[LOGO]
MANAGED BY
[LOGO] EQUITILINK
THE FIRST INTERNATIONAL
COMMONWEALTH MANAGEMENT
FUND LIMITED
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Quarterly Report July 31, 1999
Highlights
o 6.2% of assets invested in Asia
o 7.6% per annum return since inception based upon net asset value
o The Fund's discount to NAV narrowed over the quarter
o 8.8% per annum cash distribution rate based on a share price of $10.75 on
July 31, 1999
o 90.3% invested in securities rated or deemed equivalent to AA/Aa or better
[GRAPHIC OMITTED]
www.equitilink.com
NYSE - FCO
Managed by EquitiLink International
Management Limited
Advised by EquitiLink Australia Limited
ALL AMOUNTS ARE IN US DOLLARS UNLESS
OTHERWISE STATED
<PAGE>
letter to Shareholders
================================================================================
September 10, 1999
Dear Shareholder,
We are pleased to present this "new-look" Quarterly Report which covers
the activities of The First Commonwealth Fund, Inc. (the "Fund") for the three
months ended July 31, 1999. Included in this report is a review of the
Australian, Canadian, New Zealand, United Kingdom and selected Asian economies
and investment markets, together with an overview of the Fund's investments
prepared by the Investment Manager, EquitiLink International Management Limited.
Global Expansion: 6.2% of assets invested in Asia
At the Fund's 1999 annual shareholders' meeting, shareholders voted to
amend the Fund's mandate, allowing it to invest in global debt securities.
The Fund commenced investing in global bond markets in May and, on July
31, 1999, held 6.2% of assets in Asia, a region which presents attractive
opportunities. The Investment Manager's initial target is to increase this to
10% of the Fund's assets.
The ability to selectively invest in global debt securities should allow
the Fund to capitalize on the higher interest rates and potential for future
capital gains than are currently available in the Commonwealth countries. This
supports our goal of providing a very competitive yield for the Fund's
shareholders.
Investment Performance: 7.6% per annum return since inception
The Fund's total return based on Net Asset Value (NAV) in US dollar terms
was -4.5% over the three months to July 31, 1999. Performance was diminished by
the depreciation of the Australian, New Zealand and Canadian dollars against the
US dollar, as well as higher bond yields in all Commonwealth bond markets. Asian
investments had a minor impact, given they were introduced part way through the
quarter and represent a small percentage of the Fund. Since inception, the
Fund's NAV has returned 7.6% per annum to July 31, 1999.
Share Price Performance: The Fund's discount to NAV narrowed over the quarter
As of July 31, 1999, the Fund's share price was $10.75, which represented
a discount of 13.4% to the NAV. The discount has narrowed substantially from
20.6% three months ago. The total investment return, based on the Fund's share
price and assuming reinvestment of distributions, was 4.1% over the latest
quarter.
Distributions: 8.8% annual cash distribution rate
Distributions to common shareholders for the year ended July 31, 1999
totalled 94.5 cents per share. Based on the share price of $10.75 on July 31,
1999, the cash distribution rate over the last 12 months was 8.8%. Since all
distributions are paid after deducting applicable withholding taxes, the
effective distribution rate may be higher for those US investors who are able to
claim a tax credit.
1
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The First Commonwealth Fund, Inc.
================================================================================
On March 26, 1999, the Board announced its intention to maintain its
monthly distribution of 7.75 cents per share for at least the next 12 months,
commencing with the May distribution and subject to periodic review by the
Board. Under this policy, 7.75 cents per share was declared for the month of
September, to be paid on October 15, 1999.
Year 2000 Compliance
The EquitiLink Group has taken steps to determine that the computer
systems and equipment we use can deal with Year 2000 issues and we have sought
the same of the Fund's service providers.
For information on the Fund including weekly updates of share price, NAV,
and details of recent distributions, please telephone Investor Relations, toll
free on 1-800-543-6217 in the United States.
Yours sincerely,
/s/ Brian M. Sherman /s/ Laurence S. Freedman [LOGO]
THE FIRST
Brian M. Sherman Laurence S. Freedman COMMONWEALTH
Chairman President FUND
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Explore EquitiLink's Website
http//:www.equitilink.com
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2
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Dividend Reinvestment and Cash Purchase Plan The First Commonwealth Fund, Inc.
