MERRILL LYNCH
LATIN AMERICA
FUND, INC.
[GRAPHIC OMITTED]
STRATEGIC
Performance
Quarterly Report
August 31, 1999
<PAGE>
MERRILL LYNCH LATIN AMERICA FUND, INC.
Asset Allocation As a Percentage* of Net Assets as of August 31, 1999
A map illustrating the following percentages:
MEXICO 40.8%
PANAMA 0.9%
VENEZUELA 2.2%
COLOMBIA 3.0%
PERU 2.6%
BRAZIL 40.8%
ARGENTINA 3.5%
CHILE 4.8%
* Total may not equal 100%.
<PAGE>
Merrill Lynch Latin America Fund, Inc., August 31, 1999
DEAR SHAREHOLDER
During the three-month period ended August 31, 1999, total returns for Merrill
Lynch Latin America Fund, Inc.'s Class A, Class B, Class C and Class D Shares
were - 5.33%, - 5.63%, - 5.63% and - 5.43%, respectively. (Investment results
shown do not reflect sales charges and would be lower if sales charges were
included. Complete performance information can be found on pages 4 and 5 of this
report to shareholders.) The unmanaged Morgan Stanley Capital International
(MSCI) Latin America Free Index declined 6.21% and the unmanaged J.P. Morgan
Latin Brady Bond Index declined 0.81% for the same three-month period.
(References to securities markets of all countries in this letter to
shareholders correspond to those countries' market weightings in the MSCI Latin
America Free Index.) The Fund's outperformance is mainly attributable to stock
selection in both Brazil and Mexico compared to their relative markets.
Detrimental to relative performance was the Fund's overweight position in
Colombia, the worst performer in the region, down 33.02% for the August quarter.
Investment Overview
Following the scorching rallies in previous quarters, the Latin American markets
cooled during the three-month period ended August 31, 1999, with the MSCI Latin
America Free Index declining 6.21%. We believe investor fund flows to Latin
American equity and debt investments weakened, based on concerns about higher US
interest rates and a heightened aversion to countries where risks, especially
those related to debt funding, are deemed greater. Thus, the Argentine and
Brazilian markets declined 4.90% and 9.73%, respectively. Both Argentina and
Brazil have substantial and rising financing requirements.
As the end of the year gets closer, it appears to us that investors' avoidance
of exposure to developing countries before the Year 2000 has been detrimental to
the flow of liquidity to emerging markets. We believe the best preparation for
possible Year 2000 problems is to remain invested in only the best-managed
companies that have the most tradable stocks. We adhere to these selection
criteria regardless of any Year 2000 issues. Gartner Group, an independent
consultant that categorizes countries for potential failures in mission critical
systems, has placed Chile in the same category as the United States for
least-expected failures. Argentina, Brazil, Colombia, Mexico and Peru are ranked
in the next category along with France, Germany and Japan.
We believe Latin America continues to face a challenging period ahead. The
countries are still dependent on external capital and remain vulnerable to
tighter global liquidity conditions. The region faces considerable political
uncertainty in the next 18 months because of the presidential elections in
Mexico, Chile and Argentina. However, we remain positive in the long-term
potential of the Fund's investments. The lack of investor interest in public
equities and fixed-income instruments in the region has created very attractive
valuations. Furthermore, as was the case with the Brazilian devaluation,
investors seem to be focusing extensively on short-term risks.
We believe recent developments have set the stage for stronger market
performance in the coming months. Among these are small, incremental measures
that over time may reduce expenditures and strengthen revenue collection. These
include the passage of a fiscal administration law in Argentina and the start of
social security reforms in Brazil. In addition, direct foreign investments,
which are those of a longer term and strategic nature, have been growing in the
region and have even accelerated into Brazil, despite its currency crisis and
recession. We are optimistic that these positive fundamental changes will be
reflected in the stronger performance of Latin America's capital markets.
While the trend toward global growth recovery has put upward pressure on US
interest rates, its support to commodity prices has enabled natural resource
stocks to move independently and appreciate. For example, Brazilian paper and
pulp producer, Votorantim Celulose e Papel SA (VCP), whose stock has remained
strong even through the normally slow summer months, has contributed positively
to the Fund's performance during the August quarter. VCP has benefited from the
15% increase in prices since the beginning of the year. Current low inventories
combined with higher operating rates have led to announcements of further price
increases in the fall. Despite the improving fundamentals, VCP trades at a
discount compared to US companies. We expect this discount to narrow as the
perception of greater Brazilian risk dissipates.
