(ICON)
Prudential
Pacific
Growth
Fund, Inc.
SEMI
ANNUAL
REPORT
April 30, 1998
(LOGO)
<PAGE>
Prudential Pacific Growth Fund, Inc.
Performance At A Glance.
Pacific stock markets were turbulent over the
six months ended
April 30, 1998; economies slowed -- some to
recession levels -- as
countries began the process of financial and
industrial restructuring.
The Fund's new managers assumed control in
October, while the region
continued to change dramatically. We
refocused our holdings to
areas relatively buffered from the downturn
and took steps to
reduce its impact on our performance.
Although our return for
the period was negative, nonetheless it was
better than the average
Lipper Pacific Region Fund's return. Our
substantial cash position,
forward currency contracts, and new
investments in Taiwan and
India helped.
<TABLE>
Cumulative Total Returns1
As of 4/30/98
<CAPTION>
Six
One Five Since
Months
Year Years Inception2
<S> <C> <C>
<C> <C>
Class A -8.38% -
28.09% -9.14% 18.65%
Class B -8.68 -
28.58 -12.29 13.84
Class C -8.68 -
28.58 N/A -32.83
Class Z -8.23 -
27.90 N/A -30.49
Lipper Pac. Region Fund Avg3 -9.10 -
23.41 -4.25 ***
</TABLE>
<TABLE>
Average Annual Total Returns1
As of 3/31/98
<CAPTION>
One Five Since
Year Years Inception2
<S> <C> <C> <C>
Class A -29.75% -0.65% 2.68%
Class B -31.48 -0.52 2.72
Class C -27.48 N/A -9.52
Class Z -25.81 N/A -14.80
</TABLE>
Past performance is not indicative of future
results. Principal
and investment return will fluctuate so that
an investor's shares,
when redeemed, may be worth more or less than
their original cost.
1Source: Prudential Investments Fund
Management and Lipper Analytical
Services. The cumulative total returns do not
take into account
sales charges. The average annual returns do
take into account
applicable sales charges. The Fund charges a
maximum
front-end sales load of 5% for Class A shares
and a declining
contingent deferred sales charge (CDSC) of
5%, 4%, 3%, 2%, 1%
and 1% for six years for Class B shares.
Class C shares have a
1% CDSC for one year. Class B shares will
automatically
convert to Class A shares, on a quarterly
basis, approximately
seven years after purchase. Class Z shares
are not subject to a
sales charge or a distribution fee.
2Inception dates: Class A and Class B,
7/24/92; Class C, 8/1/94;
Class Z, 3/1/96.
3Lipper returns are for all funds in each
share class for the
six-month, 1-, and 5-year periods.
***Lipper Since Inception returns are 23.82%
for Classes A and
B, -29.24% for Class C, and -28.54% for Class
Z for all funds
in each share class.
How Investments Compared.
(As of 4/30/98)
(GRAPH)
Source: Lipper Analytical Services. Financial
markets change,
so a mutual fund's past performance should
never be used to
predict future results. The risks to each of
the investments
listed above are different -- we provide 12-
month total returns
for several Lipper mutual fund categories to
show you that reaching
for higher returns means tolerating more
risk. The greater the
risk, the larger the potential reward or
loss. In addition, we've
included historical 20-year average annual
returns.
These returns assume the reinvestment of
dividends.
U.S. Growth Funds will fluctuate a great
deal. Investors have
received higher historical total returns from
stocks than from
most other investments. Smaller
capitalization stocks offer greater
potential for long-term growth but may be
more volatile
than larger capitalization stocks.
General Bond Funds provide more income than
stock funds, which can
help smooth out their total returns year by
year. But their prices
still fluctuate (sometimes significantly) and
their returns have
been historically lower than those of stock
funds.
General Municipal Debt Funds invest in bonds
issued by state
governments, state agencies and/or
municipalities. This investment
provides income that is usually exempt from
federal and state
income taxes.
U.S. Taxable Money Funds attempt to preserve
a constant share
value; they don't fluctuate much in price
but, historically,
their returns have been generally among the
lowest of the major
investment categories.
<PAGE>
Steve Auth, Toru Komatsu, and Dave Descalzi,
(PICTURE)
Fund Managers.
Portfolio
Managers' Report
The Prudential Pacific Growth Fund invests
primarily in stocks of
companies in the Pacific Basin, selecting a
diversified portfolio
aimed at long-term growth of capital. Steve
Auth, head of Prudential's
global equity group, and Dave Descalzi design
overall strategy and set country allocations.
Dave also manages our
Hong Kong-based team. Toru Komatsu heads our
Japan-based team. The
Fund is subject to all of the risks
associated with foreign investing,
including currency, political and social
risks, and potential
illiquidity. There can be no assurance that
the Fund will achieve
its investment objective.
Diversification.
We believe that the changes occurring
throughout the Pacific
region will eventually make it a much
healthier place to invest.
Countries undergoing the greatest
transformations may have the most
dynamic economies in the long run. However,
to help
stabilize our returns during the transition,
we have diversified
our country holdings to include countries
likely to be less
turbulent -- such as Australia, India, and
Taiwan -- and to
companies with more secure earnings. We've
also increased our
cash, so we can move quickly should the
buying materialize
later this year.
Strategy Session.
Japan comprises about three-quarters of the
Pacific region's
economy, and the Japanese government is
reluctant to take the
dramatic steps necessary to revitalize it. So
we took advantage
of a first-quarter rally in the Japanese
stock market to
reduce our holdings there and to increase our
cash holdings (24%
of our assets at April 30). Japanese stocks
were only 31% of our
portfolio. We further reduced our yen
exposure with contracts to
sell yen in the future at the prices current
when we
made the arrangements, again benefiting from
a favorable market
window.
We refocused our Japanese holdings on
companies that are relatively
insulated from the domestic market, primarily
blue-chip,
export-oriented companies. We also seek out
smaller companies
that have found profitable niches, such as
Union Tool. It uses
its own manufacturing process to produce a
unique drill for
printed circuit boards. Its net income has
averaged 59% annual
growth for the past three years.
We increased our holdings in the healthier
economies of Australia
(to 16% of our assets), India (to 5%), and
Taiwan (to 2%). We sold
all our Indonesian holdings.
Portfolio Composition.
Sectors expressed as a percentage of
net assets as of 4/30/98.
(PIE CHART)
<PAGE>
What Went Well.
Increasing our cash helped our performance in
a generally
declining market. Among our existing
holdings, the Australian
firms Publishing & Broadcasting and Brambles
Industries rose and
we took some profits on them. We added
Woolworths Limited to our
Australian portfolio in time to gain 11% on
our shares. The Hong
Kong-based bank HSBC Holdings rose sharply
and we took some
profits there as well.
Our new purchases in South Korea and Taiwan
also made positive
contributions to our return, including Compal
Electronics and
Taiwan Semiconductor. We also bought
Mahanagar Telephone Nigam,
a major Indian utility, which began a rapid
climb.
We benefited from a first-quarter rally in
Japan. Many stocks
rose strongly. We used the rally to dispose
of our holdings
in domestic-oriented firms while they were
temporarily supported
by the Japanese government.
Five Largest Holdings.
2.8% Hutchison
Whampoa, Ltd.
Multi-Industry
2.5% Woolworths, Ltd.
Retail
2.3% Brambles Industries, Ltd.
Business & Public
Services
2.3% Goodman Fielder, Ltd.
Foods
2.2% Secom Co., Ltd.
Security/Investigation
Services
Expressed as a percentage of net assets as of
4/30/98.
And Not So Well.
We restructured our holdings to reflect our
current view of
prospects in the changing situation. The
defensive stance we
built into our portfolio initially hurt our
performance in the
rally that most area markets enjoyed in
January and February of
1998. Our view that the markets in the region
would fall further
remained firm. Our decision to sell into the
rally ultimately
proved correct. By the end of the period, we
had our Japan
holdings the way we wanted them, focused on
exporting companies
and smaller, well-managed niche firms.
Pacific stock markets
resumed their slide.
Looking Ahead.
