MERRILL
LYNCH
DEVELOPING
CAPITAL
MARKETS
FUND, INC.
Quarterly Report September 30, 1994
Investing in emerging market securities involves a number
of risk factors and special considerations, including restric-
tions on foreign investments and on repatriation of capital
invested in emerging markets, currency fluctuations, and
potential price volatility and less liquidity of securities
traded in emerging markets. In addition, there may be less
publicly available information about the issuers of securities,
and such issuers may not be subject to accounting, auditing
and financial reporting standards and requirements compar-
able to those to which US companies are subject. Therefore,
the Fund is designed as a long-term investment for investors
capable of assuming the risks of investing in emerging
markets. The Fund should be considered as a vehicle for
diversification and not as a complete investment program.
Please refer to the prospectus for details.
This report is not authorized for use as an offer of sale
or solicitation of an offer to buy shares of the Fund
unless accompanied or preceded by the Fund's current
prospectus. Past performance results shown in this report
should not be considered a representation of future
performance. Investment return and principal value of
shares will fluctuate so that shares, when redeemed,
may be worth more or less than their original cost.
Merrill Lynch
Developing Capital Markets Fund, Inc.
Box 9011
Princeton, NJ
08543-9011
Merrill Lynch Developing Capital Markets Fund, Inc.,
GRAPHIC MATERIAL APPEARS HERE. SEE APPENDIX,
GRAPHIC AND IMAGE MATERIAL, Item 1.
DEAR SHAREHOLDER
Merrill Lynch Developing Capital
Markets Fund, Inc.'s total return for
Class A Shares was +16.50%
during the September quarter. Total
return for the Fund's Class B
shares was +16.71% since inception
(July 1, 1994) to September 30,
1994. The total return for the unmanaged
Morgan Stanley Capital International
Emerging Markets Free Index was
+20.76%. The Fund's underweighting in
Asia and its overweighting in Europe
proved detrimental to its performance.
We still regard Asian stock markets as
expensive, although we recognize
that there is adequate liquidity to
drive markets such as Thailand and
Malaysia to higher levels. Our search
for attractively valued stocks in the
region led us to add to our position
in Bangkok Bank Ltd. (the largest
bank in Thailand). We expect Bangkok
Bank to capitalize on Thailand's finan-
cial sector reforms through increased
trading activity and higher fees.
In Latin America, presidential elec-
tions in Mexico and Brazil indicate
wide popular support for further
democratization and economic reform.
In addition, economic performance
far surpassed expectations of inflation
and growth. However, we feel that
many Brazilian stocks are fully valued.
Therefore, we are focusing our
investments on companies like Clark
Automotive Products Corporation S.A.
(CAPCO), a supplier of automotive
transmissions for original equipment
manufacturers. CAPCO American
Depositary Receipts are listed in the
United States, but all of its produc-
tion activities and 75% of its sales are
in Brazil. CAPCO has a sizable manu-
facturing base and an excellent record
for quality and successful product
development. The company recently
signed a letter of intent to supply
transmissions for the Corsa, GM's new
economy model automobile which
will be produced in Brazil.
In Europe, we believe that, contrary
to the growing consensus, interest
rates will not rise imminently. In fact,
interest rates in Portugal may even
decline more. This, along with
recovering corporate earnings, makes
Portuguese investments attractive.
One of the Fund's major holdings is
Sonae Investimentos-SGPS S.A., Portugal's
largest conglomerate. Sonae's activi-
ties include retailing, in which its
stores lead in the hypermarket
segment; real estate, as one of the
country's major shopping center
operators; and, the production of
chipboard, medium-density fiberboard
and other wood-based panels, for
which demand is recovering in its
home market as well as in its export
markets in Europe and Asia.
In Conclusion
We thank you for your continued
investment in Merrill Lynch Develop-
ing Capital Markets Fund, Inc., and
we look forward to reviewing our
outlook and strategy with you in our
next report to shareholders.
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
(Grace Pineda)
Grace Pineda
Vice President and Portfolio Manager
October 20, 1994
PERFORMANCE DATA
None of the past results shown should be considered a representation
of future performance. Investment return and principal value of shares
will fluctuate so that shares, when redeemed, may be worth more or
less than their original cost.
Average Annual
Total Return--
Class A Shares*
% Return Without % Return With
Period Covered Sales Charge Sales Charge*
Year Ended 9/30/94 +33.90% +25.20%
Five Years Ended 9/30/94 +16.47 +14.92
Inception (9/1/89) through 9/30/94 +16.33 +14.80
[FN]
*Maximum sales charge is 6.5%.
**Assuming maximum sales charge.
Aggregate
Total Return--
Class B Shares*
% Return % Return
Period Covered Without CDSC With CDSC**
Inception (7/1/94) to 9/30/94 +16.71% +12.71%
[FN]
*Maximum contingent deferred sales charge is 4% and is reduced to 0%
after 4 years.
