<PAGE>
The Latin American
Equity Fund, Inc.
- ---------------------
SEMI-ANNUAL REPORT
JUNE 30, 1999
[PHOTO]
<PAGE>
CONTENTS
<TABLE>
<S> <C>
Letter to Shareholders....................................................................... 1
Portfolio Summary............................................................................ 8
Schedule of Investments...................................................................... 10
Statement of Assets and Liabilities.......................................................... 14
Statement of Operations...................................................................... 15
Statement of Changes in Net Assets........................................................... 16
Financial Highlights......................................................................... 17
Notes to Financial Statements................................................................ 18
Results of Annual Meeting of Shareholders.................................................... 23
Description of InvestLink-SM- Program........................................................ 24
</TABLE>
PICTURED ON THE COVER IS CHICHEN ITZA, ONE OF THE BEST KNOWN AND MOST IMPRESSIVE
OF THE MAYAN RUINS IN MEXICO. CHICHEN ITZA TRANSLATES TO MEAN "MOUTH OF THE WELL
OF ITZA".
- --------------------------------------------------------------------------------
<PAGE>
LETTER TO SHAREHOLDERS
August 5, 1999
DEAR SHAREHOLDER:
I am writing to report on the activities of The Latin America Equity Fund, Inc.
(the "Fund") for the six months ended June 30, 1999.
At June 30, 1999, the Fund's net assets were approximately $100.8 million. The
Fund's net asset value ("NAV") was $13.54 per share as compared to $10.06 at
December 31, 1998.
PERFORMANCE: EFFECTIVE CHOICES IN MEXICO, ARGENTINA AND COLOMBIA
For the six months ended June 30, 1999, the Fund's total return, based on NAV
was 34.6%, versus 31.0% for the Morgan Stanley Capital International Emerging
Markets Free Latin America Index ("EMFLA"). In the process, the Fund's return
exceeded those of many competing funds and earned it a ranking in the top
quartile of Latin American equity funds.
The Fund outperformed its EMFLA benchmark during the period as a result of
exposure in Mexico, Argentina and Colombia:
- - The Fund's return benefited in two ways from our Mexican allocation. First, I
overweighted Mexico relative to EMFLA during a period in which, by far, Mexico
was the strongest Latin American market. Second, Mexican stock selection
emphasized companies well-positioned to prosper as the domestic economy
recovered. The most successful holdings in this regard were companies like the
cement maker Cemex, S.A. de C.V., the beverage producer Fomento Economico
Mexicano, S.A. de C.V and the retailer Cifra S.A. de C.V.
- - I chose to underweight Argentina. This approach proved effective during the
second quarter, when investor interest declined following the elimination of
YPF Sociedad Anonima (the nation's biggest oil and gas company and most liquid
stock) from trading due to its acquisition by Spain's Repsol. The Fund's
holdings in Camuzzi Argentina S.A., a gas distributor in Argentina that we had
originally purchased in a placement of private equity, also appreciated, and
we entered into an agreement to sell the position to a corporate buyer.
- - Performance in Colombia was notable principally because I opted to have
minimal exposure there. This decision paid off handsomely, as Colombia was not
simply the worst-performing Latin market in the first half of 1999, but also
the only one to generate a negative return.
THE REGION: FROM RALLY TO RECOVERY?
The impressive rally in Latin American equity markets over the first half of
this year was driven by improved sovereign risk, stronger commodity prices,
falling interest rates and generally positive macroeconomic fundamentals. All of
these conditions had been missing for some time, and their reemergence was
warmly received by investors.
- --------------------------------------------------------------------------------
1
<PAGE>
LETTER TO SHAREHOLDERS
The first stage of the rally ended in mid-May, with an ensuing correction fueled
by profit-taking and concerns about the potential for higher U.S. interest
rates. Investors returned to Latin markets in mid-June, however, igniting a
second rally phase, one more focused on corporate performance and less on the
excessively low valuations that had stimulated the first.
- - As mentioned earlier, Mexico (+52.3%) was the year's best-performing Latin
market through June. In addition to its very strong macroeconomic
fundamentals, Mexico benefited in the second quarter from an unusual financial
aid package from global lenders like the International Monetary Fund ("IMF").
The package was unusual in that, perhaps for the first time, the lenders
provided it on a proactive, rather than a reactive, basis. That is, they
sought to head off hard times ahead, as opposed to their usual role of
responding to a crisis already in progress. This approach allowed investors to
ignore some of the inevitable political noise about crime and corruption
preceding next year's presidential election and focus instead on the economic
outlook, which was (and is) very positive.
- - Although Brazil's equity market generated a healthy 18.7% return in the first
half, there is some cause for concern. Deteriorating economic fundamentals,
including disappointing trade and fiscal spending numbers, increasingly
suggest that the country will be unable to meet its IMF-mandated economic
targets for 1999. However, investor sentiment has been buoyed by the central
bank's aggressive interest-rate cuts (I.E., from a high of 45% in early March
to 21% at the end of June) and the belief that the Brazilian market still
offers substantial value that is--as yet--largely unrealized.
- - Chilean stocks (+28.7%) rose on the strength of major interest-rate cuts, a
recovery in the price of copper (+10% year-to-date through June) and the
government's announcement of an emergency plan to stimulate the economy.
Elsewhere, almost all other Latin equity markets did well over the first half,
with Peru up 19.8%, Argentina up 24.8% and Venezuela up 15.5%.
Although the numbers cited above appear impressive (especially when compared to
those of the past two years), we must keep in mind that conditions in Latin
America are still highly volatile and subject to abrupt change, both good and
bad.
A case in point is Argentina. While, on the surface, the country's equity market
appeared to be strong through June, it proved to be more a house of cards than
an enduring edifice. I felt that Argentine stocks overreacted to expectations of
a recovery during the second quarter and therefore decided to underweight
Argentina in the portfolio to a level approximating 60% of its representation in
EMFLA. This turned out to be fortuitous, as the combination of troubling
comments on debt restructuring by a leading presidential candidate and a raft of
unfavorable macroeconomic news helped push the market deeply into the red at the
beginning of July.
- --------------------------------------------------------------------------------
2
<PAGE>
LETTER TO SHAREHOLDERS
PORTFOLIO STRATEGY: FOCUSING ON BLUE-CHIP GROWTH
TOP 10 HOLDINGS, BY ISSUER*
<TABLE>
<CAPTION>
% OF
HOLDING COUNTRY NET ASSETS
----------------------- ---------------- ----------
<C> <S> <C> <C>
1. Telmex Mexico 10.4
2. Telesp Brazil 5.1
3. Televisa Mexico 4.8
4. Kimberly-Clark de Mexico 4.5
Mexico
5. Cifra Mexico 4.5
6. Cemex Mexico 4.1
7. Telebras Brazil 3.8
8. Camuzzi Argentina Argentina 3.8
9. Grupo Modelo Mexico 3.6
10. Petrobras Brazil 3.6
-----
48.2
Total
</TABLE>
<TABLE>
<S> <C>
*Company names are abbreviations of those found in the *Other includes Colombia, Global, Jamaica, Latin America
chart on page 9. and Venezuela.
</TABLE>
COUNTRY BREAKDOWN
(% of net assets)
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Argentina 8.44%
Brazil 30.40%
Chile 9.24%
Mexico 46.68%
Peru 3.06%
Cash and Other Assets 0.21%
Other* 1.97%
</TABLE>
I have chosen to address volatility in Latin markets by sticking to my
proverbial knitting: careful stock selection and a reliance on highly liquid,
well-managed companies with strong balance sheets and strong earnings growth.
With this in mind, my focus remains on blue-chips, particularly those that are
both well-positioned to prosper in a recovering economic environment and
available at reasonable valuations.