We believe that long-term prospects for the
region are excellent
and some of the changes are in progress to
realize them. However,
we have not yet seen any sign of the dramatic
measures that would
be required in Japan to restore its growth
and its position as an
engine of regional growth. We expect that
later this year declining
Japanese stock prices may near the point we
would consider a buying
opportunity. The value will be better at
lower prices. Moreover,
lower stock prices may force political and
financial leaders to
take the strong actions required to restore
economic growth.
Should this happen, our cash position will
permit us to move quickly.
1
<PAGE>
Portfolio Managers Steve Auth, Toru Komatsu,
and Dave Descalzi
Discuss the Pacific Outlook.
Q. Is it safe to invest in the Pacific now?
A. Steve Auth: We expect the region to
continue to consolidate over
the next six months or so. Although we
remain optimistic about its
long-term prospects, we believe that most
Asian stocks had gotten
expensive, particularly for economies that
were
just entering a recession. The positive side
of today's situation
is that the economic crisis is forcing
structural reforms that
will make these economies even more powerful
in the years to come.
In the near future, however, we will
stay defensive. We
have increased our cash and reduced our
exposure to currency
losses where we could. We expect both the yen
and stocks to
get less expensive. We are in a position to
buy when both the
prices and the prospects are right.
Q. What is happening in Japan?
A. Toru Komatsu: The market rally early in
1998 was based on
the assumption that the government would save
poorly managed
companies. Many of these are buying up assets
as prices decline
instead of focusing on the difficult
restructuring task.
However, everyone knows that reorganization
is necessary.
Subsidiaries will be closed and jobs lost.
People feel insecure.
They don't know what will happen to them, so
they are not spending.
We think a real economic recovery in Japan
won't happen
until after the restructuring of large,
inefficient conglomerates.
Japan is so wealthy it can defer this for a
while, unfortunately.
Q. What about elsewhere in the region?
A. Dave Descalzi: Throughout the region,
economies are slowing.
Exports had been a primary driver of growth,
but they have slowed
despite hefty currency devaluations. Japan
historically absorbed
about a fifth of the region's exports, so its
troubles
affect everybody.
Even the few countries less affected by
internal turmoil have
problems. Taiwan has continued to produce
components for the
rapidly growing worldwide personal computer
industry, but computer
inventories rose when Asian demand slackened.
Australia's domestic consumption has been
steady, but demand for
its exports, especially natural resources,
has been declining.
The Japanese economic contraction is a
factor. In India,
infrastructure investment and privatization
of state-owned
companies are driving the economy, but the
rupee has weakened
substantially, in part because of the
uncertainty introduced
by nuclear testing.
It will take some time for these economies
to recover. The
downturn will be painful in the short term.
However, we believe
that banking reform and enhanced supervision
of financial markets
can restore dynamic, world-leading growth to
the region.
Steve Auth
(PICTURE)
2
<PAGE>
President's Letter
June 9, 1998
See You On the Net!
Dear Shareholder:
We are proud to be part of the worldwide web
and we invite you
to visit our two web sites, if you have not
already done so. Yes,
we currently offer two sites -- each with its
own distinctive
identity.
http://www.prudential.com
The Prudential web site features information
on personal investing,
retirement planning, commercial and
residential real estate
opportunities, as well as insurance products
for life, health,
home and property.
You can look up performance data on your
Prudential mutual funds,
learn about proven investment strategies, or
take one of our many
interactive quizzes that will help guide you
in determining
long-term goals -- like how much to save for
your child's
college education or for your retirement.
http://www.prusec.com
The Prudential Securities Virtual Branch
Office is a full-service
brokerage web site specifically designed to
provide investors with
the information they need to make informed
financial decisions. It
was rated the No. 1 full-service brokerage
web
site of its type by Financial Net News
(February 1998), a subsidiary
of Institutional Investor magazine, and was
also rated among the
top corporate web sites by Fortune magazine
(Winter 1998).
What investors can find here are -- daily
market commentaries, stock
quotes, economic forecasts, product news, and
current market research,
in addition to interactive investing
programs. Investors, through
their Prudential Securities Financial
Advisors, may also enroll in
Prudential Online" and have access to their
personal account
information which includes balances, security
values, transactions
and account activities. They can also easily
E-mail their Financial
Advisor.
Both sites also contain professional
opportunities for people who
are searching for employment or considering a
change of career paths.
We plan to make further enhancements to our
web pages as the year
progresses. So please, the next time you are
"web browsing" or "surfing
the net," pay us a visit. Let us know what
you think and what you'd
like to see added in the future.
Sincerely,
Brian M. Storms
President, Prudential Mutual Funds &
Annuities
3
<PAGE>
Portfolio of Investments as
of April 30, 1998 (Unaudited) PRUDENTIAL
PACIFIC GROWTH FUND, INC.
- ---------------------------------------------
- ---------------
<TABLE>
<CAPTION>
Shares Description
Value (Note 1)
<C> <S>
<C>
-----------------------------------------
- -------------------
EQUITIES & EQUIVALENTS--76.1%
COMMON STOCKS--76.1%
-----------------------------------------
- -------------------
Australia--16.0%
258,800 Australia & New Zealand Banking
Group, Ltd. (Commercial
Banking) $ 1,800,063
158,391 Brambles Industries, Ltd.
(Business
& Public Services)
3,253,665
1,716,600 FXF Trust(a) (Financial Services)
223,109
2,066,681 Goodman Fielder, Ltd. (Foods)
3,196,452
289,310 Leighton Holdings, Ltd. (Building
&
Construction)
1,099,859
514,440 Publishing & Broadcasting, Ltd.
(Broadcasting & Publishing)
2,450,510
1,678,594 Sea World Property Trust, Ltd.
(Leisure & Tourism)
1,112,663
358,477 Smith (Howard), Ltd. (Diversified
Operations)
2,535,058
296,700 Southcorp, Ltd. (Diversfied
Consumer
Products)
1,072,038
50,500 St. George Bank, Ltd. (Commercial
Banking)
298,970
1,056,035 Star City Holdings, Ltd.(a)
(Gaming) 748,036
154,600 Westpac Banking Corp. (Commercial
Banking)
1,034,819
1,037,265 Woolworths, Ltd. (Retail)
3,559,111
- -------------
22,384,353
- ---------------------------------------------
- ---------------
Hong Kong--15.0%
30,000 ASM Pacific Technology, Ltd.
(Electronic Components)
23,232
203,000 Cheung Kong Holdings, Ltd. (Real
Estate)
1,349,351
61,000 CLP Holdings, Ltd.
(Utilities-Electric)
292,883
264,166 Hong Kong & Shanghai Hotels, Ltd.
(Leisure & Tourism)
179,002
280,000 Hong Kong Electric Holdings,
Ltd.(a)
(Utilities-Electric)
860,115
1,028,000 Hong Kong Telecommunications,
Ltd.
(Telecommunications)
1,923,901
108,004 HSBC Holdings, Plc. (Banking)
3,080,731
2,932,700 Hung Hing Printing Group, Ltd.
(Forest Products & Paper)
1,135,561
638,600 Hutchison Whampoa, Ltd.
(Multi-Industry)
$ 3,948,081
1,696,000 Innovative International
Holdings,
Ltd. (Automotive Parts)
374,320
1,177,000 Kingboard Chemical Holdings, Ltd.
(Electronic Components)
223,314
52,000 Lung Kee (Bermuda) Holdings, Ltd.
(Miscellaneous)
14,598
320,900 New World Development Co., Ltd.
(Property Development)
913,271
2,159,000 QPL International Holdings, Ltd.
(Electronic Components)
933,510
172,000 Sun Hung Kai Properties, Ltd.
(Real
Estate)
1,021,193
422,900 Swire-Pacific, Ltd. 'A'
(Diversified
Industries)
2,112,371
396,300 Television Broadcasts, Ltd.
(Broadcasting & Publishing)
1,012,770
455,000 Varitronix International, Ltd.
(Miscellaneous)
916,131
380,600 Wharf Holdings, Ltd.
(Multi-Industry)
609,133
363,000 Wong's International Holdings,
Ltd.
