<PAGE>
THE THAI FUND, INC.
- ---------------------------------------------
OFFICERS AND DIRECTORS
<TABLE>
<S> <C>
Barton M. Biggs Snoh Unakul
CHAIRMAN OF THE BOARD DIRECTOR
OF DIRECTORS Frederick B. Whittemore
Warren J. Olsen DIRECTOR
PRESIDENT AND DIRECTOR James W. Grisham
Peter J. Chase VICE PRESIDENT
DIRECTOR Harold J. Schaaff, Jr.
John W. Croghan VICE PRESIDENT
DIRECTOR Joseph P. Stadler
David B. Gill VICE PRESIDENT
DIRECTOR Valerie Y. Lewis
Graham E. Jones SECRETARY
DIRECTOR James R. Rooney
Sukri Kaocharern TREASURER
DIRECTOR Joanna M. Haigney
John A. Levin ASSISTANT TREASURER
DIRECTOR
William G. Morton, Jr.
DIRECTOR
</TABLE>
- ---------------------------------------------
U.S. INVESTMENT ADVISER
Morgan Stanley Asset Management Inc.
1221 Avenue of the Americas
New York, New York 10020
- ----------------------------------------------------------------
THAI INVESTMENT ADVISER
The Mutual Fund Public Company Limited
30th-32nd Floor, Lake Rajada Building
193-195 Ratchadaphisek Road
Khlong-Toey, Bangkok 10110 Thailand
- ----------------------------------------------------------------
ADMINISTRATOR
The Chase Manhattan Bank, N.A.
73 Tremont Street
Boston, Massachusetts 02108
- ----------------------------------------------------------------
CUSTODIANS
The Thai Farmers Bank Limited (International)
400 Phahon Yothin Road
Bangkok, Thailand
The Chase Manhattan Bank, N.A. (Domestic)
770 Broadway
New York, New York 10003
- ----------------------------------------------------------------
SHAREHOLDER SERVICING AGENT
The First National Bank of Boston
Investor Relations Department
P.O. Box 644, Mail Stop 45-02-09
Boston, Massachusetts 02102-0644
(617) 575-2900
- ----------------------------------------------------------------
LEGAL COUNSEL
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
- ----------------------------------------------------------------
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
1177 Avenue of the Americas
New York, New York 10036
- ----------------------------------------------------------------
For additional Fund information, including the Fund's net asset value per share
and information regarding the investments comprising the Fund's portfolio,
please call 1-800-221-6726.
----------------------------------------------------------------
THE
THAI FUND,
INC.
----------------------------
THIRD QUARTER REPORT
SEPTEMBER 30, 1995
MORGAN STANLEY ASSET MANAGEMENT INC.
INVESTMENT ADVISER
<PAGE>
LETTER TO SHAREHOLDERS
- -------
After a volatile first half of 1995 for Thai equities, during which the Thai
equity market had improved somewhat in the second quarter, the market declined
for the three months ended September 30, 1995. The Thai equity market fell
- -8.71% in the third quarter and -4.75% for the first nine months of 1995, as
measured by the U.S. dollar adjusted Securities Exchange of Thailand ("SET")
Index (the "Index"). The Thai Fund, Inc.'s total return based on net asset value
per share declined -5.72% during the third quarter and -2.08% for the nine
months ended September 30, 1995. The Fund was able to outperform the Index by
2.99% for the third quarter mainly because it was overweighted in the banking
sector. The Fund performed credibly despite being overweighted in two major
sectors, finance and communications, both of which underperformed the benchmark
during the quarter. This can be attributed largely to stock selection by the
Fund's portfolio managers in these sectors. Of the Fund's ten largest stock
holdings, three bucked the downtrend in the broader market: Advanced Information
Services, Shinawatra Computer and Siam Commercial Bank. The Fund's stock price
on the New York Stock Exchange closed at $24.00 on September 30, 1995, a 10.91%
discount to the underlying net asset value per share of $26.94. This compares
favorably with a discount of 20.91% at December 31, 1994.
Several factors contributed to the negative market sentiment in the third
quarter. Political uncertainty, in particular concerns over how long the new
Banharn government will last and rumors of a possible military coup, left
investors sidelined for most of the quarter. Weak first half-year results from
companies depressed market sentiment further. Some sectors, including
petrochemicals and finance, reported fairly dismal results and investors sold
off these two sectors rather aggressively. Rising interest rates prompted by
fears of a weak Baht and higher inflation dominated the market for the latter
part of the quarter.
