PRUDENTIAL GLOBAL GENESIS FUND INC, N-30D, 1998-08-07

PRUDENTIAL GLOBAL GENESIS FUND INC
N-30D, 1998-08-07

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(ICON)

Prudential
Global
Genesis
Fund, Inc.

ANNUAL
REPORT
May 31, 1998

(LOGO)

<PAGE>
Prudential Global Genesis Fund, Inc.

Performance At A Glance.
Global small-company stocks turned down sharply in May, as it became clearer
that Asia's economic slowdown would affect some small firms around the world.
The Lipper Global Small Company Fund Average for the past year was positive.
However, it was below its five-year average and also trailed the gains of
larger companies. The May downturn pulled the Prudential Global Genesis Fund
below the Lipper average for the year primarily because the earnings of some
of our U.S. companies failed to meet our expectations.

Cumulative Total Returns1 As of 5/31/98
<TABLE>
<CAPTION>
One Five Ten Since
Year Years Years Inception2
<S> <C> <C> <C> <C>
Class A 9.81% 71.97% N/A 112.57%
Class B 9.04 65.46 148.24% 168.09
Class C 9.04 N/A N/A 31.68
Class Z 10.22 N/A N/A 25.55
Lipper Global
Small Co. Fund Avg.3 11.90 96.84 182.83 ***
</TABLE>

Average Annual Total Returns1 As of 6/30/98
<TABLE>
<CAPTION>
One Five Ten Since
Year Years Years Inception2
<S> <C> <C> <C> <C>
Class A -3.11% 10.35% N/A 8.07%
Class B -3.76 10.49 8.81% 9.41
Class C 0.24 N/A N/A 5.96
Class Z 2.33 N/A N/A 10.58
</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 total 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 B shares will automatically convert to
Class A shares, on a quarterly basis, approximately seven years after purchase.
Class C shares have a 1% CDSC for one year. Class Z shares are not subject to
sales charge or distribution fee.

2Inception dates: Class A, 1/22/90; Class B, 1/29/88; Class C, 8/1/94; and
Class Z, 9/16/96.

3Lipper returns are for all funds in each share class for the one-, five-, and
ten-year periods.

***Lipper Since Inception returns are 137.76% for Class A; 213.03% for Class B;
71.14% for Class C; and 18.76% for Class Z based on all funds in each share
class.

How Investments Compared.
(As of 5/31/98)
(GRAPH)

U.S. General General U.S.
Growth Bond Muni Debt Taxable
Funds Funds Funds Money Funds

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.

U.S. Taxable Money 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 investing primarily 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 objective.

Which Market Matters.
We monitor and adjust our country allocations because sometimes economic
trends are so strong they overwhelm the impact of individual companies'
business strategies and management quality. Today, European companies are
generally benefiting from the quickening pace of economic activity, while most
Asian firms are suffering from a slowing regional economy and difficulty in
getting needed credit and foreign currencies.

Strategy Session.

We Like Europe.
We increased our holdings in Continental Europe and the United Kingdom
significantly to benefit more from Europe's economic acceleration. Europe is
still in the early stages of a productivity boom, with a long way to go. Its
economic expansion is fueled by low interest rates. The increased demand for
stocks bodes well for future returns. We increased our holdings in Continental
Europe to 26% and in the U.K. to 15% of total assets as of May 31, 1998.

We are somewhat more focused in Spain, Italy, and Scandinavia. We are looking
for companies that have restructured to improve their productivity. For
example, our largest holding is a French contractor, Societe Generale
D'Enterprises (SGE), which has completed a major restructuring of its European
operations. Cubiertas, a Spanish building contractor, is benefiting from its
restructuring, a construction revival in Spain, and expansion into Latin
America.

The U.S. stock market remains expensive, while earnings have begun to decline.
However, the earnings growth of smaller companies has held up and their prices
have not risen as much as those of larger companies. We are focusing on
companies whose earnings are not exposed to Asian weakness, as well as on
attractively priced technology and oil service companies.

We reduced our holdings in Japan and the Pacific to six percent of assets as
of May 31. Although we remain optimistic about their long-term prospects, we
will stay defensive in the near future.

Our Latin American holdings are up to three percent of assets. Mexican
consumers are buying, buoyed by economic expansion above six percent a year.

Portfolio Composition.
Sectors expressed as a percentage of
net assets as of 5/31/98.
(PIE CHART)

<PAGE>
What Went Well.

Taking Profits, Buying Value.
Our U.S. companies that supply productivity-enhancing goods and services
performed particularly well over the past year. Day Runner is a publisher of
personal diaries that is expanding business by adding new products. American
Management Systems is an international technological consulting firm. It has
strong sales to the U.S. government and the growing telecommunications
industry. We took our profits on In Focus Systems, which does presentation
consulting and sells liquid crystal displays.

Other U.S. holdings with strong performances included BJ Services, a leading
provider of pressure pumping and other services for the production of oil and
natural gas. The company's record revenues and profits are financing stock
repurchases and further growth. We reduced our holdings substantially before
concerns about low oil prices affected the stock. We sold all of our
inexpensively acquired stake in Allied Holdings, an auto hauler that improved
its earnings and its stock price.

In Europe, our U.K., French, and Swiss holdings performed particularly well.
John Mowlem & Co. (a construction company) in the U.K. and Mikron Holdings
(production machinery and robots) and Sarna Kunstoff (specialty chemicals) in
Switzerland are among our larger high-performing holdings.

And Not So Well.
Earnings Disappointments.
Some of our U.S. holdings had earnings disappointments and the stock markets
reacted quickly to any sign of trouble. When a company we own disappoints, we
will sell if there has been an erosion of the company's long-term position,
but we may buy more if we still believe it is a sound investment. For example,
although our shares of Compdent declined, we added to our holdings at a lower
price. By the end of our reporting period, it was on the way up again, 30%
above its low.

In other cases, we reduced or eliminated our positions. Reptron, a
manufacturer and distributor of electronic goods, grew too fast for its
management skills, in our view. Actel Corporation, a manufacturer of
semiconductor logic devices (special purpose computer chips) faced slowing
demand for communications equipment and difficulty introducing an important
new product. We also substantially reduced our position in United Dental Care.

Five Largest Holdings.
1.7% Societe Generale
D'Enterprises S.A.
Construction
1.4% Compdent Corp.
Health Care
1.2% Mikron Holdings AG
Machinery & Engineering
1.1% American Management
Systems, Inc.
Data Processing &
Reproduction
1.1% Mail-Well, Inc.
Printing

Expressed as a percentage of net assets as of 5/31/98.

Looking Ahead.
We are especially attracted to small European companies whose sales are
growing with the accelerating economy and whose margins are benefiting from
restructuring programs. This is a scenario that may run for several years.
Our U.S. holdings are relatively defensive consumer companies, inexpensive
technology stocks, niche manufacturing firms, and health care stocks. We have
less than our normal U.S. weighting. Our Latin American holdings are primarily
focused on Mexico, which has underperformed the global markets in 1998 despite
healthy growth prospects. We have reduced Pacific region and Japanese exposure
because stocks in the region are generally expensive for their current
business prospects.
- -------------------------------------------------------------------------------
1

<PAGE>
Global Opportunity Favors Small Companies
Fund Manager Steve Auth explains why small-company stocks represent value
today.

Q.Why should investors consider small-company stocks today?
A. Smaller companies are traditionally expected to grow faster than larger,
more established companies because they are more nimble and have less earnings
inertia. They are starting from a smaller base, so it takes less for them to
expand their businesses.

