(ICON)
Prudential
Global
Genesis
Fund, Inc.
SEMI
ANNUAL
REPORT
Nov. 30, 1997
(LOGO)
<PAGE>
Prudential Global Genesis Fund, Inc.
Performance At A Glance.
It was a difficult six months for global investors. Thailand's currency
devaluation in July started a wave of selling in Asian stock markets that
later drove stock prices down worldwide. The Prudential Global Genesis Fund
did register a small gain for the six-month reporting period ended November
30, 1997, while the Lipper Global Small Company Average barely broke even.
Over the past 12 months -- the first full year under our new management team
- -- your Fund outperformed its peers by a significant margin primarily because
we sharply reduced our holdings in the troubled Asian markets and increased
our presence in the strong U.S. stock market.
Cumulative Total Returns1 As of 11/30/97
<TABLE>
<CAPTION>
Six One Five Since
Months Year Years Inception2
<S> <C> <C> <C> <C>
Class A 0.66% 8.85% 96.12% 94.86%
Class B 0.30 7.90 88.56 146.59
Class C 0.30 7.90 N/A 21.11
Class Z 0.89 9.10 N/A 14.92
Lipper Global
Small Co. Fund Avg3 0.08 5.15 100.34 ***
</TABLE>
Average Annual Total Returns1 As of 12/31/97
<TABLE>
<CAPTION>
One Five Since
Year Years Inception2
<S> <C> <C> <C>
Class A 0.16% 12.49% 7.70%
Class B -0.47 12.65 9.22
Class C 3.53 N/A 4.92
Class Z 5.65 N/A 9.11
</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.
1 Source: 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 sales charge or a distribution fee.
2 Inception dates: Class A, 1/22/90; Class B, 1/29/88; Class C, 8/1/94; and
Class Z, 9/13/96.
3 The Lipper Fund average includes 33 funds for six months, 31 funds for one
year and 9 funds for five years.
***Lipper Since Inception returns are: Class A, 96.31%; Class B, 149.65%;
Class C, 20.14% and Class Z, 14.13% for all funds in each share class.
How Investments Compared.
(As of 11/30/97)
(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 yields 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, Portfolio 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 goal.
Regional Allocations.
Some influences on a stock's performance, like the current economic crisis in
Asia, affect entire countries or even larger regions. Other influences affect
only particular industries or companies. Our strategy for the first kind of
impact is primarily regional portfolio allocations. These require a broad
perspective, so our decision-making for allocations is centralized. Within
countries our worldwide team of experts, located on-site, buy the stocks that
fit our investment criteria.
Strategy Session.
During the past six months, stock performance has been dominated by large
national and global economic trends. In this kind of market, our return
depends heavily on how we allocate funds to regions of the world. We try to
reduce risk by broadly diversifying the portfolio. We will tilt the portfolio
balance toward countries with the most attractive opportunities. So, in
August, we shifted funds from Asia into North America and Europe. This brought
our North American holdings to 56% -- near the midpoint of our target range
and our largest regional focus. Only 7% of our total net assets were in Asia.
We have been increasing our European holdings, which are now nearly a third of
our total net assets. European companies have less exposure to the Asian
turmoil and also have much more room than those in the U.S. for cost-cutting,
which adds considerable potential for earnings growth. Moreover, unlike Asian
companies, European firms are now firmly convinced of the need to improve
productivity. Low or declining interest rates are likely to nourish the
current economic recovery. We see a buoyant environment for investing in
European small capitalization growth stocks.
Favored Industries. In North America, we favor companies with limited exposure
to the slowdown in Asia, such as health care. We also are maintaining our
technology holdings, which are currently inexpensive despite their excellent
long-term growth prospects. In Europe, we are investing primarily in companies
benefiting from cost cutting and restructuring. We also are finding strong
growth prospects in informa-tion technology and software firms.
In Asia, we are focusing on strong exporters. The prices of many of these
stocks dropped with the rest of the Asian markets, making them particularly
attractive.
Portfolio Composition.
Sectors expressed as a percentage
of total net assets as of 11/30/97.
(PIE CHART)
<PAGE>
What Went Well.
Timely Moves & Stock Selections.
We recognized the implications of Thailand's currency devaluation early. In
August, we began to reduce our holdings in Asia. This timely action prevented
significant additional losses in the autumn plunge of Asian markets.
Our stock selection in the U.S. was very strong, producing a 15% gain for the
half year. A particularly sizable contribution was made by Allied Holdings (up
233%), an undervalued auto hauler that began to get more investor attention
when its earnings outlook improved. Day Runner (up 47%) is a publisher of
personal diaries that is leveraging its strong brand by adding new products.
Our European holdings increased during the reporting period. Dr. Solomon (up
98%), a global publisher of anti-virus computer software, and Volker Wessels
Stevin (up 115%), an undervalued Dutch construction firm, led our European
portfolio.
One of the larger contributors to our returns was the Hong Kong industrial
company Kingboard Chemical. We sold our holdings at a 72% profit. We also
benefited from holding Lung Kee, the dominant manufacturer of mold bases,
which are used to make the molds needed for plastic injection molding. Both
companies prospered from the shift of factories into China, and also have made
market inroads into Europe.
And Not So Well.
Asia Still Hurt Us.
Our Japanese and Southeast Asian holdings declined in value substantially,
despite our defensive actions. Economic growth in Southeast Asia had been very
rapid, but at the cost of lax lending, investment and economic policies. When
Thailand had difficulty raising foreign currencies for its debts, investors
rapidly withdrew from the entire area. Currency and stock markets both fell.
The panic even affected Hong Kong, which had much sounder practices.
Japan had been slowly drawing out of an economic slump. In April, the Japanese
government increased a tax on consumer purchases to 5% from 3%, putting the
brakes on its recovery. The situation was stagnant until the Southeast Asian
crisis caused Japanese stocks to tumble.
Five Largest Holdings.
2.1% Wolverine Tube
Steel & Metals
2.0 American Management
Systems
Data Processing & Repro.
1.9 Actel Corp.
Technology
1.9 Quanex
Steel & Metals
1.5 Rowan Companies
Oil & Gas Services
Expressed as a percentage of net assets as of 11/30/97.
Looking Ahead.
We believe the year ahead will be a rocky one for equity markets everywhere,
with Asian economies possibly slipping into recession and dragging down growth
around the world. The best prospects are in Europe, where we have increased
our holdings to nearly a third of the portfolio. In the U.S., we are focusing
on industries whose exposure to Asia is small.
We have moved some funds into Latin America, where stock markets suffered from
a panicked withdrawal from all emerging markets in the wake of the Asian
crisis. Share prices there currently are low, although basic economic
conditions are sound.
In Asia, we will be watching for signs that the economic conditions have
bottomed before investing more there.
- -------------------------------------------------------------------------------
1
<PAGE>
Where Are the Global Opportunities in 1998?
Fund Manager Steve Auth sees unsettled conditions continuing in Asia, slower
growth in the U.S. and good prospects for Europe.
Q. We reduced our holdings in Asia. Was that just a tactical move, or are you
pessimistic about the region?
A. In the long term, Asia still has the foundation for long and fairly rapid
economic growth: a large, growing, and well-educated population with very high
savings rates. Moreover, stocks and currencies there are significantly cheaper
than when we were selling many of our holdings in August and September.
Unfortunately, the near-term prospects are not good, so we think it is too
early to reinvest heavily.
Q. Is there a key to watch in the Asian crisis?
A. The key to understanding the Asian crisis is Japan. For a long time, the
Japanese economy grew rapidly under a system of central government guidance
combined with policies that kept the cost of capital low and required very
little accountability for investments. That system served as a model for other
Asian countries. Unfortunately, it allows investment blunders to go uncorrected
and magnifies their impact. Japan's economy has been stagnant for some time,
while the government avoided the tough decisions necessary to improve
productivity and resume growth.
The Southeast Asian economies are smaller and don't have the accumulated
reserves to allow them to resist market discipline the way Japan has. As a
result, they are being forced to restructure first. Weaker companies may be
closed or bought out by stronger firms. The process is not likely to go
smoothly because of strong resistance to necessary changes. Stock prices may
fall further in the uncertainty, so we will be only lightly invested in Asia.
Eventually, this process will improve the Asian investment environment.
