MERRILL
LYNCH
DEVELOPING
CAPITAL
MARKETS
FUND, INC.
Semi-Annual Report December 31, 1993
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.
Asset Allocation
As a Percentage of
Net Assets as of
December 31, 1993
GRAPHIC MATERIAL APPEARS HERE. SEE APPENDIX: ITEM 1.
DEAR SHAREHOLDER
The emerging stock markets rose strongly in the fourth quarter of
1993, and Merrill Lynch Developing Capital Markets Fund, Inc. partici-
pated in the rally, with a total return of +32.17% for the period. The
Fund performed strongly largely because it had large allocations in
Asia, particularly Hong Kong (11.7% of net assets), and in Latin America,
particularly Mexico (17.0%).
<PAGE>
Investment Outlook & Strategy
During the December quarter we continued to increase our investments
in Latin America and Asia. At the same time we took profits in countries
throughout Europe.
We added to our holdings in Latin America, raising our position in the
region to 31.6% from 29.1% of net assets as of September 30, 1993. The
basis for this strategy was our expectation that the North American Free
Trade Agreement (NAFTA) would pass and that, regardless of the outcome
of the NAFTA debate in the US Congress, the stock markets in the region,
including Mexico, would perform well. We believed that stock valuations
in countries which have been steadfast in their commitment to fiscal
discipline would expand. This would apply in particular to Argentina
and Mexico, because inflation rates in those countries have declined
to less than 10%, their lowest level in 20 years. We therefore expected
economic policies to become more stimulative and to allow growth at a
faster pace.
In Latin America, we added to our holdings in blue chip companies with
large market capitalizations. These companies included Telefonos de
Mexico, S.A. de C.V., a utility company; Cifra, S.A. de C.V., a leading
Mexican retailer; Grupo Carso, S.A. de C.V., a Mexican conglomerate;
Telecomunicacoes Brasileiras S.A.-Telebras, a Brazilian telecommuni-
cations holding company; and Astra Compania Argentina de Petroleo S.A.,
an Argentine company active in the energy sector.
We also enlarged the Fund's Asian position, from 35.1% to 40.4% of net
assets. This reflects our expectation that the outflow of capital would
continue from mature markets such as the United States to developing
markets worldwide. We expected Asia to be the primary recipient of
this flow because of its proven record of growth and resilience, and
because of the conceptual attraction of China's potential economic power.
Nonetheless, we took a conservative approach to investing in Asia because
the markets had already rallied strongly for years and had become in-
creasingly speculative. We therefore purchased stocks with low relative
valuations as well as convertible bonds and warrants which were
attractively priced.
An example of our new investments in the Pacific Rim is Amway Asia
Pacific Ltd., whose food and household products have successfully
penetrated the growing consumer markets of the region. Another exam-
ple is the addition to our position in the Finance One PLC, 5.75% con-
vertible bond issue. Finance One is a Thai company whose banking, con-
sumer finance and brokerage activities will benefit from both the re-
structuring of the Thai financial services industry and from lower
interest rates in that country.
Profits were realized throughout Europe, reducing our Fund's net assets
in the region from 29.8% to 18.9%. However, the Fund maintains a substan-
tial investment in the emerging markets in Europe. Altogether, assets
invested in Greece, Hungary, Poland, Portugal, Russia and Turkey account
for 13.3% of net assets. We expect structural reforms to continue and to
improve the environment for commerce and investment in these countries.
Our key stock holdings include Michaniki S.A., a Greek construction and
engineering company, and Yapi Kredi Bankasi A.S., a Turkish bank.
<PAGE>
As for other regions, we are investigating possible stock investments
in the Middle East and Africa.
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
January 28, 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.
<TABLE>
Performance Summary
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<C> <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
------ ------
Total $0.606 Total $1.611
Cumulative total return as of 12/31/93: +112.88%**
<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 or redemption fee; results
would be lower if sales charge or redemption fee was included.
</TABLE>
<PAGE>
<TABLE>
Recent Performance Results*
<CAPTION>
12 Month 3 Month
12/31/93 9/30/93 12/31/92 % Change % Change
<S> <C> <C> <C> <C> <C>
ML Developing Capital Markets Fund, Inc. $16.80 $12.94 $10.18 +68.00%(1) +32.17%(1)
ML Developing Capital Markets Fund, Inc.--Total Return +68.96 (2) +32.17 (1)
<FN>
*Investment results shown for the 3-month and 12-month periods are before the deduction of any sales charges or
redemption fee.
(1) Percent change includes reinvestment of $0.278 per share capital gains distributions.
(2) Percent change includes reinvestment of $0.069 per share ordinary income dividends and $0.278 per share capital
gains distributions.
</TABLE>
<TABLE>
Average Annual Total Return
<CAPTION>
% Return Without % Return With
Period Covered Sales Charge Sales Charge*
<S> <C> <C>
Year Ended 12/31/93 +68.96% +57.98%
Inception (9/1/89) through 12/31/93 +19.04 +17.21
<FN>
*Assuming maximum sales charge. Maximum sales charge is 6.5%.