(Electronic Components)
111,274
- -------------
21,034,742
- ---------------------------------------------
- ---------------
India--4.6%
44,000 Bajaj Auto, Ltd. (GDR)
(Automobiles
& Auto Parts)
831,600
29,000 Industrial Credit & Investment
Corp.
of India, Ltd. (Financial
Services)
471,250
168,000 Mahanagar Telephone Nigam,
Ltd.(a)
(Telecommunications)
2,696,400
37,000 Ranbaxy Laboratories, Ltd. (GDR)
(Medical Products)
929,625
77,450 State Bank of India (GDR)
(Commercial Banking)
1,475,423
- -------------
6,404,298
</TABLE>
- ---------------------------------------------
- -----------------------------------
See Notes to Financial Statements. 4
<PAGE>
Portfolio of Investments as
of April 30, 1998 (Unaudited) PRUDENTIAL
PACIFIC GROWTH FUND, INC.
- ---------------------------------------------
- ---------------
<TABLE>
<CAPTION>
Shares Description
Value (Note 1)
<C> <S>
<C>
-----------------------------------------
- ------------------
Japan--30.7%
33,000 Advantest Corp. (Electronic
Components & Instruments)
$ 2,213,096
2,100 Bellsystem 24, Inc. (Commercial
Services)
290,528
110,000 Canon, Inc. (Office Equipment &
Supplies)
2,594,379
296,000 Daibiru Corp. (Property
Investment) 1,982,850
176,000 Hitachi Credit Corp. (Financial
Services)
2,804,913
74,000 Hitachi Maxell, Ltd.
(Audio/Visual) 1,405,169
20,000 Keyence Corp. (Electronic
Components
& Instruments)
2,685,555
700 Konaka Co., Ltd. (Retail)
2,637
78,000 Makita Corp. (Tools)
846,357
44,700 Matsumotokiyoshi (Retail)
1,539,289
334,000 Michinoku Bank, Ltd. (Commercial
Banking)
1,786,904
193,000 Minebea Co., Ltd. (Electronic
Components)
2,152,362
87,200 Namco, Ltd. (Recreation & Other
Consumer Goods)
1,764,238
4,070 Nichiei Co., Ltd. (Building
Materials & Components)
315,884
58,000 Nichii Gakkan Co. (Health Care
Services)
1,879,286
390,000 Nippon Shokubai Co., Ltd.
(Chemicals)
1,916,057
220 Nippon Telegraph & Telephone
Corp.
(Telecommunications)
1,922,990
58,100 Oiles Corp. (Miscellaneous)
1,440,351
16,300 Promise Co., Ltd. (Financial
Services)
825,379
24,100 Riso Kagaku Corp. (Office
Equipment
& Supplies)
1,254,849
60 Sanyo Coca-Cola Bottling
(Beverages) 620
53,000 Secom Co., Ltd.
(Security/Investigation
Services) 3,115,063
40,700 Square Co., Ltd. (EDP Software &
Services)
1,472,082
29,000 TDK Corp. (Electronic Components)
2,285,736
131,000 Terumo Corp. (Medical Products)
1,913,028
12,000 Toyota Motor Corp. (Automobiles &
Auto Parts)
311,958
28,800 Union Tool (Machinery &
Equipment) 1,085,073
34,210 Zenrin Co., Ltd. (Electrical
Goods) 1,250,234
- -------------
43,056,867
Korea--0.4%
5,010 Dae Duck Electronics Co.
(Electrical
Equipment)
$ 356,117
20,150 Medison Co., Ltd. (Medical
Devices) 164,336
- -------------
520,453
- ---------------------------------------------
- ---------------
Malaysia--1.8%
162,000 Berjaya Sports Toto Berhad
(Gaming) 384,112
378,000 IJM Corp. Berhad (Construction)
181,278
345,000 IOI Corp. Berhad (Agriculture &
Equipment)
258,808
400,000 Magnum Corp. Berhad (Gaming)
267,917
103,000 Malayan Banking Berhad
(Commercial
Banking)
303,550
89,000 Malaysian Pacific Industries
Berhad
(Electronic Components)
255,137
110,000 Telekom Malaysia Berhad
(Telecommunications)
330,074
302,000 Tenaga Nasional Berhad
(Utilities-Electric)
602,786
- -------------
2,583,662
- ---------------------------------------------
- ---------------
The Philippines--1.3%
64,000 Philippine Long Distance
Telephone
(ADR) (Telephones)
1,728,000
1,291,200 Solid Group, Inc. (Electrical
Equipment)
64,159
- -------------
1,792,159
- ---------------------------------------------
- ---------------
Singapore--3.6%
196,000 City Developments, Ltd. (Property
Development)
847,601
29,000 Cycle & Carriage, Ltd.
(Automobiles
& Auto Parts)
111,679
105,000 DBS Land, Ltd. (Real Estate)
158,428
137,800 Elec & Eltek International Co.,
Ltd.
(Electronics)
799,240
505,000 Hong Leong Finance, Ltd.
(Financial
Services)
765,151
58,000 Overseas Chinese Banking Corp.,
Ltd.
(Banking)
305,745
27,000 Overseas Union Bank, Ltd.
(Banking) 102,273
</TABLE>
- ---------------------------------------------
- -----------------------------------
See Notes to Financial Statements. 5
<PAGE>
Portfolio of Investments as
of April 30, 1998 (Unaudited) PRUDENTIAL
PACIFIC GROWTH FUND, INC.
- ---------------------------------------------
- ---------------
<TABLE>
<CAPTION>
Shares Description
Value (Note 1)
<C> <S>
<C>
-----------------------------------------
- ------------------
Singapore (cont'd.)
334,750 Sembawang Maritime, Ltd. (Energy
Equipment & Services)
$ 361,378
15,000 Singapore Airlines, Ltd.
(Airlines) 97,538
404,000 Singapore Technologies
Engineering,
Ltd.(a) (Engineering &
Equipment) 346,869
366,000 Singapore Telecommunications,
Ltd.
(Telecommunications)
628,485
38,000 United Overseas Bank, Ltd.
(Commercial Banking)
179,924
365,000 Wing Tai Holdings, Ltd. (Property
Development)
297,254
- -------------
5,001,565
- ---------------------------------------------
- ---------------
Taiwan--2.5%
20,000 Asustek Computer, Inc.(a)
(Computers)
407,588
94,000 Cathay Life Insurance Co., Ltd.
(Insurance)
376,291
196,000 Compal Electronics, Inc.(a)
(Computers)
852,962
96,000 Compeq Manufacturing Co., Ltd.(a)
(Electrical Equipment)
739,480
137,000 Phoenixtec Power Co., Ltd.(a)
(Electronic Components)
446,633
158,000 Taiwan Semiconductor
Manufacturing
Co.(a) (Electronic Components)
682,800
- -------------
3,505,754
- ---------------------------------------------
- ---------------
Thailand--0.2%
10,000 Banpu Public Co., Ltd. (Mineral
Resources)
68,823
15,000 PTT Exploration & Production
Public
Co., Ltd. (Oil & Gas
Exploration/Production)
158,344
2,900 Siam Cement Co., Ltd.(a)
(Building
Materials & Components)
40,968
- -------------
268,135
- -------------
Total common stocks
(cost $120,604,414)
106,551,988
- -------------
Units
WARRANTS(a)--0.0%
- ---------------------------------------------
- ---------------
Hong Kong--0.0%
533,666 Hong Kong & Shanghai Hotels, Ltd.
expiring Dec. '98 @ HKD13.79
(Leisure & Tourism)
$ 689
- ---------------------------------------------
- ---------------
Singapore--0.0%
70,200 Hong Leong Finance, Ltd.
expiring Nov. '98 @ SGD3.25
(Financial Services)
886
- -------------
Total warrants
(cost $26,857)
1,575
- -------------
Total long-term investments
(cost $120,631,271)
106,553,563
- -------------
SHORT-TERM INVESTMENTS--8.2%
Principal
Amount
(000)
- ---------------------------------------------
- ---------------
Repurchase Agreements--8.2%
$11,528 Joint Repurchase Agreement
Account
5.42%, 5/1/98
(cost $11,528,000; Note 5)
11,528,000
- -------------
- ---------------------------------------------
- ---------------
Total Investments--84.3%
(cost $132,159,271)
118,081,563
Other assets in excess of
liabilities--15.7%
22,002,586
- -------------
Net Assets--100%
$ 140,084,149
- -------------
- -------------
</TABLE>
- ---------------
(a) Non-income producing security.
