ALLIANCE MULTI-MARKET STRATEGY TRUST
SEMI-ANNUAL REPORT
APRIL 30, 1996
ALLIANCE
INVESTING WITHOUT THE MYSTERY.
LETTER TO SHAREHOLDERS ALLIANCE MULTI-MARKET STRATEGY TRUST, INC.
_______________________________________________________________________________
June 3, 1996
Dear Shareholder:
We're pleased to provide you with an update on fixed income market activity and
the investment results for Alliance Multi-Market Strategy Trust. The following
pages include information that covers the period from November 1, 1995, the
beginning of the fiscal year, through April 30, 1996.
MARKET OVERVIEW
The U.S. bond market enjoyed a sustained broad-based rally throughout most of
1995 and into early 1996, though economic news led to a setback in February.
The market reacted negatively to the stronger-than-expected job growth in the
U.S. and doubts about whether the Federal Reserve would lower interest rates
again. Outside the U.S., emerging market and other foreign debt prices rose
sharply as positive developments in Latin America and Central Europe encouraged
foreign investors.
INVESTMENT RESULTS
As shown in the table below Alliance Multi-Market Strategy Trust enjoyed solid
returns in both the six- and twelve-month periods ended April 30, 1996. For
comparison we've shown the performance for the short maturity U.S. government
bond market, represented by the unmanaged Merrill Lynch (ML) 1-3 Year
Government Bond Index, and for the Lipper Short World Multi-Market Income Funds
Average, which reflects performance of 44 funds. This peer group has generally
similar investment objectives to Multi-Market Strategy Trust though investment
policies for the various funds may differ.
TOTAL RETURN
PERIODS ENDED APRIL 30, 1996
6 MONTHS 12 MONTHS
-------- ---------
ALLIANCE MULTI-MARKET STRATEGY TRUST
Class A +8.12% +14.69%
Class B +7.63% +13.49%
Class C +7.64% +13.68%
ML 1-3 YR. INDEX +2.08% +6.89%
LIPPER SHORT WORLD MM FUNDS AVERAGE +3.92% +8.98%
TOTAL RETURNS ARE BASED ON THE NET ASSET VALUES OF EACH CLASS OF SHARES AS OF
APRIL 30; ADDITIONAL INVESTMENT RESULTS APPEAR ON PAGE 4. THE FUND'S BENCHMARKS
ARE UNMANAGED.
As of April 30, 1996 the Fund's holdings, based on market value were
distributed as follows:
PORTFOLIO DISTRIBUTION BY COUNTRY:
U.S. - 14.6%
Germany - 14.5%
Australia - 13.3%
Denmark - 12.5%
Portugal - 8.7%
Finland - 8.6%
Mexico - 7.5%
Ireland - 6.9%
New Zealand - 4.9%
Italy - 3.5%
Canada - 3.0%
Sweden - 2.0%
INVESTMENT OUTLOOK
The U.S. economy appears to be healthy, with modest growth expected in the
period ahead and falling into the 2%-2.5% range by year-end. With a gradually
strengthening economy and steady inflation, we expect no Federal Reserve action
on interest rates over the medium term. If our forecast proves correct, the
result should be steady U.S. bond prices.
The U.S. economy survived an inventory scare in 1995 and entered 1996 in a
relatively balanced and healthy condition. The latest economic data show the
U.S. economy's 'soft landing' is still intact. February's shocking payroll gain
grabbed headlines, but the 12-month comparisons were all numbers that support a
soft landing. Consumer confidence has bounced back, debt service burdens are
still manageable, and February retail sales had their best showing since last
summer, climbing 5% on a year-on-year basis. Manufacturing is likely to remain
a soft spot, although new orders for durable goods are showing hidden strength
and unfilled orders continue to rise. Revised data show the much-feared
slowdown in capital spending has already occurred. We expect a gradual
re-strengthening in the U.S. economy over the next six to twelve months.
1
ALLIANCE MULTI-MARKET STRATEGY TRUST, INC.
_______________________________________________________________________________
Measured inflation at the consumer and producer levels remains well behaved and
the U.S. economy continues to operate in the inflation 'safe zone.' However,
recent increases in unit labor costs and commodity prices warn against
complacency. Federal Reserve policy has moved into a holding pattern, and
chances for a meaningful deficit reduction plan have receded as politicians
increasingly turn their attention to the 1996 election campaign.
In the following pages is a discussion with Douglas Peebles, your Fund's
portfolio manager. Mr. Peebles provides an update on the Fund's current
investments and potential new areas of opportunity. Thank you for your
investment in Alliance Multi-Market Strategy Trust. We look forward to
reporting to you again on market activity and the Fund's investment results
later in the year.
Sincerely,
John D. Carifa
Chairman and President
2
INTERVIEW WITH PORTFOLIO MANAGER
DOUGLAS J. PEEBLES, VICE PRESIDENT ALLIANCE MULTI-MARKET STRATEGY TRUST, INC.
_______________________________________________________________________________
Q: THE TRUST WAS ABLE TO PRODUCE RELATIVELY STRONG PERFORMANCE RESULTS OVER THE
LAST REPORTING PERIOD. WHAT AREAS OF INVESTMENT MOST BENEFITED THE TRUST'S
PERFORMANCE?
MR. PEEBLES: The Trust's performance benefited most strongly from the European
fixed income markets during the last six months. Sluggish gross domestic
product growth combined with low and falling inflation levels, allowed for the
region's governing bodies' continued policy of easing of interest rates. In
turn, the lower rates led to higher fixed income prices and thus a higher net
asset value for the Trust.