Q. So where are we investing more?
A. This is a good time to be investing in Europe. It is least exposed to the
weaknesses in Asia because it has less Asian trade than the U.S. It is also
closer to growing markets in Eastern Europe and the Middle East. In addition,
the region is benefiting from its own economic and monetary union. The
policies written into the European monetary unification agreement forced
structural reforms that are producing more competitive companies and lower
inflation. Interest rates have declined and economic growth is accelerating.
Q. And what about the U.S. -- is it still the engine for recent economic
growth?
A. Unfortunately, the U.S. is near the end of the life cycle of that growth
stimulus. U.S. large-cap stocks have tripled in price over the past seven
years, while sales of the S&P 500 companies have only risen by 38%. The
difference is accounted for by improvements in productivity that have boosted
profit margins from 2.7% in 1992 to 8.2% today. But there is a limit as to how
much fat can be cut from a company. We believe that the benefits of
restructuring have largely been achieved. Moreover, the weakness in Asia and a
resulting slowdown for all emerging economies will reduce U.S. exports and
sharpen the impact of competition on price margins.
Smaller companies -- the ones the Global Genesis Fund targets -- will be less
affected by these trends than larger companies, and our holdings include
several that we expect to experience 1998 earnings growth rates above 15%.
Nonetheless, we think the overall investing environment in the U.S. will be
considerably less buoyant in the coming year. After enjoying good returns on
the funds we shifted to the U.S. in late 1996 and the first half of 1997, we
have now begun to scale back some our U.S. holdings.
- -------------------------------------------------------------------------------
2
<PAGE>
President's Letter January 22, 1998
(PHOTO)
New Opportunities for You.
Dear Shareholder:
By many measures, 1997 was very good for investors. Thanks to a sixth-straight
year of moderate economic growth and subdued inflation, the stock market
enjoyed its third year of double-digit returns while bond values rose as
yields declined. But it's time to close the books on 1997 and look ahead to
the opportunities of 1998.
Perhaps the best thing you can do at this time of year is review your
investment strategy. Wise investors know that the only thing constant in life
is change, and now, more than ever before, it's important to review your
situation. Why?
The Federal Taxpayer Relief Act of 1997 is changing the way America invests
and creating exciting new opportunities for you to accumulate wealth, save for
college or build a nest egg for retirement. Consider --
- - Expanded IRAs. Rules governing traditional Individual Retirement Accounts
have been extensively revised. Deductibility and contribution limits have been
broadened as has the list for penalty-free early withdrawals, including first-
time home buyers.
- - New Roth IRAs. The Roth IRA features tax-free distributions and does not
require mandatory withdrawals, which should be of particular interest to
retirees seeking to shelter assets in a tax-free account.
- - New Education IRAs. Similar to a traditional IRA, but specifically designed
for higher education. The new law also creates credits and deductions to help
defray college costs.
- - Revised Capital Gains Tax Rates. The good news is long-term rates are down,
which may benefit certain mutual fund investors. The bad news is there are now
three separate tax rates covering short-, mid- and long-term capital gains,
and you'll probably need a professional tax preparer to sort things out in
1998.
To learn more about the Taxpayer Relief Act and how it may benefit you, please
contact your Prudential Securities Financial Advisor or Pruco Securities
Registered Representative.
Thank you for your continued confidence in Prudential Mutual Funds & Annuities.
Sincerely,
Brian M. Storms
President, Prudential Mutual Funds & Annuities
- -------------------------------------------------------------------------------
3
<PAGE>
Portfolio of Investments as of November 30, 1997
(Unaudited) PRUDENTIAL GLOBAL GENESIS FUND, INC.
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Value
Shares Description (Note 1)
<C> <S> <C>
- ------------------------------------------------------------
LONG-TERM INVESTMENTS--93.5%
COMMON STOCKS--92.4%
- ------------------------------------------------------------
Argentina--0.0%
3,200 Nortel Inversora S.A. ADR(a)
(Telecommunication Services) $ 79,200
- ------------------------------------------------------------
Australia--0.5%
129,300 Burswood Property Trust
(Leisure & Tourism) 96,915
190,150 Goodman Fielder, Ltd. (Food
Processing) 285,050
10,000 Publishing & Broadcasting, Ltd.
(Broadcasting & Publishing) 56,556
100,000 Reinsurance Australia Corp.
(Financial Services) 241,216
-------------
679,737
- ------------------------------------------------------------
Belgium--0.2%
4,344 Neuhaus* (Manufacturing) 289,982
- ------------------------------------------------------------
Canada--2.6%
25,700 Canadian Western Bank Edmonton
(Banking) 347,383
30,900 Du Pont Photomasks, Inc.
(Electronic Components) 1,199,306
32,900 International Verifact, Inc.(a)
(Computers) 235,635
33,100 Laurentian Bank of Canada (Banking) 618,235
145,900 Le Groupe Videotron, Ltd.
(Telecommunications) 1,157,652
19,700 LGS Group, Inc. (Computer Software
& Services) 231,700
99,000 Sedna Geotech, Inc.(a)
(Mineral Resources) 191,167
-------------
3,981,078
- ------------------------------------------------------------
Chile--0.1%
6,100 Santa Isabel S.A. ADR(a) (Retail) 111,706
Denmark--0.1%
16,794 Jacob Holm & Sons A/S(a) (Textiles) $ 217,487
- ------------------------------------------------------------
Federal Republic of Germany--1.4%
4,698 BETA Systems Software AG(a)
(Computer Software & Services) 449,964
930 Buderus AG (Manufacturing &
Engineering) 449,056
13,235 Pfandbriefbank Hypothek (Banking) 750,071
3,688 Schwarz Pharma AG (Pharmaceuticals) 246,842
1,685 SGL Carbon (Industrial Components) 217,250
-------------
2,113,183
- ------------------------------------------------------------
Finland--0.3%
34,249 YIT-Yhtyma OY (Building &
Construction) 423,077
- ------------------------------------------------------------
France--3.6%
10,415 Bertrand Faure S.A. (Automobiles &
Auto Parts) 708,851
5,389 Electronique D2 S.A. (Computers) 647,793
6,309 Etam Development PLC (Retail) 357,829
3,665 Europ Extincteurs (Manufacturing) 239,514
7,420 GEODIS (Transportation/Shipping) 394,460
2,817 GFI Industries S.A. (Machinery &
Engineering) 467,394
14,125 International Metal Service (Steel
& Metals) 176,966
6,217 Le Carbone Lorraine
(Industrial/Materials) 1,671,480
71,198 Lectra Systemes(a) (Computer
Software & Services) 301,354
24,926 Medasys Digital Systems(a) (Medical
Technology) 194,124
2,290 Picogiga(a) (Electronic Components) 69,012
3,305 Vallourec S.A. (Steel & Metals) 199,593
-------------
5,428,370
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements. 4
<PAGE>
Portfolio of Investments as of November 30, 1997
(Unaudited) PRUDENTIAL GLOBAL GENESIS FUND, INC.
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Value
Shares Description (Note 1)
<C> <S> <C>
- ------------------------------------------------------------
Hong Kong--2.1%
434,000 ASM Pacific Technology, Ltd.
(Machinery & Engineering) $ 269,485
19,000 Dao Heng Bank Group, Ltd. (Banking) 44,979
22,000 Esprit Holdings, Ltd. (Retail) 7,186
238,400 Hon Kwok Land Investment, Ltd.
(Real Estate) 49,960
19,000 Hysan Development Co., Ltd. (Real
Estate) 38,097
1,492,000 Innovative International Holdings,
Ltd. (Electrical & Electronics) 262,489
35,000 International Bank Of Asia
(Banking) 13,017
144,000 JCG Holdings, Ltd. (Financial
Services) 58,678
22,500 Kwong On Bank, Ltd. (Banking) 18,919
222,000 Li & Fung, Ltd. (Consumer Products) 298,669
2,167,000 Lung Kee (Bermuda) Holdings, Ltd.
(Industrial Components) 616,716
95,000 National Mutual Asia, Ltd.
(Insurance) 87,869
727,000 QPL International Holdings, Ltd.(a)
(Electronic Components) 451,418
62,000 Sinocan Holdings, Ltd. (Containers) 16,041
4,000 Sun Hung Kai Properties, Ltd. (Real
Estate) 30,529
17,500 Swire Pacific, Ltd. (Conglomerate) 87,610
221,500 Varitronix International, Ltd.
(Electronic Components) 375,361
15,000 Wharf (Holdings) Ltd. (Real Estate) 30,562
1,360,000 Wong's International Holdings, Ltd.