I am also beginning to revisit the universe of smaller-capitalization Latin
companies, whose returns have noticeably underperformed for some time. As
longer-term shareholders well know, I reduced the Fund's exposure to small-caps
in 1997, a move that has paid off after initially generating significant trading
costs. Market volatility has created generous value among second-tier names,
however, and my research staff and I are finding an increasing number of
attractive opportunities. Although I am presently emphasizing the blue-chips, I
anticipate some allocation to neglected smaller names as market conditions
stabilize.
On a country level, I strongly favor the two biggest markets, Mexico and Brazil,
but for somewhat different reasons. Mexico's positive macroeconomic fundamentals
prompt me to weigh in on the side of growth names across the board there,
particularly those in sectors that are most responsive to the domestic economy,
such as food and beverage, retail and other consumer-related. My preference in
Brazil is decidedly for those sectors that are benefiting from a wave of
corporate restructurings currently well under way (e.g., oil & natural gas,
telecommunications).
The following are reviews of two familiar names that illustrate my approach to
each country.
- --------------------------------------------------------------------------------
3
<PAGE>
LETTER TO SHAREHOLDERS
TELEFONOS DE MEXICO, S.A.
Telefonos de Mexico, S.A. ("Telmex") was privatized in 1990 and is synonomous
with the provision of Mexican telecommunications services. It has a fully
integrated product line, 100% of the local market, 70% of pre-subscribed
long-distance lines and 64% of cellular subscribers.
Telmex fits in well with my domestic growth theme in Mexico. It has benefited
substantially from Mexico's average GDP growth rate of 5.6% over the past three
years, which has led to increased telephone usage on all fronts. To take
advantage of it, the company built a network of 360 customer service centers
nationwide, along with a comprehensive information technology system that
enables it to efficiently target new customers. This infrastructure, in turn,
allowed Telmex to raise the quality of its services to the highest in Mexico.
HERE ARE A FEW OF THE MANY OTHER REASONS TO LIKE TELMEX:
ACCESS TO U.S. HISPANIC MARKET. Telmex has inked strategic alliances with SBC
Communications and Williams Communications to gain access to large local and
long-distance networks in the U.S. that serve most of the country's Hispanic
population. It did so because the U.S. Hispanic market is huge, with more
purchasing power than most Latin American countries. The ability to capture a
large portion of U.S.-to-Mexico international calls in this way greatly improves
Telmex's long-term growth outlook.
SUPERB MANAGEMENT. Not enough can be said about the quality of Telmex's
management's team, which has been (and continues to be) unusually attentive to
minority shareholders. This is perhaps best exemplified by a value-creating
share buyback program that has been running some three years; and the
passing-through to shareholders, via dividends, of a good portion of the
substantial profits that the company has generated in recent years.
On the strategic front, management has avoided costly acquisition blunders
outside the company's core business, and positioned Telmex to be a leader in
emerging telecommunications growth areas, like cellular and data services. Along
the way, it has proven to be quite capable of meeting competitive challenges
from the likes of AT&T, MCI and others seeking to capitalize on the vast
potential of the Mexican market.
STRONG BALANCE SHEET. Telmex also enjoys a very low debt-to-equity ratio, on the
order of 8-9%. It thus possesses the deep financial strength needed both to make
additional strategic acquisitions, and expand and improve services.
CORPORATE INDEPENDENCE. Telmex is the only major Latin fixed-line operator not
controlled by a major international telecommunications concern. As such, if
current restrictions on foreign ownership were ever relaxed (which is far from
assured), Telmex would represent an extremely attractive property to global
players.
PETROLEO BRASILEIRO S.A.
Petroleo Brasileiro S.A. ("Petrobras") is Brazil's state-owned oil company. It
is involved in all aspects of the oil business, from exploration to finished
products, and is one of the largest corporations of any kind in Latin America.
- --------------------------------------------------------------------------------
4
<PAGE>
LETTER TO SHAREHOLDERS
HERE'S WHY I SEE LITTLE DOUBT THAT PETROBRAS IS AN ATTRACTIVE LONG-TERM
INVESTMENT:
PRIVATIZATION. As part of Brazil's financial aid agreement with the
International Monetary Fund, the government has agreed to divest itself of part
of its Petrobras ownership (perhaps as much as 50%) by the end of 1999. Foreign
appetite for this equity is naturally very high and likely to grow even higher.
FUTURE GROWTH PROSPECTS. As a net importer of oil, Petrobras suffers when the
price of oil is high, and it can't pass these costs through to end-users.
However, recent discoveries at the company's Campos Basin fields off the shore
of Rio de Janeiro indicate the presence of major oil reserves and are in the
process of being tapped. Future production from these fields should
substantially diminish Petrobras's need for expensive foreign oil supplies and
greatly increase cash flow going forward.
NEW MANAGEMENT. In March, Petrobras installed a new and proactive management
team. The team is viewed favorably by investors and is currently drawing up a
major restructuring plan. It is expected that this plan will include the sale of
some assets, including parts of the company's refinery base and pipelines,
providing it with the capital needed to further expand offshore oil production.
ADR LISTING. Management is also working to list Petrobras's American Depositary
Receipts, which now trade over the counter, on the New York Stock Exchange by
the end of this year. To do so, it must disclose financial information that
conforms to U.S. accounting standards. The net effect would be greater financial
transparency and an expanded investor base, including global investors who have
thus far avoided the company in favor of its peers.
As positive as they are, these broad strokes do not adequately capture the
Petrobras story. Locally, for example, the government has taken advantage of a
relatively benign inflationary environment to allow prices to increase some 49%
at the refinery level thus far this year. Further increases are expected as the
government seeks to mark up prices to international levels in advance of its
share sale. The outlook for Brazil's GDP--and, by association, domestic oil
consumption--is also improving.
Despite Petrobras's very good operating performance, its shares still trade at a
significant valuation discount to that of most of its European competitors.
Given its greater prospects for production and cash flow growth, however, this
will not last long.
OUTLOOK: POSITIVE SENTIMENT TO CONTINUE
Looking ahead, I expect investor sentiment toward Latin America to remain
upbeat, albeit with some volatility. Assuming global growth picks up and
commodity prices proceed on an upward path, though, I would see any market
correction as an opportunity to increase the Fund's exposure to selected
equities.
- --------------------------------------------------------------------------------
5
<PAGE>
LETTER TO SHAREHOLDERS
A key aspect of my optimism is the increasing likelihood that Brazil's economy,
the region's largest, has bottomed out and will begin to recover in the second
half. I additionally note in this regard that the real currency is very
competitive at existing levels, Brazilian interest rates are trending downward,
inflation is very much under control and there is definitely room for continued
easing of monetary policy.
On Brazil's corporate side, aggressive restructuring in certain sectors like oil
and gas and telecom, along with cost-cutting and tariff increases, should help
to hold investor interest. And there also is the fact that Brazilian equities
are still some 20% below their peak reached in May. In other words, value
remains available to those who are carefully opportunistic, as I intend to be.
Beyond this, I am ever mindful of the region's political instability. Most Latin
American countries have an important election coming up, or a needed reform that
must be pushed through. This is nothing new and is among many factors that I
watch carefully every day to help position the Fund for future appreciation.
SHARE REPURCHASE UPDATE
In October 1998, the Fund's directors proposed and approved a program to
repurchase up to 15% of outstanding shares to help reduce the difference between
the Fund's share price and its net asset value. As of mid-July, I had
repurchased approximately 1.3 million shares, or virtually 100% of the maximum
share amount allowed under the program. I am happy to report both that the share
repurchase was successful in its goal of benefiting shareholder value--nearly
all shares were bought back at a discount to NAV in the low-to-mid-20%
range--and not disruptive to the market in doing so.
Respectfully,
/s/ Richard W. Watt
Richard W. Watt
President and Chief Investment Officer *
FROM CREDIT SUISSE ASSET MANAGEMENT:
I. Effective January 12, 1999, the Fund's investment adviser, BEA Associates,
changed its name to Credit Suisse Asset Management ("CSAM"). In making the
announcement, the firm said that it expected the new name to enhance its
recognition as a global asset manager. CSAM is the investment division of
Credit Suisse Group, one of the world's largest financial organizations,
with $600 billion in assets under management.
