ALLIANCE SHORT-TERM MULTI-MARKET TRUST, INC.
SEMI-ANNUAL REPORT
APRIL 30, 1996
ALLIANCE
INVESTING WITHOUT THE MYSTERY.
LETTER TO SHAREHOLDERS ALLIANCE SHORT-TERM MULTI-MARKET TRUST, INC.
_______________________________________________________________________________
June 3, 1996
Dear Shareholder:
We're pleased to provide you with an update on fixed income market activity and
the investment results for Alliance Short-Term Multi-Market Trust. The
following pages include information that covers the period from November 1,
1995, the beginning of the fiscal year, through April 30, 1996.
MARKET OVERVIEW
The U.S. bond market enjoyed a sustained broad-based rally throughout most of
1995 and into early 1996, though economic news led to a setback in February.
The market reacted negatively to the stronger-than-expected job growth in the
U.S. and doubts about whether the Federal Reserve would lower interest rates
again. Outside the U.S., emerging market and other foreign debt prices rose
sharply as positive developments in Latin America and Central Europe encouraged
foreign investors.
INVESTMENT RESULTS
As shown in the table below Alliance Short-Term Multi-Market Trust enjoyed
solid returns in both the six- and twelve-month periods ended April 30, 1996.
For comparison we've shown the performance for the short maturity U.S.
government bond market, represented by the unmanaged Merrill Lynch (ML) 1-3
Year Government Bond Index, and for the Lipper Short World Multi-Market Income
Funds Average, which reflects performance of 44 funds. This peer group has
generally similar investment objectives to Short-Term Multi-Market Trust though
investment policies for the various funds may differ.
TOTAL RETURN
PERIODS ENDED APRIL 30, 1996
6 MONTHS 12 MONTHS
-------- ---------
ALLIANCE SHORT-TERM MULTI-MARKET TRUST
Class A +6.95% +12.65%
Class B +6.52% +11.60%
Class C +6.52% +11.61%
ML 1-3 YR. INDEX +2.08% +6.89%
LIPPER SHORT WORLD MM FUNDS AVERAGE +3.92% +8.98%
TOTAL RETURNS ARE BASED ON THE NET ASSET VALUES OF EACH CLASS OF SHARES AS OF
APRIL 30; ADDITIONAL INVESTMENT RESULTS APPEAR ON PAGE 4. THE FUND'S BENCHMARKS
ARE UNMANAGED.
As of April 30, 1996 the Fund's assets holdings, based on market value were
distributed as follows:
PORTFOLIO DISTRIBUTION BY COUNTRY:
U.S. - 27.0%
Germany - 9.2%
Mexico - 8.6%
Canada - 7.8%
Denmark - 7.2%
Ireland - 6.6%
New Zealand - 5.3%
Australia - 5.1%
Finland - 5.0%
Sweden - 4.6%
Norway - 4.2%
Italy - 3.6%
France - 3.1%
U.K. - 2.7%
INVESTMENT OUTLOOK
The U.S. economy appears to be healthy, with modest growth expected in the
period ahead and falling into the 2%-2.5% range by year-end. With a gradually
strengthening economy and steady inflation, we expect no Federal Reserve action
on interest rates over the medium term. If our forecast proves correct, the
result should be steady U.S. bond prices.
The U.S. economy survived an inventory scare in 1995 and entered 1996 in a
relatively balanced and healthy condition. The latest economic data show the
U.S. economy's 'soft landing' is still intact. February's shocking payroll gain
grabbed headlines, but the 12-month comparisons were all numbers that support a
soft landing. Consumer confidence has bounced back, debt service burdens are
still manageable, and February retail sales had their best showing since last
summer, climbing 5% on a year-on-year basis. Manufacturing is likely to remain
a soft spot, although new orders for durable goods are showing hidden strength
and unfilled orders continue to rise. Revised data show the much-feared
slowdown in capital spending has already occurred. We expect a gradual
re-strengthening in the U.S. economy over the next six to twelve months.
1
ALLIANCE SHORT-TERM MULTI-MARKET TRUST, INC.
_______________________________________________________________________________
Measured inflation at the consumer and producer levels remains well behaved and
the U.S. economy continues to operate in the inflation 'safe zone.' However,
recent increases in unit labor costs and commodity prices warn against
complacency. Federal Reserve policy has moved into a holding pattern, and
chances for a meaningful deficit reduction plan have receded as politicians
increasingly turn their attention to the 1996 election campaign.
In the following pages is a discussion with Douglas Peebles, your Fund's
portfolio manager. Mr. Peebles provides an update on the Fund's current
investments and potential new areas of opportunity. Thank you for your
investment in Alliance Short-Term Multi-Market Trust. We look forward to
reporting to you again on market activity and the Fund's investment results
later in the year.
Sincerely,
John D. Carifa
Chairman and President
2
INTERVIEW WITH PORTFOLIO MANAGER
DOUGLAS J. PEEBLES, VICE PRESIDENT
ALLIANCE SHORT-TERM MULTI-MARKET TRUST, INC.
_______________________________________________________________________________
Q: THE FUND WAS ABLE TO PRODUCE RELATIVELY STRONG PERFORMANCE RESULTS OVER THE
LAST REPORTING PERIOD. WHAT AREAS OF INVESTMENT MOST BENEFITED THE FUND'S
PERFORMANCE?
MR. PEEBLES: The Fund's performance benefited most strongly from the European
fixed income markets during the last six months. Sluggish gross domestic
product growth combined with low and falling inflation levels, allowed for the
region's governing bodies' continued policy of easing of interest rates. In
turn, the lower rates led to higher fixed income prices and thus a higher net
asset value for the Fund.