(Electronic Components) 369,455
116,000 Yips Hang Cheung Holdings(a)
(Chemicals) 8,703
-------------
3,135,743
- ------------------------------------------------------------
Indonesia--0.1%
104,000 Bank Tiara Asia (Banking) 10,656
199,375 Budi Acid Jaya (Chemicals) 31,323
189,000 Citacah (Quarrying) 36,147
66,500 Daya Sakti Unggul Corp.(a) (Forest
Products) 9,085
49,000 Indo Rama Synthetics (India), Ltd.
(Textiles) 24,768
25,600 Perusahaan Perkebu (Agricultural
Products) 23,606
-------------
135,585
Ireland--1.1%
42,083 Adare Printing Group PLC (Printing) $ 443,672
84,944 Greencore Group PLC (Foods) 384,707
43,452 IONA Technologies PLC (ADR)(a)
(Computer Software & Services) 866,324
-------------
1,694,703
- ------------------------------------------------------------
Japan--4.4%
800 ADO Electronic Industrial Co., Ltd.
(Electronic Components) 6,633
3,020 Advantest Corp. (Electronic
Components & Instruments) 208,585
14,000 Asia Securities Printing Co.
(Printing) 104,142
4,000 Bamiyan Co., Ltd. (Restaurants) 68,833
34,000 Calsonic Corp. (Automotive Parts) 178,185
20,200 Create Medic Co. (Health Care) 66,362
7,600 Daiseki Co., Ltd. (Commercial
Services) 77,281
20,000 Daiwa Industries, Ltd.
(Manufacturing) 106,066
2,100 Doutor Coffee Co., Ltd.
(Restaurants) 42,544
34,000 Fujikura Rubber (Rubber) 80,582
37,000 Furusato Industries (Building
Materials & Components) 121,553
13,900 Geomatec Co. (Electronic
Components) 130,471
6,600 H.I.S. Co., Ltd. (Leisure &
Tourism) 154,875
1,000 Hibiya Engineering (Engineering &
Equipment) 4,537
10,000 Ibiden Co., Ltd. (Electronic
Components) 163,479
11,600 Impact 21 Co., Ltd. (Distribution/
Wholesalers) 91,642
4,200 Itoen, Ltd. (Beverages) 95,929
12,800 Jonathons Co., Ltd. (Restaurants) 136,165
40,000 Kaga Electronics Co. (Electronic
Components) 242,481
20,000 Kanematsu Electronics, Ltd.
(Electronics) 83,852
22,000 Kawasumi Laboratories (Medical
Products) 275,333
17,900 King Jim (Office Equipment &
Supplies) 156,815
5,000 Komatsu Wall Industry (Office
Equipment & Supplies) 37,545
5,300 Matsumotokiyoshi (Retail) 186,554
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements. 5
<PAGE>
Portfolio of Investments as of November 30, 1997
(Unaudited) PRUDENTIAL GLOBAL GENESIS FUND, INC.
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Value
Shares Description (Note 1)
<C> <S> <C>
- ------------------------------------------------------------
Japan (cont'd.)
13,400 Mimasu Semiconductor Industry Co.,
Ltd. (Electronic Components) $ 221,158
4,880 Ministop Co., Ltd. (Food/Drug
Retail) 125,583
4,000 Mirai Industry Co., Ltd.
(Miscellaneous) 39,423
10,180 Misumi Corp. (Industrial
Components) 164,033
6,800 Mitsui High-Tec, Inc. (Industrial
Components) 134,569
23,000 Nagawa Co., Ltd. (Construction &
Housing) 90,133
5,000 Nichii Gakkan Co. (Health Care) 162,306
12,000 Nichizo Tech, Inc. (Engineering &
Construction) 48,340
22,000 Nihon Dempa Kogyo (Electronic
Components) 197,896
70,000 Nippei Toyama (Machinery) 249,130
250 Nippon Denwa Shisetsu (Engineering
& Equipment) 1,310
11,000 Nippon Seiki (Automotive Parts) 84,321
12,000 Nireco Co., Ltd. (Electronic
Components) 50,593
90 Nissen(a) (Merchandising) 113
17,000 Nitori Co. (Retail) 99,730
15,000 NOK Corp. (Automotive) 86,120
7,600 Oiles Corp. (Industrial Components) 190,230
2,800 Otsuka Kagu, Ltd. (Retail) 139,513
3,270 Paris Miki, Inc. (Retail) 35,809
20,200 Pigeon Corp. (Consumer Goods) 127,193
3,000 Plenus Co., Ltd. (Retail) 85,651
8,000 Rock Field Co., Ltd. (Foods) 85,103
2,900 Ryohin Keikaku Co., Ltd. (Retail) 188,275
26,000 Sasakura Engineering Co., Ltd.
(Machinery) 98,635
72 Sato Corp. (Manufacturing) 1,233
10,000 Sekiwa Real Estate (Real Estate) 33,947
11,000 Shaddy Co., Ltd. (Distribution/
Wholesalers) 70,124
11,000 Shindengen Electronics Mfg.
(Electronic Components) 84,751
6,400 Square Co., Ltd. (Computer Software
& Services) 180,719
27,000 SRL, Inc.(a) (Health Care) 154,171
11,000 Terumo Corp. (Health Care) 172,083
20,000 Trancom Co, Ltd.
(Transportation-Road & Rail) $ 46,932
5,400 Tsuchiya Home Co. (Construction &
Housing) 12,967
37,000 Up, Inc. (Education) 117,357
3,000 Yokowo Co., Ltd.
(Telecommunications Equipment) 11,984
5,500 Zenrin Co., Ltd. (Electronic
Components) 206,500
-------------
6,618,379
- ------------------------------------------------------------
Malaysia--0.1%
43,000 Arab-Malaysian Finance Berhad
(Financial Services) 12,863
4,000 Berjaya Sports Toto Berhad
(Leisure) 8,718
8,000 Cycle & Carriage Bintang Berhad
(Automotive Distribution) 9,299
22,000 Fraser & Neave Holdings Berhad
(Glass Products) 34,786
1,000 IOI Corp. Berhad (Agriculture &
Plantation) 507
15,000 Leader Universal Holdings Berhad
(Industrial Components) 5,128
31,000 Magnum Corp. Berhad (Gaming) 20,049
35,000 Metacorp Berhad (Construction) 13,960
91,000 Metroplex Berhad (Gaming) 31,889
12,000 Public Bank Berhad (Banking) 6,975
-------------
144,174
- ------------------------------------------------------------
Mexico--2.5%
222,000 Corporativo Fragua S.A.(a) (Retail) 313,342
44,700 Empresas ICA Sociedad Controladora
S.A. de C.V. (ADR) (Construction
& Housing) 692,850
74,000 Grupo Continental S.A. (Beverages) 241,309
306,000 Grupo Financiero Bancomer (Banking) 174,996
486,800 Grupo Financiero Banorte (Banking) 675,247
12,500 Grupo Televisa, S.A. de C.V. (ADR)
(Media) 462,500
35,100 Industrias Bachoco S.A. (ADR)
(Foods) 616,444
30,500 TV Azteca, S.A. de C.V. (ADR)(a)
(Broadcasting) 630,969
-------------
3,807,657
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements. 6
<PAGE>
Portfolio of Investments as of November 30, 1997
(Unaudited) PRUDENTIAL GLOBAL GENESIS FUND, INC.
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Value
Shares Description (Note 1)
<C> <S> <C>
- ------------------------------------------------------------
Netherlands--2.9%
6,582 Baan Company N.V.(a) (Technology) $ 470,819
7,188 BAM Groep N.V. (Building &
Construction) 459,008
17,307 Cap Gemini N.V. (Computer Software
& Services) 516,042
15,050 Getronics N.V. (Technology) 516,852
11,442 Internatio-Muller N.V. (Engineering
& Equipment) 351,522
12,277 Twentsche Kabel Holdings N.V.
(Diversified Industries) 678,420
20,703 Ver Ned Uitgevers N.V.