II. We wish to remind shareholders whose shares are registered in their own
name that they automatically participate in the Fund's dividend
reinvestment program which is known as the InvestLink-SM- Program (the
"Program"). The Program can be of value to shareholders in maintaining
their proportional ownership interest
- --------------------------------------------------------------------------------
6
<PAGE>
LETTER TO SHAREHOLDERS
in the Fund in an easy and convenient way. A shareholder whose shares are
held in the name of a broker/dealer or nominee should contact the Fund's
Transfer Agent for details about participating in the Program. The Program
also provides for additional share purchases. The Program is described on
pages 24 through 26 of this report.
III. Many services provided to the Fund and its shareholders by CSAM and the
Fund's service providers rely on the functioning of their respective
computer systems. Many computer systems cannot distinguish the year 2000
from the year 1900, with resulting potential difficulty in performing
various calculations (the "Year 2000 Issue"). The Year 2000 Issue could
potentially have an adverse impact on the handling of security trades, the
payment of interest and dividends, pricing, account services and other Fund
operations.
CSAM recognizes the importance of the Year 2000 Issue and is taking
appropriate steps necessary in preparation for the year 2000. At this time,
there can be no assurance that these steps will be sufficient to avoid any
adverse impact on the Fund, nor can there be any assurance that the Year
2000 Issue will not have an adverse effect on the Fund's investments or on
global markets or economies, generally.
CSAM anticipates that its systems will be adapted in time for the year
2000. CSAM is seeking assurances that comparable steps are being taken by
the Fund's other major service providers. CSAM will be monitoring the Year
2000 Issue in an effort to ensure appropriate preparation.
- --------------------------------------------------------------------------------
* Richard W. Watt, who is a Managing Director of Credit Suisse Asset Management
("CSAM"), is primarily responsible for management of the Fund's assets. He
joined CSAM on August 2, 1995. Mr. Watt formerly was associated with Gartmore
Investment Limited in London, where he was head of emerging markets investments
and research. Before joining Gartmore Investment Limited in 1992, Mr. Watt was a
Director of Kleinwort Benson International Investments in London, where he was
responsible for research, analysis and trading of equities in Latin America and
other regions. Mr. Watt is President, Chief Investment Officer and a Director of
the Fund. He also is President, Chief Investment Officer and a Director of The
Brazilian Equity Fund, Inc.; The Chile Fund, Inc.; The Emerging Markets
Infrastructure Fund, Inc.; The Emerging Markets Telecommunications Fund, Inc.;
The First Israel Fund, Inc.; The Latin America Investment Fund, Inc.; and The
Portugal Fund, Inc.
- --------------------------------------------------------------------------------
7
<PAGE>
- --------------------------------------------------------------------------------
THE LATIN AMERICA EQUITY FUND, INC.
PORTFOLIO SUMMARY - AS OF JUNE 30, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
GEOGRAPHIC ASSET BREAKDOWN
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AS A PERCENT OF NET ASSETS
<S> <C> <C>
6/30/99 12/31/98
Argentina 8.44% 12.72%
Brazil 30.40% 31.67%
Chile 9.24% 8.28%
Colombia 0.00% 0.91%
Jamaica 0.78% 0.96%
Latin America 0.27% 0.31%
Mexico 46.68% 34.75%
Peru 3.06% 4.94%
Venezuela 0.43% 1.43%
Other 0.49% 0.45%
Cash & Cash Equivalents 0.21% 3.58%
</TABLE>
SECTOR ALLOCATION
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AS A PERCENT OF NET ASSETS
<S> <C> <C>
6/30/99 12/31/98
Banking 2.29% 5.67%
Broadcast, Radio and Television 4.81% 2.01%
Cement 4.13% 3.78%
Diversified Operations 3.02% 0%
Electric Distribution 2.14% 1.91%
Electric Generation 0.83% 2.15%
Financial Services 1.79% 3.41%
Food & Beverages 14.53% 10.50%
Investment & Holding Companies 4.86% 5.78%
Local and/or Long Distance Telephone
Services 16.82% 7.08%
Mining 2.86% 5.46%
Paper Products 5.29% 3.55%
Oil & Natural Gas 7.91% 12.68%
Retail 4.76% 3.63%
Telecommunications 16.18% 18.90%
Utilities 2.82% 3.33%
Fixed or Floating Rate Investments 0.27% 1.77%
Other 4.26% 4.73%
Cash & Cash Equivalents 0.43% 3.66%
</TABLE>
- --------------------------------------------------------------------------------
8
<PAGE>
- --------------------------------------------------------------------------------
THE LATIN AMERICA EQUITY FUND, INC.
PORTFOLIO SUMMARY - AS OF JUNE 30, 1999 (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
TOP 10 HOLDINGS, BY ISSUER
<TABLE>
<CAPTION>
Percent of Net
Holding Sector Country/Region Assets
<C> <S> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------------
1. Telefonos de Mexico, S.A. Telecommunications Mexico 10.4
- --------------------------------------------------------------------------------------------------------------------------------
2. Telecomunicacoes de Sao Paulo S.A. Local and/or Long Distance
Telephone Service Brazil 5.1
- --------------------------------------------------------------------------------------------------------------------------------
3. Grupo Televisa S.A. Broadcast, Radio &
Television Mexico 4.8
- --------------------------------------------------------------------------------------------------------------------------------
4. Kimberly-Clark de Mexico, S.A. de C.V. Paper Products Mexico 4.5
- --------------------------------------------------------------------------------------------------------------------------------
5. Cifra S.A. de C.V. Retail Mexico 4.5
- --------------------------------------------------------------------------------------------------------------------------------
6. Cemex, S.A. de C.V. Cement Mexico 4.1
- --------------------------------------------------------------------------------------------------------------------------------
7. Telecomunicacoes Brasileiras S.A. Local and/or Long Distance
Telephone Service Brazil 3.8
- --------------------------------------------------------------------------------------------------------------------------------
8. Camuzzi Argentina S.A. Oil & Natural Gas Argentina 3.8
- --------------------------------------------------------------------------------------------------------------------------------
9. Grupo Modelo, S.A. de C.V. Food & Beverages Mexico 3.6
- --------------------------------------------------------------------------------------------------------------------------------
10. Petroleo Brasileiro S.A. Oil & Natural Gas Brazil 3.6
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
9
<PAGE>
- --------------------------------------------------------------------------------
THE LATIN AMERICA EQUITY FUND, INC.
SCHEDULE OF INVESTMENTS - JUNE 30, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
No. of Value
Description Shares (Note A)
<S> <C> <C>
- --------------------------------------------------------------------
EQUITY OR EQUITY-LINKED SECURITIES-99.30%
ARGENTINA-8.44%
BANKING-0.37%
Banco Frances S.A. ADR.................. 12,400 $ 235,600
Bansud S.A., Class B+................... 53,862 137,367
-----------
372,967
-----------
LOCAL AND/OR LONG DISTANCE TELEPHONE SERVICE-1.46%
Telecom Argentina Stet - France Telecom
S.A. ADR............................... 54,900 1,468,575
-----------
OIL & NATURAL GAS-4.28%
Camuzzi Argentina S.A.*+................ 1,403,504 3,775,426
Perez Companc S.A., Class B............. 92,909 534,299
-----------
4,309,725
-----------
TELECOMMUNICATIONS-2.33%
Telefonica de Argentina S.A. ADR........ 74,966 2,352,058
-----------
TOTAL ARGENTINA (Cost $6,802,061)...................... 8,503,325
-----------
BRAZIL-30.40%
BANKING-1.12%
Banco do Brasil S.A., Series A Warrants
(expiring 06/30/01)+................... 11,076,400 6,946
Banco do Brasil S.A., Series B Warrants
(expiring 06/30/06)+................... 16,614,600 12,203
Banco do Brasil S.A., Series C Warrants
(expiring 06/30/11)+................... 27,691,000 24,562
Banco Itau S.A. PN...................... 2,119,723 1,089,801
-----------
1,133,512
-----------
FERTILIZER-0.02%
Serrana S.A. ON+........................ 27,210 9,224
Serrana S.A. PN+........................ 32,445 9,715
-----------
18,939
-----------
<CAPTION>
No. of Value
Description Shares (Note A)
- --------------------------------------------------------------------
<S> <C> <C>
FOOD & BEVERAGES-3.67%
Companhia Brasileira de Distribuicao
Grupo Pao de Acucar GDR................ 53,742 $ 1,004,304
Companhia Cervejaria Brahma ADR......... 34,298 387,996
Companhia Cervejaria Brahma PN.......... 4,030,658 2,274,931
Seara Alimentos S.A..................... 160,771,340 29,974
-----------
3,697,205
-----------
LOCAL AND/OR LONG DISTANCE TELEPHONE SERVICE-15.36%
Embratel Participacoes S.A. ADR......... 109,190 1,515,011
Recibo Representativo de Carteira de
Telebras............................... 43,464,259 3,857,760
Tele Centro Sul Participacoes S.A.
