MERRILL LYNCH
DEVELOPING
CAPITAL MARKETS
FUND, INC.
FUND LOGO
Quarterly Report
September 30, 1999
Investing in emerging market securities involves a number of risk
factors and special considerations, including restrictions 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 comparable 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 a
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.
Statements and other information herein are as dated and are subject
to change.
Merrill Lynch
Developing
Capital Markets
Fund, Inc.
Box 9011
Princeton, NJ
08543-9011
Printed on post-consumer recycled paper
MERRILL LYNCH DEVELOPING CAPITAL MARKETS FUND, INC.
Map Depicting the Fund's Asset Allocation
As a Percentage* of Net Assets as of
September 30, 1999
Venezuela 0.2%
Brazil 8.7%
Hungary 2.8%
Czech Republic 0.6%
Poland 1.2%
Russia 0.7%
Greece 3.1%
Turkey 1.9%
India 9.0%
Thailand 2.4%
China 0.8%
Hong Kong 0.6%
South Korea 17.2%
Mexico 12.2%
Chile 0.2%
Argentina 1.4%
Egypt 0.4%
South Africa 10.1%
Israel 2.3%
Indonesia 1.5%
Malaysia 4.4%
Taiwan 11.8%
Philippines 1.6%
[FN]
*Total may not equal 100%.
Merrill Lynch Developing Capital Markets Fund, Inc., September 30, 1999
DEAR SHAREHOLDER
During the three-month period ended September 30, 1999, total
returns for Merrill Lynch Developing Capital Markets Fund, Inc.,
Class A, Class B, Class C and Class D Shares were -7.07%, -7.26%,
- -7.29% and -7.03%, respectively. (Results shown do not reflect sales
charges and would be lower if sales charges were included.) The
total return of the unmanaged Morgan Stanley Capital International
Emerging Markets Free (MSCI EMF) Index declined 5.15% during the
same period. The Fund's underperformance is attributable to our
underweighted position in Greece, whose market rose 33.31% during
the quarter, combined with our exposure to Malaysia. (References to
securities markets of all countries in this letter to shareholders
correspond to those countries' market weightings in the MSCI EMF
Index and are for the three months ended September 30, 1999.)
Investment Overview
We believe that the decline in performance for emerging markets
during the period suggests a healthy skepticism and greater
selectivity among investors as liquidity became less emerging market-
friendly and the varying progress among developing economies became
more distinct. As the end of the year gets closer, it appears to us
that avoidance of exposure to developing countries ahead of the Year
2000 transition might be a detriment to the flow of liquidity to
emerging markets as a whole. While we cannot foretell the problems
that may arise at the end of the year, we believe that the best
preparation for possible Year 2000 problems is to remain invested in
only the best-managed companies that provide good and timely
information and have the most tradable, liquid stocks. Typically, we
adhere to these selection criteria regardless of any Year 2000
issues.
Liquidity flows to emerging markets were also hampered by concerns
about the direction of US monetary policy. Latin American asset
prices were particularly weak, with the region's equity markets
declining 5% in aggregate. The countries are still dependent on
external capital and remain vulnerable to tighter global liquidity
conditions. In addition, the region faces considerable political
uncertainty in the next 18 months because of the presidential
elections in Mexico, Chile and Argentina.
Mexico has enjoyed a continual flow of positive news on the strength
of its economic recovery. We favored Mexico's media sector and have
an important exposure of 4.15% of net assets through our holdings in
Grupo Televisa and TV Azteca. We believe that next year will be a
strong one for advertising spending related to presidential
campaigning, debates and other activities, and Olympic events whose
TV commercial slots command a premium from sponsors. The absence of
such major televised events in 1999 makes good year-to-year
comparisons relatively easy to attain. Furthermore, Televisa's
management is determined to improve pricing, so both the companies
should benefit. We favored Televisa in particular because of its
ongoing restructuring, which we expect to unlock value in some of
its other media divisions: radio, music and publishing.
Among the Asian crisis economies, South Korea was notably successful
in exhibiting a powerful recovery. Industrial production in South
Korea has been rising at double-digit rates for several months,
propelled by both exports and domestic consumption. While they did
not undergo an economic crisis, Taiwan and India have enjoyed a pick
up in industrial production recovery. The recovery was led by
electronics exports in Taiwan and spurred by domestic demand,
especially for capital goods and consumer durables, in India.
