SEMI-ANNUAL REPORT
April 30, 1994
Prudential
Short-Term
Global Income
Fund, Inc.
Global Assets
Portfolio
(LOGO)
<PAGE>
Letter to
Shareholders
June 3, 1994
Dear Shareholder:
Over the last six months ended April 30, 1994, the Prudential Short-Term
Global Income Fund/Global Assets Portfolio avoided much of the global
fixed-income and currency market volatility that had occurred in the wake of
recent Federal Reserve actions. We are pleased to report that your Fund was
able to provide competitive returns and outperform the Lipper Short-Term World
Multi-Market Average during this period.
Historical Total Returns
As of April 30, 1994(1)
<TABLE>
<CAPTION>
6-Month 12-Month Since
Total Return Total Return Inception(2)
<S> <C> <C> <C>
Class A 0.8% 1.5% 13.2%
Lipper ST World -1.4 1.3 N/A
Multi-Mkt. Avg.(3)
</TABLE>
AVERAGE ANNUAL TOTAL RETURNS(4)
As of March 31, 1994
<TABLE>
<CAPTION>
One Year Since Inception(2)
<S> <C> <C>
Class A 0.5% 3.2%
</TABLE>
1 Source: Lipper Analytical Services. These returns do not take into account
applicable sales charges. The Fund charges a maximum sales load of .99% for
Class A shares.
2 Inception of Class A 2/15/91
3 This is the average of 48 Funds in the Short World Multi-Market Average,
according to Lipper Analytical Services, Inc.
4 Source: Prudential Mutual Fund Management. These figures take into account
applicable sales charges. Past performance is no guarantee of future results.
Investment return and principal value will fluctuate so that an investor's
shares when redeemed may be worth more or less than their original cost.
Class B shares have automatically converted to Class A shares after the one
year CDSC period expired. The Fund no longer offers Class B shares to
investors.
-1-
<PAGE>
Fund Overview
The Fund invests primarily in high-quality, worldwide debt securities with
remaining maturities of not more than one year. The Fund's net asset value as
of April 30, 1994 was $1.85 for Class A shares and $1.90 for Class B shares.
The Fund also paid dividends and distributions of $0.04 per Class A share and
$0.05 per Class B share, for the six month period ended April 30, 1994.
Market and Portfolio Review
During the last few months of 1993 and into 1994, the Fund hedged most of
its European currency exposure back into U.S. dollars. It was our belief that
the combination of falling European interest rates and rising domestic rates
would weaken foreign currencies versus the dollar. However, the Federal
Reserve's move to raise short-term interest rates in February adversely
affected global fixed-income markets. The U.S.-Japan trade dispute and
Germany's reluctance to swiftly ease monetary policy also contributed to the
recent market instability. As a result, the dollar has weakened against most
major currencies this year. This hampered some of our hedging strategies
earlier this year.
Over the past six months, the Fund held the majority of net assets in the
dollar bloc countries of the U.S., Canada, Australia, and New Zealand. As
their economies have expanded, interest rates there have begun to climb. As
the accompanying pie chart shows, as of April 30, 1994, the Fund held
approximately 85% of the Funds portfolio in the U.S., Canada, and New Zealand.
We believe that these currencies will perform well over the near-term.
During the latter part of 1993 and into early 1994, the Fund held about 21%
of the portfolio in short-term Mexican Treasury bills (Cetes), which yielded
about 11-12% in local currency. Despite attractive interest rates, we have
currently eliminated our Mexican holdings as political and social volatility
as well as a weak economy have made the peso vulnerable.
(CHART)
Outlook
Since the economies of the countries that we are currently invested in offer
good opportunities in our view, we expect to maintain our present portfolio
positions for the immediate future. We believe these holdings offer the
potential combination for competitive income and currency gain.
Now that the U.S. government has recently stated that it no longer desires to
have a weaker dollar, we believe that the dollar will strengthen later this
year. Foreign central bank intervention on behalf of the dollar and higher
anticipated domestic short-term interest rates should also help strengthen the
dollar in the future.
-2-
<PAGE>
As always, it is a pleasure to have you as a shareholder of the Prudential
Short-Term Global Income Fund/Global Assets Portfolio and to take this
opportunity to report our activities to you.
Sincerely,
Lawrence C. McQuade
President
Jeffrey E. Brummette
Portfolio Manager
-3-
<PAGE>
PRUDENTIAL SHORT-TERM GLOBAL INCOME FUND, INC. Portfolio of Investments
GLOBAL ASSETS PORTFOLIO April 30, 1994 (Unaudited)
<TABLE>
<CAPTION>
Principal Description US$
Amount Value
(000) (Note 1)
<C> <S> <C>
Canada--4.6%
Canadian Treasury
Bills,**
C$ 2,000 5.75%, 10/6/94........... $ 1,406,237
3,000 6.55%, 10/13/94.......... 2,106,558
-----------
3,512,795
-----------
Italy--5.9%
General Electric Capital
Corp.,
Lira 7,000,000# 11.50%, 2/7/95........... 4,511,562
-----------
New Zealand--15.0%
New Zealand Treasury
Bills,**
NZ$ 20,000# 4.93%, 6/22/94........... 11,408,727
-----------
Spain--5.6%
Kingdom of Spain,**
Pts 580,000# 9.77%, 7/15/94........... 4,254,311
-----------
Sweden--4.1%
Swedish Treasury Bills,**
SKr 24,000 6.87%, 5/18/94........... 3,146,743
-----------
United States--66.6%
American Telephone &
Telegraph Co., C.P.,
US$ 2,500 3.60%, 5/9/94............ 2,498,000
Associates Corp. of North
America, C.P.,
4,000 3.65%, 5/18/94........... 3,993,106
Heller Financial
Services, Inc., C.P.,
3,000 3.875%, 5/19/94.......... 2,994,188
McCormick & Co., Inc.,
C.P.,
2,000 3.65%, 5/3/94............ 1,999,594
Sonoco Products Company,
C.P.,
4,000 3.62%, 5/16/94........... 3,993,967
United States Treasury
Bills,**
10,000 4.06%, 10/6/94........... 9,818,405
10,000 4.32%, 10/20/94.......... 9,801,030
Joint Repurchase
Agreement Account,
3.54%, 5/2/94, (Note
15,470 5)..................... 15,470,000
-----------
50,568,290
<CAPTION>
Contracts(D) Description US$
Value
(Note 1)
-----------
OUTSTANDING OPTIONS
PURCHASED*--0.4%
Currency Call Options
Deutschemarks,
expiring 7/18/94
DM 20,600 @ DM 1.80.............. $ 24,720
Japanese Yen,
expiring 5/7/94 @ (YEN)
(YEN) 5,800 107.00................. 1,740
Cross-Currency Call Options
Deutschemarks,
expiring 6/16/94
@ DM 1025.00 per
6,400 Italian Lira........... 349
Currency Put Options
Deutschemarks,
expiring 6/28/94
4,600 @ DM 1.66.............. 72,680
Cross-Currency Put Options
Deutschemarks,
expiring 1/12/95
@ DM 974.16 per Italian
DM 3,700 Lira................... 52,505
@ DM 972.30 per Italian
2,700 Lira................... 37,823
expiring 1/20/95
@ DM 4.6015
7,600 per Swedish Krona...... 88,951
-----------
Total outstanding options
purchased
(cost US$801,444)........ 278,768
-----------
Total Investments Before
Outstanding Options
Written--102.2%
(cost US$77,651,243; Note
4)..................... 77,681,196
-----------
</TABLE>
--4-- See Notes to Financial Statements.
<PAGE>
<PAGE>
PRUDENTIAL SHORT-TERM GLOBAL INCOME FUND, INC.
GLOBAL ASSETS PORTFOLIO
<TABLE>
<CAPTION>
Contracts(D) Description US$
Value
(Note 1)
<C> <S> <C>
OUTSTANDING OPTIONS
WRITTEN*--(0.6%)
Currency Call Options
Japanese Yen,
expiring 5/17/94 @ (YEN)
(YEN) 5,800 107.00................. $ (331,760)
Cross-Currency Call Options
Deutschemarks,
expiring 1/12/95
@ DM 1025.00 per
DM 6,400 Italian Lira........... (34,403)
Cross-Currency Put Options
Deutschemarks,
expiring 6/16/94
@ DM 967.60 per Italian
6,400 Lira................... (51,231)
expiring 1/20/95
@ DM 4.55
7,600 per Swedish Krona...... (70,054)
-----------
Total outstanding options
written (premiums
received US$289,570)... (487,448)
-----------
Total Investments,
Net of Outstanding
Options
Written--101.6%........ 77,193,748
Other liabilities in
excess of
other assets--(1.6%)..... (1,233,248)
-----------
Net Assets--100%......... $75,960,500
-----------
-----------
</TABLE>
- ------------------
Portfolio securities are classified by country according to the
security's currency denomination.
C.P.--Commercial Paper
# Principal amount segregated as collateral for forward currency contracts and
options written. Aggregate value of segregated securities--$20,174,600.
* Non-income producing security.
** Percentage quoted represent yields to maturity as of purchase date.
(D) Expressed in thousands of local currency units.
--5-- See Notes to Financial Statements.
<PAGE>
<PAGE>
PRUDENTIAL SHORT-TERM GLOBAL
INCOME FUND, INC.
GLOBAL ASSETS PORTFOLIO
Statement of Assets and Liabilities
(Unaudited)
<TABLE>
<CAPTION>
Assets
April 30, 1994
--------------
<S>
<C>
Investments, at value (cost
$77,651,243).................................................. $ 77,681,196
Foreign currency, at value (cost
$20,902)................................................. 21,151
Interest
receivable.......................................................................
125,679
Deferred expenses and other
assets........................................................ 21,274
--------------
Total
assets........................................................................
.... 77,849,300
--------------
Liabilities
Payable for Fund shares
reacquired........................................................
800,891
Outstanding options written, at value (premiums received
$289,570)........................ 487,448
Accrued
expenses......................................................................
.... 229,021
Forward currency contracts--net amount payable to
counterparties.......................... 219,022
Dividends
payable.........................................................................
88,662
Due to
Manager.......................................................................
..... 35,767
Due to
Distributor...................................................................
..... 27,989
--------------
Total
liabilities...................................................................
.... 1,888,800
--------------
Net
Assets........................................................................
