<PAGE>
THE THAI FUND, INC.
- ---------------------------------------------
OFFICERS AND DIRECTORS
<TABLE>
<S> <C>
Barton M. Biggs William G. Morton, Jr.
CHAIRMAN OF THE BOARD DIRECTOR
OF DIRECTORS Snoh Unakul
Frederick B. Whittemore DIRECTOR
VICE-CHAIRMAN OF THE BOARD James W. Grisham
OF DIRECTORS VICE PRESIDENT
Warren J. Olsen Harold J. Schaaff, Jr.
PRESIDENT AND DIRECTOR VICE PRESIDENT
Peter J. Chase Joseph P. Stadler
DIRECTOR VICE PRESIDENT
John W. Croghan Valerie Y. Lewis
DIRECTOR SECRETARY
David B. Gill James R. Rooney
DIRECTOR TREASURER
Graham E. Jones Joanna M. Haigney
DIRECTOR ASSISTANT TREASURER
Sukri Kaocharern
DIRECTOR
John A. Levin
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
Boston Equiserve
Investor Relations Department
P.O. Box 644
Boston, Massachusetts 02102-0644
(617) 575-3120
- ----------------------------------------------------------------
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.
----------------------------
FIRST QUARTER REPORT
MARCH 31, 1996
MORGAN STANLEY ASSET MANAGEMENT INC.
INVESTMENT ADVISER
<PAGE>
LETTER TO SHAREHOLDERS
- --------
For the three months ended on March 31, 1996, the total return for the Thai
Fund, Inc. (the "Fund"), based on net asset value per share, was 4.74% compared
to 0.44% for the U.S. dollar adjusted Securities Exchange of Thailand Index
("SET Index"). For the period since the Fund's commencement of operations on
February 16, 1988 through March 31, 1996, the Fund's total return, based on net
asset value per share, is 385.81% compared with 285.23% for the SET Index. On
March 29, 1996, the closing price of the Fund's shares on the New York Stock
Exchange was $24.75, representing a 5.1% discount to the net asset value per
share.
The Thailand stock market started off on a strong note in January, rising 11% by
early February from the beginning of the year. The rally ended abruptly,
however, as regional markets corrected sharply and, given its relative
liquidity, the Thai market was one of the region's hardest hit. A spate of poor
1995 earnings reports released during the quarter, slight rumblings on the
political front prompting speculation of further turmoil in the Thai Cabinet,
and volatility in the U.S. stock market also affected investor sentiment.
The Fund outperformed the SET Index by 4.30% for the first quarter of 1996.
While the SET Index basically ended the quarter flat, the banking and energy
sectors registered gains of 10.1% and 9.4%, respectively. The building materials
sector was badly hit, however, by declining petrochemical prices and ended the
quarter down 11.5%. Fixed-line operators were negatively impacted by a rights
issue announcement by TT&T which pulled the communications sector down 6.2% for
the same period. Of the Fund's ten largest holdings, two stocks ended the
quarter down and eight were up. Among the Fund's better performing stocks were
TISCO (+52.2%), Serm Suk (+33.8%), Siam Commercial Bank (+15.3%) and Thai
Farmers Banks (+10.5%). The worst performing stock among the Fund's top ten
holdings at the beginning of the period was Siam Cement (-10.3%), which was
dropped off the list by the end of the quarter.
Looking ahead, the Thai market should trade sideways in the near term as
investors digest earnings reports of various companies and look for a clearer
trend to emerge after last year's earnings disappointment. With interest rates
likely to stabilize and many blue-chip stocks having fallen 10-15% from their
highs, the Thai market could rebound strongly. The market remains well supported
by strong economic growth and the latest economic numbers suggest a stabilizing
current and trade account deficit. Overall, the Thai economic outlook appears
bright.
Sincerely,
[SIGNATURE]
Warren J. Olsen
PRESIDENT AND DIRECTOR
[SIGNATURE]
Ean Wah Chin
SENIOR PORTFOLIO MANAGER
[SIGNATURE]
Richard Toh
PORTFOLIO MANAGER
May 7, 1996
2
<PAGE>
The Thai Fund, Inc.