Q: WHAT IS YOUR CURRENT OUTLOOK FOR GLOBAL FIXED INCOME MARKETS?
MR. PEEBLES: Our long-term outlook for fixed income markets is quite
optimistic. We believe world gross domestic product growth will be positive but
sluggish and inflation will remain subdued. A reversal of the long-term trend
of increased government spending should keep total gross domestic product
growth under control. The latter, along with increasing competition from the
emerging markets' economies, should hold down the wage increases that directly
affect the inflation outlook. This combination of low growth and low inflation
provide an excellent environment for global bond investing. This long-term
favorable outlook, however, does not preclude shorter term market sell-offs
resulting from the normal shifts and adjustments in the business cycle.
Q: IN THE LAST REPORT YOU INDICATED THAT YOU WERE LOOKING FOR FURTHER EASING BY
THE WORLD'S MAJOR CENTRAL BANKS, THE U.S. FEDERAL RESERVE, THE BANK OF JAPAN
AND THE GERMAN BUNDESBANK. ARE YOU STILL EXPECTING THIS TO CONTINUE?
MR. PEEBLES: No. The Federal Reserve and the Bank of Japan are probably
finished lowering interest rates. Even though we are not expecting any
near-term increase, the likelihood of any additional decrease is small. The
German Bundesbank, however, is very likely to decrease rates in view of the
strong possibility of recession looming over the German economy.
Q: IS THIS POTENTIAL FOR FURTHER INTEREST RATE CUTS IN GERMANY THE REASON THAT
THE PORTFOLIO IS HEAVILY WEIGHTED IN EUROPEAN ASSETS?
MR. PEEBLES: Yes. The potential for further rate cuts in Europe, both by the
Bundesbank and other European central banks, makes short-dated fixed-income
securities very attractive investments. The driving force behind European
policy makers' actions for the foreseeable future is the debt and budget
deficit targets established by the Maastricht treaty for European Monetary
Union. In order to achieve this end, however, government debt and deficit
levels need to be dramatically reduced from their current levels. This fiscal
contraction leaves monetary policy as the only tool available to stimulate the
sluggish European economies. This mixture of tight fiscal/loose monetary
policy, while quite bond friendly, is not a good combination for a currency.
For this reason we remain quite bullish on the U.S. dollar versus the European
currencies.
Q: IF GERMANY IS ABLE TO GET ITS ECONOMY BACK ON TRACK AND THE U.S. AND JAPAN
CONTINUE TO PRODUCE REASONABLE GROWTH, WILL THE TRUST BE ABLE TO BENEFIT IN ANY
SPECIFIC AREAS GIVEN STRONGER WORLD GROSS DOMESTIC PRODUCT GROWTH?
MR. PEEBLES: For the second half of 1996 the three major economic regions of
the developed world are likely to be in a synchronized growth pattern for the
first time in many years. This growth, however, is likely to be low compared to
historical standards. One area which is likely to be on an upswing in this
environment is the commodity sector. Increased world gross domestic product
growth often leads to a greater demand for commodities and natural resources.
If this scenario develops, the natural resource producing countries of
Australia and New Zealand are likely to benefit. This is why the portfolio has
the exposure it does to the Australian and New Zealand markets.
3
ALLIANCE MULTI-MARKET STRATEGY TRUST, INC.
_______________________________________________________________________________
POLICIES AND OBJECTIVES
Alliance Multi-Market Strategy Trust seeks the highest level of current income
through investment in a portfolio of high-quality debt securities having
remaining maturities of not more than five years. It invests primarily in a
non-diversified portfolio of debt securities denominated in the U.S. dollar and
selected foreign currencies. The Multi-Market Strategy Trust normally expects
to maintain at least 70% of its assets in debt securities denominated in
foreign currences.
INVESTMENT RESULTS
_______________________________________________________________________________
AVERAGE ANNUAL TOTAL RETURN AS OF APRIL 30, 1996
CLASS A SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
. One Year +14.69% +9.82%
. Since Inception* +1.60% +.72%
. SEC Yield 7.63%
CLASS B SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
. One Year +13.49% +10.49%
. Since Inception* +.82% +.82%
. SEC Yield 7.25%
CLASS C SHARES
. One Year +13.68 +13.68%
. Since Inception* +.60% +.60%
. SEC Yield 7.25%
The average annual total returns reflect investment of dividends and/or capital
gains distributions in additional shares-with and without the effect of the
4.25% maximum front-end sales charge for Class A or applicable contingent
deferred sales charge for Class B++ (3% year 1, 2% year 2, 1% year 3, 0% year
4); Class C shares are not subject to front-end or contingent deferred sales
charges. Past performance does not guarantee 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. Yields are for the 30 days
ended April 30, 1996.
* Inception: 5/29/91 Class A and Class B; 5/03/93 Class C.
++ Assumes conversion of Class B shares into Class A shares after 6 years.
4
PORTFOLIO OF INVESTMENTS
APRIL 30, 1996 (UNAUDITED) ALLIANCE MULTI-MARKET STRATEGY TRUST, INC.