================================================================================
We invite you to participate in the Fund's Dividend Reinvestment and Cash
Purchase Plan (the "Plan") which allows you to automatically reinvest your
distributions in shares of the Fund's common stock at favorable commission
rates. Distributions made under the Plan are taxable to the same extent as are
cash distributions. The Plan also enables you to make additional cash
investments in shares of at least $100 per month. As a participant in the Plan,
you will have the convenience of:
Automatic reinvestment -- the Plan Agent will automatically reinvest your
distributions, allowing you to gradually grow your holdings in the Fund;
Lower costs -- shares purchased on your behalf under the Plan will be at
reduced brokerage rates;
Convenience -- the Plan Agent will hold your shares in uncertificated form
and will provide a detailed record of your holdings at the end of each
distribution period.
If you would like further information on the Plan, please contact State
Street Bank and Trust Company, P.O. Box 8200, Boston, MA 02266, Tel:
1-800-426-5523.
3
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Report of the Investment Manager The First Commonwealth Fund, Inc.
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Distributions
During the latest 12 month period, the Fund paid a total of 94.5 cents per
share in distributions, consisting of 12 monthly payments of 7.75 cents per
share and a special distribution of 1.5 cents. The Board's policy is to provide
investors with a stable monthly distribution out of current income, supplemented
by realized capital gains if required. On March 26, 1999, the Board announced
its intention to maintain its monthly distribution of 7.75 cents per share for
at least the next 12 months, commencing with the May distribution and subject to
periodic review by the Board. Under this policy, 7.75 cents per share was
declared for the month of September, to be paid on October 15, 1999.
Based upon the July 31, 1999 share price of $10.75, and total
distributions of 94.5 cents per share paid over the past 12 months, the Fund
provided a cash distribution rate of 8.8%. At the date of this report, with the
share price at $10.13, and monthly distributions at 7.75 cents per share, the
annualized cash distribution rate to shareholders is 9.3% per annum. Since all
distributions are paid after deducting applicable withholding taxes, the
effective distribution rate may be higher for those US investors who are able to
claim a tax credit.
Net Asset Value (NAV) Performance
The Fund's NAV per share at July 31, 1999 was $12.42. The Fund's total
return based on NAV was -4.5% over three months. Since inception, the Fund has
returned 7.6% per annum. All figures assume reinvestment of distributions. At
the date of this report, the NAV was $12.37 per share.
Share Price Performance
As of July 31, 1999, the Fund's share price as quoted on the New York
Stock Exchange was $10.75, which represented a discount of 13.4% to the NAV. The
discount has narrowed substantially from 20.6% three months ago. The total
investment return, based on the Fund's share price and assuming reinvestment of
distributions, was 4.1% over the latest quarter. At the date of this report, the
share price was $10.13, representing a discount of 18.1% to NAV.
Auction Market Preferred Stock (AMPS)
The Fund's US$30 million of AMPS continue to be well bid at the weekly
auctions. The average interest rate paid was 4.81% over the quarter, compared
with 4.96% for 30-day commercial paper over the same period. These rates have
not increased significantly since the last quarter, despite the Federal
Reserve's increase in interest rates on June 30, 1999.
4
<PAGE>
Portfolio Composition The First Commonwealth Fund, Inc.
================================================================================
GEOGRAPHIC COMPOSITION/CREDIT EXPOSURE
The table below shows the geographical composition of the Fund's total
investments as of July 31, 1999, compared with the previous quarter and one year
ago.
TABLE 1: THE FIRST COMMONWEALTH FUND, INC. -- GEOGRAPHIC ASSET ALLOCATION
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July 31, 1999 April 30, 1999 July 31, 1998
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Australia 24.3% 25.8% 25.5%
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Canada 29.2% 29.6% 30.9%
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New Zealand 8.1% 11.0% 9.3%
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United Kingdom 32.1% 32.8% 34.1%
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United States* 0.1% 0.8% 0.2%
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Asia 6.2% -- --
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Total Fund 100.0% 100.0% 100.0%
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* It is the policy of the Investment Manager to maintain a portion of the
Fund's investments in US short-term securities to cover distributions and
expenses.
CURRENCY COMPOSITION
The table below shows the currency composition of the Fund's total
investments as of July 31, 1999, compared with the previous quarter and one year
ago.