(Broadcasting, Publishing &
Advertising) 495,506
30,262 Volker Wessels Stevin-N.V.(a)
(Housing Construction) 949,492
-------------
4,437,661
- ------------------------------------------------------------
New Zealand--0.2%
1,300,000 Affco Holdings, Ltd. (Food &
Household Products) 328,355
- ------------------------------------------------------------
Norway--1.6%
93,195 Agresso Group ASA (Computer
Services) 304,351
25,737 ASK ASA(a) (Data Processing &
Reproduction) 211,021
24,738 Fred Olsen Energy (Energy) 527,288
14,997 Merkantildata ASA (Technology) 516,858
12,435 Seateam Technology AS(a)
(Telecommunications Equipment) 222,921
24,260 Sondenfjedske ND (Oil Services) 475,362
22,593 Tandberg Television ASA
(Telecommunications Equipment) 226,059
-------------
2,483,860
- ------------------------------------------------------------
The Philippines--0.0%
572,200 Filinvest Land, Inc.(a) (Real
Estate) 25,213
6,900 Manila Electric Co. (Utilities) 23,888
215,400 Marsman & Co., Inc.(a)
(Distribution/ Wholesalers) 6,163
-------------
55,264
Singapore--0.2%
6,000 Amtek Engineering, Ltd.
(Manufacturing) $ 4,555
5,000 City Developments ADR(a) (Real
Estate) 24,624
19,500 Courts (Singapore), Ltd. (Retail) 8,563
8,000 DBS Land, Ltd. (Real Estate) 13,601
5,000 Development Bank of Singapore, Ltd.
(Banks) 47,051
3,000 Elec & Eltek International Co.,
Ltd. (Electronics) 22,050
14,000 Flextech Holdings, Ltd. (Electronic
Components) 14,931
20,000 GP Batteries International, Ltd.
(Electrical Goods) 57,967
105,000 Informatics Holdings, Ltd.
(Computer/Business Training) 47,428
-------------
240,770
- ------------------------------------------------------------
South Korea--0.1%
680 Korea Electric Power Corp.
(Utilities) 7,675
2,790 Yuyang Information & Communications
(Telecommunications
Equipment/Retail Chemicals) 71,569
-------------
79,244
- ------------------------------------------------------------
Spain--1.2%
10,455 Bodegas Y Bebidas S.A. (Beverages) 409,849
11,445 Pescanova S.A. (Food & Household
Products) 134,214
96,240 Sotogrande S.A. (Real Estate
Developers) 206,372
45,308 Tableros De Fibras S.A. (Paper &
Forest Products) 667,946
9,886 Vidrala S.A. (Glass Products) 422,654
-------------
1,841,035
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements. 7
<PAGE>
Portfolio of Investments as of November 30, 1997
(Unaudited) PRUDENTIAL GLOBAL GENESIS FUND, INC.
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Value
Shares Description (Note 1)
<C> <S> <C>
- ------------------------------------------------------------
Switzerland--3.4%
5,044 Agie Charmilles Holding AG(a)
(Machinery) $ 424,296
265 Ascom Holding AG(a)
(Telecommunications) 346,819
232 Gurit-Heberlein AG (Manufacturing) 728,583
1,860 Kardex AG (Storage Systems) 494,157
97 Kuoni Reisen AG (Leisure & Tourism) 360,380
8,185 Mikron Holding AG(a) (Machinery) 1,399,979
459 Prodega AG (Food Distribution) 215,576
931 Saurer AG (Machinery) 683,950
189 SIG PLC AG (Building Materials &
Components) 490,204
-------------
5,143,944
- ------------------------------------------------------------
Thailand--0.1%
10,300 Banpu Public Co., Ltd. (Mineral
Resources) 55,274
100 Phatra Thanakit Public Co., Ltd.
(Financial Services) 60
27,600 Siam City Cement Public Co., Ltd.
(Building & Products) 43,886
1,400 Siam General Factoring Public Co.,
Ltd. (Finance) 146
50,500 Srithai Superware Public Co., Ltd.
(Household Products) 10,037
134,320 Thai Storage Battery Public Co.,
Ltd. PLC (Automotive Parts) 83,429
-------------
192,832
- ------------------------------------------------------------
United Kingdom--10.4%
369,355 Aegis Group PLC (Media) 402,330
765,290 Aggregate Industries PLC (Building
& Products) 665,598
716,744 Albert Fisher Group PLC (Food
Processing) 459,966
67,086 Allied Carpets Group PLC (Retail) 224,324
247,862 Astec (BSR) PLC (Electrical &
Electronics) 483,471
132,919 Baird (William) PLC (Textiles &
Apparel) 482,618
73,374 British-Borneo Petroleum Syndicate
PLC (Oil & Gas
Exploration/Production) $ 547,700
113,032 Cadcentre Group PLC(a) (Computers) 515,399
13,472 CMG PLC (Technology) 298,045
210,589 Cordiant PLC (Advertising) 430,328
28,241 Danka Business Systems PLC (ADR)
(Office Equipment & Supplies) 422,662
169,300 Datrontech Group PLC (Electronic
Components) 278,766
65,269 Domino Printing Sciences PLC
(Office Equipment & Supplies) 426,025
43,682 Dorling Kindersley Holdings PLC
(Publishing) 178,155
9,830 Dr. Solomon's Group PLC (ADR)(a)
(Computer Software & Services) 341,593
25,914 Finelist Group PLC (Automotive
Parts) 144,857
109,236 Firstbus PLC (Transportation-Road &
Rail) 430,756
139,380 FKI PLC (Manufacturing) 431,932
343,154 Fyffes PLC (Food/Drug Retail) 515,772
73,490 Geest PLC (Food Distribution) 455,484
30,347 Goldsmiths Group PLC (Retail) 155,288
65,739 Greencore Group PLC (Foods) 305,305
117,011 Headlam Group PLC (Distribution/
Wholesalers) 645,536
66,834 Henlys Group PLC (Machinery &
Engineering) 461,636
121,350 Johnston Press PLC (Publishing) 430,366
182,412 London International Group, PLC
(Health Care) 469,788
91,470 Low & Bonar PLC (Containers) 447,976
185,583 M.A.I.D. PLC(a) (Computer Services) 561,009
74,664 Mayflower Corp. PLC (Automobiles &
Trucks) 211,836
7,758 Misys PLC (Computer Services) 217,488
568,795 Mowlem (John) & Co. PLC
(Construction) 931,764
128,292 Newsquest Energy, Ltd. (Oil & Gas
Exploration/Production) 548,149
133,526 Partco Group PLC (Automotive) 642,672
105,426 Quadramatic PLC (Manufacturing) 341,844
312,352 TLG PLC (Electrical Goods) 559,150
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements. 8
<PAGE>
Portfolio of Investments as of November 30, 1997
(Unaudited) PRUDENTIAL GLOBAL GENESIS FUND, INC.
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Value
Shares Description (Note 1)
<C> <S> <C>
- ------------------------------------------------------------
United Kingdom (cont'd.)
75,675 UniChem PLC (Pharmaceuticals) $ 407,682
73,419 Westminster Healthcare Holdings PLC
(Health Care) 427,766
-------------
15,901,036
- ------------------------------------------------------------
United States--53.2%
21,100 800-JR CIGAR, Inc.(a) (Tobacco) 580,250
200,100 Actel Corp. (Technology) 2,951,475
17,800 ACX Technologies, Inc.(a)
(Diversified Industries) 477,263
37,800 Aetrium, Inc.(a) (Electronic
Components) 704,025
35,100 AGCO Corp. (Machinery) 960,862
27,400 Allied Holdings, Inc.(a) (Trucking
& Shipping) 544,575
77,000 Allied Products Corp. (Machinery &
Engineering) 1,857,625
22,100 Alternative Resources Corp.(a)
(Human Resources) 541,450
61,400 Altron, Inc.(a) (Electrical &
Electronics) 967,050
60,300 American Homestar Corp.(a) (Home
Builder) 844,200
132,900 American Management Systems,
Inc.(a) (Data Processing &
Reproduction) 3,098,231
114,100 Apria Healthcare Group, Inc.(a)
(Health Care) 1,797,075
45,500 Bertucci's, Inc. (Restaurants) 287,219
13,400 Black Box Corp.(a) (Computer
Software & Services) 477,375
19,400 Borders Group, Inc.(a) (Retail) 554,112
21,300 Brooks Automation Inc.(a)
(Electrical Goods) 452,625
25,100 Castle Dental Centers, Inc.(a)
(Medical Technology) 276,100
12,000 Cellstar Corp.(a)
(Distribution/Wholesalers) 310,500
31,800 Centennial Cellular Corp.(a)
(Cellular Communications) 608,175
4,200 CFM Technologies, Inc.(a)
(Electronic Components) 77,700
9,000 Cincinnati Milacron, Inc.
