<PAGE>
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THE
THAI FUND,
INC.
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FIRST QUARTER REPORT
MARCH 31, 2000
MORGAN STANLEY DEAN WITTER
INVESTMENT MANAGEMENT INC.
INVESTMENT ADVISER
THE THAI FUND, INC.
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DIRECTORS AND OFFICERS
Barton M. Biggs
CHAIRMAN OF THE BOARD
OF DIRECTORS
Harold J. Schaaff, Jr.
PRESIDENT AND DIRECTOR
Peter J. Chase
DIRECTOR
John W. Croghan
DIRECTOR
Graham E. Jones
DIRECTOR
John A. Levin
DIRECTOR
William G. Morton, Jr.
DIRECTOR
Stefanie V. Chang
VICE PRESIDENT
Joseph P. Stadler
VICE PRESIDENT
Mary E. Mullin
SECRETARY
Belinda A. Brady
TREASURER
Robin L. Conkey
ASSISTANT TREASURER
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U.S. INVESTMENT ADVISER
Morgan Stanley Dean Witter Investment Management Inc.
1221 Avenue of the Americas
New York, New York 10020
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THAI INVESTMENT ADVISER
The Mutual Fund Public Company Limited
30th-32nd Floor, Lake Rajada Building
193-195 Ratchadaphisek Road
Khlong-Toey, Bangkok 10110 Thailand
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ADMINISTRATOR
The Chase Manhattan Bank
73 Tremont Street
Boston, Massachusetts 02108
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CUSTODIANS
The Thai Farmers Bank Public Company Limited
1 Soi Thai Farmers
Ratburana Road, Ratburana
Bangkok, Thailand
The Chase Manhattan Bank
3 Chase MetroTech Center
Brooklyn, New York 11245
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SHAREHOLDER SERVICING AGENT
Boston Equiserve
Investor Relations Department
P.O. Box 644
Boston, Massachusetts 02102-0644
(800) 730-6001
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LEGAL COUNSEL
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
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INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, New York 10036
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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 or visit our website at
www.msdw.com/institutional/investmentmanagement.
<PAGE>
LETTER TO SHAREHOLDERS
--------
For the three months ended March 31, 2000, The Thai Fund, Inc. (the "Fund") had
a total return, based on net asset value per share, of -13.66% compared to
-17.75% for the U.S. dollar adjusted Securities Exchange of Thailand (SET) Index
(the "Index"). For the period from the Fund's commencement of operations on
February 16, 1988 through March 31, 2000, the Fund's total return, based on net
asset value per share, was -1.53% compared to -20.25% for the Index. On March
31, 2000, the closing price of the Fund's shares on the New York Stock Exchange
was $6 1/16, representing a 22.9% premium to the Fund's net asset value per
share.
Thailand markets were sold down at the beginning of the year as the investment
community anxiously awaited the final ruling of the central bankruptcy court on
the solvency of the country's most indebted company, TPI (Thai Petrochemical
Industries). On March 15, the Thai bankruptcy court ruled TPI insolvent. This
was a step in the right direction, showing commitment to enforce the bankruptcy
laws in line with international practices. Prior to this landmark decision, the
main criticism of the Thai judicial system was that it interpreted insolvency as
liabilities being greater than assets, without taking future income streams and
cash flows into account. This rekindled investors' faith in the unduly prolonged
debt recovery process. After the ruling, the Thailand market rallied strongly,
after being down almost 25% during the first two months of the year. This ruling
should facilitate the debt-restructuring process, as Thai banks will now have
the upper hand over defaulting debtors in restructuring their non-performing
loans (NPLs). We would expect that banks' NPLs would decline gradually over the
next few quarters. However, the banking system is still loaded with some
`sticky' NPLs which could be non-restructurable. After cleaning up the easier
NPLs, there could be 15-20% of loan books left which may be more difficult to
resolve. Some bad loans were rescheduled last year and are re-entering the stock
of NPLs. Banks are still reluctant to lend and we expect lending to firm up only
in the second half of the year. We are still concerned that the capital position
of Thai banks may be fragile and they may have to recapitalize several more
times if NPLs are not effectively restructured. In March, Bangkok Bank announced
plans to raise another 20 billion baht to recapitalize its balance sheet.