ADR.................................... 26,840 1,489,620
Tele Norte Leste Participacoes S.A.
ADR.................................... 189,400 3,515,737
Telecomunicacoes Brasileiras S.A. PN.... 43,464,259 1,719
Telecomunicacoes de Minas Gerais S.A.
PNB.................................... 144,037 3,581
Telecomunicacoes de Sao Paulo S.A. ON... 6,455,099 536,101
Telecomunicacoes de Sao Paulo S.A. PN... 21,673,835 2,571,472
Telecomunicacoes de Sao Paulo S.A. PN
Receipts+.............................. 316,400 37,539
Telesp Participacoes S.A. ADR........... 85,747 1,961,463
-----------
15,490,003
-----------
MINING-2.42%
Companhia Vale do Rio Doce PNA.......... 124,201 2,441,918
-----------
OIL & NATURAL GAS-3.64%
Petroleo Brasileiro S.A. PN ADR......... 250,483 3,665,876
-----------
</TABLE>
- --------------------------------------------------------------------------------
10
<PAGE>
- --------------------------------------------------------------------------------
THE LATIN AMERICA EQUITY FUND, INC.
SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
No. of Value
Description Shares (Note A)
- --------------------------------------------------------------------
<S> <C> <C>
PAPER PRODUCTS-0.79%
Aracruz Celulose S.A. ADR............... 35,700 $ 785,400
-----------
STEEL-0.45%
Companhia Siderurgica Nacional ADR...... 17,400 456,750
-----------
TELECOMMUNICATIONS-0.97%
Celular CRT. Participacoes S.A.......... 2,597,786 347,839
Companhia Riograndense de
Telecomunicacoes S.A., PNA............. 2,597,786 630,367
Tele Centro Oeste Celular Participacoes
S.A. PN Rights (expiring 06/30/99)+.... 3,899,316 595
-----------
978,801
-----------
UTILITIES-1.96%
Companhia Paranaense de Energia ADR..... 236,628 1,981,759
-----------
TOTAL BRAZIL (Cost $28,292,148)........................ 30,650,163
-----------
CHILE-9.02%
BANKING-0.80%
Banco de Credito e Inversiones.......... 121,029 805,926
-----------
CONSUMER DURABLES-0.30%
Empresas Almacenes Paris S.A............ 366,549 307,668
-----------
ELECTRIC DISTRIBUTION-1.52%
Chilectra S.A. ADR...................... 70,900 1,534,056
-----------
ELECTRIC GENERATION-0.83%
Empresa Nacional de Electricidad S.A.... 1,193,650 459,495
Enersis S.A............................. 839,404 380,627
-----------
840,122
-----------
ENGINEERING & CONSTRUCTION-0.15%
Besalco S.A............................. 64,421 149,166
-----------
FERTILIZER-0.59%
Sociedad Quimica y Minera de Chile
S.A.................................... 213 7,455
<CAPTION>
No. of Value
Description Shares (Note A)
- --------------------------------------------------------------------
<S> <C> <C>
FERTILIZER (CONTINUED)
Sociedad Quimica y Minera de Chile S.A.,
Class A................................ 168,976 $ 586,892
-----------
594,347
-----------
FINANCIAL SERVICES-0.01%
Invercap S.A............................ 12,094 6,534
-----------
FOOD & BEVERAGES-1.09%
Compania Cervecerias Unidas S.A......... 88,567 495,599
Embotelladora Andina S.A. PNA........... 174,674 572,978
Embotelladora Andina S.A. PNB........... 10,923 27,402
-----------
1,095,979
-----------
FORESTRY-1.45%
Compania de Petroleos de Chile S.A...... 277,815 943,472
Empresas CMPC S.A....................... 56,159 515,807
-----------
1,459,279
-----------
INSURANCE-0.14%
Compania de Seguros La Prevision Vida
S.A.+.................................. 217,878 138,736
-----------
RETAIL-0.29%
Sociedad Anonima Comercial e Industrial
Falabella.............................. 350,994 291,902
-----------
STEEL-0.24%
Compania Acero del Pacifico S.A......... 155,931 240,704
-----------
TELECOMMUNICATIONS-0.75%
Compania de Telecomunicaciones de Chile
S.A. ADR............................... 11,000 272,250
Compania de Telecomunicaciones de Chile
S.A., Class A.......................... 79,573 485,192
-----------
757,442
-----------
</TABLE>
- --------------------------------------------------------------------------------
11
<PAGE>
- --------------------------------------------------------------------------------
THE LATIN AMERICA EQUITY FUND, INC.
SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
No. of Value
Description Shares (Note A)
- --------------------------------------------------------------------
<S> <C> <C>
UTILITIES-0.86%
Gener S.A. ADR.......................... 48,980 $ 869,395
-----------
TOTAL CHILE (Cost $7,795,220).......................... 9,091,256
-----------
COLOMBIA-0.00%
BANKING-0.00%
Banco de Bogota......................... 160 463
-----------
CEMENT-0.00%
Cementos Paz del Rio S.A. ADR+,++....... 31 228
-----------
TOTAL COLOMBIA (Cost $337)............................. 691
-----------
JAMAICA-0.78%
INVESTMENT & HOLDING COMPANIES-0.78%
Jamaican Assets I L.P.=/=+ (Cost
$946,859).............................. 939,513 790,234
-----------
LATIN AMERICA-0.00%
TELECOMMUNICATIONS-0.00%
International Wireless Communications,
Inc., Series D*+....................... 186,400 0
International Wireless Communications,
Inc., Series F*+....................... 10,840 0
International Wireless Communications,
Inc., Warrants (expiring 08/17/07)*+... 1 0
-----------
TOTAL LATIN AMERICA
(Cost $1,259,402)..................................... 0
-----------
MEXICO-46.68%
BROADCAST, RADIO & TELEVISION-4.80%
Grupo Televisa S.A. GDR+................ 108,117 4,844,993
-----------
CEMENT-4.13%
Cemex, S.A. de C.V. CPO................. 774,114 3,813,107
Cemex, S.A. de C.V., Class B............ 70,979 351,508
-----------
4,164,615
-----------
<CAPTION>
No. of Value
Description Shares (Note A)
- --------------------------------------------------------------------
<S> <C> <C>
DIVERSIFIED OPERATIONS-3.02%
Alfa, S.A., Series A.................... 438,491 $ 1,820,458
Desc, S.A. de C.V. ADR.................. 54,000 1,221,750
-----------
3,042,208
-----------
ENGINEERING & CONSTRUCTION-0.52%
Empresas ICA Sociedad Controladora, S.A.
de C.V. ADR............................ 77,100 520,425
-----------
FINANCIAL SERVICES-1.44%
Grupo Financiero Banamex Accival, S.A.
de C.V., Series O+..................... 571,271 1,453,924
-----------
FOOD & BEVERAGES-9.77%
Coca-Cola Femsa S.A. ADR+............... 135,461 2,624,557
Fomento Economico Mexicano, S.A. de C.V.