</TABLE>
<TABLE>
CONSOLIDATED SCHEDULE OF INVESTMENTS (in US dollars)
<CAPTION>
Value Percent of
Industries Shares Held Investments Cost (Note 1a) Net Assets
<S> <C> <S> <C> <C> <C>
EUROPE
Austria
Banking 20,500 Creditanstalt--Bankverein AG $ 786,450 $ 1,345,365 0.4%
Building & Construction 4,000 Bau Holding AG 362,527 387,203 0.1
Oil--International 16,500 Unternehmensgruppe OMV AG 1,039,188 1,218,212 0.4
Textiles 18,000 Lenzing AG 916,404 1,557,834 0.5
Transportation 26,400 Jenbacher Transportsysteme AG 1,588,046 502,445 0.2
Utilities 12,500 Energie--Versorgung Niederosterreich AG (EVN) 989,417 1,604,799 0.5
Total Investments in Austria 5,682,032 6,615,858 2.1
<PAGE>
France
Banking 40,600 Credit Commercial de France (CCF) 1,570,686 2,079,763 0.7
Building & Construction 21,353 Compagnie de Saint Gobain 1,832,679 2,122,665 0.7
Diversified 9,000 Chargeurs S.A. 2,032,987 2,078,445 0.6
Oil Field Equipment 60,000 Coflexip 960,000 975,000 0.3
Publishing & 5,082 Canal Plus 1,296,277 958,836 0.3
Broadcasting
Total Investments in France 7,692,629 8,214,709 2.6
Greece
Banking 7,890 Credit Bank S.A. 512,271 540,042 0.2
84,650 Ergo Bank (Registered) S.A. 3,038,469 3,092,393 1.0
------------ ------------ -----
3,550,740 3,632,435 1.2
Beverage 52,500 Hellenic Bottling Co. S.A. (Bearer) 818,772 1,843,085 0.6
Building & Construction 42,220 Michaniki S.A. 1,074,231 2,626,250 0.8
8,444 Michaniki S.A. (Preferred) 0 525,250 0.2
48,830 Titan Cement S.A. 1,960,314 1,569,186 0.5
------------ ------------ -----
3,034,545 4,720,686 1.5
Food 62,940 J. Boutari & Son S.A. (Bearer) 1,088,749 669,574 0.2
52,920 Delta Dairy S.A. (Ordinary) 1,388,025 1,882,261 0.6
8,750 Delta Dairy S.A. (Preferred) 247,584 259,936 0.1
6,600 Katselis Sons S.A. 56,182 60,674 0.0
------------ ------------ -----
2,780,540 2,872,445 0.9
Total Investments in Greece 10,184,597 13,068,651 4.2
Hungary
Food 25,500 ++Pick Szeged Reszvenytarsasag (GDS) (a) 782,102 1,055,955 0.3
Retail Stores 246,000 FOTEX RT--Fotex Elso Amerikai--Magyar
Fotoszolgaltatasi Reszvenytarsasag 716,761 1,069,565 0.3
Total Investments in Hungary 1,498,863 2,125,520 0.6
Italy
Automotive 841,666 Fiat Group S.p.A. (Preferred) 1,326,823 1,141,242 0.4
336,666 Fiat Group S.p.A. (Preferred) (Warrants) (c) 107,058 321,158 0.1
20,200 La Rinascente S.p.A. 116,905 106,896 0.0
------------ ------------ -----
1,550,786 1,569,296 0.5
<PAGE>
Insurance 125,000 Unipol Compagnie Assicuratice S.p.A. (Preferred) 502,555 525,104 0.2
Total Investments in Italy 2,053,341 2,094,400 0.7
Poland
Food 40,000 International Fast Food Corp. 267,500 240,000 0.1
Total Investments in Poland 267,500 240,000 0.1
Portugal
Banking 115,100 Banco Comercial Portugues, S.A. (ADR) (b) 1,621,317 1,755,275 0.5
352,212 Banco Comercial Portugues, S.A. (Registered) 4,850,549 5,300,123 1.7
77,000 Banco Totta E Acores S.A. 1,657,285 1,429,315 0.4
------------ ------------ -----
8,129,151 8,484,713 2.6
Beverages 29,100 Uniao Cervejaria S.A. (UNICER) 790,773 874,482 0.3
Building & Construction 72,600 Efacec S.A. 2,453,617 2,350,153 0.7
82,300 Soares da Costa S.A. 1,477,775 1,821,126 0.6
172,200 Sociedade de Empreitadas Somague, S.A. 1,342,194 1,637,216 0.5
------------ ------------ -----
5,273,586 5,808,495 1.8
Leisure & Entertainment 27,850 Estoril--Sol S.A. 214,326 211,200 0.1
Paints 21,875 CIN--Corporacao Industrial do Norte, S.A. 521,403 534,805 0.2
Retail 42,000 Jeronimo Martins S.A. 1,239,927 2,400,679 0.7
10,000 Sonae Investimentos S.A. 112,457 147,142 0.0
------------ ------------ -----
1,352,384 2,547,821 0.7
Total Investments in Portugal 16,281,623 18,461,516 5.7
Russia
Telecommunications 39,450 Petersburg Long Distance Inc. (ADR) (b) 301,256 443,812 0.1
Total Investments in Russia 301,256 443,812 0.1
Spain
Building & Construction 125,000 Uralita Group S.A. 956,878 1,074,799 0.3
Total Investments in Spain 956,878 1,074,799 0.3
Turkey
Banking--International 9,498,000 Yapi Kredi Bankasi A.S. 2,982,550 3,570,197 1.1
Beverage 502,400 Ege Biracilik Ve Malt Sanayii A.S. 472,057 1,450,074 0.5
Retail 231,400 Migros A.S. 791,541 3,028,796 0.9
<PAGE>
Total Investments in Turkey 4,246,148 8,049,067 2.5
Total Investments in Europe 49,164,867 60,388,332 18.9
</TABLE>
<TABLE>
CONSOLIDATED SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
Value Percent of
Industries Shares Held Investments Cost (Note 1a) Net Assets
<S> <C> <S> <C> <C> <C>
LATIN AMERICA
Argentina
Automobiles 51,060 Compania Interamericana de Automoviles S.A. (CINA) $ 2,648,304 $ 2,711,603 0.8%
Banking 138,000 Banco de Galicia y Buenos Aires S.A. 1,408,096 2,078,066 0.7
252,148 Banco Frances del Rio de la Plata S.A. 1,426,566 3,208,697 1.0
------------ ------------ -----
2,834,662 5,286,763 1.7
Oil & Related 1,551,800 Astra Compania Argentina de Petroleo S.A. 3,240,628 3,514,096 1.1
Telecommunications 200,000 Telecom Argentina Stet--France Telecom S.A. 983,748 1,252,505 0.4
23,000 Telecom Argentina Stet--France Telecom S.A. (ADR) (b) 971,085 1,426,000 0.4
34,472 ++Telefonica de Argentina S.A. (ADR) (b) 1,095,078 2,499,220 0.8
------------ ------------ -----
3,049,911 5,177,725 1.6
Total Investments in Argentina 11,773,505 16,690,187 5.2
Brazil
Banking 77,673,444 Banco Bradesco S.A. 1,757,789 2,202,575 0.7