Q: WHAT IS YOUR CURRENT OUTLOOK FOR GLOBAL FIXED INCOME MARKETS?
MR. PEEBLES: Our long-term outlook for fixed income markets is quite
optimistic. We believe world gross domestic product growth will be positive but
sluggish and inflation will remain subdued. A reversal of the long-term trend
of increased government spending should keep total gross domestic product
growth under control. The latter, along with increasing competition from the
emerging markets' economies, should hold down the wage increases that directly
affect the inflation outlook. This combination of low growth and low inflation
provide an excellent environment for global bond investing. This long-term
favorable outlook, however, does not preclude shorter term market sell-offs
resulting from the normal shifts and adjustments in the business cycle.
Q: IN THE LAST REPORT YOU INDICATED THAT YOU WERE LOOKING FOR FURTHER EASING BY
THE WORLD'S MAJOR CENTRAL BANKS, THE U.S. FEDERAL RESERVE, THE BANK OF JAPAN
AND THE GERMAN BUNDESBANK. ARE YOU STILL EXPECTING THIS TO CONTINUE?
MR. PEEBLES: No. The Federal Reserve and the Bank of Japan are probably
finished lowering interest rates. Even though we are not expecting any
near-term increase, the likelihood of any additional decrease is small. The
German Bundesbank, however, is very likely to decrease rates in view of the
strong possibility of recession looming over the German economy.
Q: IS THIS POTENTIAL FOR FURTHER INTEREST RATE CUTS IN GERMANY THE REASON THAT
THE PORTFOLIO IS HEAVILY WEIGHTED IN EUROPEAN ASSETS?
MR. PEEBLES: Yes. The potential for further rate cuts in Europe, both by the
Bundesbank and other European central banks, makes short-dated fixed-income
securities very attractive investments. The driving force behind European
policy makers' actions for the foreseeable future is the debt and budget
deficit targets established by the Maastricht treaty for European Monetary
Union. In order to achieve this end, however, government debt and deficit
levels need to be dramatically reduced from their current levels. This fiscal
contraction leaves monetary policy as the only tool available to stimulate the
sluggish European economies. This mixture of tight fiscal/loose monetary
policy, while quite bond friendly, is not a good combination for a currency.
For this reason we remain quite bullish on the U.S. dollar versus the European
currencies.
Q: IF GERMANY IS ABLE TO GET ITS ECONOMY BACK ON TRACK AND THE U.S. AND JAPAN
CONTINUE TO PRODUCE REASONABLE GROWTH, WILL THE FUND BE ABLE TO BENEFIT IN ANY
SPECIFIC AREAS GIVEN STRONGER WORLD GROSS DOMESTIC PRODUCT GROWTH?
MR. PEEBLES: For the second half of 1996 the three major economic regions of
the developed world are likely to be in a synchronized growth pattern for the
first time in many years. This growth, however, we believe will be low compared
to historical standards. One area which is likely to be on an upswing in this
environment is the commodity sector. Increased world gross domestic product
growth often leads to a greater demand for commodities and natural resources.
If this scenario develops, the natural resource producing countries of
Australia and New Zealand are likely to benefit. This is why the portfolio has
the exposure it does to both the Australian and New Zealand markets.
3
ALLIANCE SHORT-TERM MULTI-MARKET TRUST, INC.
_______________________________________________________________________________
POLICIES AND OBJECTIVES
Alliance Short-Term Multi-Market Trust seeks the highest level of current
income through investment in a portfolio of high-quality debt securities having
remaining maturities of not more than three years. It invests primarily in a
non-diversified portfolio of debt securities denominated in the U.S. dollar and
selected foreign currencies. While the Fund normally will maintain a
substantial portion of its assets in debt securities denominated in foreign
currencies, the Fund will invest at least 25% of its net assets in U.S.
dollar-denominated securities.
INVESTMENT RESULTS
_______________________________________________________________________________
AVERAGE ANNUAL TOTAL RETURN AS OF APRIL 30, 1996
CLASS A SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
. One Year +12.65% +7.86%
. Five Years +2.75% +1.86%
. Since Inception* +5.49% +4.83%
. SEC Yield 7.50%
CLASS B SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
. One Year +11.60% +8.60%
. Five Years +1.99% +1.99%
. Since Inception* +3.91% +3.91%
. SEC Yield 7.12%
NOTE: Total returns for Class B shares from inception on February 5, 1990,
reflect conversion from Class B to Class A shares in accordance with the
six-year conversion schedule in the Fund's prospectus.
CLASS C SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
. One Year +11.61% +11.61%
. Since Inception* +1.11% +1.11%
. SEC Yield 7.14%
The average annual total returns reflect investment of dividends and/or capital
gains distributions in additional shares-with and without the effect of the
4.25% maximum front-end sales charge for Class A or applicable contingent
deferred sales charge for Class B++(3% year 1, 2% year 2, 1% year 3, 0% year
4); Class C shares are not subject to front-end sales charges, but are subject
to a 1 year 1% contingent deferred sales charge for shares purchased on or
after July 1, 1996. Past performance does not guarantee future results.
Investment return and principal value will fluctuate so that an investor's
shares, when redeemed, may be worth more or less than their original cost.
Yields are for the 30 days ended April 30, 1996.
* Inception: 5/5/89 Class A; 2/5/90 Class B; 5/3/93 Class C.
++ Assumes conversion of Class B shares into Class A shares after 6 years.
