MERRILL LYNCH
DEVELOPING
CAPITAL MARKETS
FUND, INC.
FUND LOGO
Annual Report
June 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 June 30, 1999
VENEZUELA 0.6%
BRAZIL 12.3%
HUNGARY 2.5%
CZECH REPUBLIC 0.5%
POLAND 2.6%
RUSSIA 0.9%
GREECE 1.7%
TURKEY 1.7%
INDIA 6.6%
THAILAND 4.2%
CHINA 1.0%
HONG KONG 1.6%
SOUTH KOREA 16.0%
MEXICO 11.7%
CHILE 0.2%
ARGENTINA 1.3%
EGYPT 0.1%
SOUTH AFRICA 8.7%
ISRAEL 2.3%
INDONESIA 2.3%
MALAYSIA 6.8%
TAIWAN 7.9%
PHILIPPINES 1.8%
[FN]
*Total may not equal 100%.
Merrill Lynch Developing Capital Markets Fund, Inc., June 30, 1999
DEAR SHAREHOLDER
Fiscal Year in Review
During the 12-month period ended June 30, 1999, total returns for
Merrill Lynch Developing Capital Markets Fund, Inc.'s Class A, Class
B, Class C and Class D Shares were +14.60%, +13.37%, +13.42% and
+14.26%, respectively. (Results shown do not reflect sales charges
and would be lower if sales charges were included. Complete
performance information can be found on pages 6--8 of this report
to shareholders.) The unmanaged Morgan Stanley Capital International
Emerging Markets Free (MSCI EMF) Index rose 28.71% during the same
period. Detrimental to performance was the Fund's overweighted
position in Hungary, which declined 16.12%. Stock selection in
Poland, India and Mexico also negatively impacted the Fund's
performance relative to the MSCI EMF Index. Also hurting performance
was the Fund's large cash position during the later months of 1998.
Offsetting these negatives were positive performance contributions
of an overweighting in some Asian markets, specifically Malaysia,
Thailand and Taiwan.
Investment Overview and Activities
During the three-month period ended June 30, 1999, Merrill Lynch
Developing Capital Markets Fund, Inc.'s Class A, Class B, Class C
and Class D Shares had total returns of +27.88%, +27.42%, +27.40%
and +27.68%, respectively. The unmanaged MSCI EMF Index rose 24.40%
during the same period. The Fund's outperformance during the June
quarter is attributable to its overweighted positions in many of the
Asian markets, including Indonesia, Malaysia Free, South Korea and
Thailand Free, whose markets were up 121.62%, 71.57%, 64.44% and
61.19%, respectively. Also benefiting performance was the relative
outperformance of the Fund's stocks in Mexico as compared to their
relative market. (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-month period
ended June 30, 1999.)
The recovery in emerging markets continued in the three-month period
ended June 30, 1999. Overall, emerging markets enjoyed a broad-based
rally driven primarily by the perception that these economies had
seen their worst and were on the road to recovery. This perception,
which we partly share, was supported by evidence such as rising
industrial production in South Korea, a pickup in consumer spending
in Thailand and the recovery in the prices of some commodities such
as pulp and oil.
Bolstering the case for emerging markets recovery were reflationary
efforts in the major economies of the United States, Japan and the
European Union. This was indicated by the neutral monetary stance of
the US Federal Reserve Board through most of the period, the fiscal
stimulus and the possibility of monetization in Japan, and the
decline in interest rates in the European Union. In addition,
investors regained confidence in these markets as countries, such as
Brazil, Malaysia, South Korea and Thailand, were successful in
raising capital in the foreign markets.
To add balance to this positive assessment of the developing
markets, we note that the evidence of recovery has so far been
limited to relatively few countries. In our view, the necessary
structural reforms in countries such as Indonesia and Brazil are
still works in progress. Developing economies and their emerging
markets may appear to be recovering, but progress can easily be
slowed by external events.
These events could include a curtailment of capital flows to the
developing markets if there is a sharp rising trend in US interest
rates or a prolonged decline in the US stock market. Cyclical stocks
and the Mexican, Brazilian and South African stock markets in
general could be particularly vulnerable to a collapse in commodity
prices if the European and Japanese economies fail to reflate. Some
Israeli, South Korean and Taiwanese technology shares could be hurt
by a decline in prices of US technology stock prices. Nonetheless,
assuming the investment environments continue to improve, we believe
the case for investing in these countries with a long-term view is
very much intact.
South Korea was one of the best-performing markets during the three
months ended June 30, 1999, rising 64.44%. South Korea is a prime
example of an incomplete restructuring. Although the country has
made progress in areas such as recapitalizing and restructuring the
banking sector and increasing transparency in corporate financial
disclosures, little has been achieved in reforming the giant
conglomerates, or chaebols. However, the stock market has rewarded
the South Korean government's stated desire to make the necessary
improvements to the economy.
Evidence of the seriousness of the South Korean government's
intention to reform will be the deregulation of state companies such
as Korea Electric Power Corporation (KEPCO). KEPCO is the state
monopoly for generation and distribution of electricity. In the
past, the company has had to shoulder the burden of subsidizing the
industrial sectors for the sake of economic development. We believe
that the South Korean government is committed to deregulating the
pricing of electricity. South Korea had the largest country
weighting in the Fund, comprising 16.0% of net assets.
In Thailand, recovery and restructuring continued during the three-
month period ended June 30, 1999. The auctioning of bad loans taken
from the finance companies has been proceeding slowly. The three
largest banks--including two Fund investments, Bangkok Bank Public
Company Limited and Thai Farmers Bank Public Company Limited--
appear to be successfully recapitalizing themselves. One of the
largest conglomerates in Thailand, The Siam Cement Public Company
Limited, which is also a holding in the Fund, disposed of
subsidiaries and joint venture stakes in non-core businesses. The
stock price of the foreign shares of Siam Cement quadrupled from its
lowest level last year.
Growth prospects for the South African economy improved during the
three-month period ended June 30, 1999. The beginning of a commodity
cycle upturn has been extremely positive for exports of commodities
including platinum, diamonds and coal, which comprise one-third of
South Africa's exports. In addition, interest rates have been
declining and may decline further, particularly since the currency
has been relatively stable. Our investments in South Africa
comprised 8.7% of net assets.
Corporate earnings in South Africa were a positive surprise. For
example, Impala Platinum Holdings Limited reported first-half fiscal
year earnings per share up 127%. This was a strong result, despite
the flat prices for its metals. The substantial rise in earnings was
driven by the company's cost containment program, which limited the
rise in cash costs to 2.5% for the three-month period, and by fees
from refining other platinum producers' concentrate. In addition to
this, the depreciation of the South African currency during the six-
month period ended June 30, 1999 also benefited the company, since
its costs are primarily rand-based, while its revenues are US dollar-
based prices for platinum, palladium and rhodium.
The two most prominent companies engaged in these restructuring
activities are Anglo American PLC and South African Breweries PLC.
Both companies have recently moved their domiciles to London in an
effort to facilitate raising capital and to potentially lower their
costs of capital by diversifying their asset bases. In anticipation
of the changes in domicile, both companies streamlined their
operations, sold off non-core assets, and were developing strategies
intended to drive their future growth prospects, both within and
outside of South Africa.
Merrill Lynch Developing Capital Markets Fund, Inc., June 30, 1999
Restructuring is also an ongoing theme in other countries. In
Israel, Koor Industries Limited continued to enhance its shareholder
value through the disposition of non-core assets in the food and
ammunition industries and consolidation of its positions in the
telecommunications industry through increased holdings in ECI and in
the agrochemical industry through increased ownership of MA Industries.
In Poland, Elektrim Spolka Akcyjna SA--one of the country's largest
industrial conglomerates and a long-term holding of the Fund--is
transforming rapidly under new management. The company was a post-
Soviet era behemoth that inherited a broad and unrelated array of
activities, many of which operated at a loss. Through divestments
and acquisitions, it is focusing on what the company's management
deems to be businesses that are attractive in Poland and could
increase in value. These are telecommunications services, including
wireless and wired line telephone and cable television, and power,
including engineering services and generation equipment.
Our equity investments in Brazil comprised 12.3% of the Fund's net
assets. As noted above, fiscal reforms are still pending and their
postponement is causing some concern in the markets. However, there
are investments that we believe can make a positive contribution to
the Fund's performance because of their defensive qualities as well
as attractive valuations. One example is the diversified mining
company Companhia Vale do Rio Doce (CVRD). CVRD benefits from the
weaker Brazilian real, as its revenue stream is primarily US dollar-
based, while the majority of its costs are in local currency. As the
world's largest producer of iron ore, the company stands to benefit
from improving conditions in the global steel market. We believe
that values such as those in CVRD are compelling enough to justify
taking a long-term position in Brazil, notwithstanding the near-term
market volatility that we expect.