2,000,000 Banco Itau S.A. 386,442 380,169 0.1
19,127,979 Banco Nacional S.A. 777,477 1,162,306 0.4
------------ ------------ -----
2,921,708 3,745,050 1.2
Beverage 5,644,200 Companhia Cervejaria Brahma PN (Preferred) 1,094,100 1,213,580 0.4
574,872 Companhia Cervejaria Brahma S.A. (Warrants) (c) 14,956 5,968 0.0
------------ ------------ -----
1,109,056 1,219,548 0.4
Food 81,780,250 Sadia Concordia S.A. Industria e Comercio PN
(Preferred) 685,295 547,903 0.2
<PAGE>
Mining 18,892,000 Companhia Vale do Rio Doce PN (CVRD) (Preferred) 1,327,142 1,618,927 0.6
Retail 3,118,200 Lojas Americanas S.A. 561,877 476,120 0.1
Steel 492,500 Acos Industria Villares S.A. 123,508 76,581 0.0
27,659,900 Companhia Siderurgica Nacional S.A.--CSN 506,674 741,252 0.2
4,639,700,000 Usinas Siderurgicas de Minas
Gerais--Usiminas S.A. 2,583,705 3,296,414 1.0
------------ ------------ -----
3,213,887 4,114,247 1.2
Telecommunications 24,000 Telecomunicacoes Brasileiras S.A.--Telebras ON (ADR) (b) 801,500 798,000 0.2
48,300,000 Telecomunicacoes Brasileiras S.A.--Telebras ON 1,477,378 1,294,382 0.4
114,000,000 Telecomunicacoes Brasileiras S.A.--Telebras PN
(Preferred) 3,276,433 3,886,323 1.2
------------ ------------ -----
5,555,311 5,978,705 1.8
Utilities 31,284,900 Centrais Eletricas Brasileiras S.A.--Eletrobras
(Preferred) 4,654,562 5,069,380 1.6
Total Investments in Brazil 20,028,838 22,769,880 7.1
Chile
Apparel 7,458,443 Bata Chile S.A. 2,103,744 2,491,956 0.8
Building & Construction 39,052 Empresas Pizarreno S.A. 72,396 70,257 0.0
Total Investments in Chile 2,176,140 2,562,213 0.8
Mexico
Banking 66,700 ++Grupo Financiero Bancomer, S.A. de C.V. (ADR) (b) 2,224,175 2,768,050 0.9
168,250 ++Servicios Financieros Quadrum, S.A. de C.V. (ADR) (b) 1,954,207 5,384,000 1.7
------------ ------------ -----
4,178,382 8,152,050 2.6
Beverage 50,000 ++Fomento Economico Mexicano, S.A. de C.V. (Femsa)
(ADR) (b) 195,000 322,250 0.1
447,500 Fomento Economico Mexicano, S.A. de C.V. (Femsa)
(Ordinary) 1,780,336 2,947,303 0.9
------------ ------------ -----
1,975,336 3,269,553 1.0
Building & Construction 373,000 Tolmex, S.A. de C.V. 'B' 999,729 5,195,572 1.6
Capital Goods 48,000 Cementos Mexicanos, S.A. de C.V. (Series B) 848,958 1,431,498 0.4
Diversified 491,000 Grupo Carso, S.A. de C.V. 'A' 3,005,499 5,360,676 1.7
80,000 Grupo Posadas, S.A. de C.V. (ADR) (b) 1,172,100 1,480,000 0.5
------------ ------------ ----
4,177,599 6,840,676 2.2
<PAGE>
Electrical 250,000 Grupo Empresarial Fenix, S.A. de C.V. ELEKTRA
'L' Shares 2,051,523 2,222,222 0.7
Food 1,600,000 Grupo Herdez, S.A. de C.V. 'A' 1,450,009 1,777,778 0.6
Health & Personal Care 162,500 Kimberly-Clark de Mexico, S.A. de C.V. 2,193,490 3,045,894 0.9
Leisure 93,000 Grupo Situr, S.A. de C.V. (ADR) (b) 1,700,594 2,650,500 0.8
Metals 70,000 ++Grupo Simec, S.A. de C.V. (ADR) (b) 980,000 2,310,000 0.7
745,000 Grupo Simec, S.A. de C.V. (Ordinary) 670,192 1,204,477 0.4
------------ ------------ -----
1,650,192 3,514,477 1.1
Retail 2,375,000 Cifra, S.A. de C.V. 'C' 4,796,743 7,128,824 2.2
520,000 El Puerto de Liverpool, S.A. de C.V. 'C' (Non-Voting) 716,558 978,035 0.3
------------ ------------ -----
5,513,301 8,106,859 2.5
Telecommunications 12,500 Empresas ICA Sociedad Controladora, S.A. de C.V. 222,625 353,125 0.1
Utilities 119,250 Telefonos de Mexico, S.A. de C.V. (ADR) (b) 4,756,133 8,049,375 2.5
Total Investments in Mexico 31,717,871 54,609,579 17.0
Peru
Banking 326,140 Banco de Credito de Peru S.A. 311,134 676,495 0.2
Mining 116,879 Southern Peru Copper Corp. S.A. 388,390 352,535 0.1
Total Investments in Peru 699,524 1,029,030 0.3
Venezuela
Building & Construction 178,666 Corporacion Ceramica Carabobo CA--S.A.C.A. (Class A) 683,535 420,787 0.1
239,333 Corporacion Ceramica Carabobo CA--S.A.C.A. (Class B) 679,509 518,574 0.2
------------ ------------ -----
1,363,044 939,361 0.3
Cement 177,300 Venezolana de Cementos S.A.C.A.--(VENCEMOS) 273,494 277,266 0.1
Utilities 733,202 C.A. La Electricidad de Caracas S.A.I.C.A.--S.A.C.A. 2,360,661 2,541,859 0.8
Total Investments in Venezuela 3,997,199 3,758,486 1.2
Total Investments in Latin America 70,393,077 101,419,375 31.6
</TABLE>
<PAGE>
<TABLE>
CONSOLIDATED SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
Value Percent of
Industries Shares Held Investments Cost (Note 1a) Net Assets
<S> <C> <S> <C> <C> <C>
PACIFIC BASIN/ASIA
Australia
Automotive 265,000 Amway Asia Pacific Ltd. $ 7,549,106 $ 9,440,625 2.9%
Media/Publishing 458,300 Nine Network Australia Ltd. 949,114 1,723,207 0.5
Paper & Pulp 438,800 Spicers Paper Ltd. 808,666 804,097 0.3
Total Investments in Australia 9,306,886 11,967,929 3.7
China
Appliances & 676,000 Shenzhen China Bicycles 'B' Co. (Holdings) Ltd. 501,114 800,906 0.2
Household Durables
Total Investments in China 501,114 800,906 0.2
Hong Kong
Apparel 3,172,000 Top Form International Ltd. 909,258 862,515 0.3
Banking 186,000 Hong Kong & Shanghai Banking Corporation Holdings PLC 2,012,703 2,769,649 0.9
3,764,000 J.C.G. Holdings, Ltd. 2,407,812 3,021,727 0.9
11,005,000 Winton Holdings, Ltd. 3,849,116 3,776,156 1.2
------------ ------------ -----
8,269,631 9,567,532 3.0
Conglomerates 1,480,000 Sime Darby (Hong Kong) Ltd. 2,470,819 2,702,059 0.9
Diversified 5,220,000 Hopewell Smart (Warrants) (c) 896,901 2,889,486 0.9
