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Previous: CORPORATE EXPRESS INC, NT 10-K, 1996-06-03 |
Next: ZIEGLER COLLATERALIZED SECURITIES INC, 8-K, 1996-06-03 |
<PAGE>
MORGAN STANLEY
EMERGING MARKETS FUND, INC.
- ---------------------------------------------
OFFICERS AND DIRECTORS
<TABLE>
<S> <C>
Barton M. Biggs John A. Levin
CHAIRMAN OF THE BOARD DIRECTOR
OF DIRECTORS William G. Morton, Jr.
Frederick B. Whittemore DIRECTOR
VICE-CHAIRMAN OF THE BOARD James W. Grisham
OF DIRECTORS VICE PRESIDENT
Warren J. Olsen Harold J. Schaaff, Jr.
PRESIDENT AND DIRECTOR VICE PRESIDENT
Peter J. Chase Joseph P. Stadler
DIRECTOR VICE PRESIDENT
John W. Croghan Valerie Y. Lewis
DIRECTOR SECRETARY
David B. Gill James R. Rooney
DIRECTOR TREASURER
Graham E. Jones Joanna M. Haigney
DIRECTOR ASSISTANT TREASURER
</TABLE>
- ---------------------------------------------
INVESTMENT ADVISER
Morgan Stanley Asset Management Inc.
1221 Avenue of the Americas
New York, New York 10020
- --------------------------------------------------------
ADMINISTRATOR
The Chase Manhattan Bank, N.A.
73 Tremont Street
Boston, Massachusetts 02108
- --------------------------------------------------------
CUSTODIANS
Morgan Stanley Trust Company (International)
One Pierrepont Plaza
Brooklyn, New York 11201
The Chase Manhattan Bank, N.A. (Domestic)
770 Broadway
New York, New York 10003
- --------------------------------------------------------
SHAREHOLDER SERVICING AGENT
Boston Equiserve
Investor Relations Department
P.O. Box 644
Boston, Massachusetts 02102-0644
(617) 575-3120
- --------------------------------------------------------
LEGAL COUNSEL
Rogers & Wells
200 Park Avenue
New York, New York 10166
- --------------------------------------------------------
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
1177 Avenue of the Americas
New York, New York 10036
- --------------------------------------------------------
For additional Fund information, including the Fund's net asset value per share
and information regarding the investments comprising the Fund's portfolio,
please call 1-800-221-6726.
- ----------------------------------------------------------
MORGAN STANLEY
EMERGING MARKETS
FUND, INC.
---------------
FIRST QUARTER REPORT
MARCH 31, 1996
MORGAN STANLEY ASSET MANAGEMENT INC.
INVESTMENT ADVISER
<PAGE>
LETTER TO SHAREHOLDERS
- --------
For the three months ended March 31, 1996, the Morgan Stanley Emerging Markets
Fund, Inc. had a total return, based on net asset value per share, of 9.87%
compared with 6.15% for the IFC Global Total Return Composite Index. For the
period from commencement of operations on November 1, 1991 through March 31,
1996, the Fund's total return based on net asset value per share is 102.58%
compared with 60.61% for the Index. On March 29, 1996, the closing price of the
Fund's shares on the New York Stock Exchange was $16 5/8, representing a 3.0%
premium to the Fund's net asset value per share.
The first quarter of 1996 saw a continued rebound in the performance of the
emerging markets. 14 out of the 23 markets in the Morgan Stanley Capital
International Emerging Markets Index posted positive returns. Two factors have
been paramount in the recovery of the emerging markets -- confidence and
liquidity.
First, confidence has grown. In the 18 months since the Mexican peso devaluation
led to a decline in confidence in the emerging markets, the developing economies
have shown they are able to weather severe dislocations and emerge stronger from
the experience. Clearly, there has been a turning point from the oversold
position of 1995. Mexico is only one example in our universe where international
reserves are growing steadily and the uncertain financial environment caused by
the currency weakness has been replaced by a more stable and predictable
outlook.
While the U.S. wrestles with the fears of an upturn in inflation, the general
trend in inflation is downward in the emerging markets. Latin America, as a
region, has made the most marked inroads on inflation. For example, Argentinean
inflation, which averaged 393% over 1989-1993, is expected to be 1.1% in 1996.
Brazilian inflation has fallen from an average of 1,283% in the five years from
1989-1993 to an estimated 17% for 1996. In Mexico, inflation peaked at 50% in
1995 and should fall to 34% year-on-year by the end of 1996.
In Asia, the inflation outlook is more mixed although the levels of inflation
are not high by any measure. East Asian inflation bottomed at 4% in 1992 and
currently averages 6.5%. In North Asia (excluding China) the trend is reversed,
however, with a peak of 10% in 1990 and current average of 4%.
Even in Russia, inflation has fallen dramatically from 300% in 1994 to an
expected 70% in 1996, based on J.P. Morgan statistics.
The second factor behind the rise in the emerging markets is global liquidity.