Despite these longer term concerns, change at the margin for the banking sector
is certainly positive for now.
The real economy in Thailand continued to bounce back after two years of deep
recession. Buoyed by brisk external sector growth, Thailand closed in the fourth
quarter of 1999 with a higher than expected 6.5% GDP growth. GDP growth
expectations for the year 2000 exceed 6%. Robust global demand continues to buoy
the country's electronic manufacturing and export sectors. Over the last decade,
the share of electronic and computer products has risen from 13% of total
exports to 27%. The electronics sector in Thailand trades at a much cheaper
valuation relative to regional counterparts, and we continue to hold companies
like Delta Electronics in the Fund.
Our Fund is also overweight stocks in the media sector as it is likely to be a
key beneficiary of economic recovery. Advertisers are coming back strongly as
consumption picks up and certain of these companies should see an increase in
rates during the first half of the current year. We continue to be positive on
telecommunications related stocks. Internet and wireless telephone penetrations
in Thailand still remains low relative to other Asian markets and we see this as
a great long term growth sector in Thailand.
Overall, the Thailand market offers reasonable value relative to other Asian
markets, but returns will be driven by bottom-up stock selection in the medium
term.
Sincerely,
/s/ Harold J. Schaaff, Jr.*
Harold J. Schaaff, Jr.*
PRESIDENT AND DIRECTOR
May 2000
THE INFORMATION CONTAINED IN THIS OVERVIEW REGARDING SPECIFIC SECURITIES IS FOR
INFORMATIONAL PURPOSES ONLY AND SHOULD NOT BE CONSTRUED AS A RECOMMENDATION TO
PURCHASE OR SELL THE SECURITIES MENTIONED.
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DAILY NET ASSET AND MARKET VALUES, AS WELL AS MONTHLY PORTFOLIO INFORMATION FOR
THE FUND, ARE AVAILABLE ON OUR WEBSITE AT
www.msdw.com/institutional/investmentmanagement.
* HAROLD J. SCHAAFF, JR. WAS ELECTED PRESIDENT AND DIRECTOR OF THE FUND ON MARCH
20, 2000. MR. SCHAAFF JOINED MORGAN STANLEY DEAN WITTER IN 1989 AND IS A
MANAGING DIRECTOR OF MORGAN STANLEY & CO. INCORPORATED AND MORGAN STANLEY DEAN
WITTER INVESTMENT MANAGEMENT INC. HE FORMERLY SERVED AS GENERAL COUNSEL AND
SECRETARY OF MORGAN STANLEY DEAN WITTER INVESTMENT MANAGEMENT INC.
2
<PAGE>
The Thai Fund, Inc.
Investment Summary as of March 31, 2000 (Unaudited)
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<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>
Fiscal Year to Date -22.40% -- -13.66% -- -17.75% --
One Year -10.19 -10.19% 38.48 38.48% 12.78 12.78%
Five Year -66.24 -19.52 -76.94 -25.43 -78.58 -26.52
Ten Year -42.30 -5.35 -48.07 -6.34 -67.69 -10.68
Since Inception* -21.09 -1.93 -1.53 -0.13 -20.25 -1.85
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
--------------------------------------------------------------------------------
RETURNS AND PER SHARE INFORMATION
[GRAPH]
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
THREE
MONTHS
ENDED
MARCH 31,
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000
----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value Per Share....... $13.08 $15.41 $20.69 $39.42 $28.30 $24.89 $15.63 $3.81 $3.80 $5.71 $4.93
Market Value Per Share.......... $16.00 $16.25 $18.75 $36.88 $22.38 $22.38 $16.38 $5.25 $5.88 $7.81 $6.06
Premium/(Discount).............. 22.3% 5.5% -9.4% -6.4% -20.9% -10.1% 4.8% 37.8% 54.7% 36.8% 22.9%
Income Dividends................ $ 0.21 $ 0.21 -- $ 0.36 $ 0.35 $ 0.11 $ 0.32 $0.11 $0.19 -- --
Capital Gains Distributions..... $ 1.68 $ 0.47 -- $ 0.51 $ 4.62 $ 3.38 $ 0.08 $0.12 -- -- --
Fund Total Return (2)........... -20.44% 23.08% 34.26% 98.90% -10.40%+ -0.10% -35.93% -75.17% 2.88% 50.26% -13.66%
Index Total Return (3).......... -28.60% 15.80% 24.71% 88.40% -17.76% -6.11% -36.25% -75.54% 22.43% 32.41% -17.75%
</TABLE>
(1) Assumes dividends and distributions, if any, were reinvested.
