net
assets of the Class A, Class B and Class
C shares,
respectively, for the fiscal
year ended May 31, 1997.
PSI has advised the Fund that it
received
approximately $52,600 in front-end
sales charges resulting from sales of
Class A
shares during the year ended May
31, 1997. From these fees, PSI paid such
sales
charges to dealers, which in turn
paid commissions to salespersons and
incurred
other distribution costs.
PSI has advised the Fund that for the
year ended
May 31, 1997, it received
approximately $453,400 and $1,700 in
contingent
deferred sales charges imposed
upon redemptions by certain Class B and
Class C
shareholders, respectively.
PIC, PSI and PIFM are indirect, wholly-
owned
subsidiaries of The Prudential
Insurance Company of America.
The Fund, along with other affiliated
registered
investment companies (the
'Funds'), entered into a credit
agreement (the
'Agreement') on
- ----------------------------------------
- ----------
- ------------------------------
---
- --
14
<PAGE>
Notes to Financial Statements
PRUDENTIAL GLOBAL GENESIS FUND, INC.
- ----------------------------------------
- ----------
- ------------------------------
December 31, 1996 with an unaffiliated
lender. The
maximum commitment under the
Agreement is $200,000,000. The Agreement
expires
on December 30, 1997. Interest
on any such borrowings outstanding will
be at
market rates. The purpose of the
Agreement is to serve as an alternative
source of
funding for capital share
redemptions. The Fund has not borrowed
any amounts
pursuant to the Agreement as
of December 31, 1996. The Funds pay a
commitment
fee at an annual rate of .055
of 1% on the unused portion of the
credit
facility. The commitment fee is
accrued and paid quarterly on a pro-rata
basis by
the Funds.
- ----------------------------------------
- ----------
- ----------
Note 3. Other Transactions With
Affiliates
Prudential Mutual Fund Services LLC
('PMFS'), a
wholly-owned subsidiary of PIFM,
serves as the Fund's transfer agent and
during the
year ended May 31, 1997, the
Fund incurred fees of approximately
$433,000 for
the services of PMFS. As of May
31, 1997, approximately $38,400 of such
fees were
due to PMFS. Transfer agent
fees and expenses in the Statement of
Operations
include certain out-of-pocket
expenses paid to non-affiliates. For the
year
ended May 31, 1997 PSI and/or its
foreign affiliates earned approximately
$4,800 in
broker commissions from
portfolio transactions executed on
behalf of the
Fund.
- ----------------------------------------
- ----------
- ----------
Note 4. Portfolio Securities
Purchases and sales of investment
securities,
other than short-term investments,
for the year ended May 31, 1997
aggregated
$273,444,122 and $305,721,646,
respectively.
The federal income tax basis of the
Fund's
investments at May 31, 1997 was
$158,205,941 and accordingly, net
unrealized
appreciation for federal income tax
purposes was $4,880,217 (gross
unrealized
appreciation--$15,022,566; gross
unrealized depreciation--$10,142,349).
The Fund utilized its capital loss
carryforward of
approximately $2,070,300 to
offset net taxable gains realized and
recognized
during the fiscal year ended
May 31, 1997.