ADR--American Depository Receipt.
GDR--Global Depository Receipt.
- ---------------------------------------------
- -----------------------------------
See Notes to Financial Statements. 6
<PAGE>
Portfolio of Investments as
of April 30, 1998 (Unaudited) PRUDENTIAL
PACIFIC GROWTH FUND, INC.
- ---------------------------------------------
- ---------------
The industry classification of portfolio
holdings and other
net assets in excess of liabilities shown as
a percentage of
net assets as of April 30, 1998 was as
follows:
Telecommunications...........................
......... 5.4%
Electronic
Components.................................
5.1
Commercial
Banking....................................
4.8
Retail.......................................
......... 3.6
Financial
Services....................................
3.6
Electronic Components &
Instruments................... 3.5
Multi-
Industry.....................................
... 3.3
Office Equipment &
Supplies........................... 2.7
Broadcasting &
Publishing.............................
2.5
Banking......................................
......... 2.5
Foods........................................
......... 2.3
Business & Public
Services............................ 2.3
Security/Investigation
Services....................... 2.2
Medical
Products.....................................
. 2.0
Real
Estate.......................................
.... 1.8
Diversified
Operations................................
1.8
Miscellaneous................................
......... 1.7
Property
Development..................................
1.5
Diversified
Industries................................
1.5
Property
Investment...................................
1.4
Chemicals....................................
......... 1.4
Utilities-
Electric....................................
1.3
Recreation & Other Consumer
Goods..................... 1.3
Health Care
Services..................................
1.3
Telephones...................................
......... 1.2
EDP Software &
Services...............................
1.1
Gaming.......................................
......... 1.0%
Audio/Visual.................................
......... 1.0
Leisure &
Tourism.....................................
0.9
Electrical
Goods......................................
0.9
Computers....................................
......... 0.9
Automobile & Auto
Parts............................... 0.9
Machinery &
Equipment.................................
0.8
Forest Products &
Paper............................... 0.8
Electrical
Equipment..................................
0.8
Diversified Consumer
Products......................... 0.8
Building &
Construction...............................
0.8
Tools........................................
......... 0.6
Electronics..................................
......... 0.6
Insurance....................................
......... 0.3
Energy Equipment &
Services........................... 0.3
Building Materials &
Components....................... 0.3
Automotive
Parts......................................
0.3
Engineering &
Equipment...............................
0.2
Commercial
Services...................................
0.2
Agriculture &
Equipment...............................
0.2
Oil & Gas
Exploration/Production......................
0.1
Medical
Devices......................................
. 0.1
Construction.................................
......... 0.1
Airlines.....................................
......... 0.1
Other assets in excess of liabilities
(including Joint
Repurchase
Agreement)...............................
23.9
- -----
100.0%
- -----
- -----
- ---------------------------------------------
- -----------------------------------
See Notes to Financial Statements. 7
<PAGE>
Statement of Assets and Liabilities
(Unaudited)
PRUDENTIAL PACIFIC GROWTH FUND, INC.
- ---------------------------------------------
- -----------------------------------
<TABLE>
<CAPTION>
Assets
April 30, 1998
<S>
<C>
Investments, at value (cost
$132,159,271)................................
...................................
$118,081,563
Foreign currency, at value (cost
$18,929,265).................................
..............................
18,711,453
Cash.........................................
.............................................
.................. 19,400
Receivable for investments
sold.........................................
....................................
1,910,385
Receivable for Fund shares
sold.........................................
....................................
1,852,677
Forward currency contracts - net amount
receivable from
counterparties...............................
....... 1,399,537
Dividends and interest
receivable...................................
........................................
407,061
Variation margin- due from
broker.......................................
....................................
9,481
Other
assets.......................................
.............................................
............ 7,247
- --------------
Total
assets.......................................
.............................................
......... 142,398,804
- --------------
Liabilities
Payable for Fund shares
reacquired...................................
.......................................
1,135,211
Payable for investments
purchased....................................
.......................................
571,117
Accrued expenses and other
liabilities..................................
....................................
398,510
Management fee
payable......................................
.............................................
... 89,152
Distribution fee
payable......................................
.............................................
. 88,700
Withholding taxes
payable......................................
.............................................
31,965
- --------------
Total
liabilities..................................
.............................................
......... 2,314,655
- --------------
Net
Assets.......................................
.............................................
.............. $140,084,149
- --------------
- --------------
Net assets were comprised of:
Common stock, at
par..........................................
...........................................
$ 14,507
Paid-in capital in excess of
par..........................................
...............................
179,943,053
- --------------
179,957,560
Accumulated net investment
loss.........................................
.................................
(68,332)
Accumulated net realized loss on
investments, foreign currency transactions
and futures..................
(26,857,037)
Net unrealized depreciation on
investments, foreign currencies and
futures...............................
(12,948,042)
- --------------
Net assets, April 30,
1998.........................................
.........................................
$140,084,149
- --------------
- --------------
Class A:
Net asset value and redemption price per
share
($28,001,735 / 2,832,703 shares of
common stock issued and
outstanding)...............................
$9.89
Maximum sales charge (5.00% of offering
price).......................................
.................... .52
- --------------
Maximum offering price to
public.......................................
..................................
$10.41
- --------------
- --------------
Class B:
Net asset value, offering price and
redemption price per share
($94,580,672 / 9,898,226 shares of
common stock issued and
outstanding)...............................
$9.56
- --------------
- --------------
Class C:
Net asset value, offering price and
redemption price per share
($2,858,439 / 298,971 shares of common
stock issued and
outstanding).................................
. $9.56
- --------------
- --------------
Class Z:
Net asset value, offering price and
redemption price per share
($14,643,303 / 1,476,649 shares of
common stock issued and
outstanding)...............................
$9.92
- --------------
- --------------
</TABLE>
- ---------------------------------------------
- -----------------------------------
See Notes to Financial Statements. 8
<PAGE>
PRUDENTIAL PACIFIC GROWTH FUND, INC.
Statement of Operations (Unaudited)
- ---------------------------------------------
- ---------------
<TABLE>
<CAPTION>
Six Months
Ended
Net Investment Income (Loss)
April 30, 1998
<S>
<C>
Income
Dividends (net of foreign withholding
taxes
of
$73,167).............................. $
1,412,897
Interest....................................
357,715
- --------------
Total
income.............................
1,770,612
- --------------
Expenses
Management
fee..............................
576,116
Distribution fee--Class
A................... 37,082
Distribution fee--Class
B................... 520,335
Distribution fee--Class
C................... 11,733
Transfer agent's fees and
expenses.......... 376,000
Custodian's fees and
expenses............... 185,000
Reports to
shareholders.....................
58,000
Registration
fees...........................
20,000
Audit fees and
expenses.....................
18,000
Directors'
fees.............................
17,000
Legal fees and
expenses.....................
7,000
Miscellaneous...............................
7,324
- --------------
Total
expenses...........................
1,833,590
- --------------
Net investment
loss............................
(62,978)
- --------------
Realized and Unrealized Gain (Loss) on
Investments, Foreign Currency Transactions
and Futures
Net realized gain (loss) on:
Investment
transactions.....................
(28,647,955)
Foreign currency
transactions............... 1,499,181
Futures
transactions........................
298,467
- --------------
(26,850,307)
- --------------
Net change in unrealized appreciation
(depreciation) on:
Investments.................................
10,302,294
Foreign
currencies..........................
1,433,565
Futures.....................................
(27,750)
- --------------
11,708,109
- --------------
Net loss on investments, foreign currencies
and
futures.....................................
(15,142,198)
- --------------
Net Decrease in Net Assets
Resulting from
Operations...................... $
(15,205,176)
- --------------
- --------------
</TABLE>
PRUDENTIAL PACIFIC GROWTH FUND, INC.
Statement of Changes in Net Assets
(Unaudited)
<TABLE>
<CAPTION>
Six Months
Increase (Decrease) Ended
Year Ended
in Net Assets April 30,
1998 October 31, 1997
<S> <C>
<C>
Operations
Net investment loss......... $
(62,978) $ (1,316,909)
Net realized gain (loss) on
investments, futures and
foreign currency
transactions.............