In the semiconductor area, we were skeptical about the strength and
sustainability of demand, but we differed from the consensus view
that there would be an oversupply. We suspected that sell-side
analysts were being overbearish, which is typical when a cyclical
industry is just coming out of a record long trough. The stock's
rally since the middle of this year was underpinned by analyst
earnings revisions as the excess supply scenario became less likely.
Our substantial overweighting in the Korean market resulted
primarily from our large position in companies such as Samsung
Electronics. Samsung Electronics is our largest holding in the Fund
(with a weighting of 6.04% of net assets) and one of the strongest
outperforming emerging market stocks this year. Year-to-date returns
of 156.1% (in US dollar terms) at September 30, 1999 were driven by
favorable supply/demand trends in three key product areas:
semiconductors, TFT-LCDs and digital cellular handsets.
An earthquake hit a sizable section of Turkey's industrial region on
August 17, 1999. The disaster was widespread with casualties in the
tens of thousands. The earthquake's effect on the economy and the
investment environment remains difficult to assess. Turkey's gross
domestic product growth is estimated to decline because of stalled
industrial production--which was weak even before the earthquake--as
well as to bottlenecks and supply shortages. On the positive side,
the government has redoubled its efforts to pass structural reforms,
successfully passing the social security reform bill and reaffirming
its inflation-fighting stance. Turkey's government also announced
plans to raise various taxes to contain the fiscal shortfall.
Despite this disaster, the Turkish market rose 7.91%.
The stock market in Russia declined 31.39%, despite evidence of a
cyclical recovery in Russia (helped by the devaluation last year and
a rise in oil and gas prices), more stable government finances and
an encouraging trend in its payments system. Political disruptions,
which included the removal of high-ranking cabinet members,
overshadowed positive developments in Russia.
In Conclusion
During the last five years, emerging markets have performed poorly
(declining 30%) while the US market has surged almost 190%. This
comparison may lead investors to question the premise that
developing country investments would result in returns above those
that are available in mature markets.
We believe that the premise still holds, and for several reasons is
even more compelling at this time. First, expectations are lower.
This is reflected in valuations (the relationship of security prices
to earnings or assets), which are more attractive. Second, investors
are extremely skeptical, and for a good contrarian, this presents an
opportunity to take the opposite view. Third, the countries we
invest in have used the crises to bolster reform support. An example
is the reform impetus in Brazil after its devaluation last winter.
Finally, as crises have occurred, company leaders restructured their
operations and finances to improve their efficiency and reduce their
costs. We believe that these companies may emerge from these crises
even stronger than before.
We thank you for your ongoing interest in Merrill Lynch Developing
Capital Markets Fund, Inc., and we look forward to reviewing our
strategy with you in our next report to shareholders.
Sincerely,
(Terry K. Glenn)
Terry K. Glenn
President and Director
(Grace Pineda)
Grace Pineda
Senior Vice President and
Portfolio Manager
November 2, 1999
Merrill Lynch Developing Capital Markets Fund, Inc., September 30, 1999
PERFORMANCE DATA
About Fund
Performance
Investors are able to purchase shares of the Fund through the
Merrill Lynch Select Pricing SM System, which offers four pricing
alternatives:
* Class A Shares incur a maximum initial sales charge (front-end
load) of 5.25% and bear no ongoing distribution or account
maintenance fees. Class A Shares are available only to eligible
investors.
* Class B Shares are subject to a maximum contingent deferred sales
charge of 4% if redeemed during the first year, decreasing 1% each
year thereafter to 0% after the fourth year. In addition, Class B
Shares are subject to a distribution fee of 0.75% and an account
maintenance fee of 0.25%. These shares automatically convert to
Class D Shares after approximately 8 years. (There is no initial
sales charge for automatic share conversions.)
* Class C Shares are subject to a distribution fee of 0.75% and an
account maintenance fee of 0.25%. In addition, Class C Shares are
subject to a 1% contingent deferred sales charge if redeemed within
one year of purchase.
* Class D Shares incur a maximum initial sales charge of 5.25% and
an account maintenance fee of 0.25% (but no distribution fee).
None of the past results shown should be considered a representation
of future performance. Figures shown in the "Recent Performance
Results" and "Average Annual Total Return" tables assume
reinvestment of all dividends and capital gains distributions at net
asset value on the ex-dividend date. Investment return and principal
value of shares will fluctuate so that shares, when redeemed, may be
worth more or less than their original cost. Dividends paid to each
class of shares will vary because of the different levels of account
maintenance, distribution and transfer agency fees applicable to
each class, which are deducted from the income available to be paid
to shareholders.