(2) Total investment return based on net asset value per share 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
per share of the Fund.
(3) The U.S. dollar adjusted Securities Exchange of Thailand (SET) Index is a
capitalization weighted index of all stocks traded on the Stock Exchange of
Thailand, including dividends, expressed in U.S. dollars.
* The Fund commenced operations on February 16, 1988.
+ This return does not include the effect of the rights issued in connection
with the Rights Offering.
3
<PAGE>
The Thai Fund, Inc.
Investment Summary as of March 31, 2000 (Unaudited)
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DIVERSIFICATION OF TOTAL INVESTMENTS
[CHART]
<TABLE>
<S> <C>
Equity Securities (96.3%)
Short-Term Investments (3.7%)
</TABLE>
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INDUSTRIES
[CHART]
<TABLE>
<S> <C>
Banks (15.0%)
Beverages (3.8%)
Communications Equipment (6.6%)
Construction Materials (15.1%)
Diversified Telecommunication Services (9.9%)
Electronic Equipment & Instruments (9.0%)
Food Products (6.9%)
Media (5.4%)
Oil & Gas (4.1%)
Telecommunication Wireless (5.3%)
Other (18.9%)
</TABLE>
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TEN LARGEST HOLDINGS
<TABLE>
<CAPTION>
PERCENT
OF
NET
ASSETS
<S> <C>
1. Delta Electronics Public Co., Ltd. 9.0%
2. Siam Cement Co., Ltd. 8.9
3. Thai Farmers Bank Public Co., Ltd. 8.5
4. Charoen Pokphand Feedmill Co., Ltd. 6.9
5. Shinawatra Computer Co., Ltd. 6.6
6. Siam City Cement Co., Ltd. 6.2
7. TelecomAsia Corp. Public Co., Ltd. 5.4
8. BEC World Co., Ltd. 5.4
9. Advanced Information Services Co., Ltd. 5.3
10. Shinawatra Satellite Public Co., Ltd. 4.5
------
66.7%
======
</TABLE>
4
<PAGE>
FINANCIAL STATEMENTS
------
STATEMENT OF NET ASSETS (UNAUDITED)
------
MARCH 31, 2000
<TABLE>
<CAPTION>
VALUE
SHARES (000)
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<S> <C> <C>
THAI INVESTMENT PLAN (98.8%)
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THAI COMMON STOCKS(95.1%)
(Unless Otherwise Noted)
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AIRLINES(2.4%)
Thai Airways International Public Co., Ltd. 1,329,900 U.S. $ 1,547
------------------
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AUTO COMPONENTS(0.4%)
Thai Storage Battery Co., Ltd. 390,600 235
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BANKS(14.3%)
Bangkok Bank Public Co., Ltd. 2,288,750 2,360
Siam Commercial Bank Co., Ltd. (Foreign) 1,711,900 1,460
Thai Farmers Bank Public Co., Ltd. 6,124,100 5,546
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9,366
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BEVERAGES(3.8%)
The Serm Suk Co., Ltd. 869,300 2,505
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CHEMICALS(2.5%)
National Petrochemical Co., Ltd. 1,526,300 1,614
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COMMUNICATIONS EQUIPMENT(6.6%)
Shinawatra Computer Co., Ltd. 627,300 4,313
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CONSTRUCTION MATERIALS(15.1%)
Siam Cement Co., Ltd. 416,500 5,793
Siam City Cement Co., Ltd. 1,271,945 4,069
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9,862
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DIVERSIFIED TELECOMMUNICATION SERVICES(9.9%)
Shinawatra Satellite Public Co., Ltd. 3,409,475 2,952
Telecomasia Corp. Public Co., Ltd. 2,534,500 3,552
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6,504
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ELECTRIC UTILITIES(2.5%)
Electricity Generating Public Co., Ltd. 1,950,800 1,625
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ELECTRONIC EQUIPMENT & INSTRUMENTS(9.0%)