Q. What are the prospects for global small-cap stocks?
A. By our estimates, earnings of smaller companies in the rapidly changing
European economy will grow 15% to 20% annually over the next three years, a
bit better than European large-company earnings. In the U.S., where large-
company earnings growth has been slowing for two years, we expect earnings to
grow at single-digit rates, compared with rates in the mid-teens for smaller
firms. Although the Japanese economy is declining today, and earnings
prospects generally are not good, we have found a number of exciting smaller
companies. They are in dynamic growth niches, which are expanding rapidly.

Q. What are we paying for this growth potential?
A. That's what's unusual today. Normally we do pay more for each dollar of
projected earnings of small firms because of their greater growth potential.
Today, however, global investors have "flown to quality" -- they have
preferred the large, well-known companies with diverse markets. As a result,
we now pay significantly less for a dollar of small- company profits than we
do for those of large companies. We estimate that global small-company stocks
are selling at almost a 20% discount to large company stocks, on average,
despite their superior growth prospects.

Q. How does this affect buying opportunities?
A. Take Japan as an example: Japanese stocks have been much more expensive
than stocks elsewhere and they still are, despite their falling market over
the past year. However, we find a much larger gap in price between large and
small firms. Investors have had more difficulty identifying good small
Japanese companies -- they are followed by only four analysts, on average,
compared with more than six analysts for U.S. small companies and nearly 12
analysts for European ones. (Large companies in all markets are followed by
more analysts.) Our Tokyo-based team gives us local insight with Western
analytical tools. We expect price/earnings ratios for Japanese stocks to come
nearer to the same levels we find in the rest of the world. Small-company
stocks have much less distance to travel.

(PHOTO)
- -------------------------------------------------------------------------------

2
<PAGE>
President's Letter July 13, 1998
(PHOTO)
See You On the Net!

Dear Shareholder:
We are proud to be part of the worldwide web and we invite you to visit our
two web sites, if you have not already done so. Yes, we currently offer two
sites--each with its own distinctive identity.

http://www.prudential.com
The Prudential web site features information on personal investing, retirement
planning, commercial and residential real estate opportunities, as well as
insurance products for life, health, home and property.

You can look up performance data on your Prudential mutual funds, learn about
proven investment strategies, or take one of our many interactive quizzes that
will help guide you in determining long-term goals--like how much to save for
your child's college education or for your retirement.

http://www.prusec.com
The Prudential Securities Virtual Branch Office is a full-service brokerage
web site specifically designed to provide investors with the information they
need to make informed financial decisions. It was rated the No. 1 full-service
brokerage web site of its type by Financial Net News (February 1998), a
subsidiary of Institutional Investor magazine, and was also rated among the
top corporate web sites by Fortune magazine (Winter 1998).

What investors can find here are--daily market commentaries, stock quotes,
economic forecasts, product news, and current market research, in addition to
interactive investing programs. Investors, through their Prudential Securities
Financial Advisors, may also enroll in Prudential OnlineR and have access to
their personal account information which includes balances, security values,
transactions and account activities. They can also easily E-mail their
Financial Advisor.

Both sites also contain professional opportunities for people who are
searching for employment or considering a change of career paths.

We plan to make further enhancements to our web pages as the year progresses.
So please, the next time you are "web browsing" or "surfing the net," pay us a
visit. Let us know what you think and what you'd like to see added in the
future.

Sincerely,
Brian M. Storms
President, Prudential Mutual Funds & Annuities
- -------------------------------------------------------------------------------
3

<PAGE>
Portfolio of Investments as
of May 31, 1998 PRUDENTIAL GLOBAL GENESIS FUND, INC.
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Value
Shares Description (Note 1)
<C> <S> <C>
------------------------------------------------------------
LONG-TERM INVESTMENTS--95.5%
COMMON STOCKS--92.5%
------------------------------------------------------------
Australia--0.2%
190,150 Goodman Fielder, Ltd. (Food
Processing) $ 284,928
- ------------------------------------------------------------
Brazil--0.1%
202,000 Companhia Forca E Luz Cataguazes
(Utilities-Electric) 20,284
847,000 Telecomunicacoes de Sao Paulo S.A.
(Telecommunication Services) 128,863
-------------
149,147
- ------------------------------------------------------------
Canada--1.5%
25,300 Canadian Western Bank Edmonton
(Banking) 399,533
53,400 Clearnet Communications, Inc.
(Cellular Communications) 610,762
48,600 International Verifact, Inc.(a)
(Computers) 330,351
14,000 Laurentian Bank of Canada (Banking) 324,419
20,200 LGS Group, Inc. (Computer Software
& Services) 233,005
105,600 Sedna Geotech, Inc.(a) (Mineral
Resources) 79,756
-------------
1,977,826
- ------------------------------------------------------------
Chile--0.4%
14,100 Laboratorio Chile S.A. (ADR)
(Medical Devices) 250,275
28,000 Quinenco S.A. (ADR)
(Telecommunication Services) 266,000
-------------
516,275
- ------------------------------------------------------------
Denmark--0.3%
30,097 Jacob Holm & Sons A/S(a) (Textiles) 420,423
- ------------------------------------------------------------
France--5.4%
9,359 Ciments Francais (Basic
Industries-Manufacturing) 584,615
4,372 Compagnie Francaise d'Etudes et de
Construction Technip (Building &
Construction) $ 626,522
38,433 Dollfus-Mieg & Cie S.A. (Textiles) 1,058,508
381 Galeries Lafayette (Retail) 369,081
8,061 Geodis (Transportation/Shipping) 632,784
2,239 GFI Industries S.A. (Machinery &
Engineering) 609,926
667 Groupe Flo(a) (Restaurants) 39,771
2,706 Havas Advertising S.A.
(Advertising) 571,725
53,082 Lectra Systemes(a) (Computer
Software & Services) 414,918
48,305 Societe Generale D' Enterprises
S.A.(a) (Construction) 2,234,811
-------------
7,142,661
- ------------------------------------------------------------
Germany--1.0%
10,208 Pfandbriefbank Hypothek (Banking) 816,549
5,983 Schwarz Pharma AG (Pharmaceuticals) 499,365
-------------
1,315,914
- ------------------------------------------------------------
Hong Kong--1.7%
434,000 ASM Pacific Technology, Ltd.
(Machinery & Engineering) 294,038
1,492,000 Innovative International Holdings,
Ltd. (Automotive Parts) 288,811
170,000 Li & Fung, Ltd. (Consumer Products) 263,260
2,107,000 Lung Kee (Bermuda) Holdings, Ltd.
(Industrial Components) 516,621
727,000 QPL International Holdings, Ltd.(a)
(Electronic Components) 170,750
196,500 Varitronix International, Ltd.
(Electronic Components) 412,069
1,179,000 Wong's International Holdings, Ltd.
(Electronic Components) 270,825
116,000 Yips Hang Cheung Holdings(a)
(Chemicals) 7,111
-------------
2,223,485
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements. 4