........ $ 75,960,500
--------------
--------------
Net assets were comprised of:
Common stock, at
par.................................................................... $
41,020
Paid-in capital in excess of
par........................................................ 93,730,094
--------------
93,771,114
Overdistributed net investment
income................................................... (6,569,143)
Accumulated net realized loss on investment and foreign currency
transactions........... (10,860,115)
Net unrealized depreciation on investments and foreign
currencies....................... (381,356)
--------------
Net assets, April 30
,1994................................................................ $
75,960,500
--------------
--------------
Class A:
Net asset value and redemption price per share ($75,908,453 / 40,992,966 shares
of
common stock
issued and
outstanding)...............................................................
$1.85
Maximum sales charge (.99% of offering
price)........................................... .02
--------------
Maximum offering price to
public........................................................ $1.87
--------------
--------------
Class B:
Net asset value and redemption price per share ($52,047 / 27,448 shares of
common stock
issued and
outstanding)...............................................................
$1.90
--------------
--------------
</TABLE>
See Notes to Financial Statements.
--6--
<PAGE>
<PAGE>
PRUDENTIAL SHORT-TERM GLOBAL
INCOME FUND, INC.
GLOBAL ASSETS PORTFOLIO
Statement of Operations
(Unaudited)
<TABLE>
<CAPTION>
Six months
Ended
Net Investment Income April 30, 1994
--------------
<S> <C>
Income
Interest........................... $ 2,866,410
--------------
Expenses
Management fee..................... 278,882
Distribution fee--Class A.......... 252,171
Custodian's fees and expenses...... 171,000
Transfer agent's fees and
expenses........................... 68,000
Reports to shareholders............ 27,000
Registration fees.................. 23,000
Directors' fees.................... 17,500
Audit fee.......................... 15,000
Legal fees......................... 12,000
Amortization of organization
expense............................ 6,000
Miscellaneous...................... 6,754
--------------
Total expenses................... 877,307
--------------
Net investment income................ 1,989,103
--------------
Realized and Unrealized Gain (Loss)
on Investments and Foreign
Currency Transactions
Net realized gain (loss) on:
Investment transactions............ (341,934)
Foreign currency transactions...... (1,458,138)
Written option transactions........ 206,121
--------------
(1,593,951)
--------------
Net change in unrealized
appreciation/ depreciation of:
Investments........................ (81,835)
Foreign currencies................. 498,350
Written options.................... (184,103)
--------------
232,412
--------------
Net loss on investments, foreign
currencies and written options..... (1,361,539)
--------------
Net Increase in Net Assets
Resulting from Operations............ $ 627,564
--------------
--------------
</TABLE>
PRUDENTIAL SHORT-TERM GLOBAL
INCOME FUND, INC.
GLOBAL ASSETS PORTFOLIO
Statement of Changes in Net Assets
(Unaudited)
<TABLE>
<CAPTION>
Six Months Year Ended
Net Increase (Decrease) Ended October 31,
in Net Assets April 30, 1994 1993
-------------- -------------
<S> <C> <C>
Operations
Net investment
Income................. $ 1,989,103 $ 14,327,588
Net realized loss on
investments.......... (1,593,951) (21,161,713)
Net change in
unrealized
appreciation/depreciation
of investments....... 232,412 17,158,011
-------------- -------------
Net increase in net
assets resulting from
operations........... 627,564 10,323,886
-------------- -------------
Contingent deferred sales
charges collected (Note
2)..................... 8,161 25,932
-------------- -------------
Net equalization
debits................. -- (3,675,103)
-------------- -------------
Dividends and
distributions (Note 1)
Dividends from net
investment income
Class A.............. (513,651) (3,217,487)
Class B.............. (2,953) (1,053,946)
-------------- -------------
(516,604) (4,271,433)
-------------- -------------
Dividends in excess of
net investment income
Class A.............. (1,884,531) --
Class B.............. (10,834) --
-------------- -------------
(1,895,365) --
-------------- -------------
Taxable return of
capital distributions
Class A.............. -- (4,026,397)
Class B.............. -- (1,318,920)
-------------- -------------
-- (5,345,317)
-------------- -------------
Fund share transactions
(Note 6)
Net proceeds from
shares subscribed.... 2,080,033 169,695,598
Net asset value of
shares issued to
shareholders in
reinvestment of
dividends and
distributions........ 1,615,733 5,821,978
Cost of shares
reacquired............. (55,471,546) (356,365,191)
-------------- -------------
Net decrease in net
assets from Fund
share transactions... (51,775,780) (180,847,615)
-------------- -------------
Total decrease........... (53,552,024) (183,789,650)
Net Assets
Beginning of period...... 129,512,524 313,302,174
-------------- -------------
End of period............ $ 75,960,500 $ 129,512,524
-------------- -------------
-------------- -------------
</TABLE>
See Notes to Financial Statements. See Notes to Financial Statements.
--7--
<PAGE>
<PAGE>
PRUDENTIAL SHORT-TERM GLOBAL INCOME FUND, INC.
GLOBAL ASSETS PORTFOLIO
Notes to Financial Statements
(Unaudited)
Prudential Short-Term Global Income Fund, Inc. (the ``Fund''), registered
under the Investment Company Act of 1940 as a non-diversified, open-end
management investment company, was incorporated in Maryland on February 21,
1990. The Fund consists of two series, namely: Short-Term Global Income
Portfolio and Global Assets Portfolio. The Global Assets Portfolio (the
``Portfolio'') commenced investment operations on February 15, 1991. The
investment objective of the Portfolio is to seek high current income with
minimum risk to principal, by investing primarily in high-quality debt
securities in the U.S. and abroad having remaining maturities of not more than
one year. The ability of the issuers of the debt securities held by the Fund to
meet their obligations may be affected by economic developments in a specific
country or industry.
Note 1. Accounting The following is a summary
Policies of significant accounting poli-
cies followed by the Fund, and the Portfolio in
the preparation of its financial statements.
Securities Valuation: In valuing the Fund's assets, quotations of foreign
securities in a foreign currency are converted to U.S. dollar equivalents at the
then current exchange rate. Government securities for which quotations are
available will be based on prices provided by an independent pricing service or
principal market makers. Other portfolio securities that are actively traded in
the over-the-counter market, including listed securities for which the primary
market is believed to be over-the-counter, will be valued at the average of the
quoted bid and asked prices provided by an independent pricing service or by
principal market makers. Any security for which the primary market is on an
exchange is valued at the last sale price on such exchange on the day of
valuation or, if there was no sale on such day, the last bid price quoted on
such day. Securities for which market quotations are not readily available are
valued at fair value as determined in good faith by or under the direction of
the Board of Directors.
Short-term securities which mature in more than 60 days are valued at current
market quotations. Short-term securities which mature in 60 days or less are
valued at amortized cost which approximates market value.
In connection with transactions in repurchase agreements with U.S. financial
institutions, it is the Fund's policy that its custodian or designated
subcustodians, as the case may be under triparty repurchase agreements, takes
possession of the underlying collateral securities, the value of which exceeds
the principal amount of the repurchase transaction including accrued interest.
If the seller defaults and the value of the collateral declines or if bankruptcy
proceedings are commenced with respect to the seller of the security,
realization of the collateral by the Fund may be delayed or limited.
Foreign Currency Translation: The books and records of the Fund are maintained
in U.S. dollars. Foreign currency amounts are translated into U.S. dollars on
the following basis:
(i) market value of investment securities, other assets and liabilities--at
the closing daily rate of exchange;
(ii) purchases and sales of investment securities, income and expenses--at
the rate of exchange prevailing on the respective dates of such transactions.
Although the net assets of the Fund are presented at the foreign exchange
rates and market values at the close of the fiscal period, the Fund does not
isolate that portion of the results of operations arising as a result of changes
in the foreign exchange rates from the fluctuations arising from changes in the
market prices of securities held at the end of the fiscal period. Similarly, the
Fund does not isolate the effect of changes in foreign exchange rates from the
fluctuations arising from changes in the market prices of debt securities sold
during the fiscal period. Accordingly, realized foreign currency gains and
losses are included in the reported net realized loss on investment
transactions.
Net realized loss on foreign currency transactions represents net foreign
exchange gains or losses from sales and maturities of short-term securities,
holding of foreign currencies, currency gains or losses realized between the
trade and settlement dates on security transactions, and the difference between
the amounts of interest and foreign taxes recorded on the Fund's books and the
U.S. dollar equivalent amounts actually received or paid. Net currency gains and
losses from valuing foreign currency denominated assets (excluding investments)
and liabilities at fiscal period end exchange rates are reflected as a component
of net unrealized depreciation on investments and foreign currencies.
--8--
<PAGE>
<PAGE>
Foreign security and currency transactions may involve certain considerations
and risks not typically associated with those of U.S. companies as a result of,
among other factors, the possibility of political and economic instability and
the level of governmental supervision and regulation of foreign securities
markets.
Forward Currency Contracts: The Fund enters into forward currency contracts in
order to hedge its exposure to changes in foreign currency exchange rates on its
foreign portfolio holdings. A forward contract is a commitment to purchase or
sell a foreign currency at a future date at a negotiated forward rate. The gain
or loss arising from the difference between the settlement value of the original
and renegotiated forward contracts, if any, is isolated and is included in net
realized gain (loss) from foreign currency transactions. Risks may arise upon
entering into these contracts from the potential inability of the counterparties
to meet the terms of their contracts.
Option Writing: When the Fund writes an option, an amount equal to the premium
received by the Fund is recorded as a liability and is subsequently adjusted to
the current market value of the option written. Premiums received from writing
options which expire unexercised are treated by the Fund on the expiration date
as realized gains from securities or currencies based on the type of option
written. The difference between the premium and the amount paid on effecting a
closing purchase transaction, including brokerage commissions, is also treated
as a realized gain, or if the premium is less than the amount paid for the
closing purchase transaction, as a realized loss. If a call option is exercised,
the premium is added to the proceeds from the sale of the underlying security or
currency in determining whether the Fund has realized a gain or loss. If a put
option is exercised, the premium reduces the cost basis of the securities or
currencies purchased by the Fund. The Fund as writer of an option may have no
control over whether the underlying securities or currencies may be sold
(called) or purchased (put) and as a result bears the market risk of an
unfavorable change in the price of the security or currency underlying the
written option.
Securities Transactions and Investment Income: Securities transactions are
recorded on the trade date. Realized gains and losses from security and currency
transactions are calculated on the identified cost basis. Interest income is
recorded on the accrual basis.