(26,850,307) 19,797,626
Net change in unrealized
appreciation
(depreciation) on
investments, futures and
foreign currencies.......
11,708,109 (56,009,460)
------------
- -- ----------------
Net decrease in net assets
resulting from
operations...............
(15,205,176) (37,528,743)
------------
- -- ----------------
Distributions in excess of
net investment income
Class A..................
(1,079,173) --
Class B..................
(2,945,918) --
Class C..................
(50,643) --
Class Z..................
(685,936) --
------------
- -- ----------------
(4,761,670) --
------------
- -- ----------------
Distributions from net
realized gains
Class A..................
(2,309,696) (2,078,862)
Class B..................
(8,685,264) (7,004,628)
Class C..................
(149,828) (268,013)
Class Z..................
(1,332,334) (775,335)
------------
- -- ----------------
(12,477,122) (10,126,838)
------------
- -- ----------------
Fund share transactions (net of
share conversions) (Note 7)
Net proceeds from shares
sold.....................
80,876,326 2,461,825,495
Net asset value of shares
issued in reinvestment of
distributions............
16,174,425 9,110,015
Cost of shares reacquired...
(111,528,022) (2,726,822,208)
------------
- -- ----------------
Net decrease in net assets
from Fund share
transactions.............
(14,477,271) (255,886,698)
------------
- -- ----------------
Total decrease.................
(46,921,239) (303,542,279)
Net Assets
Beginning of period............
187,005,388 490,547,667
------------
- -- ----------------
End of period.................. $
140,084,149 $ 187,005,388
------------
- -- ----------------
------------
- -- ----------------
</TABLE>
- ---------------------------------------------
- -----------------------------------
See Notes to Financial Statements. 9
<PAGE>
Notes to Financial Statements (Unaudited)
PRUDENTIAL PACIFIC GROWTH FUND, INC.
- ---------------------------------------------
- -----------------------------------
Prudential Pacific Growth Fund, Inc. (the
'Fund') is registered under the
Investment Company Act of 1940 as a
diversified, open-end management investment
company. The Fund was incorporated in
Maryland on August 14, 1991 and had no
operations other than the issuance of 5,000
shares each of Class A and Class B
common stock for $100,000 on May 6, 1992 to
Prudential Investments Fund
Management LLC ('PIFM'). The Fund commenced
investment operations on July 24,
1992. The investment objective of the Fund is
to seek long-term capital growth
by investing primarily in common stocks,
common stock equivalents and other
securities of companies doing business in or
domiciled in the Pacific Basin
region.
- ---------------------------------------------
- ---------------
Note 1. Accounting Policies
The following is a summary of significant
accounting policies followed by the
Fund in the preparation of its financial
statements.
Securities Valuation: Securities traded on an
exchange (whether domestic or
foreign) are valued at the last reported
sales price on the primary exchange on
which they are traded. Securities traded in
the over-the-counter market
(including securities listed on exchanges for
which a last sales price is not
available) are valued at the average of the
last reported bid and asked prices.
Any securities or other assets for which
current market quotations are not
readily available are valued at fair value as
determined in good faith under
procedures established by and under the
general supervision and responsibility
of the Fund's Board of Directors.
Short-term securities which mature in more
than 60 days are valued at current
market quotations. Short-term securities
which mature in 60 days or less are
valued at amortized cost.
In connection with transactions in repurchase
agreements with U.S. financial
institutions, it is the Fund's policy that
its custodian or designated
subcustodians, as the case may be under
triparty repurchase agreements, take
possession of the underlying collateral
securities, the value of which exceeds
the principal amount of the repurchase
transaction including accrued interest.
If the seller defaults and the value of the
collateral declines or if bankruptcy
proceedings are commenced with respect to the
seller of the security,
realization of the collateral by the Fund may
be delayed or limited.
Foreign Currency Translation: The books and
records of the Fund are maintained
in U.S. dollars. Foreign currency amounts are
translated into U.S. dollars on
the following basis:
(i) market value of investment securities,
other assets and liabilities--at the
closing rates of exchange;
(ii) purchases and sales of investment
securities, income and expenses--at the
rate of exchange prevailing on the respective
dates of such transactions.
Although the net assets of the Fund are
presented at the foreign exchange rates
and market values at the close of the fiscal
year, the Fund does not isolate
that portion of the results of operations
arising as a result of changes in the
foreign exchange rates from the fluctuations
arising from changes in the market
prices of securities held at the end of the
period. Similarly, the Fund does not
isolate the effect of changes in foreign
exchange rates from the fluctuations
arising from changes in the market prices of
long-term debt securities sold
during the period. Accordingly, realized
foreign currency gains (losses) are
included in the reported net realized gains
on investment transactions.
Net realized gains or losses on foreign
currency transactions represent net
foreign exchange gains or losses from forward
currency contracts, disposition of
foreign currencies, currency gains or losses
realized between the trade and
settlement dates on security transactions,
and the difference between the
amounts of interest, dividends and foreign
taxes recorded on the Fund's books
and the U.S. dollar equivalent amounts
actually received or paid. Net currency
gains and losses from valuing foreign
currency denominated assets and
liabilities at April 30, 1998 exchange rates
are reflected as a component of
unrealized depreciation on investments and
foreign currencies.
Foreign security and currency transactions
may involve certain considerations
and risks not typically associated with those
of domestic origin as a result of,
among other factors, the possibility of
political and economic instability and
the level of governmental supervision and
regulation of foreign securities
markets.
Forward Currency Contracts: A forward
currency contract is a commitment to
purchase or sell a foreign currency at a
future date at a negotiated forward
rate. The Fund enters into forward currency
contracts in order to hedge its
exposure to changes in foreign currency
exchange rates on its foreign portfolio
holdings or on specific receivables and
payables denominated in a foreign
currency. The contracts are valued daily at
current exchange rates and any
unrealized gain or loss is included in net
unrealized appreciation or
depreciation on investments. Gain or loss is
realized on the settlement date of
the contract equal to the difference between
the settlement value of the
original and renegotiated forward contracts.
This gain or loss, if any, is
included in net realized gain (loss) on
foreign currency transactions. Risks may
arise upon entering into these contracts
- ---------------------------------------------
- -----------------------------------
10
<PAGE>
Notes to Financial Statements (Unaudited)
PRUDENTIAL PACIFIC GROWTH FUND, INC.
- ---------------------------------------------
- -----------------------------------
from the potential inability of the
counterparties to meet the terms of their
contracts.
Securities Transactions and Net Investment
Income: Securities transactions are
recorded on the trade date. Realized gains
and losses from investment and
foreign currency transactions are calculated
on the identified cost basis.
Dividend income is recorded on the ex-
dividend date and interest income is
recorded on an accrual basis. Expenses are
recorded on the accrual basis which
may require the use of certain estimates by
management.
Net investment income or loss, other than
distribution fees, and unrealized and
realized gains or losses are allocated daily
to each class of shares of the Fund
based upon the relative proportion of net
assets of each class at the beginning
of the day.
Dividends and Distributions: The Fund expects
to pay dividends of net investment
income and distributions of net realized
capital and currency gains, if any,
annually. Dividends and distributions are
recorded on the ex-dividend date.
Income distributions and capital gain
distributions are determined in accordance
with income tax regulations which may differ
from generally accepted accounting
principles due to timing differences
concerning recognition of income.
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
taxable income to shareholders. Therefore, no
federal income tax provision is
required.
Withholding taxes on foreign dividends,
interest and capital gains have been
provided for in accordance with the Fund's
understanding of the applicable
country's tax rules and rates.
Deferred Organization Expenses: Approximately
$200,000 of organization and
initial registration costs were deferred and
amortized over the period of
benefit of 60 months from the date the Fund
commenced investment operations.
- ---------------------------------------------
- ---------------
Note 2. Agreements
The Fund has a management agreement with
PIFM. Pursuant to this agreement, PIFM
has responsibility for all investment
advisory services and supervises the
subadviser's performance of such services.