There has been value in emerging market investments for some time.
Nevertheless, the stock markets declined. We believe that aside from
compelling stock valuations, there are several drivers that could
improve the performance of these stock markets. These include the
improving outlook for earnings and economic growth, the scope for
interest rate declines as perceived risk subsides, and what we
believe to be the bottoming out of the global economic cycle and
commodity prices.
In Conclusion
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
August 12, 1999
OFFICERS AND DIRECTORS
Terry K. Glenn, President and Director
Donald Cecil, Director
Roland M. Machold, Director
Edward H. Meyer, Director
Charles C. Reilly, Director
Richard R. West, Director
Arthur Zeikel, Director
Edward D. Zinbarg, Director
Grace Pineda, Senior Vice President
and Portfolio Manager
Donald C. Burke, Vice President and Treasurer
Barbara G. Fraser, 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., June 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.
Total Return Based on a $10,000 Investment--Class A Shares
A line graph depicting the growth of an investment in the Fund's
Class A Shares compared to growth of an investment in the Morgan
Stanley Capital International EAFE Index and the Morgan Stanley
Capital International Emerging Markets Free Index. Beginning and
ending values are:
9/01/89** 6/99
ML Developing Capital Markets Fund, Inc.++--
Class A Shares* $ 9,475 $17,090
Morgan Stanley Capital International
EAFE Index++++ $10,000 $17,627
Morgan Stanley Capital International
Emerging Markets Free Index++++++ $10,000 $29,269
A line graph depicting the growth of an investment in the Fund's
Class B Shares compared to growth of an investment in the Morgan
Stanley Capital International EAFE Index and the Morgan Stanley
Capital International Emerging Markets Free Index. Beginning and
ending values are:
7/01/94** 6/99
ML Developing Capital Markets Fund, Inc.++--
Class B Shares* $10,000 $ 9,283
Morgan Stanley Capital International
EAFE Index++++ $10,000 $14,836
Morgan Stanley Capital International
Emerging Markets Free Index++++++ $10,000 $ 9,594
A line graph depicting the growth of an investment in the Fund's
Class C Shares and Class D Shares compared to growth of an
investment in the Morgan Stanley Capital International EAFE Index
and the Morgan Stanley Capital International Emerging Markets Free
Index. Beginning and ending values are:
10/21/94** 6/99
ML Developing Capital Markets Fund, Inc.++--
Class C Shares* $10,000 $ 8,078
ML Developing Capital Markets Fund, Inc.++--
Class D Shares* $ 9,475 $ 7,945
Morgan Stanley Capital International
EAFE Index++++ $10,000 $14,344
Morgan Stanley Capital International
Emerging Markets Free Index++++++ $10,000 $ 8,091
[FN]
*Assuming maximum sales charge, transaction costs and other
operating expenses, including advisory fees.
**Commencement of operations.
++ML Developing Capital Markets Fund, Inc. invests in securities,
principally equities, of issuers in countries having smaller capital
markets.
++++This unmanaged Index measures the total returns of developed
foreign stock markets in Europe, Asia and the Far East. The starting
date for the Index in the Class A Shares' graph is from 8/31/89, in
the Class B Shares' graph is from 6/30/94 and in the Class C & Class
D Shares' graph is from 10/31/94.
++++++This unmanaged Index measures the total returns of emerging
foreign stock markets in Europe, Asia and the Far East. The starting
date for the Index in the Class A Shares' graph is from 8/31/89, in
the Class B Shares' graph is from 6/30/94 and in the Class C & Class
D Shares' graph is from 10/31/94.
Average Annual
Total Return
% Return Without % Return With
Class A Shares* Sales Charge Sales Charge**
Year Ended 6/30/99 +14.60% +8.59%
Five Years Ended 6/30/99 - 0.52 -1.59
Inception (9/01/89) through 6/30/99 + 6.18 +5.60
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
% Return % Return
Class B Shares* Without CDSC With CDSC**
Year Ended 6/30/99 +13.37% +9.37%
Inception (7/01/94)
through 6/30/99 - 1.48 -1.48
[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 6/30/99 +13.42% +12.42%
Inception (10/21/94)
through 6/30/99 - 4.45 - 4.45
[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 6/30/99 +14.26% +8.26%
Inception (10/21/94)
through 6/30/99 - 3.69 -4.79
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
Merrill Lynch Developing Capital Markets Fund, Inc., June 30, 1999
PERFORMANCE DATA (concluded)
<TABLE>
Recent
Performance
Results*
<CAPTION>
12 Month 3 Month Since Inception
Total Return Total Return Total Return
<S> <C> <C> <C>
ML Developing Capital Markets Fund Class A Shares +14.60% +27.88% +80.35%
ML Developing Capital Markets Fund Class B Shares +13.37 +27.42 - 7.17
ML Developing Capital Markets Fund Class C Shares +13.42 +27.40 -19.22
ML Developing Capital Markets Fund Class D Shares +14.26 +27.68 -16.16
<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 since inception dates are from 9/01/89 for Class A Shares,
from 7/01/94 for Class B Shares and from 10/21/94 for Class C &
Class D Shares.
</TABLE>
Merrill Lynch Developing Capital Markets Fund, Inc., June 30, 1999
<TABLE>
CONSOLIDATED SCHEDULE OF INVESTMENTS (in US dollars)
<CAPTION>
Shares Value Percent of
AFRICA Industries Held Investments Cost (Note 1a) Net Assets
<S> <S> <C> <S> <C> <C> <C>
South Banking 96,766 Nedcor Limited $ 1,955,708 $ 2,190,626 1.0%
Africa
Beverages 120,159 ++South African Breweries PLC 876,599 1,043,476 0.5
35 ++South African Breweries PLC (c) 298 304 0.0
-------------- -------------- ------
876,897 1,043,780 0.5
Financial 2,329,267 FirstRand Limited 3,412,002 2,663,563 1.3
Services
Gold Mines 51,830 AngloGold Limited (ADR)(a) 1,128,679 1,114,345 0.5
Health Insurance 363,939 ++Sanlam Limited 388,152 431,250 0.2
Insurance 13,232 ++Liberty International PLC 91,631 87,607 0.0
28,380 Liberty Life Association of Africa
Limited 403,890 363,569 0.2
-------------- -------------- ------
495,521 451,176 0.2
Metals--Non-Ferrous 53,279 ++Anglo American PLC 2,549,343 2,490,003 1.2
615,066 Gencor Limited 1,447,453 1,692,094 0.8
64,652 Impala Platinum Holdings Limited 1,527,864 1,626,479 0.8
-------------- -------------- ------
5,524,660 5,808,576 2.8
Miscellaneous 44,395 De Beers (ADR)(a) 1,020,956 1,059,931 0.5
Materials & 571,894 Nampak Limited 862,910 1,582,802 0.7
Commodities -------------- -------------- ------
1,883,866 2,642,733 1.2
Retail 1,377,400 Metro Cash and Carry Limited 1,037,172 1,141,366 0.5
207,852 Pepkor Limited 667,665 837,057 0.4
-------------- -------------- ------
1,704,837 1,978,423 0.9
Retail--Stores 17,368 Edgars Consolidated Stores Limited 64,258 134,995 0.1
Total Investments in Africa 17,434,580 18,459,467 8.7
EUROPE
Czech Telephone Networks 67,928 ++SPT Telecom AS 904,584 1,101,884 0.5
Republic
Total Investments in the Czech Republic 904,584 1,101,884 0.5
Greece Banking 8,707 Alpha Credit Bank 541,568 561,011 0.3
Beverages 27,253 Hellenic Bottling Co. 899,249 658,272 0.3
Building & 25,021 Titan Cement Company 2,162,016 2,303,082 1.1
Construction
Total Investments in Greece 3,602,833 3,522,365 1.7
Hungary Banking 21,305 OTP Bank Rt. (GDR)(b) 950,150 873,505 0.4
Oil & Related 74,466 ++MOL Magyar Olaj-es Gazipari Rt.