Investment Summary as of March 31, 1996
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
HISTORICAL
INFORMATION (UNAUDITED)
TOTAL RETURN (%)
-------------------------------------------------------------------------------------
MARKET VALUE (1) NET ASSET VALUE (2) INDEX (1)(3)
--------------------------- --------------------------- ---------------------------
AVERAGE AVERAGE AVERAGE
CUMULATIVE ANNUAL CUMULATIVE ANNUAL CUMULATIVE ANNUAL
--------------------------- --------------------------- ---------------------------
<S> <C> <C> <C> <C> <C> <C>
FISCAL YEAR TO DATE 10.62% -- 4.74% -- 0.44% --
ONE YEAR 28.59 28.59% 13.78 13.78% 3.46 3.46%
FIVE YEAR 96.27+ 14.44+ 126.74+ 17.79+ 51.57 8.67
SINCE INCEPTION* 361.21+ 20.70+ 385.81+ 21.47+ 285.23 18.05
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
- --------------------------------------------------------------------------------
RETURNS AND PER SHARE INFORMATION
A BAR CHART REFLECTING THE DATA BELOW IS REFLECTED HERE.
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31:
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1988* 1989 1990 1991 1992 1993 1994 1995
Net Asset Value Per Share $10.24 $18.88 $13.08 $15.41 $20.69 $39.42 $28.30 $24.89
Market Value Per Share $11.75 $32.25 $16.00 $16.25 $18.75 $36.88 $22.38 $22.38
Premium/(Discount) 14.7% 70.8% 22.3% 5.5% -9.4% -6.4% -20.9% -10.1%
Income Dividends $0.29 $0.36 $0.21 $0.21 - $0.36 $0.35 $0.11
Capital Gains Distributions - $2.09 $1.68 $0.47 - $0.51 $4.62 $3.38
Fund Total Return (2) -5.60% 109.87% -20.44% 23.08% 34.26% 98.89% -10.43%+ -0.05%
Index Total Return (1)(3)
** 3.90% 120.97% -28.60% 15.80% 24.71% 88.40% -17.76% -6.11%
<CAPTION>
THREE MONTHS ENDED
YEARS ENDED DECEMBER 31: MARCH 31,1996
<S> <C>
(Unaudited)
Net Asset Value Per Share $26.07
Market Value Per Share $24.74
Premium/(Discount) -5.1%
Income Dividends -
Capital Gains Distributions -
Fund Total Return (2) 4.74%
Index Total Return (1)(3)
** 0.44%
</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. This return does not include the effect of dilution in
connection with the Rights Offering. 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 per share of the Fund.
(3) U.S. dollar adjusted Securities Exchange of Thailand (SET) Index.
* The Fund commenced operations on February 16, 1988.
** Unaudited.
+ Adjusted for Rights Offering.
3
<PAGE>
The Thai Fund, Inc.
Portfolio Summary as of March 31, 1996 (Unaudited)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INVESTMENTS DIVERSIFICATION
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Equity Securities 97.0%
Short-Term Investments 3.0%
</TABLE>
- --------------------------------------------------------------------------------
SECTORS
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Banking 31.4%
Beverages & Tobacco 4.6%
Building Materials & Components 6.5%
Construction & Housing 2.3%
Electrical & Electronics 4.8%
Energy Sources 3.2%
Financial Services 22.2%
Real Estate 3.1%
Telecommunications 15.7%
Wholesale & International Trade 2.1%
Other 4.1%
</TABLE>
- --------------------------------------------------------------------------------