<TABLE>
Recent
Performance
Results*
<CAPTION>
10 Year/
3 Month 12 Month Since Inception
As of September 30, 1999 Total Return Total Return Total Return
<S> <C> <C> <C>
ML Developing Capital Markets Fund Class A Shares -7.07% +43.65% +66.56%
ML Developing Capital Markets Fund Class B Shares -7.26 +42.02 -13.91
ML Developing Capital Markets Fund Class C Shares -7.29 +42.06 -25.11
ML Developing Capital Markets Fund Class D Shares -7.03 +43.24 -22.05
<FN>
*Investment results shown do not reflect sales charges; results
shown would be lower if a sales charge was included. Total
investment returns are based on changes in net asset values for the
periods shown, and assume reinvestment of all dividends and capital
gains distributions at net asset value on the ex-dividend date. The
Fund's ten year/since inception periods are ten years for Class A
Shares, from 7/01/94 for Class B Shares and from 10/21/94 for Class
C & Class D Shares.
</TABLE>
Average Annual
Total Return
% Return Without % Return With
Class A Shares* Sales Charge Sales Charge**
Year Ended 9/30/99 +43.65% +36.11%
Five Years Ended 9/30/99 - 4.92 - 5.94
Ten Years Ended 9/30/99 + 5.23 + 4.67
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
% Return % Return
Class B Shares* Without CDSC With CDSC**
Year Ended 9/30/99 +42.02% +38.02%
Five Years Ended 9/30/99 - 5.90 - 5.90
Inception (7/01/94) to 9/30/99 - 2.81 - 2.81
[FN]
*Maximum contingent deferred sales charge is 4% and is reduced to 0%
after 4 years.
**Assuming payment of applicable contingent deferred sales charge.
% Return % Return
Class C Shares* Without CDSC With CDSC**
Year Ended 9/30/99 +42.06% +41.06%
Inception (10/21/94) to 9/30/99 - 5.68 - 5.68
[FN]
*Maximum contingent deferred sales charge is 1% and is reduced to 0%
after 1 year.
**Assuming payment of applicable contingent deferred sales charge.
% Return Without % Return With
Class D Shares* Sales Charge Sales Charge**
Year Ended 9/30/99 +43.24% +35.72%
Inception (10/21/94) to 9/30/99 - 4.92 - 5.95
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
PORTFOLIO INFORMATION
Ten Largest Equity Holdings Percent of
As of September 30, 1999 Net Assets
Samsung Electronics 6.0%
Korea Electric Power Corporation* 5.2
Taiwan Semiconductor Manufacturing Company 5.0
Grupo Televisa SA (GDR) 2.7
Telefonos de Mexico SA (ADR) 2.4
Telekom Malaysia Berhad 2.3
Korea Telecom Corporation (ADR) 2.2
Hindustan Lever Limited 2.1
Companhia Vale do Rio Doce 'A' (Preferred) 2.1
Tele Norte Leste Participacoes SA* 1.6
[FN]
*Includes combined holdings.
OFFICERS AND DIRECTORS
Terry K. Glenn, President and Director
Donald Cecil, Director
Edward H. Meyer, Director
Charles C. Reilly, Director
Richard R. West, Director
Arthur Zeikel, Director
Edward D. Zinbarg, Director
Robert C. Doll, Senior Vice President
Grace Pineda, Senior Vice President and
Portfolio Manager
Donald C. Burke, Vice President and Treasurer
Susan B. Baker, Secretary
Custodian
Brown Brothers Harriman & Co.