ADR.................................... 71,470 2,849,866
Grupo Industrial Bimbo, S.A. de C.V.,
Series A............................... 317,078 706,112
Grupo Modelo, S.A. de C.V., Series C.... 1,285,480 3,666,958
-----------
9,847,493
-----------
INVESTMENT & HOLDING COMPANIES-3.58%
Grupo Carso, S.A. de C.V., Series A1+... 780,192 3,615,524
-----------
PAPER PRODUCTS-4.51%
Kimberly-Clark de Mexico, S.A. de C.V.,
Series A............................... 1,104,408 4,544,118
-----------
RETAIL-4.47%
Cifra S.A. de C.V. ADR+................. 234,998 4,507,097
-----------
TELECOMMUNICATIONS-10.44%
Telefonos de Mexico, S.A., Class L
ADR.................................... 130,223 10,523,646
-----------
TOTAL MEXICO (Cost $35,982,553)........................ 47,064,043
-----------
PERU-3.06%
ELECTRIC DISTRIBUTION-0.62%
Ontario-Quinta A.V.V.*.................. 786,686 624,508
-----------
</TABLE>
- --------------------------------------------------------------------------------
12
<PAGE>
- --------------------------------------------------------------------------------
THE LATIN AMERICA EQUITY FUND, INC.
SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
No. of Value
Description Shares (Note A)
- --------------------------------------------------------------------
<S> <C> <C>
ENGINEERING & CONSTRUCTION-0.40%
Ferreyros S.A........................... 617,319 $ 405,680
-----------
FINANCIAL SERVICES-0.34%
Credicorp Limited....................... 31,012 341,132
-----------
MINING-0.44%
Southern Peru Copper Corp. ADR.......... 30,600 441,787
-----------
TELECOMMUNICATIONS-1.26%
Telefonica del Peru S.A. ADR............ 83,960 1,269,895
-----------
TOTAL PERU (Cost $2,895,935)........................... 3,083,002
-----------
VENEZUELA-0.43%
TELECOMMUNICATIONS-0.43%
Venworld Telecommunications=/= (Cost
$817,105).............................. 40,161 437,243
-----------
GLOBAL-0.49%
INVESTMENT & HOLDING COMPANIES-0.49%
Emerging Markets Ventures, L.P.+=/=#
(Cost $530,167)........................ 521,708 490,087
-----------
TOTAL EQUITY OR EQUITY-LINKED SECURITIES (Cost
$85,321,787).......................................... 100,110,044
-----------
FIXED OR FLOATING RATE INVESTMENTS-0.27%
ARGENTINA-0.00%
<CAPTION>
Par (000)
-------------
<S> <C> <C>
Republic of Argentina, Bocon Pre 2, FRN,
5.70%,
04/01/01 (a) (Cost $265)............... USD 0 257
-----------
LATIN AMERICA-0.27%
International Wireless Communications,
Inc., Senior Secured Note,
14.00%-25.00%,
08/17/02*(b) (Cost $456,942)........... 323 266,820
-----------
TOTAL FIXED OR FLOATING RATE INVESTMENTS (Cost
$457,207)............................................. 267,077
-----------
<CAPTION>
Units Value
Description (000) (Note A)
- --------------------------------------------------------------------
<S> <C> <C>
SHORT-TERM INVESTMENTS-0.22%
CHILEAN INFLATION-ADJUSTED TIME DEPOSITS-0.16%
Banco Security, 5.90%**, 08/30/99 (Cost
$170,507).............................. CLP 6 $ 162,084
-----------
CHILEAN MUTUAL FUNDS-0.06%
<CAPTION>
No. of
Shares
-------------
<S> <C> <C>
Bice Manager Investment Fund............ 7,828 20,284
Fondo Mutuo Security Check.............. 9,144 40,572
-----------
TOTAL CHILEAN MUTUAL FUNDS
(Cost $63,832)........................................ 60,856
-----------
TOTAL SHORT-TERM INVESTMENTS (Cost $234,339)...........
222,940
-----------
TOTAL INVESTMENTS-99.79%
(Cost $86,013,333) (Notes A,D)........................ 100,600,061
CASH AND OTHER ASSETS IN EXCESS OF LIABILITIES-0.21%...
214,988
-----------
NET ASSETS-100.00%..................................... $100,815,049
-----------
-----------
- ---------------------------------------------------------
* Not readily marketable security.
+ Security is non-income producing.
** Effective yield on the date of purchase.
++ SEC Rule 144A security. Such securities are traded
only among "qualified institutional buyers."
=/= Restricted security, not readily marketable (See Note
F).
# As of June 30, 1999, the Fund committed to investing
an additional $711,375 of capital in Emerging Markets
Ventures, L.P.
(a) Adjustable rate: rate resets based on 1-month U.S.
Dollar London Interbank Offered Rate (LIBOR) flat.
Pro-rata sinking fund has been established.
(b) As of March 31, 1998, this investment ceased accruing
interest.
ADR American Depositary Receipts.
CPO Ordinary Participation Certificates.
FRN Floating Rate Note.
GDR Global Depositary Receipts.
ON Ordinary Shares.
PN Preferred Shares.
PNA Preferred Shares, Class A.
PNB Preferred Shares, Class B.
CLP Chilean Pesos.
USD United States Dollars.
</TABLE>
- --------------------------------------------------------------------------------
See accompanying notes to financial statements.
13
<PAGE>
- --------------------------------------------------------------------------------
THE LATIN AMERICA EQUITY FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES - JUNE 30, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS
Investments, at value (Cost $86,013,333)
(Note A)............................... $100,600,061
Cash (including $796 of foreign
currencies with a cost of $798) (Note
A)..................................... 531,496
Receivables:
Dividends............................. 583,854
Investments sold...................... 2,652
Interest.............................. 1,192
Prepaid expenses........................ 17,352
------------
Total Assets............................ 101,736,607
------------
LIABILITIES
Payables:
Investment advisory fee (Note B)...... 286,854
Capital shares repurchased (Note G)... 260,247
Investments purchased................. 222,454
Administration fees (Note B).......... 31,963
Chilean repatriation taxes (Note A)... 461
Other accrued expenses................ 119,579
------------
Total Liabilities....................... 921,558
------------
NET ASSETS (applicable to 7,445,228
shares of common stock outstanding)
(Note C)............................... $100,815,049
------------
------------
NET ASSET VALUE PER SHARE ($100,815,049
DIVIDED BY 7,445,228)................. $13.54
------------
------------
NET ASSETS CONSIST OF
Capital stock, $0.001 par value;
7,445,228 shares issued and outstanding
(100,000,000 shares authorized)........ $ 7,445
Paid-in capital......................... 123,213,818
Distributions in excess of net
investment income...................... (387,642)
Accumulated net realized loss on
investments and foreign currency
related transactions................... (36,491,465)
Net unrealized appreciation in value of
investments and translation of other
assets and liabilities denominated in
foreign currencies..................... 14,472,893
------------
Net assets applicable to shares
outstanding............................ $100,815,049
------------
------------
</TABLE>
- --------------------------------------------------------------------------------
See accompanying notes to financial statements.
14
<PAGE>
- --------------------------------------------------------------------------------
THE LATIN AMERICA EQUITY FUND, INC.