TEN LARGEST HOLDINGS
<TABLE>
<CAPTION>
PERCENT OF
NET ASSETS
----------
<C> <S> <C>
1. Bangkok Bank Ltd. (Local) 10.6%
2. Thai Farmers Bank Ltd.
(Local) 10.5
3. Siam Commercial Bank Co.,
Ltd. (Local) 8.7
4. Advanced Information Services
Co., Ltd. (Local) 6.8
5. The Serm Suk Co., Ltd.
(Local) 4.6
<CAPTION>
PERCENT OF
NET ASSETS
----------
<C> <S> <C>
6. Finance One Co., Ltd. (Local) 4.6%
7. Phatra Thanakit Co., Ltd.
(Local) 4.4
8. Shinawatra Computer Co., Ltd.
(Local) 4.1
9. TelecomAsia Corp., Ltd.
(Local) 4.1
10. Thai Investment & Securities
Co., Ltd. (Local) 4.0
---
62.4%
---
---
</TABLE>
4
<PAGE>
INVESTMENTS (UNAUDITED)
- ---------
MARCH 31, 1996
<TABLE>
<CAPTION>
VALUE
SHARES (000)
<S> <C> <C>
- ------------------------------------------------------------------
- -------------
THAI INVESTMENT PLAN (104.1%)
- ----------------------------------------------------
- ----------
APPLIANCES & HOUSEHOLD DURABLES (1.4%)
Sanyo Universal Electric Company, Ltd. 158,600 U.S.$ 568
Singer Thailand, Ltd. (Local) 500,300 4,102
--------------
4,670
--------------
- ------------------------------------------------------------------
- -------------
AUTOMOBILES (1.5%)
Swedish Motor Corp., Ltd. (Local) 1,500,000 5,080
--------------
- ------------------------------------------------------------------
- -------------
BANKING (31.4%)
Bangkok Bank Ltd. (Local) 3,970,000 35,851
Industrial Finance Corp. of Thailand (Local) 980,653 3,573
Siam City Bank, Ltd. (Local) 2,100,000 2,204
Siam Commercial Bank Co., Ltd. (Local) 2,600,000 29,452
Thai Farmers Bank, Ltd. (Local) 4,724,000 35,550
--------------
106,630
--------------
- ------------------------------------------------------------------
- -------------
BEVERAGES & TOBACCO (4.6%)
The Serm Suk Co., Ltd. (Local) 751,100 15,529
--------------
- ------------------------------------------------------------------
- -------------
BUILDING MATERIALS & COMPONENTS (6.5%)
American Standard Sanitaryware
Thailand, Ltd. (Local) 75,150 1,280
Siam Cement Co., Ltd. (Local) 264,000 12,526
Siam City Cement Co., Ltd. (Local) 620,000 8,202
--------------
22,008
--------------
- ------------------------------------------------------------------
- -------------
CONSTRUCTION & HOUSING (2.3%)
Bangkok Expressway Public Co., Ltd. 242,500 408
Ch. Karnchang Public Co., Ltd. 489,000 3,699
Italian-Thai Development Corp. 390,000 3,708
--------------
7,815
--------------
- ------------------------------------------------------------------
- -------------
ELECTRICAL & ELECTRONICS (4.8%)
International Engineering Co., Ltd.
(Local) 499,700 2,157
Shinawatra Computer Co., Ltd. (Local) 550,400 13,952
--------------
16,109
--------------
- ------------------------------------------------------------------
- -------------
ENERGY SOURCES (3.2%)
Banpu Public Co., Ltd. (Local) 140,000 3,527
Electricity Generating Public Co.
(Local) 1,250,000 3,812
PTT Exploration & Production Co., Ltd.
(Local) 300,000 3,612
--------------
10,951
--------------
- ------------------------------------------------------------------
- -------------
<CAPTION>
VALUE
SHARES (000)
<S> <C> <C>
- ----------------------------------------------------------
- ------------
FINANCIAL SERVICES (22.2%)
Dhana Siam Finance & Securities Co.,
Ltd. (Local) 1,800,000 U.S.$ 10,195
Finance One Co., Ltd. (Local) 2,752,600 15,481
General Finance & Securities Co., Ltd.
(Local) 1,200,000 4,753
Krungthai Thanakit plc 1,100,000 5,011
National Finance & Securities Co.,
Ltd. (Local) 2,300,000 11,478
Phatra Thanakit Co., Ltd. (Local) 2,000,000 14,813
Thai Investment & Securities Co., Ltd.