Net investment income (other than distribution fees) and unrealized and
realized gains or losses are allocated daily to each class of shares based upon
the relative proportion of net assets of each class at the beginning of the day.
Equalization: The Fund follows the accounting practice known as equalization by
which a portion of the proceeds from sales and costs of reacquisitions of Fund
shares, equivalent on a per share basis to the amount of distributable net
investment income on the date of the transaction, is credited or charged to
undistributed net investment income. As a result, undistributed net investment
income per share is unaffected by sales or reacquisitions of the Fund's shares.
Dividends and Distributions: The Fund declares daily and pays dividends of net
investment income monthly and makes distributions at least annually of any net
capital gains. Dividends and distributions are recorded on the ex-dividend date.
Income distributions and capital gain distributions are determined in
accordance with income tax regulations which may differ from generally accepted
accounting principles. These differences are primarily due to differing
treatments for foreign currency transactions.
Reclassification of Capital Accounts: The Fund accounts and reports for
distributions to shareholders in accordance with A.I.C.P.A.'s Statement of
Position 93-2; Determination, Disclosure, and Financial Statement Presentation
of Income, Capital Gain, and Return of Capital Distributions by Investment
Companies. The effect of applying this statement was to decrease paid-in capital
by $215,386, decrease undistributed net investment income by $1,472,499 and
decrease accumulated net realized loss on investments by $1,687,885. Net
investment income, net realized gains and net assets were not affected by this
change.
Federal Income Taxes: For federal income tax purposes, each portfolio in the
Fund is treated as a separate taxpaying entity. It is the Portfolio's intent to
continue to meet the requirements of the Internal Revenue Code applicable to
regulated investment companies and to distribute all of its taxable income to
shareholders. Therefore, no federal income tax provision is required.
Withholding taxes on foreign interest have been provided for in accordance
with the Fund's understanding of the applicable country's tax rules and rates.
Deferred Organization Expenses: Approximately $60,000 of organization and
initial registration costs were incurred. These costs have been deferred and are
being amortized over the period of benefit not to exceed 60 months from the date
the Portfolio commenced investment operations.
Note 2. Agreements The Fund has a management
agreement with Prudential Mutual Fund Management,
Inc. (``PMF''). Pursuant to this
--9--
<PAGE>
<PAGE>
agreement, PMF has responsibility for all investment advisory services and
supervises the subadviser's performance of such services. PMF has entered into
a
subadvisory agreement with The Prudential Investment Corporation (``PIC''); PIC
furnishes investment advisory services in connection with the managment of the
Fund. PMF pays for the cost of the subadviser's services, the compensation of
officers of the Fund, occupancy and certain clerical and bookkeeping costs of
the Fund. The Fund bears all other costs and expenses.
The management fee paid PMF is computed daily and payable monthly at an
annual rate of .55 of 1% of the average daily net assets of the Portfolio.
The Fund has distribution agreements with Prudential Mutual Fund
Distributors, Inc. (``PMFD''), which acts as the distributor of the Class A
shares of the Fund and with Prudential Securities Incorporated (``PSI'') which
acts as distributor of the Class B shares of the Fund (collectively the
``Distributors'').
Pursuant to the Class A Plan, the Portfolio reimburses PMFD for its expenses
with respect to distributing and servicing the Fund's Class A shares at an
annual rate of up to .50 of 1% of the average daily net assets of the Class A
shares. PMFD pays various broker-dealers, including PSI and Pruco Securities
Corporation (``Prusec''), affiliated broker-dealers, for account servicing fees
and other expenses incurred by such broker-dealers.
PMFD recovers the distribution expenses and account servicing fees incurred
through the receipt of reimbursement payments from the Fund under the Class A
Plan and the receipt of initial sales charges. PMFD has advised the Portfolio
that it has received approximately $5,400 in front-end sales charges resulting
from sales of Class A shares during the six months ended April 30, 1994. From
these fees, PMFD paid such sales charges to dealers (PSI and Prusec) which in
turn paid commissions to salespersons.
Pursuant to the Class B Plan, the Portfolio reimburses PSI for its
distribution-related expenses with respect to Class B shares, at an annual rate
of up to 1% of the average daily net assets of the Class B shares.
Effective February 1, 1993, PSI had no distribution costs reimbursable to it
under the Class B Plan and therefore, as of such date, the Fund discontinued
assessing distribution fees on the Class B shares and discontinued the payment
to PSI of any contingent deferred sales charges collected on the redemption of
Class B shares. All such contingent deferred sales charges collected on the
redemption of Class B shares are being retained and credited to the Fund's Class
B shares paid-in capital account.
PMFD is a wholly-owned subsidiary of PMF; PSI, PMF and PIC are indirect,
wholly-owned subsidiaries of The Prudential Insurance Company of America.
Note 3. Other Prudential Mutual Fund
Transactions Services, Inc. (``PMFS''), a
With Affiliates wholly-owned subsidiary of
PMF, serves as the Fund's transfer agent and
during the six months ended April 30, 1994, the Portfolio incurred fees of
approximately $55,500 for the services of PMFS. As of April 30, 1994,
approximately $8,600 of such fees were due to PMFS for its services. Transfer
agent fees and expenses in the Statement of Operations include certain
out-of-pocket expenses paid to non-affiliates.
Note 4. Portfolio The federal income tax basis
Securities of the Portfolio's investments
at April 30, 1994 was substantially the same as
the basis for financial reporting purposes and, accordingly, net unrealized
appreciation for federal income tax purposes was $29,953 (gross unrealized
appreciation--$579,744; gross unrealized depreciation--$549,791).
For federal income tax purposes, the Portfolio has a capital loss
carryforward as of October 31, 1993 of approximately $10,954,000 of which
$4,701,000 expires in 2000 and $6,253,000 expires in 2001. Accordingly, no
capital gains distributions are expected to be paid to shareholders until future
net gains have been realized in excess of such carryforward.
Transactions in options written during the six months ended April 30, 1994
were as follows:
<TABLE>
<CAPTION>
Number of
Contracts Premiums
(000) Received
--------- ---------
<S> <C> <C>
Options outstanding at
October 31, 1993................. 9,500 $ 71,725
Options written.................... 119,800 888,305
Options terminated in closing
purchase transactions............ (88,100) (584,085)
Options expired.................... (11,600) (76,175)
Options exercised.................. (3,400) (10,200)
--------- ---------
Options outstanding at
April 30, 1994................... 26,200 $ 289,570
--------- ---------
--------- ---------
</TABLE>
At April 30, 1994, the Portfolio had outstanding forward currency contracts,
both to purchase and sell foreign currencies, as follows:
--10--
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
Value at
Foreign Currency Settlement Date Current Appreciation
Purchase Contracts Payable Value (Depreciation)
- --------------------- --------------- ----------- --------------
<S> <C> <C> <C>
Australian Dollars,
expiring
5/4-5/9/94......... $ 15,423,946 $15,476,453 $ 52,507
British Pounds,
expiring 5/31/94... 10,050,134 10,143,993 93,859
Canadian Dollars,
expiring 5/4/94.... 8,746,092 8,732,515 (13,577)
Deutschemarks,
expiring
5/3-5/20/94........ 28,095,847 28,886,464 790,617
Italian Lira,
expiring
5/13-5/31/94....... 8,004,128 8,168,276 164,148
Japanese Yen,
expiring
5/2-6/2/94......... 14,962,555 15,208,895 246,340
Spanish Pesetas,
expiring
5/5-5/20/94........ 2,531,679 2,585,237 53,558
Swedish Krona,
expiring 5/10/94... 8,842,040 9,199,531 357,491
--------------- ----------- --------------
$ 96,656,421 $98,401,364 $ 1,744,943
--------------- ----------- --------------
--------------- ----------- --------------
</TABLE>
<TABLE>
<CAPTION>
Value at
Foreign Currency Settlement Date Current Appreciation
Sale Contracts Receivable Value (Depreciation)
- --------------------- --------------- ----------- --------------
<S> <C> <C> <C>
Australian Dollars,
expiring
5/4-5/9/94......... $ 3,988,261 $ 3,992,498 $ (4,237)
Canadian Dollars,
expiring
5/4-5/24/94........ 3,502,618 3,504,209 (1,591)
Deutschemarks,
expiring
5/3-10/11/94....... 39,741,345 40,875,350 (1,134,005)
French Francs,
expiring 6/21/94... 5,248,765 5,333,639 (84,874)
Japanese Yen,
expiring
5/2-5/16/94........ 9,534,227 9,712,086 (177,859)
New Zealand Dollars,
expiring 5/31/94... 2,488 2,496 (8)
Swedish Krona,
expiring 5/10/94... 7,545,489 7,845,158 (299,669)
Swiss Francs,
expiring
5/19-10/26/94...... 7,598,336 7,860,058 (261,722)
--------------- ----------- --------------
$ 77,161,529 $79,125,494 $ (1,963,965)
--------------- ----------- --------------
--------------- ----------- --------------
</TABLE>
Note 5. Joint The Portfolio, along with
Repurchase other affiliated registered
Agreement investment companies, trans-
Account fers uninvested cash balances
into a single joint account, the daily aggregate
balance of which is invested in one or more repurchase agreements collateralized
by U.S. Treasury or Federal agency obligations. At April 30, 1994, the Portfolio
had a 1.6% undivided interest in the repurchase agreements in the joint account.
The undivided interest for the Portfolio represented $15,470,000 in principal
amount. As of such date, each repurchase agreement in the joint account and the
value of the collateral therefor was as follows:
Barclays de Zoete Wedd, Inc., 3.55%, in the principal amount of $53,000,000,
repurchase price $53,015,679, due 5/2/94. The value of the collateral including
accrued interest is $54,060,428.
Goldman Sachs & Co., 3.50%, in the principal amount of $315,000,000,
repurchase price $315,091,875, due 5/2/94. The value of the collateral including
accrued interest is $321,300,231.
Merrill Lynch, Pierce, Fenner & Smith, Inc., 3.55%, in the principal amount
of $315,000,000, repurchase price $315,093,188, due 5/2/94. The value of the
collateral including accrued interest is $321,300,584.
Morgan (J.P.) Securities, Inc., 3.58%, in the principal amount of
$295,000,000, repurchase price $295,088,008, due 5/2/94. The value of the
collateral including accrued interest is $300,901,625.