40 Water Street
Boston, MA 02119
Transfer Agent
Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, FL 32246-6484
(800) 637-3863
Merrill Lynch Developing Capital Markets Fund, Inc., September 30, 1999
<TABLE>
CONSOLIDATED SCHEDULE OF INVESTMENTS (in US dollars)
<CAPTION>
Shares Percent of
AFRICA Industries Held Investments Value Net Assets
<S> <S> <C> <S> <C> <C>
South Africa Banking 96,304 Nedcor Limited $ 1,888,345 1.0%
Beverages 119,617 South African Breweries PLC 1,015,174 0.5
35 South African Breweries PLC 297 0.0
-------------- ------
1,015,471 0.5
Financial Services 1,576,289 FirstRand Limited 1,637,396 0.9
Gold Mines 51,631 AngloGold Limited (ADR)(a) 1,623,150 0.9
Health Insurance 360,046 Sanlam Limited 393,214 0.2
Insurance 28,151 Liberty Life Association of Africa Limited 220,608 0.1
33,015 Standard Bank Investment Corporation Limited 105,692 0.1
-------------- ------
326,300 0.2
Metals--Non-Ferrous 53,059 Anglo American PLC 2,974,312 1.6
612,432 Gencor Limited 2,297,577 1.2
64,401 Impala Platinum Holdings Limited 2,222,761 1.2
-------------- ------
7,494,650 4.0
Miscellaneous 44,233 De Beers (ADR)(a) 1,194,291 0.6
Materials & 569,183 Nampak Limited 1,328,647 0.7
Commodities -------------- ------
2,522,938 1.3
Retail 1,371,318 Metro Cash and Carry Limited 1,097,512 0.6
206,350 Pepkor Limited 691,561 0.4
-------------- ------
1,789,073 1.0
Retail--Stores 17,524 Edgars Consolidated Stores Limited 143,318 0.1
Steel 3,792 Iscor Limited 1,467 0.0
Total Investments in Africa 18,835,322 10.1
EUROPE
Czech Republic Telephone Networks 67,648 SPT Telecom AS 1,039,341 0.6
Total Investments in the Czech Republic 1,039,341 0.6
Greece Banking 8,210 Alpha Credit Bank 658,130 0.4
Beverages 26,247 Hellenic Bottling Co. 629,078 0.3
Building & 21,870 Titan Cement Company 2,549,316 1.4
Construction
Telecommunications 168,263 Hellenic Telecommunication
Organization SA (OTE)(ADR)(a) 1,882,442 1.0
Total Investments in Greece 5,718,966 3.1
Hungary Banking 21,196 OTP Bank Rt. (GDR)(b) 929,445 0.5
Oil & Related 74,151 MOL Magyar Olaj-es Gazipari Rt. (GDR)(b) 1,557,171 0.8
Telecommunications 1,183 Magyar Tavkozlesi Rt. (ADR)(a) 32,237 0.0
494,843 Magyar Tavkozlesi Rt.--Matav 2,719,795 1.5
-------------- ------
2,752,032 1.5
Total Investments in Hungary 5,238,648 2.8
Poland Banking 90,148 Wielkopolski Bank Kredytowy SA 475,506 0.3
Multi-Industry 125,476 Elektrim Spolka Akcyjna SA 1,164,368 0.6
Telephone 64,718 Telekomunikacja Polska SA 317,663 0.2
Communications 53,800 Telekomunikacja Polska SA (GDR)(b) 258,240 0.1
-------------- ------
575,903 0.3
Total Investments in Poland 2,215,777 1.2
Russia Energy Sources 2,025,000 Irkutskenergo 141,750 0.1
36,053 LUKoil Holding (ADR)(a) 980,642 0.5
-------------- ------
1,122,392 0.6
Telecommunications 3,268,800 Bashinformsvyaz 98,064 0.1
150,704 Nizhnovsvyazinform 37,676 0.0
-------------- ------
135,740 0.1
Utilities-- 2,066,208 Bashkirenergo 68,185 0.0
Electric
Total Investments in Russia 1,326,317 0.7
Turkey Banking 152,906,140 Turkiye Garanti Bankasi AS 1,110,658 0.6
52,621,402 Yapi ve Kredi Bankasi AS 718,809 0.4
42,674,721 Yapi ve Kredi Bankasi AS (Receipts) 582,937 0.3
-------------- ------
2,412,404 1.3
Beverages 9,321,633 Ege Biracilik Ve Malt Sanayii AS 303,175 0.1
Retail 2,174,850 Migros Turk T.A.S. 943,127 0.5
Total Investments in Turkey 3,658,706 1.9
Total Investments in Europe 19,197,755 10.3
LATIN
AMERICA