Currently the growth in the supply of money exceeds the growth of demand from
industry for investment capital. The result is, the excess is attracted to
financial markets. Long term, stable foreign direct investment continued to flow
into the emerging markets during 1995. World Bank estimates show this category
of capital flows increased from $60 billion in 1994 to approximately $90 billion
in 1995. The short term horizon portfolio flows to emerging stock markets fell
substantially in the first nine months of 1995, but began to increase in the
last quarter of the year and have continued to be strong in the first three
months of 1996. For example, our portfolio managers in India estimate that
around $450 million of new investment came into the Indian stock market in
February alone. While we do not anticipate that the positive liquidity factors
will persist indefinitely, demands for capital are not expected to pick up in
the major economies until late 1996. Liquidity will have a very positive effect
on emerging stock markets over the coming six months at least, and longer if the
pick up in growth in the OECD is more sluggish than expected.
Over the quarter, the Fund benefited from its overweight positions in India
(which rose 11.5%), Hong Kong (up 11%), Brazil (up 10%), Mexico (up 10%), Poland
(up 33%) and Turkey (up 34%).
2
<PAGE>
The low weighting in South Africa was also a positive. The rand weakened
considerably on worries about the removal of exchange controls and Nelson
Mandela's health. South Africa fell 2% in dollar terms. The zero position in
Malaysia was a drag on performance, however, as the market rose 14%.
The outlook for emerging markets is more positive today than it has been for
several years, but there are some potential hazards to be negotiated in the
coming months. One challenge will be the interest rate environment in the United
States. Rising U.S. interest rates tend to have a cooling impact on emerging
market performance although some recent work by the Bank Credit Analyst shows
that liquidity has a more tangible impact on market performance than interest
rate movement. Another challenge is politics. Elections are coming up in India
and Russia. The value in the emerging markets is compelling, however and
liquidity factors are currently positive. The progress on inflation coupled with
a build up in foreign reserves and more stable currencies in the emerging
markets will maintain investor confidence in the asset class.
Sincerely,
[SIGNATURE]
Warren J. Olsen
PRESIDENT AND DIRECTOR
[SIGNATURE]
Madhav Dhar
PORTFOLIO MANAGER
[SIGNATURE]
Marianne L. Hay
PORTFOLIO MANAGER
April 29, 1996
3
<PAGE>
Morgan Stanley Emerging Markets Fund, Inc.
Investment Summary as of March 31, 1996
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
HISTORICAL
INFORMATION (UNAUDITED)
TOTAL RETURN (%)
-------------------------------------------------------------------------------------
MARKET VALUE (1) NET ASSET VALUE (2) INDEX (1)(3)
--------------------------- --------------------------- -----------------
AVERAGE AVERAGE AVERAGE
CUMULATIVE ANNUAL CUMULATIVE ANNUAL CUMULATIVE ANNUAL
--------------------------- --------------------------- -----------------
<S> <C> <C> <C> <C> <C> <C>
FISCAL YEAR TO
DATE 7.26% -- 9.87% -- 6.15% --
ONE YEAR 8.34+ 8.34%+ 14.74+ 14.74%+ 6.75 6.75%
SINCE INCEPTION* 108.66+ 18.12+ 102.58+ 17.33+ 60.61 11.33
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
- --------------------------------------------------------------------------------
RETURNS AND PER SHARE INFORMATION
A BAR CHART REFLECTING THE DATA BELOW IS REFLECTED HERE.
<TABLE>
<CAPTION>
3 MONTHS ENDED
YEARS ENDED DECEMBER 31: MARCH 31,1996
<S> <C> <C> <C> <C> <C> <C>
1991* 1992 1993 1994 1995 (Unaudited)
Net Asset Value Per Share $ 14.71 $ 16.74 $ 28.20 $ 20.30 $ 14.69 $ 16.14
Market Value Per Share $14.25 $18.13 $31.63 $21.50 $15.50 $16.63
Premium/(Discount) -3.1% 8.3% 12.2% 5.9% 5.5% 3.0%
Income Dividends $0.04 $0.01 - - - -
Capital Gains Distributions - $0.01 $1.49 $6.50 $1.29 -
Fund Total Return (2) 4.61% 13.94% 95.22%+ -5.33% -16.30%+ 9.87%
Index Total Return (1)(3)** 3.25% 0.33% 67.52% -0.51% -12.34% 6.15%
</TABLE>
(1) Assumes dividends and distributions, if any, were reinvested.
(2) Total investment return based on per share net asset value reflects the
effects of changes in net asset value on the performance of the Fund during
each period, and assumes dividends and distributions, if any, were
reinvested. This return does not include the effect of dilution in
connection with the Rights Offering. These percentages are not an indication
of the performance of a shareholder's investment in the Fund based on market
value due to differences between the market price of the stock and the net
asset value per share of the Fund.
(3) IFC Global Total Return Composite Index.
* The Fund commenced operations on November 1, 1991.
** Unaudited.
+ Adjusted for Rights Offering.
4
<PAGE>
Morgan Stanley Emerging Markets Fund, Inc.