(GDR)(b) 2,045,484 1,768,568 0.8
Telecommunications 498,975 Magyar Tavkozlesi Rt.--Matav 2,904,795 2,700,398 1.3
1,183 Magyar Tavkozlesi Rt. (ADR)(a) 31,202 32,533 0.0
-------------- -------------- ------
2,935,997 2,732,931 1.3
Total Investments in Hungary 5,931,631 5,375,004 2.5
Poland Banking 90,148 Wielkopolski Bank Kredytowy SA 886,674 528,795 0.2
Business & 100,135 ++ComputerLand SA 2,109,294 1,902,591 0.9
Public
Services
Multi-Industry 220,231 Elektrim Spolka Akcyjna SA 2,280,859 3,117,271 1.5
Total Investments in Poland 5,276,827 5,548,657 2.6
Russia Energy Sources 2,025,000 Irkutskenergo 255,918 202,500 0.1
26,483 LUKoil Holding (ADR)(a) 871,819 1,048,727 0.5
-------------- -------------- ------
1,127,737 1,251,227 0.6
Telecommuni- 3,268,800 ++Bashinformsvyaz 1,455,190 228,816 0.1
cations 169,200 Nizhnovsvyazinform 879,840 164,124 0.1
-------------- -------------- ------
2,335,030 392,940 0.2
Utilities-- 2,066,208 Bashkirenergo 1,187,599 146,701 0.1
Electric
Total Investments in Russia 4,650,366 1,790,868 0.9
Turkey Banking 155,373,140 ++Turkiye Garanti Bankasi AS 1,273,901 1,160,298 0.5
53,343,402 Yapi ve Kredi Bankasi AS 549,106 771,425 0.4
42,674,721 Yapi ve Kredi Bankasi AS (Receipts) 286,788 617,140 0.3
-------------- -------------- ------
2,109,795 2,548,863 1.2
Beverages 3,118,811 Ege Biracilik Ve Malt Sanayii AS 332,529 232,907 0.1
Retail 728,650 Migros Turk T.A.S. 968,064 906,904 0.4
Total Investments in Turkey 3,410,388 3,688,674 1.7
Total Investments in Europe 23,776,629 21,027,452 9.9
</TABLE>
Merrill Lynch Developing Capital Markets Fund, Inc., June 30, 1999
<TABLE>
CONSOLIDATED SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
LATIN Shares Value Percent of
AMERICA Industries Held Investments Cost (Note 1a) Net Assets
<S> <S> <C> <S> <C> <C> <C>
Argentina Oil & Related 203,276 Perez Companc SA 'B' $ 1,300,801 $ 1,169,001 0.6%
Real Estate 33,761 ++IRSA Inversiones y Representaciones
SA (GDR)(b) 924,979 1,042,371 0.5
Telecommunications 9,112 Telecom Argentina Stet-France
Telecom SA (ADR)(a)(c) 310,355 243,746 0.1
7,898 Telefonica de Argentina SA (ADR)(a) 292,700 247,800 0.1
-------------- -------------- ------
603,055 491,546 0.2
Total Investments in Argentina 2,828,835 2,702,918 1.3
Brazil Banking 1,364,032 Banco Itau SA (Preferred) 709,168 700,490 0.3
80,710 Uniao de Bancos Brasileiros SA
(Unibanco) (GDR)(b) 1,156,684 1,942,084 0.9
-------------- -------------- ------
1,865,852 2,642,574 1.2
Beverages 3,083 Companhia Cervejaria Brahma (ADR)(a) 28,710 34,876 0.0
3,054,861 Companhia Cervejaria Brahma
(Preferred) 1,797,729 1,718,790 0.8
-------------- -------------- ------
1,826,439 1,753,666 0.8
Metals & Steel 185,245 Companhia Vale do Rio Doce 'A'
(Preferred) 3,643,010 3,637,994 1.7
Oil & Related 8,778,334 Petroleo Brasileiro SA--Petrobras
(Preferred) 2,088,949 1,357,372 0.6
Retail 7,500 Companhia Brasileira de Distribuicao
Grupo Pao de Acucar SA (ADR)(a) 118,901 140,156 0.1
Telecommuni- 66,120,526 ++Tele Celular Sul Participacoes SA 130,355 98,136 0.0
cations 119,678,442 ++Tele Norte Leste Participacoes SA 1,389,487 1,073,864 0.5
273,272 ++Tele Norte Leste Participacoes SA
(ADR)(a) 4,054,109 5,072,612 2.4
42,623 ++Telecomunicacoes Brasileiras SA--
Telebras (ADR)(a) 2,664 2,664 0.0
41,290 Telecomunicacoes Brasileiras SA--
Telebras (Preferred Block)(ADR)(a) 3,261,179 3,723,842 1.8
23,507,700 Telerj Celular SA 'B' 652,176 766,786 0.4
73,248,526 ++Telesp Participacoes SA 1,652,828 950,743 0.4
44,699 Telesp Participacoes SA (ADR)(a) 955,307 1,022,490 0.5
-------------- -------------- ------
12,098,105 12,711,137 6.0
Utilities 123,698,000 ++Centrais Eletricas Basileiras SA--
--Electric Eletrobras 3,811,773 2,338,534 1.1
78,293,870 Companhia Energetica de Minas
Gerais SA--CEMIG (Preferred) 2,070,190 1,643,641 0.8
-------------- -------------- ------
5,881,963 3,982,175 1.9
Total Investments in Brazil 27,523,219 26,225,074 12.3
Chile Utilities-- 17,626 Enersis SA (ADR)(a) 419,041 403,195 0.2
Electric & Gas
Total Investments in Chile 419,041 403,195 0.2
Mexico Beverages & 28,663 Fomento Economico Mexicano, SA de
Tobacco CV (ADR)(a) 1,006,365 1,142,937 0.6
109,729 Panamerican Beverages, Inc. 'A'
(US Registered Shares) 3,258,436 2,612,922 1.2
-------------- -------------- ------
4,264,801 3,755,859 1.8
Broadcasting/Media 122,372 ++Grupo Televisa SA (GDR)(b) 2,505,638 5,483,795 2.6
118,810 ++TV Azteca, SA de CV (ADR)(a) 902,019 616,327 0.3
-------------- -------------- ------
3,407,657 6,100,122 2.9
Building Materials 14,455 Cemex, SA de CV (ADR)(a) 125,617 142,291 0.1
60,800 Cemex, SA de CV 'B' 162,661 300,939 0.1
162,355 Cemex, SA de CV 'B' (ADR)(a) 1,603,563 1,605,042 0.8
2,335 Cemex, SA de CV-CPO 10,837 11,533 0.0
-------------- -------------- ------
1,902,678 2,059,805 1.0
Diversified 47,142 ++Grupo Sanborns SA 'B1' 85,323 88,938 0.0
Companies
Food 569,400 Grupo Industrial Bimbo, SA de CV 'A' 1,216,194 1,261,310 0.6
Healthcare/ 791,698 Kimberly-Clark de Mexico, SA de
Personal Care CV 'A' 2,694,146 3,255,737 1.5
Multi-Industry 472,514 ++Grupo Carso, SA de CV 'A1' 1,418,781 2,188,539 1.0
Telecommunications 75,858 Telefonos de Mexico SA (ADR)(a) 3,438,332 6,130,275 2.9
Total Investments in Mexico 18,427,912 24,840,585 11.7
Venezuela Telecommunications 48,672 Compania Anonima Nacional Telefonos
de Venezuela (CANTV)(ADR)(a) 782,493 1,326,312 0.6
Total Investments in Venezuela 782,493 1,326,312 0.6
Total Investments in Latin America 49,981,500 55,498,084 26.1
MIDDLE
EAST
Egypt Banking 29,677 Commercial International (c) 271,089 264,125 0.1
Total Investments in Egypt 271,089 264,125 0.1
Israel Banking 429,403 Bank Hapoalim 834,632 1,103,761 0.5
565,134 Bank Leumi Le-Israel 1,065,518 1,070,083 0.5
-------------- -------------- ------
1,900,150 2,173,844 1.0
Multi-Industry 34,155 Koor Industries Limited (ADR)(a) 830,584 798,373 0.4
Telecommunications 486,496 ++Bezeq Israeli Telecommunication
Corporation Ltd. 2,040,197 1,962,880 0.9
Total Investments in Israel 4,770,931 4,935,097 2.3
Total Investments in the Middle East 5,042,020 5,199,222 2.4
PACIFIC
BASIN/ASIA
China Electrical & 641,500 Eastern Communication Co., Ltd. 'B' 582,047 654,330 0.3
Electronics
Machinery & 3,192,774 Qingling Motor Company 'H' 1,504,408 769,531 0.4
Engineering
Utilities-- 2,056,000 Beijing Datang Power Generation Company
Electric Limited 'H' 944,745 662,491 0.3
Total Investments in China 3,031,200 2,086,352 1.0
</TABLE>
Merrill Lynch Developing Capital Markets Fund, Inc., June 30, 1999
<TABLE>
CONSOLIDATED SCHEDULE OF INVESTMENTS (continued) (in US dollars)
PACIFIC
BASIN/ASIA Shares Value Percent of
(continued) Industries Held Investments Cost (Note 1a) Net Assets
<S> <S> <C> <S> <C> <C> <C>
Hong Kong Building 11,002,219 ++Anhui Conch Cement Co. Ltd. 'H' $ 3,013,733 $ 1,871,849 0.9%
Products
Insurance-- 731,800 ++Pacific Century Insurance Holdings
Multiline Limited 598,325 592,337 0.3
Transportation 9,060,000 Sichuan Expressway Co. 'H' 905,593 945,867 0.4
Total Investments in Hong Kong 4,517,651 3,410,053 1.6
India Banking 800 State Bank of India 5,934 4,375 0.0
96,780 State Bank of India 474,675 529,262 0.3
-------------- -------------- ------
480,609 533,637 0.3
Building Products 100 ++Associated Cement Companies Ltd. 330 395 0.0
7,110 ++Associated Cement Companies Ltd. 23,476 28,089 0.0
8,000 Associated Cement Companies Ltd.