For the final quarter of the year, our portfolio managers believe that the
market should find strong support at current levels resulting primarily from
strong economic growth prospects and relatively cheap valuations in relation to
other markets in the region. For these reasons, Thailand should enjoy strong
institutional support from both domestic and foreign funds. The market is
unlikely, however, to experience any sharp run up in the fourth quarter. The
flood in Bangkok suggests that inflation will continue to be a near-term concern
and it is unlikely that interest rates will fall in Thailand in the quarter.
Looking beyond 1995, the Thai equities market should improve once the political
situation becomes more settled.
Our Fund remains fully invested. In the third quarter, we continued our strategy
of further concentrating the portfolio. At September 30, 1995, the Fund held 49
issues compared to 50 issues held at June 30, 1995, and 63 issues at December
31, 1994. The Fund will continue to focus on those stocks that can be purchased
at attractive valuation levels while still offering significant opportunity to
participate in Thailand's continuing economic success.
Sincerely,
[SIG]
Warren J. Olsen
PRESIDENT
NOVEMBER 7, 1995
1
<PAGE>
The Thai Fund, Inc.
Investment Summary as of September 30, 1995
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
HISTORICAL
INFORMATION
TOTAL RETURN (%)
----------------------------------------------------------------------------
MARKET VALUE (1) NET ASSET VALUE (2) INDEX (3)
------------------------ ------------------------ ------------------------
AVERAGE AVERAGE AVERAGE
CUMULATIVE ANNUAL CUMULATIVE ANNUAL CUMULATIVE ANNUAL
------------------------ ------------------------ ------------------------
<S> <C> <C> <C> <C> <C> <C>
CURRENT QUARTER -6.88% -- -5.72% -- -8.71% --
FISCAL YEAR TO DATE 10.29 -- -2.08 -- -4.75 --
ONE YEAR -9.05 -9.05% -9.07 -9.07% -13.25 -13.25%
FIVE YEAR 121.92 17.28 179.06 22.78 103.98 15.32
SINCE INCEPTION* 304.63 20.12 354.20 21.96 249.38 17.83
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
- --------------------------------------------------------------------------------
RETURNS AND PER SHARE INFORMATION (2)
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
PERIODS ENDED SEPTEMBER 30:
<S> <C> <C> <C> <C> <C> <C> <C>
1988* 1989 1990 1991 1992 1993 1994
Net Asset Value $10.24 $18.88 $13.06 $15.41 $20.69 $39.42 26.30
Income Dividends 0.29 0.36 0.21 0.21 - 0.36 0.35
Capital Gains and Other Distributions - 2.09 1.88 0.47 - 0.51 4.62
Total Return (2) (5.5%) 109.9% (20.4%) 23.1% 34.3% 98.9% (10.4%)
Index Total Return (3) 3.9% 121.0% (28.6%) 15.8% 24.7% 88.4% (17.8%)
<CAPTION>
PERIODS ENDED SEPTEMBER 30:
<S> <C>
9 Months Ended 9/30/95 (Unaudited)
Net Asset Value $26.94
Income Dividends -
Capital Gains and Other Distributions 0.71
Total Return (2) (2.1%)
Index Total Return (3) (4.8%)
</TABLE>
(1)Assumes dividends and distributions, if any, were reinvested.
(2)Total investment return based on per share net asset value reflects the
effects of changes in net asset value on the performance of the Fund during
each period, and assumes dividends and distributions, if any, were
reinvested. These percentages are not an indication of the performance of a
shareholder's investment in the Fund based on market value due to differences
between the market price of the stock and the net asset value of the Fund.
(3)U.S. dollar adjusted Securities Exchange of Thailand (SET) Index
*The Fund commenced operations on February 16, 1988.
2
<PAGE>
The Thai Fund, Inc.
Portfolio Summary as of September 30, 1995
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INVESTMENTS DIVERSIFICATION
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Equity Securities 95.7%
Cash Equivalents 4.3%
</TABLE>
- --------------------------------------------------------------------------------
SECTORS
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Banking 27.8%
Financial Services 21.3%
Telecommunications 17.1%
Building Materials & Components 7.8%
Electrical & Electronics 6.5%
Real Estate 4.4%
Energy Sources 4.2%
Construction & Housing 2.4%
Beverages & Tobacco 2.0%
Other 6.5%
</TABLE>
- --------------------------------------------------------------------------------