4
PORTFOLIO OF INVESTMENTS
APRIL 30, 1996 (UNAUDITED) ALLIANCE SHORT-TERM MULTI-MARKET TRUST, INC.
_______________________________________________________________________________
PRINCIPAL
AMOUNT
(000) U.S. $VALUE
- --------------------------------------------------------------------
AUSTRALIA4.9%
GOVERNMENT OBLIGATION4.9%
Commonwealth of Australia
12.50%, 1/15/98 (a)
(cost $35,084,768) AU$ 43,195 $36,339,533
CANADA7.6%
GOVERNMENT OBLIGATION7.6%
Government of Canada
8.00%, 11/01/98 (a)
(cost $56,281,234) CA$ 72,800 55,576,683
DENMARK7.0%
GOVERNMENT OBLIGATION7.0%
Kingdom of Denmark
9.00%, 11/15/98 (a)
(cost $54,596,699) DKK 277,000 51,439,562
FINLAND4.8%
GOVERNMENT OBLIGATION4.8%
Government of Finland
11.00%, 1/15/99 (a)
(cost $39,795,056) FIM 150,000 35,354,898
FRANCE3.0%
GOVERNMENT OBLIGATION3.0%
Government of France
5.75%, 11/12/98 (a)
(cost $22,637,709) FRF 110,000 21,835,095
GERMANY8.9%
GOVERNMENT OBLIGATION8.9%
Government of Germany
6.88%, 2/24/99 (a)
(cost $67,931,964) DEM 94,000 65,686,033
IRELAND6.4%
GOVERNMENT OBLIGATION6.4%
Republic of Ireland
6.25%, 4/01/99 (a)
(cost $46,823,214) IEP 30,185 46,829,852
ITALY3.5%
GOVERNMENT OBLIGATION3.5%
Republic of Italy
10.50%, 11/01/98 (a)
(cost $24,865,649) ITL 38,600,000 25,692,864
MEXICO5.6%
GOVERNMENT OBLIGATIONS5.6%
Mexican Treasury Bills
39.80%, 7/04/96 (a) (b) MXP 92,264 11,704,532
40.00%, 8/01/96 (a) (b) 108,533 13,420,011
41.50%, 5/02/96 (a) (b) 50,445 6,777,490
41.55%, 5/23/96 (a) (b) 64,000 8,443,797
41.70%, 5/30/96 (a) (b) 6,088 798,368
Total Mexican Securities
(cost $40,964,403) 41,144,198
NEW ZEALAND5.1%
GOVERNMENT OBLIGATION5.1%
Government of New Zealand
10.00%, 7/15/97 (a)
(cost $37,461,668) NZ$ 53,900 37,350,598
NORWAY4.1%
GOVERNMENT OBLIGATION4.1%
Kingdom of Norway
9.00%, 1/31/99 (a)
(cost $30,095,595) NOK 178,400 29,817,124
SWEDEN4.4%
GOVERNMENT OBLIGATION4.4%
Kingdom of Sweden
11.00%, 1/21/99 (a)
(cost $32,845,551) SEK 200,900 32,510,493
UNITED KINGDOM2.6%
GOVERNMENT OBLIGATION2.6%
United Kingdom Treasury
9.50%, 1/15/99 (a)
(cost $19,856,020) GBP 12,100 19,294,152
5
PORTFOLIO OF INVESTMENTS (CONTINUED)
ALLIANCE SHORT-TERM MULTI-MARKET TRUST, INC.
_______________________________________________________________________________
PRINCIPAL
AMOUNT
(000) U.S. $VALUE
- --------------------------------------------------------------------
UNITED STATES28.8%
DEBT OBLIGATIONS11.5%
KFW International Finance, Inc.
8.25%, 3/18/98 (a) US$ 4,250 $ 4,400,556
National Bank of Australia Ltd.
5.38%, 2/09/99 (a) 15,000 14,641,500
SMM Trust Co., Ltd. FRN
6.13%, 5/16/96 (a)(c) 5,000 5,000,000
7.91%, 1/22/97 (a) 41,000 40,979,500
United Mexican States
30.16%, 11/27/96 (c)(d) 20,000 19,705,600
------------
84,727,156
CERTIFICATES OF DEPOSIT8.5%
ABN-AMRO
5.56%, 6/05/96 (a) US$ 40,000 40,008,000
Rabobank
6.42%, 2/23/98 (a)(b) 25,000 22,447,500
------------
62,455,500
TIME DEPOSIT8.8%
Credit Agricole
5.31%, 5/01/96 65,000 65,000,000
Total United States Securities
(cost $211,974,385) 212,182,656
TOTAL INVESTMENTS-96.7%
(cost $721,213,915) 711,053,741
Other assets less liabilities-3.3% 24,225,367
NET ASSETS100% $735,279,108
(a) Security, or portion thereof, has been segregated to collateralize forward
exchange currency contracts. This collateral has a total value of approximately
$626,348,141.
(b) Interest rate represents annualized yield to maturity at purchase date.
(c) Stated interest rate in effect at April 30, 1996.
(d) Restricted security, valued at fair value.
Glossary:
FRN - Floating Rate Note.
See notes to financial statements.
6
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1996 (UNAUDITED) ALLIANCE SHORT-TERM MULTI-MARKET TRUST, INC.