(Machinery) $ 266,063
71,700 Claire Stores, Inc. (Retail) 1,622,212
32,700 Clayton Williams Energy, Inc.(a)
(Oil & Gas
Exploration/Production) 515,025
18,600 Cleveland-Cliffs, Inc. (Mining) 802,125
37,300 Coherent, Inc.(a) (Health Care) 1,398,750
113,900 Compdent Corp.(a) (Health Care) 2,320,712
64,300 Cooker Restaurant Corp.
(Restaurants) 638,981
56,700 Day Runner, Inc.(a) (Consumer
Goods) 2,204,212
15,600 Electro Scientific Industries,
Inc.(a) (Electronic Components) 648,375
19,200 Etec Systems, Inc.(a) (Electronic
Components) 878,400
19,300 Family Golf Centers, Inc.(a)
(Leisure) 548,844
3,500 Faro Technologies, Inc.(a)
(Electronic Components) 43,094
20,000 FBL Financial Group, Inc.
(Financial Services) 790,000
15,600 Financial Security Assurance
Holdings, Ltd. (Financial
Services) 684,450
70,400 Foodmaker, Inc.(a) (Restaurants) 1,091,200
145,000 Galoob Toys, Inc.(a) (Retail) 1,721,875
38,200 Gaylord Container Corp.
(Containers) 260,238
4,070 Gucci Group N.V. (Apparel) 165,598
7,100 Hadco Corp.(a) (Computers) 440,200
29,400 Imax Corp.(a) (Electronic
Components) 727,650
20,300 In Focus Systems, Inc.(a)
(Technology) 667,362
36,000 Insituform Technologies, Inc.(a)
(Engineering & Construction) 315,000
1,000 International Verifact, Inc.(a)
(Computers) 7,188
21,100 Invacare Corp. (Health Care) 487,938
45,200 Invivo Corp.(a) (Health Care) 389,850
41,700 Kentek Information Systems, Inc.
(Computer Related Equipment) 323,175
17,000 Kulicke & Soffa Industries, Inc.(a)
(Electrical Goods) 468,563
31,800 Lam Research Corp.(a)
(Semiconductor & Related
Devices) 973,875
115,700 Landec Corp.(a) (Chemicals) 549,575
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements. 9
<PAGE>
Portfolio of Investments as of November 30, 1997
(Unaudited) PRUDENTIAL GLOBAL GENESIS FUND, INC.
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Value
Shares Description (Note 1)
<C> <S> <C>
- ------------------------------------------------------------
United States (cont'd.)
7,600 Lattice Semiconductor Corp.(a)
(Electronic Components) $ 428,925
10,400 Lone Star Technologies, Inc.(a)
(Steel - Producers) 301,600
19,300 Mail-Well, Inc.(a) (Printing) 629,662
5,100 Marquette Medical Systems, Inc.(a)
(Medical Products) 114,750
27,800 Medical Assurance, Inc.(a)
(Insurance) 790,562
41,400 Miller Industries, Inc.(a)
(Automotive Parts) 403,650
69,200 Network General Corp.(a) (Computer
Software & Services) 1,306,150
20,200 Nichols Research Corp.(a)
(Electronics) 474,700
90,200 Northwest Pipe Co.(a) (Steel &
Metals) 2,052,050
25,700 NS Group, Inc.(a) (Steel & Metals) 481,875
31,200 O'Reilly Automotive, Inc.(a)
(Automobiles & Parts) 737,100
6,900 Panamerican Beverages, Inc.
(Beverages) 236,325
20,000 Panavision, Inc.(a) (Photography) 460,000
16,900 Park Electrochemical Corp.
(Electronic Components) 443,625
20,900 Patterson Dental Co.(a) (Health
Care) 858,206
25,300 Perceptron, Inc.(a) (Commercial
Services) 559,762
35,400 Photronics, Inc.(a) (Electronic
Components) 1,690,350
19,200 Power-One, Ltd.(a) (Energy
Equipment) 314,400
40,100 Quality Semiconductor, Inc.(a)
(Semiconductor & Related
Devices) 230,575
98,900 Quanex Corp. (Steel & Metals) 2,942,275
9,300 RDO Equipment Co.(a) (Retail) 163,331
19,600 Regal Cinemas, Inc.(a)
(Entertainment) 499,800
120,600 Reptron Electronics, Inc.(a)
(Electronic Components) 1,839,150
36,200 Res-Care, Inc.(a) (Health Care) 850,700
68,900 Rowan Companies, Inc.(a) (Oil & Gas
Services) 2,342,600
16,700 SCI Systems Inc.(a) (Electronic
Components) 765,069
99,700 Scientific Games Holdings Corp.(a)
(Consumer Goods) $ 2,099,931
11,600 Silicon Valley Group, Inc.(a)
(Electronic Components) 275,500
40,100 Southern Pacific Funding Corp.(a)
(Other Financial Intermediaries) 496,238
100,300 Summit Care Corp.(a) (Health Care) 1,579,725
65,000 Summit Design, Inc.(a) (Software) 893,750
43,800 The BISYS Group, Inc.(a) (Data
Processing & Reproduction) 1,401,600
20,700 The PMI Group, Inc. (Insurance) 1,345,500
14,500 Triangle Pacific Corp.(a) (Building
Materials & Components) 465,813
11,500 Triquint Semiconductor, Inc.(a)
(Semiconductor & Related
Devices) 230,000
148,600 United Dental Care, Inc.(a) (Health
Care) 1,913,225
63,900 Valmont Industries, Inc. (Steel &
Metals) 1,389,825
90,100 Vanguard Cellular System, Inc.(a)
(Telecommunications) 1,255,769
34,800 Vari-Lite International, Inc.(a)
(Electrical Equipment) 413,250
19,300 Vital Signs, Inc. (Health Care) 390,825
18,700 Walbro Corp. (Automotive Parts) 272,319
21,800 Watsco, Inc. (Building & Products) 566,800
38,500 Western Wireless Corp.(a)
(Telecommunications) 717,062
100,400 Wolverine Tube, Inc.(a) (Steel &
Metals) 3,187,700
-------------
81,130,441
-------------
Total common stocks
(cost US$145,872,832) 140,694,503
-------------
PREFERRED STOCKS--1.1%
- ------------------------------------------------------------
Australia--0.0%
76,000 Sydney Harbour Casino Holdings,
Ltd.(a) (Leisure & Tourism) 77,317
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements. 10
<PAGE>
Portfolio of Investments as of November 30, 1997
(Unaudited) PRUDENTIAL GLOBAL GENESIS FUND, INC.
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Value
Shares Description (Note 1)
<C> <S> <C>
- ------------------------------------------------------------
Federal Republic of Germany--0.7%
3,862 Fresenius AG (Health Care) $ 654,428
13,523 Moebel Walther AG (Retail) 356,373
-------------
1,010,801
- ------------------------------------------------------------
Netherlands--0.4%
10,968 Ballast Nedam N.V. (Building &
Construction) 544,870
-------------
Total preferred stocks
(cost US$2,266,184) 1,632,988
-------------
WARRANTS(a)--0.0%
- ------------------------------------------------------------
Hong Kong--0.0%
149,200 Innovative International Holdings,
Ltd.
Expiring 8/31/99 @ HKD 4.00
(Automotive Parts) 1,390
166,000 Kingboard Chemical Holdings, Ltd.
Expiring 12/31/98 @ HKD 2.40
(Chemicals) 4,939
339,400 Wong's International Holdings, Ltd.
Expiring 5/31/00 @ HKD 3.80
(Electronic Components) 16,684
-------------
23,013
- ------------------------------------------------------------
Switzerland--0.0%
7,203 Mikron Holding AG
Expiring 12/10/97 @ CHF 3.40
(Machinery & Engineering) 17,167
-------------
Total warrants 40,180
-------------
RIGHTS(a)--0.0%
- ------------------------------------------------------------
Thailand--0.0%
10,592 Siam City Cement Public Co., Ltd.
Expiring 12/01/97 @ THB 4.00
(Building & Products) 1,053
-------------
Total long-term investments
(cost US$148,139,016) 142,368,723
-------------
<CAPTION>
Principal
Amount
(000)
- ------------------------------------------------------------
SHORT-TERM INVESTMENTS--4.2%
- ------------------------------------------------------------
Repurchase Agreements
United States--4.2%
US$6,424 Joint Repurchase Agreement Account
5.740%, 12/01/97
(cost US$6,424,000; Note 5) $ 6,424,000
-------------
- ------------------------------------------------------------
Total Investments--97.7%
(cost US$154,563,016; Note 4) 148,792,724
Other assets in excess of
liabilities--2.3% 3,569,885
-------------
Net Assets--100% $ 152,362,609
-------------
-------------
</TABLE>
- ---------------
(a) Non-income producing security.