Portfolio Summary as of March 31, 1996 (Unaudited)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INVESTMENTS DIVERSIFICATION
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Equity Securities 91.7%
Debt Instruments 3.0%
Short-Term Investments 5.3%
</TABLE>
- --------------------------------------------------------------------------------
SECTORS
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Banking 13.7%
Beverages & Tobacco 8.8%
Building Materials & Components 4.0%
Electronic Components & Instruments 3.2%
Energy Equipment & Services 3.7%
Multi-Industry 10.9%
Real Estate 5.6%
Telecommunications 12.2%
Utilities-Electrical & Gas 3.9%
Other 34.0%
</TABLE>
- --------------------------------------------------------------------------------
COUNTRY WEIGHTINGS
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Brazil 12.9%
India 12.1%
Mexico 11.1%
Hong Kong 10.4%
Russia 5.8%
Turkey 5.5%
Philippines 5.4%
Indonesia 5.2%
Thailand 4.8%
South Africa 4.3%
Taiwan 3.7%
Israel 2.7%
Pakistan 2.4%
Greece 2.1%
Korea 2.1%
China 1.9%
Poland 1.5%
Colombia 1.3%
Zimbabwe 0.8%
Mauritus 0.7%
Argentina 0.6%
Morocco 0.5%
United Kingdom 0.3%
Egypt 0.3%
Portugal 0.1%
Other 1.5%
</TABLE>
- --------------------------------------------------------------------------------
5
<PAGE>
Morgan Stanley Emerging Markets Fund, Inc.
Portfolio Summary as of March 31, 1996 (Unaudited) (continued)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TEN LARGEST HOLDINGS*
<TABLE>
<CAPTION>
PERCENT OF
NET ASSETS
---------------
<C> <S> <C>
1. Telebras 3.5%
2. Bharat Heavy Electricals 3.0
3. Telmex 'L' ADR 2.1
4. Eletrobras 2.1
5. State Bank of India 2.0
<CAPTION>
PERCENT OF
NET ASSETS
---------------
<C> <S> <C>
6. Brahma 1.9%
7. Bank for Foreign Economic
Affairs
Unrestructured Loans 1.6
8. Finance One Co., Ltd. (Foreign) 1.6
9. G. Bancomer 1.6
10. FEMSA 'B' 1.5
---
20.9%
---
---
</TABLE>
- --------------------------------------------------------------------------------
* Excludes short-term securities.
6
<PAGE>
INVESTMENTS (UNAUDITED)
- ---------
MARCH 31, 1996
<TABLE>
<CAPTION>
VALUE
SHARES (000)
<S> <C> <C>
- ---------------------------------------------------------
- ------------
COMMON STOCKS (93.3%)
(Unless otherwise noted)
- --------------------------------------------------
- ----------
ARGENTINA (0.6%)
AUTOMOBILES
CIADEA 1 U.S.$ --
--------------
BEVERAGES & TOBACCO
Quilmes Industrial S.A. 133,065 1,597
Quilmes Industrial S.A. (Preferred)
ADR 66,533 715
--------------
2,312
--------------
2,312
--------------
- ---------------------------------------------------------
- ------------
BRAZIL (12.2%)
BANKING
Banco Bradesco (Preferred) 533,668,910 5,593
Banco do Brasil (Preferred) 8,111,000 82
Banco Itau (Preferred) 9,316,500 3,311
Banco Nacional (Preferred) 61,598,720 3
--------------
8,989
--------------
BEVERAGES & TOBACCO
Brahma (Preferred) 14,085,209 6,803
Brahma (Rights) 966,600 --
--------------
6,803
--------------
ENERGY SOURCES
Petrobras (Preferred) 25,077,999 2,996
--------------
MERCHANDISING
Cia Brasileira 6,460,000 97
Cia Brasileira (Preferred) GDR 72,270 1,057
Lojas Americanas (Preferred) 65,534 10
--------------
1,164
--------------
MULTI-INDUSTRY
Itausa Investimentos Itau (Preferred) 115,000 78
--------------
TELECOMMUNICATIONS
Telebras 44,622,000 1,766
Telebras (Preferred) 190,951,183 9,512
Telebras (Preferred) ADR 33,825 1,683
Telesp 3,543,000 538
Telesp (Preferred) 4,702,535 800
--------------
14,299
--------------
UTILITIES -- ELECTRICAL & GAS
Cemig GDR 7,525 211
Cemig (Preferred) 70,902,860 1,989
CPFL (Preferred) 15,435,000 523
Eletrobras 11,278,078 2,946
Eletrobras 'B' (Preferred) 17,414,138 4,761
Light (Rights) 3,498,000 248
--------------
10,678
--------------
45,007
--------------
- ---------------------------------------------------------
- ------------
<CAPTION>
VALUE
SHARES (000)
<S> <C> <C>
- ---------------------------------------------------------
- ------------