Electrical Equipment 358,000 Johnson Electric Holdings Ltd. 897,892 917,830 0.3
Finance 1,800,000 Hopewell Holdings Ltd. 1,504,191 2,354,008 0.7
Food 9,039,000 C.P. Pokphand Co., Ltd. (Ordinary) 2,895,870 3,979,360 1.3
Publishing 1,772,000 Ming Pao Enterprise Corp., Ltd. 870,697 2,225,612 0.7
& Broadcasting
Real Estate 460,000 Cheung Kong Holdings Ltd. 775,308 1,584,358 0.5
2,066,152 South Seas Development Co., Ltd. 0 339,766 0.1
5,894,000 Sun Hung Kai Properties, Ltd. 3,575,674 4,769,843 1.5
------------ ------------ -----
4,350,982 6,693,967 2.1
Steel 224,000 Linkful International Holdings Ltd. 70,546 67,435 0.0
<PAGE>
Telecommunications 1,536,000 ABC Communications Holdings, Ltd. 446,373 775,657 0.2
Textiles 5,994,000 Fountain Set Holdings Ltd. 954,313 1,269,921 0.4
7,740,000 United Success International Holdings Ltd. 1,029,241 1,092,399 0.3
------------ ------------ -----
1,983,554 2,362,320 0.7
Utilities--Gas 700,000 Hong Kong and China Gas Co. (The) 1,545,089 2,030,299 0.6
Total Investments in Hong Kong 27,111,803 37,428,080 11.7
India
Aluminum 60,000 Hindalco Industries Ltd. (GDS) (a) 831,833 1,605,000 0.5
26,500 Hindalco Industries Ltd. (Ordinary) 496,362 582,975 0.2
30,000 Hindalco Industries Ltd. (Warrants) (c) 134,167 330,000 0.1
------------ ------------ -----
1,462,362 2,517,975 0.8
Building & Construction 22,000 The Associated Cement Co. Ltd. 1,514,678 1,999,044 0.6
Electrical Equipment 280,000 Bombay Electric Supply Co. Ltd. 1,519,270 1,571,178 0.5
Environmental 65,000 Western Paques (India) Ltd. 233,861 279,770 0.1
Insurance 70,000 ++Grasim Industries Ltd. (ADR) (b) 1,015,000 1,575,000 0.5
Total Investments in India 5,745,171 7,942,967 2.5
Indonesia
Tobacco 420,000 P.T. Gudang Garam 2,010,276 2,009,950 0.6
936,000 P.T. Hanjaya Mandala Sampoerna 1,604,227 5,698,934 1.8
------------ ------------ -----
3,614,503 7,708,884 2.4
Total Investments in Indonesia 3,614,503 7,708,884 2.4
Korea
Automotive 26,239 Dong Ah Tire Industries 1,248,434 1,748,725 0.5
Food 9,460 Lotte Confectionary 587,944 1,164,772 0.4
Pharmaceuticals 31,397 Choong Wae Pharmaceutical Corp. 962,822 1,112,569 0.3
Retail Stores 7,700 Shinsegae Department Store 283,129 492,281 0.2
4,432 Shinsegae Department Store (New) 107,310 274,783 0.1
------------ ------------ -----
390,439 767,064 0.3
Telecommunications 6,817 Korea Mobile Telecommunications Corp. 1,328,813 3,637,394 1.1
Utilities 41,470 Korea Electric Power Corp. 1,094,397 1,125,255 0.4
Total Investments in Korea 5,612,849 9,555,779 3.0
<PAGE>
Malaysia
Building & Construction 561,000 IJM Corp. BHD 2,018,065 2,229,415 0.7
Construction & Housing 458,000 Golden Plus Holdings BHD 2,004,616 2,772,665 0.9
Financial Services 790,000 Commerce Asset-Holdings BHD 1,516,366 4,078,366 1.3
263,333 Commerce Asset-Holdings BHD (TSRs) 88,025 83,621 0.0
493,000 Idris Hydraulic BHD 1,512,666 1,446,500 0.4
1,653,000 Public Bank BHD "Foreign" 1,642,679 3,844,664 1.2
------------ ------------ -----
4,759,736 9,453,151 2.9
Real Estate 1,219,000 Tan & Tan Developments BHD 2,003,691 1,937,723 0.6
Steel 1,251,000 Maruichi (Malaysia) Steel Tube BHD 2,501,235 3,182,674 1.0
Telecommunications 228,000 Leader Universal Holdings BHD 339,992 1,177,047 0.4
Total Investments in Malaysia 13,627,335 20,752,675 6.5
New Zealand
Beverages 1,000,000 D.B. Group Ltd. 384,967 402,480 0.1
Broadcasting 66,800 Independent Newspapers Ltd. 221,330 265,869 0.0
& Publishing
Total Investments in New Zealand 606,297 668,349 0.1
Pakistan
Banking--International 146,200 Bank of Punjab 500,391 612,205 0.2
Electrical Equipment 185,000 Karachi Electrical Supply Corp. 130,550 253,615 0.1
Total Investments in Pakistan 630,941 865,820 0.3
</TABLE>
<TABLE>
CONSOLIDATED SCHEDULE OF INVESTMENTS (concluded) (in US dollars)
<CAPTION>
Shares Held/ Value Percent of
Industries Face Amount Investments Cost (Note 1a) Net Assets
<S> <C> <S> <C> <C> <C>
PACIFIC BASIN/ASIA (concluded)
Philippines
Beverages 108,000 San Miguel Corp. 'B' $ 501,254 $ 995,255 0.3%
Electric Utilities 29,786 Manila Electric Co. (MERALCO) 'B' 165,929 538,105 0.2
Total Investments in the Philippines 667,183 1,533,360 0.5
Singapore
Banking Services 1,029,000 United Overseas Bank Ltd. (Warrants) (c) 1,988,883 5,119,403 1.6
<PAGE>
Health Care Products 1,475,000 Parkway Holdings Ltd. 2,031,451 3,632,463 1.1
& Services
Total Investments in Singapore 4,020,334 8,751,866 2.7
Sri Lanka
Building & Construction 262,500 Lankan Tiles 337,398 376,942 0.1
Diversified 62,500 Aitken Spence 413,990 525,668 0.2
Total Investments in Sri Lanka 751,388 902,610 0.3
Thailand
Banking 317,900 Bangkok Bank Ltd. "Foreign" 1,546,650 3,137,908 1.0
Finance $2,750,000 ++Finance One PLC, 5.75% due 6/17/2003 3,388,750 7,425,000 2.3
Health & Personal Care 34,480 International Cosmetics Co. Ltd. "Foreign" 1,039,171 1,480,222 0.5
Industrial $1,305,000 Sino Land Co. Ltd., 5.00% due 10/21/2000 1,777,300 1,872,675 0.6
Insurance 159,000 Ayudhya Insurance Co. "Foreign" 1,187,126 1,992,949 0.6
Real Estate 101,800 M.D.X. Co. Ltd. "Foreign" 564,712 813,443 0.3
Steel $3,000,000 NTS Steel Groups Co. Ltd., 4.00% due 12/16/2008 3,000,000 3,127,500 1.0
Telecommunications 130,000 TelecomAsia Corp. Public Co. Ltd. 284,022 779,083 0.2