Argentina Oil & Related 203,276 Perez Companc SA 'B' 1,230,029 0.7
Real Estate 33,761 IRSA Inversiones y Representaciones
SA (GDR)(b) 949,528 0.5
Telecommunications 9,022 Telecom Argentina Stet-France Telecom
SA (ADR)(a) 240,775 0.1
7,819 Telefonica de Argentina SA (ADR)(a) 206,226 0.1
-------------- ------
447,001 0.2
Total Investments in Argentina 2,626,558 1.4
Brazil Banking 13,437,320 Banco Itau SA (Preferred) 699,860 0.4
35,027 Uniao de Bancos Brasileiros SA
(Unibanco)(GDR)(b) 619,540 0.3
-------------- ------
1,319,400 0.7
Beverages 3,054,861 Companhia Cervejaria Brahma (Preferred) 1,844,054 1.0
3,083 Companhia Cervejaria Brahma
(Preferred)(ADR)(a) 36,996 0.0
-------------- ------
1,881,050 1.0
Metals & Steel 184,472 Companhia Vale do Rio Doce 'A' (Preferred) 3,929,638 2.1
Oil & Related 9,129,734 Petroleo Brasileiro SA--Petrobras (Preferred) 1,364,705 0.8
</TABLE>
Merrill Lynch Developing Capital Markets Fund, Inc., September 30, 1999
<TABLE>
CONSOLIDATED SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
LATIN AMERICA Shares Percent of
(concluded) Industries Held Investments Value Net Assets
<S> <S> <C> <S> <C> <C>
Brazil Telecommunications 63,490,526 Tele Celular Sul Participacoes SA $ 79,363 0.0%
(concluded) 7,000,000 Tele Norte Leste Participacoes SA 77,656 0.0
190,017 Tele Norte Leste Participacoes SA (ADR)(a) 2,945,264 1.6
42,623 Telecomunicacoes Brasileiras SA--Telebras
(ADR)(a) 1,332 0.0
26,704 Telecomunicacoes Brasileiras SA--Telebras
(Preferred Block)(ADR)(a) 2,001,131 1.1
73,248,526 Telesp Participacoes SA 763,005 0.4
44,699 Telesp Participacoes SA (ADR)(a) 704,009 0.4
-------------- ------
6,571,760 3.5
Utilities-- 77,582,270 Companhia Energetica de Minas
Electric Gerais SA--CEMIG (Preferred) 1,171,816 0.6
Total Investments in Brazil 16,238,369 8.7
Chile Utilities-- 16,756 Enersis SA (ADR)(a) 349,781 0.2
Electric & Gas
Total Investments in Chile 349,781 0.2
Mexico Beverages & Tobacco 28,054 Fomento Economico Mexicano, SA de CV (ADR)(a) 878,441 0.5
108,725 Panamerican Beverages, Inc. 'A'
(US Registered Shares) 1,800,758 1.0
-------------- ------
2,679,199 1.5
Broadcasting/Media 125,661 Grupo Televisa SA (GDR)(b) 5,018,586 2.7
546,201 TV Azteca, SA de CV (ADR)(a) 2,731,005 1.5
-------------- ------
7,749,591 4.2
Building Materials 87,775 Cemex, SA de CV 423,839 0.2
64,633 Cemex, SA de CV (ADR)(a) 1,559,271 0.8
-------------- ------
1,983,110 1.0
Diversified Companies 47,142 Grupo Sanborns SA 'B1' 73,994 0.0
Food 553,545 Grupo Industrial Bimbo, SA de CV 'A' 1,161,615 0.6
Healthcare/ 778,160 Kimberly-Clark de Mexico, SA de CV 'A' 2,749,388 1.5
Personal Care
Multi-Industry 445,148 Grupo Carso, SA de CV 'A1' 1,875,436 1.0
Telecommunications 63,506 Telefonos de Mexico SA (ADR)(a) 4,524,802 2.4
Total Investments in Mexico 22,797,135 12.2
Venezuela Telecommunications 15,076 Compania Anonima Nacional Telefonos
de Venezuela (CANTV)(ADR)(a) 404,225 0.2
Total Investments in Venezuela 404,225 0.2
Total Investments in Latin America 42,416,068 22.7
MIDDLE
EAST
Egypt Banking 29,677 Commercial International Bank (GDR)(b) 277,480 0.2
Total Investments in Egypt 277,480 0.2
Israel Banking 429,403 Bank Hapoalim 1,057,193 0.6
554,937 Bank Leumi Le-Israel 966,631 0.5
-------------- ------
2,023,824 1.1
Multi-Industry 34,155 Koor Industries Limited (ADR)(a) 595,578 0.3
Telecommunications 482,701 Bezeq Israeli Telecommunication
Corporation Ltd. 1,725,625 0.9
Total Investments in Israel 4,345,027 2.3