<PAGE>
Portfolio of Investments as
of May 31, 1998 PRUDENTIAL GLOBAL GENESIS FUND, INC.
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Value
Shares Description (Note 1)
<C> <S> <C>
------------------------------------------------------------
Ireland--1.1%
43,676 Adare Printing Group PLC (Printing) $ 616,923
100,699 Anglo Irish Bank Corp. PLC
(Banking) 275,229
63,312 DCC PLC (Diversified Operations) 558,926
-------------
1,451,078
- ------------------------------------------------------------
Italy--2.5%
22,221 Banca Popolare Di Bergamo Credito
Vaesino SpA (Banking) 523,631
123,999 Banca Popolare di Milano (Banking) 1,117,824
88,155 Bulgari SpA (Retail) 520,214
18,723 Mediolanum SpA (Life Insurance) 626,744
168,237 Pirelli SpA (Misc. Materials &
Commodities) 555,670
-------------
3,344,083
- ------------------------------------------------------------
Japan--4.1%
1,200 Advantest Corp. (Electronic
Components) 73,939
13,600 Asatsu, Inc. (Advertising) 268,721
10,000 Asia Securities Printing Co.
(Printing) 82,059
2,000 Bellsystem, Inc. (Communications) 264,891
5,000 C Uyemura & Co. (Chemicals) 143,603
41,000 Calsonic Corp. (Automotive Parts) 145,496
6,700 Daiseki Co., Ltd. (Commercial
Services) 47,022
500 Furusato Industries (Building
Materials & Components) 1,512
5,000 Hogy Medical Co. (Medical Products) 145,042
9,000 Ibiden Co., Ltd. (Electronic
Components) 132,158
3,600 Itoen, Ltd. (Beverages) 110,909
7,000 Japan Lifeline Co., Ltd. (Medical
Technology) 143,603
20,000 Kawasumi Laboratories (Medical
Products) 292,244
2,300 Keyence Corp. (Electronic
Components) 276,315
6,400 Matsumotokiyoshi (Retail) 219,744
11,600 Mimasu Semiconductor Industry Co.,
Ltd. (Electronic Components) 141,947
15,818 Ministop Co., Ltd. (Food/Drug
Retail) 306,852
3,000 Mirai Industry Co., Ltd.
(Miscellaneous) 29,152
8,500 Misumi Corp. (Industrial
Components) 156,631
6,800 Mitsui High-Tec, Inc. (Industrial
Components) $ 166,421
6,000 Nichii Gakkan Co. (Health Services) 198,668
17,200 Nihon Dempa Kogyo (Electronic
Components) 112,913
37,000 Nippei Toyama (Machinery) 119,849
90 Nissen(a) (Merchandising) 162
7,600 Oiles Corp. (Industrial Components) 186,000
3,200 Otsuka Kagu, Ltd. (Retail) 154,558
3,000 Plenus Co., Ltd. (Retail) 47,076
9,000 Pulstec Industrial Co., Ltd. (Misc.
Materials & Commodities) 132,805
5,600 Riso Kagaku Corp. (Office Equipment
& Supplies) 315,220
8,000 Rock Field Co., Ltd. (Foods) 108,260
2,800 Ryohin Keikaku Co., Ltd. (Retail) 249,919
6,200 Square Co., Ltd. (Computer Software
& Services) 198,596
7,800 Union Tool Co. (Machinery &
Engineering) 275,112
18,500 Up, Inc. (Education) 46,608
6,050 Zenrin Co., Ltd. (Electronic
Components) 204,679
-------------
5,498,686
- ------------------------------------------------------------
Mexico--2.4%
25,000 Apasco S.A. de C.V. (Building &
Products) 152,657
195,000 Biper S.A. de C.V.
(Telecommunication Services) 91,016
7,700 Coca Cola Femsa S.A. de C.V. (ADR)
(Beverages) 130,900
212,600 Consorcio Hogar S.A. de C.V.
(Building & Construction) 250,004
52,000 Corporacion Interamericana de Entre
Entretenimiento S.A.
(Miscellaneous Services) 167,010
246,200 Corporativo Fragua S.A.(a) (Retail) 278,917
5,340 Fomento Economico Mexicano S.A.
(Development) 176,220
109,000 G Accion, S.A. de C.V. (Real
Estate-Landlords) 98,788
26,400 Geo Corp. S.A. de C.V. (Building &
Construction) 150,738
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements. 5

<PAGE>
Portfolio of Investments as
of May 31, 1998 PRUDENTIAL GLOBAL GENESIS FUND, INC.
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Value
Shares Description (Note 1)
<C> <S> <C>
------------------------------------------------------------
Mexico (cont'd.)
22,700 Grupo Elektra, S.A. de C.V. (ADR)
(Retail) $ 263,887
379,400 Grupo Financiero Bancomer S.A. de
C.V. (Banking) 189,120
244,800 Grupo Financiero Banorte S.A. de
C.V. (Banking) 332,797
19,200 Grupo Radio Centro S.A. de C.V.
(ADR) (Radio & Television) 247,200
12,100 Industrias Bachoco S.A. (ADR)
(Foods) 136,125
63,700 Kimberly-Clark de Mexico, S.A. de
C.V. (Cosmetics & Soaps) 265,567
19,600 Tubos de Acero de Mexico, S.A.
(Steel-Producers) 292,775
-------------
3,223,721
- ------------------------------------------------------------
Netherlands--2.9%
2,521 BAM Groep N.V. (Building &
Construction) 225,907
23,357 DOCdata N.V. (Miscellaneous) 709,283
17,830 Getronics N.V. (Technology) 886,161
16,128 Internatio-Muller NV (Engineering &
Equipment) 581,139
3,533 Prolion Holdings N.V. (Machinery) 451,271
787 Twentsche Kabel Holdings N.V.
(Diversified Industries) 29,727
29,073 Volker Wessels Stevin-N.V.(a)
(Housing Construction) 924,764
-------------
3,808,252
- ------------------------------------------------------------
Norway--2.4%
146,215 Agresso Group ASA (Computer
Services) 668,011
64,831 ASK ASA(a) (Data Processing &
Reproduction) 540,873
14,713 Seateam Technology ASA(a)
(Telecommunications Equipment) 311,741
39,507 Sondenfjedske ND (Oil Services) 844,927
78,491 Tandberg Television ASA
(Telecommunications Equipment) 805,553
-------------
3,171,105
Peru--0.1%
8,400 Compania De Minas Buenaventura
(ADR) (Construction) $ 131,775
- ------------------------------------------------------------
Portugal--0.4%
10,322 Portugal Telecom S.A.
(Telecommunications) 541,778
- ------------------------------------------------------------
Spain--1.8%
14,336 BCO PASTOR (Gold) 793,976
2,682 Bodegas Y Bebidas S.A. (Beverages) 122,721
5,173 GPO Acciona (Building &
Construction) 1,330,171
3,697 Miquel Y Costas & Miquel S.A.
(Paper) 188,909
-------------
2,435,777
- ------------------------------------------------------------
Sweden--1.1%
29,176 Enator AB (Computer Services) 918,595
15,743 NetCom Systems AB(a)
(Telecommunication Services) 602,019
-------------
1,520,614
- ------------------------------------------------------------
Switzerland--5.1%
376 Gurit-Heberlein AG (Manufacturing) 1,467,503
125 Hilti (Machinery) 114,309
2,379 Kardex AG (Miscellaneous) 777,765
6,222 Mikron Holding AG(a) (Machinery &
Engineering) 1,593,771
292 Phonak Holding AG (Medical
Products) 275,565
2,190 PubliGroupe S.A. (Advertising) 696,785
601 Sarna Kunststoff Holdings AG(a)
(Building & Products) 1,134,344
172 SIG Schweizerische
Industrie-Gesellschaft Holding
AG (Industrial Machinery) 162,899
2,089 Valora Holdings (Restaurants) 566,783
-------------
6,789,724
- ------------------------------------------------------------
Thailand--0.1%
134,320 Thai Storage Battery Public Co.,
Ltd. PLC (Automotive Parts) 136,349
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements. 6