14,300 ++United Communication Industry Public Co. Ltd. 130,577 128,829 0.0
------------ ------------ -----
414,599 907,912 0.2
Total Investments in Thailand 12,918,308 20,757,609 6.5
Total Investments in the Pacific Basin/Asia 85,114,112 129,636,834 40.4
<CAPTION>
SHORT-TERM SECURITIES Face Amount
<S> <C> <S> <C> <C> <C>
United States
Commercial Paper* $8,714,000 Delaware Funding Corp., 3.30% due 1/14/1994 8,703,616 8,703,616 2.7
9,000,000 General Electric Capital Corp., 3.22% due 1/03/1994 8,998,390 8,998,390 2.8
Total Investments in Short-Term Securities 17,702,006 17,702,006 5.5
Total Investments $222,374,062 309,146,547 96.4
============
Other Assets Less Liabilities 11,507,794 3.6
------------ -----
Net Assets $320,654,341 100.0%
============ =====
<PAGE>
<FN>
*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.
++Restricted securities as to resale. The value of the Fund's investment in restricted securities was approximately
$23,468,000, representing 7.3% of net assets.
</TABLE>
<TABLE>
<CAPTION>
Value
Issue Acquisition Dates Cost (Note 1a)
<S> <C> <C> <C>
Grasim Industries Ltd. (ADR) 8/24/93 $ 1,015,000 $ 1,575,000
Grupo Financiero Bancomer, S.A. de C.V. (ADR) 6/17/92-12/10/92 2,224,175 2,768,050
Grupo Simec, S.A. de C.V. (ADR) 7/01/93 980,000 2,310,000
Finance One PLC, 5.75% due 6/17/2003 9/17/93 3,388,750 7,425,000
Fomento Economico Mexicano, S.A. de C.V. (Femsa) (ADR) 6/21/93 195,000 322,250
Pick Szeged Reszvenytarsasag (GDS) 11/20/92 782,102 1,055,955
Servicios Financieros Quadrum, S.A. de C.V. (ADR) 7/28/93 1,954,207 5,384,000
Telefonica de Argentina S.A. (ADR) 12/17/91-12/28/92 1,095,078 2,499,220
United Communication Industry Public Co. Ltd. 12/03/93 130,577 128,829
Total $11,764,889 $23,468,304
=========== ===========
See Notes to Financial Statements.
</TABLE>
PORTFOLIO INFORMATION
Ten Largest Equity Holdings Percent of
As of December 31, 1993 Net Assets
Amway Asia Pacific Ltd. 2.9%
Telefonos de Mexico, S.A. de C.V. (ADR) 2.5
Cifra, S.A. de C.V. 'C' 2.2
Telecomunicacoes Brasileiras S.A.--Telebras PN
(Preferred & ADR) 1.8
P.T. Hanjaya Mandala Sampoerna 1.8
Servicios Financieros Quadrum, S.A. de C.V. (ADR) 1.7
Grupo Carso, S.A. de C.V. 'A' 1.7
Banco Comercial Portugues, S.A. (Registered) 1.7
Tolmex, S.A. de C.V. 'B' 1.6
United Overseas Bank Ltd. (Warrants) 1.6
<PAGE>
<TABLE>
CONSOLIDATED STATEMENT OF ASSETS AND LIABILITIES
<CAPTION>
As of December 31, 1993
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$222,374,062) (Note 1a) $309,146,547
Foreign cash 2,345,717
Cash 62,023
Receivables:
Capital shares sold $12,896,975
Securities sold 9,006,327
Dividends 287,075
Interest 104,429 22,294,806
-----------
Deferred organization expenses (Note 1g) 30,527
Prepaid registration fees and other assets (Note 1g) 63,573
------------
Total assets 333,943,193
------------
Liabilities: Payables:
Securities purchased 11,913,004
Capital shares redeemed 751,150
Investment adviser (Note 2) 233,509 12,897,663
-----------
Accrued expenses and other liabilities 391,189
------------
Total liabilities 13,288,852
------------
Net Assets: Net assets $320,654,341
============
Net Assets Common Stock, $0.10 par value, 200,000,000 shares authorized $ 1,908,322
Consist of: Paid-in capital in excess of par 222,800,916
Accumulated investment loss--net (894,865)
Undistributed realized capital gains from investment and foreign currency transactions--net 9,992,527
Unrealized appreciation on investments and foreign currency transactions--net 86,847,441
------------
Net assets--Equivalent to $16.80 per share based on 19,083,223 shares of capital outstanding $320,654,341
============
Maximum offering price per share ($16.80/.935) $ 17.97
============
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
CONSOLIDATED STATEMENT OF OPERATIONS
<CAPTION>
For the Six Months Ended December 31, 1993
<S> <S> <C> <C>
Investment Dividends (net of $118,607 foreign withholding tax) $ 1,538,602
Income Interest and discount earned 192,120
(Notes 1c & 1d): ------------
Total income 1,730,722
------------
Expenses: Investment advisory fees (Note 2) 1,020,345
Custodian fees 219,938
Transfer agent fees (Note 2) 67,678
Accounting services (Note 2) 48,791
Printing and shareholder reports 46,751
Professional fees 36,052
Registration fees (Note 1g) 23,722
Directors' fees and expenses 15,215
Amortization of organization expenses (Note 1g) 12,779
Other 10,502
------------
Total expenses 1,501,773
------------
Investment income--net 228,949
------------
Realized & Realized gain (loss) from:
Unrealized Gain Investments--net $16,346,632
(Loss) on Foreign currency transactions (485,576) 15,861,056
Investments & -----------
Foreign Currency Change in unrealized appreciation/depreciation on:
Transactions--Net Investments--net 71,325,411
(Notes 1b,1d & 3): Foreign currency transactions 235,328 71,560,739
----------- ------------
Net realized and unrealized gain on investments and foreign currency
transactions 87,421,795
------------
Net Increase in Net Assets Resulting from Operations $ 87,650,744
============
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS
<CAPTION>
For the Six For the
Months Ended Year Ended
December 31, June 30,
Increase (Decrease) in Net Assets: 1993 1993
<S> <S> <C> <C>