TABLE 2: THE FIRST COMMONWEALTH FUND, INC. -- CURRENCY ALLOCATION
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July 31, 1999 April 30, 1999 July 31, 1998
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Australia 24.3% 25.8% 25.5%
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Canada 29.2% 29.6% 30.9%
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New Zealand 8.1% 11.0% 9.3%
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United Kingdom 32.1% 32.8% 34.1%
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United States* 2.2% 0.8% 0.2%
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Asia 4.1% -- --
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Total Fund 100.0% 100.0% 100.0%
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* Includes Asian Yankee bond investments.
5
<PAGE>
Portfolio Composition (continued) The First Commonwealth Fund, Inc.
================================================================================
MATURITY COMPOSITION
On July 31, 1999, the average maturity of the Fund's assets was 9.1 years,
increased from 8.5 years three months ago, to lock in the high yields available
from Asian bond investments. The table below shows the maturity composition of
the Fund's investments:
TABLE 3: THE FIRST COMMONWEALTH FUND, INC. -- MATURITY ANALYSIS -- JULY 31, 1999
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Less than 1 year 1-5 years 5-10 years Over 10 years
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Australia 5.2% 43.3% 45.5% 6.0%
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Canada 9.3% 40.7% 11.1% 38.9%
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New Zealand 11.2% 55.3% 33.5% --
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United Kingdom 4.0% 25.4% 31.9% 38.7%
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United States 100.0% -- -- --
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Asia 3.1% 43.7% 31.4% 21.8%
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Total Fund 6.3% 36.6% 28.9% 28.2%
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SECTORAL COMPOSITION
The table below shows the sectoral composition of the Fund's total
investments:
TABLE 4: THE FIRST COMMONWEALTH FUND, INC. --
SECTORAL COMPOSITION -- JULY 31, 1999
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State/
Sovereign Province Corporate Cash or
Govt. Bonds Bonds Eurobonds Bonds Equivalent
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Australia 9.7% 7.3% 3.2% 3.1% 1.0%
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Canada 18.8% 3.3% 3.6% 1.2% 2.3%
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New Zealand 0.6% -- 1.1% 1.6% 4.8%
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United Kingdom 18.1% -- 12.7% -- 1.3%
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United States -- -- -- -- 0.1%
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Asia 1.9% -- -- 1.8% 2.5%
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Total Fund 49.1% 10.6% 20.6% 7.7% 12.0%
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6
<PAGE>
Portfolio Composition (concluded) The First Commonwealth Fund, Inc.
================================================================================
QUALITY OF INVESTMENTS
On July 31, 1999, 90.3% of the Fund's assets were invested in securities
where either the issue or the issuer was rated at least "AA" by Standard &
Poor's Ratings Group or "Aa" by Moody's Investors Service, Inc. or, if unrated,
were judged to be of equivalent quality by the Investment Manager.
TABLE 5: THE FIRST COMMONWEALTH FUND, INC. -- ASSET QUALITY -- JULY 31, 1999
- --------------------------------------------------------------------------------
AAA/Aaa AA/Aa A BBB/Baa BB/Ba*
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Australia 75.2% 24.8% -- -- --
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Canada 1.8% 91.1% 7.1% -- --
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New Zealand 22.4% 60.6% 17.0% -- --
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United Kingdom 58.6% 33.8% 7.6% -- --
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Asia 3.1% -- -- 57.2% 39.7%
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Total Portfolio 41.9% 48.4% 5.5% 2.5% 1.7%
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* Below Investment Grade.
7
<PAGE>
Market Review and Outlook The First Commonwealth Fund, Inc.
================================================================================
Australia
Improving expectations for global economic expansion have led to an
increase in interest rates by the US Federal Reserve and a correction in
Australian bond markets over the past few months. Australian ten-year government
bond yields have risen from 5.67% to 6.24% over the last quarter.
The strength of the US dollar following the US increase in interest rates
caused the Australian dollar to appear weak. It depreciated 1.4% over the
quarter, to close at 65.20 cents.
The Investment Manager reduced the Fund's exposure to Australia from 25.8%
to 24.3% over the period, in favor of more attractive longer-term opportunities
in Asian bond markets.
Canada
Expectations of a monetary policy tightening led Canadian bond yields to
rise over the quarter, from 5.16% to 5.72%.
The Canadian dollar depreciated 2.8% against the US dollar over the
reporting period, to close at 66.61 cents.
The Fund's exposure to the Canadian markets declined slightly, from 29.6%
to 29.2%.