At May 31, 1997 the Fund had outstanding
forward
currency contracts both to
purchase and sell foreign currencies as
follows:
<TABLE>
<CAPTION>
Value at
Settlement
Foreign Currency Date
Current
Purchase Contract Payable
Value Appreciation
- ------------------------ -----------
- ------
- ----- --------------
<S> <C>
<C>
<C>
Swiss Franc
expiring 11/20/97 $ 3,209,289
$
3,300,031 $ 90,742
Japanese Yen
expiring
11/19/97-11/20/97 10,661,138
11,362,000 700,862
Deutsche Mark
expiring
7/13/97-7/17/97 2,531,749
2,720,000 188,251
-----------
- ------
- ----- --------------
$16,402,176
$17,382,031 $ 979,855
-----------
- ------
- ----- --------------
-----------
- ------
- ----- --------------
<CAPTION>
Value at
Settlement
Foreign Currency Date
Current Appreciation/
Sale Contract Payable
Value Depreication
- ------------------------ -----------
- ------
- ----- --------------
<S> <C>
<C>
<C>
Swiss Franc
expiring 11/20/97 $ 6,500,000
$
6,576,102 $ (76,102)
Japanese Yen
expiring
11/19/97-11/26/97 14,453,000
14,152,240 300,760
French Franc
expiring 11/20/97 3,209,289
3,279,595 (70,306)
-----------
- ------
- ----- --------------
$24,162,289
$24,007,937 $ 154,352
-----------
- ------
- ----- --------------
-----------
- ------
- ----- --------------
</TABLE>
- ----------------------------------------
- ----------
- ----------
Note 5. Joint Repurchase Agreement
Account
The Fund, along with other affiliated
registered
investment companies, transfers
uninvested cash balances into a single
joint
account, the daily aggregate
balance of which is invested in one or
more
repurchase agreements collateralized
by U.S. Treasury or federal agency
obligations. At
May 31, 1997, the Fund had a
.81% undivided interest in the
repurchase
agreements in the joint account. The
undivided interest for the Fund
represented
$6,531,000 in principal amount. As
of such date, each repurchase agreement
in the
joint account and the value of
the collateral therefor were as follows:
Bear, Stearns & Co., 5.53%, in the
principal
amount of $270,000,000, repurchase
price $270,082,950, due 6/2/97. The
value of the
collateral including accrued
interest is $275,689,730.
J.P. Morgan Securities, Inc., 5.52%, in
the
principal amount of $270,000,000,
repurchase price $270,124,200, due
6/2/97. The
value of the collateral including
accrued interest is $275,400,031.
- ----------------------------------------
- ----------
- ------------------------------
---
- --
15
<PAGE>
Notes to Financial Statements
PRUDENTIAL GLOBAL GENESIS FUND, INC.
- ----------------------------------------
- ----------
- ------------------------------
Smith Barney, Inc., 5.54%, in the
principal amount
of $270,000,000, repurchase
price $270,124,650, due 6/2/97. The
value of the
collateral including accrued
interest is $275,400,376.
- ----------------------------------------
- ----------
- ----------
Note 6. Capital
The Fund offers Class A, Class B, Class
C and
Class Z shares. Class A shares are
sold with a front-end sales charge of up
to 5%.
Class B shares are sold with a
contingent deferred sales charge which
declines
from 5% to zero depending on the
period of time the shares are held.
Class C shares
are sold with a contingent
deferred sales charge of 1% during the
first year.
Class B shares will
automatically convert to Class A shares
on a
quarterly basis approximately seven
years after purchase. Effective
September 13, 1996
the Fund commenced offering
Class Z shares. Class Z shares are not
subject to
any sales or redemption charge
and are offered exclusively for sale to
a limited
group of investors.
The Fund has authorized 500 million
shares of
common stock at $.01 par value per
share equally divided into four classes,
designated Class A, Class B, Class C
and Class Z common stock.
Transactions in shares of common stock
were as
follows:
<TABLE>
<CAPTION>
Class A
Shares
Amount
- ------------------------------------ --
- --------
- -------------
<S>
<C>
<C>
Year ended May 31, 1997:
Shares sold.........................
8,953,813
$ 182,785,315
Shares issued in reinvestment of
dividends and distributions.......
190,292
3,701,176
Shares reacquired...................
(9,155,598)
(187,256,402)
--
- --------
- -------------
Net decrease in shares outstanding
before conversion.................
(11,493)
(769,911)
Shares issued upon conversion from
Class B...........................
498,308
10,387,463
--
- --------
- -------------
Net increase in shares
outstanding.......................
486,815
$ 9,617,552
--
- --------
- -------------
--
- --------
- -------------
Year ended May 31, 1996:
Shares sold.........................
8,715,437
$ 171,119,515
Shares issued in reinvestment of
dividends and distributions.......
9,315
180,140
Shares reacquired...................
(9,127,818)
(179,580,690)
--
- --------
- -------------
Net decrease in shares outstanding
before conversion.................
(403,066)
(8,281,035)
Shares issued upon conversion from
Class B...........................