Ultimately, sustained commodity price recovery will support the recovery of the
Brazilian economy. One of our favorite stocks in Brazil is Companhia Brasileira
de Distribuicao Grupo Pao de Acucar (CBD), the dominant supermarket and
hypermarket operator in Brazil, whose sales have been growing despite the
country's recession. The recent purchase by the French retailer, Casino
Guichard-Perrachon SA, of a stake in CBD, highlights the long-term attraction of
the consumer sector in Brazil and the solid position CBD holds within the
industry. Furthermore, this acquisition injects cash into the company, enabling
it to continue to grow through store openings and acquisitions, and to halve its
debt and dramatically lower interest expense. This stock is another one of the
stronger contributors to the Fund's performance during the August quarter.
In contrast to other markets in the region, Mexico has enjoyed a continual flow
of positive news on the strength of its economic recovery. We favor Mexico's
media sector and have an important exposure to it (8.4% of net assets) through
our holdings in Grupo Televisa, SA and TV Azteca, SA de CV. We believe that the
year 2000 will be a strong one for advertising spending related to Presidential
campaigning, debates and other activities, and Olympic events whose TV
commercial slots command a premium from sponsors. The absence of such major
televised events in 1999 makes good year-to-year comparisons relatively easy to
attain. Furthermore, Televisa's management is determined to improve pricing, so
both companies are likely to benefit. We favor Televisa in particular because of
its ongoing restructuring, which we expect to unlock value in some of its other
media divisions: radio, music and publishing.
In Conclusion
During the last five years, emerging markets have performed poorly (declining
30%) while the US market surged almost 200%. This comparison may lead investors
to question the premise that developing country investments would result in
returns above those that are available in mature markets.
We believe that the premise still holds, and for several reasons is even more
compelling at this time. First, expectations are lower. This is being reflected
in valuations -- the relationship of security prices to earnings or assets --
which are more attractive. Second, investors are presently extremely skeptical
and, for a good contrarian, this presents an opportunity to take the opposite
view. Third, the countries we invest in have used the crises to bolster reform
support. An example is the reform impetus in Brazil after its devaluation last
winter. Finally, as crises have occurred, company leaders have restructured
their operations and finances to improve efficiency and reduce their costs. As a
result, these companies may emerge from the crises even stronger than before.
We thank you for your ongoing interest in Merrill Lynch Latin America Fund,
Inc., and we look forward to reviewing our strategy with you in our next report
to shareholders.
Sincerely,
/s/ Terry K. Glenn
Terry K. Glenn
President
/s/ Grace Pineda
Grace Pineda
Senior Vice President and Portfolio Manager
September 29, 1999
2 & 3
<PAGE>
Merrill Lynch Latin America Fund, Inc., August 31, 1999
PERFORMANCE DATA
About Fund Performance
Investors are able to purchase shares of the Fund through the Merrill
Lynch Select Pricing(SM) System, which offers four pricing alternatives:
o Class A Shares incur a maximum initial sales charge (front-end load) of
5.25% and bear no ongoing distribution or account maintenance fees. Class
A Shares are available only to eligible investors, as detailed in the
Fund's prospectus. If you were a Class A shareholder prior to October 21,
1994, your Class A Shares were redesignated to Class D Shares on October
21, 1994. However, in the case of certain eligible investors, the shares
were simultaneously exchanged for Class A Shares.
o Class B Shares are subject to a maximum contingent deferred sales charge
of 4% if redeemed during the first year, decreasing 1% each year
thereafter to 0% after the fourth year. In addition, Class B Shares are
subject to a distribution fee of 0.75% and an account maintenance fee of
0.25%. These shares automatically convert to Class D Shares after
approximately 8 years. (There is no initial sales charge for automatic
share conversions.)
o Class C Shares are subject to a distribution fee of 0.75% and an account
maintenance fee of 0.25%. In addition, Class C Shares are subject to a 1%
contingent deferred sales charge if redeemed within one year of purchase.
o Class D Shares incur a maximum initial sales charge of 5.25% and an
account maintenance fee of 0.25% (but no distribution fee).