CHINA (1.9%)
APPLIANCES & HOUSEHOLD DURABLES
Shanghai Refrigerator Compressor 'B' 1,999,300 U.S.$ 864
--------------
AUTOMOBILES
Shanghai Diesel Engine Co. Ltd. 'B' 998,000 561
Shenzen North Jianshe Motorcycle 'B' 1,547,000 595
--------------
1,156
--------------
BUILDING MATERIALS & COMPONENTS
Shanghai Yaohua Pilkington 'B' 186,000 179
--------------
BUSINESS & PUBLIC SERVICES
Jinqiao Export Processing
Zone Development Co. 'B' 2,301,000 736
--------------
CHEMICALS
Jilin Chemical Industrial Co. ADR 29,000 613
Shenzhen Yizheng Chemical 4,342,000 1,123
--------------
1,736
--------------
HEALTH & PERSONAL CARE
Shenzhen Lizhu Pharmaceutical Group,
Inc. 'B' 535,000 159
--------------
MACHINERY & ENGINEERING
Harbin Power Equipment Co. Ltd. 'H' 1,458,000 268
Shanghai Erfangji Co. Ltd. 'B' 239,680 32
--------------
300
--------------
METALS -- STEEL
Maanshan Iron & Steel Co. Ltd. 'H' 3,404,000 537
--------------
REAL ESTATE
Chiwan Wharf Holdings 'B' 1,499,700 588
--------------
RECREATION, OTHER CONSUMER GOODS
Shanghai Phoenix Bicycle Ltd. 'B' 223,000 37
--------------
TRANSPORTATION -- SHIPPING
China Merchants Shekou Port Service
'B' 2,060,520 711
--------------
7,003
--------------
- ---------------------------------------------------------
- ------------
COLOMBIA (0.6%)
BANKING
Banco de Colombia 5,465,000 2,146
--------------
- ---------------------------------------------------------
- ------------
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- ---------------------------------------------------------
- ------------
<S> <C> <C>
EGYPT (0.3%)
BANKING
Commercial International Bank 4,100 U.S.$ 532
--------------
BEVERAGES & TOBACCO
Eastern Tobacco 21,600 241
--------------
BUILDING MATERIALS & COMPONENTS
Ameriyah Cement Co. 5,900 78
Helwan Portland Cement 14,500 136
Tora H. Portland Cement 7,150 90
--------------
304
--------------
FOOD & HOUSEHOLD PRODUCTS
North Cairo Flour Mills 7,910 194
--------------
1,271
--------------
- ---------------------------------------------------------
- ------------
GREECE (2.1%)
BANKING
Alpha Credit Bank 12,000 862
Ergo Bank S.A. 40,000 1,960
--------------
2,822
--------------
BEVERAGES & TOBACCO
Delta Dairy S.A. 152,000 2,216
Hellenic Bottling Co. S.A. 54,000 2,016
--------------
4,232
--------------
CONSTRUCTION & HOUSING
Aegek 111,150 801
--------------
7,855
--------------
- ---------------------------------------------------------
- ------------
HONG KONG (9.8%)
ELECTRICAL & ELECTRONICS
Great Wall Electronics International
ADR 58,630 233
--------------
ELECTRONIC COMPONENTS & INSTRUMENTS
Varitronix International Ltd. 1,100,000 2,020
--------------
ENERGY SOURCES
Shandong Huaneng Power Co. Ltd. 71,000 621
Zhenhai Refining & Chemical Co. Ltd.
'H' 2,129,000 545
--------------
1,166
--------------
FOOD & HOUSEHOLD PRODUCTS
Charoen Pokphand Co. Ltd. 4,518,000 2,147
Tingyi (Cayman Island) Holding Co. 3,572,000 935
--------------
3,082
--------------
MULTI-INDUSTRY
Citic Pacific Ltd. 846,000 3,281
Guangdong Investments Ltd. 3,724,000 2,359
Hutchison Whampoa Ltd. 640,000 4,038
Swire Pacific Ltd. 'A' 419,000 3,684
--------------
13,362
--------------
- ---------------------------------------------------------
- ------------
<CAPTION>
VALUE
SHARES (000)
<S> <C> <C>
- ---------------------------------------------------------
- ------------
REAL ESTATE
Cheung Kong (Holdings) Ltd. 543,000 U.S.$ 3,826
Hopewell Holdings 3,742,000 2,177
New World Development Co. Ltd. 1,085,000 5,050
Sun Hung Kai Properties Ltd. 206,100 1,845
--------------
12,898
--------------
TELECOMMUNICATIONS
Hong Kong Telecom Ltd. 1,014,800 2,027
--------------
TRANSPORTATION -- SHIPPING
Cosco Pacific Ltd. 1,512,000 1,192
--------------
35,980
--------------
- ---------------------------------------------------------
- ------------
INDIA (11.2%)
AUTOMOBILES
Apollo Tyres Ltd. 80,000 420
Hero Honda 191,687 1,630
MRF Ltd. 3,500 267
Tata Engineering & Locomotive 72,040 963