204,786
4,094,014
--
- --------
- -------------
Net decrease in shares
outstanding.......................
(198,280)
$ (4,187,021)
--
- --------
- -------------
--
- --------
- -------------
<CAPTION>
Class B
Shares
Amount
- ------------------------------------ --
- --------
- -------------
<S>
<C>
<C>
Year ended May 31, 1997:
Shares sold.........................
810,611
$ 15,969,287
Shares issued in reinvestment of
dividends and distributions.......
566,184
10,491,393
Shares reacquired...................
(2,346,819)
(45,831,867)
--
- --------
- -------------
Net decrease in shares outstanding
before conversion.................
(970,024)
(19,371,187)
Shares reacquired upon conversion
into Class A......................
(521,816)
(10,387,463)
--
- --------
- -------------
Net decrease in shares
outstanding.......................
(1,491,840)
$ (29,758,650)
--
- --------
- -------------
--
- --------
- -------------
Year ended May 31, 1996:
Shares sold.........................
8,445,077
$ 161,457,654
Shares issued in reinvestment of
dividends and distributions.......
34,065
639,398
Shares reacquired...................
(9,438,151)
(180,608,303)
--
- --------
- -------------
Net decrease in shares outstanding
before conversion.................
(959,009)
(18,511,251)
Shares reacquired upon conversion
into Class A......................
(212,363)
(4,094,014)
--
- --------
- -------------
Net decrease in shares
outstanding.......................
(1,171,372)
$ (22,605,265)
--
- --------
- -------------
--
- --------
- -------------
<CAPTION>
Class C
- ------------------------------------
<S>
<C>
<C>
Year ended May 31, 1997:
Shares sold.........................
38,355
$ 755,412
Shares issued in reinvestment of
dividends and distributions.......
7,732
143,268
Shares reacquired...................
(62,253)
(1,230,103)
--
- --------
- -------------
Net decrease in shares
outstanding.......................
(16,166)
$ (331,423)
--
- --------
- -------------
--
- --------
- -------------
Year ended May 31, 1996:
Shares sold.........................
72,739
$ 1,408,266
Shares issued in reinvestment of
dividends and distributions.......
431
8,088
Shares reacquired...................
(37,424)
(724,275)
--
- --------
- -------------
Net increase in shares
outstanding.......................
35,746
$ 692,079
--
- --------
- -------------
--
- --------
- -------------
<CAPTION>
Class Z
- ------------------------------------
<S>
<C>
<C>
September 13, 1996* through
May 31, 1997:
Shares sold.........................
43,203
$ 879,620
Shares issued in reinvestment of
dividends and distributions.......
83
1,624
Shares reacquired...................
(15,118)
(302,961)
--
- --------
- -------------
Net increase in shares
outstanding.......................
28,168
$ 578,283
--
- --------
- -------------
--
- --------
- -------------
- ---------------
* Commencement of offering of Class Z
shares.
</TABLE>
- ----------------------------------------
- ----------
- ------------------------------
---
- --
16
<PAGE>
Financial Highlights
PRUDENTIAL GLOBAL GENESIS FUND, INC.
- ----------------------------------------
- ----------
- ------------------------------
<TABLE>
<CAPTION>
Class A
- ----------------------------------------
- ----------
- -----
Year Ended May 31,
- ----------------------------------------
- ----------
- -----
1997 1996(b) 1995(b)
1994(b)
1993(b)
- ------- ------- ------- ----
- --- --
- -----
PER SHARE OPERATING PERFORMANCE:
<S>
<C> <C> <C> <C>
<C>
Net asset value, beginning of
period..........
$ 21.74 $ 18.44 $ 18.75 $
15.34
$12.62
- ------- ------- ------- ----
- --- --
- -----
Income from investment operations
Net investment income
(loss)..................
(.14) .05(a) --
(.03)(a)
.10 (a)
Net realized and unrealized gain (loss)
on
investment and foreign currency
transactions............................
...
1.45 3.34 (.21) 3.83
2.62
- ------- ------- ------- ----
- --- --
- -----
Total from investment
operations...........