_______________________________________________________________________________
PRINCIPAL
AMOUNT
(000) U.S. $VALUE
- -------------------------------------------------------------------
AUSTRALIA12.8%
GOVERNMENT OBLIGATION8.6%
Republic of Australia
8.75%, 1/15/01 (a) AU$ 18,600 $14,678,588
DEBT OBLIGATIONS4.2%
Deutsche Bank AG
6.00%, 7/05/00 (a) 10,000 7,139,589
Total Australian Securities
(cost $21,596,081) 21,818,177
CANADA2.9%
GOVERNMENT OBLIGATION2.9%
Government of Canada
7.50%, 9/01/00 (a)
(cost $4,944,007) CA$ 6,500 4,874,678
DENMARK12.0%
GOVERNMENT OBLIGATION12.0%
Kingdom of Denmark
9.00%, 11/15/00 (a)
(cost $21,586,279) DKK 108,000 20,465,983
FINLAND8.3%
GOVERNMENT OBLIGATION8.3%
Republic of Finland
11.00%, 1/15/99 (a)
(cost $15,241,429) FIM 60,000 14,141,959
GERMANY13.8%
DEBT OBLIGATIONS12.1%
Deutsche Pfandbrief Hypotheken
5.00%, 2/22/01 (a) DEM 10,000 6,446,405
Dresdner Finance
6.50%, 5/22/00 (a) 10,000 6,865,922
SMM Trust Co., Ltd. FRN
5.2125%, 11/22/96 (a) (b) 4,000 2,614,902
Union Bank of Switzerland
6.50%, 5/02/00 (a) 7,000 4,729,744
20,656,973
GOVERNMENT OBLIGATION1.7%
Federal Republic of Germany
8.50%, 8/21/00 (a) DEM 4,000 2,971,088
Total German Securities
(cost $25,046,249) 23,628,061
IRELAND6.6%
GOVERNMENT OBLIGATION6.6%
Republic of Ireland
8.00%, 10/18/00 (a)
(cost $11,427,143) IEP 6,900 11,254,977
ITALY3.4%
GOVERNMENT OBLIGATION3.4%
Republic of Italy
10.50%, 11/01/98 (a)
(cost $5,604,329) ITL 8,700,000 5,790,878
MEXICO5.8%
GOVERNMENT OBLIGATIONS5.8%
Mexican Treasury Bills
39.80%, 7/04/96 (a) (c) MXP 35,090 4,451,528
40.10%, 7/11/96 (a) (c) 42,610 5,372,240
Total Mexican Securities
(cost $9,750,513) 9,823,768
NEW ZEALAND4.7%
GOVERNMENT OBLIGATIONS4.7%
Government of New Zealand
9.00%, 11/15/96 (a) NZ$ 10,000 6,838,704
10.00%, 7/15/97 (a) 1,600 1,108,738
Total New Zealand Securities
(cost $7,706,279) 7,947,442
5
PORTFOLIO OF INVESTMENTS (CONTINUED)
ALLIANCE MULTI-MARKET STRATEGY TRUST, INC.
_______________________________________________________________________________
PRINCIPAL
AMOUNT
(000) U.S. $VALUE
- -------------------------------------------------------------------
PORTUGAL8.4%
GOVERNMENT OBLIGATION8.4%
Government of Portugal
11.88%, 2/23/00 (a)
(cost $14,229,638) PTE 2,000,000 $ 14,286,329
SWEDEN1.9%
GOVERNMENT OBLIGATION1.9%
Kingdom of Sweden
11.00% 1/21/99 (a)
(cost $3,259,595) SEK 20,000 3,236,485
UNITED STATES15.5%
DEBT OBLIGATIONS9.8%
Bayerische Landesbank Girozentrale
5.75%, 2/28/01 (a) US$ 5,000 4,810,500
Bayerische Vereinsbank Finansiering
8.125%, 1/27/00 (a) US$ 7,000 7,395,647
SMM Trust Co., Ltd. FRN
5.375%, 11/22/96 (a)(b) 2,000 2,000,000
United Mexican States
30.16%, 11/27/96 (b)(d) 2,500 2,463,207
------------
16,669,354
TIME DEPOSIT5.7%
Credit Agricole
5.31%, 5/01/96 9,700 9,700,000
Total United States Securities
(cost $26,649,236) 26,369,354
TOTAL INVESTMENTS96.0%
(cost $167,040,778) 163,638,091
Other assets less liabilities4.0% 6,847,595
NET ASSETS100% $170,485,686
(a) Security, or portion thereof, has been segregated to collateralize forward
exchange currency contracts. This collateral has a total market value of
approximately $151,474,884.
(b) Stated interest rate in effect at April 30, 1996.
(c) Annualized yield to maturity at purchase date.
(d) Restricted security, valued at fair value.
Glossary:
FRN - Floating Rate Note.
See notes to financial statements.
6
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1996 (UNAUDITED) ALLIANCE MULTI-MARKET STRATEGY TRUST, INC.