New Zealand
The New Zealand bond market corrected to a greater extent than the
Australian bond market, as there are fears that the New Zealand central bank
will raise interest rates. Ten-year government bond yields increased from 5.77%
to 6.63% over the period.
The New Zealand dollar depreciated 5.2% against the US dollar, to close
the quarter at 52.96 cents.
The Fund's exposure to the New Zealand markets was reduced, from 11.0% to
8.1% in favor of more attractive longer-term opportunities in Asian bond
markets.
United Kingdom
More positive economic growth indications led UK bond yields to increase
over the quarter. Ten-year government bond yields rose from 4.61% to 5.34%.
The Pound was the strongest of the Commonwealth currencies, appreciating
0.5% against the US dollar over the quarter, to close at $1.62.
The Fund's exposure to the UK markets declined slightly, from 32.8% to
32.1%.
8
<PAGE>
Market Review and Outlook (concluded) The First Commonwealth Fund, Inc.
================================================================================
Asia
Domestic and Yankee (US$ denominated) bonds
Large balance of payments surpluses, a strong build-up in foreign exchange
reserves, declining inflation, appreciating currencies and falling interest
rates point to most Asian economies having now emerged from recession.
Easier monetary and fiscal policy settings, along with more competitive
exchange rates, have allowed a reliquification of the region following the
credit crunch of a year ago.
The recovery in Asian economic activity in 1999 has been far more
impressive than was expected only a few months ago. A resurgent Korean economy
appears to have helped pull much of Asia out of recession. Growth forecasts for
most economies within the region continue to be raised.
These conditions present a generally strong fundamental outlook for Asian
domestic and Yankee bonds, but higher US interest rates have led to increased
rates in the Asian region over the past quarter.
Asian bond investment commenced over the quarter. On July 31, 1999, the
Fund held a 6.2% exposure to the region, with 2.1% held in Asian Yankee (US$
denominated) bonds.
Currencies
Asian currencies have generally depreciated against the strong US dollar
since investment commenced. On July 31, 1999, the Fund's Asian currency exposure
was 4.1%.
9
<PAGE>
Summary of Key Rates The First Commonwealth Fund, Inc.
================================================================================
The following table summarizes the movements of key interest rates and
currencies over the last three and twelve month periods.
- --------------------------------------------------------------------------------
July 31, 1999 April 30, 1999 July 31, 1998
- --------------------------------------------------------------------------------
Australia
90 day bank bills 4.91% 4.81% 5.15%
10 year bonds 6.24% 5.67% 5.57%
Australian Dollar $ 0.65 $ 0.66 $ 0.61
Canada
90 day bank bills 4.73% 4.52% 4.97%
10 year bonds 5.72% 5.16% 5.46%
Canadian Dollar $ 0.66 $ 0.69 $ 0.66
New Zealand
90 day bank bills 4.75% 4.64% 7.12%
10 year bonds 6.63% 5.77% 6.14%
NZ Dollar $ 0.53 $ 0.56 $ 0.51
United Kingdom
90 day bank bills 4.81% 4.97% 7.40%
10 year bonds 5.34% 4.61% 5.77%
British Pound $ 1.62 $ 1.61 $ 1.63
South Korea
90 day bank bills 7.52% 6.02% 12.39%
5 year bonds 8.81% 7.12% 11.75%
South Korean Won* W 1204 W 1158 W 1230
Thailand
90 day bank bills 3.25% 3.63% 12.75%
10 year bonds 7.74% 7.55% N/A
Thai Baht* B 37 B 37 B 40
Philippines
90 day bank bills 9.56% 10.88% 16.00%
10 year bonds 15.00% 14.94% 20.15%
Philippines Peso* P 39 P 38 P 42
Hong Kong
90 day bank bills 6.25% 4.94% 8.75%
5 year bonds 6.88% 6.52% 9.78%
Hong Kong Dollar* HK$7.8 HK$7.8 HK$7.7
US$ Yankee Bonds**
South Korea 8.41% 7.43% 9.82%
Thailand 8.37% 7.09% 9.95%
Philippines 9.29% 8.57% 9.47%
* These currencies are quoted Asian currency per US dollar. The Australian,
New Zealand and Canadian dollars and the British pound are quoted US
dollars per currency.
** Ten-year sovereign issues.
Yield comparisons are direct and do not take into account fluctuations in
currency exchange rates.