Operations: Investment income--net $ 228,949 $ 1,546,983
Realized gain (loss) on investments and foreign currency transactions--net 15,861,056 (1,811,821)
Change in unrealized appreciation/depreciation on investments and foreign
currency transactions--net 71,560,739 6,852,494
------------ ------------
Net increase in net assets resulting from operations 87,650,744 6,587,656
------------ ------------
Dividends & Investment income--net (902,496) (1,572,465)
Distributions Realized gain on investments--net (4,808,440) (8,062,455)
To Shareholders ------------ ------------
(Note 1h): Net decrease in net assets resulting from dividends and distributions to
shareholders (5,710,936) (9,634,920)
------------ ------------
Capital Share Net increase in net assets derived from capital share transactions 96,429,789 18,914,752
Transactions ------------ ------------
(Note 4):
Net Assets: Total increase in net assets 178,369,597 15,867,488
Beginning of period 142,284,744 126,417,256
------------ ------------
End of period* $320,654,341 $142,284,744
============ ============
<FN>
*Accumulated investment loss--net $ (894,865) $ (221,318)
============ ============
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
CONSOLIDATED FINANCIAL HIGHLIGHTS
<CAPTION>
For the
The following per share data and ratios have been derived For the Six Period
from information provided in the financial statements. Months Ended For the Year Ended Sept. 1, 1989++
December 31, June 30, to June 30,
Increase (Decrease) in Net Asset Value: 1993 1993++++ 1992 1991 1990
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 11.62 $ 11.92 $ 10.43 $ 11.58 $ 9.60
Operating -------- -------- -------- -------- --------
Performance: Investment income--net (1) .05 .12 .15 .24 .24
Realized and unrealized gain (loss) on investments
and foreign currency transactions--net (1) 5.48 .42 1.59 (.75) 1.88
-------- -------- -------- -------- --------
Total from investment operations 5.53 .54 1.74 (.51) 2.12
-------- -------- -------- -------- --------
Less dividends and distributions:
Investment income--net (.07) (.14) (.17) (.15) (.13)
Realized gain on investments--net (.28) (.70) (.08) (.49) (.01)
-------- -------- -------- -------- --------
Total dividends and distributions (.35) (.84) (.25) (.64) (.14)
-------- -------- -------- -------- --------
Net asset value, end of period $ 16.80 $ 11.62 $ 11.92 $ 10.43 $ 11.58
======== ======== ======== ======== ========
Total Investment Based on net asset value per share 68.96%+++ 5.17% 17.02% (4.45%) 22.29%+++
Return:** ======== ======== ======== ======== ========
Ratios to Expenses 1.47%* 1.71% 1.64% 1.77% 1.71%*
Average ======== ======== ======== ======== ========
Net Assets: Investment income (loss)--net .22%* (.04%) 1.73% 1.98% 2.69%*
======== ======== ======== ======== ========
Supplemental Net assets, end of period (in thousands) $320,654 $142,285 $126,417 $111,947 $104,033
Data: ======== ======== ======== ======== ========
Portfolio turnover 37.27% 91.72% 71.05% 84.74% 64.53%
======== ======== ======== ======== ========
<FN>
*Annualized.
**Total investment returns exclude the effects of sales loads.
++Commencement of Operations.
++++Based on average number of shares outstanding.
+++Aggregate total investment return.
(1) Foreign currency transaction amounts have been reclassified
to conform to the 1993 presentation.
See Notes to Financial Statements.
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
Merrill Lynch Developing Capital Markets Fund, Inc. (the "Fund")
is registered under the Investment Company Act of 1940 as a non-
diversified, open-end investment management company. The
following is a summary of significant accounting policies followed
by the Fund:
(a) Valuation of Securities--Portfolio securities which are traded
on stock exchanges are valued at the last sale price on the principal
market on which such securities are traded, as of the close of
business on the day the securities are being valued or, lacking any
sales, at the last available bid price. Securities traded in the over-
the-counter market are valued at the last available bid prices obtained
from one or more dealers in the over-the-counter market prior to the
time of valuation. Portfolio securities which are traded both in the
over-the-counter market and on a stock exchange are valued accord-
ing to the broadest and most representative market. Options written
by the Fund are valued at the last asked price in the case of
exchange-traded options or, in the case of options traded in the
over-the-counter market, the average of the last asked price as
obtained from one or more dealers. Options purchased by the Fund
are valued at their last bid price in the case of exchange-traded
options or, in the case of options traded in the over-the-counter
market, the average of the last bid price as obtained from two or
more dealers. Other investments, including futures contracts and
related options, are stated at market value. Short-term securities
are valued at amortized cost, which approximates market. Securities
and assets for which market quotations are not readily available
are valued at fair value as determined in good faith by or under
the direction of the Fund's Board of Directors.