--------------
3,280
--------------
BANKING
Bank of Rajasthan (New) 241,950 1,433
State Bank of India 1,071,200 7,469
--------------
8,902
--------------
BEVERAGES & TOBACCO
ITC Ltd. 79,000 531
--------------
BUILDING MATERIALS & COMPONENTS
Associated Cement Co. Ltd. 8,280 923
Gujarat Ambuja Cements Ltd. 96,000 991
--------------
1,914
--------------
CHEMICALS
Indian Petro Chemical Corp. 196,700 894
Reliance Industries Ltd. GDS 2,424 15
--------------
909
--------------
ELECTRICAL & ELECTRONICS
Asian Electronics Ltd. 50,000 733
--------------
ELECTRONIC COMPONENTS & INSTRUMENTS
Modi Xerox Ltd. 99,550 555
--------------
ENERGY EQUIPMENT & SERVICES
Bharat Heavy Electricals 3,125,000 11,112
Crompton Greaves Ltd. 81,850 542
--------------
11,654
--------------
FINANCIAL SERVICES
Housing Development Finance Corp. 47,880 4,549
--------------
HEALTH & PERSONAL CARE
E. Merck (India) Ltd. 62,350 347
Nicholas Piramal India Ltd. 225,000 1,963
Ranbaxy Labs Ltd. 71 1
--------------
2,311
--------------
- ---------------------------------------------------------
- ------------
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- ---------------------------------------------------------
- ------------
<S> <C> <C>
INDIA (CONTINUED)
MACHINERY & ENGINEERING
Bharat Forge Co. Ltd. 56,533 U.S.$ 244
Bharat Forge Co. Ltd. (Warrants) 14,285 62
--------------
306
--------------
MISCELLANEOUS MATERIALS & COMMODITIES
Essel Packaging Ltd. 71,950 452
--------------
MULTI-INDUSTRY
Morgan Stanley Growth Fund 6,881,800 1,130
--------------
RECREATION & OTHER CONSUMER GOODS
Tube Investments 158,000 676
--------------
TELECOMMUNICATIONS
Videsh Sanchar Nigam Ltd. 62,600 2,203
--------------
TEXTILES & APPAREL
Mahavir Spinning Mills Ltd. 5,500 20
Raymond Ltd. 45,000 442
--------------
462
--------------
TRANSPORTATION -- SHIPPING
Great Eastern Shipping Ltd. 'A' 579,500 765
--------------
UTILITIES -- ELECTRICAL & GAS
Tata Power Co. Ltd. 250 1
--------------
41,333
--------------
- ---------------------------------------------------------
- ------------
INDONESIA (5.0%)
BANKING
Bank Bali (Foreign) 140,000 299
Bank Bali (Warrants), expiring 8/29/00 24,200 11
--------------
310
--------------
BEVERAGES & TOBACCO
Gudang Garam (Foreign) 19,000 235
HM Sampoerna (Foreign) 154,500 1,614
--------------
1,849
--------------
BUILDING MATERIALS & COMPONENTS
Indocement Tunggal Prakarsa (Foreign) 280,000 1,015
Semen Gresik (Foreign) 381,000 1,348
--------------
2,363
--------------
CHEMICALS
Sorini Corp. (Foreign) 80,000 421
--------------
ELECTRICAL & ELECTRONICS
Voksel Electronics (Foreign) 329,000 274
--------------
FOREST PRODUCTS & PAPER
Barito Pacific Timber (Foreign) 1,079,500 1,085
--------------
HEALTH & PERSONAL CARE
Kalbe Farma (Foreign) 495,520 1,510
--------------
MACHINERY & ENGINEERING
United Tractors (Foreign) 597,500 1,201
--------------
- ---------------------------------------------------------
- ------------
<CAPTION>
VALUE
SHARES (000)
<S> <C> <C>
- ---------------------------------------------------------
- ------------
MERCHANDISING
Tempo Scan Pacific (Foreign) 200,000 U.S.$ 530
--------------
MISCELLANEOUS MATERIALS & COMMODITIES
Charoen Pokphand Indonesia (Foreign) 562,694 1,125
--------------
MULTI-INDUSTRY
Bimantara Citra (Foreign) 1,150,000 1,402
--------------
TELECOMMUNICATIONS
Indosat (Foreign) 361,500 1,241
Telekomunikasi (Foreign) 3,341,000 5,216
--------------
6,457
--------------
18,527
--------------
- ---------------------------------------------------------
- ------------
ISRAEL (2.7%)
AEROSPACE & MILITARY TECHNOLOGY
Elbit Ltd. 27,400 1,501
--------------
BANKING
First International Bank of Israel 10,321 1,243
--------------
ELECTRICAL & ELECTRONICS
Scitex Ltd. 55,467 770
--------------
FOOD & HOUSEHOLD PRODUCTS
Osem Investment Ltd. 154,176 929
Super Sol Ltd. 60,013 1,441
--------------
2,370
--------------
HEALTH & PERSONAL CARE
Teva Pharmaceutical Industries Ltd.