(Rights) 4,467 5,361 0.0
-------------- -------------- ------
28,273 33,845 0.0
Business & Public 62,838 ++Pentafour Software & Exports Ltd. 1,106,893 1,654,013 0.8
Services 29,870 ++Satyam Computer Services Limited 1,056,086 874,479 0.4
-------------- -------------- ------
2,162,979 2,528,492 1.2
Chemicals 170 Reliance Industries Ltd. 726 693 0.0
177,785 ++Reliance Industries Ltd. 650,372 725,343 0.3
-------------- -------------- ------
651,098 726,036 0.3
Energy Sources 92,414 BSES Ltd. (GDR)(b) 1,183,826 901,037 0.4
682 Bombay Electrical Supply 3,819 2,349 0.0
-------------- -------------- ------
1,187,645 903,386 0.4
Financial Services 39 Housing Development Finance
Corporation Ltd. (HDFC) 3,324 2,001 0.0
1,004,527 ICICI Ltd. 1,709,178 1,704,750 0.8
80,850 ICICI Ltd. (GDR)(b) 829,133 808,500 0.4
-------------- -------------- ------
2,541,635 2,515,251 1.2
Food & Household 68,795 ++Hindustan Lever Limited 2,762,014 3,780,469 1.8
Products
Leisure & Tourism 51,397 ++EIH Limited 575,881 249,212 0.1
Metals--Non-Ferrous 133,000 Hindalco Industries Ltd. 1,347,790 1,930,051 0.9
Oil Services 400 Hindustan Petroleum Corporation Ltd. 5,058 2,295 0.0
Telecommunications 71,797 Videsh Sanchar Nigam Ltd. (GDR)(b) 928,676 886,693 0.4
Total Investments in India 12,671,658 14,089,367 6.6
Indonesia Building Products 1,098,500 P.T. Semen Gresik (Persero) Tbk 836,725 2,386,314 1.1
Telecommunications 123,835 P.T. Indosat (Persero) Tbk (ADR)(a) 3,227,397 2,414,783 1.2
Total Investments in Indonesia 4,064,122 4,801,097 2.3
Malaysia+++ Banking 473,000 Malayan Banking Berhad 993,395 1,419,000 0.7
Energy Sources 713,000 Petronas Gas Berhad 2,966,536 1,688,684 0.8
Telecommunications 1,784,000 Telekom Malaysia Berhad 4,655,281 6,666,526 3.1
Tobacco 627,400 Rothmans of Pall Mall (Malaysia)
Berhad 4,240,742 4,746,776 2.2
Total Investments in Malaysia 12,855,954 14,520,986 6.8
Phili- Banking 170,740 Metropolitan Bank & Trust Company 1,353,726 1,707,400 0.8
ppines
Utilities-- 603,160 Manila Electric Company 'B' 2,077,599 2,174,550 1.0
Electric & Gas
Total Investments in the Philippines 3,431,325 3,881,950 1.8
South Automobile 33,769 ++Hyundai Motor Company Ltd. 566,960 800,828 0.4
Korea
Banking 48,580 Housing & Commercial Bank, Korea 815,450 1,531,896 0.7
75,150 Kookmin Bank 692,266 1,525,723 0.7
-------------- -------------- ------
1,507,716 3,057,619 1.4
Chemicals 13,790 Honam Petrochemical Corporation 212,442 321,667 0.1
35,360 L.G. Chemical Limited 431,923 962,281 0.5
-------------- -------------- ------
644,365 1,283,948 0.6
Cosmetics 10,760 Pacific Corporation 204,618 260,285 0.1
Electronic 47,996 Samsung Display Devices Co., Ltd. 1,704,303 2,612,309 1.2
Components
Electronics 70,341 Samsung Electronics 2,886,843 7,717,760 3.6
Retail--Stores 24,160 ++Keumkang Development Ind. Company 206,479 320,394 0.2
Steel 32,746 Pohang Iron & Steel Company, Ltd.
(ADR)(a) 499,377 1,101,084 0.5
Telecommunications 110,066 ++Korea Telecom Corporation (ADR)(a) 3,035,664 4,402,640 2.1
Utilities-- 158,350 Korea Electric Power Corporation 3,823,755 6,580,246 3.1
Electric 287,307 Korea Electric Power Corporation
(ADR)(a) 3,657,450 5,889,794 2.8
-------------- -------------- ------
7,481,205 12,470,040 5.9
Total Investments in South Korea 18,737,530 34,026,907 16.0
Taiwan Banking 545 Bank Sinopac 235 380 0.0
3,243,240 ++E. Sun Commercial Bank 2,271,667 1,807,938 0.8
-------------- -------------- ------
2,271,902 1,808,318 0.8
Building Products 605,000 Asia Cement Corporation 523,604 543,357 0.3
628,000 Taiwan Cement Corporation 569,152 486,219 0.2
-------------- -------------- ------
1,092,756 1,029,576 0.5
Chemicals 1,363,446 Formosa Plastic Corporation 2,468,079 2,871,302 1.4
Electronic 471,636 ++Mosel Vitelic, Inc. 522,759 331,562 0.2
Components
Financial 1,327,000 ++Grand Cathay Securities Corporation 912,702 1,047,956 0.5
Securities
Financial 386,000 ++China Development Industrial Bank Inc. 767,464 962,310 0.5
Services
Health Insurance 463,000 Cathay Life Insurance Co., Ltd. 1,583,994 1,663,301 0.8
Semiconductors 1,313,640 ++Taiwan Semiconductor Manufacturing
Company 2,274,450 5,024,297 2.3
Steel 2,089,500 China Steel Corporation 1,314,133 1,578,935 0.7
Transportation-- 618,335 ++Yang Ming Marine Transport Corp. 683,132 402,138 0.2
Marine
Total Investments in Taiwan 13,891,371 16,719,695 7.9
</TABLE>
Merrill Lynch Developing Capital Markets Fund, Inc., June 30, 1999
<TABLE>
CONSOLIDATED SCHEDULE OF INVESTMENTS (concluded) (in US dollars)
PACIFIC
BASIN/ASIA Shares Value Percent of
(concluded) Industries Held Investments Cost (Note 1a) Net Assets
<S> <S> <C> <S> <C> <C> <C>
Thailand Banking 554,000 ++Bangkok Bank Public Company Limited
'Foreign' $ 1,338,620 $ 2,074,681 1.0%
1,297,000 Siam Commercial Bank Public Company
Limited (Warrants)(d) 0 835,923 0.4
979,300 ++Thai Farmers Bank Public Company
Limited 'Foreign' 3,610,451 3,029,585 1.4
-------------- -------------- ------
4,949,071 5,940,189 2.8
Broadcasting/Media 363,160 BEC World Public Company Limited
'Foreign' 3,123,757 2,266,670 1.1
Building Materials 23,349 ++The Siam Cement Public Company Limited 571,282 709,657 0.3
Total Investments in Thailand 8,644,110 8,916,516 4.2
Total Investments in the Pacific
Basin/Asia 81,844,921 102,452,923 48.2
SHORT-TERM Face
SECURITIES Amount
Commercial US$ 9,650,000 General Motors Acceptance Corp.,
Paper* 5.63% due 7/01/1999 9,650,000 9,650,000 4.5
Total Investments in Short-Term
Securities 9,650,000 9,650,000 4.5
Total Investments $ 187,729,650 212,287,148 99.8
==============
Unrealized Depreciation on Forward Foreign Exchange Contracts** (468,835) (0.2)
Other Assets Less Liabilities 816,623 0.4
-------------- ------
Net Assets $ 212,634,936 100.0%
============== ======
<FN>
++Non-income producing security.