STATEMENT OF OPERATIONS - FOR THE SIX MONTHS ENDED JUNE 30, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
INVESTMENT INCOME
Income (Note A):
Dividends............................. $ 1,307,363
Interest.............................. 124,434
Less: Foreign taxes withheld.......... (115,513)
-----------
Total Investment Income............... 1,316,284
-----------
Expenses:
Investment advisory fees (Note B)..... 623,829
Administration fees (Note B).......... 87,810
Custodian fees........................ 68,341
Audit and legal fees.................. 62,231
Printing.............................. 58,925
Accounting fees....................... 40,906
Directors' fees....................... 18,205
Transfer agent fees................... 15,023
NYSE listing fees..................... 8,018
Insurance............................. 5,470
Other................................. 10,256
Brazilian taxes (Note A).............. 17,634
Chilean repatriation taxes (Note A)... 1,535
-----------
Total Expenses........................ 1,018,183
Less: Fee waivers (Note B)............ (36,925)
-----------
Net Expenses...................... 981,258
-----------
Net Investment Income................. 335,026
-----------
NET REALIZED AND UNREALIZED GAIN ON
INVESTMENTS AND FOREIGN CURRENCY
RELATED TRANSACTIONS
Net realized loss from:
Investments........................... (7,046,897)
Foreign currency related
transactions......................... (39,138)
Net change in unrealized depreciation in
value of investments and translation of
other assets and liabilities
denominated in foreign currencies...... 30,448,740
-----------
Net realized and unrealized gain on
investments and foreign currency
related transactions................... 23,362,705
-----------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS........................ $23,697,731
-----------
-----------
</TABLE>
- --------------------------------------------------------------------------------
See accompanying notes to financial statements.
15
<PAGE>
- --------------------------------------------------------------------------------
THE LATIN AMERICA EQUITY FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Six Months
Ended For the Year
June 30, 1999 Ended
(unaudited) December 31, 1998
<S> <C> <C>
------------------------------------------
INCREASE/(DECREASE) IN NET ASSETS
Operations:
Net investment income................. $ 335,026 $ 1,298,894
Net realized loss on investments and
foreign currency related
transactions......................... (7,086,035) (28,447,116)
Net change in unrealized
appreciation/(depreciation) in value
of investments and translation of
other assets and liabilities
denominated in foreign currencies.... 30,448,740 (33,578,308)
------------------ ------------------
Net increase/(decrease) in net
assets resulting from operations... 23,697,731 (60,726,530)
------------------ ------------------
Dividends and distributions to
shareholders:
Net investment income............... -- (947,499)
------------------ ------------------
Capital share transactions:
Proceeds from 23,364 shares issued in
reinvestment of dividends............ -- 297,889
Cost of 1,168,400 shares and 10,100
shares, respectively, repurchased
(Note G)............................. (9,558,663) (77,509)
------------------ ------------------
Net increase/(decrease) in net
assets resulting from capital share
transactions....................... (9,558,663) 220,380
------------------ ------------------
Total increase/(decrease) in net
assets............................. 14,139,068 (61,453,649)
------------------ ------------------
NET ASSETS
Beginning of period..................... 86,675,981 148,129,630
------------------ ------------------
End of period........................... $100,815,049 $ 86,675,981
------------------ ------------------
------------------ ------------------
</TABLE>
- --------------------------------------------------------------------------------
See accompanying notes to financial statements.
16
<PAGE>
- --------------------------------------------------------------------------------
THE LATIN AMERICA EQUITY FUND, INC.
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share of common
stock outstanding, total investment return, ratios to average net assets and
other supplemental data for each period indicated. This information has been
derived from information provided in the financial statements and market price
data for the Fund's shares.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the
For the Six Period
Months October
Ended 30, 1991*
June 30, For the Years Ended December 31, through
1999+ ------------------------------------------------------------------------------- December
(unaudited) 1998 1997 1996 1995 1994+ 1993+ 1992 31, 1991
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------------------
PER SHARE OPERATING
PERFORMANCE
Net asset value,
beginning of
period............. $10.06 $17.22 $16.89 $14.93 $17.92 $22.50 $14.37 $15.44 $13.85**
----------- ----------- --------- --------- --------- --------- --------- --------- ---------
Net investment
income............. 0.04 0.15 0.15 0.19 0.06 0.01 0.11 0.21 0.06
Net realized and
unrealized
gain/(loss) on
investments and
foreign currency
related
transactions....... 3.10 (7.20)++ 1.84 1.83 (2.81) 0.96 8.75 0.43 1.60
----------- ----------- --------- --------- --------- --------- --------- --------- ---------
Net
increase/(decrease)
in net assets
resulting from
operations......... 3.14 (7.05) 1.99 2.02 (2.75) 0.97 8.86 0.64 1.66
----------- ----------- --------- --------- --------- --------- --------- --------- ---------
Dividends and
distributions to
shareholders:
Net investment
income........... -- (0.11) (0.16) (0.06) -- (0.17) -- (0.21) (0.06)
Net realized gain
on investments
and foreign
currency related
transactions..... -- -- (1.50) -- (0.24) (3.10) (0.75) (1.32) (0.01)
In excess of net
realized gain.... -- -- -- -- -- -- -- (0.18) --
----------- ----------- --------- --------- --------- --------- --------- --------- ---------
Total dividends and
distributions to
shareholders....... -- (0.11) (1.66) (0.06) (0.24) (3.27) (0.75) (1.71) (0.07)
----------- ----------- --------- --------- --------- --------- --------- --------- ---------
Anti-dilutive impact
due to capital
shares
repurchased........ 0.34 -- -- -- -- -- -- -- --
Effect of reduction
of accrued offering
costs.............. -- -- -- -- -- -- 0.02 -- --
Dilution due to
capital share
rights offering.... -- -- -- -- -- (2.28) -- -- --
----------- ----------- --------- --------- --------- --------- --------- --------- ---------
Net asset value, end
of period.......... $13.54 $10.06 $17.22 $16.89 $14.93 $17.92 $22.50 $14.37 $15.44
----------- ----------- --------- --------- --------- --------- --------- --------- ---------
----------- ----------- --------- --------- --------- --------- --------- --------- ---------
Market value, end of
period............. $10.375 $7.188 $13.688 $14.000 $12.875 $17.625 $25.625 $14.000 $13.500
----------- ----------- --------- --------- --------- --------- --------- --------- ---------
----------- ----------- --------- --------- --------- --------- --------- --------- ---------
Total investment
return(a).......... 44.35% (46.63)% 10.29% 9.18% (25.65)% (17.78)% 89.35% 16.49% (2.73)%
----------- ----------- --------- --------- --------- --------- --------- --------- ---------
----------- ----------- --------- --------- --------- --------- --------- --------- ---------
RATIOS/SUPPLEMENTAL
DATA
Net assets, end of
period (000
omitted)........... $100,815 $86,676 $148,130 $145,230 $128,377 $153,128 $135,573 $86,359 $92,751
Ratio of expenses to
average net
assets(c).......... 2.20%(b) 2.41% 1.89% 1.69% 2.04% 1.94% 2.00% 2.20% 2.35%(b)
Ratio of expenses to
average net assets,
excluding fee
waivers............ 2.28%(b) 2.60% 2.02% 1.80% 2.15% -- -- -- --
Ratio of expenses to
average net assets,
excluding taxes.... 2.16%(b) 1.77% 1.65% -- 1.81% 1.70% -- -- --
Ratio of net
investment income
to average net
assets............. 0.75%(b) 1.12% 0.77% 1.16% 0.42% 0.04% 0.63% 1.27% 2.46%(b)
Portfolio turnover
rate............... 104.70% 142.35% 111.83% 43.22% 27.05% 68.46% 49.48% 68.70% 11.58%
</TABLE>
- ---------------------------------------------------------------------------
* Commencement of investment operations.
** Initial public offering price of $15.00 per share less underwriting
discount of $1.05 per share and offering expenses of $0.10 per share.
+ Based on average shares outstanding except for dividends and
distributions to shareholders, if any, which are based on actual
dividends and distributions paid.
++ Includes a $0.01 per share decrease to the Fund's net asset value per
share resulting from the dilutive impact of shares issued pursuant to
the Fund's automatic dividend reinvestment program.
(a) Total investment return at market value is based on the changes in
market price of a share during the period and assumes reinvestment of
dividends and distributions, if any, at actual prices pursuant to the
Fund's dividend reinvestment program. Total investment return does not
reflect brokerage commissions or initial underwriting discounts and
has not been annualized.
(b) Annualized.