None of the past results shown should be considered a representation of
future performance. Figures shown in the "Recent Performance Results" and
"Average Annual Total Return" tables assume reinvestment of all dividends
and capital gains distributions at net asset value on the ex-dividend
date. Investment return and principal value of shares will fluctuate so
that shares, when redeemed, may be worth more or less than their original
cost. Dividends paid to each class of shares will vary because of the
different levels of account maintenance, distribution and transfer agency
fees applicable to each class, which are deducted from the income
available to be paid to shareholders.
Recent Performance Results*
<TABLE>
<CAPTION>
12 Month 3 Month Since Inception
As of August 31, 1999 Total Return Total Return Total Return
==========================================================================================================================
<S> <C> <C> <C>
ML Latin America Fund, Inc. Class A Shares +34.19% -5.33% -32.73%
- --------------------------------------------------------------------------------------------------------------------------
ML Latin America Fund, Inc. Class B Shares +32.77 -5.63 +19.97
- --------------------------------------------------------------------------------------------------------------------------
ML Latin America Fund, Inc. Class C Shares +32.67 -5.63 -36.10
- --------------------------------------------------------------------------------------------------------------------------
ML Latin America Fund, Inc. Class D Shares +33.69 -5.43 +27.65
==========================================================================================================================
</TABLE>
* Investment results shown do not reflect sales charges; results shown would
be lower if a sales charge was included. Total investment returns are
based on changes in net asset values for the periods shown, and assume
reinvestment of all dividends and capital gains distributions at net asset
value on the ex-dividend date. The Fund's since inception dates are from
10/21/94 for Class A & Class C Shares and from 9/27/91 for Class B & Class
D Shares.
Average Annual Total Return
% Return Without % Return With
Sales Charge Sales Charge**
================================================================================
Class A Shares*
================================================================================
Year Ended 6/30/99 -0.28% -5.51%
- --------------------------------------------------------------------------------
Inception (10/21/94) through 6/30/99 -5.86 -6.93
- --------------------------------------------------------------------------------
* Maximum sales charge is 5.25%.
** Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
================================================================================
Class B Shares*
================================================================================
Year Ended 6/30/99 -1.35% -5.19%
- --------------------------------------------------------------------------------
Five Years Ended 6/30/99 -2.48 -2.48
- --------------------------------------------------------------------------------
Inception (9/27/91) through 6/30/99 +3.90 +3.90
- --------------------------------------------------------------------------------
* Maximum contingent deferred sales charge is 4% and is reduced to 0% after
4 years.
** Assuming payment of applicable contingent deferred sales charge.
================================================================================
% Return % Return
Without CDSC With CDSC**
================================================================================
Class C Shares*
================================================================================
Year Ended 6/30/99 -1.31% -2.27%
- --------------------------------------------------------------------------------
Inception (10/21/94) through 6/30/99 -6.84 -6.84
- --------------------------------------------------------------------------------
* Maximum contingent deferred sales charge is 1% and is reduced to 0% after
1 year.
** Assuming payment of applicable contingent deferred sales charge.
================================================================================
% Return Without % Return With
Sales Charge Sales Charge**
================================================================================
Class D Shares*
================================================================================
Year Ended 6/30/99 -0.56% -5.78%
- --------------------------------------------------------------------------------
Five Years Ended 6/30/99 -1.70 -2.75
- --------------------------------------------------------------------------------
Inception (9/27/91) through 6/30/99 +4.72 +4.00
- --------------------------------------------------------------------------------
* Maximum sales charge is 5.25%.