(Local) 310,000 2,394
Thai Investment & Securities (Rights) 1,550,000 11,296
--------------
75,421
--------------
- ------------------------------------------------------------------
- -------------
INSURANCE (0.7%)
Bangkok Insurance Co., Ltd. (Local) 161,804 2,422
--------------
- ------------------------------------------------------------------
- -------------
MERCHANDISING (0.2%)
SP Suzuki Public Co., Ltd. 200,000 673
--------------
- ------------------------------------------------------------------
- -------------
MISCELLANEOUS MATERIALS & COMMODITIES (1.5%)
Charoen Pokphand Feedmill Co., Ltd.
(Local) 1,040,000 5,231
--------------
- ------------------------------------------------------------------
- -------------
MULTI-INDUSTRY (0.6%)
Loxley Co., Ltd. (Local) 164,000 2,157
--------------
- ------------------------------------------------------------------
- -------------
REAL ESTATE (3.1%)
Land & House Co., Ltd. (Local) 715,600 9,580
MBK Properties and Development plc 470,000 894
--------------
10,474
--------------
- ------------------------------------------------------------------
- -------------
TELECOMMUNICATIONS (15.7%)
Advanced Information Services Co.,
Ltd. (Local) 1,200,000 23,004
TelecomAsia Corp., Ltd. (Local) 5,000,000 13,763
Thai Telephone & Telecommunications
Co. (Local) 1,150,000 4,099
United Communications Industry (Local) 900,000 12,334
--------------
53,200
--------------
- ------------------------------------------------------------------
- -------------
TEXTILES & APPAREL (0.0%)
Thai Rung Textile 3,832 49
--------------
- ------------------------------------------------------------------
- -------------
WHOLESALE & INTERNATIONAL TRADE (2.1%)
International Cosmetics Co., Ltd.
(Local) 875,000 7,070
--------------
- ------------------------------------------------------------------
- -------------
TOTAL THAI COMMON STOCKS
(Cost U.S. $185,004) 345,489
--------------
- ------------------------------------------------------------------
- -------------
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE
(000) (000)
- ----------------------------------------------------------
- ------------
<S> <C> <C>
FOREIGN CURRENCY ON DEPOSIT
WITH CUSTODIAN (2.3%)
Thai Baht (Cost U.S. $7,976) THB 197,703 U.S.$ 7,830
--------------
- ------------------------------------------------------------------
- -------------
TOTAL THAI INVESTMENT PLAN
(Cost U.S. $192,980) 353,319
--------------
- ------------------------------------------------------------------
- -------------
SHORT TERM INVESTMENT (0.8%)
- ----------------------------------------------------------
- ------------
REPURCHASE AGREEMENT
The Chase Manhattan Bank, N.A. 5.15%,
dated 3/29/96, due 4/1/96, to be
repurchased at U.S.$2,717,
collateralized by U.S.$1,825 United
States Treasury Bond 11.25%, due
2/15/15, valued at U.S.$2,776
(Cost U.S. $2,716) U.S.$ 2,716 2,716
--------------
- ------------------------------------------------------------------
- -------------
TOTAL INVESTMENTS (104.9%)
(Cost U.S. $195,696) U.S.$ 356,035
--------------
- ------------------------------------------------------------------
- -------------
OTHER ASSETS AND LIABILITIES (-4.9%)
Other Assets U.S.$ 2,788
Liabilities (19,486) (16,698)
--------------- --------------
- ------------------------------------------------------------------
- -------------
NET ASSETS (100%)
Applicable to 13,018,864, issued and outstanding U.S.
$0.01 par value shares (30,000,000 shares authorized) U.S.$ 339,337
--------------
--------------
- ------------------------------------------------------------------
- -------------
NET ASSET VALUE PER SHARE U.S.$ 26.07
--------------
--------------
- ------------------------------------------------------------------
- -------------
</TABLE>
6