ADR--American Depository Receipt.
- --------------------------------------------------------------------------------
See Notes to Financial Statements. 11
<PAGE>
Statement of Assets and Liabilities
(Unaudited) PRUDENTIAL GLOBAL GENESIS FUND, INC.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Assets November 30, 1997
<S> <C>
Investments, at value (cost $154,563,016).................................................................... $148,792,724
Foreign currency, at value (cost $5,644,509)................................................................. 5,504,919
Cash......................................................................................................... 58,914
Receivable for investments sold.............................................................................. 1,666,755
Forward currency contracts - net amount receivable from counterparties....................................... 693,276
Dividends and interest receivable............................................................................ 186,997
Receivable for Fund shares sold.............................................................................. 176,493
Due from broker - variation margin........................................................................... 5,422
Other assets................................................................................................. 3,925
------------
Total assets.............................................................................................. 157,089,425
------------
Liabilities
Payable for investments purchased............................................................................ 3,282,732
Forward currency contracts - net amount payable to counterparties............................................ 548,421
Accrued expenses and other liabilities....................................................................... 374,228
Payable for Fund shares reacquired........................................................................... 285,974
Management fee payable....................................................................................... 127,110
Distribution fee payable..................................................................................... 96,391
Withholding taxes payable.................................................................................... 11,960
------------
Total liabilities......................................................................................... 4,726,816
------------
Net Assets................................................................................................... $152,362,609
------------
------------
Net assets were comprised of:
Common stock, at par...................................................................................... $ 73,957
Paid-in capital in excess of par.......................................................................... 107,490,514
------------
107,564,471
Undistributed net investment income....................................................................... 1,960,123
Accumulated net realized gain on investments and foreign currency transactions............................ 48,608,189
Net unrealized depreciation on investments and foreign currency translations.............................. (5,770,174)
------------
Net assets, November 30, 1997................................................................................ $152,362,609
------------
------------
Class A:
Net asset value and redemption price per share
($48,038,489 / 2,242,108 shares of common stock issued and outstanding)................................ $21.43
Maximum sales charge (5% of offering price)............................................................... 1.12
------------
Maximum offering price to public.......................................................................... $22.55
------------
------------
Class B:
Net asset value, offering price and redemption price per share
($101,990,972 / 5,040,202 shares of common stock issued and outstanding)............................... $20.24
------------
------------
Class C:
Net asset value, offering price and redemption price per share
($1,617,158 / 79,911 shares of common stock issued and outstanding).................................... $20.24
------------
------------
Class Z:
Net asset value, offering price and redemption price per share
($715,990 / 33,179 shares of common stock issued and outstanding)...................................... $21.58
------------
------------
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements. 12
<PAGE>
PRUDENTIAL GLOBAL GENESIS FUND, INC.
Statement of Operations (Unaudited)
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months
Ended
Net Investment Income November 30, 1997
<S> <C>
Income
Dividends (net of foreign withholding
taxes of $78,844).................. $ 791,425
Interest.............................. 74,242
-----------------
Total income....................... 865,667
-----------------
Expenses
Management fee........................ 849,057
Distribution fee--Class A............. 66,741
Distribution fee--Class B............. 568,466
Distribution fee--Class C............. 10,203
Transfer agent's fees and expenses.... 189,000
Custodian's fees and expenses......... 118,000
Registration fees..................... 40,500
Reports to shareholders............... 23,000
Audit fees and expenses............... 21,000
Directors' fees and expenses.......... 10,500
Legal fees and expenses............... 500
Miscellaneous......................... 1,844
-----------------
Total expenses..................... 1,898,811
-----------------
Net investment (loss).................... (1,033,144)
-----------------
Realized and Unrealized Gain (Loss)
on Investments and Foreign
Currency Transactions
Net realized gain on:
Investment transactions............... 13,712,010
Foreign currency...................... 820,014
Financial futures contracts........... 125,002
-----------------
14,657,026
-----------------
Net change in unrealized
appreciation/depreciation on:
Investment transactions............... (10,786,390)
Foreign currency...................... (1,101,727)
Financial futures contracts........... (3,305)
-----------------
(11,891,422)
-----------------
Net gain on investments and foreign
currencies............................ 2,765,604
-----------------
Net Increase in Net Assets
Resulting from Operations................ $ 1,732,460
-----------------
-----------------
</TABLE>
PRUDENTIAL GLOBAL GENESIS FUND, INC.
Statement of Changes in Net Assets (Unaudited)
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months
Ended Year Ended
Increase (Decrease) November 30, May 31,
in Net Assets 1997 1997
<S> <C> <C>
Operations
Net investment (loss)........ $ (1,033,144) $ (1,924,435)
Net realized gain on
investments and foreign
currency transactions..... 14,657,026 58,597,973
Net change in unrealized
appreciation/depreciation
on investments and foreign
currencies................ (11,891,422) (46,993,272)
------------- -------------
Net increase in net assets
resulting from
operations................ 1,732,460 9,680,266
------------- -------------
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................ 134,473,075 200,389,634
Net asset value of shares
issued to shareholders in
reinvestment of dividends
and distributions......... -- 14,337,461
Cost of shares reacquired.... (163,418,795) (234,621,333)
------------- -------------
Net decrease in net assets
from Fund share
transactions.............. (28,945,720) (19,894,238)
------------- -------------
Total decrease.................. (27,213,260) (25,608,179)
Net Assets
Beginning of period............. 179,575,869 205,184,048
------------- -------------
End of period................... $ 152,362,609 $ 179,575,869
------------- -------------
------------- -------------
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements. 13
<PAGE>
Notes to Financial Statements (Unaudited) 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.
- --------------------------------------------------------------------------------
14
<PAGE>
Notes to Financial Statements (Unaudited) 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 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 $820,014 for the period ended
November 30, 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 six
months ended November 30, 1997.
PSI has advised the Fund that it received approximately $19,000 in front-end
sales charges resulting from sales of Class A shares during the
- --------------------------------------------------------------------------------
15
<PAGE>
Notes to Financial Statements (Unaudited) PRUDENTIAL GLOBAL GENESIS FUND, INC.
- --------------------------------------------------------------------------------
six months ended November 30, 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 six months ended November 30, 1997, it
received approximately $153,500 and $5,000 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 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 November 30,
1997. 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 period ended November 30,
1997, the Fund incurred fees of approximately $167,000 for the services of PMFS.
As of November 30, 1997, approximately $27,000 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 non-affiliates.
- ------------------------------------------------------------
Note 4. Portfolio Securities
Purchases and sales of investment securities, other than short-term investments,
for the six months ended November 30, 1997 aggregated $174,605,161 and
$191,711,734, respectively.
On November 30, 1997, the Fund held 7 purchased financial futures contracts
expiring in December, 1997. The cost of such contracts was $476,307. The value
of such contracts on November 30, 1997 was $473,002, thereby resulting in an
unrealized loss of $3,305.
The federal income tax basis of the Fund's investments at November 30, 1997 was
$154,725,678 and accordingly, net unrealized depreciation for federal income tax
purposes was $5,932,955 (gross unrealized appreciation--$10,605,638; gross
unrealized depreciation--$16,538,593).
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 November 30, 1997 the Fund had outstanding forward currency contracts both to
purchase and sell foreign currencies as follows:
<TABLE>
<CAPTION>
Value at
Foreign Currency Settlement Current
Purchase Contract Date Payable Value Depreciation
- ------------------------ ------------ ----------- --------------
<S> <C> <C> <C>
Japanese Yen
expiring 3/5/98-3/25/98 $ 6,631,970 $ 6,172,978 $ (458,992)
Deutsche Mark
expiring
12/17/97-12/18/97 5,715,619 5,626,190 (89,429)
------------ ----------- --------------
$12,347,589 $11,799,168 $ (548,421)
------------ ----------- --------------
------------ ----------- --------------
<CAPTION>
Value at
Foreign Currency Settlement Current Appreciation/
Sale Contract Date Payable Value Depreication
- ------------------------ ------------ ----------- --------------
<S> <C> <C> <C>
Hong Kong Dollar
expiring
4/24/98-4/27/98 $ 639,491 $ 658,310 $ (18,819)
Japanese Yen
expiring 3/4/98-5/13/98 12,177,872 11,503,225 674,647
French Franc
expiring
12/17/97-12/18/97 5,715,619 5,678,171 37,448
------------ ----------- --------------
$18,532,982 $17,839,706 $ 693,276
------------ ----------- --------------
------------ ----------- --------------
</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 November 30, 1997, the Fund
had a 0.58% undivided interest in the repurchase agreements in the joint
account. The undivided interest for the Fund represented $6,424,000 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., 5.74%, in the principal amount of $330,000,000, repurchase
price $330,157,842, due 12/1/97. The value of the collateral including accrued
interest is $337,310,022.