(c) Ratios reflect actual expenses incurred by the Fund. Amounts are net
of fee waivers and inclusive of taxes.
- --------------------------------------------------------------------------------
See accompanying notes to financial statements.
17
<PAGE>
- --------------------------------------------------------------------------------
THE LATIN AMERICA EQUITY FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
NOTE A. SIGNIFICANT ACCOUNTING POLICIES
The Latin America Equity Fund, Inc. (the "Fund") was incorporated in Maryland on
September 16, 1991 and commenced investment operations on October 30, 1991. The
Fund is registered under the Investment Company Act of 1940, as amended, as a
closed-end, non-diversified management investment company. Significant
accounting policies are as follows:
MANAGEMENT ESTIMATES: The preparation of financial statements in accordance
with generally accepted accounting principles requires management to make
certain estimates and assumptions that may affect the reported amounts and
disclosures in the financial statements. Actual results could differ from those
estimates.
PORTFOLIO VALUATION: Investments are stated at value in the accompanying
financial statements. All equity securities for which market quotations are
readily available are valued at the last sales price prior to the time of
determination, or, if no sales price is available at that time, at the closing
price quoted for the securities (but if bid and asked quotations are available,
at the mean between the current bid and asked prices). Securities that are
traded over-the-counter are valued at the mean between the current bid and the
asked prices, if available. All other securities and assets are valued at the
fair value as determined in good faith by the Board of Directors. Short-term
investments having a maturity of 60 days or less are valued on the basis of
amortized cost. The Board of Directors has established general guidelines for
calculating fair value of not readily marketable securities. At June 30, 1999,
the Fund held 6.33% of its net assets in securities valued in good faith by the
Board of Directors with an aggregate cost of $6,880,412 and fair value of
$6,384,318. The net asset value per share of the Fund is calculated on each
business day, with the exception of those days on which the New York Stock
Exchange is closed.
CASH: Deposits held at Brown Brothers Harriman & Co., the Fund's custodian, in
a variable rate account are classified as cash. At June 30, 1999, the interest
rate was 4.00% which resets on a daily basis. Amounts on deposit are generally
available on the same business day.
INVESTMENT TRANSACTIONS AND INVESTMENT INCOME:
Investment transactions are accounted for on the trade date. The cost of
investments sold is determined by use of the specific identification method for
both financial reporting and income tax purposes. Interest income is recorded on
an accrual basis; dividend income is recorded on the ex-dividend date.
TAXES: No provision is made for U.S. federal income or excise taxes as it is
the Fund's intention to continue to qualify as a regulated investment company
and to make the requisite distributions to its shareholders which will be
sufficient to relieve it from all or substantially all U.S. federal income and
excise taxes.
For U.S. federal income tax purposes, realized foreign currency losses and net
realized capital losses from investments incurred after October 31, 1998, within
the Fund's prior fiscal year, are deemed to arise on the first day of the
current fiscal year. The Fund incurred and elected to defer such losses of
$95,714 and $691,438, respectively.
At December 31, 1998, the Fund had a capital loss carryover of $26,179,244 which
expires in 2006.
Income received by the Fund from sources within Latin America may be subject to
withholding and other taxes imposed by such countries. Also, certain Latin
American countries impose taxes on funds remitted or repatriated from such
countries.
The Fund is subject to a 10% Chilean repatriation tax with respect to all
remittances from Chile in excess of
- --------------------------------------------------------------------------------
18
<PAGE>
- --------------------------------------------------------------------------------
THE LATIN AMERICA EQUITY FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
original invested capital. For the six months ended June 30, 1999, the Fund
incurred $1,535 of such expense.
From January 23, 1997 through January 22, 1999, Brazil imposed a 0.20%
Contribucao Provisoria sobre Movimentacaoes Financieras ("CPMF") tax that
applied to most debit transactions carried out by financial institutions.
Effective January 23, 1999 the CPMF tax expired and was reinstated on June 17,
1999 for a period of three years. The tax is assessed at a rate of 0.38% for the
initial year and will drop to 0.30% for the remaining two years. For the six
months ended June 30, 1999, the Fund incurred $17,634 of such expense.
FOREIGN CURRENCY TRANSLATIONS: 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, assets and liabilities at the
current rate of exchange; and
(II) purchases and sales of investment securities, income and expenses at
the relevant rates of exchange prevailing on the respective dates of
such transactions.
The Fund does not isolate that portion of gains and losses in investments in
equity securities which is due to changes in the foreign exchange rates from
that which is due to changes in market prices of equity securities. Accordingly,
realized and unrealized foreign currency gains and losses with respect to such
securities are included in the reported net realized and unrealized gains and
losses on investment transactions balances. However, the Fund does isolate the
effect of fluctuations in foreign exchange rates when determining the gain or
loss upon the sale or maturity of foreign currency denominated debt obligations
pursuant to U.S. federal income tax regulations, with such amount categorized as
foreign exchange gain or loss for both financial reporting and U.S. federal
income tax reporting purposes.
Net currency gains or losses from valuing foreign currency denominated assets
and liabilities at period end exchange rates are reflected as a component of net
unrealized appreciation/depreciation in value of investments and translation of
other assets and liabilities denominated in foreign currencies.
Net realized foreign exchange losses represent foreign exchange gains and losses
from sales and maturities of debt securities, transactions in foreign currencies
and forward foreign currency contracts, exchange gains or losses realized
between the trade date and settlement date on security transactions, and the
difference between the amounts of interest and dividends recorded on the Fund's
books and the U.S. dollar equivalent of the amounts actually received.
DISTRIBUTIONS OF INCOME AND GAINS: The Fund distributes at least annually to
shareholders, substantially all of its net investment income and net realized
short-term capital gains, if any. The Fund determines annually whether to
distribute any net realized long-term capital gains in excess of net short-term
capital losses, including capital loss carryovers, if any. An additional
distribution may be made to the extent necessary to avoid the payment of a 4%
U.S. federal excise tax. Dividends and distributions to shareholders are
recorded by the Fund on the ex-dividend date.
The character of distributions made during the year from net investment income
or net realized gains may differ from their ultimate characterization for U.S.
federal income tax purposes due to U.S. generally accepted accounting
principles/tax differences in the character of income and expense recognition.
- --------------------------------------------------------------------------------
19
<PAGE>
- --------------------------------------------------------------------------------
THE LATIN AMERICA EQUITY FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
OTHER: Securities denominated in currencies other than U.S. dollars are subject
to changes in value due to fluctuations in exchange rates.
Some countries require governmental approval for the repatriation of investment
income, capital or the proceeds of sales of securities by foreign investors. In
addition, if there is a deterioration in a country's balance of payments or for
other reasons, a country may impose temporary restrictions on foreign capital
remittances abroad. Amounts repatriated prior to the end of specified periods
may be subject to taxes as imposed by a foreign country.
The Latin American securities markets are substantially smaller, less liquid and
more volatile than the major securities markets in the United States.
Consequently, acquisition and disposition of securities by the Fund may be
inhibited. A significant proportion of the aggregate market value of equity
securities listed on the major securities exchange are held by a small number of
investors. This may limit the number of shares for acquisition or disposition by
the Fund.
The Fund, subject to local investment limitations, may invest up to 10% of its
assets in non-publicly traded equity securities which may involve a high degree
of business and financial risk and may result in substantial losses. Because of
the current absence of any liquid trading market for these investments, the Fund
may take longer to liquidate these positions than would be the case for publicly
traded securities. Although these securities may be resold in privately
negotiated transactions, the prices realized on such sales could be
substantially less than those originally paid by the Fund or the current
carrying values. Further, companies whose securities are not publicly traded may
not be subject to the disclosure and other investor protection requirements
applicable to companies whose securities are publicly traded.