<PAGE>
Portfolio of Investments as
of May 31, 1998 PRUDENTIAL GLOBAL GENESIS FUND, INC.
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Value
Shares Description (Note 1)
<C> <S> <C>
------------------------------------------------------------
United Kingdom--15.3%
6,830 Alliance UniChem PLC
(Pharmaceuticals) $ 56,631
75,719 Arriva PLC (Diversified Industries) 551,205
214,674 Baird (William) PLC (Textiles &
Apparel) 833,930
75,462 Blacks Leisure Group PLC (Retail) 453,262
89,223 British-Borneo Petroleum Syndicate
PLC (Oil & Gas
Exploration/Production) 560,675
102,549 Cadcentre Group PLC(a) (Computers) 493,772
73,544 Capita Group PLC (Merchandising) 651,809
290,769 Datrontech Group PLC (Electronic
Components) 579,004
98,393 David Brown Group PLC
(Manufacturing) 425,582
240,923 Dialog Corp. PLC(a) (Computer
Services) 570,190
17,207 Dr. Solomon's Group PLC(a) (ADR)
(Computer Software & Services) 507,607
165,704 Finelist Group PLC (Automotive
Parts) 979,073
158,262 FirstGroup PLC (Transportation-Road
& Rail) 1,121,088
149,926 FKI PLC (Manufacturing) 513,889
21,996 Games Workshop Group PLC (Toy
Manufacturer) 190,280
133,158 Headlam Group, PLC (Distribution/
Wholesalers) 858,495
168,189 Hewden Stuart PLC (Auto/Equipment
Rental) 565,507
25,199 Hozelock Group PLC (Farm &
Industrial Machinery) 150,124
1,048 Icon PLC (ADR)(a) (Retail) 26,724
96,329 Jarvis PLC (Construction) 1,202,796
250,301 Jarvis Hotels PLC (Hotels) 694,520
68,689 Johnson Matthey PLC (Electronics) 695,108
138,934 Johnston Press PLC (Publishing) 535,173
80,370 London International Group, PLC
(Health Care) 255,801
92,603 Matalan PLC (Retail) 426,233
173,395 Mayflower Corp. PLC (Automobiles &
Trucks) 679,237
692,951 Mowlem (John) & Co. PLC
(Construction) 1,453,380
33,303 Nestor Healthcare Group PLC (Health
Care) 177,748
162,062 Partco Group PLC (Automotive) 814,714
4,295 Perpetual (Financial Services) 301,443
242,593 Skillsgroup PLC (Computer Services) $ 1,187,881
388,808 Skyepharma PLC(a) (Drugs & Medical
Supplies) 526,728
127,447 Westminster Healthcare Holdings PLC
(Health Services) 634,458
90,009 WPP Group PLC (Advertising) 575,898
-------------
20,249,965
- ------------------------------------------------------------
United States--42.6%
67,900 Actel Corp. (Technology) 865,725
14,300 ACX Technologies, Inc.(a)
(Diversified Industries) 324,431
20,900 Aetrium, Inc.(a) (Electronic
Components) 274,313
12,400 AGCO Corp. (Machinery) 311,550
61,600 Allied Products Corp. (Machinery &
Engineering) 1,324,400
34,200 Alternative Resources Corp.(a)
(Miscellaneous) 696,825
40,200 Altron, Inc.(a) (Electrical &
Electronics) 444,713
55,400D American Management Systems,
Inc.(a) (Data Processing &
Reproduction) 1,502,725
51,800 Anadigics, Inc. (Computer Products) 747,862
23,300 Arm Financial, Inc. (Medical
Technology) 476,194
19,300 Artesyn Technologies Inc.(a)
(Electrical Equipment) 316,641
13,600 Billing Concepts Corp. (Commercial
Services) 316,200
15,600 BJ Services Co.(a) (Oil Services) 509,925
8,200 Black Box Corp.(a) (Computer
Software & Services) 326,975
19,200 Borders Group, Inc.(a) (Retail) 595,200
26,000 Brightpoint, Inc.
(Distribution/Wholesalers) 411,125
30,900 Brooks Automation, Inc.(a)
(Electrical Goods) 397,838
23,600 Carramerica Realty Corp. (Real
Estate-Developers) 660,800
31,000 Cellstar Corp.(a) (Distribution/
Wholesalers) 932,906
18,300 Centennial Cellular Corp.(a)
(Cellular Communications) 640,500
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements. 7

<PAGE>
Portfolio of Investments as
of May 31, 1998 PRUDENTIAL GLOBAL GENESIS FUND, INC.
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Value
Shares Description (Note 1)
<C> <S> <C>
------------------------------------------------------------
United States (cont'd.)
14,200 Centerpoint Properties Trust (Real
Estate) $ 481,025
50,300 Claire Stores, Inc. (Retail) 946,269
34,000 Clayton Williams Energy, Inc.(a)
(Oil & Gas
Exploration/Production) 357,000
127,200 Compdent Corp.(a) (Health Care) 1,876,200
44,800 Complete Management, Inc. (Health
Care) 302,400
64,900 Cooker Restaurant Corp.
(Restaurants) 681,450
32,500 Cost Plus, Inc. (Real Estate) 962,812
38,800 Day Runner, Inc.(a) (Consumer
Goods) 853,600
9,200 DENTSPLY International, Inc.
(Dental Supplies) 310,500
31,500 Digital Microwave Corp.
(Appliances) 304,172
23,800 Electro Scientific Industries,
Inc.(a) (Electronic Components) 797,300
10,500 Etec Systems, Inc.(a) (Electronic
Components) 383,906
9,350 Family Golf Centers, Inc.(a)
(Leisure) 245,438
23,000 Faro Technologies, Inc.(a)
(Electronic Components) 248,688
21,200 FBL Financial Group, Inc.
(Financial Services) 594,925
8,500 Financial Security Assurance
Holdings, Ltd. (Financial
Services) 503,625
52,500 Foodmaker, Inc.(a) (Restaurants) 885,937
29,900 Frontier Insurance Group, Inc.
(Financial Services) 732,550
54,800 Galoob Toys, Inc. (Retail) 606,225
21,600 Gaylord Container Corp.
(Containers) 180,900
25,800 General Scanning, Inc.(a)
(Industrial Components) 390,225
8,300 Golf Trust of America, Inc. (Real
Estate) 271,825
43,300 Hall, Kinion & Assoc., Inc.(a)
(Human Resources) 611,612
37,100 Imax Corp.(a) (Electronic
Components) 936,775
12,900 Interim Services, Inc.(a)
(Financial Services) 374,906
1,000 International Verifact, Inc.(a)
(Computers) 6,813
19,900 Invacare Corp. (Health Care) 524,862
36,600 Invivo Corp.(a) (Health Care) 434,625
16,900 Jabil Circuit, Inc.(a)
(Electronics) 575,656
27,000 Kilroy Realty Corp.(a) (Real
Estate) 707,062
24,800 Kulicke & Soffa Industries, Inc.(a)
(Electrical Goods) $ 424,700
25,500 Lam Research Corp.(a)
(Semiconductor & Related
Devices) 607,219
44,700 Landec Corp.(a) (Chemicals) 312,900
26,000 Liberty Property Trust (Real
Estate) 687,375
32,400 Mail-Well, Inc.(a) (Printing) 1,490,400
24,590 Medical Assurance, Inc.(a)
(Insurance) 679,299
16,400 Microchip Technology, Inc.
(Industrials) 401,800
35,600 Natural Microsystems Corp.(a)
(Telecommunications) 762,062
12,000 NCI Building Systems, Inc. (Steel &
Metals) 636,750
20,300 Nichols Research Corp.(a)
(Electronics) 487,200
38,200 Northwest Pipe Co.(a) (Steel &
Metals) 869,050
22,400 Omniquip International, Inc.
(Machinery & Equipment) 491,400
38,700 P-Com, Inc. (Network Systems) 580,500
36,000 Pairgain Technologies, Inc.(a)
(Telecommunications) 562,500
21,700 Parkway Properties, Inc. (Real
Estate) 671,344
18,950 Patterson Dental Co.(a) (Health
Care) 615,875
7,900 Perceptron, Inc.(a) (Commercial
Services) 96,775
11,500 Photronics, Inc.(a) (Electronic
Components) 303,313
39,100 Power-One, Ltd.(a) (Energy
Equipment) 386,113
24,100 Pride International, Inc. (Energy) 540,744
36,200 Quanex Corp. (Steel & Metals) 1,124,462
24,600 RDO Equipment Co.(a) (Retail) 424,350
40,000 Remec, Inc. (Aerospace/Defense) 575,000
35,500 Rowan Companies, Inc.(a) (Oil & Gas
Services) 907,469
16,000 Rural/Metro Corp.
(Security/Investigation
Services) 378,000
21,600 Sawtek, Inc.(a) (Electronic
Components) 554,175
27,700 SCI Systems Inc.(a) (Electronic
Components) 945,262
57,300D Scientific Games Holdings Corp.(a)
(Consumer Goods) 1,210,462
29,400 Sequent Computer Systems, Inc.(a)
(Computers) 486,937
17,100 Southern Pacific Funding Corp.(a)
(Other Financial Intermediaries) 262,913
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements. 8