**Assuming payment of applicable contingent deferred sales charge.
<TABLE>
Performance
Summary--
Class A Shares
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<S> <C> <C> <C> <C> <C>
9/1/89--12/31/89 $ 9.60 $10.13 $0.004 $0.132 + 6.97%
1990 10.13 9.04 -- 0.640 - 5.33
1991 9.04 10.89 -- 0.252 +23.35
1992 10.89 10.18 0.324 0.518 + 0.85
1993 10.18 16.80 0.278 0.069 +68.96
1/1/94--9/30/94 16.80 17.02 -- -- + 1.31
------ ------
Total $0.606 Total $1.611
Cumulative total return as of 9/30/94: +115.67%**
<FN>
*Figures may include short-term capital gains distributions.
**Figures assume reinvestment of all dividends and capital gains distributions at net asset value on the
ex-dividend date, and do not include sales charge; results would be lower if sales charge was included.
</TABLE>
<TABLE>
Recent
Performance
Results
<CAPTION>
12 Month 3 Month
9/30/94 6/30/94 9/30/93 % Change % Change
<S> <C> <C> <C> <C> <C>
ML Developing Capital Markets Fund Class A Shares* $17.02 $14.61 $12.94 +33.90%(1) +16.50%
ML Developing Capital Markets Fund Class B Shares* 16.97 -- -- -- +16.71**
ML Developing Capital Markets Fund Class A Shares--Total Return* +33.90(1) +16.50
ML Developing Capital Markets Fund Class B Shares--Total Return* -- +16.71**
<FN>
*Investment results shown do not reflect sales charges; results shown would be lower
if a sales charge was included.
**Investment results are based on the inception (7/10/94) per share net asset value of $14.54.
(1)Percent change includes reinvestment of $0.278 per share capital gains distributions.
</TABLE>
<TABLE>
CONSOLIDATED SCHEDULE OF INVESTMENTS (in US dollars)
<CAPTION>
Face Amount/ Percent of
AFRICA Industries Shares Held Investments Cost Value Net Assets
<S> <S> <C> <S> <C> <C> <C>
Morocco Banking 5,000 Banque Marocaine du Commerce Exterieur $ 132,685 $ 189,855 0.0%
150,000 Wafa Bank 5,810,251 6,001,700 1.1
------------ ------------ ------
5,942,936 6,191,555 1.1
Building & 163,154 Groupe Omnium Nord Africain 6,686,860 7,212,248 1.3
Construction
Building Materials 10,000 Les Ciments de l'Oriental 340,024 372,910 0.1
Total Investments in Morocco 12,969,820 13,776,713 2.5
South Africa Beverage 45,000 South African Breweries Ltd. 950,625 883,125 0.2
Mining 245,000 De Beers Consolidated Mines Ltd. (ADR) (b) 5,809,096 5,788,125 1.0
Total Investments in South Africa 6,759,721 6,671,250 1.2
Total Investments in Africa 19,729,541 20,447,963 3.7
EUROPE
Austria Banking 20,500 Creditanstalt--Bankverein AG 786,450 1,143,583 0.2
Building & 4,000 Bau Holding AG 362,527 337,089 0.1
Construction
Oil 18,562 Unternehmensgruppe OMV AG 1,164,668 1,673,079 0.3
Textiles 18,000 Lenzing AG 916,404 2,014,839 0.4
ATS 3,600,000 Lenzing AG, Convertible Bond,
5.25% due 12/31/2001 322,519 320,692 0.1
------------ ------------ ------
1,238,923 2,335,531 0.5
Transportation 26,400 Jenbacher Transportsysteme AG 1,588,046 454,630 0.1
Utilities 12,500 Energie--Versorgung Niederosterreich AG
(EVN) 989,417 1,597,279 0.3
Total Investments in Austria 6,130,031 7,541,191 1.5
Czech Banking 13,500 Komercni Banka 2,034,490 1,136,323 0.2
Republic
Electrical 9,206 Podnik Vypocetni Techniky (PVT) 1,903,926 1,346,986 0.2
Equipment
Food 43,000 Ceska General Food 4,520,734 4,620,509 0.8
Paper 60,807 SEPAP 3,025,696 2,177,979 0.4
Total Investments in the Czech Republic 11,484,846 9,281,797 1.6
Greece Banking 15,780 Credit Bank S.A. 613,712 668,078 0.1
84,650 Ergo Bank (Registered) S.A. 3,038,469 3,080,300 0.6
------------ ------------ ------
3,652,181 3,748,378 0.7
Beverage 122,500 Hellenic Bottling Co. S.A. (Bearer) 2,892,532 3,604,467 0.6
Building & 95,200 Michaniki S.A. 830,130 1,731,092 0.3
Construction 48,830 Titan Cement S.A. 1,960,314 1,498,804 0.3
------------ ------------ ------
2,790,444 3,229,896 0.6