1.31 3.39 (.21) 3.80
2.72
- ------- ------- ------- ----
- --- --
- -----
Less distributions
Dividends from net investment
income..........
- -- -- -- (.15)
- --
Dividends in excess of net investment
income..................................
...
- -- (.09) (.08) --
- --
Distributions from net realized gains on
investment and foreign currency
transactions............................
...
(1.75) -- (.02)
(.24)
- --
- ------- ------- ------- ----
- --- --
- -----
Total
distributions........................
(1.75) (.09) (.10)
(.39)
- --
- ------- ------- ------- ----
- --- --
- -----
Net asset value, end of
period................
$ 21.30 $ 21.74 $ 18.44 $
18.75
$15.34
- ------- ------- ------- ----
- --- --
- -----
- ------- ------- ------- ----
- --- --
- -----
TOTAL RETURN
(c):.............................
6.74% 18.41% (0.95)%
25.09%
21.55 %
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000)...............
$57,032 $47,617 $44,051
$29,221
$3,435
Average net assets
(000)......................
$47,563 $45,070 $32,430
$16,909
$3,106
Ratios to average net assets:
Expenses, including distribution
fees......
1.78% 1.79%(a) 1.42%(a)
1.48%(a)
1.49 %(a)
Expenses, excluding distribution
fees......
1.53% 1.54%(a) 1.17%(a)
1.25%(a)
1.29 %(a)
Net investment income
(loss)...............
(.49)% .26%(a) .02%(a)
(.17)%(a)
.79 %(a)
For Class A, B, C and Z shares:
Portfolio turnover
rate.......................
60% 44% 64% 31%
67
%
Average commission rate per
share.............
$0.0116 $0.0090 N/A
N/A
N/A
</TABLE>
- ---------------
(a) Net of expense subsidies and/or fee
waivers.
(b) Calculated based upon average shares
outstanding, by class.
(c) Total return does not consider the
effects of
sales loads. Total return is
calculated assuming a purchase of
shares on
the first day and a sale on the
last day of each period reported and
includes
reinvestment of dividends and
distributions. Total returns for
periods of
less than a full year are not
annualized.
- ----------------------------------------
- ----------
- ------------------------------
---
- --
See Notes to Financial Statements.
17
<PAGE>
Financial Highlights
PRUDENTIAL GLOBAL GENESIS FUND, INC.
- ----------------------------------------
- ----------
- ------------------------------
<TABLE>
<CAPTION>
Class B
- ----------------------------------------
- ----------
- ----------
Year Ended May 31,
- ----------------------------------------
- ----------
- ----------
1997 1996(b) 1995(b)
1994(b)
1993(b)
- -------- -------- -------- -
- -------
- --------
PER SHARE OPERATING PERFORMANCE:
<S>
<C> <C> <C>
<C>
<C> <C>
Net asset value, beginning of
period..........
$ 20.87 $ 17.84 $ 18.22 $
14.93
$ 12.38
- -------- -------- -------- -
- -------
- --------
Income from investment operations
Net investment income
(loss)..................
(.33) (.09)(a) (.13)(a)
(.16)(a)
- --
Net realized and unrealized gain (loss)
on
investment and foreign currency
transactions............................
...
1.39 3.21 (.19)
3.74
2.55
- -------- -------- -------- -
- -------
- --------
Total from investment
operations...........
1.06 3.12 (.32)
3.58
2.55
- -------- -------- -------- -
- -------
- --------
Less distributions
Dividends from net investment
income..........
- -- -- --
(.05)
- --
Dividends in excess of net investment
income..................................
...
- -- (.09) (.03) -
- -
- --
Distributions from net realized gains on
investment and foreign currency
transactions............................
...
(1.75) -- (.03)
(.24)
- --
- -------- -------- -------- -
- -------
- --------
Total
distributions........................
(1.75) (.09) (.06)
(.29)
- --
- -------- -------- -------- -
- -------
- --------
Net asset value, end of
period................
$ 20.18 $ 20.87 $ 17.84 $
18.22
$ 14.93
- -------- -------- -------- -
- -------
- --------
- -------- -------- -------- -
- -------
- --------
TOTAL RETURN
(c):.............................