Credit Suisse First Boston Corp., 5.70%, in the principal amount of
$330,000,000, repurchase price $330,156,750, due 12/1/97. The value of the
collateral including accrued interest is $342,024,757.
- --------------------------------------------------------------------------------
16
<PAGE>
Notes to Financial Statements (Unaudited) PRUDENTIAL GLOBAL GENESIS FUND, INC.
- --------------------------------------------------------------------------------
Deutsche Morgan Grenfell, 5.70%, in the principal amount of $330,000,000,
repurchase price $330,156,750, due 12/1/97. The value of the collateral
including accrued interest is $336,600,387.
Morgan Stanley, Dean Witter, Discover & Co., 5.625%, in the principal amount of
$119,585,000, repurchase price $119,641,055, due 12/1/97. The value of the
collateral including accrued interest is $121,976,916.
- ------------------------------------------------------------
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>
Six months ended November 30, 1997:
Shares sold......................... 4,210,873 $ 92,414,910
Shares issued in reinvestment of
dividends and distributions....... -- --
Shares reacquired................... (4,900,837) (107,761,885)
---------- -------------
Net decrease in shares outstanding
before conversion................. (689,964) (15,346,975)
Shares issued upon conversion from
Class B........................... 254,898 5,559,958
---------- -------------
Net decrease in shares
outstanding....................... (435,066) $ (9,787,017)
---------- -------------
---------- -------------
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>
Six months ended November 30, 1997:
Shares sold......................... 1,465,918 $ 30,603,069
Shares issued in reinvestment of
dividends and distributions....... -- --
Shares reacquired................... (2,104,949) (44,002,126)
---------- -------------
Net decrease in shares outstanding
before conversion................. (639,031) (13,399,057)
Shares reacquired upon conversion
into Class A...................... (269,088) (5,559,958)
---------- -------------
Net decrease in shares
outstanding....................... (908,119) $ (18,959,015)
---------- -------------
---------- -------------
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
- ------------------------------------
Six months ended November 30, 1997:
Shares sold......................... 532,449 $ 11,174,179
Shares issued in reinvestment of
dividends and distributions....... -- --
Shares reacquired................... (545,385) (11,485,598)
---------- -------------
Net decrease in shares
outstanding....................... (12,936) $ (311,419)
---------- -------------
---------- -------------
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)
---------- -------------
---------- -------------
</TABLE>
- --------------------------------------------------------------------------------
17
<PAGE>
Notes to Financial Statements (Unaudited) PRUDENTIAL GLOBAL GENESIS FUND, INC.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class Z Shares Amount
- ------------------------------------ ---------- -------------
<S> <C> <C>
Six months ended November 30, 1997:
Shares sold......................... 12,577 $ 280,917
Shares issued in reinvestment of
dividends and distributions....... -- --
Shares reacquired................... (7,566) (169,186)
---------- -------------
Net increase in shares
outstanding....................... 5,011 $ 111,731
---------- -------------
---------- -------------
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
---------- -------------
---------- -------------
</TABLE>
- ---------------
* Commencement of offering of Class Z shares.
- ------------------------------------------------------------
Note 7. Distributions
On December 11, 1997, the Board of Directors of the Fund declared a short-term
capital gain distribution of $3.24 per share and a long-term capital gain
distribution of $3.41 per share for Class A, B, C and Z shares, respectively,
payable on December 19, 1997 to shareholders of record on December 16, 1997.
- --------------------------------------------------------------------------------
18
<PAGE>
Financial Highlights (Unaudited) PRUDENTIAL GLOBAL GENESIS FUND, INC.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class A
------------------------------------------------------------------------
Six Months
Ended Year Ended May 31,
November 30, -------------------------------------------------------
1997 1997 1996(b) 1995(b) 1994(b) 1993(b)
------------ ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period.......... $ 21.30 $ 21.74 $ 18.44 $ 18.75 $ 15.34 $12.62
------ ------- ------- ------- ------- -------
Income from investment operations
Net investment income (loss).................. .06 (.14) .05(a) -- (.03)(a) .10(a)
Net realized and unrealized gain (loss) on
investment and foreign currency
transactions............................... .07 1.45 3.34 (.21) 3.83 2.62
------ ------- ------- ------- ------- -------
Total from investment operations........... .13 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................ $ 21.43 $ 21.30 $ 21.74 $ 18.44 $ 18.75 $15.34
------ ------- ------- ------- ------- -------
------ ------- ------- ------- ------- -------
TOTAL RETURN (c):............................. 0.61% 6.74% 18.41% (0.95)% 25.09% 21.55%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000)............... $ 48,038 $57,032 $47,617 $44,051 $29,221 $3,435
Average net assets (000)...................... $ 53,247 $47,563 $45,070 $32,430 $16,909 $3,106
Ratios to average net assets:
Expenses, including distribution fees...... 1.73%(d) 1.78% 1.79%(a) 1.42%(a) 1.48%(a) 1.49%(a)
Expenses, excluding distribution fees...... 1.48%(d) 1.53% 1.54%(a) 1.17%(a) 1.25%(a) 1.29%(a)
Net investment income (loss)............... (.70)%(d) (.49)% .26%(a) .02%(a) (.17)%(a) .79%(a)
For Class A, B, C and Z shares:
Portfolio turnover rate....................... 110% 60% 44% 64% 31% 67%
Average commission rate per share............. $ 0.0100 $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.
(d) Annualized.
- --------------------------------------------------------------------------------
See Notes to Financial Statements. 19
<PAGE>
Financial Highlights (Unaudited) PRUDENTIAL GLOBAL GENESIS FUND, INC.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class B
-----------------------------------------------------------------------------
Six Months
Ended Year Ended May 31,
November 30, ------------------------------------------------------------
1997 1997 1996(b) 1995(b) 1994(b) 1993(b)
------------ -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period.......... $ 20.18 $ 20.87 $ 17.84 $ 18.22 $ 14.93 $ 12.38
------------ -------- -------- -------- -------- --------
Income from investment operations
Net investment income (loss).................. (.16) (.33) (.09)(a) (.13)(a) (.16)(a) --
Net realized and unrealized gain (loss) on
investment and foreign currency
transactions............................... .22 1.39 3.21 (.19) 3.74 2.55
------------ -------- -------- -------- -------- --------
Total from investment operations........... .06 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................ $ 20.24 $ 20.18 $ 20.87 $ 17.84 $ 18.22 $ 14.93
------------ -------- -------- -------- -------- --------
------------ -------- -------- -------- -------- --------
TOTAL RETURN (c):............................. 0.30% 5.83% 17.51% (1.73)% 24.16% 20.60%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000)............... $101,991 $120,067 $155,292 $153,670 $174,659 $ 36,136
Average net assets (000)...................... $113,382 $133,073 $154,566 $173,591 $102,451 $ 31,561
Ratios to average net assets:
Expenses, including distribution fees...... 2.48%(d) 2.53% 2.54%(a) 2.17%(a) 2.25%(a) 2.29%(a)
Expenses, excluding distribution fees...... 1.48%(d) 1.53% 1.54%(a) 1.17%(a) 1.25%(a) 1.29%(a)
Net investment (loss)...................... (1.46)%(d) (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.
(d) Annualized.