EquitiLink International Management Limited
September 1999
10
<PAGE>
Portfolio of Investments (unaudited)
July 31, 1999 The First Commonwealth Fund, Inc.
================================================================================
- --------------------------------------------------------
Principal Amount
Local Currency Value
(000) Description (US$)
- --------------------------------------------------------
LONG-TERM INVESTMENTS -- 88.9%
AUSTRALIA -- 23.5%
Government and Semi-Government
Bonds -- 17.1%
Commonwealth of Australia -- 9.8%
Commonwealth of Australia,
A$ 1,000 13.00%, 7/15/00 ........... 701,017
1,500 12.00%, 11/15/01 .......... 1,115,517
3,000 10.00%, 10/15/02 .......... 2,203,923
2,000 9.50%, 8/15/03 ............ 1,477,549
3,000 10.00%, 2/15/06 ........... 2,364,022
2,600 10.00%, 10/15/07 .......... 2,100,811
2,700 8.75%, 8/15/08 ............ 2,059,175
3,000 7.50%, 9/15/09 ............ 2,130,925
------------
14,152,939
------------
New South Wales -- 1.6%
New South Wales Treasury
Corporation,
2,000 8.00%, 12/01/01 ........... 1,370,243
1,500 7.00%, 4/01/04 ............ 1,009,394
------------
2,379,637
------------
Queensland -- 3.3%
Queensland Treasury
Corporation,
3,000 8.00%, 8/14/01 ............ 2,049,497
2,000 8.00%, 5/14/03 (Global) ... 1,394,367
1,000 8.00%, 9/14/07 ............ 710,093
1,000 8.00%, 9/14/07 (Global) ... 711,788
------------
4,865,745
------------
South Australia -- 0.5%
South Australia Finance
Authority,
1,000 12.50%, 10/15/00 .......... 706,612
------------
Victoria -- 1.4%
Treasury Corporation of
Victoria,
2,500 10.25%, 11/15/06 .......... 1,984,949
------------
Western Australia -- 0.5%
Western Australia Treasury
Corporation,
1,000 10.00%, 7/15/05 ........... 769,301
------------
Total Australian government
and semi-government bonds
(cost US$26,513,441) ...... 24,859,183
------------
Corporate Bonds -- 3.1%
Services -- 3.1%
First Australian National
Mortgage Acceptance
Corporation,
Series 22,
1,911 11.40%, 12/15/01 .......... 1,365,797
Telstra Corp.,
2,000 11.50%, 10/15/02 .......... 1,501,817
2,000 12.00%, 5/15/06 ........... 1,668,468
------------
Total Australian corporate
bonds
(cost US$4,901,516) ....... 4,536,082
------------
Eurobonds -- 3.3%
Financial Services -- 1.2%
Export Finance & Insurance
Corporation,
1,750 11.00%, 12/29/04 .......... 1,375,932
ING Mercantile Mutual
Bank Ltd.,
500 7.125%, 3/13/02 ........... 334,020
------------
1,709,952
------------
Semi-Government -- 0.7%
South Australia Finance
Authority,
500 12.50%, 5/08/01 ........... 362,675
Treasury Corporation of
Victoria,
1,000 9.00%, 6/27/05 ............ 736,238
------------
1,098,913
------------
Services -- 0.3%
State Electricity Commission
of Victoria,
535 10.50%, 5/27/03 ........... 400,236
------------
Supranational -- 1.1%
Eurofima,
2,000 9.875%, 1/17/07 ........... 1,552,151
------------
Total Australian eurobonds
(cost US$4,999,977) ....... 4,761,252
------------
Total Australian long-term
investments
(cost US$36,414,934) ...... 34,156,517
------------
11
<PAGE>
Portfolio of Investments (continued)(unaudited)
July 31, 1999 The First Commonwealth Fund, Inc.