+++Effective February 16, 1999, the Fund's Board of Directors
adopted a change in valuation for Malaysian securities. The Fund
will utilize a Malaysian exchange rate of 3.80 and record an
estimated exit tax on the value of any investments made before
February 15, 1999, based upon its value as of August 31, 1998, in
the amount of 30% through March 31, 1999, 20% from April 1, 1999
through May 31, 1999 and 10% from June 1, 1999 through August 31,
1999. These changes are due to the capital controls implemented by
the Malaysian government, which froze the Malaysian ringgit at 3.80
until September 1, 1999 and initiated a tax at various rates, as
described above, on any funds repatriated from Malaysia.
(a)American Depositary Receipts (ADR).
(b)Global Depositary Receipts (GDR).
(c)The security may be offered and sold to "qualified institutional
buyers" under Rule 144A of the Securities Act of 1933.
(d)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.
*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.
**Forward foreign exchange contracts sold as of June 30, 1999 were
as follows:
Unrealized
Foreign Expiration Depreciation
Currency Sold Date (Note 1b)
KRW 18,000,000,000 April 2000 $ (468,835)
Total Unrealized Depreciation on Forward
Foreign Exchange Contracts--Net
(US$ Commitment--$15,000,000) $ (468,835)
==========
See Notes to Consolidated Financial Statements.
</TABLE>
<TABLE>
CONSOLIDATED STATEMENT OF ASSETS AND LIABILITIES
<CAPTION>
As of June 30, 1999
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$187,729,650) (Note 1a) $ 212,287,148
Foreign cash (Note 1c) 965,548
Receivables:
Securities sold $ 1,921,158
Dividends 949,100
Capital shares sold 488,836 3,359,094
--------------
Prepaid expenses and other assets (Note 1f) 23,757
--------------
Total assets 216,635,547
--------------
Liabilities: Unrealized depreciation on forward foreign exchange
contracts (Note 1b) 468,835
Payables:
Securities purchased 1,089,061
Capital shares redeemed 793,439
Investment adviser (Note 2) 183,750
Distributor (Note 2) 99,394 2,165,644
--------------
Accrued expenses and other liabilities 1,366,132
--------------
Total liabilities 4,000,611
--------------
Net Assets: Net assets $ 212,634,936
==============
Net Assets Class A Shares of Common Stock, $.10 par value,
Consist of: 100,000,000 shares authorized $ 699,753
Class B Shares of Common Stock, $.10 par value,
100,000,000 shares authorized 795,743
Class C Shares of Common Stock, $.10 par value,
100,000,000 shares authorized 154,096
Class D Shares of Common Stock, $.10 par value,
100,000,000 shares authorized 166,302
Paid-in capital in excess of par 449,083,577
Accumulated distributions in excess of investment
income--net (Note 1g) (2,542,794)
Accumulated realized capital losses on investments and
foreign currency transactions--net (Note 6) (231,616,998)
Accumulated distributions in excess of realized capital
gains on investments and foreign currency
transactions--net (Note 1g) (27,312,230)
Unrealized appreciation on investments and foreign currency
transactions--net 23,207,487
--------------
Net assets $ 212,634,936
==============
Net Asset Class A--Based on net assets of $83,114,734 and 6,997,528
Value: shares outstanding $ 11.88
==============
Class B--Based on net assets of $92,104,098 and 7,957,431
shares outstanding $ 11.57
==============
Class C--Based on net assets of $17,768,346 and 1,540,963
shares outstanding $ 11.53
==============
Class D--Based on net assets of $19,647,758 and 1,663,022
shares outstanding $ 11.81
==============
See Notes to Consolidated Financial Statements.
</TABLE>
Merrill Lynch Developing Capital Markets Fund, Inc., June 30, 1999
<TABLE>
CONSOLIDATED STATEMENT OF OPERATIONS
<CAPTION>
For the Year Ended June 30, 1999
<S> <S> <C> <C>
Investment Income Dividends (net of $572,802 foreign withholding tax) $ 5,514,199
(Notes 1d & 1e): Interest and discount earned 4,353,785
--------------
Total income 9,867,984
--------------
Expenses: Investment advisory fees (Note 2) $ 2,512,044
Account maintenance and distribution fees--Class B (Note 2) 1,023,333
Custodian fees 820,843
Transfer agent fees--Class B (Note 2) 445,084
Transfer agent fees--Class A (Note 2) 399,660
Accounting services (Note 2) 205,571
Account maintenance and distribution fees--Class C (Note 2) 200,590
Printing and shareholder reports 159,115
Professional fees 109,881
Transfer agent fees--Class C (Note 2) 88,818
Transfer agent fees--Class D (Note 2) 71,761
Registration fees (Note 1f) 70,593
Account maintenance fees--Class D (Note 2) 49,691
Directors' fees and expenses 44,243
Dividend fees 22,033
Pricing fees 12,599
Other 63,806
--------------
Total expenses 6,299,665
--------------
Investment income--net 3,568,319
--------------
Realized & Realized loss from:
Unrealized Gains Investments--net (122,154,044)
(Loss) on Foreign currency transactions--net (2,588,902) (124,742,946)
Investments & --------------
Foreign Currency Change in unrealized appreciation/depreciation on:
Transactions--Net Investments--net 103,728,131
(Notes 1b, 1c, Foreign currency transactions--net (1,206,088) 102,522,043
1e & 3): -------------- --------------
Net realized and unrealized loss on investments and foreign
currency transactions (22,220,903)
--------------
Net Decrease in Net Assets Resulting from Operations $ (18,652,584)
==============
See Notes to Consolidated Financial Statements.
</TABLE>
<TABLE>
CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS
<CAPTION>
For the Year
Ended June 30,
Increase (Decrease) in Net Assets: 1999 1998
<S> <S> <C> <C>
Operations: Investment income--net $ 3,568,319 $ 282,261
Realized loss on investments and foreign currency trans-
actions--net (124,742,946) (116,151,091)
Change in unrealized appreciation/depreciation on investments and
foreign currency transactions--net 102,522,043 (227,927,015)
-------------- --------------
Net decrease in net assets resulting from operations (18,652,584) (343,795,845)
-------------- --------------
Dividends & Investment income--net:
Distributions to Class A -- (3,476,156)
Shareholders Class B -- (1,510,618)
(Note 1g): Class C -- (306,010)
Class D -- (421,011)
In excess of investment income--net:
Class A -- (2,738,268)
Class B -- (1,189,956)
Class C -- (241,052)
Class D -- (331,643)
In excess of realized gain on investments--net:
Class A (567,181) (14,124,131)
Class B (682,842) (10,342,043)
Class C (135,257) (1,974,039)
Class D (129,720) (1,891,446)
-------------- --------------
Net decrease in net assets resulting from dividends and
distributions to shareholders (1,515,000) (38,546,373)
-------------- --------------
Capital Share Net decrease in net assets derived from capital share
Transactions transactions (215,573,715) (184,994,706)
(Note 4): -------------- --------------
Net Assets: Total decreasein net assets (235,741,299) (567,336,924)
Beginning of year 448,376,235 1,015,713,159
-------------- --------------
End of year $ 212,634,936 $ 448,376,235
============== ==============
See Notes to Consolidated Financial Statements.