_______________________________________________________________________________
ASSETS
Investments in securities, at value (cost $721,213,915) $711,053,741
Cash 22,524
Receivable for investment securities sold 72,776,037
Interest receivable 19,133,882
Unrealized appreciation of forward exchange currency contracts 8,944,362
Receivable for capital stock sold 273,397
Prepaid expenses 2,483
Total assets 812,206,426
LIABILITIES
Payable for investment securities purchased 71,789,351
Payable for capital stock redeemed 2,358,576
Dividend payable 1,664,360
Advisory fee payable 333,337
Distribution fee payable 86,846
Unrealized depreciation of swap contracts 62,347
Accrued expenses 632,501
Total liabilities 76,927,318
NET ASSETS $735,279,108
COMPOSITION OF NET ASSETS
Capital stock, at par $ 965,103
Additional paid-in capital 822,250,163
Distributions in excess of net investment income (7,560,599)
Accumulated net realized loss on investments, swaps,
and foreign currency transactions (78,907,884)
Net unrealized depreciation of investments, swaps,
and foreign currency denominated assets and liabilities (1,467,675)
$735,279,108
CALCULATION OF MAXIMUM OFFERING PRICE
CLASS A SHARES
Net asset value and redemption price per share($295,887,996/
38,838,337 shares of capital stock issued and outstanding) $7.62
Sales Charge-4.25% of public offering price .34
Maximum offering price $7.96
CLASS B SHARES
Net asset value and offering price per share($434,659,728/
57,051,006 shares of capital stock issued and outstanding) $7.62
CLASS C SHARES
Net asset value, redemption and offering price per share($4,731,384
/620,999 shares of capital stock issued and outstanding) $7.62
See notes to financial statements.
7
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 1996 (UNAUDITED)
ALLIANCE SHORT-TERM MULTI-MARKET TRUST, INC.
_______________________________________________________________________________
INVESTMENT INCOME
Interest (net of foreign taxes withheld of $78,051) $37,155,587
EXPENSES
Advisory fee $2,143,050
Distribution fee - Class A 450,535
Distribution fee - Class B 2,374,998
Distribution fee - Class C 19,518
Transfer agency 1,077,324
Custodian 385,952
Printing 97,049
Administrative 81,172
Audit and legal 60,482
Registration 48,964
Directors' fees 11,868
Miscellaneous 31,204
Total expenses 6,782,116
Net investment income 30,373,471
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY TRANSACTIONS
Net realized gain on investment and swap transactions 11,865,233
Net realized loss on foreign currency transactions (9,971,612)
Net change in unrealized appreciation (depreciation) of:
Investment and swap transactions (1,688,459)
Foreign currency denominated assets and liabilities 19,400,281
Net gain on investments and foreign currency transactions 19,605,443
NET INCREASE IN NET ASSETS FROM OPERATIONS $49,978,914
See notes to financial statements.
8
STATEMENT OF CHANGES IN NET ASSETS
ALLIANCE SHORT-TERM MULTI-MARKET TRUST, INC.
_______________________________________________________________________________
SIX MONTHS ENDED YEAR ENDED
APRIL 30,1996 OCTOBER 31,
(UNAUDITED) 1995
------------- ---------------
INCREASE(DECREASE)INNETASSETSFROMOPERATIONS
Net investment income $ 30,373,471 $ 76,244,033
Net realized gain(loss) on investments, swaps,
options and foreign currency transactions 1,893,621 (178,828,835)
Net change in unrealized appreciation
(depreciation) of investments, swaps,
options and foreign currency denominated
assets and liabilities 17,711,822 (10,683,058)
Net increase (decrease) in net assets from
operations 49,978,914 (113,267,860)
DISTRIBUTIONSTOSHAREHOLDERSFROM:
Net investment income
Class A (14,357,048) -0-
Class B (20,730,336) -0-
Class C (169,830) -0-
Tax return of capital
Class A -0- (38,284,995)
Class B -0- (58,142,957)
Class C -0- (436,849)
CAPITALSTOCKTRANSACTIONS
Net decrease (126,720,376) (548,036,954)
Total decrease (111,998,676) (758,169,615)
NETASSETS
Beginning of year 847,277,784 1,605,447,399
End of period $ 735,279,108 $ 847,277,784
See notes to financial statements.
9
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1996 (UNAUDITED) ALLIANCE SHORT-TERM MULTI-MARKET TRUST, INC.
_______________________________________________________________________________
NOTE A: SIGNIFICANT ACCOUNTING POLICIES
Alliance Short-Term Multi-Market Trust, Inc. (the 'Fund'), was incorporated in
the State of Maryland on February 17, 1989 as a non-diversified, open-end
investment company.
The Fund offers Class A, Class B and Class C shares. Class A shares are sold
with a front-end sales charge of up to 4.25%. Class B shares are sold with a
contingent deferred sales charge which declines from 3.0% to zero depending on
the period of time the shares are held. Class B shares will automatically
convert to Class A shares six years after the end of the calendar month of
purchase. Class C shares are sold without an initial or contingent deferred
sales charge. All three classes of shares have identical voting, dividend,
liquidation and other rights and the same terms and conditions, except that
each class bears different distribution expenses and has exclusive voting
rights with respect to its distribution plan. The following is a summary of
significant accounting policies followed by the Fund.
1. SECURITY VALUATION
Investments are stated at value. Investments for which market quotations are
readily available are valued at the closing price on the exchange on the day of
valuation or, if no such closing price is available, at the mean of the last
bid and ask price quoted on such day. Options are valued at market value or
fair value using methods as determined by the Board of Directors. Securities
for which market quotations are not readily available are valued in good faith
at fair value using methods determined by the Board of Directors. Securities
which mature in 60 days or less are valued at amortized cost, which
approximates market value unless this method does not represent fair value.