** Assuming maximum sales charge.
4 & 5
<PAGE>
Merrill Lynch Latin America Fund, Inc., August 31, 1999
CONSOLIDATED SCHEDULE OF INVESTMENTS (in US dollars)
<TABLE>
<CAPTION>
Percent
Shares Held/ of Net
COUNTRY Industries Face Amount Long-Term Investments Cost Value Assets
====================================================================================================================================
<C> <C> <C> <S> <C> <C> <C>
Argentina Beverages 195,284 Quilmes Industrial SA (Quinsa) (ADR)* $ 2,156,698 $ 1,928,429 0.9%
----------------------------------------------------------------------------------------------------------------------
Merchandising 557,659 Grimoldi SA 'B' 3,188,753 741,790 0.4
----------------------------------------------------------------------------------------------------------------------
Real Estate 197,329 IRSA Inversiones y Representaciones SA 'B' 521,356 572,335 0.3
56,748 IRSA Inversiones y Representaciones SA (GDR)** 1,139,491 1,645,692 0.8
------------ ------------ ------
1,660,847 2,218,027 1.1
----------------------------------------------------------------------------------------------------------------------
Telecommunications 22,233 Telefonica de Argentina SA (ADR)* 681,725 661,432 0.3
525,000 Telefonica de Argentina SA 'B' 1,497,352 1,554,218 0.8
------------ ------------ ------
2,179,077 2,215,650 1.1
----------------------------------------------------------------------------------------------------------------------
Total Long-Term Investments in Argentina 9,185,375 7,103,896 3.5
====================================================================================================================================
Brazil Banking 95,899,592 Banco Bradesco SA (Preferred) 711,586 380,197 0.2
2,980,655 Banco Itau SA (Preferred) 1,764,001 1,383,820 0.7
14,800,000 Uniao de Bancos Brasileiros SA (Unibanco)
(Units)(a) 1,182,280 501,826 0.2
------------ ------------ ------
3,657,867 2,265,843 1.1
----------------------------------------------------------------------------------------------------------------------
Beverages & Tobacco 8,137,125 Companhia Cervejaria Brahma (Preferred) 5,420,757 4,316,879 2.1
----------------------------------------------------------------------------------------------------------------------
Diversified 326,867 Souza Cruz SA 2,377,110 1,841,505 0.9
----------------------------------------------------------------------------------------------------------------------
Energy Sources 177,312 Companhia Paranaense de Energia--Copel (ADR)* 2,961,939 1,219,020 0.6
19,125,244 Petroleo Brasileiro SA--Petrobras (Preferred) 4,582,102 2,564,000 1.3
------------ ------------ ------
7,544,041 3,783,020 1.9
----------------------------------------------------------------------------------------------------------------------
Foreign Government Republic of Brazil:
Obligations US$ 1,614,000 10.125% due 5/15/2027 1,398,128 1,143,923 0.6
US$ 9,945,925 'C', 6.78% due 4/15/2014 (c)(d) 5,838,069 5,955,123 2.9
------------ ------------ ------
7,236,197 7,099,046 3.5
----------------------------------------------------------------------------------------------------------------------
Forest Products 142,396,720 Votorantim Celulose e Papel SA (Preferred) 4,099,989 4,456,861 2.2
----------------------------------------------------------------------------------------------------------------------
Machinery & 9,058,000 Weg SA (Preferred) 5,426,464 3,780,073 1.8
Engineering
----------------------------------------------------------------------------------------------------------------------
Metals & Steel 265,058,200 Companhia Siderurgica de Tubarao (Preferred) 4,141,518 2,350,543 1.2
949 Companhia Siderurgica Nacional 23 23 0.0
BRL 1,099,391 Companhia Vale do Rio Doce, 0% due
12/31/2049(b) 0 0 0.0
350,292 Companhia Vale do Rio Doce 'A' (Preferred) 6,204,870 7,784,267 3.8
------------ ------------ ------
10,346,411 10,134,833 5.0
----------------------------------------------------------------------------------------------------------------------
Retail 347,851 Companhia Brasileira de Distribuicao Grupo
Pao de Acucar (ADR)* 5,194,484 7,174,427 3.5
----------------------------------------------------------------------------------------------------------------------
Telecommunications 152,005,637 Embratel Participacoes SA 2,372,234 831,789 0.4
149,205,637 Tele Celular Sul Participacoes SA 294,154 147,104 0.1
149,205,637 Tele Centro Oeste Celular Participacoes SA 126,486 139,321 0.1
178,700 Tele Centro Oeste Celular Participacoes
SA (ADR)* 604,435 603,112 0.3
149,205,637 Tele Centro Sul Participacoes SA 1,767,868 712,171 0.3