</TABLE>
Merrill Lynch Developing Capital Markets Fund, Inc., June 30, 1999
<TABLE>
CONSOLIDATED FINANCIAL HIGHLIGHTS
<CAPTION>
The following per share data and ratios have
been derived from information provided in the
financial statements. Class A
For the Year Ended June 30,
Increase (Decrease) in Net Asset Value: 1999++ 1998++ 1997++ 1996++ 1995
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of year $ 10.44 $ 17.23 $ 15.05 $ 13.35 $ 14.61
Operating -------- -------- -------- -------- --------
Performance: Investment income--net .18 .08 .36 .23 .24
Realized and unrealized gain (loss) on
investments and foreign currency trans-
actions--net 1.32 (6.18) 2.21 1.71 (.40)
-------- -------- -------- -------- --------
Total from investment operations 1.50 (6.10) 2.57 1.94 (.16)
-------- -------- -------- -------- --------
Less dividends and distributions:
Investment income--net -- (.12) (.28) (.24) (.04)
In excess of investment income--net -- (.09) -- -- --
Realized gain on investments--net -- -- (.11) -- (.60)
In excess of realized gain on
investments--net (.06) (.48) -- -- (.46)
-------- -------- -------- -------- --------
Total dividends and distributions (.06) (.69) (.39) (.24) (1.10)
-------- -------- -------- -------- --------
Net asset value, end of year $ 11.88 $ 10.44 $ 17.23 $ 15.05 $ 13.35
======== ======== ======== ======== ========
Total Investment Based on net asset value per share 14.60% (36.00%) 17.66% 14.82% (1.67%)
Return:** ======== ======== ======== ======== ========
Ratios to Average Expenses 1.97% 1.63% 1.53% 1.54% 1.62%
Net Assets: ======== ======== ======== ======== ========
Investment income--net 1.94% .53% 2.32% 1.66% 1.56%
======== ======== ======== ======== ========
Supplemental Net assets, end of year (in thousands) $ 83,115 $219,422 $471,790 $342,884 $350,081
Data: ======== ======== ======== ======== ========
Portfolio turnover 84.92% 98.16% 86.68% 71.01% 63.37%
======== ======== ======== ======== ========
<CAPTION>
Class B
For the
The following per share data and ratios have Period
been derived from information provided in the July 1,
financial statements. 1994++++ to
For the Year Ended June 30, June 30,
Increase (Decrease) in Net Asset Value: 1999++ 1998++ 1997++ 1996++ 1995
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 10.28 $ 17.04 $ 14.90 $ 13.24 $ 14.54
Operating -------- -------- -------- -------- --------
Performance: Investment income (loss)--net .08 (.07) .19 .09 .08
Realized and unrealized gain (loss) on
investments and foreign currency
transactions--net 1.27 (6.08) 2.20 1.69 (.32)
-------- -------- -------- -------- --------
Total from investment operations 1.35 (6.15) 2.39 1.78 (.24)
-------- -------- -------- -------- --------
Less dividends and distributions:
Investment income--net -- (.07) (.14) (.12) --
In excess of investment income--net -- (.06) -- -- --
Realized gain on investments--net -- -- (.11) -- (.60)
In excess of realized gain on
investments--net (.06) (.48) -- -- (.46)
-------- -------- -------- -------- --------
Total dividends and distributions (.06) (.61) (.25) (.12) (1.06)
-------- -------- -------- -------- --------
Net asset value, end of period $ 11.57 $ 10.28 $ 17.04 $ 14.90 $ 13.24
======== ======== ======== ======== ========
Total Investment Based on net asset value per share 13.37% (36.68%) 16.39% 13.63% (2.22%)+++
Return:** ======== ======== ======== ======== ========
Ratios to Average Expenses 3.04% 2.67% 2.57% 2.56% 2.79%*
Net Assets: ======== ======== ======== ======== ========
Investment income (loss)--net .91% (.53%) 1.22% .65% 1.01%*
======== ======== ======== ======== ========
Supplemental Net assets, end of period (in thousands) $ 92,104 $164,929 $398,468 $302,183 $162,774
Data: ======== ======== ======== ======== ========
Portfolio turnover 84.92% 98.16% 86.68% 71.01% 63.37%
======== ======== ======== ======== ========
<CAPTION>
Class C
For the
The following per share data and ratios have Period
been derived from information provided in the October 21,
financial statements. 1994++++ to
For the Year Ended June 30, June 30,
Increase (Decrease) in Net Asset Value: 1999++ 1998++ 1997++ 1996++ 1995
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 10.24 $ 16.99 $ 14.87 $ 13.22 $ 16.71
Operating -------- -------- -------- -------- --------
Performance: Investment income (loss)--net .08 (.07) .18 .09 .08
Realized and unrealized gain (loss) on
investments and foreign currency
transactions--net 1.27 (6.08) 2.20 1.70 (2.50)
-------- -------- -------- -------- --------
Total from investment operations 1.35 (6.15) 2.38 1.79 (2.42)
-------- -------- -------- -------- --------
Less dividends and distributions:
Investment income--net -- (.07) (.15) (.14) (.01)
In excess of investment income--net -- (.05) -- -- --
Realized gain on investments--net -- -- (.11) -- (.60)
In excess of realized gain on
investments--net (.06) (.48) -- -- (.46)
-------- -------- -------- -------- --------
Total dividends and distributions (.06) (.60) (.26) (.14) (1.07)
-------- -------- -------- -------- --------
Net asset value, end of period $ 11.53 $ 10.24 $ 16.99 $ 14.87 $ 13.22
======== ======== ======== ======== ========
Total Investment Based on net asset value per share 13.42% (36.69%) 16.37% 13.68% (14.97%)+++
Return:** ======== ======== ======== ======== ========
Ratios to Average Expenses 3.04% 2.68% 2.58% 2.56% 2.96%*
Net Assets: ======== ======== ======== ======== ========
Investment income (loss)--net .90% (.51%) 1.19% 0.67% 1.32%*
======== ======== ======== ======== ========
Supplemental Net assets, end of period (in thousands) $ 17,768 $ 32,339 $ 71,769 $ 46,983 $ 18,573
Data: ======== ======== ======== ======== ========
Portfolio turnover 84.92% 98.16% 86.68% 71.01% 63.37%
======== ======== ======== ======== ========
<FN>
++Based on average shares outstanding.
++++Commencement of operations.
+++Aggregate total investment return.
*Annualized.
**Total investment returns exclude the effects of sales loads.
See Notes to Consolidated Financial Statements.
</TABLE>
Merrill Lynch Developing Capital Markets Fund, Inc., June 30, 1999
<TABLE>
CONSOLIDATED FINANCIAL HIGHLIGHTS (concluded)
<CAPTION>
Class D
For the
The following per share data and ratios have Period
been derived from information provided in the October 21,
financial statements. 1994++++ to
For the Year Ended June 30, June 30,
Increase (Decrease) in Net Asset Value: 1999++ 1998++ 1997++ 1996++ 1995
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 10.41 $ 17.19 $ 15.02 $ 13.33 $ 16.77
Operating -------- -------- -------- -------- --------
Performance: Investment income--net .16 .04 .32 .21 .13
Realized and unrealized gain (loss) on
investments and foreign currency trans-
actions--net 1.30 (6.15) 2.20 1.69 (2.48)
-------- -------- -------- -------- --------
Total from investment operations 1.46 (6.11) 2.52 1.90 (2.35)
-------- -------- -------- -------- --------
Less dividends and distributions:
Investment income--net -- (.11) (.24) (.21) (.03)
In excess of investment income--net -- (.08) -- -- --
Realized gain on investments--net -- -- (.11) -- (.60)
In excess of realized gain on
investments--net (.06) (.48) -- -- (.46)
-------- -------- -------- -------- --------
Total dividends and distributions (.06) (.67) (.35) (.21) (1.09)
-------- -------- -------- -------- --------
Net asset value, end of period $ 11.81 $ 10.41 $ 17.19 $ 15.02 $ 13.33
======== ======== ======== ======== ========
Total Investment Based on net asset value per share 14.26% (36.13%) 17.30% 14.55% (14.49%)+++
Return:** ======== ======== ======== ======== ========
Ratios to Average Expenses 2.20% 1.88% 1.78% 1.76% 2.19%*
Net Assets: ======== ======== ======== ======== ========
Investment income--net 1.74% .28% 2.06% 1.48% 2.10%*
======== ======== ======== ======== ========
Supplemental Net assets, end of period (in thousands) $ 19,648 $ 31,686 $ 73,686 $ 57,821 $ 21,899
Data: ======== ======== ======== ======== ========
Portfolio turnover 84.92% 98.16% 86.68% 71.01% 63.37%
======== ======== ======== ======== ========
<FN>
++Based on average shares outstanding.
++++Commencement of operations.
+++Aggregate total investment return.
*Annualized.
**Total investment returns exclude the effects of sales loads.
See Notes to Consolidated Financial Statements.