<PAGE>
Portfolio of Investments as
of May 31, 1998 PRUDENTIAL GLOBAL GENESIS FUND, INC.
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Value
Shares Description (Note 1)
<C> <S> <C>
------------------------------------------------------------
United States (cont'd.)
14,000 SpeedFam International, Inc.(a)
(Electronics) $ 273,000
29,900 Suburban Lodges America, Inc.
(Hotel/Motel) 480,269
44,600 Summit Design, Inc.(a) (Software) 663,425
7,900 Tech Data Corp.(a) (Distribution/
Wholesalers) 320,938
39,800 The BISYS Group, Inc.(a) (Data
Processing & Reproduction) 1,477,575
5,200 The PMI Group, Inc. (Insurance) 390,975
6,500 Trinity Industrial, Inc.
(Machinery) 310,375
26,800 Valmont Industries, Inc. (Steel &
Metals) 536,000
80,100 Vanguard Cellular Systems, Inc.
(Telecommunication Services) 1,436,794
68,500 Vari-Lite International, Inc.(a)
(Electrical Equipment) 479,500
13,200 Veritas DGC, Inc.(a)
(Miscellaneous) 683,925
51,200 Western Wireless Corp.(a)
(Telecommunication Services) 947,200
27,700 Wolverine Tube, Inc.(a) (Steel &
Metals) 1,011,050
-------------
56,653,506
-------------
Total common stocks
(cost US$118,150,163) 122,987,072
-------------
PREFERRED STOCKS--3.0%
- ------------------------------------------------------------
Australia--0.1%
76,000 Star City Holdings, Ltd.(a)
(Leisure & Tourism) 48,400
- ------------------------------------------------------------
Brazil--0.4%
1,450,000 Caemi Mineracao e Metalurgia S.A.
(Mining) 90,763
1,640,000 CIA Elet Est Bahia
(Utilities-Electric) 77,705
66,500 CIA Riograndense Tel
(Telecommunication Services) 71,689
104,000 Telepar-Telec Do Parana S.A.(a)
(Telecommunications) $ 36,618
1,194,000 Telecomunicacoes de Sao Paulo S.A.
(Telecommunication Services) 255,356
-------------
532,131
- ------------------------------------------------------------
Germany--2.1%
2,434 Fresenius AG (Health Care) 486,745
9,546 Henkel KGAA (Chemicals) 855,568
395 Hugo Boss AG (Apparel) 854,631
1,870 Ksb Kl Schanz Beck (Machinery &
Engineering) 565,651
-------------
2,762,595
- ------------------------------------------------------------
Netherlands--0.4%
11,859 Ballast Nedam N.V. (Building &
Construction) 562,876
-------------
Total preferred stocks
(cost US$3,599,013) 3,906,002
-------------
WARRANTS(a)--0.0%
- ------------------------------------------------------------
Hong Kong--0.0%
149,200 Innovative International Holdings,
Ltd.
Expiring 8/31/99 @ HKD0.072
(Automotive Parts) 1,194
166,000 Kingboard Chemical Holdings
Expiring 12/31/98 @ HKD0.23
(Chemicals) 857
339,400 Wong's International Holdings, Ltd.
Expiring 5/31/00 @ HKD0.38
(Electronic Components) 8,365
-------------
Total warrants
(cost US$0) 10,416
-------------
Total long-term investments
(cost US$121,749,176) 126,903,490
-------------
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements. 9

Electronic Components.............................. 5.1%
Retail............................................. 4.2
Miscellaneous...................................... 3.9
Construction....................................... 3.8
Health Care........................................ 3.4
Steel & Metals..................................... 3.1
Machinery & Engineering............................ 3.1
Banking............................................ 3.0
Telecommunication Services......................... 2.9
Real Estate........................................ 2.9
Data Processing & Reproduction..................... 2.7
Computer Services.................................. 2.5
Building & Construction............................ 2.1
Distribution/Wholesalers........................... 1.9
Manufacturing...................................... 1.8
Printing........................................... 1.7
Financial Services................................. 1.7
Restaurants........................................ 1.6
Consumer Goods..................................... 1.6
Advertising........................................ 1.6
Electronics........................................ 1.5
Telecommunications................................. 1.4
Technology......................................... 1.3
Computer Software & Services....................... 1.3
Automotive Parts................................... 1.2
Industrial Components.............................. 1.1
Oil Services....................................... 1.0
Machinery.......................................... 1.0
Computers.......................................... 1.0
Building & Products................................ 1.0
Transportation-Road & Rail......................... 0.9
Chemicals.......................................... 0.9
Cellular Communications............................ 0.9
Telecommunications Equipment....................... 0.8
Insurance.......................................... 0.8
Oil & Gas Services................................. 0.7
Oil & Gas Exploration/Production................... 0.7
Housing Construction............................... 0.7
Diversified Industries............................. 0.7
Textiles & Apparel................................. 0.6
Health Services.................................... 0.6
Gold............................................... 0.6
Electrical Equipment............................... 0.6
Electrical Goods................................... 0.6
Computer Products.................................. 0.6
Automotive......................................... 0.6
Apparel............................................ 0.6
Other.............................................. 17.2
-----
95.5
Other assets in excess of liabilities.............. 4.5
(including Joint Repurchase Agreement)
100.0%
-----
-----
- --------------------------------------------------------------------------------
See Notes to Financial Statements. 10