149,205,637 Tele Leste Celular Participacoes SA 91,188 67,714 0.0
15,200 Tele Leste Celular Participacoes SA (ADR)* 421,950 391,400 0.2
149,205,637 Tele Nordeste Celular Participacoes SA 132,369 114,414 0.1
23,800 Tele Nordeste Celular Participacoes SA (ADR)* 421,629 592,025 0.3
149,205,637 Tele Norte Celular Participacoes SA 73,539 60,710 0.0
33,400 Tele Norte Celular Participacoes SA (ADR)* 620,722 716,012 0.4
314,091,637 Tele Norte Leste Participacoes SA 3,557,202 2,754,241 1.3
463,546 Tele Norte Leste Participacoes SA (ADR)* 6,861,540 7,416,736 3.6
149,205,637 Tele Sudeste Celular Participacoes SA 588,309 362,701 0.2
92,560,000 Telecomunicacoes Brasileiras SA--Telebras 5,109,650 3,813,935 1.9
241,765,637 Telecomunicacoes Brasileiras SA--Telebras 44,136 6,306 0.0
47,995 Telecomunicacoes Brasileiras SA--Telebras
(ADR)* 3,000 2,250 0.0
47,995 Telecomunicacoes Brasileiras SA--Telebras
(Preferred Block) (ADR)* 3,790,525 3,560,629 1.7
9,845,775 Telecomunicacoes de Minas Gerais--Telemig 837,551 143,809 0.1
735,140 Telecomunicacoes de Minas Gerais--Telemig 'B'
(Preferred) 51,070 17,257 0.0
149,205,637 Telemig Celular Participacoes SA 294,154 151,774 0.1
3,200 Telemig Celular Participacoes SA (ADR)* 83,992 96,000 0.1
9,845,775 Telemig Celular SA 343,357 46,738 0.0
735,140 Telemig Celular SA 'C' (Preferred) 38,455 5,867 0.0
149,205,637 Telesp Celular Participacoes SA 1,176,618 669,363 0.3
152,005,637 Telesp Participacoes SA 3,997,614 1,624,724 0.8
------------ ------------ ------
33,703,747 25,048,102 12.3
----------------------------------------------------------------------------------------------------------------------
Textiles & Apparel 20,831,686 Companhia de Tecidos Norte de Minas--
Coteminas (Preferred) 8,433,359 1,249,792 0.6
21,491,685 Empresa Nasional de Comercio SA 6,971 17,601 0.0
------------ ------------ ------
8,440,330 1,267,393 0.6
----------------------------------------------------------------------------------------------------------------------
Utilities 1,122,012 Centrais Eletricas de Santa Catarina SA--
CELESC 'B' (Preferred) 591,246 286,795 0.1
39,955 Centrais Eletricas de Santa Catarina SA--
CELESC (GDR)** 3,175,623 1,039,437 0.5
27,891 Companhia Energetica de Minas Gerais SA--
CEMIG (ADR)* 510,849 432,453 0.2
72,502 Companhia Energetica de Minas Gerais SA--
CEMIG (ADR)* 1,416,102 1,124,151 0.6
213,720,264 Companhia Energetica de Minas Gerais SA--
CEMIG (Preferred) 7,894,751 3,300,010 1.6
163,811 Companhia Paulista de Forca e Luz--CPFL
(Preferred) 14,058 9,143 0.0
289,800 Globex Utilidades SA (Preferred) 4,975,624 1,284,977 0.6
------------ ------------ ------
18,578,253 7,476,966 3.6
----------------------------------------------------------------------------------------------------------------------
</TABLE>
6 & 7
<PAGE>
Merrill Lynch Latin America Fund, Inc., August 31, 1999
CONSOLIDATED SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<TABLE>
<CAPTION>
Percent
Shares Held/ of Net
COUNTRY Industries Face Amount Long-Term Investments Cost Value Assets
====================================================================================================================================
<C> <C> <C> <S> <C> <C> <C>
Brazil Utilities--Electric 1,196,500,000 Companhia Energetica do Ceara-Coelce 'A'
(concluded) (Preferred) $ 4,959,310 $ 2,621,439 1.3%
57,400 Espirito Santo Centrais Eletricas SA--Escelsa 10,006,434 2,095,983 1.0
------------ ------------ ------
14,965,744 4,717,422 2.3
----------------------------------------------------------------------------------------------------------------------
Total Long-Term Investments in Brazil 126,991,394 83,362,370 40.8
====================================================================================================================================
Chile Telecommunications 298,615 Compania de Telecomunicaciones de Chile SA
(ADR)* 7,633,546 6,718,837 3.3
----------------------------------------------------------------------------------------------------------------------
Utilities 75,000 Chilectra SA (ADR)* 1,263,750 1,471,800 0.7
1,649,656 Empresa Nacional de Electricidad SA (Endesa) 1,264,057 680,583 0.3
1,014,657 Enersis SA 467,990 452,919 0.2
25,055 Enersis SA (ADR)* 610,035 562,172 0.3
------------ ------------ ------
3,605,832 3,167,474 1.5
----------------------------------------------------------------------------------------------------------------------
Total Long-Term Investments in Chile 11,239,378 9,886,311 4.8
====================================================================================================================================