Total Investments in the Middle East 4,622,507 2.5
PACIFIC
BASIN/ASIA
China Electrical & 603,500 Eastern Communication Co., Ltd. 'B' 535,908 0.3
Electronics
Machinery & 3,177,774 Qingling Motor Company 'H' 609,561 0.3
Engineering
Utilities-- 2,035,000 Beijing Datang Power Generation
Electric Company Limited 'H' 458,469 0.2
Total Investments in China 1,603,938 0.8
Hong Kong Building Products 10,999,219 Anhui Conch Cement Co. Ltd. 'H' 1,217,777 0.6
Total Investments in Hong Kong 1,217,777 0.6
India Banking 122,543 State Bank of India 613,700 0.3
Building Products 7,210 Associated Cement Companies Ltd. 34,286 0.0
Business & 62,838 Pentafour Software & Exports Ltd. 866,134 0.5
Public Services 62,838 Pentafour Software & Exports Ltd. (New Shares) 863,968 0.5
28,570 Satyam Computer Services Limited 735,745 0.4
28,570 Satyam Computer Services Limited (New Shares) 735,351 0.4
-------------- ------
3,201,198 1.8
Chemicals 177,955 Reliance Industries Ltd 966,835 0.5
Energy Sources 93,430 BSES Ltd. (GDR)(b) 1,121,160 0.6
682 Bombay Electrical Supply 2,875 0.0
-------------- ------
1,124,035 0.6
Financial Services 390 Housing Development Finance Corporation Ltd. 2,381 0.0
997,398 ICICI Ltd. 2,004,878 1.1
80,750 ICICI Ltd. (GDR)(b) 928,625 0.5
-------------- ------
2,935,884 1.6
Food & Household 67,474 Hindustan Lever Limited 3,969,387 2.1
Products
Leisure & Tourism 37,997 EIH Limited 201,638 0.1
Metals--Non-Ferrous 127,800 Hindalco Industries Ltd. 2,617,360 1.4
5,015 Hindalco Industries Ltd. (GDR)(b) 132,897 0.1
-------------- ------
2,750,257 1.5
Oil Services 400 Hindustan Petroleum Corporation Ltd. 2,334 0.0
Pharmaceutical-- 1,129 Ranbaxy Laboratories Limited (GDR)(b) 26,588 0.0
Prescription
Telecommunications 70,740 Videsh Sanchar Nigam Ltd. (GDR)(b) 969,138 0.5
Total Investments in India 16,795,280 9.0
</TABLE>
Merrill Lynch Developing Capital Markets Fund, Inc., September 30, 1999
<TABLE>
CONSOLIDATED SCHEDULE OF INVESTMENTS (concluded) (in US dollars)
<CAPTION>
PACIFIC BASIN/ Shares Percent of
ASIA(concluded) Industries Held Investments Value Net Assets
<S> <S> <C> <S> <C> <C>
Indonesia Building Products 726,000 P.T. Semen Gresik (Persero) Tbk $ 1,159,160 0.6%
Telecommunications 123,835 P.T. Indosat (Persero) Tbk (ADR)(a) 1,671,773 0.9
Total Investments in Indonesia 2,830,933 1.5
Malaysia Banking 467,000 Malayan Banking Berhad 1,450,158 0.8
Energy Sources 707,000 Petronas Gas Berhad 1,488,421 0.8
Telecommunications 1,675,000 Telekom Malaysia Berhad 4,341,776 2.3
Tobacco 141,100 Rothmans of Pall Mall (Malaysia) Berhad 861,453 0.5
Total Investments in Malaysia 8,141,808 4.4
Philippines Banking 170,740 Metropolitan Bank & Trust Company 1,255,441 0.7
Utilities-- 603,160 Manila Electric Company 'B' 1,744,433 0.9
Electric & Gas
Total Investments in the Philippines 2,999,874 1.6
South Korea Automobile 36,839 Hyundai Motor Company Ltd. 761,925 0.4
Banking 47,750 Housing & Commercial Bank, Korea 922,800 0.5
74,060 Kookmin Bank 928,795 0.5
-------------- ------
1,851,595 1.0
Chemicals 13,790 Honam Petrochemical Corporation 310,729 0.2
34,820 L.G. Chemical Limited 1,010,811 0.5
-------------- ------
1,321,540 0.7
Electronic Components 7,606 Samsung Display Devices Co., Ltd. 431,590 0.2
Electronics 69,681 Samsung Electronics 11,288,780 6.0
Finance 36,840 Daewoo Securities 543,814 0.3
7,480 Dongwon Securities 175,928 0.1
23,980 Hyundai Securities 433,849 0.2
9,790 L.G. Securities Company 177,122 0.1