</TABLE>
NOTES TO CONSOLIDATED 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 management investment company. The Fund's
consolidated financial statements are prepared in accordance with
generally accepted accounting principles, which may require the use
of management accruals and estimates. The Fund offers four classes
of shares under the Merrill Lynch Select Pricing SM System. Shares of
Class A and Class D are sold with a front-end sales charge. Shares
of Class B and Class C may be subject to a contingent deferred sales
charge. All classes of shares have identical voting, dividend,
liquidation and other rights and the same terms and conditions,
except that Class B, Class C and Class D Shares bear certain
expenses related to the account maintenance of such shares, and
Class B and Class C Shares also bear certain expenses related to the
distribution of such shares. Each class has exclusive voting rights
with respect to matters relating to its account maintenance and
distribution expenditures. The following is a summary of significant
accounting policies followed by the Fund.
(a) Valuation of securities--Portfolio securities that are traded on
stock exchanges are valued at the last sale price on the exchange 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 price prior to the time
of valuation. In cases where securities are traded on more than one
exchange, the securities are valued on the exchange designated by or
under the authority of the Board of Directors as the primary market.
Securities that are traded both in the over-the-counter market and
on a stock exchange are valued according to the broadest and most
representative market. Options written or purchased are valued at
the last sale price in the case of exchange-traded options. In the
case of options traded in the over-the-counter market, valuation is
the last asked price (options written) or the last bid price
(options purchased). Short-term securities are valued at amortized
cost, which approximates market value. Other investments, including
futures contracts and related options, are stated at market value.
Securities and assets for which market value quotations are not
available are valued at their fair value as determined in good faith
by or under the direction of the Fund's Board of Directors.
(b) Derivative financial instruments--The Fund may engage in various
portfolio strategies to seek to increase its return by hedging its
portfolio against adverse movements in the equity, debt and currency
markets. Losses may arise due to changes in the value of the
contract or if the counterparty does not perform under the contract.
* Forward foreign exchange contracts--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.
* Foreign currency options and futures--The Fund may also purchase
or sell listed or over-the-counter foreign currency options, foreign
currency futures and related options on foreign currency futures as
a short or long hedge against possible variations in foreign
exchange rates. Such transactions may be effected with respect to
hedges on non-US dollar denominated securities owned by the Fund,
sold by the Fund but not yet delivered, or committed or anticipated
to be purchased by the Fund.
* Options--The Fund is authorized to write put and covered call
options and purchase call and 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
market value of the option written. When a security is purchased or
sold through an exercise of an option, the related premium paid (or
received) is added to (or deducted from) the basis of the security
acquired or deducted from (or added to) the proceeds 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.
* Financial futures contracts--The Fund may purchase or sell
financial futures contracts and options on such futures contracts
for the purpose of hedging the market risk on existing securities or
the intended purchase of securities. Futures contracts are contracts
for delayed delivery of securities at a specific future date and at
a specific price or yield. 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.
Merrill Lynch Developing Capital Markets Fund, Inc., June 30, 1999
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(c) 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) assets or liabilities expressed in foreign
currencies into US dollars. Realized and unrealized gains or losses
from investments include the effects of foreign exchange rates on
investments.
(d) 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.
(e) Security transactions and investment income--Security
transactions are recorded on the dates the transactions are entered
into (the trade dates). Dividend income is recorded on the ex-
dividend dates. Dividends from foreign securities where the ex-
dividend date may have passed are subsequently recorded when the
Fund has determined 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.
(f) Prepaid registration fees--Prepaid registration fees are charged
to expense as the related shares are issued.
(g) Dividends and distributions--Dividends and distributions paid by
the Fund are recorded on the ex-dividend dates. Distributions in
excess of investment income and realized capital gains are due
primarily to differing tax treatments for foreign currency
transactions.
(h) Basis of consolidation--The accompanying consolidated financial
statements include the accounts of Inversiones en Marcado Accionario
de Valores Chile Limitada., a wholly-owned subsidiary, which
primarily invests in Chilean securities. Intercompany accounts and
transactions have been eliminated.
(i) Reclassification--Generally accepted accounting principles
require that certain components of net assets be adjusted to reflect
permanent differences between financial and tax reporting.
Accordingly, current year's permanent book/tax differences of
$2,534,408 have been reclassified between accumulated distributions
in excess of net investment income and accumulated distributions in
excess of net realized capital gains, $4,213,639 has been
reclassified between paid-in capital in excess of par and
accumulated distribution in excess of net investment income and $21
has been reclassified between paid-in capital in excess of par and
accumulated distributions in excess of net realized capital gains.
These reclassifications have no effect on net assets or net asset
values per share.
2. Investment Advisory Agreement and Transactions
with Affiliates:
The Fund has entered into an Investment Advisory Agreement with
Merrill Lynch Asset Management, L.P. ("MLAM"). The general partner
of MLAM is Princeton Services, Inc. ("PSI"), an indirect, wholly-
owned subsidiary of Merrill Lynch & Co., Inc. ("ML & Co."), which is
a limited partner. The Fund has also entered into a Distribution
Agreement and Distribution Plans with Merrill Lynch Funds
Distributor ("MLFD" or the "Distributor"), a division of Princeton
Funds Distributor, Inc. ("PFD"), which is a wholly-owned subsidiary
of Merrill Lynch Group, Inc.
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.
Pursuant to the Distribution Plans adopted by the Fund in accordance
with Rule 12b-1 under the Investment Company Act of 1940, the Fund
pays the Distributor ongoing account maintenance and distribution
fees. The fees are accrued daily and paid monthly at annual rates
based upon the average daily net assets of the shares as follows:
Account
Maintenance Distribution
Fee Fee
Class B 0.25% 0.75%
Class C 0.25% 0.75%
Class D 0.25% --
Pursuant to a sub-agreement with the Distributor, Merrill Lynch,
Pierce, Fenner & Smith Incorporated ("MLPF&S"), a subsidiary of ML &
Co., also provides account maintenance and distribution services to
the Fund. The ongoing account maintenance fee compensates the
Distributor and MLPF&S for providing account maintenance services to
Class B, Class C and Class D shareholders. The ongoing distribution
fee compensates the Distributor and MLPF&S for providing shareholder
and distribution-related services to Class B and Class C
shareholders.
For the year ended June 30, 1999, MLFD earned underwriting discounts
and direct commissions and MLPF&S earned dealer concessions on sales
of the Fund's Class A and Class D Shares as follows:
MLFD MLPF&S
Class A $1,117 $16,684
Class D $2,167 $31,038
For the year ended June 30, 1999, MLPF&S received contingent
deferred sales charges of $447,441 and $7,544 relating to
transactions in Class B and Class C Shares, respectively.
Furthermore, MLPF&S received contingent deferred sales charges of
$30,000 relating to transactions subject to front-end sales charge
waivers in Class A Shares.
In addition, MLPF&S received $290,563 in commissions on the
execution of portfolio security transactions for the Fund for the
year ended June 30, 1999.
Financial Data Services, Inc. ("FDS"), a wholly-owned subsidiary of
ML & Co., 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 MLAM, PSI, FDS, PFD, and/or ML & Co.
3. Investments:
Purchases and sales of investments, excluding short-term securities,
for the year ended June 30, 1999 were $195,418,481 and $376,209,356,
respectively.
Net realized losses for the year ended June 30, 1999 and net
unrealized gains (losses) as of June 30, 1999 were as follows:
Unrealized
Realized Gains
Losses (Losses)
Long-term investments $(121,413,203) $ 24,557,497
Short-term investments (740,841) --
Foreign currency transactions (2,588,902) (881,175)
Forward foreign exchange
contracts -- (468,835)
------------- ------------
Total $(124,742,946) $ 23,207,487
============= ============
As of June 30, 1999, net unrealized appreciation for Federal income
tax purposes aggregated $20,166,150, of which $40,272,341 related to
appreciated securities and $20,106,191 related to depreciated
securities. The aggregate cost of investments at June 30, 1999 for
Federal income tax purposes was $192,120,998.
4. Capital Share Transactions:
Net decrease in net assets derived from capital share transactions
was $215,573,715 and $184,994,706 for the years ended June 30, 1999
and June 30, 1998, respectively.