5.83% 17.51% (1.73)%
24.16%
20.60%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000)...............
$120,067 $155,292 $153,670
$174,659
$ 36,136
Average net assets
(000)......................
$133,073 $154,566 $173,591
$102,451
$ 31,561
Ratios to average net assets:
Expenses, including distribution
fees......
2.53% 2.54%(a) 2.17%(a)
2.25%(a)
2.29%(a)
Expenses, excluding distribution
fees......
1.53% 1.54%(a) 1.17%(a)
1.25%(a)
1.29%(a)
Net investment
loss........................
(1.26)% (.48)%(a) (.77)%(a)
(.91)%(a) (.01)%(a)
</TABLE>
- ---------------
(a) Net of expense subsidies and/or fee
waivers.
(b) Calculated based upon average shares
outstanding, by class.
(c) Total return does not consider the
effects of
sales loads. Total return is
calculated assuming a purchase of
shares on
the first day and a sale on the
last day of each period reported and
includes
reinvestment of dividends and
distributions. Total returns for
periods of
less than a full year are not
annualized.
- ----------------------------------------
- ----------
- ------------------------------
---
- --
See Notes to Financial Statements.
18
<PAGE>
Financial Highlights
PRUDENTIAL GLOBAL GENESIS FUND, INC.
- ----------------------------------------
- ----------
- ------------------------------
<TABLE>
<CAPTION>
Class C Class Z
- ---------------------------------- -
- ----------
- ---
August 1, September 13,
1994(d) 1996(e)
Year Ended May 31, Through
Through
- -------------------- May 31,
May 31,
1997 1996(b) 1995(b)
1997
- ------- -------- --------- -
- ----------
- ---
PER SHARE OPERATING PERFORMANCE:
<S>
<C> <C> <C>
<C>
<C>
Net asset value, beginning of
period..........
$ 20.87 $17.84 $ 18.44
$20.46
- ------- -------- ---------
- -----
Income from investment operations
Net investment gain
(loss)....................
(.27) (.08)(a) (.12)(a)
.03
Net realized and unrealized gain (loss)
on
investment and foreign currency
transactions............................
...
1.33 3.20 (.44)
2.65
- ------- -------- ---------
- -----
Total from investment
operations...........
1.06 3.12 (.56)
2.68
- ------- -------- ---------
- -----
Less distributions
Dividends from net investment
income..........
- -- -- --
- --
Dividends in excess of net investment
income..................................
...
- -- (.09) (.03)
- --
Distributions from net realized gains on
investment and foreign currency
transactions............................
...
(1.75) -- (.01)
(1.75)
- ------- -------- ---------
- -----
Total
distributions........................
(1.75) (.09) (.04)
(1.75)
- ------- -------- ---------
- -----
Net asset value, end of
period................
$ 20.18 $20.87 $ 17.84
$21.39
- ------- -------- ---------
- -----
- ------- -------- ---------
- -----
TOTAL RETURN
(c):.............................
5.83% 17.51% (2.90)%
13.90%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000)...............
$ 1,874 $2,275 $ 1,307
$ 603
Average net assets
(000)......................
$ 1,958 $1,809 $ 862
$ 188
Ratios to average net assets:
Expenses, including distribution
fees......
2.53% 2.54%(a) 2.27%(a)(f)
1.53%(f)
Expenses, excluding distribution
fees......
1.53% 1.54%(a) 1.27%(a)(f)
1.53%(f)
Net investment gain
(loss).................
(1.24)% (.44)%(a) (.90) (a)(f)
(.87)%(f)
</TABLE>
- ---------------
(a) Net of expense subsidies and/or fee
waivers.
(b) Calculated based upon average shares
outstanding, by class.
(c) Total return does not consider the
effects of
sales loads. Total return is
calculated assuming a purchase of
shares on
the first day and a sale on the
last day of each period reported and
includes
reinvestment of dividends and
distributions. Total returns for
periods of
less than a full year are not
annualized.
(d) Commencement of offering of Class C
shares.
(e) Commencement of offering of Class Z
shares.