_______________________________________________________________________________
ASSETS
Investments in securities, at value (cost $167,040,778) $163,638,091
Cash 44,419
Receivable for investment securities sold 9,901,418
Interest receivable 5,058,100
Unrealized appreciation of forward exchange currency contracts 2,448,126
Unrealized appreciation of swap contracts 199,977
Receivable for capital stock sold 19,801
Deferred organization expenses and other assets 68,669
Total assets 181,378,601
LIABILITIES
Payable for investment securities purchased 9,700,000
Dividend payable 424,123
Payable for capital stock redeemed 337,733
Distribution fee payable 100,026
Advisory fee payable 84,268
Loan commitment fee 29,233
Accrued expenses and other liabilities 217,532
Total liabilities 10,892,915
NET ASSETS $170,485,686
COMPOSITION OF NET ASSETS
Capital stock, at par $ 24,208
Additional paid-in capital 186,189,666
Distributions in excess of net investment income (783,198)
Accumulated net realized loss on investments, options,
swaps, and foreign currency transactions (14,096,283)
Net unrealized depreciation of investments, swaps, and
foreign currency denominated assets and liabilities (848,707)
$170,485,686
CALCULATION OF MAXIMUM OFFERING PRICE
CLASS A SHARES
Net asset value and redemption price per share($70,037,960/
9,945,034 shares of capital stock issued and outstanding) $7.04
Sales Charge-4.25% of public offering price .31
Maximum offering price $7.35
CLASS B SHARES
Net asset value and offering price per share($99,649,274/
14,149,634 shares of capital stock issued and outstanding) $7.04
CLASS C SHARES
Net asset value, redemption and offering price per share($798,452
/113,376 shares of capital stock issued and outstanding) $7.04
See notes to financial statements.
7
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 1996 (UNAUDITED)
ALLIANCE MULTI-MARKET STRATEGY TRUST, INC.
_______________________________________________________________________________
INVESTMENT INCOME
Interest (net of foreign taxes withheld of $19,420) $ 9,223,072
EXPENSES
Advisory fee $537,932
Distribution fee - Class A 107,738
Distribution fee - Class B 533,909
Distribution fee - Class C 3,728
Transfer agency 232,241
Custodian 127,648
Loan commitment fees (see Note E) 91,491
Administrative 83,022
Audit and legal 65,587
Amortization of organization expenses 24,206
Registration 22,144
Printing 13,034
Directors' fees 10,132
Miscellaneous 3,100
Total expenses 1,855,912
Net investment income 7,367,160
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY TRANSACTIONS
Net realized gain on investment and swap transactions 2,079,893
Net realized gain on foreign currency transactions 4,157,321
Net change in unrealized appreciation (depreciation) of:
Investment and swap transactions (3,682,670)
Foreign currency denominated assets and liabilities 3,860,941
Net gain on investments 6,415,485
NET INCREASE IN NET ASSETS FROM OPERATIONS $13,782,645
See notes to financial statements.
8
STATEMENT OF CHANGES IN NET ASSETS ALLIANCE MULTI-MARKET STRATEGY TRUST, INC.
_______________________________________________________________________________
SIX MONTHS ENDED YEAR ENDED
APRIL 30,1996 OCTOBER 31,
(UNAUDITED) 1995
-------------- -------------
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS
Net investment income $ 7,367,160 $ 16,952,551
Net realized gain (loss) on investments, swaps,
and foreign currency transactions 6,237,214 (44,131,178)
Net change in unrealized appreciation of
investments, swaps, and foreign currency
denominated assets and liabilities 178,271 6,324,586
Net increase (decrease) in net assets from
operations 13,782,645 (20,854,041)
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A (3,468,266) -0-
Class B (4,670,863) -0-
Class C (32,588) -0-
Tax return of capital
Class A -0- (6,001,336)
Class B -0- (13,227,764)
Class C -0- (77,659)
CAPITAL STOCK TRANSACTIONS
Net decrease (29,298,430) (53,199,891)
Total decrease (23,687,502) (93,360,691)
NET ASSETS
Beginning of year 194,173,188 287,533,879
End of period (including undistributed net
investment income of $21,359 at
October 31, 1995) $170,485,686 $194,173,188
See notes to financial statements.
9
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1996 (UNAUDITED) ALLIANCE MULTI-MARKET STRATEGY TRUST, INC.
_______________________________________________________________________________
NOTE A: SIGNIFICANT ACCOUNTING POLICIES
Alliance Multi-Market Strategy Trust, Inc. (the 'Fund'), was incorporated in
the State of Maryland as a non-diversified, open-end investment company.
The Fund offers Class A, Class B and Class C shares. Class A shares are sold
with a front-end sales charge of up to 4.25%. Class B shares are sold with a
contingent deferred sales charge which declines from 3.0% to zero depending on
the period of time the shares are held. Class B shares will automatically
convert to Class A shares six years after the end of the calendar month of
purchase. Class C shares are sold without an initial or contingent deferred
sales charge. All three classes of shares have identical voting, dividend,
liquidation and other rights and the same terms and conditions, except that
each class bears different distribution expenses and has exclusive voting
rights with respect to its distribution plan. The following is a summary of
significant accounting policies followed by the Fund.
1. SECURITY VALUATION
Investments are stated at value. Investments for which market quotations are
readily available are valued at the closing price on the day of valuation or,
if no such closing price is available, at the mean of the last bid and ask
price quoted on such day. Options are valued at market value or fair value
using methods determined by the Board of Directors. Securities for which market
quotations are not readily available are valued in good faith at fair value
using methods determined by the Board of Directors. Securities which mature in
60 days or less are valued at amortized cost, which approximates market value,
unless this method does not represent fair value. Restricted securities are
valued at fair value as determined by the Board of Directors. In determining
fair value, consideration is given to cost, operating and other financial data.
2. CURRENCY TRANSLATION
Assets and liabilities denominated in foreign currencies and commitments under
forward foreign exchange currency contracts are translated into U.S. dollars at
the mean of the quoted bid and asked price of such currencies against the U.S.
dollar. Purchases and sales of portfolio securities are translated at the rates
of exchange prevailing when such securities were acquired or sold. Income and
expenses are translated at rates of exchange prevailing when accrued.