Transactions in capital shares for each class were as follows:
Class A Shares for the Year Dollar
Ended June 30, 1999 Shares Amount
Shares sold 1,619,556 $ 15,898,254
Shares issued to shareholders
in reinvestment of distributions 59,063 489,047
------------- -------------
Total issued 1,678,619 16,387,301
Shares redeemed (15,707,343) (133,315,366)
------------- -------------
Net decrease (14,028,724) $(116,928,065)
============= =============
Class A Shares for the Year Dollar
Ended June 30, 1998 Shares Amount
Shares sold 11,519,583 $ 161,951,614
Shares issued to shareholders
in reinvestment of dividends
and distributions 1,430,204 17,663,020
------------- -------------
Total issued 12,949,787 179,614,634
Shares redeemed (19,311,328) (246,084,606)
------------- -------------
Net decrease (6,361,541) $ (66,469,972)
============= =============
Class B Shares for the Year Dollar
Ended June 30, 1999 Shares Amount
Shares sold 1,372,844 $ 12,591,100
Shares issued to shareholders
in reinvestment of distributions 73,184 594,258
------------- -------------
Total issued 1,446,028 13,185,358
Automatic conversion of shares (190,641) (1,779,556)
Shares redeemed (9,342,483) (83,600,044)
------------- -------------
Net decrease (8,087,096) $ (72,194,242)
============= =============
Merrill Lynch Developing Capital Markets Fund, Inc., June 30, 1999
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (concluded)
Class B Shares for the Year Dollar
Ended June 30, 1998 Shares Amount
Shares sold 4,893,597 $ 71,910,397
Shares issued to shareholders
in reinvestment of dividends
and distributions 933,535 11,426,467
------------- -------------
Total issued 5,827,132 83,336,864
Automatic conversion of shares (217,370) (2,811,462)
Shares redeemed (12,949,733) (170,607,474)
------------- -------------
Net decrease (7,339,971) $ (90,082,072)
============= =============
Class C Shares for the Year Dollar
Ended June 30, 1999 Shares Amount
Shares sold 302,107 $ 2,904,136
Shares issued to shareholders
in reinvestment of distributions 14,361 116,179
------------- -------------
Total issued 316,468 3,020,315
Shares redeemed (1,933,187) (17,202,260)
------------- -------------
Net decrease (1,616,719) $ (14,181,945)
============= =============
Class C Shares for the Year Dollar
Ended June 30, 1998 Shares Amount
Shares sold 1,356,907 $ 19,858,908
Shares issued to shareholders
in reinvestment of dividends
and distributions 181,874 2,217,051
------------- -------------
Total issued 1,538,781 22,075,959
Shares redeemed (2,604,945) (34,584,547)
------------- -------------
Net decrease (1,066,164) $ (12,508,588)
============= =============
Class D Shares for the Year Dollar
Ended June 30, 1999 Shares Amount
Shares sold 630,224 $ 5,544,815
Automatic conversion of shares 187,608 1,779,556
Shares issued to shareholders
in reinvestment of distributions 13,643 112,554
------------- -------------
Total issued 831,475 7,436,925
Shares redeemed (2,213,300) (19,706,389)
------------- -------------
Net decrease (1,381,825) $ (12,269,464)
============= =============
Class D Shares for the Year Dollar
Ended June 30, 1998 Shares Amount
Shares sold 2,736,989 $ 41,244,505
Automatic conversion of shares 215,130 2,811,462
Shares issued to shareholders
in reinvestment of dividends
and distributions 181,728 2,240,703
------------- -------------
Total issued 3,133,847 46,296,670
Shares redeemed (4,374,540) (62,230,744)
------------- -------------
Net decrease (1,240,693) $ (15,934,074)
============= =============
5. Commitments:
At June 30, 1999, the Fund entered into foreign exchange contracts
under which it had agreed to purchase and sell various foreign
currencies with approximate values of $598,000 and $755,000,
respectively.
6. Capital Loss Carryforward:
At June 30, 1999, the Fund had a net capital loss carryforward of
approximately $226,180,000, all of which expires in 2007. This
amount will be available to offset like amounts of any future
taxable gains.
<AUDIT-REPORT>
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholders,
Merrill Lynch Developing Capital Markets Fund, Inc.:
We have audited the accompanying consolidated statement of assets
and liabilities, including the consolidated schedule of investments,
of Merrill Lynch Developing Capital Markets Fund, Inc. and its
subsidiary as of June 30, 1999, the related consolidated statements
of operations for the year then ended and changes in net assets for
each of the years in the two-year period then ended, and the
consolidated financial highlights for each of the years in the five-
year period then ended. These financial statements and the financial
highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial
statements and the financial highlights based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial
statements and the financial highlights are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements.
Our procedures included confirmation of securities owned at June 30,
1999 by correspondence with the custodians and brokers; where
replies were not received from brokers, we performed other auditing
procedures. An audit also includes assessing the accounting
principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.
In our opinion, such consolidated financial statements and
consolidated financial highlights present fairly, in all material
respects, the financial position of Merrill Lynch Developing Capital
Markets Fund, Inc. and its subsidiary as of June 30, 1999, the
results of their operations, the changes in their net assets, and
the consolidated financial highlights for the respective stated
periods in conformity with generally accepted accounting principles.
Deloitte & Touche LLP
Princeton, New Jersey
August 16, 1999
</AUDIT-REPORT>
Merrill Lynch Developing Capital Markets Fund, Inc., June 30, 1999
IMPORTANT TAX INFORMATION (unaudited)
During the fiscal year ended June 30, 1999, Merrill Lynch Developing
Capital Markets Fund, Inc. paid a long-term capital gains
distribution of $.058926 per share to shareholders of record on
December 14, 1998. All of this long-term capital gains distribution
is subject to the 20% tax rate.
Please retain this information for your records.
EQUITY PORTFOLIO CHANGES (unaudited)
For the Quarter Ended June 30, 1999
Additions
*Anglo American Corporation of South
Africa Limited
Anglo American PLC
Associated Cement Companies Ltd.
Bezeq Israeli Telecommunication
Corporation Ltd.
Cemex, SA de CV--CPO
*Commercial Bank of Greece
Companhia Brasileira de Distribuicao
Grupo Pao de Acucar SA (ADR)
Companhia Cervejaria Brahma (ADR)
De Beers (ADR)
Ege Biracilik Ve Malt Sanayii AS
Fomento Economico Mexicano, SA de CV
(ADR)
Grand Cathay Securities Corporation
Grupo Industrial Bimbo, SA de CV 'A'
Grupo Sanborns SA 'B1'
ICICI Ltd. (GDR)
Impala Platinum Holdings Limited
Koor Industries Limited (ADR)
Korea Telecom Corporation (ADR)
LUKoil Holding (ADR)
Liberty International PLC
Liberty Life Association of Africa Limited
Magyar Tavkozlesi Rt. (ADR)
Metro Cash and Carry Limited
*PT Bank Internasional Indonesia 'Foreign'
Pacific Century Insurance Holdings
Limited
*Portugal Telecom SA (Registered Shares)
Reliance Industries Ltd.
*Synergon Info Systems Ltd. (GDR)
Satyam Computer Services Limited
*Siam Commercial Bank Public Company
Limited 'Foreign'
State Bank of India
Telecom Argentina Stet-France Telecom
SA (ADR)
Telecomunicacoes Brasileiras SA--Telebras (ADR)
Telefonica de Argentina SA (ADR)
The Siam Cement Public Company
Limited
Yapi ve Kredi Bankasi AS (Receipts)
Deletions
*Anglo American Corporation of South
Africa Limited
BSES Ltd.
Banco Santander Chile (ADR)
*Commercial Bank of Greece
Credicorp Limited
Debica SA
Karachi Electric Supply
Minorco SA (Minerals & Resources
Corporation Limited)
National Bank of Greece SA
*PT Bank Internasional Indonesia 'Foreign'
*Portugal Telecom SA (Registered Shares)
*Synergon Info Systems Ltd. (GDR)
Shinhan Bank
*Siam Commercial Bank Public Company
Limited 'Foreign'
Teva Pharmaceutical Industries Ltd. (ADR)
YPF Sociedad Anonima (ADR)
[FN]
*Added and deleted in the same quarter.
PORTFOLIO INFORMATION (unaudited)
Ten Largest Equity Holdings Percent of
As of June 30, 1999 Net Assets
Korea Electric Power Corporation* 5.9%
Samsung Electronics 3.6
Telekom Malaysia Berhad 3.1
Tele Norte Leste Participacoes SA* 2.9
Telefonos de Mexico SA (ADR) 2.9
Grupo Televisa SA (GDR) 2.6
Taiwan Semiconductor Manufacturing Company 2.3
Rothmans of Pall Mall (Malaysia) Berhad 2.2
Korea Telecom Corporation (ADR) 2.1
Hindustan Lever Limited 1.8
[FN]
*Includes combined holdings.