<PAGE>
Statement of Assets and Liabilities PRUDENTIAL GLOBAL GENESIS FUND, INC.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Assets May 31, 1998
<S> <C>
Investments, at value (cost $125,113,176).................................................................... $130,267,490
Foreign currency, at value (cost $3,730,369)................................................................. 3,663,661
Cash......................................................................................................... 868
Receivable for investments sold.............................................................................. 2,781,052
Forward currency contracts - amount receivable from counterparties........................................... 571,063
Dividends and interest receivable............................................................................ 282,722
Receivable for Fund shares sold.............................................................................. 57,794
Other assets................................................................................................. 2,955
------------
Total assets.............................................................................................. 137,627,605
------------
Liabilities
Payable for investments purchased............................................................................ 3,072,946
Payable for Fund shares reacquired........................................................................... 939,469
Accrued expenses and other liabilities....................................................................... 452,058
Management fee payable....................................................................................... 117,970
Distribution fee payable..................................................................................... 85,745
Withholding taxes payable.................................................................................... 22,526
Due to broker - variation margin............................................................................. 6,517
------------
Total liabilities......................................................................................... 4,697,231
------------
Net Assets................................................................................................... $132,930,374
------------
------------
Net assets were comprised of:
Common stock, at par...................................................................................... $ 89,050
Paid-in capital in excess of par.......................................................................... 124,469,349
------------
124,558,399
Accumulated net realized gain on investments and foreign currency transactions............................ 2,643,958
Net unrealized appreciation on investments and foreign currency translations.............................. 5,728,017
------------
Net assets, May 31, 1998..................................................................................... $132,930,374
------------
------------
Class A:
Net asset value and redemption price per share
($47,258,981 / 2,987,524 shares of common stock issued and outstanding)................................ $15.82
Maximum sales charge (5% of offering price)............................................................... .83
------------
Maximum offering price to public.......................................................................... $16.65
------------
------------
Class B:
Net asset value, offering price and redemption price per share
($83,668,568 / 5,784,096 shares of common stock issued and outstanding)................................ $14.47
------------
------------
Class C:
Net asset value, offering price and redemption price per share
($1,234,426 / 85,334 shares of common stock issued and outstanding).................................... $14.47
------------
------------
Class Z:
Net asset value, offering price and redemption price per share
($768,399 / 48,003 shares of common stock issued and outstanding)...................................... $16.01
------------
------------
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements. 11

<PAGE>
PRUDENTIAL GLOBAL GENESIS FUND, INC.
Statement of Operations
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended
Net Investment Income May 31, 1998
<S> <C>
Income
Dividends (net of foreign withholding taxes
of $169,107)............................ $ 1,598,041
Interest................................... 192,668
------------
Total income............................ 1,790,709
------------
Expenses
Management fee............................. 1,545,460
Distribution fee--Class A.................. 125,771
Distribution fee--Class B.................. 1,018,360
Distribution fee--Class C.................. 17,392
Custodian's fees and expenses.............. 420,000
Transfer agent's fees and expenses......... 341,000
Reports to shareholders.................... 75,000
Registration fees.......................... 50,000
Audit fees and expenses.................... 32,000
Legal fees and expenses.................... 25,000
Directors' fees and expenses............... 24,000
Miscellaneous.............................. 4,412
------------
Total expenses.......................... 3,678,395
------------
Net investment (loss)......................... (1,887,686 )
------------
Realized and Unrealized Gain (Loss)
on Investments and Foreign
Currency Transactions
Net realized gain on:
Investment transactions.................... 14,507,227
Financial futures contracts................ 377,351
Foreign currency transactions.............. 624,555
------------
15,509,133
------------
Net change in unrealized appreciation/depreciation on:
Investments................................ 136,745
Financial futures contracts................ 76,139
Foreign currency transactions.............. (606,115 )
------------
(393,231 )
------------
Net gain on investments and foreign
currencies................................. 15,115,902
------------
Net Increase in Net Assets
Resulting from Operations..................... $13,228,216
------------
------------
</TABLE>

PRUDENTIAL GLOBAL GENESIS FUND, INC.
Statement of Changes in Net Assets
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Increase (Decrease) Year Ended May 31,
in Net Assets 1998 1997
<S> <C> <C>
Operations
Net investment (loss)........ $ (1,887,686) $ (1,924,435)
Net realized gain (loss) on
investments and foreign
currency transactions..... 15,509,133 58,597,973
Net change in unrealized
appreciation/depreciation
on investments and foreign
currencies................ (393,231) (46,993,272)
------------- -------------
Net increase in net assets
resulting from
operations................ 13,228,216 9,680,266
------------- -------------
Dividends from net realized
gains on investment and
foreign currency transactions
Class A...................... (14,893,328) (3,934,145)
Class B...................... (32,320,533) (11,301,405)
Class C...................... (507,925) (157,024)
Class Z...................... (200,133) (1,633)
------------- -------------
(47,921,919) (15,394,207)
------------- -------------
Fund share transactions (Net of
share conversions) (Note 6)
Net proceeds from shares
subscribed................ 158,861,747 200,389,634
Net asset value of shares
issued to shareholders in
reinvestment of dividends
and distributions......... 44,797,423 14,337,461
Cost of shares reacquired.... (215,610,962) (234,621,333)
------------- -------------
Net decrease in net assets
from Fund share
transactions.............. (11,951,792) (19,894,238)
------------- -------------
Total decrease.................. (46,645,495) (25,608,179)
Net Assets
Beginning of year............... 179,575,869 205,184,048
------------- -------------
End of year*.................... $ 132,930,374 $ 179,575,869
------------- -------------
------------- -------------
- ---------------
* Includes undistributed net
investment income of:........ $ -- $ 2,173,253
------------- -------------
</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.
Financial Futures Contracts: A financial futures contract is an agreement to
purchase (long) or sell (short) an agreed amount of securities at a set price
for delivery on a future date. Upon entering into a financial futures contract,
the Fund is required to pledge to the broker an amount of cash and/or other
assets equal to a certain percentage of the contract amount. This amount is
known as the 'initial margin.' Subsequent payments, known as 'variation margin,'
are made or received by the Fund each day, depending on the daily fluctuations
in the value of the underlying security. Such variation margin is recorded for
financial statement purposes on a daily basis as unrealized gain or loss. When
the contract expires or is closed, the gain or loss is realized and is presented
in the statement of operations as net realized gain (loss) on financial futures
contracts.
The Fund invests in financial futures contracts in order to hedge existing
portfolio securities, or securities the Fund intends to purchase, against
fluctuations in value. Under a variety of circumstances, the Fund may not
achieve the anticipated benefits of the financial futures contracts and may
realize a loss. The use of futures transactions involves the risk of imperfect
correlation in movements in the price of futures contracts and the underlying
assets.
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 foreign investment companies and foreign currency 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 decrease undistributed net investment income and increase
accumulated net realized gain on investments by $285,567 for the year ended May
31, 1998. Net realized gains and net assets were not affected by this change.
This was primarily due to reclassification of net operating loss and foreign
currency gains.
- ------------------------------------------------------------
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. Effective July 1, 1998, Prudential Investment Management
Services LLC ('PIMS') became the distributor of the Fund and will serve the Fund
under the same terms and conditions as under the arrangement with PSI.
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%
- --------------------------------------------------------------------------------
14
<PAGE>
Notes to Financial Statements PRUDENTIAL GLOBAL GENESIS FUND, INC.
- --------------------------------------------------------------------------------
of the average daily net assets of the Class A, Class B and Class C shares,
respectively, for the year ended May 31, 1998.
PSI has advised the Fund that it received approximately $39,000 in front-end
sales charges resulting from sales of Class A shares during the year ended May
31, 1998. 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, 1998, it received
approximately $256,200 and $5,600 in contingent deferred sales charges imposed
upon redemptions by certain Class B and Class C shareholders, respectively.
PIC, PSI, PIFM and PIMS are indirect, wholly owned subsidiaries of The
Prudential Insurance Company of America.
The Fund, along with other affiliated registered investment companies (the
'Funds'), has a credit agreement (the 'Agreement') with an unaffiliated lender.
The maximum commitment under the Agreement is $200,000,000. 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 did not borrow any amounts pursuant to the Agreement during the fiscal year
ended May 31, 1998. 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. The Agreement expired on
December 30, 1997 and has been extended through December 29, 1998 under the same
terms.
- ------------------------------------------------------------
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, 1998, the
Fund incurred fees of approximately $327,000 for the services of PMFS. As of May
31, 1998, approximately $26,000 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 nonaffiliates.
- ------------------------------------------------------------
Note 4. Portfolio Securities
Purchases and sales of investment securities, other than short-term investments,
for the year ended May 31, 1998 aggregated $287,072,166 and $316,860,579,
respectively.
On May 28, 1998, the Fund sold 20 Hang Seng Stock Index financial futures
contracts expiring in June, 1998. The value of such contracts at trade date was
$1,219,512. The value of such contracts on May 31, 1998 was $1,143,373, thereby
resulting in an unrealized gain of $76,139.
For federal income tax purposes, the Fund will elect to treat net capital losses
of $2,548,833 incurred in the seven month period ending May 31, 1998 as having
been incurred in the following fiscal year.
The federal income tax basis of the Fund's investments at May 31, 1998 was
$125,136,232 and accordingly, net unrealized appreciation for federal income tax
purposes was $5,131,258 (gross unrealized appreciation--$13,855,446; gross
unrealized depreciation--$8,724,188).
At May 31, 1998 the Fund had outstanding forward currency contracts to sell
foreign currencies as follows:
<TABLE>
<CAPTION>
Value at
Foreign Currency Settlement Current
Sale Contract Date Payable Value Appreciation
- ------------------------ ------------ ---------- --------------
<S> <C> <C> <C>
Hong Kong Dollar
expiring 4/27/99 $1,400,000 $1,378,228 $ 21,772
Japanese Yen
expiring
6/19/98-11/16/98 6,234,805 5,685,514 549,291
------------ ---------- --------------
$7,634,805 $7,063,742 $ 571,063
------------ ---------- --------------
------------ ---------- --------------
</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, 1998, the Fund had a
.27% undivided interest in the repurchase agreements in the joint account. The
undivided interest for the Fund represented $3,364,000 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., Inc., 5.56%, in the principal amount of $300,000,000,
repurchase price $300,139,000, due 6/1/98. The value of the collateral including
accrued interest is $306,379,160.
Credit Suisse First Boston Corp., 5.60%, in the principal amount of
$300,000,000, repurchase price $300,140,750, due 6/1/98. The value of the
collateral including accrued interest is $310,487,462.
Deutsche Morgan Grenfell, Inc., 5.57%, in the principal amount of $300,000,000,
repurchase price $300,139,250, due 6/1/98. The value of the collateral including
accrued interest is $306,000,546.
- --------------------------------------------------------------------------------
15