Net realized gains on foreign currency transactions represent foreign exchange
gains and losses from sales and maturities of securities, holdings of foreign
currencies, options on foreign currencies, exchange gains and losses realized
between the trade and settlement dates on security transactions, and the
difference between the amounts of interest recorded on the Fund's books and the
U.S. dollar equivalent amounts actually received or paid. Net change in
unrealized appreciation (depreciation) of foreign currency denominated assets
and liabilities represents net currency gains and losses from valuing foreign
currency denominated assets and liabilities at period end exchange rates.
3. ORGANIZATION EXPENSES
Organization expenses of approximately $243,000 have been deferred and are
being amortized on a straight-line basis through May 1996.
4. TAXES
It is the Fund's policy to meet the requirements of the Internal Revenue Code
applicable to regulated investment companies and to distribute all of its
investment company taxable income and net realized gains, if applicable, to
shareholders. Therefore, no provisions for federal income or excise taxes are
required.
5. INVESTMENT INCOME AND SECURITY TRANSACTIONS
Interest income is accrued daily. Security transactions are accounted for on
the date the securities are purchased or sold. Security gains and losses are
determined on the identified cost basis. The Fund accretes discounts as
adjustments to interest income.
6. DIVIDENDS AND DISTRIBUTIONS
Dividends and distributions to shareholders are recorded on the ex-dividend
date and are determined in accordance with income tax regulations.
10
ALLIANCE MULTI-MARKET STRATEGY TRUST, INC.
_______________________________________________________________________________
NOTE B: ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Under the terms of an investment advisory agreement, the Fund pays Alliance
Capital Management L.P. (the 'Adviser'), an advisory fee at an annual rate of
.60 of 1% of the average daily net assets of the Fund. Such fee is accrued
daily and paid monthly.
The Adviser has agreed under the terms of the advisory agreement, to reimburse
the Fund to the extent that its aggregate expenses (exclusive of interest,
taxes, brokerage, distribution fees, and extraordinary expenses) exceed the
limits prescribed by any state in which the Fund's shares are qualified for
sale. The Fund believes that the most restrictive expense ratio limitation
currently imposed by any state is 2 1/2% of the first $30 million of the Fund's
average daily net assets, 2% of the next $70 million of the Fund's average
daily net assets and 1 1/2% of its average daily net assets in excess of $100
million. No reimbursement was required by the Adviser for the six months ended
April 30, 1996. Pursuant to the advisory agreement, the Fund also paid $83,022
to the Adviser representing the costs of certain legal and accounting services
provided to the Fund by the Adviser for the six months ended April 30, 1996.
The Fund compensates Alliance Fund Services, Inc. (a wholly-owned subsidiary of
the Adviser) under a Transfer Agency Agreement for providing personnel and
facilities to perform transfer agency services for the Fund. Such compensation
amounted to $144,368 for the six months ended April 30, 1996.
Alliance Fund Distributors, Inc. (a wholly-owned subsidiary of the Adviser)
serves as the Distributor of the Fund's shares. The Distributor received
front-end sales charges of $2,049 from the sale of Class A shares and $13,356
in contingent deferred sales charges imposed upon redemptions by shareholders
of Class B shares for the six months ended April 30, 1996.
NOTE C: DISTRIBUTION SERVICES AGREEMENT
The Fund has adopted a Distribution Services Agreement (the 'Agreement')
pursuant to Rule 12b-1 under the Investment Company Act of 1940. Under the
Agreement, the Fund pays a distribution fee to the Distributor at an annual
rate of up to .30 of 1% of the average daily net assets attributable to the
Class A shares and up to 1% of the average daily net assets attributable to
both Class B and Class C shares. Such fee is accrued daily and paid monthly.
The Agreement provides that the Distributor will use such payments in their
entirety for distribution assistance and promotional activities. The
Distributor has incurred expenses in excess of the distribution costs
reimbursed by the Fund in the amount of $9,786,768 and $387,112 for Class B and
C shares, respectively; such costs may be recovered from the Fund in future
periods so long as the agreement is in effect. In accordance with the
Agreement, there is no provision for recovery of unreimbursed distribution
costs, incurred by the Distributor, beyond the current fiscal year for Class A
shares. The Agreement also provides that the Adviser may use its own resources
to finance the distribution of the Fund's shares.
11
NOTES TO FINANCIAL STATEMENTS (CONT.)
ALLIANCE MULTI-MARKET STRATEGY TRUST, INC.
_______________________________________________________________________________
NOTE D: INVESTMENT TRANSACTIONS
Purchases and sales of investment securities (excluding short-term investments
and U.S. Government obligations) aggregated $197,431,245 and $178,648,354,
respectively, for the six months ended April 30, 1996.
The Fund enters into forward exchange currency contracts for investment
purposes and to hedge its exposure to changes in foreign currency exchange
rates on its foreign portfolio holdings and to hedge certain firm purchase and
sales commitments denominated in foreign currencies. A forward exchange
currency 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 original contracts and the closing of such contracts is
included in realized gains or losses from foreign currency transactions.
Fluctuations in the value of forward exchange currency contracts are recorded
for financial reporting purposes as unrealized gains or losses by the Fund.
The Fund's custodian will place and maintain cash not available for investment
or other liquid high quality debt securities in a separate account of the Fund
having a value equal to the aggregate amount of the Fund's commitments under
forward exchange currency contracts entered into with respect to position
hedges.