Note 6. Capital The Portfolio currently offers
only Class A shares. Class A shares are sold with
a front-end sales charge of up to .99%. Prior to April 14, 1993, Class B shares
were sold with a contingent deferred sales charge of 1% on shares that were held
for less than one year. Both classes of shares have equal rights as to earnings,
assets and voting privileges except that each class has exclusive voting rights
with respect to its distribution plan. Class B shares held greater than one year
from date of purchase are automatically converted into Class A shares. Effective
May 10, 1994, the remaining Class B shares converted to Class A shares. There
are 500 million authorized shares of $.001 par value common stock divided into
two classes, designated Class A and Class B common stock, each of which consists
of 250 million authorized shares.
--11--
<PAGE>
<PAGE>
Transactions in shares of common stock for the six months ended April 30,
1994 and the fiscal year ended October 31, 1993 were as follows:
<TABLE>
<CAPTION>
Class A Shares Amount
- ---------------------------- ------------ -------------
<S> <C> <C>
Six months ended April 30,
1994:
Shares sold................. 285,794 $ 533,304
Shares sold--conversion from
Class B................... 826,184 1,546,729
Shares issued in
reinvestment of
dividends................. 862,004 1,606,290
Shares reacquired........... (28,734,616) (53,496,735)
------------ -------------
Net decrease in shares
outstanding............... (26,760,634) $ (49,810,412)
------------ -------------
------------ -------------
Year ended October 31, 1993:
Shares sold................. 6,064,340 $ 11,274,743
Shares sold--conversion from
Class B................... 83,379,084 154,875,114
Shares issued in
reinvestment of dividends
and distributions......... 2,229,981 4,138,266
Shares reacquired........... (83,960,705) (155,987,024)
------------ -------------
Net increase in shares
outstanding............... 7,712,700 $ 14,301,099
------------ -------------
------------ -------------
<CAPTION>
Class B Shares Amount
- ---------------------------- ------------ -------------
Six months ended April 30,
1994:
Shares issued in
reinvestment of
dividends................. 4,960 $ 9,443
Shares reacquired........... (226,904) (428,082)
Shares
reacquired--conversion
into Class A.............. (813,295) (1,546,729)
------------ -------------
Net decrease in shares
outstanding............... (1,035,239) $ (1,965,368)
------------ -------------
------------ -------------
Year ended October 31, 1993:
Shares sold................. 1,902,610 $ 3,545,741
Shares issued in
reinvestment of dividends
and distributions......... 903,347 1,683,712
Shares reacquired........... (24,366,585) (45,503,053)
Shares
reacquired--conversion
into Class A.............. (83,275,750) (154,875,114)
------------ -------------
Net decrease in shares
outstanding............... (104,836,378) $(195,148,714)
------------ -------------
------------ -------------
</TABLE>
--12--
<PAGE>
<PAGE>
PRUDENTIAL SHORT-TERM GLOBAL INCOME FUND, INC.
GLOBAL ASSETS PORTFOLIO
Financial Highlights
(Unaudited)
<TABLE>
<CAPTION>
Class A
Class B
--------------------------------------------------
- --------------------------------------------------
<S> <C> <C> <C> <C>
<C> <C> <C> <C>
February 15,
February 15,
Six Months Year Ended 1991*
Six Months Year Ended 1991*
Ended October 31, through
Ended October 31, through
April 30, -------------------- October 31,
April 30, ------------------- October 31,
1994 1993 1992 1991
1994 1993 1992 1991
---------- -------- -------- ------------
- ---------- ------- -------- ------------
PER SHARE OPERATING
PERFORMANCE:
Net asset value,
beginning of
period.............. $ 1.88 $ 1.89 $ 2.00 $ 2.00
$ 1.90 $ 1.89 $ 2.00 $ 2.00
---------- -------- -------- ------------
- ---------- ------- -------- ------------
Income from investment operations
Net investment
income.............. .03 .12 .16 .12(D)
.04 .12 .15 .11(D)
Net realized and
unrealized gain
(loss) on investment
and foreign currency
transactions........ (.02) (.04) (.13) --
(.02) (.04) (.13) --
---------- -------- -------- ------------
- ---------- ------- -------- ------------
Total from
investment
operations........ .01 .08 .03 .12
.02 .08 .02 .11
---------- -------- -------- ------------
- ---------- ------- -------- ------------
Less distributions
Dividends from net
investment
income.............. (.01) (.04) (.14) (.12)
(.01) (.04) (.13) (.11)
Dividends in excess of
net investment
income.............. (.03) -- -- --
(.04) -- -- --
Taxable return of
capital
distributions....... -- (.05) -- --
-- (.05) -- --
---------- -------- -------- ------------
- ---------- ------- -------- ------------
Total
distributions....... (.04) (.09) (.14) (.12)
(.05) (.09) (.13) (.11)
---------- -------- -------- ------------
- ---------- ------- -------- ------------
Contingent deferred
sales charges
collected........... -- -- -- --
.03 .02 -- --
---------- -------- -------- ------------
- ---------- ------- -------- ------------
Net asset value, end
of period........... $ 1.85 $ 1.88 $ 1.89 $ 2.00
$ 1.90 $ 1.90 $ 1.89 $ 2.00
---------- -------- -------- ------------
- ---------- ------- -------- ------------
---------- -------- -------- ------------
- ---------- ------- -------- ------------
TOTAL RETURN#:........ .76% 4.36% 1.46% 5.91%
2.60% 5.47% 0.94% 5.53%
RATIOS/SUPPLEMENTAL
DATA:
Net assets, end of
period (000)........ $ 75,908 $127,490 $113,412 $ 86,443
$ 52 $ 2,023 $199,890 $ 134,015
Average net assets
(000)............... $ 101,704 $153,339 $138,331 $ 23,224
$ 548 $52,653 $248,941 $ 42,449
Ratios to average net
assets:
Expenses, including
distribution
fees.............. 1.73%** 1.48% 1.33% 1.25%(D)**
1.23%** 1.61% 1.83% 1.75%(D)**
Expenses, excluding
distribution
fees.............. 1.23%** .98% .83% .75%(D)**
1.23%** .98% .83% .75%(D)**
Net investment
income............ 3.92%** 6.44% 8.16% 8.64%(D)**
4.48%** 6.31% 7.66% 8.21%(D)**
</TABLE>
- ---------------
* Commencement of investment operations.
** Annualized.
# Total return does not consider the effects of sales loads. Total return is
calculated assuming a purchase of shares on the first day and a sale on
the last day of each period reported and includes reinvestment of
dividends. Total returns for periods of less than a full year are not
annualized.
(D) Net of expense subsidy.
See Notes to Financial Statements.
--13--
<PAGE>
<PAGE>
Directors
Stephen C. Eyre
Delayne Dedrick Gold
Don G. Hoff
Harry A. Jacobs, Jr.
Sidney R. Knafel
Robert E. La Blanc
Lawrence C. McQuade
Thomas A. Owens, Jr.
Richard A. Redeker
Clay T. Whitehead
Officers
Lawrence C. McQuade, President
Robert F. Gunia, Vice President
Susan C. Cote, Treasurer
S. Jane Rose, Secretary
Domenick Pugliese, Assistant Secretary
Manager
Prudential Mutual Fund Management, Inc.
One Seaport Plaza
New York, NY 10292
Investment Adviser
The Prudential Investment Corporation
Prudential Plaza
Newark, NJ 07101
Distributors
Prudential Mutual Fund Distributors, Inc.
Prudential Securities Incorporated
One Seaport Plaza
New York, NY 10292
Custodian
State Street Bank and Trust Company
One Heritage Drive
North Quincy, MA 02171
Transfer Agent
Prudential Mutual Fund Services, Inc.
P.O. Box 15005
New Brunswick, NJ 08906
Independent Accountants
Deloitte & Touche
1633 Broadway
New York, NY 10019
Legal Counsel
Shereff, Friedman, Hoffman & Goodman
919 Third Avenue
New York, NY 10022
One Seaport Plaza
New York, NY 10292
Toll free (800) 225-1852
Collect (908) 417-7555
This report is not authorized for distribution to prospective investors
unless preceded or accompanied by a current prospectus.
The accompanying financial statements as of April 30, 1994 were not audited
and, accordingly, no opinion is expressed on them.
74436H309 MF 149E2
74436H408 Cat #4443624
-14-
<PAGE>
S E M I A N N U A L R E P O R T
April 30,1994
Prudential
Short-Term
Global Income
Fund, Inc.
(LOGO)
Short-Term
Global Income
Portfolio
(LOGO)
<PAGE>
Letter to
Shareholders
June 3, 1994
Dear Shareholder:
Over the last six months ended April 30, 1994, the Prudential Short-term Global
Income Fund/Short-Term Global Income Portfolio circumvented much of the global
fixed-income and currency market volatility that had occurred in the wake of
recent Federal Reserve actions. We are pleased to report that your Fund was
able to provide competitive returns and outperform the Lipper Short-Term World
Multi-Market Average during this period.
<TABLE>
HISTORICAL TOTAL RETURNS
As of April 30, 1994(1)
<CAPTION>
6-Month 12-Month Since
Total Return TotalReturn Inception(2)
<S> <C> <C> <C>
Class A -0.5% 2.5% 18.5%
Class B -0.8 1.6 15.1
Lipper ST World -1.4 1.3 N/A
Multi-Mkt. Avg.(3)
</TABLE>
<TABLE>
AVERAGE ANNUAL TOTAL RETURNS(4)
As of March 31, 1994
<CAPTION>
One Year Since Inception(2)
<S> <C> <C>
Class A 0.0% 4.0%
Class B -0.7 3.8
</TABLE>
1 Source: Lipper Analytical Services. These returns do not take into account
applicable sales charges. The Fund charges a maximum sales load of 3% for
Class A shares. Class B shares are subject to a declining contingent deferred
sales charge of 3%, 2%, 1% and 1% respectively, over a four year period.
2 Inception of Class A and Class B 11/01/90
3 This is the average of 48 Funds in the Short World Multi-Market Average,
according to Lipper Analytical Services, Inc.
4 Source: Prudential Mutual Fund Management. These figures take into account
applicable sales charges. Past performance is no guarantee of future results.
Investment return and principal value will fluctuate so that an investor's
shares when redeemed may be worth more or less than their original cost.
-1-
<PAGE>
Fund Overview
The Fund invests primarily in high-quality, short-term, worldwide debt
securities with remaining maturities of not more than three years. The Fund's
net asset value as of April 30, 1994 was $8.97 for both Class A and Class B
shares. The Fund also paid dividends of $0.29 per Class A share and $0.24 per
Class B share, for the six month period ended April 30, 1994.