<PAGE>
Notes to Financial Statements PRUDENTIAL GLOBAL GENESIS FUND, INC.
- --------------------------------------------------------------------------------
J.P. Morgan Securities, Inc., 5.55%, in the principal amount of $148,698,000,
repurchase price $148,766,772, due 6/1/98. The value of the collateral including
accrued interest is $151,672,586.
UBS Securities LLC, 5.55%, in the principal amount of $194,446,000, repurchase
price $194,535,931, due 6/1/98. The value of the collateral including accrued
interest is $198,337,064.
- ------------------------------------------------------------
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 16, 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, 1998:
Shares sold......................... 5,019,452 $ 105,272,172
Shares issued in reinvestment of
dividends and distributions....... 1,015,441 14,134,947
Shares reacquired................... (6,145,726) (127,189,388)
---------- -------------
Net decrease in shares outstanding
before conversion................. (110,833) (7,782,269)
Shares issued upon conversion from
Class B........................... 421,183 8,102,359
---------- -------------
Net increase in shares
outstanding....................... 310,350 $ 320,090
---------- -------------
---------- -------------
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
---------- -------------
---------- -------------
<CAPTION>
Class B Shares Amount
- ------------------------------------ ---------- -------------
<S> <C> <C>
Year ended May 31, 1998:
Shares sold......................... 2,217,860 $ 41,493,238
Shares issued in reinvestment of
dividends and distributions....... 2,349,000 29,996,731
Shares reacquired................... (4,280,118) (75,664,364)
---------- -------------
Net decrease in shares outstanding
before conversion................. 286,742 (4,174,395)
Shares reacquired upon conversion
into Class A...................... (450,967) (8,102,359)
---------- -------------
Net decrease in shares
outstanding....................... (164,225) $ (12,276,754)
---------- -------------
---------- -------------
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)
---------- -------------
---------- -------------
<CAPTION>
Class C
- ------------------------------------
<S> <C> <C>
Year ended May 31, 1998:
Shares sold......................... 557,352 $ 11,511,610
Shares issued in reinvestment of
dividends and distributions....... 36,604 467,431
Shares reacquired................... (601,469) (12,299,491)
---------- -------------
Net decrease in shares
outstanding....................... (7,513) $ (320,450)
---------- -------------
---------- -------------
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)
---------- -------------
---------- -------------
<CAPTION>
Class Z
- ------------------------------------
<S> <C> <C>
Year ended May 31, 1998:
Shares sold......................... 32,016 $ 584,727
Shares issued in reinvestment of
dividends and distributions....... 14,095 198,314
Shares reacquired................... (26,276) (457,719)
---------- -------------
Net increase in shares
outstanding....................... 19,835 $ 325,322
---------- -------------
---------- -------------
September 16, 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,
-------------------------------------------------------
1998 1997 1996(b) 1995(b) 1994(b)
------- ------- ------- ------- -------
PER SHARE OPERATING PERFORMANCE:
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year............ $ 21.30 $ 21.74 $ 18.44 $ 18.75 $ 15.34
------- ------- ------- ------- -------
Income from investment operations
Net investment income (loss).................. (.20) (.14) .05(a) -- (.03)(a)
Net realized and unrealized gain (loss) on
investment and foreign currency
transactions............................... 1.37 1.45 3.34 (.21) 3.83
------- ------- ------- ------- -------
Total from investment operations........... 1.17 1.31 3.39 (.21) 3.80
------- ------- ------- ------- -------
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............................... (6.65) (1.75) -- (.02) (.24)
------- ------- ------- ------- -------
Total distributions........................ (6.65) (1.75) (.09) (.10) (.39)
------- ------- ------- ------- -------
Net asset value, end of year.................. $ 15.82 $ 21.30 $ 21.74 $ 18.44 $ 18.75
------- ------- ------- ------- -------
------- ------- ------- ------- -------
TOTAL RETURN (c):............................. 9.81% 6.74% 18.41% (0.95)% 25.09%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (000)................. $47,259 $57,032 $47,617 $44,051 $29,221
Average net assets (000)...................... $50,309 $47,563 $45,070 $32,430 $16,909
Ratios to average net assets:
Expenses, including distribution fees...... 1.88% 1.91%(d) 1.79%(a) 1.42%(a) 1.48%(a)
Expenses, excluding distribution fees...... 1.63% 1.66%(d) 1.54%(a) 1.17%(a) 1.25%(a)
Net investment income (loss)............... (.71)% (.49)% .26%(a) .02%(a) (.17)%(a)
For Class A, B, C and Z shares:
Portfolio turnover rate....................... 198% 60% 44% 64% 31%
</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 year reported and includes reinvestment of dividends and
distributions.
(d) Restated from prior year.
- --------------------------------------------------------------------------------
See Notes to Financial Statements. 17