(f) Annualized.
- ----------------------------------------
- ----------
- ------------------------------
---
- --
See Notes to Financial Statements.
19
<PAGE>
Report of Independent Accountants
PRUDENTIAL GLOBAL GENESIS FUND, INC.
- ----------------------------------------
- ----------
- ------------------------------
To the Board of Directors and
Shareholders of
Prudential Global Genesis Fund, Inc.
In our opinion, the accompanying
statement of
assets and liabilities, including
the portfolio of investments, and the
related
statements of operations and of
changes in net assets and the financial
highlights
present fairly, in all
material respects, the financial
position of
Prudential Global Genesis Fund,
Inc. (the 'Fund') at May 31, 1997, the
results of
its operations for the year
then ended, the changes in its net
assets for each
of the two years in the
period then ended and the financial
highlights for
each of the five years in the
period then ended, in conformity with
generally
accepted accounting principles.
These financial statements and financial
highlights (hereafter referred to as
'financial statements') are the
responsibility of
the Fund's management; our
responsibility is to express an opinion
on these
financial statements based on
our audits. We conducted our audits of
these
financial statements in accordance
with generally accepted auditing
standards which
require that we plan and
perform the audit to obtain reasonable
assurance
about whether the financial
statements are free of material
misstatement. An
audit includes examining, on a
test basis, evidence supporting the
amounts and
disclosures in the financial
statements, assessing the accounting
principles
used and significant estimates
made by management, and evaluating the
overall
financial statement presentation.
We believe that our audits, which
included
confirmation of securities at May 31,
1997 by correspondence with the
custodian and
brokers and the application of
alternative auditing procedures where
confirmations from brokers were not
received, provide a reasonable basis for
the
opinion expressed above.
PRICE WATERHOUSE LLP
1177 Avenue of the Americas
New York, New York
July 24, 1997
Tax Information
PRUDENTIAL GLOBAL GENESIS FUND, INC.
- ----------------------------------------
- ----------
- ------------------------------
We are required by the Internal Revenue
Code to
advise you within 60 days of the
Fund's fiscal year end (May 31, 1997) as
to the
federal income tax status of
dividends paid during such fiscal year.
Accordingly, we are advising you that
during its fiscal year ended May 31,
1997, the
Fund paid a long-term capital
gain distribution of $1.63, which is
taxable as
such, and a short-term capital
gain distribution of $.12 which is
taxable as
ordinary income. Further, we wish
to advise you that 5.72% of the ordinary
income
dividend paid in the fiscal year
ended May 31, 1997 qualified for the
corporate
dividends received deduction
available to corporate taxpayers.
In January 1998, you will be advised on
IRS Form
1099 DIV or substitute Form
1099, as to the federal tax status of
the
distributions received by you in
calendar 1997. The amounts that will be
reported
on such form 1099 DIV will be
the amounts to use on your federal
income tax
return and will differ from the
amounts which we must report for the
Fund's fiscal
year ended May 31, 1997.
- ----------------------------------------
- ----------
- ------------------------------
---
- --
20
<PAGE>
Comparing A $10,000 Investment.
- ----------------------------------------
- ----------
- -
Prudential Global Genesis Fund, Inc. vs.
Morgan Stanley Capital International
World Index.
//Prudential Global Genesis
Fund, Inc. vs.
- --Morgan Stanley Capital
International World Index.
Class A
(CHART)
Average Annual Total
Returns - Class A
- -------------------------
With Sales Load
8.6% Since Inception
12.6% for 5 Years
1.4% for 1 Year
Without Sales Load
9.4% Since Inception
13.7% for 5 Years
6.7% for 1 Year
Class B
(CHART)
Average Annual Total
Returns - Class B
- -------------------------
With Sales Load
10.1% Since Inception
12.7% for 5 Years
.83% for 1 Year
Without Sales Load
10.1% Since Inception
12.9% for 5 Years
5.8% for 1 Year
Class C
(CHART)
Average Annual Total
Returns - Class C
- ----------------------------
With Sales Load
6.9% Since Inception
N/A for 5 Years
4.8% for 1 Year
Without Sales Load
6.9% Since Inception
N/A for 5 Years
5.8% for 1 Year
Past performance is not indicative of
future
results. Investment
return and principal value will
fluctuate so an
investor's shares,
when redeemed, may be worth more or less
than
their original cost.