(b) Foreign Currency Transactions--Transactions denominated in
foreign currencies are recorded at the exchange rate prevailing when
recognized. Assets and liabilities denominated in foreign currencies
are valued at the exchange rate at the end of the period. Foreign
currency transactions are the result of settling (realized) or valuing
(unrealized) such transactions expressed in foreign currencies into
US dollars. Realized and unrealized gains or losses from investments
include the effects of foreign exchange rates on investments.
The Fund is authorized to enter into forward foreign exchange
contracts as a hedge against either specific transactions or portfolio
positions. Such contracts are not entered on the Fund's records.
However, the effect on operations is recorded from the date the Fund
enters into such contracts. Premium or discount is amortized over
the life of the contracts.
NOTES TO FINANCIAL STATEMENTS (concluded)
<PAGE>
(c) Income Taxes--It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated
investment companies and to distribute all of its taxable income
to its shareholders. Therefore, no Federal income tax provision
is required. Under the applicable foreign tax law, a withholding
tax may be imposed on interest, dividends and capital gains at
various rates.
(d) Security Transactions and Investment Income--Security trans-
actions are recorded on the dates the transactions are entered into
(the trade dates). Dividend income is recorded on the ex-dividend
date, except that the ex-dividend date has passed, certain dividends
from foreign securities are recorded as soon as the Fund is informed
of the ex-dividend date. Interest income (including amortization
of discount) is recognized on the accrual basis. Realized gains and
losses on security transactions are determined on the identified
cost basis.
(e) Options--The Fund can write covered call options and purchase
put options. When the Fund writes an option, an amount equal to
the premium received by the Fund is reflected as an asset and an
equivalent liability. The amount of the liability is subsequently
marked to market to reflect the current value of the option written.
When a security is sold through an exercise of an option, the
related premium received (or paid) is deducted from (or added to)
the basis of the security sold. When an option expires (or the Fund
enters into a closing transaction), the Fund realizes a gain or loss
on the option to the extent of the premiums received or paid
(or gain or loss to the extent the cost of the closing transaction
exceeds the premium paid or received).
Written and purchased options are non-income producing investments.
(f) Financial Futures Contracts--The Fund may purchase or sell
stock index futures contracts and options on such futures contracts.
Upon entering into a contract, the Fund deposits and maintains as
collateral such initial margin as required by the exchange on which
the transaction is effected. Pursuant to the contract, the Fund
agrees to receive from or pay to the broker an amount of cash equal
to the daily fluctuation in value of the contract. Such receipts or
payments are known as variation margin and are recorded by the
Fund as unrealized gains or losses. When the contract is closed,
the Fund records a realized gain or loss equal to the difference
between the value of the contract at the time it was opened and
the value at the time it was closed.
(g) Deferred Organization Expenses and Prepaid Registration Fees--
Deferred organization expenses are charged to expense on a
straight-line basis over a five-year period. Prepaid registration fees
are charged to expense as the related shares are issued.
<PAGE>
(h) Dividends and Distributions--Dividends and distributions paid
by the Fund are recorded on the ex-dividend dates.
(i) Basis of Consolidation--The accompanying consolidated financial
statements include the accounts of Inversiones en Mercado
Accionario de Valores Chile Ltda., a wholly-owned subsidiary, which
primarily invests in Chilean securities. Intercompany accounts and
transactions have been eliminated.
(j) Reclassifications--Certain 1992 amounts have been reclassified
to conform to the 1993 presentations.
2. Investment Advisory Agreement and Transactions
with Affiliates:
The Fund has entered into an Investment Advisory Agreement
with Merrill Lynch Asset Management ("MLAM"). MLAM is the
name under which Merrill Lynch Investment Management, Inc.
("MLIM") does business. MLIM is an indirect wholly-owned sub-
sidiary of Merrill Lynch & Co., Inc. The Fund has also entered
into a Distribution Agreement and a Distribution Plan with
Merrill Lynch Funds Distributor, Inc. ("MLFD" or "Distributor"),
a wholly-owned subsidiary of MLIM.
MLAM is responsible for the management of the Fund's portfolio
and provides the necessary personnel, facilities, equipment and
certain other services necessary to the operations of the Fund.
For such services, the Fund pays a monthly fee of 1.0%, on an annual
basis, of the average daily value of the Fund's net assets. The
Investment Advisory Agreement obligates MLAM to reimburse the
Fund to the extent the Fund's expenses (excluding interest, taxes,
distribution fees, brokerage fees and commissions, and extraordinary
items) exceed 2.5% of the Fund's first $30 million of average daily
net assets, 2.0% of the Fund's next $70 million of average daily net
assets, and 1.5% of the average daily net assets in excess thereof.
No fee payment will be made to MLAM during any fiscal year which
will cause such expenses to exceed the expense limitations at the
time of such payment.
Effective January 1, 1994, the investment advisory business of
MLAM reorganized from a corporation to a limited partnership.
The general partner of MLAM is Princeton Services, Inc., an indirect
wholly-owned subsidiary of Merrill Lynch & Co.
During the six months ended December 31, 1993, MLFD earned
underwriting discounts of $201,542, and Merrill Lynch, Pierce,
Fenner & Smith Inc. ("MLPF&S") earned dealer concessions of
$3,001,177 on sales of the Fund's shares. MLPF&S also received
$45,499 in commissions on the execution of portfolio security
transactions during the year.
<PAGE>
Financial Data Services, Inc. ("FDS"), a wholly-owned subsidiary of
Merrill Lynch & Co., Inc., is the Fund's transfer agent.
Accounting services are provided to the Fund by MLAM at cost.
Certain officers and/or directors of the Fund are officers and/or
directors of MLIM, FDS, MLFD, MLPF&S, and/or Merrill Lynch &
Co., Inc.
3. Investments:
Purchases and sales of investments, excluding short-term securities,
for the six months ended December 31, 1993 were $141,166,055 and
$72,290,164, respectively.
Net realized and unrealized gains (losses) as of December 31, 1993
were as follows:
Realized
Gains Unrealized
(Losses) Gains
Long-term investments $ 16,346,632 $ 86,772,485
Foreign currency transactions (485,576) 74,956
------------ ------------
Total $ 15,861,056 $ 86,847,441
============ ============
As of December 31, 1993, net unrealized appreciation for Federal
income tax purposes aggregated $86,772,485, of which $90,905,518
related to appreciated securities and $4,133,033 related to depreci-
ated securities. The aggregate cost of investments at December 31,
1993 for Federal income tax purposes was $222,374,062.