PIFM has entered into a subadvisory
agreement with The Prudential Investment
Corporation ('PIC'); PIC furnishes
investment advisory services in connection
with the management of the Fund. PIFM
pays for the cost of the subadviser's
services, the compensation of officers of
the Fund, occupancy and certain clerical and
bookkeeping costs of the Fund. The
Fund bears all other costs and expenses.
The management fee paid PIFM is computed
daily and payable monthly at an annual
rate of .75 of 1% of the average daily net
assets of the Fund.
The Fund has a distribution agreement with
Prudential Securities Incorporated
('PSI'), which acts as the distributor of the
Class A, Class B, Class C and
Class Z shares. The Fund compensates PSI for
distributing and servicing the
Fund's Class A, Class B and Class C shares,
pursuant to plans of distribution,
(the 'Class A, B and C Plans'), regardless of
expenses actually incurred by PSI.
The distribution fees are accrued daily and
payable monthly. No distribution or
service fees are paid to PSI as distributor
of the Class Z shares of the Fund.
Pursuant to the Class A, B and C Plans, the
Fund compensates PSI for
distribution-related activities at an annual
rate of up to .30 of 1%, 1% and 1%
of the average daily net assets of the Class
A, B and C shares, respectively.
Such expenses under the Class A, Class B and
Class C Plans were .25%, 1% and 1%,
respectively, of the average daily net assets
of the Class A, Class B and Class
C shares for the six months ended April 30,
1998.
PSI has advised the Fund that it has received
approximately $35,000 in front-end
sales charges resulting from sales of Class A
shares during the six months ended
April 30, 1998. From these fees, PSI paid
such sales charges to affiliated
broker-dealers, which in turn paid
commissions to salespersons and incurred
other distribution costs.
PSI has advised the Fund that for the six
months ended April 30, 1998, it
received approximately $290,000 and $8,000 in
contingent deferred sales charges
imposed upon certain redemptions by Class B
and Class C shareholders,
respectively.
PSI, PIFM and PIC are (indirect) wholly owned
subsidiaries of The Prudential
Insurance Company of America ('Prudential').
- ---------------------------------------------
- ---------------
Note 3. Other Transactions With Affiliates
Prudential Mutual Fund Services LLC ('PMFS'),
a wholly owned subsidiary of PIFM,
serves as the Fund's transfer agent. During
the six months ended April 30, 1998,
the Fund incurred fees of approximately
$250,200 for the services of PMFS. As of
April 30, 1998, approximately $40,800 of such
fees were due to PMFS. Transfer
agent fees and expenses in the statement of
operations include certain
out-of-pocket expenses paid to nonaffiliates.
- ---------------------------------------------
- -----------------------------------
11
<PAGE>
Notes to Financial Statements (Unaudited)
PRUDENTIAL PACIFIC GROWTH FUND, INC.
- ---------------------------------------------
- -----------------------------------
Note 4. Portfolio Securities
Purchases and sales of investment securities,
other than short-term investments,
for the six months ended April 30, 1998 were
$67,476,278 and $94,658,496,
respectively.
At April 30, 1998, the Fund had outstanding
forward currency contracts, to sell
foreign currencies, as follows:
<TABLE>
<CAPTION>
Value at
Forward Currency Settlement Date
Current
Sales Contracts Receivable
Value Appreciation
<S> <C> <C>
<C>
- ------------------- --------------- ------
- ----- -------------
Hong Kong Dollars,
expiring
4/27/99.......... $11,900,000
$11,873,736 $ 26,264
Japanese Yen,
expiring
5/29/98.......... 9,200,000
8,593,689 606,311
Japanese Yen,
expiring
8/12/98.......... 800,000
735,217 64,783
Japanese Yen,
expiring
8/13-9/28;
10/20/98......... 27,329,993
26,719,511 610,482
Japanese Yen,
expiring
8/13-11/2/98..... 8,127,219
8,030,822 96,397
--------------- ------
- ----- -------------
$57,357,212
$55,952,975 $ 1,404,237
--------------- ------
- ----- -------------
--------------- ------
- ----- -------------
</TABLE>
The United States federal income tax basis of
the Fund's investments is
substantially the same as for financial
reporting purposes and accordingly, as
of April 30, 1998, net unrealized
depreciation for federal income tax purposes
was $14,077,708 (gross unrealized
appreciation--$5,350,846; gross unrealized
depreciation--$19,428,554).
- ---------------------------------------------
- ---------------
Note 5. Joint Repurchase Agreement Account
The Fund, along with other affiliated
registered investment companies, transfers
uninvested cash balances into a single joint
account, the daily aggregate
balance of which is invested in one or more
repurchase agreements collateralized
by U.S. Treasury or Federal agency
obligations. As of April 30, 1998, the Fund
had a 1.0% undivided interest in the
repurchase agreements in the joint account.
The undivided interest for the Fund
represented $11,528,000 in principal amount.
As of such date, each repurchase agreement in
the joint account and the value of
the collateral therefore was as follows:
Bear, Stearns & Co. Inc., 5.53%, in the
principal amount of $310,000,000,
repurchase price $310,047,619, due 5/1/98.
The value of the collateral including
accrued interest was $316,688,713.
Credit Suisse First Boston, 5.54%, in the
principal amount of $310,000,000,
repurchase price $310,047,706, due 5/1/98.
The value of the collateral including
accrued interest was $321,763,994.
J.P. Morgan Securities, Inc., 5.53%, in the
principal amount of $310,000,000,
repurchase price $310,047,619, due 5/1/98.
The value of the collateral including
accrued interest was $316,200,983.
UBS Securities LLC, 5.375%, in the principal
amount of $218,770,000, repurchase
price $218,802,664, due 5/1/98. The value of
the collateral including accrued
interest was $223,146,143.
- ---------------------------------------------
- ---------------
Note 6. Borrowings
The Fund, along with other affiliated
registered investment companies (the
'Funds'), has a credit agreement (the
'Agreement') with an unaffiliated lender.
The maximum commitment under the Agreement is
$200,000,000. Interest on any such
borrowings outstanding will be at market
rates. The purpose of the Agreement is
to serve as an alternative source of funding
for capital share redemptions. The
Fund has not borrowed any amounts pursuant to
the Agreement during the six
months ended April 30, 1998. The Funds pay a
commitment fee at an annual rate of
.055 of 1% on the unused portion of the
credit facility. The commitment fee is
accrued and paid quarterly on a pro rata
basis by the Funds. The Agreement
expired on December 30, 1997 and has been
extended through December 29, 1998
under the same terms.
- ---------------------------------------------
- ---------------
Note 7. Capital
The Fund offers Class A, Class B, Class C and
Class Z shares. Class A shares are
sold with a front-end sales charge of up to
5%. Class B shares are sold with a
contingent deferred sales charge which
declines from 5% to zero depending on the
period of time the shares are held. Class C
shares are sold with a contingent
deferred sales charge of 1% during the first
year. Class B shares automatically
convert to Class A shares on a quarterly
basis approximately seven years after
purchase. A special exchange privilege is
also available for shareholders who
qualified to purchase Class A shares at net
asset value. Class Z shares are not
subject to any sales or redemption charge and
are offered exclusively for sale
to a limited group of investors.
The Fund has authorized 2 billion shares of
common stock at $.001 par value per
share divided into four classes, designated
Class A, Class B, Class C and Class
Z common stock each consisting of 500 million
authorized shares.
- ---------------------------------------------
- -----------------------------------
12
<PAGE>
Notes to Financial Statements (Unaudited)
PRUDENTIAL PACIFIC GROWTH FUND, INC.
- ---------------------------------------------
- -----------------------------------
Transactions in shares of common stock for
the six months ended April 30, 1998
and fiscal year ended October 31, 1997 were
as follows:
<TABLE>
<CAPTION>
Class A Shares
Amount
- --------------------------------- ----------
- - ---------------
<S> <C>
<C>
Six months ended April 30, 1998:
Shares sold......................
2,431,287 $ 24,829,197
Shares issued in reinvestment of
distributions..................
329,658 3,143,004
Shares reacquired................
(2,925,892) (30,320,194)
----------
- - ---------------
Net decrease in shares
outstanding before
conversion.....................