Risks may arise from the potential inability of a counterparty to meet the
terms of a contract and from unanticipated movements in the value of a foreign
currency relative to the U.S. dollar. The face or contract amount, in U.S.
dollars, as reflected in the following table, reflects the total exposure of
the Fund in that particular currency contract.
At April 30, 1996, the Fund had outstanding forward exchange currency
contracts, as follows:
<TABLE>
<CAPTION>
CONTRACT VALUE ON U.S. $ UNREALIZED
AMOUNT ORIGINATION CURRENT APPRECIATION
(000) DATE VALUE (DEPRECIATION)
--------- ------------ ------------ --------------
<S> <C> <C> <C> <C>
FOREIGN CURRENCY BUY CONTRACTS
Deutsche Marks, expiring 6/20/96 10,399 $7,016,862 $6,816,678 $(200,184)
Japanese Yen, expiring 5/07/96-6/11/96 745,000 6,975,080 7,144,652 169,572
Norwegian Krone, expiring 6/17/96 25,000 3,853,327 3,810,222 (43,105)
New Zealand Dollars, expiring 5/20/96 3,596 2,433,874 2,463,128 29,254
Polish Zloty, expiring 4/11/97 7,600 2,555,739 2,526,536 (29,203)
Spanish Pesetas, expiring 7/25/96 431,000 3,401,119 3,372,644 (28,475)
</TABLE>
12
ALLIANCE MULTI-MARKET STRATEGY TRUST, INC.
_______________________________________________________________________________
<TABLE>
<CAPTION>
CONTRACT VALUE ON U.S. $ UNREALIZED
AMOUNT ORIGINATION CURRENT APPRECIATION
(000) DATE VALUE (DEPRECIATION)
--------- ------------ ------------ --------------
<S> <C> <C> <C> <C>
FOREIGN CURRENCY SALE CONTRACTS
Australian Dollars, expiring 5/20/96 15,340 $12,063,022 $12,036,555 $ 26,467
Canadian Dollars, expiring 6/18/96 6,456 4,763,847 4,746,706 17,141
Deutsche Marks, expiring 6/24/96-4/11/97 93,479 62,393,763 61,323,888 1,069,875
Finnish Markka, expiring 5/20/96 68,411 14,476,774 14,155,586 321,188
French Franc, expiring 6/05/96 38,915 7,703,569 7,538,308 165,261
Japanese Yen, expiring 6/11/96 290,000 2,739,571 2,788,144 (48,573)
Netherlands Gilder, expiring 5/01/96-8/02/96 14,573 8,851,778 8,571,855 279,923
Spanish Pesetas, expiring 5/28/96 964,552 7,720,430 7,570,259 150,171
Swedish Krona, expiring 5/20/96-7/25/96 45,344 6,726,249 6,678,559 47,690
Swiss Francs, expiring 6/04/96-7/18/96 22,905 19,065,572 18,544,448 521,124
-----------
$2,448,126
</TABLE>
The Fund enters into currency and interest rate swaps to protect itself from
interest rate fluctuations on the underlying floating rate debt instruments as
well as foreign currency fluctuations. A swap is an agreement that obligates
two parties to exchange a series of cash flows at specified intervals based
upon or calculated by reference to changes in specified prices or rates for a
specified amount of an underlying asset. The payment flows are usually netted
against each other, with the difference being paid by one party to the other.
Risks may arise as a result of the failure of a counterparty to the swap
contract to comply with the terms of the swap contract. The loss incurred by
the failure of a counterparty is generally limited to the net interest payment
to be received by the Fund, and/or the termination value at the end of the
contract. Therefore, the Fund considers the creditworthiness of each
counterparty to a swap contract in evaluating potential credit risk.
Additionally, risks may arise from unanticipated movements in interest rates or
in the value of the foreign securities.
13
NOTES TO FINANCIAL STATEMENTS (CONT.)
ALLIANCE MULTI-MARKET STRATEGY TRUST, INC.
_______________________________________________________________________________
The Fund records a net receivable or payable on a daily basis for the net
interest income or expense expected to be received or paid in the interest
period. Net interest received or paid on these contracts is recorded as
interest income (or as an offset to interest income). Fluctuations in the value
of swap contracts are recorded for financial statement purposes as unrealized
appreciation or depreciation on swap contracts.
<TABLE>
<CAPTION>
RATE TYPE
--------------------------------- UNREALIZED
SWAP NOTIONAL TERMINATION PAYMENTS MADE PAYMENTS RECEIVED APPRECIATION
COUNTERPARTY AMOUNT DATE BY THE FUND BY THE FUND (DEPRECIATION)
- ------------ ------------------ ----------- ------------- ----------------- --------------
<S> <C> <C> <C> <C> <C>
J.P. Morgan DEM 15,000,000 8/17/97 Fixed-5.225% Floating-LIBOR $(205,882)
J.P. Morgan DEM 7,000,000 8/17/00 Floating-LIBOR Fixed-6.33% 193,529
J.P. Morgan ESP 1,300,000,000 1/4/99 Fixed-9.19% 100,889
JPY 1,100,000,000 Fixed 1.35%
J.P. Morgan ITL 15,000,000,000 4/23/01 Fixed-9.51953% Fixed-9.57% 111,441
----------
$ 199,977
</TABLE>
At April 30, 1996, the cost of investments for federal income tax purposes was
the same as the cost for financial reporting purposes. Accordingly, gross
unrealized appreciation of investments was $783,050 and gross unrealized
depreciation of investments was $4,185,737, resulting in net unrealized
depreciation of $3,402,687 (excluding foreign currency transactions). At April
30, 1996, the Fund had a capital loss carryfoward of $20,333,496 of which
$3,437,991 expires in the year 2000, $2,099,120 in 2001, $8,740,977 in 2002,
and $6,055,908 in the year 2003. In addition, under certain conditions, the
Fund may be able to use up to $7,984,508 of ACM Managed Multi-Market Trust,
Inc's capital loss carryforward, which was acquired by the Fund on May 5, 1995.