ADR 20,000 770
--------------
MULTI-INDUSTRY
Koor Industries Ltd. 19,850 1,887
Pec Israel Economic Corp. 43,870 943
--------------
2,830
--------------
REAL ESTATE
Israel Land Development 157,600 484
--------------
9,968
--------------
- ---------------------------------------------------------
- ------------
KOREA (2.1%)
APPLIANCES & HOUSEHOLD PRODUCTS
Samsung Electronics Co. (Foreign) 27,228 3,202
Samsung Electronics Co. RFD (Foreign) 858 101
Samsung Electronics Co. RFD (Foreign) (Bonus Issue)
8,205 965
--------------
4,268
--------------
BANKING
Korea Housing Bank 8,140 226
Shinhan Bank Co. Ltd. (Foreign) 69,034 1,649
--------------
1,875
--------------
ENERGY EQUIPMENT & SERVICES
Yukong Ltd. (Foreign) 27,600 924
--------------
METALS -- STEEL
Pohang Iron & Steel (Foreign) 7,870 661
--------------
7,728
--------------
- ---------------------------------------------------------
- ------------
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- ---------------------------------------------------------
- ------------
<S> <C> <C>
MAURITIUS (0.7%)
BANKING
State Bank of Mauritius 5,726,285 U.S.$ 2,450
--------------
- ---------------------------------------------------------
- ------------
MEXICO (11.1%)
BANKING
G. Banacci 'B' 1,585,670 3,380
G. Banacci 'L' 736,191 1,409
G. Bancomer 'B' 1,473,925 593
G. Bancomer 'L' 79,393 26
G. Bancomer ADR 633,508 5,108
--------------
10,516
--------------
BEVERAGES & TOBACCO
Coca-Cola Femsa S.A. ADR 13,895 314
FEMSA 'B' 1,999,885 5,661
Panamerican Beverages, Inc. 'A' 57,422 2,318
--------------
8,293
--------------
BROADCASTING & PUBLISHING
G. Televisa ADR 88,660 2,205
--------------
BUILDING MATERIALS & COMPONENTS
Apasco 222,558 1,124
Cemex CPO 'A' 1,068,105 3,804
Cemex CPO ADR 240,612 1,739
--------------
6,667
--------------
CONSTRUCTION & HOUSING
Empresas ICA Sociedad Controladora
S.A. ADS 79,889 1,039
--------------
MERCHANDISING
Cifra S.A. de C.V. 'B' 200,800 266
Cifra S.A. de C.V. 'C' 950,575 1,248
--------------
1,514
--------------
MULTI-INDUSTRY
Alfa S.A. de C.V. 'A' 108,500 1,442
G. Carso ADR 93,690 1,456
G. Sidek 'A' 1,000 --
--------------
2,898
--------------
TELECOMMUNICATIONS
Telmex 'L' ADR 236,000 7,758
--------------
40,890
--------------
- ---------------------------------------------------------
- ------------
MOROCCO (0.5%)
BANKING
Wafabank 20,000 884
--------------
MULTI-INDUSTRY
Groupe Ona 21,400 884
--------------
1,768
--------------
- ---------------------------------------------------------
- ------------
PAKISTAN (2.3%)
BEVERAGES & TOBACCO
Industrial Fruit Products 100 --
--------------
BUILDING MATERIALS & COMPONENTS
Cherat Cement Ltd. 21,056 20
D. G. Khan Cement Ltd. 731,500 424
D. G. Khan Cement Ltd. (Rights) 219,450 13
--------------
457
--------------
- ---------------------------------------------------------
- ------------
<CAPTION>
VALUE
SHARES (000)
<S> <C> <C>
- ---------------------------------------------------------
- ------------
CHEMICALS
Fauji Fertilizer Co. Ltd. 1,250,000 U.S.$ 2,709
--------------
ENERGY SOURCES
Pakistan State Oil Co. Ltd. 148,200 1,302
--------------
INSURANCE
Adamjee Insurance Co. Ltd. 11,884 46
--------------
TELECOMMUNICATIONS
Pakistan Telecommunications 22,000 2,239
Pakistan Telecommunications GDR 4,500 441
--------------
2,680
--------------
TEXTILES & APPAREL
Crescent Textile Mills Ltd. 2,771 2
Dewan Salman Fibre 60,000 79
Nishat Mills Ltd. 471,926 383
--------------
464
--------------
UTILITIES -- ELECTRICAL & GAS
Karachi Electric Supply Corp. 554,400 466
Sui Northern Gas Co. 337,000 351
--------------
817
--------------
8,475
--------------
- ---------------------------------------------------------
- ------------
PHILIPPINES (5.4%)
BEVERAGES & TOBACCO
San Miguel Corp. 'B' 738,000 2,481
--------------
CONSTRUCTION & HOUSING
DMCI Holdings, Inc. 2,257,000 1,466
--------------
ENERGY SOURCES
Petron Corp. 4,953,625 2,129
--------------
MULTI-INDUSTRY
JG Summit Holdings 'B' 6,134,000 2,132
--------------
REAL ESTATE
Ayala Land, Inc. 'B' 1,553,081 2,521
C&P Homes, Inc. 2,926,000 2,207
SM Prime Holdings, Inc. 6,294,100 1,875
--------------
6,603
--------------
TELECOMMUNICATIONS
Philippine Long Distance Telephone 'B' 44,510 2,414
--------------
UTILITIES -- ELECTRICAL & GAS
Manila Electric Co. 'B' 308,865 2,725
--------------
19,950
--------------
- ---------------------------------------------------------
- ------------
POLAND (1.3%)
CHEMICALS
Eastbridge 33,600 2,259
--------------
CONSTRUCTION & HOUSING
Mostostal Exports S.A. 246,000 722
--------------
FINANCIAL SERVICES
Bank Rozwoju Eksportu 4,550 97
--------------
- ---------------------------------------------------------
- ------------
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- ---------------------------------------------------------