Colombia Banking 1,028,297 Banco de Bogota 4,753,531 2,541,620 1.2
83,802 Banco Ganadero SA (Preferred) (ADR)* 1,884,467 549,951 0.3
------------ ------------ ------
6,637,998 3,091,571 1.5
----------------------------------------------------------------------------------------------------------------------
Beverages & Tobacco 488,354 Bavaria SA 1,797,411 1,472,103 0.7
----------------------------------------------------------------------------------------------------------------------
Financial Services 534,984 Valores Bavaria SA 1,074,990 344,351 0.2
----------------------------------------------------------------------------------------------------------------------
Merchandising 540,808 Almacenes Exito SA 4,043,018 1,228,096 0.6
----------------------------------------------------------------------------------------------------------------------
Total Long-Term Investments in Colombia 13,553,417 6,136,121 3.0
====================================================================================================================================
Mexico Banking 63,000 Grupo Financiero Banamex Accival, SA de CV
(Banacci) 'L' 140,485 94,762 0.1
1,595,873 Grupo Financiero Banamex Accival, SA de CV
(Banacci) 'O' 3,668,848 3,064,403 1.5
------------ ------------ ------
3,809,333 3,159,165 1.6
----------------------------------------------------------------------------------------------------------------------
Beverages 202,601 Panamerican Beverages, Inc. 'A'
(US Registered Shares) 4,354,104 3,811,431 1.9
----------------------------------------------------------------------------------------------------------------------
Beverages & Tobacco 132,646 Fomento Economico Mexicano, SA de CV (ADR)* 2,617,465 4,385,608 2.2
----------------------------------------------------------------------------------------------------------------------
Broadcasting & 274,034 Grupo Televisa, SA (GDR)** 7,005,598 9,967,987 4.9
Publishing
----------------------------------------------------------------------------------------------------------------------
Building Materials 48,697 Cemex, SA de CV (ADR)* 418,044 433,038 0.2
113,337 Cemex, SA de CV 'B' 599,155 502,968 0.2
483,238 Cemex, SA de CV 'B' (ADR)* 4,812,883 4,292,023 2.1
33,938 Cemex, SA de CV--CPO 132,276 149,886 0.1
------------ ------------ ------
5,962,358 5,377,915 2.6
----------------------------------------------------------------------------------------------------------------------
Chemicals 178,719 Desc SA de CV (ADR)* 3,807,084 3,496,190 1.7
----------------------------------------------------------------------------------------------------------------------
Diversified 766,268 Alfa SA 'A' 6,379,316 2,901,911 1.4
357,900 Grupo Sanborns SA 'B1' 665,540 584,155 0.3
------------ ------------ ------
7,044,856 3,486,066 1.7
----------------------------------------------------------------------------------------------------------------------
Foods 1,092,953 Grupo Industrial Bimbo, SA de CV 'A' 2,373,708 2,301,567 1.1
----------------------------------------------------------------------------------------------------------------------
Foreign Government US$ 2,862,000 United Mexican States, 11.50% due 5/15/2026 3,191,771 3,105,270 1.5
Obligations
----------------------------------------------------------------------------------------------------------------------
Health & Personal Care 957,412 Kimberly-Clark de Mexico, SA de CV 'A' 2,812,265 3,028,298 1.5
----------------------------------------------------------------------------------------------------------------------
Industrial-- 128,500 Tubos de Acero de Mexico SA (ADR)* 1,292,800 1,509,875 0.7
Manufacturing
----------------------------------------------------------------------------------------------------------------------
Merchandising 2,996,446 Cifra, SA de CV 'C' 3,717,634 4,577,460 2.2
4,277,200 Grupo Elektra, SA de CV 2,601,067 1,993,958 1.0
------------ ------------ ------
6,318,701 6,571,418 3.2
----------------------------------------------------------------------------------------------------------------------
Multi-Industry 1,349,308 Grupo Carso, SA de CV 'A1' 6,372,435 5,232,275 2.6
38,557 Grupo Carso, SA de CV (ADR)* 369,232 297,645 0.1
------------ ------------ ------
6,741,667 5,529,920 2.7
----------------------------------------------------------------------------------------------------------------------
Music 643,700 Corporacion Interamericana de
Entretenimiento SA 'B' 1,680,948 1,716,716 0.9
----------------------------------------------------------------------------------------------------------------------