Restricted securities are valued at fair value as determined by the Board of
Directors. In determining fair value, consideration is given to cost, operating
and other financial data.
2. CURRENCY TRANSLATION
Assets and liabilities denominated in foreign currencies and commitments under
forward foreign exchange currency contracts are translated into U.S. dollars at
the mean of the quoted bid and asked price of such currencies against the U.S.
dollar. Purchases and sales of portfolio securities are translated at the rates
of exchange prevailing when such securities were acquired or sold. Income and
expenses are translated at rates of exchange prevailing when accrued.
Net realized loss on foreign currency transactions represents foreign exchange
gains and losses from sales and maturities of securities, holdings of foreign
currencies, exchange gains and losses realized between the trade and settlement
dates on security transactions, and the difference between the amount of
interest recorded on the Fund's books and the U.S. dollar equivalent amounts
actually received or paid. Net change in unrealized appreciation (depreciation)
of foreign currency denominated assets and liabilities represents net currency
gains and losses from valuing foreign currency denominated assets and
liabilities at period end exchange rates.
3. TAXES
It is the Fund's policy to meet the requirements of the Internal Revenue Code
applicable to regulated investment companies and to distribute all of its
investment company taxable income and net realized gains, if applicable, to
shareholders. Therefore, no provisions for federal income or excise taxes are
required.
4. INVESTMENT INCOME AND SECURITY TRANSACTIONS
Interest income is accrued daily. Security transactions are accounted for on
the date securities are purchased or sold. Security gains and losses are
determined on the identified cost basis. The Fund accretes discounts as
adjustments to interest income.
5. DIVIDENDS AND DISTRIBUTIONS
Dividends and distributions to shareholders are recorded on the ex-dividend
date and are determined in accordance with income tax regulations.
10
ALLIANCE SHORT-TERM MULTI-MARKET TRUST, INC.
_______________________________________________________________________________
NOTE B: ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Under the terms of an investment advisory agreement, the Fund pays Alliance
Capital Management L.P. (the 'Adviser'), an advisory fee at an annual rate of
.55 of 1% of the average daily net assets of the Fund. Such fee is accrued
daily and paid monthly.
The Adviser has agreed under the terms of the advisory agreement, to reimburse
the Fund to the extent that its aggregate expenses (exclusive of interest,
taxes, brokerage, distribution fees, and extraordinary expenses) exceed the
limits prescribed by any state in which the Fund's shares are qualified for
sale. The Fund believes that the most restrictive expense ratio limitation
currently imposed by any state is 2 1/2% of the first $30 million of the Fund's
average daily net assets, 2% of the next $70 million of the Fund's average
daily net assets and 1 1/2% of its average daily net assets in excess of $100
million. No reimbursement was required by the Adviser for the six months ended
April 30, 1996. Pursuant to the advisory agreement, the Fund also paid $81,172
to the Adviser representing the costs of certain legal and accounting services
provided to the Fund by the Adviser for the six months ended April 30, 1996.
The Fund compensates Alliance Fund Services, Inc. (a wholly-owned subsidiary of
the Adviser) under a Transfer Agency Agreement for providing personnel and
facilities to perform transfer agency services for the Fund. Such compensation
amounted to $692,732 for the six months ended April 30, 1996.
Alliance Fund Distributors, Inc. (a wholly-owned subsidiary of the Adviser)
serves as the Distributor of the Fund's shares. The Distributor received
front-end sales charges of $7,580 from the sale of Class A shares and $42,797
in contingent deferred sales charges imposed upon redemptions by shareholders
of Class B shares for the six months ended April 30, 1996.
NOTE C: DISTRIBUTION SERVICES AGREEMENT
The Fund has adopted a Distribution Services Agreement (the 'Agreement')
pursuant to Rule 12b-1 under the Investment Company Act of 1940. Under the
Agreement, the Fund pays a distribution fee to the Distributor at an annual
rate of .30 of 1% of the average daily net assets attributable to the Class A
shares and 1% of the average daily net assets attributable to both Class B and
Class C shares. Such fee is accrued daily and paid monthly. The Agreement
provides that the Distributor will use such payments in their entirety for
distribution assistance and promotional activities. The Distributor has
incurred expenses in excess of the distribution costs reimbursed by the Fund in
the amount of $27,046,458, and $1,078,460, for Class B and C shares,
respectively; such costs may be recovered from the Fund in future periods so
long as the agreement remains in effect. In accordance with the Agreement,
there is no provision for recovery of unreimbursed distribution costs incurred
by the Distributor beyond the current fiscal year for Class A shares. The
Agreement also provides that the Adviser may use its own resources to finance
the distribution of the Fund's shares.
11
NOTES TO FINANCIAL STATEMENTS (CONT.)
ALLIANCE SHORT-TERM MULTI-MARKET TRUST, INC.
_______________________________________________________________________________
NOTE D: INVESTMENT TRANSACTIONS
Purchases and sales of investment securities (excluding short-term investments
and U.S. Government obligations) aggregated $732,529,289 and $666,280,625
respectively, for the six months ended April 30, 1996. There were purchases of
$28,966,080 and sales of $28,295,938 of U.S. Government and government agency
obligations for the six months ended April 30, 1996.
The Fund enters into forward exchange currency contracts for investment
purposes and to hedge its exposure to changes in foreign currency exchange
rates on its foreign portfolio holdings and to hedge certain firm purchase and
sales commitments denominated in foreign currencies. A forward exchange
currency contract is a commitment to purchase or sell a foreign currency at a
future date at a negotiated forward rate. The gain or loss arising from the
difference between the original contracts and the closing of such contracts is
included in realized gains or losses from foreign currency transactions.