Financial Services 12,950 Etba Leasing S.A. 473,030 276,325 0.0
Food 63,500 Delta Dairy S.A. (Ordinary) 1,671,986 1,801,228 0.3
41,170 Delta Dairy S.A. (Preferred) 1,170,377 871,507 0.2
------------ ------------ ------
2,842,363 2,672,735 0.5
Total Investments in Greece 12,650,550 13,531,801 2.4
Hungary Food 56,807 Pick Szeged Reszvenytarsasag (GDS) (a) 2,947,401 3,786,755 0.7
Insurance 225,000 Pharmauti Gyogyszer es Elelmiszeripari
Reszvenytarsasag 2,587,500 3,262,500 0.6
Retail Stores 1,342,000 FOTEX RT--Fotex Elso Amerikai--Magyar
Fotoszolgaltatasi Reszvenytarsasag 6,101,168 4,548,319 0.8
Total Investments in Hungary 11,636,069 11,597,574 2.1
Latvia Transportation 70,000 Baltic International USA, Inc. 470,400 245,000 0.0
70,000 Baltic International USA, Inc. (Warrants)
(c) 19,600 17,500 0.0
------------ ------------ ------
490,000 262,500 0.0
Total Investments in Latvia 490,000 262,500 0.0
Poland Appliances & 89,000,000 Swarzedzkie Fabryki Mebli S.A. 2,102,193 877,302 0.2
Household
Durables
Banking 216,000,000 Wielkopolski Bank Kredytowy 1,795,589 1,064,591 0.2
Electrical 15,000,000 Elektrim Towarzystwo Handlowe S.A. 1,916,544 684,176 0.1
Equipment
Food 40,000 International Fast Food Corp. 267,500 80,000 0.0
Total Investments in Poland 6,081,826 2,706,069 0.5
Portugal Banking 352,212 Banco Comercial Portugues, S.A.
(Registered) 4,850,549 4,837,342 0.9
77,000 Banco Totta E Acores, S.A. 1,657,285 1,501,013 0.3
------------ ------------ ------
6,507,834 6,338,355 1.2
Beverage 58,200 Uniao Cervejaria, S.A. (UNICER) 790,773 830,639 0.1
Building & 72,600 Efacec S.A. 1,363,120 1,056,835 0.2
Construction 72,600 Efacec S.A. (New Shares) 1,238,401 1,056,835 0.2
280,000 Soares da Costa S.A. 5,551,268 5,690,380 1.0
172,200 Sociedade de Empreitadas Somague, S.A. 1,342,194 1,760,146 0.3
------------ ------------ ------
9,494,983 9,564,196 1.7
Retail 125,200 Jeronimo Martins S.A. 2,895,368 5,150,633 0.9
850,050 Sonae Investimentos-SGPS S.A. 18,070,132 18,830,222 3.4
------------ ------------ ------
20,965,500 23,980,855 4.3
Total Investments in Portugal 37,759,090 40,714,045 7.3
</TABLE>
<TABLE>
CONSOLIDATED SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
EUROPE Percent of
(concluded) Industries Shares Held Investments Cost Value Net Assets
<S> <S> <C> <S> <C> <C> <C>
Russia Telecommunications 39,450 Petersburg Long Distance Corp. (ADR) (b) $ 301,256 $ 325,463 0.1%
Total Investments in Russia 301,256 325,463 0.1
Turkey Beverage 502,400 Ege Biracilik Ve Malt Sanayii A.S. 472,057 1,542,456 0.3
650,000 Erciyas Biracilik Ve Malt Sanayii A.S. 640,556 617,690 0.1
------------ ------------ ------
1,112,613 2,160,146 0.4
Building Materials 1,850,000 Alarko Holdings A.S. 1,435,263 1,595,760 0.3
396,000 Cimentas Izmir Cimento Fabrikasi T.A.S. 919,996 937,895 0.2
------------ ------------ ------
2,355,259 2,533,655 0.5
Food 650,000 Kerevitas Gida Sanayii Ve Ticaret A.S. 474,164 684,211 0.1
Retail 507,000 Migros Turk A.S. 357,126 1,111,842 0.2
Steel 72,775,000 Izmir Demir Celik Sanayii A.S. 4,117,899 6,170,980 1.1
Total Investments in Turkey 8,417,061 12,660,834 2.3
Total Investments in Europe 94,950,729 98,621,274 17.8
LATIN
AMERICA
Argentina Automobiles 267,991 Compania Interamericana de Automoviles
S.A. (CINA) 4,032,563 3,926,461 0.7
Banking 138,000 Banco de Galicia y Buenos Aires S.A. 1,408,096 1,615,840 0.3
252,148 Banco Frances del Rio de la Plata S.A. 1,426,566 2,514,167 0.5
------------ ------------ ------
2,834,662 4,130,007 0.8
Energy 1,551,800 Astra Compania Argentina de Petroleo S.A. 3,240,628 3,491,899 0.6
205,000 Transportadora de Gas del Sur S.A. 2,815,251 2,511,250 0.5
------------ ------------ ------
6,055,879 6,003,149 1.1
Oil & Gas Producers 122,000 Yacimientos Petroliferos Fiscales S.A.