Telecommunications 172,000 Carso Global Telecom (ADR)* 1,134,134 1,918,299 0.9
225,773 Telefonos de Mexico SA (ADR)* 12,844,546 16,791,867 8.2
------------ ------------ ------
13,978,680 18,710,166 9.1
----------------------------------------------------------------------------------------------------------------------
Television 1,432,875 TV Azteca, SA de CV (ADR)* 7,356,305 7,253,930 3.5
----------------------------------------------------------------------------------------------------------------------
Total Long-Term Investments in Mexico 80,347,643 83,411,522 40.8
====================================================================================================================================
Panama Banking 70,876 Banco Latinoamericano de Exportaciones, SA 'E' 1,209,098 1,860,495 0.9
----------------------------------------------------------------------------------------------------------------------
Total Long-Term Investments in Panama 1,209,098 1,860,495 0.9
====================================================================================================================================
Peru Financial Services 102,021 Credicorp Limited 1,571,991 1,052,091 0.5
----------------------------------------------------------------------------------------------------------------------
Food & Household 6,996,882 Alicorp SA 5,483,960 1,530,956 0.8
Products
----------------------------------------------------------------------------------------------------------------------
Metals--Non-Ferrous 176,685 Compania de Minas Buenaventura SA (ADR)* 3,269,570 2,716,532 1.3
1 Minsur SA 3 2 0.0
------------ ------------ ------
3,269,573 2,716,534 1.3
----------------------------------------------------------------------------------------------------------------------
Total Long-Term Investments in Peru 10,325,524 5,299,581 2.6
====================================================================================================================================
</TABLE>
8 & 9
<PAGE>
Merrill Lynch Latin America Fund, Inc., August 31, 1999
CONSOLIDATED SCHEDULE OF INVESTMENTS (concluded) (in US dollars)
<TABLE>
<CAPTION>
Percent
Shares Held/ of Net
COUNTRY Industries Face Amount Long-Term Investments Cost Value Assets
====================================================================================================================================
<C> <C> <C> <S> <C> <C> <C>
Venezuela Building Materials 1,497,199 Corporacion Venezolana de Cementos I, SACA $ 505,161 $ 422,938 0.2%
989,726 Corporacion Venezolana de Cementos II, SACA 361,820 279,584 0.1
------------ ------------ ------
866,981 702,522 0.3
----------------------------------------------------------------------------------------------------------------------
Food & Household 28,061,157 Mavesa SA 1,748,791 1,336,246 0.7
Products
----------------------------------------------------------------------------------------------------------------------
Metal Processing 46,750 International Briquettes Holding, Inc. 610,672 90,578 0.0
----------------------------------------------------------------------------------------------------------------------
Telecommunications 101,000 Compania Anonima Nacional Telefonos de
Venezuela (CANTV) (ADR)* 2,441,756 2,013,687 1.0
----------------------------------------------------------------------------------------------------------------------
Textiles 765,505 Sudamtex de Venezuela (ADR)* 10,150,880 493,904 0.2
----------------------------------------------------------------------------------------------------------------------
Total Long-Term Investments in Venezuela 15,819,080 4,636,937 2.2
====================================================================================================================================
Total Investments $268,670,909 201,697,233 98.6
============
Other Assets Less Liabilities 2,800,215 1.4
------------ ------
Net Assets $204,497,448 100.0%
============ ======
====================================================================================================================================
Net Asset Value: Class A--Based on net assets of $26,634,941 and 2,457,834 shares outstanding $ 10.84
============
Class B--Based on net assets of $132,739,841 and 12,575,019 shares outstanding $ 10.56
============
Class C--Based on net assets of $9,573,093 and 906,635 shares outstanding $ 10.56
============
Class D--Based on net assets of $35,549,573 and 3,294,539 shares outstanding $ 10.79
============
====================================================================================================================================
</TABLE>
* American Depositary Receipts (ADR).