(164,947) (2,347,993)
Shares issued upon conversion
from Class B...................
62,119 647,910
----------
- - ---------------
Net decrease in shares
outstanding....................
(102,828) $ (1,700,083)
----------
- - ---------------
----------
- - ---------------
Year ended October 31, 1997:
Shares sold......................
81,011,975 $ 1,296,933,660
Shares issued in reinvestment of
distributions..................
110,855 1,771,786
Shares reacquired................
(85,608,895) (1,376,512,897)
----------
- - ---------------
Net decrease in shares
outstanding before
conversion.....................
(4,486,065) (77,807,451)
Shares issued upon conversion
from Class B...................
261,162 4,152,328
----------
- - ---------------
Net decrease in shares
outstanding....................
(4,224,903) $ (73,655,123)
----------
- - ---------------
----------
- - ---------------
<CAPTION>
Class B
- ---------------------------------
<S> <C>
<C>
Six months ended April 30, 1998:
Shares sold......................
1,920,439 $ 19,235,234
Shares issued in reinvestment of
distributions..................
1,170,551 10,820,405
Shares reacquired................
(4,064,097) (40,805,993)
----------
- - ---------------
Net decrease in shares
outstanding before
conversion.....................
(973,107) (10,750,354)
Shares reacquired upon conversion
into Class A...................
(64,323) (647,910)
----------
- - ---------------
Net decrease in shares
outstanding....................
(1,037,430) $ (11,398,264)
----------
- - ---------------
----------
- - ---------------
<CAPTION>
Class B Shares
Amount
- --------------------------------- ----------
- - ---------------
<S> <C>
<C>
Year ended October 31, 1997:
Shares sold......................
40,987,211 $ 633,115,767
Shares issued in reinvestment of
distributions..................
415,124 6,363,693
Shares reacquired................
(51,456,334) (794,472,870)
----------
- - ---------------
Net decrease in shares
outstanding before
conversion.....................
(10,053,999) (154,993,410)
Shares reacquired upon conversion
into Class A...................
(270,285) (4,152,328)
----------
- - ---------------
Net decrease in shares
outstanding....................
(10,324,284) $ (159,145,738)
----------
- - ---------------
----------
- - ---------------
<CAPTION>
Class C
- ---------------------------------
<S> <C>
<C>
Six months ended April 30, 1998:
Shares sold......................
946,920 $ 9,134,665
Shares issued in reinvestment of
distributions..................
21,081 194,900
Shares reacquired................
(918,133) (8,988,925)
----------
- - ---------------
Net increase in shares
outstanding....................
49,868 $ 340,640
----------
- - ---------------
----------
- - ---------------
Year ended October 31, 1997:
Shares sold......................
26,331,596 $ 408,638,884
Shares issued in reinvestment of
distributions..................
12,995 199,203
Shares reacquired................
(26,898,046) (419,221,061)
----------
- - ---------------
Net decrease in shares
outstanding....................
(553,455) $ (10,382,974)
----------
- - ---------------
----------
- - ---------------
<CAPTION>
Class Z
- ---------------------------------
<S> <C>
<C>
Six months ended April 30, 1998:
Shares sold......................
2,716,765 $ 27,677,230
Shares issued in reinvestment of
distributions..................
211,034 2,016,116
Shares reacquired................
(3,041,153) (31,412,910)
----------
- - ---------------
Net decrease in shares
outstanding....................
(113,354) $ (1,719,564)
----------
- - ---------------
----------
- - ---------------
Year ended October 31, 1997:
Shares sold......................
7,750,167 $ 123,137,184
Shares issued in reinvestment of
distributions..................
48,879 775,333
Shares reacquired................
(8,555,074) (136,615,380)
----------
- - ---------------
Net decrease in shares
outstanding....................
(756,028) $ (12,702,863)
----------
- - ---------------
----------
- - ---------------
</TABLE>
- ---------------------------------------------
- -----------------------------------
13
<PAGE>
Financial Highlights (Unaudited)
PRUDENTIAL PACIFIC GROWTH FUND, INC.
- ---------------------------------------------
- -----------------------------------
<TABLE>
<CAPTION>
Class A(a)
- ---------------------------------------------
- ---------------------------
Six Months
Ended Year Ended
October 31,
April 30, ------------------------------
- ---------------------------
1998 1997 1996 1995
1994 1993
- ---------- ------- -------- -----
- --- ------- -------
<S>
<C> <C> <C> <C>
<C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of
period............ $ 12.22 $ 15.86
$ 15.75 $ 16.90 $ 16.10 $ 10.65
- ---------- ------- -------- -----
- --- ------- -------
Income from investment operations
Net investment income
(loss).................... .02
.02 .07 .04 (.08)
(.01)
Net realized and unrealized gain (loss) on
investment and foreign currency
transactions.................................
(1.09) (3.31) .23 (1.09)
1.15 5.48
- ---------- ------- -------- -----
- --- ------- -------
Total from investment
operations............. (1.07)
(3.29) .30 (1.05) 1.07
5.47
- ---------- ------- -------- -----
- --- ------- -------
Less distributions
Distributions in excess of net investment
income.......................................
(.40) -- (.19) --
(.06) (.02)
Distributions from net realized
gains........... (.86) (.35)
- -- (.10) (.21) --
- ---------- ------- -------- -----
- --- ------- -------
Total
distributions..........................
(1.26) (.35) (.19) (.10)
(.27) (.02)
- ---------- ------- -------- -----
- --- ------- -------
Net asset value, end of
period.................. $ 9.89 $
12.22 $ 15.86 $ 15.75 $ 16.90
$ 16.10
- ---------- ------- -------- -----
- --- ------- -------
- ---------- ------- -------- -----
- --- ------- -------
TOTAL
RETURN(b).................................
(8.38)% (21.32)% 1.97%
(6.23)% 6.67% 51.39%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000)................. $ 28,002
$35,860 $113,585 $ 98,998 $98,921
$64,353
Average net assets
(000)........................ $ 29,911
$73,942 $106,148 $101,920 $92,233
$26,264
Ratios to average net assets:
Total
expenses...............................
1.90%(c) 1.48% 1.37% 1.46%
1.57% 1.63%
Operating expenses, including distribution
fees......................................
1.90%(c) 1.42% 1.37% 1.46%
1.57% 1.63%
Operating expenses, excluding distribution
fees......................................
1.65%(c) 1.17% 1.12% 1.21%
1.33% 1.43%
Net investment income
(loss)................. .42%(c)
.14% .44% .26% (.50)%
(.04)%
For Class A, B, C and Z shares:
Portfolio turnover
rate...................... 54%
81% 91% 54% 56%
44%
</TABLE>
- ---------------
(a) Calculated based upon weighted average
shares outstanding during the period.
(b) Total return does not consider the
effects of sales loads. Total return is
calculated assuming a purchase of shares
on the first day and a sale on the
last day of each period reported and
includes reinvestment of dividends and
distributions.
(c) Annualized.
- ---------------------------------------------
- -----------------------------------
See Notes to Financial Statements. 14
<PAGE>
Financial Highlights (Unaudited)
PRUDENTIAL PACIFIC GROWTH FUND, INC.
- ---------------------------------------------
- -----------------------------------
<TABLE>
<CAPTION>
Class B(a)
- ---------------------------------------------
- ------------------------------
Six Months
Ended Year Ended
October 31,
April 30, ------------------------------
- ------------------------------
1998 1997 1996 1995
1994 1993
- ---------- -------- -------- ----
- ---- -------- --------
<S>
<C> <C> <C> <C>
<C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of
period............ $ 11.77 $ 15.40
$ 15.38 $ 16.62 $ 15.94 $
10.63
- ---------- -------- -------- ----
- ---- -------- --------
Income from investment operations
Net investment
loss.............................
(.02) (.09) (.04) (.08)
(.21) (.10)
Net realized and unrealized gain (loss) on
investment and foreign currency
transactions.................................
(1.04) (3.19) .25
(1.06) 1.13 5.43
- ---------- -------- -------- ----
- ---- -------- --------
Total from investment
operations............. (1.06)
(3.28) .21 (1.14) .92
5.33
- ---------- -------- -------- ----
- ---- -------- --------
Less distributions
Distributions in excess of net investment
income.......................................