(Sponsored) (ADR) (b) 3,114,189 3,080,500 0.6
Telecommunications 200,000 Telecom Argentina Stet--France Telecom S.A. 983,748 1,336,134 0.2
50,000 Telecom Argentina Stet--France Telecom S.A.
(ADR) (b) 3,065,372 3,275,000 0.6
34,472 Telefonica de Argentina S.A. (ADR) (b) 1,095,078 2,387,186 0.4
------------ ------------ ------
5,144,198 6,998,320 1.2
Total Investments in Argentina 21,181,491 24,138,437 4.4
Brazil Automotive 242,800 Clark Automotive Products Corp. S.A.
(CAPCO) 3,021,788 3,065,350 0.6
Banking 679,339,024 Banco Bradesco S.A. 4,571,237 6,697,709 1.2
48,967,626 Banco Nacional S.A. 970,334 1,428,222 0.3
------------ ------------ ------
5,541,571 8,125,931 1.5
Beverage 5,644,200 Companhia Cervejaria Brahma
S.A. PN (Preferred) 1,094,100 1,722,408 0.3
574,872 Companhia Cervejaria Brahma S.A.
(Warrants) (c) 14,956 817 0.0
------------ ------------ ------
1,109,056 1,723,225 0.3
Electrical 10,763,900 Light--Servicios de Eletricidade S.A. 3,549,779 4,358,621 0.8
Equipment
Mining 23,957,000 Companhia Vale do Rio Doce S.A. PN
(CVRD) (Preferred) 2,236,502 5,004,820 0.9
Oil & Related 76,963,333 Petroleo Brasileiro S.A. 10,333,572 15,265,298 2.7
Retail 1,500,000 Mesbla S.A. 350,350 323,398 0.1
Steel 6,970,300,000 Usinas Siderurgicas de Minas
Gerais--Usiminas S.A. 5,007,302 11,453,541 2.1
Telecommunications 42,000 Telecomunicacoes Brasileiras S.A.--
Telebras (ADR) (b) 1,471,188 2,583,000 0.5
53,142,632 Telecomunicacoes Brasileiras
S.A.--Telebras ON 1,682,509 2,619,707 0.5
99,740,591 Telecomunicacoes Brasileiras
S.A.--Telebras PN (Preferred) 4,480,975 6,227,934 1.1
------------ ------------ ------
7,634,672 11,430,641 2.1
Utilities 3,442,400 Centrais Eletricas Brasileiras S.A.--
Eletrobras (Preferred) 846,196 1,482,818 0.3
119,587 Centrais Eletricas Brasileiras S.A.--
Eletrobras (Preferred) (Rights) (d) 0 0 0.0
260,000 Companhia Energetica de Minas Gerais S.A.
(CEMIG) (ADR) (b) 6,240,000 7,085,000 1.3
------------ ------------ ------
7,086,196 8,567,818 1.6
Total Investments in Brazil 45,870,788 69,318,643 12.7
Chile Apparel 6,800,201 Bata Chile S.A. 1,920,913 1,634,029 0.3
Broadcast & 126,132 Editorial Lord Cochrane S.A. 62,664 65,821 0.0
Publishing
Utilities 17,000 Compania de Telefonos de Chile S.A. (ADR)
(b) 2,037,586 1,491,750 0.3
Total Investments in Chile 4,021,163 3,191,600 0.6
</TABLE>
<TABLE>
CONSOLIDATED SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
LATIN AMERICA Percent of
(concluded) Industries Shares Held Investments Cost Value Net Assets
<S> <S> <C> <S> <C> <C> <C>
Mexico Banking 380,500 Grupo Financiero Banamex Accival,
S.A. de C.V.--Banacci $ 3,682,726 $ 2,691,424 0.5%
Beverage 50,000 Fomento Economico Mexicano, S.A. de C.V.
(FEMSA) (ADR) (b) 195,000 263,750 0.0
447,500 Fomento Economico Mexicano, S.A. de C.V.