** Global Depositary Receipts (GDR).
(a) Each unit represents one preferred share of Uniao de Bancos Brasileiros SA
(Unibanco) and one preferred 'B' share of Unibanco Holdings SA.
(b) Received through a bonus issue from Companhia Vale do Rio Doce. As of
August 31, 1999, the bonds have not commenced trading and the coupon rate
has not been determined.
(c) Floating rate note.
(d) Represents a Brady Bond. Brady Bonds are securities which have been issued
to refinance commercial bank loans and other debt. The risk associated
with these instruments is the amount of any uncollateralized principal or
interest payments since there is a high default rate of commercial bank
loans by countries issuing these securities.
PORTFOLIO INFORMATION
As of August 31, 1999
Ten Largest Holdings Percent of
(Equity Investments) Net Assets
Telefonos de Mexico SA (ADR) ....................................... 8.2%
Grupo Televisa, SA (GDR) ........................................... 4.9
Companhia Vale do Rio Doce 'A' (Preferred) ......................... 3.8
Tele Norte Leste Participacoes SA (ADR) ............................ 3.6
TV Azteca, SA de CV (ADR) .......................................... 3.5
Companhia Brasileira de Distribuicao Grupo
Pao de Acucar (ADR) ............................................. 3.5
Compania de Telecomunicaciones de Chile
SA (ADR) ........................................................ 3.3
Grupo Carso, SA de CV 'A1' ......................................... 2.6
Cifra, SA de CV 'C' ................................................ 2.2
Votorantim Celulose e Papel SA (Preferred) ......................... 2.2
Ten Largest Industries Percent of
(Equity Investments) Net Assets
Telecommunications ................................................. 26.8%
Utilities .......................................................... 5.1
Banking ............................................................ 5.1
Beverages & Tobacco ................................................ 5.0
Metals & Steel ..................................................... 5.0
Broadcasting & Publishing .......................................... 4.9
Merchandising ...................................................... 4.2
Television ......................................................... 3.5
Retail ............................................................. 3.5
Building Materials ................................................. 2.9
EQUITY PORTFOLIO CHANGES
For the Quarter Ended August 31, 1999
Additions
Corporacion Interamericana de Entretenimiento SA 'B'
Grupo Elektra, SA de CV
Grupo Sanborns SA 'B1'
Telemig Celular SA 'C' (Preferred)
Tubos de Acero de Mexico SA (ADR)
Deletions
Telerj Celular SA 'B' (Preferred)
Uniao de Bancos Brasileiros SA (Unibanco) (GDR)
YPF Sociedad Anonima (ADR)
10 & 11
<PAGE>
Officers and Directors
Terry K. Glenn, President and Director
Donald Cecil, Director
Edward H. Meyer, Director
Charles C. Reilly, Director
Richard R. West, Director
Arthur Zeikel, Director
Edward D. Zinbarg, Director
Grace Pineda, Senior Vice President and
Portfolio Manager
Donald C. Burke, Vice President and
Treasurer
Susan B. Baker, Secretary
Custodian
Brown Brothers Harriman & Co.
40 Water Street
Boston, MA 02109
Transfer Agent
Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, FL 32246-6484
(800) 637-3863
Investing in emerging market securities involves a number of risk factors and
special considerations, including restrictions on foreign investments and on
repatriation of capital invested in emerging markets, currency fluctuations, and
potential price volatility and less liquidity of securities traded in emerging
markets. In addition, there may be less publicly available information about the
issuers of securities, and such issuers may not be subject to accounting,
auditing and financial reporting standards and requirements comparable to those
to which US companies are subject. Therefore, the Fund is designed as a
long-term investment for investors capable of assuming the risks of investing in
emerging markets. The Fund should be considered as a vehicle for diversification
and not as a complete investment program. Please refer to the prospectus for
details.
This report is not authorized for use as an offer of sale or a solicitation of
an offer to buy shares of the Fund unless accompanied or preceded by the Fund's
current prospectus. Past performance results shown in this report should not be
considered a representation of future performance. Investment return and
principal value of shares will fluctuate so that shares, when redeemed, may be
worth more or less than their original cost. Statements and other information
herein are as dated and are subject to change.
Merrill Lynch
Latin America
Fund, Inc.
Box 9011
Princeton, NJ
08543-9011 #16140 -- 8/99
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