NOTE E: BANK BORROWING
The Fund entered into a Multi-Currency Credit Agreement with Morgan Guaranty
Trust Company of New York on November 18, 1994, which terminates on November
18, 1997 unless extended for an additional one year period by the Fund. The
maximum credit available is $50,000,000 and requires no collateralization.
There was no loan outstanding during the year. The Fund is obligated to pay
Morgan Guaranty a commitment fee computed at a rate of .1875 of 1% per annum on
the unused daily portion of the revolving credit.
14
ALLIANCE MULTI-MARKET STRATEGY TRUST, INC.
_______________________________________________________________________________
NOTE F: CAPITAL STOCK
There are 9,000,000,000 shares of $.001 par value capital stock authorized,
divided into three classes, designated Class A, Class B and Class C shares.
Each class consists of 3,000,000,000 authorized shares. Transactions in capital
stock were as follows:
SHARES AMOUNT
--------------------------- ------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
APRIL 30,1996 OCTOBER 31, APRIL 30,1996 OCTOBER 31,
(UNAUDITED) 1995 (UNAUDITED) 1995
------------ ------------ -------------- --------------
CLASS A
Shares sold 127,974 305,681 $ 885,247 $ 2,874,213
Shares issued in
reinvestment of
dividends 116,578 260,742 806,152 1,837,650
Shares issued in
connection with
the acquisition of
ACM Managed
Multi-Market Trust -0- 11,271,799 -0- 76,655,259
Shares converted from
Class B to Class A 174,664 -0- 1,210,268 -0-
Shares redeemed (1,729,823) (7,101,609) (11,958,328) (48,938,183)
Net increase
(decrease) (1,310,607) 4,736,613 $ (9,056,661) $ 32,428,939
CLASS B
Shares sold 263,841 635,644 $ 1,826,160 $ 4,405,832
Shares issued in
reinvestment of
dividends 135,907 655,586 940,199 4,703,261
Shares converted from
Class B to Class A (174,664) -0- (1,210,268) -0-
Shares redeemed (3,150,380) (13,315,785) (21,787,474) (94,453,615)
Net decrease (2,925,296) (12,024,555) $(20,231,383) $(85,344,522)
CLASS C
Shares sold 41,120 56,352 $ 286,140 $ 405,752
Shares issued in
reinvestment of
dividends 1,917 5,580 13,263 39,757
Shares redeemed (44,713) (102,739) (309,789) (729,817)
Net decrease (1,676) (40,807) $ (10,386) $ (284,308)
15
FINANCIAL HIGHLIGHTS ALLIANCE MULTI-MARKET STRATEGY TRUST, INC.
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
CLASS A
-------------------------------------------------------------------------------
SIX MONTHS MAY 29,
ENDED 1991(F)
APRIL 30, YEAR ENDED OCTOBER 31, TO
1996 -------------------------------------------------- OCTOBER 28,
(UNAUDITED) 1995 1994 1993 1992 1991
------------- ----------- ----------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $6.83 $8.04 $8.94 $8.85 $9.91 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income .30(a) .77(a) .85 1.02 1.00 .42
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions .24 (1.31) (1.08) (.26) (1.23) (.09)
Net increase (decrease) in net asset
value from operations .54 (.54) (.23) .76 (.23) .33
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.33) -0- (.09) (.67) (.81) (.42)
Distributions from net realized gains -0- -0- -0- -0- (.02) -0-
Tax return of capital -0- (.67) (.58) -0- -0- -0-
Total dividends and distributions (.33) (.67) (.67) (.67) (.83) (.42)
Net asset value, end of period $7.04 $6.83 $8.04 $8.94 $8.85 $ 9.91
TOTAL RETURN
Total investment return based on net
asset value(b) 8.12% (6.47)% (2.64)% 9.01% (2.80)% 3.68%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $70,038 $76,837 $52,385 $82,977 $141,526 $143,594
Ratio to average net assets of:
Expenses 1.65%(c) 1.60% 1.41% 1.94% 2.53% 2.81%(c)
Expenses, excluding interest expense(d) 1.59%(c) 1.55% 1.30% 1.40% 1.33% 1.33%(c)
Net investment income 8.60%(c) 8.56% 7.17% 9.17% 10.58% 10.17%(c)
Portfolio turnover rate 137% 400% 605% 200% 239% 121%
</TABLE>
See footnote summary on page 18.
16
ALLIANCE MULTI-MARKET STRATEGY TRUST, INC.