TEN LARGEST HOLDINGS
<TABLE>
<C> <S>
1. Bangkok Bank Ltd. (Local)
2. Thai Farmers Bank, Ltd. (Local)
3. Siam Commercial Bank Co., Ltd.
4. Advanced Information Services
Co., Ltd. (Local)
5. TelecomAsia Corp., Ltd. (Local)
6. National Finance & Securities
Co., Ltd. (Local)
7. Phatra Thanakit Co., Ltd. (Local)
8. Finance One Co., Ltd. (Local)
9. Shinawatra Computer Co., Ltd.
(Local)
10. Siam Cement Co., Ltd. (Local)
</TABLE>
3
<PAGE>
INVESTMENTS (UNAUDITED)
- ---------
SEPTEMBER 30, 1995
<TABLE>
<CAPTION>
VALUE
SHARES (000)
<S> <C> <C>
- -----------------------------------------------------------
- -------------
THAI INVESTMENT PLAN (104.2%)
- --------------------------------------------------
- ----------
THAI COMMON STOCKS (100.9%)
(Unless otherwise noted)
- -----------------------------------------------------------
- -------------
APPLIANCES & HOUSEHOLD DURABLES (1.0%)
Sanyo Universal Electric Company, Ltd.158,600 U.S.$ 657
Singer Thailand, Ltd.
(Local) 334,875 2,829
------------
3,486
------------
- -----------------------------------------------------------
- -------------
AUTOMOBILES (1.1%)
Swedish Motor Corp., Ltd.
(Local) 987,800 3,621
------------
- -----------------------------------------------------------
- -------------
BANKING (27.8%)
Bangkok Bank Ltd. (Local) 4,020,000 33,000
Industrial Finance Corp. of
Thailand (Local) 980,653 3,009
Siam City Bank, Ltd. (Local) 2,100,000 2,322
Siam City Credit, Ltd.
(Rights) 12,352 -
Siam City Finance, Ltd.
(Rights) 15,555 -
Siam Commercial Bank Co.,
Ltd. (Local) 2,600,000 22,793
Thai Farmers Bank, Ltd.
(Local) 4,724,000 30,872
Thai Military Bank, Ltd.
(Local) 660,000 2,275
------------
94,271
------------
- -----------------------------------------------------------
- -------------
BEVERAGES & TOBACCO (2.0%)
The Serm Suk Co., Ltd.
(Local) 550,000 6,926
------------
- -----------------------------------------------------------
- -------------
BUILDING MATERIALS & COMPONENTS (7.8%)
American Standard
Sanitaryware Thailand, Ltd.
(Local) 75,150 1,288
Siam Cement Co., Ltd.
(Local) 264,000 14,749
Siam City Cement Co., Ltd
(Local) 620,000 10,327
------------
26,364
------------
- -----------------------------------------------------------
- -------------
CONSTRUCTION & HOUSING (2.4%)
Bangkok Expressway Public
Co., Ltd. 242,500 406
Ch. Karnchang Public Co.,
Ltd. 322,000 3,439
Ch. Karnchang Public Co.,
Ltd. (Foreign) 4,000 43
Italian-Thai Development
Corp. 390,000 4,351
------------
8,239
------------
- -------------
- -----------------------------------------------------------
<CAPTION>
VALUE
SHARES (000)
<S> <C> <C>
- -----------------------------------------------------------
- -------------
ELECTRICAL & ELECTRONICS
(6.5%)
Delta Electronic Industrial 190,000 U.S.$ 886
International Engineering
Co., Ltd. (Local) 1,221,000 6,325
Shinawatra Computer Co.,
Ltd. (Local) 600,000 14,824
------------
22,035
------------
- -----------------------------------------------------------
- -------------
ENERGY SOURCES (4.2%)
Banpu Public Co., Ltd.
(Local) 260,000 6,009
Electricity Generating
Public Co. (Local) 1,947,000 5,160
PTT Exploration & Production
Co., Ltd. (Local) 300,000 2,917
------------
14,086
------------
- -----------------------------------------------------------
- -------------
FINANCIAL SERVICES (21.3%)
Asia Credit, Ltd. (Local) 69,800 467
Dhana Siam Finance &
Securities Co., Ltd.
(Local) 2,500,000 12,253
Finance One Co., Ltd.
(Local) 2,822,600 15,184
General Finance & Securities
Co., Ltd. (Local) 1,302,400 5,813
Krungthai Thanakit plc 100,000 259
National Finance &
Securities Co., Ltd.
(Local) 3,436,000 16,157
Phatra Thanakit Co., Ltd.