(FEMSA) (Ordinary) 1,780,336 2,395,108 0.4
61,900 Grupo Embotellador de Mexico, S.A. de C.V. 1,747,469 1,795,100 0.3
------------ ------------ ------
3,722,805 4,453,958 0.7
Building & Construction 155,000 Grupo Tribasa, S.A. de C.V. (ADR) (b) 3,974,192 5,696,250 1.0
806,500 Tolmex, S.A. de C.V. 'B' 5,928,905 12,241,306 2.2
------------ ------------ ------
9,903,097 17,937,556 3.2
Capital Goods 89,437 Cementos Mexicanos, S.A. de C.V. (Class B) 1,607,850 1,643,405 0.3
394,875 Cementos Mexicanos, S.A. de C.V. (Class B)
(ADR) (b) 2,952,927 3,636,853 0.7
------------ ------------ ------
4,560,777 5,280,258 1.0
Electrical 287,800 Grupo Empresarial Fenix, S.A. de C.V.
(ELEKTRA) 'L' Shares 2,404,684 3,146,885 0.6
Financial Services 66,700 Grupo Financiero Bancomer, S.A. de C.V.
(ADR) (b) 2,224,175 1,600,800 0.3
195,250 Servicios Financieros Quadrum, S.A. de C.V.
(ADR) (b) 2,452,895 3,124,000 0.6
------------ ------------ ------
4,677,070 4,724,800 0.9
Food 1,600,000 Grupo Herdez, S.A. de C.V. 'A' 1,450,009 1,626,879 0.3
Glass Manufacturing 56,000 Vitro, S.A. de C.V. 387,158 478,632 0.1
120,500 Vitro, S.A. de C.V. (ADR) (b) 2,448,344 3,117,938 0.6
------------ ------------ ------
2,835,502 3,596,570 0.7
Health & Personal Care 125,000 Kimberly-Clark de Mexico, S.A. de C.V. 2,069,659 2,615,679 0.5
Leisure 825,700 Grupo Carso, S.A. de C.V. 'A' 6,725,536 9,320,457 1.7
105,000 Grupo Carso, S.A. de C.V. (ADR) (b) 2,035,998 2,362,500 0.4
93,000 Grupo Situr, S.A. de C.V. (ADR) (b) 1,700,594 3,138,518 0.6
458,000 Grupo Situr, S.A. de C.V. 'B' (Ordinary) 1,419,439 1,571,211 0.3
------------ ------------ ------
11,881,567 16,392,686 3.0
Metals 450,000 Grupo Sidek, S.A. de C.V. 1,991,716 2,161,804 0.4
11,188 Grupo Sidek, S.A. de C.V. 'L' 49,518 56,385 0.0
82,700 Grupo Simec, S.A. de C.V. (ADR) (b) 1,464,457 2,315,600 0.4
745,000 Grupo Simec, S.A. de C.V. (Ordinary) 670,192 1,031,978 0.2
------------ ------------ ------
4,175,883 5,565,767 1.0
Retail 2,375,000 Cifra, S.A. de C.V. 'C' 4,796,743 6,649,720 1.2
Utilities 331,250 Telefonos de Mexico, S.A. de C.V. (ADR)
(b) 19,736,780 20,703,125 3.7
Total Investments in Mexico 75,897,302 95,385,307 17.3
Panama Beverage 74,750 Panamerican Beverages, Inc. (Class A) 2,289,974 2,681,656 0.5
Total Investments in Panama 2,289,974 2,681,656 0.5
Peru Banking 138,774 Banco de Credito de Peru S.A. 94,494 296,002 0.1
25,000 Banco Weise Limitado S.A. (ADR) (b) 493,750 606,250 0.1
------------ ------------ ------
588,244 902,252 0.2
Mining 497,154 Southern Peru Copper Corp. S.A. 2,196,347 2,619,986 0.5
Total Investments in Peru 2,784,591 3,522,238 0.7
Venezuela Building & Construction 59,555 Corporacion Ceramica Carabobo CA--S.A.C.A.
(Class A) 170,883 77,267 0.0
79,776 Corporacion Ceramica Carabobo CA--S.A.C.A.
(Class B) 131,693 119,967 0.0
------------ ------------ ------
302,576 197,234 0.0
Building Materials 32,236 Venezolana de Cementos S.A.C.A. (VENCEMOS) 42,076 56,081 0.0
Utilities 1,807,183 C.A. La Electricidad de Caracas
S.A.I.C.A.--S.A.C.A. 4,219,681 3,413,047 0.6
Total Investments in Venezuela 4,564,333 3,666,362 0.6
Total Investments in Latin America 156,609,642 201,904,243 36.8
MIDDLE
EAST
Pakistan Banking 190,060 Bank of Punjab 500,391 446,917 0.1
Electrical Equipment 411,775 Karachi Electric Supply Corp. Ltd. 430,873 578,271 0.1
Total Investments in Pakistan 931,264 1,025,188 0.2
Total Investments in the Middle East 931,264 1,025,188 0.2
</TABLE>
<TABLE>
CONSOLIDATED SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
PACIFIC Face Amount/ Percent of
BASIN/ASIA Industries Shares Held Investments Cost Value Net Assets
<S> <S> <C> <S> <C> <C> <C>
Australia Media/Publishing 458,300 Nine Network Australia Ltd. $ 949,114 $ 1,393,874 0.2%
Merchandising 265,000 Amway Asia Pacific Ltd. 7,549,106 7,983,125 1.4
Paper & Pulp 438,800 Spicers Paper Ltd. 808,666 772,815 0.1
Total Investments in Australia 9,306,886 10,149,814 1.7
China Appliances & 3,135,500 Shenzhen China Bicycles 'B' Co.