Fluctuations in the value of forward exchange currency contracts are recorded
for financial reporting purposes as unrealized gains or losses by the Fund.
The Fund's custodian will place and maintain cash not available for investment
or other liquid high quality debt securities in a separate account of the Fund
having a value equal to the aggregate amount of the Fund's commitments under
forward exchange currency contracts entered into with respect to position
hedges.
Risks may arise from the potential inability of a counterparty to meet the
terms of a contract and from unanticipated movements in the value of a foreign
currency relative to the U.S. dollar. The face or contract amount, in U.S.
dollars, as reflected in the following table, reflects the total exposure the
Fund has in that particular currency contract.
At April 30, 1996, the Fund had outstanding forward exchange currency
contracts, as follows:
<TABLE>
<CAPTION>
CONTRACT VALUE ON U.S. $ UNREALIZED
AMOUNT ORIGINATION CURRENT APPRECIATION
(000) DATE VALUE (DEPRECIATION)
----------- ------------ ------------ --------------
<S> <C> <C> <C> <C>
FOREIGN CURRENCY BUY CONTRACTS
Australian Dollars, expiring 5/20/96 4,579 $ 3,600,715 $ 3,592,815 $ (7,900)
Deutsche Marks, expiring 6/20/96 34,298 23,215,790 22,482,667 (733,123)
Japanese Yen, expiring 5/07/96-6/11/96 2,117,500 19,673,548 20,295,039 621,491
Polish Zloty, expiring 4/11/97 37,000 12,442,412 12,300,243 (142,169)
Spanish Pesetas, expiring 7/25/96 1,806,000 14,251,557 14,132,240 (119,317)
Thailand Baht, expiring 6/28/96 445,500 17,398,946 17,579,096 180,150
</TABLE>
12
ALLIANCE SHORT-TERM MULTI-MARKET TRUST, INC.
_______________________________________________________________________________
<TABLE>
<CAPTION>
CONTRACT VALUE ON U.S. $ UNREALIZED
AMOUNT ORIGINATION CURRENT APPRECIATION
(000) DATE VALUE (DEPRECIATION)
----------- ------------ ------------ --------------
<S> <C> <C> <C> <C>
FOREIGN CURRENCY SALE CONTRACTS
British Pounds, expiring 6/26/96 11,596 $ 18,015,651 $ 17,427,929 $ 587,722
Canadian Dollars, expiring 6/18/96 75,439 55,666,486 55,466,182 200,304
Deutsche Marks, expiring 6/24/96-4/11/97 243,591 162,647,319 159,856,848 2,790,471
Finnish Marka, expiring 5/20/96 171,181 36,225,741 35,420,439 805,302
French Francs, expiring 5/22/96 110,254 21,876,668 21,343,317 533,351
Japanese Yen, expiring 5/07/96-6/11/96 2,113,658 19,941,319 20,258,285 (316,966)
Netherlands Guilder, expiring 6/28/96 50,400 30,712,980 29,566,923 1,146,057
New Zealand Dollars, expiring 5/20/96 7,939 5,374,194 5,438,790 (64,596)
Spanish Pesetas, expiring 5/28/96 5,498,493 44,010,826 43,154,763 856,063
Swedish Krona, expiring 5/20/96-7/25/96 321,714 47,825,779 47,396,113 429,666
Swiss Francs, expiring 6/04/96-7/18/96 101,486 84,449,605 82,171,467 2,278,138
Thailand Baht, expiring 6/28/96 445,500 17,478,814 17,579,096 (100,282)
-----------
$8,944,362
</TABLE>
The Fund enters into currency and interest rate swaps to protect itself from
interest rate fluctuations on the underlying floating rate debt instruments as
well as foreign currency fluctuations. A swap is an agreement that obligates
two parties to exchange a series of cash flows at specified intervals based
upon or calculated by reference to changes in specified prices or rates for a
specified amount of an underlying asset. The payment flows are usually netted
against each other, with the difference being paid by one party to the other.
Risks may arise as a result of the failure of another party to the swap
contract to comply with the terms of the swap contract. The loss incurred by
the failure of a counterparty is generally limited to the net interest payment
to be received by the Fund, and/or the termination value at the end of the
contract. Therefore, the Fund considers the creditworthiness of each
counterparty to a swap contract in evaluating potential credit risk.
Additionally, risks may arise from unanticipated movements in interest rates
or in the value of the foreign securities.
The Fund records a net receivable or payable on a daily basis for the net
interest income or expense expected to be received or paid in the interest
period. Net interest received or paid on these contracts is recorded as
interest income (or as an offset to interest income). Fluctuations in the
value of swap contracts are recorded for financial statement purposes as
unrealized appreciation or depreciation on rate swap contracts.
13
NOTES TO FINANCIAL STATEMENTS (CONT.)
ALLIANCE SHORT-TERM MULTI-MARKET TRUST, INC.