<PAGE>
Financial Highlights PRUDENTIAL GLOBAL GENESIS FUND, INC.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class B
------------------------------------------------------------
Year Ended May 31,
------------------------------------------------------------
1998 1997 1996(b) 1995(b) 1994(b)
-------- -------- -------- -------- --------
PER SHARE OPERATING PERFORMANCE:
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year............ $ 20.18 $ 20.87 $ 17.84 $ 18.22 $ 14.93
-------- -------- -------- -------- --------
Income from investment operations
Net investment income (loss).................. (.26) (.33) (.09)(a) (.13)(a) (.16)(a)
Net realized and unrealized gain (loss) on
investment and foreign currency
transactions............................... 1.20 1.39 3.21 (.19) 3.74
-------- -------- -------- -------- --------
Total from investment operations........... .94 1.06 3.12 (.32) 3.58
-------- -------- -------- -------- --------
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............................... (6.65) (1.75) -- (.03) (.24)
-------- -------- -------- -------- --------
Total distributions........................ (6.65) (1.75) (.09) (.06) (.29)
-------- -------- -------- -------- --------
Net asset value, end of year.................. $ 14.47 $ 20.18 $ 20.87 $ 17.84 $ 18.22
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
TOTAL RETURN (c):............................. 9.04% 5.83% 17.51% (1.73)% 24.16%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (000)................. $ 83,669 $120,067 $155,292 $153,670 $174,659
Average net assets (000)...................... $101,836 $133,073 $154,566 $173,591 $102,451
Ratios to average net assets:
Expenses, including distribution fees...... 2.63% 2.66%(d) 2.54%(a) 2.17%(a) 2.25%(a)
Expenses, excluding distribution fees...... 1.63% 1.66%(d) 1.54%(a) 1.17%(a) 1.25%(a)
Net investment (loss)...................... (1.48)% (1.26)% (.48)%(a) (.77)%(a) (.91)%(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 year reported and includes reinvestment of dividends and
distributions.
(d) Restated from prior year.
- --------------------------------------------------------------------------------
See Notes to Financial Statements. 18

<PAGE>
Financial Highlights PRUDENTIAL GLOBAL GENESIS FUND, INC.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class C Class Z
--------------------------------------------- -----------------------------
August 1, September 16,
1994(d) 1996(e)
Year Ended May 31, Through Year Ended Through
------------------------------- May 31, May 31, May 31,
1998 1997 1996(b) 1995(b) 1998 1997
------- ------- ------- --------- ---------- --------------
PER SHARE OPERATING PERFORMANCE:
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period.......... $ 20.18 $ 20.87 $17.84 $ 18.44 $ 21.39 $20.46
------- ------- ------- --------- ---------- -----
Income from investment operations
Net investment gain (loss).................... (.26) (.27) (.08 )(a) (.12)(a) (.38) .03
Net realized and unrealized gain (loss) on
investment and foreign currency
transactions............................... 1.20 1.33 3.20 (.44) 1.65 2.65
------- ------- ------- --------- ---------- -----
Total from investment operations........... .94 1.06 3.12 (.56) 1.27 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............................... (6.65) (1.75) -- (.01) (6.65) (1.75)
------- ------- ------- --------- ---------- -----
Total distributions........................ (6.65) (1.75) (.09 ) (.04) (6.65) (1.75)
------- ------- ------- --------- ---------- -----
Net asset value, end of period................ $ 14.47 $ 20.18 $20.87 $ 17.84 $ 16.01 $21.39
------- ------- ------- --------- ---------- -----
------- ------- ------- --------- ---------- -----
TOTAL RETURN (c):............................. 9.04% 5.83% 17.51 % (2.90)% 10.22% 13.90%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000)............... $ 1,234 $ 1,874 $2,275 $ 1,307 $ 768 $ 603
Average net assets (000)...................... $ 1,739 $ 1,958 $1,809 $ 862 $ 662 $ 188
Ratios to average net assets:
Expenses, including distribution fees...... 2.63% 2.66%(g) 2.54 %(a) 2.27%(a)(f) 1.63% 1.66%(f)(g)
Expenses, excluding distribution fees...... 1.63% 1.66%(g) 1.54 %(a) 1.27%(a)(f) 1.63% 1.66%(f)(g)
Net investment (loss)...................... (1.43)% (1.24)% (.44 )%(a) (.90) (a)(f) (.43)% (.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.
(g) Restated from prior year.
- --------------------------------------------------------------------------------
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, 1998, 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 periods
presented, 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,
1998 by correspondence with the custodian and brokers, provide a reasonable
basis for the opinion expressed above.

PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, New York
July 20, 1998
- --------------------------------------------------------------------------------
20

<PAGE>
Tax Information (Unaudited) 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, 1998) 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, 1998, the Fund paid a long-term capital
gain distribution of $3.41 of which $3.30 is taxable as 28% rate gains and $0.11
is taxable as 20% rate gains, and a short-term capital gain distribution of
$3.24 which is taxable as ordinary income. Further, we wish to advise you that
0% of the ordinary income dividend paid in the fiscal year ended May 31, 1998
qualified for the corporate dividends received deduction available to corporate
taxpayers.
In January 1999, 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 1998. 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, 1998.
- --------------------------------------------------------------------------------
21

<PAGE>

Comparing A $10,000 Investment.
Prudential Global Genesis Fund, Inc. vs.
Morgan Stanley Capital International World Index.

// Prudential Global Genesis Fund, Inc.
- -- Morgan Stanley Capital International World Index

Past performance is not indicative of future results. Principal and investment
return will fluctuate so an investor's shares, when redeemed, may be worth
more or less than their original cost. The boxes on top of the graphs are
designed to give you an idea of 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 Fund (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 Class A, C, and Z shares
and for 10 years for Class B shares, and subsequent account values at the end
of each fiscal year (May 31), as measured on a quarterly basis, beginning in
1990 for Class A shares, 1988 for Class B shares, 1994 for Class C shares, and
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, 1998; (c) all recurring
fees (including management fees) were deducted; and (d) all dividends and
distributions were reinvested. Class Z shares are not subject to a sales
charge or distribution fee. Class B shares will automatically convert to Class
A shares, on a quarterly basis, 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. An investment cannot be made directly in
an index.

Class A Best Year: 1993 60.93%
Worst Year: 1994 -8.20%

(GRAPH)

Average Annual Total Returns - Class A

With Sales Load
8.78% Since Inception
10.32% for 5 Years
4.32% for 1 Year

Without Sales Load
9.45% Since Inception
11.45% for 5 Years
9.81% for 1 Year

Class B Best Year: 1993 59.74%
Worst Year: 1994 -17.32%

(GRAPH)

Average Annual Total Returns - Class B

With Sales Load
10.01% Since Inception
9.52% for 10 Years
10.46% for 5 Years
4.04% for 1 Year

Without Sales Load
10.01% Since Inception
9.52% for 10 Years
10.60% for 5 Years
9.04% for 1 Year

Class C Best Year: 1995 9.82%
Worst Year: 1997 4.53%

(GRAPH)

Average Annual Total Returns - Class C

With Sales Load
7.45% Since Inception
8.04% for 1 Year

Without Sales Load
7.45% Since Inception
9.04% for 1 Year

Class Z

Average Annual Total Returns - Class Z
14.29% Since Inception
10.22% for 1 Year

<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, CFA
Richard A. Redeker
Robin B. Smith
Stephen Stoneburn
Nancy H. Teeters

Officers
Richard A. Redeker, President
Robert F. Gunia, Vice President
Grace C. Torres, Treasurer
Stephen M. Ungerman, Assistant Treasurer
S. Jane Rose, Secretary
Robert C. Rosselot, Assistant 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 07102-3777

Distributor
Prudential Investment Management Services LLC
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077

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
PricewaterhouseCoopers 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