13,650 Samsung Securities Company Ltd. 443,400 0.2
-------------- ------
1,774,113 0.9
Steel 32,746 Pohang Iron & Steel Company Ltd. (ADR)(a) 1,025,359 0.6
Telecommunications 109,101 Korea Telecom Corporation (ADR)(a) 4,036,737 2.2
Utilities--Electric 156,820 Korea Electric Power Corporation 5,158,553 2.8
284,794 Korea Electric Power Corporation (ADR)(a) 4,574,504 2.4
-------------- ------
9,733,057 5.2
Total Investments in South Korea 32,224,696 17.2
Taiwan Banking 567 Bank Sinopac 303 0.0
3,438,267 E. Sun Commercial Bank 1,352,494 0.7
-------------- ------
1,352,797 0.7
Building Products 677,600 Asia Cement Corporation 612,302 0.3
690,800 Taiwan Cement Corporation 495,455 0.3
-------------- ------
1,107,757 0.6
Chemicals 1,444,887 Formosa Plastic Corporation 2,807,601 1.5
Computer Equipment 150,000 Compal Electronics Inc. 476,303 0.3
Electronic 471,636 Mosel Vitelic, Inc. 500,694 0.3
Components
Electronic/ 400,000 Vanguard International Semiconductor Corporation 446,130 0.2
Semi-Conductors
Financial 1,444,300 Grand Cathay Securities Corporation 684,502 0.4
Securities
Financial Services 540,400 China Development Industrial Bank Inc. 822,979 0.5
Health Insurance 528,450 Cathay Life Insurance Co., Ltd. 1,369,128 0.7
Semiconductors 2,227,640 Taiwan Semiconductor Manufacturing Company 9,396,207 5.0
Steel 2,047,500 China Steel Corporation 1,669,052 0.9
Transportation-- 618,335 Yang Ming Marine Transport Corp. 377,057 0.2
Marine
Wire & Cable 1,998,000 Pacific Electrical Wire & Cable Co. Ltd. 978,483 0.5
Total Investments in Taiwan 21,988,690 11.8
Thailand Banking 533,000 Bangkok Bank Public Company
Limited 'Foreign' 1,048,546 0.5
1,297,000 Siam Commercial Bank Public Company
Limited (Warrants)(c) 372,428 0.2
907,300 Thai Farmers Bank Public Company
Limited 'Foreign' 1,069,825 0.6
-------------- ------
2,490,799 1.3
Broadcasting/Media 264,160 BEC World Public Company Limited 'Foreign' 1,433,126 0.8
Building Materials 23,249 The Siam Cement Public Company Limited 484,070 0.3
Total Investments in Thailand 4,407,995 2.4
Total Investments in the Pacific Basin/Asia 92,210,991 49.3
Total Investments (Cost--$167,353,593) 177,282,643 94.9
SHORT-TERM Face
SECURITIES Amount Issue
Commercial US$2,697,000 General Electric Capital Corp., 5.60%
Paper* due 10/01/1999 2,697,000 1.4
Total Investments in
Short-Term Securities (Cost--$2,697,000) 2,697,000 1.4
Total Investments (Cost--$170,050,593) 179,979,643 96.3
Other Assets Less Liabilities 6,840,028 3.7
-------------- ------
Net Assets $ 186,819,671 100.0%
============== ======
Net Asset Value: Class A--Based on net assets of $72,845,218 and
6,596,165 shares outstanding $ 11.04
==============
Class B--Based on net assets of $80,357,408 and
7,486,788 shares outstanding $ 10.73
==============
Class C--Based on net assets of $15,880,176 and
1,485,196 shares outstanding $ 10.69
==============
Class D--Based on net assets of $17,736,869 and
1,615,699 shares outstanding $ 10.98
==============
<FN>
*Commercial Paper is traded on a discount basis; the interest rate
shown reflects the discount rate paid at the time of purchase by the
Fund.
(a)American Depositary Receipts (ADR).
(b)Global Depositary Receipts (GDR).
(c)Warrants entitle the Fund to purchase a predetermined number of
shares of common stock and are non-income producing. The purchase
price and number of shares are subject to adjustment under certain
conditions until the expiration date.
</TABLE>