_______________________________________________________________________________
At April 30, 1996, the Fund had outstanding currency and interest rate swap
contracts with the following terms:
<TABLE>
<CAPTION>
RATE TYPE
-------------------------------- UNREALIZED
SWAP NOTIONAL TERMINATION PAYMENTS MADE PAYMENTS RECEIVED APPRECIATION
COUNTERPARTY AMOUNT DATE BY THE FUND BY THE FUND (DEPRECIATION)
- ------------ ------------------- ----------- ------------- ----------------- -------------
<S> <C> <C> <C> <C> <C>
J.P. Morgan USD 41,000,000 1/22/97 Fixed-7.91% Floating+ $ 20,500
J.P. Morgan ESP 6,000,000,000 1/4/99 Fixed-9.19% (223,109)
JPY 5,150,000,000 Fixed-1.35%
J.P. Morgan ITL 30,000,000,000 4/23/99 Fixed-9.5195% Fixed-9.25% 140,262
----------
$ (62,347)
</TABLE>
At April 30, 1996, the cost of investments for federal income tax purposes was
$721,579,010. Accordingly, gross unrealized appreciation of investments was
$2,394,221 and gross unrealized depreciation of investments was $12,919,490,
resulting in net unrealized depreciation of $10,525,269 (excluding foreign
currency transactions). At October 31, 1995, the Fund had a capital loss
carryforward of $80,801,505 of which $40,988,072 expires in the year 2001,
$20,009,696 in the year 2002, and $19,803,737 in the year 2003.
NOTE E: CAPITAL STOCK
There are 3,600,000,000 shares of $.01 par value capital stock authorized,
divided into three classes, designated Class A, Class B and Class C shares.
Each Class consists of 1,200,000,000 authorized shares. Transactions in capital
stock were as follows:
SHARES AMOUNT
--------------------------- ------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
APRIL 30,1996 OCTOBER 31, APRIL 30,1996 OCTOBER 31,
(UNAUDITED) 1995 (UNAUDITED) 1995
------------ ------------ -------------- --------------
CLASS A
Shares sold 847,286 2,011,084 $ 8,805,046 $ 15,716,134
Shares issued in
reinvestment of
dividends and
distributions 992,172 2,981,786 7,455,913 23,083,728
Shares converted from
Class B to Class A 1,823,181 -0- 11,288,354 -0-
Shares redeemed (7,691,743) (30,294,790) (57,809,459) (233,197,213)
Net decrease (4,029,104) (25,301,920) $ (30,260,146) $(194,397,351)
CLASS B
Shares sold 952,707 2,069,111 $ 7,169,082 $ 16,026,464
Shares issued in
reinvestment of
dividends and
distributions 1,123,935 3,656,313 8,448,622 28,470,965
Shares converted from
Class B to Class A (1,823,181) -0- (11,288,354) -0-
Shares redeemed (13,250,716) (50,907,467) (102,030,282) (394,607,766)
Net decrease (12,997,255) (45,182,043) $ (97,700,932) $(350,110,337)
+ Floating is composed of three month LIBOR plus a fixed amount of .125%.
14
ALLIANCE SHORT-TERM MULTI-MARKET TRUST, INC.
_______________________________________________________________________________
SHARES AMOUNT
--------------------------- ------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
APRIL 30,1996 OCTOBER 31, APRIL 30, 1996 OCTOBER 31,
(UNAUDITED) 1995 (UNAUDITED) 1995
------------ ------------ -------------- --------------
CLASS C
Shares sold 297,410 646,889 $ 2,242,463 $ 5,398,144
Shares issued in
reinvestment of
dividends 10,668 43,525 80,209 339,247
Shares redeemed (144,064) (1,167,573) (1,081,970) (9,266,657)
Net increase(decrease) 164,014 (477,159) $ 1,240,702 $(3,529,266)
15
FINANCIAL HIGHLIGHTS ALLIANCE SHORT-TERM MULTI-MARKET TRUST, INC.
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
CLASS A
------------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED OCTOBER 31,
APRIL 30,1996 ---------------------------------------------------------------
(UNAUDITED) 1995 1994 1993 1992 1991
------------- ----------- ----------- ---------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year $7.47 $8.71 $9.25 $9.25 $9.94 $9.89
INCOME FROM INVESTMENT OPERATIONS
Net investment income .29(a) .46(a) .93 .92 .91 .97
Net realized and unrealized gain (loss)
on investments and foreign
currency transactions .20 (.98) (.86) (.32) (.86) .06
Net increase (decrease) in net asset
value from operations .49 (.52) .07 .60 .05 1.03
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income
and other sources (.34) -0- -0- (.60) (.72) (.97)
Tax return of capital -0- (.72) (.61) -0- -0- -0-
Distributions from net realized gain -0- -0- -0- -0- (.02) (.01)
Total dividends and distributions (.34) (.72) (.61) (.60) (.74) (.98)
Net asset value, end of period $7.62 $7.47 $8.71 $9.25 $9.25 $9.94
TOTAL RETURN
Total investment return based on net
asset value(b) 6.95% (5.74)% .84% 6.67% .49% 10.91%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $295,888 $320,333 $593,677 $953,571 $1,596,903 $2,199,393
Ratio of expenses to average net assets 1.30%(c) 1.23% 1.13% 1.16% 1.10% 1.09%
Ratio of net investment income to
average net assets 8.21%(c) 7.39% 7.28% 8.26% 9.00% 9.64%
Portfolio turnover rate 99% 230% 109% 182% 133% 146%
</TABLE>
See footnote summary on page 18.
16
ALLIANCE SHORT-TERM MULTI-MARKET TRUST, INC.