Bond Markets
European bonds finished 1993 on a strong note. Rising unemployment, sluggish
demand and low inflation caused interest rates to fall throughout Europe. We
took advantage of these declining yields by investing more than 50% of net
assets in European bonds by the end of 1993. As the accompanying pie chart
shows, as of April 30, 1994, the Fund held approximately 46% of its portfolio
in European bonds, including holdings in Ireland, Italy, Spain, Sweden and the
U.K.
(CHART)
The Federal Reserve's move to raise short-term interest rates in February,
however, was the primary cause behind the subsequent volatility in most world
bond markets. The U.S.-Japan trade dispute and Germany's reluctance to swiftly
ease monetary policy also contributed to the instability. As a result,
interest rates rose worldwide, with European bonds faring the worst. Rising
worldwide bond yields reduced the value of most Fund positions, thus lowering
the Fund's per share net asset value.
We have added to our short-term U.S., Canadian and New Zealand bond exposure
following the sharp rise in yields in those markets. We believe that their
short-term markets are attractive, particularly in Canada and New Zealand where
interest rates have risen in sympathy with the U.S. market.
Currency Markets
During the last few months of 1993 and into 1994, the Fund hedged most of its
European currency exposure back into U.S. dollars. It was our belief that the
combination of falling European interest rates and rising domestic rates would
weaken foreign currencies versus the dollar. However, despite these diverging
monetary policies, the U.S. dollar has failed to gain strength in 1994 and, in
fact, has weakened against most major currencies.
We were more positive on the dollar bloc currencies of Australia, New Zealand
and Canada, and held securities denominated in their currencies on an unhedged
basis. Since the dollar remains weak, we have removed some of the currency
hedges on our European holdings. We have also eliminated our Mexican holdings as
political and social turmoil as well as a weak economy have made the peso
vulnerable.
Outlook
We still expect European rates to fall further from current levels, particularly
in the shorter maturities in which the Fund invests, and view the
-2-
<PAGE>
recent backup in yields as temporary. In contrast to the U.S., most European
economies remain weak with unemployment at extremely high levels. Furthermore,
inflation rates are low and monetary policies are still being eased. As a
result, we will still keep some of the Fund's assets in selected European
markets.
The recent rise in Australian, New Zealand and Canadian interest rates are of a
permanent nature in our view. Higher interest rates as well as rising world
growth and greater commodity prices should help support these currencies. As a
result, we are currently holding large positions in these countries.
As always, it is a pleasure to have you as a shareholder of the Prudential
Short-Term Global Income Fund/Short-Term Global Income Portfolio and to take
this opportunity to report our activities to you.
Sincerely,
Lawrence C. McQuade
President
Jeffrey E. Brummette
Portfolio Manager
-3-
<PAGE>
PRUDENTIAL SHORT-TERM GLOBAL INCOME FUND, INC. Portfolio of Investments
Short-Term Global Income Portfolio April 30, 1994 (Unaudited)
<TABLE>
<CAPTION>
Principal US$
Amount Value
(000) Description (Note 1)
<C> <S> <C>
LONG-TERM INVESTMENTS--76.1%
Australia--17.5%
New South Wales
Treasury Corp.,
A$ 18,000# 8.50%, 3/1/96.......... $ 13,209,052
South Australia Fin.
Auth.,
5,000# 13.00%, 7/15/95........ 3,850,605
12,650# 12.50%, 10/15/96....... 10,056,178
Victorian Treasury
Corp.,
17,200# 12.50%, 7/15/96........ 13,598,660
Western Australia
Treasury Corp.,
18,607# 10.00%, 1/15/97........ 14,067,885
------------
54,782,380
------------
Canada--11.9%
Alberta Province
Canada,
C$ 20,000# 5.75%, 9/3/96.......... 13,975,282
Canadian Gov't. Bonds,
32,650# 6.50%, 8/1/96.......... 23,209,676
------------
37,184,958
------------
Ireland--3.4%
Irish Gov't. Bonds,
IEP 7,000# 9.00%, 7/30/96......... 10,752,990
------------
Italy--14.3%
Credit Local De France,
Lira 4,500,000# 12.20%, 6/12/96........ 3,054,270
Deutsche Bank,
10,000,000# 12.00%, 10/2/96........ 6,812,556
European Investor Bank,
10,000,000# 7.625%, 11/25/96....... 6,297,267
Export Finance of
Norway,
8,000,000# 12.25%, 8/5/96......... 5,414,133
Italian Gov't. BTP,
Lira 2,000,000# 10.00%, 8/1/96......... $ 1,294,936
30,000,000# 9.00%, 10/1/96......... 19,080,342
4,000,000# 12.00%, 1/1/97......... 2,691,032
------------
44,644,536
------------
New Zealand--4.7%
New Zealand Gov't.
Bonds,
NZ$ 25,000# 8.00%, 11/15/95........ 14,653,449
------------
Spain--12.9%
Nordic Investment Bank,
Pts 150,000 13.80%, 11/30/95....... 1,204,168
Spanish Gov't. Bonds,
5,167,000 9.00%, 2/28/97......... 38,932,162
------------
40,136,330
------------
Sweden--4.3%
Statens Bostad Housing
Fund,
SKr 70,000 12.50%, 1/23/97........ 10,064,367
Swedish Gov't. Bonds,
25,000 11.50%, 9/1/95......... 3,442,185
------------
13,506,552
------------
United Kingdom--7.1%
Bayerische Hypothelsen
Bank,
(BrPd) 5,000# 11.13%, 6/24/96........ 8,186,251
United Kingdom Treasury
Bills,
8,550# 10.50%, 2/21/97........ 14,108,528
------------
22,294,779
------------
Total long-term
investments
(cost
US$237,243,990)...... 237,955,974
------------
</TABLE>
-4- See Notes to Financial Statements.
<PAGE>
<PAGE>
PRUDENTIAL SHORT-TERM GLOBAL INCOME FUND, INC.
Short-Term Global Income Portfolio
<TABLE>
<CAPTION>
Principal US$
Amount Value
(000) Description (Note 1)
<C> <S> <C>
SHORT-TERM INVESTMENT--24.7%
Canada--3.7%
Canadian Treasury
Bills,**
C$ 9,000# 6.39%, 4/6/95.......... $ 6,116,795
8,000# 6.96%, 4/20/95......... 5,423,368
------------
11,540,163
------------
New Zealand--10.1%
New Zealand Gov't.
Bonds,
NZ$ 26,000# 10.00%, 2/15/95........ 15,389,348
New Zealand Treasury
Bills,**
1,300# 6.05%, 5/4/94.......... 748,285
7,000# 6.63%, 7/6/94.......... 3,983,420
20,000# 6.85%, 7/6/94.......... 11,381,131
------------
31,502,184
------------
Sweden--3.9%
Swedish Treasury
Bills,**
SKr 92,000 7.08%, 5/18/94......... 12,062,758
------------
United States--7.0%
Joint Repurchase
Agreement Account,
US$ 15,328 3.54%, 5/2/94 (Note
5)................... 15,328,000
United States Treasury
Bills,**
7,000 4.48%, 4/6/95.......... 6,681,959
------------
22,009,959
------------
Total short-term
investments
(cost US$75,577,179)... 77,115,064
------------
</TABLE>
<TABLE>
<CAPTION>
US$
Value
Contracts(D) Description (Note 1)
<C> <S> <C>
OUTSTANDING OPTIONS
PURCHASED*--0.3%
Currency Call Options
Deutschemarks,
DM 82,400 expiring 7/18/94
@DM1.80.............. $ 98,880
French Francs,
FF 55,000 expiring 12/19/94
@FF94.40............. 7,666
Japanese Yen,
(YEN) 19,300 expiring 5/17/94
@ (YEN)107.00........ 5,790
------------
112,336
------------
Currency Put Options
Deutschemarks,
DM 19,000 expiring 6/28/94
@DM1.66.............. 300,200
------------
Cross-Currency Call Options
Deutschemarks,
24,700 expiring 6/16/94
@DM1025.00
per Italian Lira..... 1,348
------------
Cross-Currency Put Options
Deutschemarks,
expiring 1/12/95
15,000 @DM974.16
per Italian Lira..... 212,856
9,700 @DM972.30
per Italian Lira..... 135,882
27,400 expiring 1/20/95
@DM4.6015
per Swedish Krona.... 320,691
------------
669,429
------------
</TABLE>
-5- See Notes to Financial Statements.
<PAGE>
<PAGE>
PRUDENTIAL SHORT-TERM GLOBAL INCOME FUND, INC.
Short-Term Global Income Portfolio
<TABLE>
<CAPTION>
US$
Value
Contracts(D) Description (Note 1)
<C> <S> <C>
Total outstanding
options purchased
(cost US$3,134,929).... $ 1,083,313
------------
Total Investments
Before Outstanding
Options Written--
101.1%
(cost US$315,956,098;
Note 4).............. 316,154,351
------------
OUTSTANDING OPTIONS
WRITTEN*--(0.5%)
Currency Put Options
French Francs,
FF 55,000 expiring 12/19/94
@FF94.20............. (3,724)
Italian Lira,
Lira 24,700 expiring 6/16/94
@L967.60............. (197,720)
Japanese Yen,
(YEN) 19,300 expiring 5/17/94
@ (YEN)107.00........ (1,103,960)
------------
(1,305,404)
------------
Cross-Currency Call Options
Deutschemark,
DM 24,700 expiring 1/12/95
@DM1025.00 per
Italian Lira......... (132,292)
------------
Cross-Currency Put Options
Deutschemark,
DM 27,400 expiring 1/20/95
@DM4.55
per Swedish Krona.... $ (252,565)
------------
Total outstanding
options written
(premiums
received
US$1,054,220)........ (1,690,261)
------------
Total Investments,
Net of Outstanding
Options Written--
100.6%............... 314,464,090
Other liabilities in
excess of
other assets--(0.6%)... (1,919,565)
------------
Net Assets--100%....... $312,544,525
------------
------------
</TABLE>
- ------------------
Portfolio securities are classified according to the security's currency
denomination.
# Principal amount segregated as collateral for forward currency contracts and
options written. Aggregate value of segregated securities--$227,355,439.
* Non-income producing security.
** Percentage quoted represent yields to maturity as of purchase date.
(DAG) Expressed in thousands of local currency units.
-6- See Notes to Financial Statements.
<PAGE>
<PAGE>
PRUDENTIAL SHORT-TERM GLOBAL
INCOME FUND, INC.