- ------------
<S> <C> <C>
POLAND (CONTINUED)
MISCELLANEOUS MATERIALS & COMMODITIES
Debica 9,700 U.S.$ 236
--------------
MULTI-INDUSTRY
Elektrim 116,500 689
International UNP Holdings Ltd. 2,280,000 611
--------------
1,300
--------------
4,614
--------------
- ---------------------------------------------------------
- ------------
PORTUGAL (0.1%)
BROADCASTING & PUBLISHING
Filmes Lusomundo 35,000 229
--------------
MULTI-INDUSTRY
Portuguese Investment Fund Ltd. 200 15
--------------
244
--------------
- ---------------------------------------------------------
- ------------
RUSSIA (4.2%)
BROADCASTING & PUBLISHING
Storyfirst Communications 'C'
(Preferred) 270 180
Storyfirst Communications 'D'
(Preferred) 720 540
Storyfirst Communications 'E'
(Preferred) 780 780
--------------
1,500
--------------
ENERGY EQUIPMENT & SERVICES
Moscow Energy 3,650,000 867
--------------
ENERGY SOURCES
Edinaya Energetics 62,500 2
Irkutskenergo 169,000 761
LUKoil Holdings 101,000 472
LUKoil Holdings ADR 187,850 3,475
United Energy System 21,072,500 632
--------------
5,342
--------------
MULTI-INDUSTRY
Alliance Cellulose 'B' 156,075 2,480
--------------
TELECOMMUNICATIONS
Global Telesystems Group 214,285 2,143
Rostelecom 1,415,000 1,292
Russian Telecom Development Corp. 176,000 1,760
--------------
5,195
--------------
15,384
--------------
- ---------------------------------------------------------
- ------------
SOUTH AFRICA (4.3%)
CHEMICALS
SASOL Ltd. 212,227 2,072
--------------
FINANCIAL SERVICES
Amalgamated Banks of South Africa 342,900 1,812
--------------
- ---------------------------------------------------------
- ------------
<CAPTION>
VALUE
SHARES (000)
<S> <C> <C>
- ---------------------------------------------------------
- ------------
FOOD & HOUSEHOLD PRODUCTS
Bidvest Group Ltd. 367,537 U.S.$ 2,404
--------------
INSURANCE
Liberty Life Strategic Investments
Ltd. 120,000 460
--------------
MERCHANDISING
Metro Cash and Carry Ltd. 470,000 2,040
--------------
MULTI-INDUSTRY
Anglo American Industrial Corp. 38,850 1,867
Barlow Ltd. 259,000 3,323
Morgan Stanley Africa Investment Fund 141,445 1,927
--------------
7,117
--------------
15,905
--------------
- ---------------------------------------------------------
- ------------
TAIWAN (3.5%)
ELECTRICAL & ELECTRONICS
Mosel Vitelic, Inc. 478,470 1,132
--------------
ELECTRONIC COMPONENTS & INSTRUMENTS
Acer, Inc. 820,000 1,609
Advanced Semiconductor Engineering,
Inc. 321,000 694
Taiwan Semiconductor Co. 1,495,000 4,112
United Micro Electronics Corp. Ltd. 1,202,629 2,690
--------------
9,105
--------------
INDUSTRIAL COMPONENTS
Walsin Lihwa Electric Wire & Cable
Corp. GDR 121,000 1,074
--------------
METALS -- STEEL
China Steel Corp. 1,310,000 1,014
--------------
TEXTILES & APPAREL
Shinkong Synthetic Fiber 705,599 554
--------------
12,879
--------------
- ---------------------------------------------------------
- ------------
THAILAND (4.8%)
BANKING
Bangkok Bank Ltd. (Foreign) 300,900 4,052
Thai Farmers Bank Ltd. (Foreign) 364,760 4,276
--------------
8,328
--------------
ELECTRICAL & ELECTRONICS
Shinawatra Computer Co. Ltd. (Foreign) 67,000 1,720
--------------
FINANCIAL SERVICES
Finance One Co. Ltd. (Foreign) 774,600 5,798
--------------
TELECOMMUNICATIONS
Advanced Information Services Co. Ltd.
(Foreign) 92,700 1,748
--------------
17,594
--------------
- ---------------------------------------------------------
- ------------
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- ---------------------------------------------------------
- ------------
<S> <C> <C>
TURKEY (5.5%)
AUTOMOBILES
Tofas Turk Otomobil Fabrikasi 8,290,000 U.S.$ 954
Tofas Turk Otomobil Fabrikasi GDR 665,200 366
--------------
1,320
--------------
BANKING
Demirbank TAS 4,400,000 170
Turkiye Garanti Bankasi AS 4,452,000 418
Yapi Kredi Bankasi AS 12,960,000 982
--------------
1,570
--------------
BEVERAGES & TOBACCO
Ege Biracilik Ve Malt Sanayii 11,857,880 4,326
Erciyas Biracilik Ve Malt Sanayii 1,582,000 954
Guney Biracilik Ve Malt Sanayii 1,046,000 235
--------------
5,515
--------------
BROADCASTING & PUBLISHING
Sabah Yayincilik AS 30,998,000 728
--------------
BUILDING MATERIALS & COMPONENTS
Borusan Birmesik 3,275,000 793
Ege Seramik Sanayi ve Ticaret AS 1,615,000 465
Trakya Cam Sanayii AS 9,291,000 1,401
--------------
2,659
--------------
CHEMICALS
Bagfas Bandirma Gubre Fabrikalari AS 926,000 318
--------------
FOOD & HOUSEHOLD PRODUCTS
Migros Turk TAS 1,296,000 1,382
Tat Konserve Sanayii AS 3,535,000 2,157
--------------
3,539
--------------
HEALTH & PERSONAL CARE
Efes Sinai Yatirim 30,236,087 976
--------------
METALS -- NON-FERROUS
Eregli Demir Ve Celik Fabrikalari TAS 17,107,000 1,992
--------------
TEXTILES & APPAREL