(.29) -- (.19) --
(.03) (.02)
Distributions from net realized
gains........... (.86) (.35)
- -- (.10) (.21) --
- ---------- -------- -------- ----
- ---- -------- --------
Total
distributions..........................
(1.15) (.35) (.19)
(.10) (.24) (.02)
- ---------- -------- -------- ----
- ---- -------- --------
Net asset value, end of
period.................. $ 9.56 $
11.77 $ 15.40 $ 15.38 $ 16.62
$ 15.94
- ---------- -------- -------- ----
- ---- -------- --------
- ---------- -------- -------- ----
- ---- -------- --------
TOTAL
RETURN(b).................................
(8.68)% (21.84)% 1.36%
(6.82)% 5.79% 50.17%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000)................. $ 94,581
$128,694 $327,315 $344,313
$459,949 $250,997
Average net assets
(000)........................ $104,930
$244,462 $357,548 $368,771
$404,506 $ 74,590
Ratios to average net assets:
Total
expenses...............................
2.65%(c) 2.23% 2.12% 2.21%
2.33% 2.37%
Operating expenses, including distribution
fees......................................
2.65%(c) 2.17% 2.12% 2.21%
2.33% 2.37%
Operating expenses, excluding distribution
fees......................................
1.65%(c) 1.17% 1.12% 1.21%
1.33% 1.37%
Net investment
loss..........................
(.34)%(c) (.61)% (.25)%
(.55)% (1.27)% (.83)%
</TABLE>
- ---------------
(a) Calculated based upon weighted average
shares outstanding during the period.
(b) Total return does not consider the
effects of sales loads. Total return is
calculated assuming a purchase of shares
on the first day and a sale on the
last day of each period reported and
includes reinvestment of dividends and
distributions.
(c) Annualized.
- ---------------------------------------------
- -----------------------------------
See Notes to Financial Statements. 15
<PAGE>
Financial Highlights (Unaudited)
PRUDENTIAL PACIFIC GROWTH FUND, INC.
- ---------------------------------------------
- -----------------------------------
<TABLE>
<CAPTION>
Class C(a) Class
Z(a)
- ---------------------------------------------
- --------------- ----------
August 1,
Six Months
1994(d) Six Months
Ended Year Ended October 31,
Through Ended
April 30, -----------------------------
October 31, April 30,
1998 1997 1996 1995
1994 1998
- ---------- ------ ------- ------
- ----------- ----------
<S>
<C> <C> <C> <C>
<C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of
period............ $11.77 $15.40
$ 15.38 $16.62 $ 16.68 $
12.28
- ----- ------ ------- ------
- ----- ----------
Income from investment operations
Net investment income
(loss).................... (.02)
(.09) (.04) (.08) (.06)
.03
Net realized and unrealized gain (loss) on
investment and foreign currency
transactions.................................
(1.04) (3.19) .25 (1.06)
- -- (1.09)
- ----- ------ ------- ------
- ----- ----------
Total from investment
operations............. (1.06)
(3.28) .21 (1.14) (.06)
(1.06)
- ----- ------ ------- ------
- ----- ----------
Less distributions
Distributions in excess of net investment
income.......................................
(.29) -- (.19) --
- -- (.44)
Distributions from net realized
gains........... (.86) (.35)
- -- (.10) -- (.86)
- ----- ------ ------- ------
- ----- ----------
Total
distributions..........................
(1.15) (.35) (.19) (.10)
- -- (1.30)
- ----- ------ ------- ------
- ----- ----------
Net asset value, end of
period.................. $ 9.56
$11.77 $ 15.40 $15.38 $ 16.62
$ 9.92
- ----- ------ ------- ------
- ----- ----------
- ----- ------ ------- ------
- ----- ----------
TOTAL
RETURN(b).................................
(8.68)% (21.84)% 1.36% (6.82)%
(.36)% (8.23)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000)................. $2,858
$2,932 $12,360 $2,443 $ 718
$ 14,643
Average net assets
(000)........................ $2,366
$6,557 $ 6,402 $1,624 $ 458
$ 17,697
Ratios to average net assets:
Total
expenses...............................
2.65%(c) 2.23% 2.12% 2.21%
3.00%(c) 1.65%(c)
Operating expenses, including distribution
fees......................................
2.65%(c) 2.17% 2.12% 2.21%
3.00%(c) 1.65%(c)
Operating expenses, excluding distribution
fees......................................
1.65%(c) 1.17% 1.12% 1.21%
2.00%(c) 1.65%(c)
Net investment income
(loss)................. (.34)%(c)
(.61)% (.25)% (.43)%
(1.64)%(c) .61%(c)
<CAPTION>
March 1,
Year 1996(e)
Ended Through
October 31, October 31,
1997 1996
- ----------- -----------
<S>
<C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of
period............ $ 15.89 $ 16.57
- ----------- -----------
Income from investment operations
Net investment income
(loss).................... .06
.11
Net realized and unrealized gain (loss) on
investment and foreign currency
transactions.................................
(3.32) (.79)
- ----------- -----------
Total from investment
operations............. (3.26)
(.68)
- ----------- -----------
Less distributions
Distributions in excess of net investment
income.......................................
- -- --
Distributions from net realized
gains........... (.35) --
- ----------- -----------
Total
distributions..........................
(.35) --
- ----------- -----------
Net asset value, end of
period.................. $ 12.28 $
15.89
- ----------- -----------
- ----------- -----------
TOTAL
RETURN(b).................................
(21.02)% (4.09)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000)................. $19,520
$37,288
Average net assets
(000)........................ $31,945
$33,868
Ratios to average net assets:
Total
expenses...............................
1.23% 1.12%(c)
Operating expenses, including distribution
fees......................................
1.17% 1.12%(c)
Operating expenses, excluding distribution
fees......................................
1.17% 1.12%(c)
Net investment income
(loss)................. .39%
.68%(c)
</TABLE>
- ---------------
(a) Calculated based upon weighted average
shares outstanding during the period.
(b) Total return does not consider the
effects of sales loads. Total return is
calculated assuming a purchase of shares
on the first day and a sale on the
last day of each period reported and
includes reinvestment of dividends and
distributions. Total returns for periods
of less than a full year are not
annualized.
(c) Annualized.
(d) Commencement of offering of Class C
shares.
(e) Commencement of offering of Class Z
shares.
- ---------------------------------------------
- -----------------------------------
See Notes to Financial Statements. 16
<PAGE>
Prudential Mutual Funds
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
(800) 225-1852
http://www.prudential.com
Directors
Edward D. Beach
Stephen C. Eyre
Delayne D. Gold
Robert F. Gunia
Don G. Hoff
Robert E. LaBlanc
Mendel A. Melzer, CFA
Richard A. Redeker
Robin B. Smith
Stephen Stoneburn
Nancy H. Teeters
Officers
Richard A. Redeker, President
Robert F. Gunia, Vice President
Grace C. Torres, Treasurer
Stephen M. Ungerman, Assistant Treasurer
S. Jane Rose, Secretary
Robert C. Rosselot, Assistant Secretary
Manager
Prudential Investments Fund Management LLC
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
Investment Adviser
The Prudential Investment Corporation
Prudential Plaza
Newark, NJ 07102-3777
Distributor
Prudential Securities Incorporated
One Seaport Plaza
New York, NY 10292
Custodian
State Street Bank and Trust Company
One Heritage Drive
North Quincy, MA 02171
Transfer Agent
Prudential Mutual Fund Services LLC
P.O. Box 15005
New Brunswick, NJ 08906
Independent Accountants
Price Waterhouse LLP
1177 Avenue of the Americas
New York, NY 10036
Legal Counsel
Sullivan & Cromwell
125 Broad Street
New York, NY 10004
The views expressed in this report and
information about
the Fund's portfolio holdings are for the
period covered
by this report and are subject to change
thereafter.
The accompanying financial statements as of
April 30, 1998
were not audited and, accordingly, no opinion
is expressed
on them.
This report is not authorized for
distribution to prospective
investors unless preceded or accompanied by a
current prospectus.
<PAGE>
(LOGO)
Prudential Mutual Funds
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
(800) 225-1852
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