Short-Term Global Income Portfolio
Statement of Assets and Liabilities
(Unaudited)
<TABLE>
<CAPTION>
Assets
April 30, 1994
--------------
<S>
<C>
Investments, at value (cost
$315,956,098)................................................. $ 316,154,351
Foreign currency, at value (cost
$14,785)................................................. 14,765
Receivable for investments
sold........................................................... 10,144,675
Interest
receivable.......................................................................
6,665,946
Receivable for Fund shares
sold........................................................... 75,094
Deferred expenses and other
assets........................................................ 74,328
--------------
Total
assets..........................................................................
333,129,159
--------------
Liabilities
Bank
overdraft.....................................................................
....... 5,786
Payable for investments
purchased.........................................................
10,145,561
Forward contracts-net amount payable to
counterparties.................................... 4,450,159
Payable for Fund shares
reacquired........................................................
2,904,784
Outstanding options written, at value (premiums received
$1,054,220)...................... 1,690,261
Dividends
payable.........................................................................
417,598
Accrued
expenses......................................................................
.... 371,683
Distribution fee
payable..................................................................
240,523
Withholding taxes
payable.................................................................
212,452
Management fee
payable....................................................................
145,827
--------------
Total
liabilities.....................................................................
20,584,634
--------------
Net
Assets........................................................................
........ $ 312,544,525
--------------
--------------
Net assets were comprised of:
Common stock, at
par.................................................................... $
34,837
Paid-in capital in excess of
par........................................................ 362,388,119
--------------
362,422,956
Overdistributed net investment
income................................................... (9,057,814)
Accumulated net realized loss on investment and foreign currency
transactions........... (36,103,598)
Net unrealized depreciation on investments and foreign
currencies....................... (4,717,019)
--------------
Net assets, April 30,
1994.............................................................. $
312,544,525
--------------
--------------
Class A:
Net asset value and redemption price per share ($34,820,662 / 3,880,432 shares
of common
stock issued and
outstanding).........................................................
$8.97
Maximum sales charge (3.00% of offering
price).......................................... .28
--------------
Maximum offering price to
public........................................................ $9.25
--------------
--------------
Class B:
Net asset value, offering price and redemption price per share ($277,723,863
/
30,956,930 shares of common stock issued and
outstanding)............................. $8.97
--------------
--------------
</TABLE>
See Notes to Financial Statements.
-7-
<PAGE>
<PAGE>
PRUDENTIAL SHORT-TERM GLOBAL
INCOME FUND, INC.
Short-Term Global Income Portfolio
Statement of Operations
(Unaudited)
<TABLE>
<CAPTION>
Six Months
Ended
April 30,
Net Investment Income 1994
------------
<S> <C>
Income
Interest (net of foreign
withholding
taxes of $215,861)............... $ 16,071,236
------------
Expenses
Distribution fee--Class A.......... 33,123
Distribution fee--Class B.......... 1,638,910
Management fee..................... 1,022,851
Custodian's fees and expenses...... 416,000
Transfer agent's fees and
expenses........................... 256,000
Reports to shareholders............ 40,000
Registration fees.................. 28,000
Amortization of organization
expenses........................... 20,000
Audit fee.......................... 19,000
Directors' fees.................... 17,500
Legal.............................. 11,000
Miscellaneous...................... 5,104
------------
Total expenses................... 3,507,488
------------
Net investment income................ 12,563,748
------------
Realized and Unrealized Gain (Loss)
on Investments and Foreign
Currency Transactions
Net realized gain (loss) on:
Investment transactions............ (11,321,275)
Foreign currency transactions...... (4,370,105)
Written option transactions........ 692,743
------------
(14,998,637)
------------
Net change in unrealized
appreciation/ depreciation of:
Investments........................ 5,789,408
Foreign currencies................. (5,006,006)
Written options.................... (591,816)
------------
191,586
------------
Net loss on investments, foreign
currencies and written options..... (14,807,051)
------------
Net Decrease in Net Assets
Resulting from Operations............ $ (2,243,303)
------------
------------
</TABLE>
See Notes to Financial Statements.
PRUDENTIAL SHORT-TERM GLOBAL
INCOME FUND, INC.
Short-Term Global Income Portfolio
Statement of Changes in Net Assets
(Unaudited)
<TABLE>
<CAPTION>
Six Months
Ended Year Ended
Net Increase (Decrease) April 30, October 31,
in Net Assets 1994 1993
------------- -------------
<S> <C> <C>
Operations
Net investment
income............. $ 12,563,748 $ 52,264,411
Net realized loss on
investments........ (14,998,637) (52,043,418)
Net change in
unrealized
appreciation/depreciation
of investments..... 191,586 37,156,133
------------- -------------
Net increase
(decrease) in net
assets resulting
from operations.... (2,243,303) 37,377,126
------------- -------------
Net equalization
debits............. -- (7,869,071)
------------- -------------
Dividends to
shareholders from net
investment income
(Note 1)
Class A.............. (1,369,621) (4,363,707)
Class B.............. (8,681,413) (25,199,590)
------------- -------------
(10,051,034) (29,563,297)
------------- -------------
Fund share transactions
(Note 6)
Net proceeds from
shares
subscribed......... 5,441,743 39,187,479
Net asset value of
shares issued to
shareholders in
reinvestment of
dividends.......... 6,081,069 17,172,475
Cost of shares
reacquired......... (121,155,627) (330,090,306)
------------- -------------
Net decrease in net
assets from Fund
share
transactions....... (109,632,815) (273,730,352)
------------- -------------
Total decrease......... (121,927,152) (273,785,594)
Net Assets
Beginning of period.... 434,471,677 708,257,271
------------- -------------
End of period.......... $ 312,544,525 $ 434,471,677
------------- -------------
------------- -------------
</TABLE>
See Notes to Financial Statements.
-8-
<PAGE>
PRUDENTIAL SHORT-TERM GLOBAL INCOME FUND, INC.
Short-Term Global Income Portfolio
Notes to Financial Statements
(Unaudited)
Prudential Short-Term Global Income Fund, Inc. (the ``Fund'') is registered
under the Investment Company Act of 1940 as a non-diversified, open-end
management investment company. The Fund consists of two series, namely:
Short-Term Global Income Portfolio and Global Assets Portfolio. The Fund was
incorporated in Maryland on February 21, 1990 and had no significant operations
other than the issuance of 5,000 shares each of Class A and Class B common stock
of the Short-Term Global Income Portfolio for $100,000 on September 21, 1990 to
Prudential Mutual Fund Management, Inc. (``PMF''). The Short-Term Global Income
Portfolio (the ``Portfolio'') commenced investment operations on November 1,
1990. The investment objective of the Portfolio is to seek high current income
with minimum risk to principal, by investing primarily in high-quality debt
securities in both the U.S. and abroad having remaining maturities of not more
than three years. The ability of the issuers of the debt securities held by the
Fund to meet their obligations may be affected by economic developments in a
specific country or industry.
Note 1. Accounting The following is a summary
Policies of significant accounting poli-
cies followed by the Fund, and the Portfolio in
the preparation of its financial statements.
Securities Valuation: In valuing the Fund's assets, quotations of foreign
securities in a foreign currency are converted to U.S. dollar equivalents at the
then current currency value. Government securities for which quotations are
available will be based on prices provided by an independent pricing service or
principal market makers. Other portfolio securities that are actively traded in
the over-the-counter market, including listed securities for which the primary
market is believed to be over-the-counter, will be valued at the average of the
quoted bid and asked prices provided by an independent pricing service or by
principal market makers. Any security for which the primary market is on an
exchange is valued at the last sale price on such exchange on the day of
valuation or, if there was no sale on such day, the last bid price quoted on
such day. Securities for which market quotations are not readily available are
valued at fair value as determined in good faith by or under the direction of
the Board of Directors.
Short-term securities which mature in more than 60 days are valued at current
market quotations. Short-term securities which mature in 60 days or less are
valued at amortized cost which approximates market value.
In connection with transactions in repurchase agreements with U.S. financial
institutions, it is the Fund's policy that its custodian or designated
subcustodians, as the case may be under triparty repurchase agreements, takes
possession of the underlying collateral securities, the value of which exceeds
the principal amount of the repurchase transaction including accrued interest.
If the seller defaults and the value of the collateral declines or if bankruptcy
proceedings are commenced with respect to the seller of the security,
realization of the collateral by the Fund may be delayed or limited.
Foreign Currency Translation: The books and records of the Fund are maintained
in U.S. dollars. Foreign currency amounts are translated into U.S. dollars on
the following basis:
(i) market value of investment securities, other assets and liabilities--at
the closing daily rate of exchange;
(ii) purchases and sales of investment securities, income and expenses--at
the rate of exchange prevailing on the respective dates of such transactions.
Although the net assets of the Fund are presented at the foreign exchange
rates and market values at the close of the fiscal period, the Fund does not
isolate that portion of the results of operations arising as a result of changes
in the foreign exchange rates from the fluctuations arising from changes in the
market prices of securities held at the end of the fiscal period. Similarly, the
Fund does not isolate the effect of changes in foreign exchange rates from the
fluctuations arising from changes in the market prices of long-term debt
securities sold during the fiscal period. Accordingly, realized foreign currency
gains and losses are included in the reported net realized loss on investment
transactions.
Net realized loss on foreign currency transactions represents net foreign
exchange gains or losses from sales and maturities of short-term securities,
holding of foreign currencies, currency gains or losses realized between the
trade and settlement dates on security transactions, and the difference between
the amounts of interest and foreign taxes recorded on the Fund's books and the
U.S. dollar equivalent amounts actually received or paid. Net currency gains and
losses from
-9-
<PAGE>
<PAGE>
valuing foreign currency denominated assets (excluding investments) and
liabilities at fiscal period end exchange rates are reflected as a component of
net unrealized depreciation on investments and foreign currencies.
Foreign security and currency transactions may involve certain considerations
and risks not typically associated with those of U.S. companies as a result of,
among other factors, the possibility of political and economic instability and
the level of governmental supervision and regulation of foreign securities
markets.
Forward Currency Contracts: The Fund enters into forward currency contracts in
order to hedge its exposure to changes in foreign currency exchange rates on its
foreign portfolio holdings. A forward contract is a commitment to purchase or
sell a foreign currency at a future date at a negotiated forward rate. The gain
or loss arising from the difference between the settlement value of the original
and renegotiated forward contracts, if any, is isolated and is included in net
realized gain (loss) from foreign currency transactions. Risks may arise upon
entering into these contracts from the potential inability of the counterparties
to meet the terms of their contracts.