Aksa Akrilik Kimya Sanayii AS 1,945,727 710
Bossa Ticaret Sanayi Isletme 4,182,000 446
--------------
1,156
--------------
UTILITIES -- ELECTRICAL & GAS
Turcas Petroculuk AS 863,750 297
--------------
20,070
--------------
- ---------------------------------------------------------
- ------------
UNITED KINGDOM (0.3%)
MULTI-INDUSTRY
Lonrho plc 318,961 1,042
--------------
- ---------------------------------------------------------
- ------------
<CAPTION>
VALUE
SHARES (000)
<S> <C> <C>
- ---------------------------------------------------------
- ------------
ZIMBABWE (0.8%)
MULTI-INDUSTRY
Trans Zambezi Industries Ltd. 1,800,000 U.S.$ 2,790
--------------
- ---------------------------------------------------------
- ------------
TOTAL COMMON STOCKS
(Cost U.S. $320,048) 343,185
--------------
- ---------------------------------------------------------
- ------------
<CAPTION>
FACE
AMOUNT
(000)
<S> <C> <C>
- ---------------------------------------------------------
- ------------
DEBT INSTRUMENTS (3.1%)
- ---------------------------------------------------------
- ------------
COLOMBIA (0.6%)
FINANCE
Banco de Colombia (Convertible) 5.20%,
2/1/99 U.S.$ 2,615 2,321
--------------
- ---------------------------------------------------------
- ------------
INDIA (0.9%)
CHEMICALS
Supreme Petrochem 15.00%, 4/22/02 INR 60,000 246
--------------
MACHINERY & ENGINEERING
Bharat Forge Co. Ltd. 14.50%, 4/18/02 1,429 19
--------------
MATERIALS
Shri Ishar Alloy Steels 15.00%,
4/21/02 58,100 288
--------------
MULTI-INDUSTRY
DCM Shriram Industries 16.50%, 3/2/02 33,500 608
DCM Shriram Industries (Convertible)
15.00%, 3/2/02 33,000 454
Raymond Ltd. 16.00%, 1/5/02 12,359 362
Somani Pilkington 15.00%, 1/4/02 20,725 1,140
--------------
2,564
--------------
3,117
--------------
- ---------------------------------------------------------
- ------------
POLAND (0.0%)
BRADY BOND
Polish People's Republic Past Due
Interest Bond 3.75%, 10/27/14 U.S.$ 28 21
--------------
- ---------------------------------------------------------
- ------------
RUSSIA (1.6%)
LOAN AGREEMENTS
Bank for Foreign Economic Affairs
Unrestructured Loans CHF 1,935 546
Bank for Foreign Economic Affairs
Unrestructured Loans U.S.$ 16,000 5,460
--------------
6,006
--------------
- ---------------------------------------------------------
- ------------
TOTAL DEBT INSTRUMENTS
(Cost U.S. $11,398) 11,465
--------------
- ---------------------------------------------------------
- ------------
</TABLE>
12
<PAGE>
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE
(000) (000)
- ---------------------------------------------------------
- ------------
<S> <C> <C>
SHORT TERM INVESTMENT (3.2%)
REPURCHASE AGREEMENT
The Chase Manhattan Bank, N.A., 5.15%, dated 3/29/96,
due 4/1/96, to be repurchased at U.S.$11,781,
collateralized by U.S.$11,940 United States Treasury
Notes 6.00%, due 8/31/97, valued at U.S.$12,015
(Cost $11,776) U.S.$ 11,776 U.S.$ 11,776
--------------
</TABLE>
<TABLE>
<S> <C> <C>
- ---------------------------------------------
- ---------
FOREIGN CURRENCY ON DEPOSIT WITH
CUSTODIAN (2.2%)
Argentine Peso ARP 30,568 30
Brazilian Real BRC 2,387,114 2,417
Colombian Peso COP 375,517,827 360
Hong Kong Dollar HKD 17,647,677 2,282
Indian Rupee INR 10,834,074 318
Indonesian Rupiah IDR 1,244,311,197 532
Israeli Shekel ISS 15,148 5
Malaysian Ringgit MYR 1 --
Mexican Peso MXP 210,444 28
Pakistani Rupee PKR 16,302,973 473
Peruvian New Sol PSS 46,279 19
Philippine Peso PHP 80,496 3
Polish Zloty PLZ 2,141,328 827
South African Rand ZAR 31,042 8
South Korean Won KRW 13,827,601 18
Taiwan Dollar TWD 16,901,323 620
Turkish Lira TRL 65 --
------------
(Cost U.S. $8,039) 7,940
------------
- ---------------------------------------------------------
- ------------
TOTAL INVESTMENTS (101.8%)
(Cost U.S. $351,261) 374,366
------------
- ---------------------------------------------------------
- ------------
OTHER ASSETS AND LIABILITIES (-1.8%)
Other Assets U.S.$ 11,465
Liabilities (18,043) (6,578)
------------- ------------
- ---------------------------------------------------------
- ------------
NET ASSETS (100%)
Applicable to 22,794,370 issued and
outstanding U.S. $0.01 par value shares
(100,000,000 shares authorized) U.S.$367,788
------------
------------
- ---------------------------------------------------------
- ------------
NET ASSET VALUE PER SHARE U.S.$ 16.14
------------
------------
- ---------------------------------------------------------
- ------------
</TABLE>
ADR -- American Depositary Receipt
GDR -- Global Depositary Receipt
GDS -- Global Depositary Shares
RFD -- Ranked for Dividend
- ---------------------------------------------------------
- ------------
13
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