4. Capital Share Transactions:
Transactions in capital shares were as follows:
For the Six Months Ended Dollar
December 31, 1993 Shares Amount
Shares sold 7,590,664 $106,715,802
Shares issued to shareholders in
reinvestment of dividends and
distributions 332,847 4,929,176
------------ ------------
Total issued 7,923,511 111,644,978
Shares redeemed (1,083,773) (15,215,189)
------------ ------------
Net increase 6,839,738 $ 96,429,789
============ ============
<PAGE>
For the Year Ended Dollar
June 30, 1993 Shares Amount
Shares sold 2,825,803 $ 31,697,736
Shares issued to shareholders in
reinvestment of dividends and
distributions 744,456 7,999,187
------------ ------------
Total issued 3,570,259 39,696,923
Shares redeemed (1,927,987) (20,782,171)
------------ ------------
Net increase 1,642,272 $ 18,914,752
============ ============
5. Commitments:
At December 31, 1993, the Fund entered into forward exchange
contracts under which it had agreed to buy and sell foreign
currencies with values of approximately $496,000 and $6,203,000,
respectively.
PORTFOLIO CHANGES
For the Quarter Ended December 31, 1993
Additions
Amway Asia Pacific Ltd.
Banco Comercial Portugues, S.A. (ADR)
Cheung Kong Holdings Ltd.
*China Overseas Land Investments
*China Overseas Land Investments (Warrants)
Cifra, S.A. de C.V. 'C'
*Citic Pacific Ltd.
Coflexip
Commerce Asset-Holdings BHD (TSRs)
Compania Interamericana de Automoviles S.A. (CINA)
*Consolidated Electric Power Ltd.
Delta Dairy S.A. (Preferred)
*Enersis S.A. (ADR)
Fiat Group S.p.A. (Preferred) (Warrants)
Golden Plus Holdings BHD
Grupo Empresarial Fenix, S.A. de C.V. ELEKTRA
Grupo Simec, S.A. de C.V. (Ordinary)
Grupo Situr, S.A. de C.V. (ADR)
Hong Kong and China Gas Co. (The)
Hopewell Holdings Ltd.
Hopewell Smart (Warrants)
Idris Hydraulic BHD
IJM Corp. BHD
*Innovative International Holdings Ltd.
Johnson Electric Holdings Ltd.
La Rinascente S.p.A.
<PAGE>
Linkful International Holdings Ltd.
Michaniki S.A. (Preferred)
NTS Steel Groups Co. Ltd., 4.00% due 12/16/2008
P.T. Gudang Garam
Public Bank BHD "Foreign"
Shinsegae Department Store (New)
Sime Darby (Hong Kong) Ltd.
Sino Land Company Limited, 5.00% due 10/21/2000
South Seas Development Co. Ltd.
Sun Hung Kai Properties, Ltd.
Tan & Tan Developments BHD
Telecom Argentina Stet-France Telecom S.A.
Telecom Argentina Stet-France Telecom S.A. (ADR)
TelecomAsia Corp. Public Co. Ltd.
Telecomunicacoes Brasileiras S.A.--Telebras (ADR)
Top Form International Ltd.
United Communication Industry Public Co. Ltd.
Uralita Group S.A.
*Wattachak Publishing Co.
Deletions
Arcelik A.S.
Banco de Bogota
*China Overseas Land Investments
*China Overseas Land Investments (Warrants)
Chow Sang Sang Holdings, Ltd.
CINCA--Companhia Industrial de Ceramica S.A.
*Citic Pacific Ltd.
Companhia Portuguesa Radio Marconi S.A.
*Consolidated Electric Power Ltd.
Controladora Comercial Mexicana, S.A. de C.V. (COMERCI)
Credit Suisse Holdings (Bearer)
Credit Suisse Holdings (Warrants)
*Enersis S.A. (ADR)
Goldlion Holdings Ltd.
Goldlion Holdings Ltd. (1995 Warrants)
Goldlion Holdings Ltd. (1996 Warrants)
Gran Cadena de Almacenes Colombianos (CADENALCO)
Grupo Cydsa, S.A. de C.V.
Grupo Gigante, S.A. de C.V. 'B'
Grupo Industrial Alfa, S.A. de C.V. 'A'
Hai Sun Hup Group, Ltd.
Hutchison Whampoa Ltd.
Iberdrola I S.A.
*Innovative International Holdings Ltd.
Otosan Otomobil Sanayii A.S.
Panamerican Beverages, S.A. de C.V.
Public Bank BHD "Foreign"
P.T. Pakuwon Jati
Rothmans of Pall Mall (Malaysia) BHD
Telefonica de Espana S.A.
The News Corp. Ltd.
Transmark Corp. Ltd.
Uniphone Telecommunications BHD
Vaisala Oy 'A'
*Wattachak Publishing Co.
Westpac Banking Corp.
<PAGE>
[FN]
*Added and deleted in the same quarter.
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
Gerald M. Richard, Treasurer
Mark B. Goldfus, Secretary
Custodian
The Chase Manhattan Bank, N.A.
Global Securities Services
Chase Metro Tech Center
Brooklyn, New York 11245
Transfer Agent
Financial Data Services, Inc.
Transfer Agency Mutual Fund Operations
4800 Deer Lake Drive East
Jacksonville, Florida 32246-6484
(800) 637-3863
APPENDIX: ITEM 1.
Asset Allocation as a Percentage of Net Assets as of
December 30, 1993
<PAGE>
A map illustrating the following percentages:
Mexico 17.0% Greece 6.2%
Chile 0.8 Russia 0.1
Peru 0.3 Turkey 2.5
Pakistan 2.5
Venezuela 1.2 India 2.5
Argentina 5.4 Sri Lanka 0.3
Brazil 7.1 Malaysia 6.5
Portugal 5.7 Thailand 6.6
Spain 0.3 Singapore 2.7
France 2.6 China 0.2
Korea 3.0
Hungary 0.6 Hong Kong 11.7
Austria 2.1 Philippines 0.5
Poland 0.1 Indonesia 2.4
Australia 3.7
Italy 0.7 New Zealand 0.1