(Local) 2,200,000 15,342
Thai Investment & Securities
Co., Ltd. (Local) 237,000 6,686
------------
72,161
------------
- -----------------------------------------------------------
- -------------
HEALTH & PERSONAL CARE (0.1%)
BUMRUNGRAD HOSPITAL CO.,
LTD. (LOCAL) 116,000 203
------------
- ---------------------------------------------------------
- ------------
INSURANCE (1.1%)
Ayudhya Life Assurance Co.,
Ltd. (Local) 196,612 932
Bangkok Insurance Co., Ltd.
(Local) 161,804 2,708
------------
3,640
------------
- -----------------------------------------------------------
- -------------
METALS -- STEEL (0.2%)
Sahaviriya Steel Industry
(Local) 351,300 616
------------
- -----------------------------------------------------------
- -------------
MISCELLANEOUS MATERIALS & COMMODITIES (1.4%)
Charoen Pokphand Feedmill
Co., Ltd. (Local) 1,040,000 4,600
Thai Modern Plastic Industry
Co., Ltd. (Local) 121,600 138
------------
4,738
------------
- -------------
- -----------------------------------------------------------
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (000)
<S> <C> <C>
- -----------------------------------------------------------
- -------------
MULTI-INDUSTRY (1.0%)
Loxley Co., Ltd. (Local) 164,000 U.S.$ 3,333
------------
- -----------------------------------------------------------
- -------------
REAL ESTATE (4.4%)
Land & House Co., Ltd.
(Local) 715,600 10,322
MDX Co., Ltd. (Local) 1,247,000 2,087
Quality House Co., Ltd.
(Local) 520,300 2,426
------------
14,835
------------
- -----------------------------------------------------------
- -------------
TELECOMMUNICATIONS (17.1%)
Advanced Information
Services Co., Ltd. (Local) 1,339,800 21,142
TelecomAsia Corp., Ltd.
(Local) 5,500,000 16,547
Thai Telephone &
Telecommunications Co.
(Local) 1,150,000 8,020
United Communications
Industry (Local) 940,000 12,211
------------
57,920
------------
- -----------------------------------------------------------
- -------------
TEXTILES & APPAREL (0.0%)
Thai Rung Textile 3,832 50
------------
- -----------------------------------------------------------
- -------------
WHOLESALE & INTERNATIONAL TRADE (1.5%)
International Cosmetics Co.,
Ltd. (Local) 331,287 5,096
------------
- -----------------------------------------------------------
- -------------
TOTAL THAI COMMON STOCKS
(Cost U.S. $193,394) 341,620
------------
- -------------
- -----------------------------------------------------------
<CAPTION>
AMOUNT
(000)
<S> <C> <C>
- -----------------------------------------------------------
- -------------
FOREIGN CURRENCY ON DEPOSIT WITH CUSTODIAN (3.3%)
(Interest Bearing Demand Account)
Thai Baht
(Cost U.S.$11,351) THB 282,141 11,243
------------
- -------------
- -----------------------------------------------------------
<CAPTION>
FACE
AMOUNT VALUE
(000) (000)
<S> <C> <C>
- -----------------------------------------------------------
- -------------
TOTAL THAI INVESTMENT PLAN
(Cost U.S.$204,745) U.S.$352,863
------------
- -----------------------------------------------------------
- -------------
SHORT TERM INVESTMENT (1.2%)
- ---------------------------------------------------------
- ------------
REPURCHASE AGREEMENT (1.2%)
Chase Manhattan Bank, N.A.,
6.00%, dated 9/29/95, due
10/2/95 to be repurchased
at U.S.$4,062,
collateralized by
U.S.$3,630 United States
Treasury Bonds 7.875%, due
2/15/21, valued at
U.S.$4,143 (Cost
U.S.$4,060) U.S.$ 4,060 4,060
------------
- -----------------------------------------------------------
- -------------
TOTAL INVESTMENTS (105.4%)
(Cost U.S.$208,805) 356,923
------------
- -----------------------------------------------------------
- -------------
OTHER ASSETS AND LIABILITIES (-5.4%)
Other Assets 1,159
Liabilities (19,355) (18,196)
------------- ------------
- -----------------------------------------------------------
- -------------
NET ASSETS (100%)
Applicable to 12,572,354,
issued and outstanding U.S.
$.01 par value shares
(30,000,000 shares
authorized) U.S.$338,727
-------------
- -----------------------------------------------------------
- -------------
NET ASSET VALUE PER SHARE U.S.$ 26.94
-------------
- -----------------------------------------------------------
- -------------
</TABLE>
5