Household Durables (Holdings) Ltd. 2,109,821 2,166,976 0.4
Total Investments in China 2,109,821 2,166,976 0.4
Hong Kong Apparel 3,172,000 Top Form International Ltd. 909,258 365,367 0.1
Automotive 1,974,000 Sime Darby (Hong Kong) Ltd. 3,349,768 3,065,733 0.6
Diversified 660,000 Jardine Matheson Holdings, Ltd. 4,683,104 5,594,885 1.0
Financial Services 11,005,000 Winton Holdings Ltd. 3,849,116 3,845,561 0.7
Food 9,039,000 C.P. Pokphand Co. Ltd. (Ordinary) 2,895,870 2,702,330 0.5
Real Estate 2,000,000 Cheung Kong Holdings Ltd. 9,598,683 9,732,486 1.8
416,000 Hong Kong Land Holdings Ltd. (Warrants)
(c) 340,988 328,420 0.1
2,616,984 Hong Kong Resorts International Ltd. 3,065,333 2,497,865 0.4
------------ ------------ ------
13,005,004 12,558,771 2.3
Textiles 7,740,000 United Success International Holdings Ltd. 1,029,241 826,420 0.1
Total Investments in Hong Kong 29,721,361 28,959,067 5.3
India Aluminum 135,000 Hindalco Industries Ltd. (GDS) (a) 3,181,583 4,455,000 0.8
26,500 Hindalco Industries Ltd. (Ordinary) 496,362 950,729 0.2
30,000 Hindalco Industries Ltd. (Warrants) (c) 134,167 547,500 0.1
------------ ------------ ------
3,812,112 5,953,229 1.1
Broadcasting & 888,600 Videocon International Ltd. (ADR) (b) 7,773,607 5,109,450 0.9
Publishing
Building & 31,250 The Associated Cement Co. Ltd. 2,499,847 4,584,230 0.8
Construction
Business & 65,000 Western Paques (India) Ltd. 233,861 528,582 0.1
Public Services
Chemicals 355,500 Mardia Chemicals Ltd. 1,545,509 2,267,400 0.4
Energy 502,000 Bombay Suburban Electric Supply Co. Ltd. 3,184,756 3,902,177 0.7
140,000 Bombay Suburban Electric Supply Co. Ltd.,
Convertible Debentures, 15% due
3/01/1995 267,793 267,879 0.0
------------ ------------ ------
3,452,549 4,170,056 0.7
Tobacco 145,250 Indian Tobacco Co. Ltd. (I.T.C.) (GDR) 3,851,562 2,851,258 0.5
Utilities 667,500 Kec International Ltd. 5,050,805 5,960,297 1.1
Total Investments in India 28,219,852 31,424,502 5.6
Indonesia Banking--International 1,826,500 P.T. Bank Bali 5,296,988 4,994,795 0.9
Broadcasting & $ 745,000 P.T. Surya Citra Television,
Publishing 4% due 7/01/1997 745,000 737,550 0.1
Food & Household 1,099,000 P.T. Wicaksana Overseas International 1,681,770 2,651,783 0.5
Products
Tobacco 420,000 P.T. Gudang Garam 2,010,276 1,814,505 0.3
Total Investments in Indonesia 9,734,034 10,198,633 1.8
Korea Automotive 27,026 Dong Ah Tire Industries 1,248,434 1,798,236 0.3
Banking 330,000 Bank of Seoul 3,820,202 3,434,314 0.6
69,507 Bank of Seoul (New Shares) 491,307 705,951 0.1
------------ ------------ ------
4,311,509 4,140,265 0.7
Financial Services 69,050 Hanyang Securities Corp. 1,619,850 968,516 0.2
Food 15,560 Lotte Confectionery Corp. 1,412,542 1,905,588 0.3
Pharmaceuticals 66,012 Choong Wae Pharmaceutical Corp. 2,410,450 2,901,717 0.5
20,739 Choong Wae Pharmaceutical Corp.