Option Writing: When the Fund writes an option, an amount equal to the premium
received by the Fund is recorded as a liability and is subsequently adjusted to
the current market value of the option written. Premiums received from writing
options which expire unexercised are treated by the Fund on the expiration date
as realized gains from securities or currencies based on the type of option
written. The difference between the premium and the amount paid on effecting a
closing purchase transaction, including brokerage commissions, is also treated
as a realized gain, or if the premium is less than the amount paid for the
closing purchase transaction, as a realized loss. If a call option is exercised,
the premium is added to the proceeds from the sale of the underlying security or
currency in determining whether the Fund has realized a gain or loss. If a put
option is exercised, the premium reduces the cost basis of the securities or
currencies purchased by the Fund. The Fund as writer of an option may have no
control over whether the underlying securities or currencies may be sold
(called) or purchased (put) and as a result bears the market risk of an
unfavorable change in the price of the security or currency underlying the
written option.
Securities Transactions and Investment Income: Securities transactions are
recorded on the trade date. Realized gains and losses from security and currency
transactions are calculated on the identified cost basis. Interest income is
recorded on the accrual basis.
Net investment income (other than distribution fees) and unrealized and
realized gains or losses are allocated daily to each class of shares based upon
the relative proportion of net assets of each class at the beginning of the day.
Equalization: The Fund follows the accounting practice known as equalization by
which a portion of the proceeds from sales and costs of reacquisitions of Fund
shares, equivalent on a per share basis to the amount of distributable net
investment income on the date of the transaction, is credited or charged to
undistributed net investment income. As a result, undistributed net investment
income per share is unaffected by sales or reacquisitions of the Fund's shares.
Dividends and Distributions: The Fund declares daily and pays dividends of net
investment income monthly and makes distributions at least annually of any net
capital gains. Dividends and distributions are recorded on the ex-dividend date.
Income distributions and capital gain distributions are determined in
accordance with income tax regulations which may differ from generally accepted
accounting principles. These differences are primarily due to differing
treatments for foreign currency transactions.
Reclassification of Capital Accounts: The Fund accounts and reports for
distributions to shareholders in accordance with A.I.C.P.A.'s Statement of
Position 93-2: Determination, Disclosure, and Financial Statement Presentation
of Income, Capital Gain, and Return of Capital Distributions by Investment
Companies. The effect of applying this statement was to decrease undistributed
net investment income and decrease accumulated net realized loss by $5,592,053.
Net investment income, net realized gains and net assets were not affected by
this change.
Federal Income Taxes: For federal income tax purposes, each portfolio in the
Fund is treated as a separate taxpaying entity. It is the Portfolio's intent to
continue to meet the requirements of the Internal Revenue Code applicable to
regulated investment companies and to distribute all of its taxable income to
shareholders. Therefore, no federal income tax provision is required.
Withholding taxes on foreign interest have been provided for in accordance
with the Fund's understanding of the applicable country's tax rules and rates.
Deferred Organization Expenses: Approximately $200,000 of organization and
initial registration costs were incurred. These costs have been deferred and are
being amortized over the period of benefit not to exceed 60 months from the date
the Portfolio commenced investment operations. PMF has agreed not to redeem the
10,000
-10-
<PAGE>
<PAGE>
shares purchased until all organization expenses have been amortized.
Note 2. Agreements The Fund has a management
agreement with PMF. Pursuant to this agreement,
PMF has responsibility for all investment advisory services and supervises the
subadviser's performance of such services. PMF has entered into a subadvisory
agreement with The Prudential Investment Corporation (``PIC''); PIC furnishes
investment advisory services in connection with the managment of the Fund. PMF
pays for the cost of the subadviser's services, the compensation of officers of
the Fund, occupancy and certain clerical and bookkeeping costs of the Fund. The
Fund bears all other costs and expenses.
The management fee paid PMF is computed daily and payable monthly at an
annual rate of .55 of 1% of the average daily net assets of the Portfolio.
The Fund has distribution agreements with Prudential Mutual Fund
Distributors, Inc. (``PMFD''), which acts as the distributor of the Class A
shares of the Fund and with Prudential Securities Incorporated (``PSI'') which
acts as distributor of the Class B shares of the Fund (collectively, the
``Distributors''). To reimburse the Distributors for their expenses incurred in
distributing and servicing the Fund's Class A and B shares, the Fund, pursuant
to plans of distribution, pays the Distributors a reimbursement, accrued daily
and payable monthly.
Pursuant to the Class A Plan, the Portfolio reimburses PMFD for its expenses
with respect to Class A shares at an annual rate of up to .30 of 1% of the
average daily net assets of the Class A shares. Such expenses under the Class A
Plan were .15 of 1% of the average daily net assets of the Class A shares for
the six months ended April 30, 1994. PMFD pays various broker-dealers, including
PSI and Pruco Securities Corporation (``Prusec''), affiliated broker-dealers,
for account servicing fees and other expenses incurred by such broker-dealers.
Pursuant to the Class B Plan, the Portfolio reimburses PSI for its
distribution-related expenses with respect to Class B shares at an annual rate
of up to 1% of the average daily net assets of the Class B shares.
The Class B distribution expenses include commission credits for payment of
commissions and account servicing fees to financial advisers and an allocation
for overhead and other distribution-related expenses, interest and/or carrying
charges, the cost of printing and mailing prospectuses to potential investors
and of advertising incurred in connection with the distribution of shares.
The Distributors recover the distribution expenses and account servicing fees
incurred through the receipt of reimbursement payments from the Portfolio under
the plans and the receipt of initial sales charges (Class A only) and contingent
deferred sales charges (Class B only) from shareholders.
PMFD has advised the Portfolio that it has received approximately $8,700 in
front-end sales charges resulting from sales of Class A shares during the six
months ended April 30, 1994. From these fees, PMFD paid such sales charges to
dealers (PSI and Prusec) which in turn paid commissions to salespersons.
With respect to the Class B Plan, at any given time the amount of expenses
incurred by PSI in distributing the Portfolio's shares and not recovered through
the imposition of contingent deferred sales charges in connection with certain
redemptions of shares may exceed the total payments made by the Portfolio
pursuant to the Class B Plan. PSI has advised the Portfolio that, for the six
months ended April 30, 1994, it received approximately $556,900 in contingent
deferred sales charges imposed upon certain redemptions by investors. PSI, as
distributor, has also advised the Portfolio that at April 30, 1994, the amount
of distribution expenses incurred by PSI and not yet reimbursed by the Portfolio
or recovered through contingent deferred sales charges approximated $14,290,100.
This amount may be recovered through future payments under the Class B Plan or
contingent deferred sales charges.
In the event of termination or noncontinuation of the Class B Plan, the Fund
would not be contractually obligated to pay PSI, as distributor, for any
expenses not previously reimbursed or recovered through contingent deferred
sales charges.
PMFD is a wholly-owned subsidiary of PMF; PSI, PMF and PIC are indirect,
wholly-owned subsidiaries of The Prudential Insurance Company of America.
Note 3. Other Prudential Mutual Fund Ser-
Transactions vices, Inc. (``PMFS'') a
With Affiliates wholly-owned subsidiary of
PMF, serves as the Fund's transfer agent and
during the six months ended April 30, 1994, the Portfolio incurred fees of
approximately $204,900 for the services of PMFS. As of April 30, 1994,
approximately $32,100 of such fees were due to PMFS for its services. Transfer
agent fees and expenses in the Statement of Operations include certain
out-of-pocket expenses paid to non-affiliates.
Note 4. Portfolio Purchases and sales of invest-
Securities ment securities, other than
short-term investments and
-11-
<PAGE>
<PAGE>
options, for the six months ended April 30, 1994 aggregated $367,003,418 and
$482,084,982, respectively.
The federal income tax basis of the Portfolio's investments at April 30, 1994
was $316,530,194 and, accordingly, net unrealized depreciation for federal
income tax purposes was $375,843 (gross unrealized appreciation-- $5,709,256;
gross unrealized depreciation--$6,085,099).
For federal income tax purposes, the Portfolio had a capital loss
carryforward as of October 31, 1993, of approximately $26,697,000 which expires
in 2001. Accordingly, no capital gains distributions are expected to be paid to
shareholders until future net gains have been realized in excess of such
carryforward.