================================================================================
- --------------------------------------------------------
Principal Amount
Local Currency Value
(000) Description (US$)
- --------------------------------------------------------
CANADA -- 27.2%
Government, Provincial and
Municipal Bonds -- 22.3%
Canada -- 19.0%
Canadian Government,
C$ 5,500 7.50%, 3/01/01 ............ 3,771,340
6,000 8.50%, 4/01/02 ............ 4,276,619
5,000 7.25%, 6/01/03 ............ 3,509,492
2,500 7.25%, 6/01/07 ............ 1,821,459
2,000 5.50%, 6/01/09 ............ 1,310,498
8,000 10.25%, 3/15/14 ........... 7,655,582
4,000 8.00%, 6/1/23 ............. 3,392,486
2,000 9.00%, 6/01/25 ............ 1,877,391
------------
27,614,867
------------
Alberta -- 0.6%
City of Edmonton,
1,000 9.625%, 2/13/12 ........... 850,706
------------
British Columbia -- 1.1%
Province of British Columbia,
1,000 10.15%, 8/29/01 ........... 722,842
1,000 9.50%, 1/09/12 ............ 849,660
------------
1,572,502
------------
Ontario -- 1.6%
Province of Ontario,
1,000 8.75%, 4/22/03 ............ 728,291
2,000 7.50%, 2/07/24 ............ 1,597,655
------------
2,325,946
------------
Total Canadian government,
provincial and municipal
bonds
(cost US$34,427,614) ...... 32,364,021
------------
Corporate Bonds -- 1.2%
Diversified Industrials -- 0.7%
Bell Telephone Company of
Canada,
500 10.50%, 7/15/09 ........... 372,742
Imperial Oil Ltd.,
1,000 9.875%, 12/15/99 .......... 676,925
------------
1,049,667
------------
Financial Services -- 0.5%
Bank of Nova Scotia,
1,000 10.35%, 7/19/01 ........... 718,625
------------
Total Canadian corporate
bonds
(cost US$2,184,922) ....... 1,768,292
------------
Eurobonds -- 3.7%
Diversified Industrials -- 0.2%
Procter & Gamble Company,
500 10.875%, 8/15/01 .......... 362,044
------------
Financial Services -- 1.0%
Credit Local de France,
1,000 6.75%, 3/21/06 ............ 688,982
Rabobank Nederland N.V.,
1,000 9.00%, 12/22/00 ........... 692,912
------------
1,381,894
------------
Natural Resources -- 1.3%
Ontario Hydro,
500 8.50%, 5/26/25 ............ 422,186
Quebec Hydro,
1,500 7.00%, 6/01/04 ............ 1,043,865
Tokyo Electric Power Company,
500 10.50%, 6/14/01 ........... 358,247
------------
1,824,298
------------
Provincial and Municipal -- 0.8%
Metropolitan Municipality of
Toronto,
750 9.625%, 5/14/02 ........... 545,264
Ville de Montreal,
1,000 6.375%, 2/15/01 ........... 670,064
------------
1,215,328
------------
Supranational -- 0.4%
Canada (Cayman),
750 7.25%, 6/01/08 ............ 535,522
------------
Total Canadian eurobonds
(cost US$5,769,048) ....... 5,319,086
------------
Total Canadian long-term
investments
(cost US$42,381,584) ...... 39,451,399
------------
12
<PAGE>
Portfolio of Investments (continued)(unaudited)
July 31, 1999 The First Commonwealth Fund, Inc.
================================================================================
- --------------------------------------------------------
Principal Amount
Local Currency Value
(000) Description (US$)
- --------------------------------------------------------
NEW ZEALAND -- 3.3%
Corporate Bonds -- 2.2%
Diversified Industrials -- 1.1%
Electricity Corporation of
New Zealand Ltd.,
NZ$ 1,750 10.00%, 10/15/01 .......... 1,004,318
1,000 8.00%, 2/15/03 ............ 554,703
------------
1,559,021
------------
Financial Services -- 0.2%
Transpower Finance Ltd.,
500 8.00%, 6/15/05 ............ 273,877
------------
Services -- 0.9%
Housing New Zealand,
1,500 8.00%, 11/15/06 ........... 819,408
TCNZ Finance Limited,
1,000 9.25%, 7/01/02 ............ 563,388
------------
1,382,796
------------
Total New Zealand corporate
bonds
(cost US$3,490,252) ....... 3,215,694
------------
Eurobonds -- 1.1%
Financial Services -- 0.4%
Primary Industry Bank of
Australia Limited,
1,000 8.25%, 3/27/00 ............ 539,186
------------