Delta Electronics Public Co., Ltd. 468,355 5,920
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FOOD & HOUSEHOLD PRODUCTS(1.8%)
Thai Union Frozen Products Public Co., Ltd. 380,200 1,176
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FOOD PRODUCTS(6.9%)
Charoen Pokphand Feedmill Co., Ltd. 1,190,948 4,503
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HOUSEHOLD DURABLES(1.8%)
Compass East Industry Public Co., Ltd. 348,700 1,180
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INSURANCE(1.0%)
Bangkok Insurance Co., Ltd. 248,100 656
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MEDIA(5.4%)
Bec World Co., Ltd. 480,100 3,504
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OIL & GAS(4.1%)
Ptt Exploration & Production Public Co., 527,000 2,717
Ltd.
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REAL ESTATE(0.6%)
Golden Land Property Development Public
Co., Ltd. 1,850,000 421
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TEXTILES & APPAREL(1.7%)
Big C Supercenter Co., Ltd.
Saha-Union Co., Ltd. 1,483,600 441
Thai Rung Textile Co., Ltd. 958
Thai Wacoal Co., Ltd. 347,013 670
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1,111
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WIRELESS TELECOMMUNICATION SERVICES(5.3%)
Advanced Information Services Co., Ltd. 335,100 3,473
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TOTAL THAI COMMON STOCKS
(Cost U.S.$65,753) 62,232
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<CAPTION>
NO. OF VALUE
WARRANTS (000)
----------------------------------------------------------------------------------------
<S> <C> <C>
WARRANTS(0.7%)
----------------------------------------------------------------------------------------
BANKS(0.7%)
Siam Commercial Bank Public Co., Ltd.,
Expiring 5/10/02 (Cost U.S.$--@) 1,687,800 458
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<CAPTION>
FACE
AMOUNT VALUE
(000) (000)
----------------------------------------------------------------------------------------
<S> <C> <C>
FOREIGN CURRENCY ON DEPOSIT WITH CUSTODIAN(3.0%)
(INTEREST BEARING DEMAND ACCOUNT)
----------------------------------------------------------------------------------------
THAI BAHT
(Cost U.S.$1,903) THB 72,500 1,917
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TOTAL THAI INVESTMENT PLAN
(Cost U.S.$67,656) 64,607
------------------
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5
<PAGE>
<CAPTION>
FACE
AMOUNT VALUE
(000) (000)
----------------------------------------------------------------------------------------
<S> <C> <C>
SHORT-TERM INVESTMENTS(0.7%)
----------------------------------------------------------------------------------------
REPURCHASE AGREEMENT(0.7%)
Chase Securities, Inc., 5.90%, dated
3/31/00, Due 4/3/00, to be repurchased
at U.S.$475, collateralized by U.S.$480
Federal Home Loan Mortgage Corporation,
5.75%, due 7/15/03 (Cost U.S. $474) U.S.$ 474 U.S.$ 474
------------------
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TOTAL INVESTMENTS(99.5%)
(Cost U.S.$68,130) 65,081
------------------
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OTHER ASSETS (0.5%)
Other Assets U.S.$ 1,057
Liabilities (718) 339
--------------- ------------------
----------------------------------------------------------------------------------------
NET ASSETS (100%)
Applicable to 13,267,713 issued and
outstanding U.S.$0.01 par value shares
(30,000,000 shares authorized) U.S.$ 65,420
------------------
----------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE U.S.$ 4.93
------------------
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@--Value is less than U.S.$500.
</TABLE>
6