Transactions in options written during the six months ended April 30, 1994
were as follows:
<TABLE>
<CAPTION>
Number of
Contracts Premiums
(000) Received
--------- -----------
<S> <C> <C>
Options outstanding at
October 31, 1993................. 30,500 $ 230,275
Options written.................... 492,600 3,192,716
Options terminated in closing
purchase transactions............ (322,700) (2,090,021)
Options expired.................... (36,500) (38,400)
Options exercised.................. (12,800) (240,350)
--------- -----------
Options outstanding at
April 30, 1994................... 151,100 $ 1,054,220
--------- -----------
--------- -----------
</TABLE>
At April 30, 1994, the Portfolio had outstanding forward currency contracts,
both to purchase and sell foreign currencies, as follows:
<TABLE>
<CAPTION>
Value at
Foreign Currency Settlement Date Current Appreciation
Purchase Contracts Payable Value (Depreciation)
- ------------------ --------------- ------------ -----------
<S> <C> <C> <C>
Australian
Dollars,
expiring
5/4-5/9/94...... $ 46,890,932 $ 46,731,802 $ (159,130)
Belgian Francs,
expiring
5/4/94.......... 12,526,459 12,785,198 258,739
British Pounds,
expiring
5/20-5/27/94.... 13,215,441 13,389,838 174,397
Canadian Dollars,
expiring
5/4/94.......... 15,696,694 15,734,836 38,142
Deutschemarks,
expiring
5/6-5/20/94..... 110,258,925 113,354,173 3,095,248
French Francs,
expiring
6/21/94......... 14,716,681 15,300,572 583,891
Italian Lira,
expiring
5/16-5/31/94.... $ 13,427,267 $ 13,792,567 $ 365,300
Japanese Yen,
expiring
5/2/94.......... 55,462,120 56,451,635 989,515
Spanish Pesetas,
expiring
5/5/94.......... 7,481,367 7,632,910 151,543
Swedish Krona,
expiring
5/10/94......... 1,359,807 1,422,909 63,102
--------------- ------------ -----------
$ 291,035,693 $296,596,440 $ 5,560,747
--------------- ------------ -----------
--------------- ------------ -----------
</TABLE>
<TABLE>
<CAPTION>
Value at
Foreign Currency Settlement Date Current Appreciation
Sale Contracts Receivable Value (Depreciation)
- ----------------- --------------- ------------ ------------
<S> <C> <C> <C>
Australian
Dollars,
expiring
5/4-5/9/94..... $ 63,226,944 $ 64,130,120 $ (903,176)
Belgian Francs,
expiring
5/4/94......... 12,326,536 12,785,198 (458,662)
Canadian Dollars,
expiring
5/4-5/24/94.... 26,885,589 26,847,001 38,588
Deutschemarks,
expiring
5/6-10/11/94... 166,581,807 171,667,309 (5,085,502)
French Francs,
expiring
6/21/94........ 33,605,947 34,265,979 (660,032)
Italian Lira,
expiring
5/31/94........ 5,622,796 5,723,619 (100,823)
Japanese Yen,
expiring
5/2-5/16/94.... 36,790,796 37,871,997 (1,081,201)
New Zealand
Dollars,
expiring
5/31/94........ 6,639 6,661 (22)
Spanish Pesetas,
expiring
5/20-5/31/94... 22,181,524 22,615,263 (433,739)
Swedish Krona,
expiring
5/10/94........ 6,100,000 6,358,932 (258,932)
Swiss Francs,
expiring
5/19-10/26/94.. 30,892,644 31,960,049 (1,067,405)
--------------- ------------ ------------
$ 404,221,222 $414,232,128 $(10,010,906)
--------------- ------------ ------------
--------------- ------------ ------------
</TABLE>
-12-
<PAGE>
<PAGE>
Note 5. Joint The Portfolio, along with
Repurchase other affiliated registered
Agreement investment companies, trans-
Account fers uninvested cash balances
into a single joint account, the daily aggregate
balance of which is invested in one or more repurchase agreements collateralized
by U.S. Treasury or Federal agency obligations. As of April 30, 1994, the
Portfolio has a 1.6% undivided interest in the repurchase agreements in the
joint account. The undivided interest for the Portfolio represents $15,328,000
in principal amount. As of such date, each repurchase agreement in the joint
account and the value of the collateral therefor were as follows:
Barclays de Zoete Wedd, Inc., 3.55%, in the principal amount of $53,000,000,
repurchase price $53,015,679, due 5/2/94. The value of the collateral including
accrued interest is $54,060,428.
Goldman Sachs & Co., 3.50%, in the principal amount of $315,000,000,
repurchase price $315,091,875, due 5/2/94. The value of the collateral including
accrued interest is $321,300,231.
Merrill Lynch, Pierce, Fenner & Smith, Inc., 3.55%, in the principal amount
of $315,000,000, repurchase price $315,093,188, due 5/2/94. The value of the
collateral including accrued interest is $321,300,584.
Morgan (J.P.) Securities, Inc., 3.58%, in the principal amount of
$295,000,000, repurchase price $295,088,008, due 5/2/94. The value of the
collateral including accrued interest is $300,901,625.
Note 6. Capital The Portfolio offers both
Class A and Class B shares. Class A shares are
sold with a front-end sales charge of up to 3.0%. Class B shares are sold with
a
contingent deferred sales charge which declines from 3% to zero depending on the
period of time the shares are held. Both classes of shares have equal rights as
to earnings, assets and voting privileges except that each class bears different
distribution expenses and has exclusive voting rights with respect to its
distribution plan.
There are 1.5 billion authorized shares of $.001 par value common stock
divided into two classes, designated Class A and Class B common stock, each of
which consists of 750 million authorized shares. Of the 34,837,362 shares issued
and outstanding at April 30, 1994, PMF owned 10,000 shares.
Transactions in shares of common stock for the six months ended April 30,
1994 and the year ended October 31, 1993 were as follows:
<TABLE>
<CAPTION>
Class A Shares Amount
- ------------------------------ ----------- -------------
<S> <C> <C>
Six months ended April 30,
1994:
Shares sold................... 72,160 $ 663,130
Shares issued in reinvestment
of
dividends................... 109,676 1,006,473
Shares reacquired............. (2,700,686) (24,909,015)
----------- -------------
Net decrease in shares
outstanding................. (2,518,850) $ (23,239,412)
----------- -------------
----------- -------------
Year ended October 31, 1993:
Shares sold................... 2,800,748 $ 25,157,507
Shares issued in reinvestment
of
dividends................... 334,726 3,006,237
Shares reacquired............. (7,797,277) (69,726,785)
----------- -------------
Net decrease in shares
outstanding................. (4,661,803) $ (41,563,041)
----------- -------------
----------- -------------
Class B
- ------------------------------
Six months ended April 30,
1994:
Shares sold................... 519,967 $ 4,778,613
Shares issued in reinvestment
of
dividends................... 553,776 5,074,596
Shares reacquired............. (10,502,589) (96,246,612)
----------- -------------
Net decrease in shares
outstanding................. (9,428,846) $ (86,393,403)
----------- -------------
----------- -------------
Year ended October 31, 1993:
Shares sold................... 1,558,807 $ 14,029,972
Shares issued in reinvestment
of
dividends................... 1,575,399 14,166,238
Shares reacquired............. (29,032,710) (260,363,521)
----------- -------------
Net decrease in shares
outstanding................. (25,898,504) $(232,167,311)
----------- -------------
----------- -------------
</TABLE>
-13-
<PAGE>
<PAGE>
PRUDENTIAL SHORT-TERM GLOBAL INCOME FUND, INC.
Short-Term Global Income Portfolio
Financial Highlights
(Unaudited)
<TABLE>
<CAPTION>
Class A
Class B
------------------------------------------------
------------------------------------------------
Six Months
Six Months
Ended Year Ended October 31,
Ended Year Ended October 31,
April 30, ----------------------------------
April 30, ----------------------------------
1994 1993 1992 1991
1994 1993 1992 1991
---------- ---------- -------- --------
---------- ---------- -------- --------
<S> <C> <C> <C> <C>
<C> <C> <C> <C>
PER SHARE OPERATING
PERFORMANCE:
Net asset value, beginning
of period............... $ 9.29 $ 9.16 $ 9.97 $ 10.00
$ 9.29 $ 9.16 $ 9.97 $ 10.00
---------- ---------- -------- --------
---------- ---------- -------- --------
Income from investment
operations
Net investment income..... .35 .97 .96 1.03
.30 .88 .88 .95
Net realized and
unrealized loss on
investment and foreign
currency transactions... (.38) (.26) (.95) (.02)
(.38) (.26) (.95) (.02)
---------- ---------- -------- --------
---------- ---------- -------- --------
Total from investment
operations.............. (.03) .71 .01 1.01
(.08) .62 (.07) .93
---------- ---------- -------- --------
---------- ---------- -------- --------
Less distributions
Dividends from net
investment income....... (.29) (.58) (.82) (1.03)
(.24) (.49) (.74) (.95)
Distributions from net
capital gains........... -- -- -- (.01)
-- -- -- (.01)
---------- ---------- -------- --------
---------- ---------- -------- --------
Total distributions..... (.29) (.58) (.82) (1.04)
(.24) (.49) (.74) (.96)
---------- ---------- -------- --------
---------- ---------- -------- --------
Net asset value, end of
period.................. $ 8.97 $ 9.29 $ 9.16 $ 9.97
$ 8.97 $ 9.29 $ 9.16 $ 9.97
---------- ---------- -------- --------
---------- ---------- -------- --------
---------- ---------- -------- --------
---------- ---------- -------- --------
TOTAL RETURN#:............ (0.39)% 7.96% (0.07)% 10.41%
(0.85)% 7.00% (0.86)% 9.51%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000)................... $34,821 $59,458 $101,358 $105,148
$277,724 $375,013 $606,899 $669,086
Average net assets
(000)................... $44,530 $70,347 $119,171 $51,830
$330,498 $474,175 $814,734 $349,607
Ratios to average net
assets:
Expenses, including
distribution fees..... 1.14%* 1.02% 1.08% 1.01%
1.99%* 1.87% 1.93% 1.87%
Expenses, excluding
distribution fees..... .99%* .87% .93% .86%
.99%* .87% .93% .87%
Net investment income... 7.52%* 10.81% 9.93% 10.23%
6.65%* 9.42% 9.05% 9.46%
Portfolio turnover rate... 214% 307% 180% 66%
214% 307% 180% 66%
</TABLE>
- ---------------
* Annualized.
# Total return does not consider the effects of sales loads. Total return is
calculated assuming a purchase of shares on the first day and a sale on the
last day of each period reported and includes reinvestment of dividends and
distributions. Total returns for periods of less than a full year are not
annualized.
See Notes to Financial Statements.
-14-
<PAGE>
Directors
Stephen C. Eyre
Delayne Dedrick Gold
Don G. Hoff
Harry A. Jacobs, Jr.
Sidney R. Knafel
Robert E. La Blanc
Lawrence C. McQuade
Thomas A. Owens, Jr.
Richard A. Redeker
Clay T. Whitehead
Officers
Lawrence C. McQuade, President
Robert F. Gunia, Vice President
Susan C. Cote, Treasurer
S. Jane Rose, Secretary
Domenick Pugliese, Assistant Secretary
Manager
Prudential Mutual Fund Management, Inc.
One Seaport Plaza
New York, NY 10292
Investment Adviser
The Prudential Investment Corporation
Prudential Plaza
Newark, NJ 07101
Distributors
Prudential Mutual Fund Distributors, Inc.
Prudential Securities Incorporated
One Seaport Plaza
New York, NY 10292
Custodian
State Street Bank and Trust Company
One Heritage Drive
North Quincy, MA 02171
Transfer Agent
Prudential Mutual Fund Services, Inc.
P.O. Box 15005
New Brunswick, NJ 08906
Independent Accountants
Deloitte & Touche
1633 Broadway
New York, NY 10019
Legal Counsel
Shereff, Friedman, Hoffman & Goodman
919 Third Avenue
New York, NY 10022
One Seaport Plaza
New York, NY 10292
Toll free (800) 225-1852
Collect (908) 417-7555
This report is not authorized for distribution to prospective
investors unless preceded or accompanied by a current prospectus.
The accompanying financial statements as of April 30, 1994 were
not audited and, accordingly, no opinion is expressed on them.
74436H101 MF 144E2
74436H200 Cat #4443640
<PAGE>