Global -- 0.3%
Canadian Government,
1,000 6.625%, 10/03/07 .......... 515,407
------------
Supranational -- 0.4%
International Bank for
Reconstruction and
Development,
1,000 7.00%, 9/18/00 ............ 537,809
------------
Total New Zealand eurobonds
(cost US$1,777,466) ....... 1,592,402
------------
Total New Zealand
long-term investments
(cost US$5,267,718) ....... 4,808,096
------------
PHILIPPINES -- 0.7%
Government Bonds -- 0.7%
Philippine Government,
PHP 30,000 11.875%, 6/10/01 .......... 785,448
7,000 16.50%, 2/25/09 ........... 195,972
------------
Total Philippine government
bonds
(cost US$999,077) ......... 981,420
------------
THAILAND -- 0.9%
Government Bonds -- 0.9%
Thailand Government,
THB 24,000 6.125%, 4/12/02 ........... 672,215
25,000 8.00%, 12/08/06 ........... 704,993
------------
Total Thailand government
bonds
(cost US$1,391,152) ....... 1,377,208
------------
UNITED KINGDOM -- 31.1%
Government Bonds -- 18.2%
United Kingdom Treasury,
(pound) 250 8.00%, 12/07/00 ........... 418,188
1,000 7.00%, 11/06/01 ........... 1,660,932
2,000 8.00%, 6/10/03 ............ 3,481,174
1,500 6.75%, 11/26/04 ........... 2,540,939
2,000 7.50%, 12/07/06 ........... 3,584,142
2,750 8.00%, 12/07/15 ........... 5,854,709
2,450 8.00%, 6/07/21 ............ 5,607,908
1,700 6.00%, 12/07/28 ........... 3,317,347
------------
Total United Kingdom
government bonds
(cost US$25,545,307) ...... 26,465,339
------------
Eurobonds -- 12.9%
Diversified Industrials -- 1.8%
British Gas PLC,
1,400 8.875%, 7/08/08 ........... 2,588,910
------------
Financial Services -- 7.0%
Abbey National Treasury
Services PLC,
1,250 8.00%, 4/02/03 ............ 2,103,223
Barclays Bank PLC,
1,000 9.875%, 5/29/49 ........... 1,894,068
Halifax Building Society,
1,500 11.00%, 1/17/14 ........... 3,422,242
Lloyds Bank PLC,
500 7.375%, 3/11/04 ........... 827,309
Prudential Finance B.V.,
1,000 9.375%, 6/04/07 ........... 1,881,278
------------
10,128,120
------------
Natural Resources -- 1.2%
Thames Water Utilities
Finance PLC,
1,000 10.50%, 11/21/01 .......... 1,749,168
------------
13
<PAGE>
Portfolio of Investments (concluded)(unaudited)
July 31, 1999 The First Commonwealth Fund, Inc.
================================================================================
- --------------------------------------------------------
Principal Amount
Local Currency Value
(000) Description (US$)
- --------------------------------------------------------
Supranational -- 2.9%
Republic of Finland,
(pound)1,000 8.00%, 4/07/03 ............ 1,694,834
1,250 10.125%, 6/22/08 .......... 2,531,914
------------
4,226,748
------------
Total United Kingdom
eurobonds
(cost US$16,314,720) ...... 18,692,946
------------
Total United Kingdom
long-term investments
(cost US$41,860,027) ...... 45,158,285
------------
UNITED STATES -- 2.2%
Yankee Obligations -- 2.2%
Diversified Industrials -- 1.9%
Petroliam Nasional Berhad,
US$ 1,000 7.125%, 10/18/06 .......... 878,500
Reliance Industries Ltd.,
1,000 10.25%, 1/15/97 ........... 784,817
Samsung Electronics America,
1,000 9.75%, 5/01/03 ............ 1,015,208
------------
2,678,525
------------
Thailand Government -- 0.3%
Kingdom of Thailand,
500 7.07%, 9/30/13 ............ 446,825
------------
Total United States long-term
investments
(cost US$3,253,350) ....... 3,125,350
------------
Total long-term investments
(cost US$131,567,842) ..... 129,058,275
------------
SHORT-TERM INVESTMENTS -- 4.6%
Australia -- 0.8%
Banque Nationale de Paris
Fixed Deposit,
A$ 1,767 4.35%, 8/03/99
(cost US$1,151,924) ....... 1,151,924
------------
Canada -- 2.3%
State Street Bank and Trust
Company Time Deposit,
C$ 4,942 4.375%, 8/05/99
(cost US$3,266,964) ....... 3,292,208
------------
Singapore -- 0.1%
Singapore Treasury Bills,
SG$ 300 0%, 9/30/99
(cost US$175,953) ......... 177,893
------------
United Kingdom -- 1.3%