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
CLASS B
------------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED OCTOBER 31,
APRIL 30,1996 ---------------------------------------------------------------
(UNAUDITED) 1995 1994 1993 1992 1991
------------- ----------- ----------- ---------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year $7.47 $8.71 $9.25 $9.25 $9.94 $9.89
INCOME FROM INVESTMENT OPERATIONS
Net investment income .28(a) .41(a) .94 .87 .84 .89
Net realized and unrealized gain (loss)
on investments and foreign
currency transactions .20 (.99) (.93) (.34) (.86) .07
Net increase (decrease) in net asset
value from operations .48 (.58) .01 .53 (.02) .96
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income
and other sources (.33) -0- -0- (.53) (.65) (.90)
Tax return of capital -0- (.66) (.55) -0- -0- -0-
Distributions from net realized gain -0- -0- -0- -0- (.02) (.01)
Total dividends and distributions (.33) (.66) (.55) (.53) (.67) (.91)
Net asset value, end of period $7.62 $7.47 $8.71 $9.25 $9.25 $9.94
TOTAL RETURN
Total investment return based on net
asset value(b) 6.52% (6.50)% .12% 5.91% (.24)% 10.11%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $434,660 $523,530 $1,003,633 $1,742,703 $2,966,071 $3,754,033
Ratio of expenses to average net assets 2.01%(c) 1.95% 1.85% 1.87% 1.81% 1.81%
Ratio of net investment income to
average net assets 7.46%(c) 6.69% 6.58% 7.57% 8.28% 8.87%
Portfolio turnover rate 99% 230% 109% 182% 133% 146%
</TABLE>
See footnote summary on page 18.
17
FINANCIAL HIGHLIGHTS (CONTINUED) ALLIANCE SHORT-TERM MULTI-MARKET TRUST, INC.
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
CLASS C
-----------------------------------------------------
SIX MONTHS MAY 3,1993(D)
ENDED YEAR ENDED OCTOBER 31, TO
APRIL 30,1996 ------------------------ OCTOBER 31,
(UNAUDITED) 1995 1994 1993
------------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $7.47 $8.71 $9.25 $9.18
INCOME FROM INVESTMENT OPERATIONS
Net investment income .29(a) .39(a) .58 .28
Net realized and unrealized gain (loss)
on investments and foreign
currency transactions .19 (.97) (.57) .05
Net increase (decrease) in net asset
value from operations .48 (.58) .01 .33
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income
and other sources (.33) -0- -0- (.26)
Tax return of capital -0- (.66) (.55) -0-
Total dividends and distributions (.33) (.66) (.55) (.26)
Net asset value, end of period $7.62 $7.47 $8.71 $9.25
TOTAL RETURN
Total investment return based on net
asset value(b) 6.52% (6.49)% .12% 3.66%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $4,731 $3,416 $8,136 $5,538
Ratio of expenses to average net assets 1.99%(c) 1.92% 1.83% 1.82%(c)
Ratio of net investment income to
average net assets 7.46%(c) 6.66% 6.50% 7.19%(c)
Portfolio turnover rate 99% 230% 109% 182%
</TABLE>
(a) Based on average shares outstanding.
(b) Total investment return is calculated assuming an initial investment made
at the net asset value at the beginning of the period, reinvestment of all
dividends and distributions at net asset value during the period, and a
redemption on the last day of the period. Initial sales charge or contingent
deferred sales charge is not reflected in the calculation of total investment
return. Total investment return calculated for a period of less than one year
is not annualized.
(c) Annualized.
(d) Commencement of distributions.
18
ALLIANCE SHORT-TERM MULTI-MARKET TRUST, INC.
_______________________________________________________________________________
BOARD OF DIRECTORS
JOHN D. CARIFA, CHAIRMAN AND PRESIDENT
RUTH BLOCK (1)
DAVID H. DIEVLER (1)
JAMES R. GREENE (1)
DR. JAMES M. HESTER (1)
CLIFFORD L. MICHEL (1)
EUGENE F. O'NEIL (1)
ROBERT C. WHITE (1)
OFFICERS
KATHLEEN A. CORBET, SENIOR VICE PRESIDENT
WAYNE D. LYSKI, SENIOR VICE PRESIDENT
F. JEANNE GOETZ, VICE PRESIDENT
DOUGLAS J. PEEBLES, VICE PRESIDENT
JOHN J. KELLEY, VICE PRESIDENT
EDMUND P. BERGAN, JR., SECRETARY
MARK D. GERSTEN, TREASURER AND CHIEF FINANCIAL OFFICER
JUAN J. RODRIGUEZ, CONTROLLER
CUSTODIAN
BROWN BROTHERS HARRIMAN AND CO.
40 Water Street
Boston, MA 02109
PRINCIPAL UNDERWRITERS
ALLIANCE FUND DISTRIBUTORS, INC.
1345 Avenue of the Americas
New York, NY 10105
LEGAL COUNSEL
SEWARD & KISSEL
One Battery Park Plaza
New York, NY 10004
TRANSFER AGENT
ALLIANCE FUND SERVICES, INC.
P.O. Box 1520
Secaucus, NJ 07096-1520
Toll-free 1-(800) 221-5672
INDEPENDENT AUDITORS
ERNST & YOUNG LLP
787 Seventh Avenue
New York, NY 10019
(1) Member of the Audit Committee.
19
ALLIANCE SHORT-TERM MULTI-MARKET TRUST, INC.
1345 Avenue of the Americas
New York, NY 10105
(800) 221-5672
ALLIANCECAPITAL
INVESTING WITHOUT THE MYSTERY.
THIS REPORT IS INTENDED SOLELY FOR DISTRIBUTION TO CURRENT SHAREHOLDERS
OF THE FUND.
R THESE REGISTERED SERVICE MARKS USED UNDER LICENSE FROM THE OWNER,
ALLIANCE CAPITAL MANAGEMENT L.P.
STMSR