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
CLASS B
-------------------------------------------------------------------------------
SIX MONTHS MAY 29,
ENDED 1991(F)
APRIL 30, YEAR ENDED OCTOBER 31, TO
1996 -------------------------------------------------- OCTOBER 28,
(UNAUDITED) 1995 1994 1993 1992 1991
------------- ----------- ----------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $6.83 $8.04 $8.94 $8.85 $9.91 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income .27(a) .44(a) .88 .92 1.04 .39
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions .24 (1.05) (1.18) (.22) (1.34) (.09)
Net increase (decrease) in net asset
value from operations .51 (.61) (.30) .70 (.30) .30
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.30) -0- (.08) (.61) (.74) (.39)
Distributions from net realized gains -0- -0- -0- -0- (.02) -0-
Tax return of capital -0- (.60) (.52) -0- -0- -0-
Total dividends and distributions (.30) (.60) (.60) (.61) (.76) (.39)
Net asset value, end of period $7.04 $6.83 $8.04 $8.94 $8.85 $ 9.91
TOTAL RETURN
Total investment return based on net
asset value(b) 7.63% (7.31)% (3.35)% 8.25% (3.51)% 3.36%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $99,649 $116,551 $233,896 $431,186 $701,465 $662,981
Ratio to average net assets of:
Expenses 2.35%(c) 2.29% 2.11% 2.64% 3.24% 3.53%(c)
Expenses, excluding interest expense(d) 2.30%(c) 2.22% 2.01% 2.11% 2.05% 2.05%(c)
Net investment income 7.88%(c) 7.53% 6.44% 8.46% 9.83% 9.40%(c)
Portfolio turnover rate 137% 400% 605% 200% 239% 121%
</TABLE>
See footnote summary on page 18.
17
FINANCIAL HIGHLIGHTS (CONTINUED) ALLIANCE MULTI-MARKET STRATEGY TRUST, INC.
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
CLASS C
-----------------------------------------------------
SIX MONTHS MAY 3,
ENDED 1993(E)
APRIL 30, YEAR ENDED OCTOBER 31, TO
1996 ------------------------ OCTOBER 31,
(UNAUDITED) 1995 1994 1993
------------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $6.83 $8.04 $8.94 $8.76
INCOME FROM INVESTMENT OPERATIONS
Net investment income .27(a) .44(a) .46 .32
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions .24 (1.04) (.75) .16
Net increase (decrease) in net asset
value from operations .51 (.60) (.29) .48
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.30) -0- (.09) (.30)
Distributions from net realized gains -0- -0- -0- -0-
Tax return of capital -0- (.61) (.52) -0-
Total dividends and distributions (.30) (.61) (.61) (.30)
Net asset value, end of period $7.04 $6.83 $8.04 $8.94
TOTAL RETURN
Total investment return based on net
asset value(b) 7.64% (7.29)% (3.34)% 5.54%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $798 $786 $1,252 $718
Ratio to average net assets of:
Expenses 2.34%(c) 2.29% 2.08% 2.44%(c)
Expenses, excluding interest expense(d) 2.29%(c) 2.24% 1.99% 2.11%(c)
Net investment income 7.86%(c) 7.55% 6.10% 7.17%(c)
Portfolio turnover rate 137% 400% 605% 200%
</TABLE>
(a) Based on average shares outstanding.
(b) Total investment return is calculated assuming an initial investment made
at the net asset value at the beginning of the period, reinvestment of all
dividends and distributions at net asset value during the period, and
redemption on the last day of the period. Initial sales charge or contingent
deferred sales charge is not reflected in the calculation of the total
investment return. Total investment return calculated for a period of less than
one year is not annualized.
(c) Annualized.
(d) Interest expense includes commitment fees paid.
(e) Commencement of distribution.
(f) Commencement of operations.
18
ALLIANCE MULTI-MARKET STRATEGY TRUST, INC.
_______________________________________________________________________________
BOARD OF DIRECTORS
JOHN D. CARIFA, CHAIRMAN AND PRESIDENT
RUTH BLOCK (1)
DAVID H. DIEVLER (1)
JOHN H. DOBKIN (1)
WILLIAM H. FOULK, JR. (1)
DR. JAMES M. HESTER (1)
CLIFFORD L. MICHEL (1)
ROBERT C. WHITE (1)
OFFICERS
KATHLEEN A. CORBET, SENIOR VICE PRESIDENT
WAYNE D. LYSKI, SENIOR VICE PRESIDENT
DOUGLAS J. PEEBLES, VICE PRESIDENT
EDMUND P. BERGAN, JR., SECRETARY
MARK D. GERSTEN, TREASURER & CHIEF FINANCIAL OFFICER
JUAN J. RODRIGUEZ, CONTROLLER
CUSTODIAN
BROWN BROTHERS HARRIMAN & CO.
40 Water Street
Boston, MA 02109
PRINCIPAL UNDERWRITER
ALLIANCE FUND DISTRIBUTORS, INC.
1345 Avenue of the Americas
New York, NY 10105
LEGAL COUNSEL
SEWARD & KISSEL
One Battery Park Plaza
New York, NY 10004
TRANSFER AGENT
ALLIANCE FUND SERVICES, INC.
P.O. Box 1520
Secaucus, NJ 07096-1520
Toll-Free 1-(800) 221-5672
INDEPENDENT AUDITORS
ERNST & YOUNG LLP
787 Seventh Avenue
New York, NY 10019
(1) Member of the Audit Committee.
19
ALLIANCE MULTI-MARKET STRATEGY TRUST, INC.
1345 Avenue of the Americas
New York, NY 10105
(800) 221-5672
ALLIANCECAPITAL
INVESTING WITHOUT THE MYSTERY.
THIS REPORT IS INTENDED SOLELY FOR DISTRIBUTION TO CURRENT SHAREHOLDERS
OF THE FUND.
R THESE REGISTERED SERVICE MARKS USED UNDER LICENSE FROM THE OWNER,
ALLIANCE CAPITAL MANAGEMENT L.P.
ASTSR