- --------------------------------------------------------------------------------
See Notes to Financial Statements. 20
<PAGE>
Financial Highlights (Unaudited) PRUDENTIAL GLOBAL GENESIS FUND, INC.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class C Class Z
--------------------------------------------------- ------------
August 1,
Six Months 1994(d) Six Months
Ended Year Ended May 31, Through Ended
November 30, -------------------- May 31, November 30,
1997 1997 1996(b) 1995(b) 1997
------------ ------- -------- --------- ------------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period.......... $20.18 $ 20.87 $17.84 $ 18.44 $ 21.39
----- ------- -------- --------- ------
Income from investment operations
Net investment gain (loss).................... (.12) (.27) (.08)(a) (.12)(a) (.17)
Net realized and unrealized gain (loss) on
investment and foreign currency
transactions............................... .18 1.33 3.20 (.44) .36
----- ------- -------- --------- ------
Total from investment operations........... .06 1.06 3.12 (.56) .19
----- ------- -------- --------- ------
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) --
----- ------- -------- --------- ------
Total distributions........................ -- (1.75) (.09) (.04) --
----- ------- -------- --------- ------
Net asset value, end of period................ $20.24 $ 20.18 $20.87 $ 17.84 $ 21.58
----- ------- -------- --------- ------
----- ------- -------- --------- ------
TOTAL RETURN (c):............................. 0.30% 5.83% 17.51% (2.90)% 0.89%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000)............... $1,617 $ 1,874 $2,275 $ 1,307 $ 716
Average net assets (000)...................... $2,035 $ 1,958 $1,809 $ 862 $ 284
Ratios to average net assets:
Expenses, including distribution fees...... 2.48%(f) 2.53% 2.54%(a) 2.27%(a)(f) 1.48%(f)
Expenses, excluding distribution fees...... 1.48%(f) 1.53% 1.54%(a) 1.27%(a)(f) 1.48%(f)
Net investment (loss)...................... (1.36)%(f) (1.24)% (.44)%(a) (.90)(a)(f) (1.23)%(f)
<CAPTION>
September 13,
1996(e)
Through
May 31,
1997
--------------
<S> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period.......... $20.46
-----
Income from investment operations
Net investment gain (loss).................... .03
Net realized and unrealized gain (loss) on
investment and foreign currency
transactions............................... 2.65
-----
Total from investment operations........... 2.68
-----
Less distributions
Dividends from net investment income.......... --
Dividends in excess of net investment
income..................................... --
Distributions from net realized gains on
investment and foreign currency
transactions............................... (1.75)
-----
Total distributions........................ (1.75)
-----
Net asset value, end of period................ $21.39
-----
-----
TOTAL RETURN (c):............................. 13.90%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000)............... $ 603
Average net assets (000)...................... $ 188
Ratios to average net assets:
Expenses, including distribution fees...... 1.53%(f)
Expenses, excluding distribution fees...... 1.53%(f)
Net investment (loss)...................... (.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. 21
<PAGE>
Getting The Most From Your Prudential Mutual Fund.
Some mutual fund shareholders won't ever read this -- they don't read annual
and semi-annual reports. It's quite understandable. These annual and semi-
annual reports are prepared to comply with Federal regulations. They are often
written in language that is difficult to understand. So when most people run
into those particularly daunting sections of these reports, they don't read
them.
We think that's a mistake.
At Prudential Mutual Funds, we've made some changes to our report to make it
easier to understand and more pleasant to read, in hopes you'll find it
profitable to spend a few minutes familiarizing yourself with your investment.
Here's what you'll find in the report:
At A Glance
Since an investment's performance is often a shareholder's primary concern, we
present performance information in two different formats. You'll find it first
on the "At A Glance" page where we compare the Fund and the comparable average
calculated by Lipper Analytical Services, a nationally recognized mutual fund
rating agency. We report both the cumulative total returns and the average
annual total returns. The cumulative total return is the total amount of
income and appreciation the Fund has achieved in various time periods. The
average annual total return is an annualized representation of the Fund's
performance -- it generally smoothes out returns and gives you an idea how
much the Fund has earned in an average year, for a given time period. Under
the performance box, you'll see legends that explain the performance
information, whether fees and sales charges have been included in returns, and
the inception dates for the Fund's share classes.
See the performance comparison charts at the back of the report for more
performance information. And keep in mind that past perfor-mance is not
indicative of future results.
Portfolio Manager's Report
The portfolio manager who invests your money for you reports onsuccessful --
and not-so-successful -- strategies in this section of your report. Look for
recent purchases and sales here, as well as information about the sectors the
portfolio manager favors and any changes that are on the drawing board.
Portfolio Of Investments
This is where the report begins to look technical, but it's really just a
listing of each security held at the end of the reporting period, along with
valuations and other information. Please note that sometimes we discuss a
security in the Portfolio Manager's Report that doesn't appear in this listing
because it was sold before the close of the reporting period.
<PAGE>
Statement Of Assets And Liabilities
The balance sheet shows the assets (the value of the Fund's holdings),
liabilities (how much the Fund owes) and net assets (the Fund's equity, or
holdings after the Fund pays its debts) as of the end of the reporting period.
It also shows how we calculate the net asset value per share for each class
of shares. The net asset value is reduced by payment of your dividend, capital
gain, or other distribution, but remember that the money or new shares are
being paid or issued to you. The net asset value fluctuates daily along with
the value of every security in the portfolio.
Statement Of Operations
This is the income statement, which details income (mostly interest and
dividends earned) and expenses (including what you pay us to manage your
money). You'll also see capital gains here -- both realized and unrealized.
Statement Of Changes In Net Assets
This schedule shows how income and expenses translate into changes in net
assets. The Fund is required to pay out the bulk of its income to shareholders
every year, and this statement shows you how we do it -- through dividends
and distributions -- and how that affects the net assets. This statement also
shows how money from investors flowed into and out of the Fund.
Notes To Financial Statements
This is the kind of technical material that can intimidate readers, but it
does contain useful information. The Notes provide a brief history and
explanation of your Fund's objectives. In addition, they also outline how
Prudential Mutual Funds prices securities. The Notes also explain who manages
and distributes the Fund's shares, and more importantly, how much they are
paid for doing so. Finally, the Notes explain how many shares are outstanding
and the number issued and redeemed over the period.
Financial Highlights
This information contains many elements from prior pages, but on a per share
basis. It is designed to help you understand how the Fund performed and to
compare this year's performance and expenses to those of prior years.
Independent Auditor's Report
Once a year, an outside auditor looks over our books and certifies that the
information is fairly presented and complies with generally accepted
accounting principles.
Tax Information
This is information which we report annually about how much of your total
return is taxable. Should you have any questions, you may want to consult a
tax advisor.
Performance Comparison
These charts are included in the annual report and are required by the
Securities Exchange Commission. Performance is presented here as a
hypothetical $10,000 investment in the Fund since its inception or for 10
years (whichever is shorter). To help you put that return in context, we are
required to include the performance of an unmanaged, broad based securities
index, as well. The index does not reflect the cost of buying the securities
it contains or the cost of managing a mutual fund. Of course, the index
holdings do not mirror those of the fund -- the index is a broadly based
reference point commonly used by investors to measure how well they are doing.
A definition of the selected index is also provided. Investors generally
cannot invest directly in an index.
<PAGE>
Getting The Most From Your Prudential Mutual Fund.
Change Your Mind.
You can exchange your shares in most Prudential Mutual Funds for shares in
most other Prudential Mutual Funds, without charges. This may be most helpful
if your investment needs change.
Reinvest Dividends Free Of Charge.
Reinvest your dividends and/or capital gains distributions automatically --
without charge.
Invest For Retirement.
There is no minimum investment for an IRA. Plus, you defer taxes on your
investment earnings by investing in an IRA.
If you'd like, you can contribute up to $2,000 a year in an IRA. And if you
are married and not covered by a retirement plan at work, you and your spouse
may each contribute $2,000 a year to an IRA for a total of $4,000.
Change Your Job.
You can take your pension with you. Use a rollover IRA to manage your company-
sponsored retirement plan while retaining the special tax-deferred advantages.
Invest In Your Children.
There's no fee to open a custodial account for a child's education or other
needs.
Take Income.
Would you like to receive monthly or quarterly checks in any amount from your
fund account? Just let us know. We'll take care of it. Of course, there are
minimum amounts. And shares redeemed may be subject to tax, and Class B and C
shares may be subject to contingent deferred sales charges. We'll gladly
answer your questions.
Keep Informed.
We want to keep you up-to-date. Of course, you receive account activity
statements every quarter. But you also receive annual and semi-annual fund
reports, as well as other important updates on events that affect your
investments, including tax information.
This material is only authorized for distribution when preceded or accompanied
by a current prospectus. Read the prospectus carefully before you invest or
send money.
<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
Thomas A. Early, 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 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.
The accompanying financial statements as of November 30, 1997 were not audited
and, accordingly, no opinion is expressed on them.
This report is not authorized for distribution to prospective investors unless
preceded or accompanied by a current prospectus.
<PAGE>
Prudential Mutual Funds
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
(800) 225-1852
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