(New Shares) 774,133 799,951 0.1
------------ ------------ ------
3,184,583 3,701,668 0.6
Retail Stores 12,132 Shinsegae Department Store 390,439 1,266,833 0.2
Telecommunications 6,817 Korea Mobile Telecommunications Corp. 1,328,813 5,416,036 1.0
Utilities 118,470 Korea Electric Power Corp. 4,008,319 6,148,274 1.1
Total Investments in Korea 17,504,489 25,345,416 4.4
Malaysia Automotive 3,720,000 Sime Darby BHD 11,215,620 10,740,538 1.9
Banking 4,413,000 Public Bank BHD 'Foreign' 8,461,166 10,422,100 1.8
Broadcasting 1,725,000 Sistem Televisyen Malaysia BHD 5,065,560 4,509,364 0.8
Building & 561,000 IJM Corp. BHD 2,018,065 2,134,120 0.4
Construction
Financial Services 2,324,333 Commerce Asset-Holdings BHD 8,323,364 10,519,806 1.9
Food 438,000 Nestle (Malaysia) BHD 2,836,136 2,700,117 0.5
Newspaper/Publishing 1,256,000 New Straits Times Press BHD 5,118,753 5,047,522 0.9
Steel 2,706,000 Maruichi (Malaysia) Steel Tube BHD 6,417,204 8,868,670 1.6
Telecommunications 228,000 Leader Universal Holdings BHD 339,992 1,307,686 0.2
Total Investments in Malaysia 49,795,860 56,249,923 10.0
New Zealand Beverage 1,000,000 D.B. Group Ltd. 384,967 487,620 0.1
Transportation 1,700,000 Ports of Auckland Ltd. 2,117,611 2,384,522 0.4
Total Investments in New Zealand 2,502,578 2,872,142 0.5
</TABLE>
<TABLE>
CONSOLIDATED SCHEDULE OF INVESTMENTS (concluded) (in US dollars)
<CAPTION>
PACIFIC BASIN/ Face Amount/ Percent of
ASIA(concluded)Industries Shares Held Investments Cost Value Net Assets
<S> <S> <C> <S> <C> <C> <C>
Philippines Electric Utilities 44,679 Manila Electric Co. (MERALCO) 'B' $ 165,929 578,855 0.1%
Telecommunications $ 20,000,000 Philippine Long Distance Telephone Co.,
10.625% due 6/02/2004 20,390,000 19,750,000 3.6
Total Investments in the Philippines 20,555,929 20,328,855 3.7
Singapore Banking 561,269 United Overseas Bank Ltd. (Warrants) (c) 1,307,918 2,840,430 0.5
Total Investments in Singapore 1,307,918 2,840,430 0.5
Sri Lanka Building & 262,500 Lankan Tiles 337,398 511,390 0.1
Construction
Diversified 90,625 Aitken Spence 518,247 612,412 0.1
Total Investments in Sri Lanka 855,645 1,123,802 0.2
Taiwan Merchandising 74,650 Hocheng Group Corp. (ADR) (b) 2,166,321 2,108,862 0.4
Total Investments in Taiwan 2,166,321 2,108,862 0.4
Thailand Appliances & 236,500 Karat Sanitary Ware Co., Ltd. 1,347,378 1,325,991 0.2
Household Durables
Banking 948,600 Bangkok Bank Ltd. 'Foreign' 7,046,720 9,801,314 1.8
Insurance 159,000 Ayudhya Insurance Co. 'Foreign' 1,187,126 1,528,234 0.3
20,000 Thai Reinsurance Co., Ltd. 65,928 64,878 0.0
------------ ------------ ------
1,253,054 1,593,112 0.3
Real Estate 1,760,000 Bangkok Land Company Ltd. 6,063,212 5,779,736 1.0
Utilities 49,400 Sanyo Universal Electric Co., Ltd. 1,170,520 1,147,457 0.2
Total Investments in Thailand 16,880,884 19,647,610 3.5
Total Investments in the Pacific
Basin/Asia 190,661,578 213,416,032 38.0
<CAPTION>
SHORT-TERM
SECURITIES Face Amount
United Commercial Paper* $ 15,000,000 Ciesco L.P., 4.80% due 11/08/1994 14,924,000 14,924,000 2.6
States 5,073,000 General Electric Capital Corp., 4.95%
due 10/03/1994 5,071,605 5,071,605 0.9
Total Investments in Short-Term Securities 19,995,605 19,995,605 3.5
Total Investments $482,878,359 555,410,305 100.0
============
Liabilities in Excess of Other Assets (134,852) (0.0)
------------ ------
Net Assets $555,275,453 100.0%
============ ======
Net Asset Value: Class A--Based on net assets of $482,094,285 and 28,332,232
shares outstanding $ 17.02
============
Class B--Based on net assets of $73,181,168 and 4,312,807
shares outstanding $ 16.97
============
*Commercial Paper is traded on a discount basis; the interest rates shown are the
discount rates paid at the time of purchase by the Fund.
(a)Global Depositary Shares (GDS).
(b)American Depositary Receipt (ADR).
(c)Warrants entitle the Fund to purchase a predetermined number of shares of Common
Stock. The purchase price and number of shares are subject to adjustment of
certain conditions until the expiration date.