State Street Bank and Trust
Company Fixed Deposit,
(pound)1,160 5.0625%, 8/05/99
(cost US$1,842,177) ....... 1,878,375
------------
United States -- 0.1%
US$ 132 Repurchase Agreement, State
Street Bank and Trust
Company, 4.90% dated
7/30/99, due 08/02/99 in
the amount of $132,000
(cost $132,000;
collateralized by $110,000
U.S. Treasury Bond, 8.125%
due 08/15/19; value
$139,475) ................. 132,000
------------
Total short-term investments
(cost US$6,569,018) ....... 6,632,400
------------
Total Investments -- 93.5%
(cost US$138,136,860) ..... 135,690,675
Unrealized depreciation
on forward foreign
currency exchange
contracts -- (0.1%) (a) ... (92,193)
Other assets in excess of
liabilities -- 6.6% ....... 9,508,949
------------
Total Net Assets -- 100.0% .. $145,107,431
============
(a) Forward foreign currency exchange contracts entered into as of July 31,
1999 were as follows:
- --------------------------------------------------------------------------------
Purchases
Net Unrealized
Contracts to Receive In exchange For Settlement Date Value Depreciation
- --------------------------------------------------------------------------------
KRW 3,501,000,000 $3,000,000 09/15/99 $2,907,807 $(92,193)
14
<PAGE>
Directors Officers
================================================================================
Brian M. Sherman, Chairman Laurence S. Freedman, President
Sir Roden Cutler Brian M. Sherman, Vice President
David Lindsay Elsum David Manor, Treasurer
Rt. Hon. Malcolm Fraser Roy M. Randall, Secretary
Laurence S. Freedman Ouma Sananikone-Fletcher,
Michael Gleeson-White Assistant Vice President and
Michael R. Horsburgh Chief Investment Officer
David Manor Barry G. Sechos, Assistant Treasurer
William J. Potter Allan S. Mostoff, Assistant Secretary
Peter D. Sacks Margaret A. Bancroft, Assistant Secretary
Anton E. Schrafl Sander M. Bieber, Assistant Secretary
E. Duff Scott
John T. Sheehy
Warren C. Smith
Notice is hereby given in accordance with Section 23(c) of the Investment
Company Act of 1940 that the Fund may purchase, from time to time, shares of its
common stock in the open market.
[RECYCLE LOGO] Printed on post-consumer recycled paper
15
<PAGE>
INVESTMENT MANAGER
EquitiLink International Management Limited
P.O. Box 578, 17 Bond Street
St. Helier, Jersey JE45XB
Channel Islands
INVESTMENT ADVISER
EquitiLink Australia Limited
Level 3, 190 George Street
Sydney, NSW 2000, Australia
CONSULTANT
CIBC Wood Gundy Securities Inc.
BCE Place, P.O. Box 500
Toronto, Ontario, MSJ 258
Canada
ADMINISTRATOR
Princeton Administrators, L.P.
Box 9095
Princeton, New Jersey 08543-9095
CUSTODIAN AND TRANSFER AGENT
State Street Bank and Trust Company
1 Heritage Drive
Boston, Massachusetts 02171
AUCTION AGENT
The Chase Manhattan Bank
450 West 33rd St.
New York, New York 10001
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, New York 10036
LEGAL COUNSEL
Dechert Price & Rhoads
1775 Eye Street, N.W.
Washington, DC 20006
Stikeman, Elliott
Level 40 Chifley Tower
2 Chifley Square
Sydney, NSW 2000, Australia
The shares of The First Commonwealth Fund, Inc. are traded on the New York Stock
Exchange under the symbol "FCO." Information about the Fund's net asset value
and market price is published weekly in Barron's and in the Monday edition of
The Wall Street Journal.
For a weekly update of the Fund's net asset value and share price, or to receive
more information on the Fund, call toll-free: 1-800-543-6217
This report, including the financial information herein, is transmitted to the
shareholders of The First Commonwealth Fund, Inc. for their general information
only. It does not have regard to the specific investment objectives, financial
situation and the particular needs of any specific person. Past performance is
no guarantee of future returns.
The First Commonwealth Fund, Inc.
Box 9095
Princeton, NJ 08543-9095
(609) 282-4600