The box on top of the graphs are
designed to give
you an idea how much the Fund's returns
can
fluctuate from year
to year by measuring the best and worst
calendar
years in terms
of total annual return since inception
of each
share class.
These graphs are furnished to you in
accordance
with SEC
regulations. They compare a $10,000
investment in
the
Prudential Global Genesis (Class A,
Class B, Class
C
and Class Z) with a similar investment
in the
Morgan
Stanley Capital International World
Index (the
Index)
by portraying the initial account values
at the
commencement of operations of each
class, and
subsequent account values at the end of
this
reporting
period (May 31), as measured on a
quarterly basis,
beginning
in 1990 for Class A shares, in 1988 for
Class B
shares, in
1994 for Class C shares and in 1996 for
Class Z
shares. For
purposes of the graphs, and unless
otherwise
indicated, in
the accompanying tables it has been
assumed (a)
that the
maximum applicable front-end sales
charge was
deducted
from the initial $10,000 investment in
Class A
shares;
(b) the maximum applicable contingent
deferred
sales charge
was deducted from the value of the
investment in
Class B and
Class C shares, assuming full redemption
on May
31, 1997; (c)
all recurring fees (including management
fees)
were deducted;
and (d) all dividends and distributions
were
reinvested. Class
Z shares do not have a sales charge or
distribution fee. Since
Class Z shares have been in existence
less then
one year, no
average annual returns are shown. Class
B shares
will
automatically convert to Class A shares,
on a
quarterly
basis, beginning approximately seven
years after
purchase.
This conversion feature is not reflected
in the
graph.
The Index is a weighted index comprised
of
approximately
1,500 companies listed on the stock
exchanges of
the U.S.,
Europe, Canada, Australia, New Zealand
and the Far
East. The
combined market capitalization of these
companies
represents
approximately 60% of the aggregate
market value of
the stock
exchanges in the countries comprising
the Index.
The Index is
unmanaged and includes the reinvestment
of all
dividends, but
does not reflect the payment of
transaction costs
and advisory
fees associated with an investment in
the Fund.
The securities
in the Index may differ substantially
from the
securities in
the Fund. The Index is not the only one
that may
be used to
characterize performance of stock funds
and other
indexes may
portray different comparative
performance.
<PAGE>
Prudential Mutual Funds
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
(800) 225-1852
http://www.prudential.com
Directors
Edward D. Beach
Stephen C. Eyre
Delayne Dedrick Gold
Robert F. Gunia
Don G. Hoff
Robert E. LaBlanc
Mendel A. Melzer
Richard A. Redeker
Robin B. Smith
Stephen Stoneburn
Nancy H. Teeters
Officers
Richard A. Redeker, President
Susan C. Cote, Vice President
Thomas A. Early, Vice President
Grace C. Torres, Treasurer
Stephen M. Ungerman, Assistant Treasurer
S. Jane Rose, Secretary
Manager
Prudential Investments Fund Management
LLC Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
Investment Adviser
The Prudential Investment Corporation
Prudential Plaza
Newark, NJ 07101
Distributor
Prudential Securities Incorporated
One Seaport Plaza
New York, NY 10292
Custodian
State Street Bank and Trust Company
One Heritage Drive
North Quincy, MA 02171
Transfer Agent
Prudential Mutual Fund Services LLC
P.O. Box 15005
New Brunswick, NJ 08906
Independent Accountants
Price Waterhouse LLP
1177 Avenue of the Americas
New York, NY 10036
Legal Counsel
Sullivan & Cromwell
125 Broad Street
New York, NY 10004
The views expressed in this report and
information
about the
Fund's portfolio holdings are for the
period
covered by this
report and are subject to change
thereafter.
This report is not authorized for
distribution to
prospective investors unless preceded or
accompanied
by a current prospectus.
744333105 MF136E
744333204 Cat. #430150J
744333303
744333402