(d)The rights may be exercised until October 13, 1994.
</TABLE>
PORTFOLIO INFORMATION
Ten Largest Equity Holdings Percent of
As of September 30, 1994 Net Assets
Telefonos de Mexico, S.A. de C.V. (ADR) 3.7%
Sonae Investimentos-SGPS S.A. 3.4
Petroleo Brasileiro S.A. 2.7
Tolmex, S.A. de C.V. 'B' 2.2
Usinas Siderurgicas de Minas Gerais--
Usiminas S.A. 2.1
Sime Darby BHD 1.9
Commerce Asset-Holdings BHD 1.9
Bangkok Bank Ltd. 'Foreign' 1.8
Cheung Kong Holdings Ltd. 1.8
Grupo Carso, S.A. de C.V. 'A' 1.7
PORTFOLIO CHANGES
For the Quarter Ended September 30, 1994
Additions
Alarko Holdings A.S.
Banco Weise Limitado S.A. (ADR)
Bangkok Land Company Ltd.
Centrais Eletricas Brasileiras S.A.--
Eletrobras (Preferred) (Rights)
Cimentas Izmir Cimento Fabrikasi T.A.S.
Companhia Energetica de Minas Gerais S.A.
(CEMIG) (ADR)
Editorial Lord Cochrane S.A.
Erciyas Biracilik Ve Malt Sanayii A.S.
Grupo Sidek, S.A. de C.V. 'L'
Hocheng Group Corp. (ADR)
Hong Kong Land Holdings Ltd. (Warrants)
Indian Tobacco Co. Ltd. (I.T.C.) (GDR)
Karat Sanitary Ware Co., Ltd.
Kec International Ltd.
Nestle (Malaysia) BHD
New Straits Times Press BHD
P.T. Bank Bali
P.T. Wicaksana Overseas International
Sanyo Universal Electric Co., Ltd.
Sime Darby BHD
Sistem Televisyen Malaysia BHD
Thai Reinsurance Co., Ltd.
Yacimientos Petroliferos Fiscales S.A.
(Sponsored) (ADR)
Deletions
Ampal--American Israel Corp.
Ampal--American Israel Corp. (Warrants)
Banco Comercial Portugues, S.A. (ADR)
China Light & Power Co., Ltd.
Dogan Sirketler Grubu Holding A.S.
Estoril--Sol S.A.
Grupo Financiero (GBM) Atlantico,
S.A. de C.V.
Grupo Posadas, S.A. de C.V. (ADR)
The Hong Kong and China Gas Co.
Hong Kong & Shanghai Banking Corp.
Holdings PLC
Idris Hydraulic BHD
J. Boutari & Son S.A. (Bearer)
Jardine Strategic Holdings, Ltd.
Johnson Electric Holdings Ltd.
Katselis Sons S.A.
Michaniki S.A. (Preferred)
Ming Pao Enterprise Corp. Ltd.
San Miguel Corp. 'B'
Sun Hung Kai Properties Ltd.
United Communication Industry Public
Co. Ltd.
Unternehmensgruppe OMV AG (New Shares)
Yapi Kredi Bankasi A.S.
OFFICERS AND DIRECTORS
Arthur Zeikel, President and Director
Donald Cecil, Director
Edward H. Meyer, Director
Charles C. Reilly, Director
Richard R. West, Director
Terry K. Glenn, Executive Vice President
Norman R. Harvey, Senior Vice President
Donald C. Burke, Vice President
Grace Pineda, Vice President and Portfolio Manager
Gerald M. Richard, Treasurer
Mark B. Goldfus, Secretary
Custodian
The Chase Manhattan Bank, N.A.
Global Securities Services
Chase MetroTech Center
Brooklyn, New York 11245
Transfer Agent
Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, Florida 32246-6484
(800) 637-3863
APPENDIX: GRAPHIC AND IMAGE MATERIAL.
Item 1:
Asset Allocation as a Percentage* of Net Assets as of September
30, 1994
A map illustrating the following percentages:
Peru 0.7%
Panama 0.5%
Venezuela 0.6%
Brazil 12.7%
Portugal 7.3%
Hungary 2.1%
Austria 1.5%
Poland 0.5%
Czech Republic 1.6%
Russia 0.1%
Greece 2.4%
Pakistan 0.2%
India 5.6%
Thailand 3.5%
Singapore 0.5%
China 0.4%
Korea 4.4%
Mexico 17.3%
Chile 0.6%
Argentina 4.4%
Morocco 2.5%
South Africa 1.2%
Turkey 2.3%
Sri Lanka 0.2%
Malaysia 10.0%
Indonesia 1.8%
Hong Kong 5.3%
Phillipines 3.7%
Austrailia 1.7%
Taiwan 0.4%
New Zealand 0.5%
[FN]
*Total may not equal 100%.