The Fund is permitted to engage in the trading of sovereign debt of Latin
American countries which involves a high degree of risk. The issuer of the debt
or the governmental authorities that control the repayment of the debt may be
unable or unwilling to repay principal and/or interest when due in accordance
with the terms of such debt. Sovereign debt in which the Fund will invest is
widely considered to have a credit quality below investment grade as determined
by U.S. rating agencies. As a result, sovereign debt may be regarded as
predominantly speculative with respect to the issuer's capacity to pay interest
and repay principal in accordance with the terms of the obligations and involves
major risk exposure to adverse conditions.
The Fund may enter into repurchase agreements on U.S. Government securities with
primary government securities dealers recognized by the Federal Reserve Bank of
New York and member banks of the Federal Reserve System and on securities issued
by the governments of foreign countries, their instrumentalities and with
creditworthy parties in accordance with established procedures. Repurchase
agreements are contracts under which the buyer of a security simultaneously buys
and commits to resell the security to the seller at an agreed upon price and
date. Repurchase agreements are deposited with Fund's custodian and pursuant to
the terms of the repurchase agreement, the collateral must have an aggregate
market value greater than or equal to the repurchase price plus accrued interest
at all times. If the underlying securities fall below the value of the
repurchase price plus accrued interest, the Fund will require the seller to
deposit additional collateral by the next business day. If the request for
additional collateral is not met, or the seller defaults on its repurchase
obligation, the Fund maintains the right to sell the underlying securities at
market value and may claim any resulting loss against the seller; collectibility
of such claims may be limited. As of June 30, 1999, the Fund had no such
agreements.
- --------------------------------------------------------------------------------
20
<PAGE>
- --------------------------------------------------------------------------------
THE LATIN AMERICA EQUITY FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
NOTE B. AGREEMENTS
Credit Suisse Asset Management ("CSAM"), formerly BEA Associates, serves as the
Fund's investment adviser, with respect to all investments. As compensation for
its advisory services, CSAM receives from the Fund an annual fee, calculated
weekly and paid quarterly, equal to 1.25% of the first $100 million of the
Fund's average weekly net assets, 1.15% of the next $50 million of the Fund's
average weekly net assets and 1.05% of the Fund's average weekly net assets in
excess of $150 million. CSAM has agreed to waive its portion of the advisory fee
previously payable to the Fund's former sub-advisers. For the six months ended
June 30, 1999, CSAM earned $623,829 for advisory services, of which CSAM waived
$36,925. CSAM also provides certain administrative services to the Fund and is
reimbursed by the Fund for costs incurred on behalf of the Fund. For the six
months ended June 30, 1999, CSAM was reimbursed $5,973 for administrative
services rendered to the Fund.
Celfin Servicios Financieros Limitada ("Celfin") serves as the Fund's
sub-adviser, with respect to Chilean investments. In return for its services,
Celfin is paid a fee, out of the advisory fees payable to CSAM, computed weekly
and paid quarterly at an annual rate of 0.25% of the Fund's average weekly net
assets invested in Chile. For the six months ended June 30, 1999, Celfin earned
$6,980 for sub-advisory services.
Bear Stearns Funds Management Inc. ("BSFM") serves as the Fund's U.S.
administrator. The Fund pays BSFM a monthly fee for its services rendered that
is computed weekly at an annual rate of 0.10% of the first $100 million of the
Fund's average weekly net assets and 0.08% of amounts in excess of $100 million.
For the six months ended June 30, 1999, BSFM earned $44,517 for administrative
services.
BEA Administration, Administradora de Fondos de Inversion de Capital Extranjero
S.A. ("AFICE") serves as the Fund's Chilean administrator. For its services,
AFICE is paid an annual fee by the Fund equal to the greater of 2,000 U.F.'s
(approximately $57,500 at June 30, 1999) or 0.10% of the Fund's average weekly
net assets invested in Chile and an annual reimbursement of out-of-pocket
expenses not to exceed 500 U.F.'s. Such fees are paid by AFICE to Celfin for
certain administrative services. An accounting fee is also paid to Celfin which
is calculated and paid quarterly at an annual rate of 205.32 U.F.'s
(approximately $5,900 at June 30, 1999). For the six months ended June 30, 1999,
Celfin earned $37,320 and $3,620 for administration and accounting services,
respectively.
NOTE C. CAPITAL STOCK
The authorized capital stock of the Fund is 100,000,000 shares of common stock,
$0.001, par value. Of the 7,445,228 shares outstanding at June 30, 1999, CSAM
owned 7,169 shares.
NOTE D. INVESTMENT IN SECURITIES
For U.S. federal income tax purposes, the cost of securities owned at June 30,
1999 was $88,046,183. Accordingly, the net unrealized appreciation of
investments (including investments denominated in foreign currencies) of
$12,553,878 was composed of gross appreciation of $18,080,805 for those
investments having an excess of value over cost and gross depreciation of
$5,526,927 for those investments having an excess of cost over value.
For the six months ended June 30, 1999, purchases and sales of securities, other
than short-term investments, were $91,433,017 and $98,162,177, respectively.
NOTE E. CREDIT AGREEMENT
The Fund, along with 10 other U.S. regulated management investment companies for
which CSAM serves as investment adviser, has a credit agreement with BankBoston,
N.A. The agreement provides that each fund is permitted to borrow an amount
equal to the lesser of $25,000,000 or 25% of the net assets of the
- --------------------------------------------------------------------------------
21
<PAGE>
- --------------------------------------------------------------------------------
THE LATIN AMERICA EQUITY FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
fund. However, at no time shall the aggregate outstanding principal amount of
all loans to any of the 11 funds exceed $25,000,000. The line of credit will
bear interest at (i) the greater of the bank's prime rate or the Federal Funds
Effective Rate plus 0.50% or (ii) the Adjusted Eurodollar Rate plus 1.50%. The
Fund had no amounts outstanding under the credit agreement for the six months
ended and at June 30, 1999. Upon termination of the above agreement with
BankBoston, N.A., the Fund entered into a credit agreement with Deutsche Bank AG
and State Street Bank and Trust Company effective July 28, 1999.
NOTE F. RESTRICTED SECURITIES
Certain of the Fund's investments are restricted as to resale and are valued at
the direction of the Fund's Board of Directors in good faith, at fair value,
after taking into consideration appropriate indications of value. The table
below shows the number of shares held, the acquisition dates, aggregate cost,
fair value as of June 30, 1999, per share value of such securities and percent
of net assets which the securities comprise.
<TABLE>
<CAPTION>
NUMBER ACQUISITION FAIR VALUE AT VALUE PERCENT OF
SECURITY OF SHARES DATES COST JUNE 30, 1999 PER SHARE NET ASSETS
- ------------------------------------------------- ----------- ---------- ---------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Emerging Markets Ventures, L.P................... 5,333 01/22/98 $ 5,434 $ 5,010 $ 0.94 0.01
Emerging Markets Ventures, L.P................... 234,747 05/06/98 239,183 220,518 0.94 0.22
Emerging Markets Ventures, L.P................... 115,870 07/07/98 118,060 108,847 0.94 0.11
Emerging Markets Ventures, L.P................... 91,609 10/27/98 93,340 86,057 0.94 0.09
Emerging Markets Ventures, L.P................... 52,774 02/26/99 52,774 49,575 0.94 0.05
Emerging Markets Ventures, L.P................... 21,375 04/19/99 21,376 20,080 0.94 0.02
Jamaican Assets I L.P............................ 469,756 07/29/97 473,429 395,117 0.84 0.39
Jamaican Assets I L.P............................ 469,757 10/20/97 473,430 395,117 0.84 0.39
Venworld Telecommunications...................... 24,498 07/30/92 502,406 266,716 10.89 0.26
Venworld Telecommunications...................... 15,663 08/07/92 314,699 170,527 10.89 0.17
</TABLE>
The Fund may incur certain costs in connection with the disposition of the above
securities.
NOTE G. SHARE REPURCHASE PROGRAM
On October 21, 1998, the Fund announced that its Board of Directors has
authorized the repurchase by the Fund of up to 15% of the Fund's outstanding
common stock, for the purposes of enhancing shareholder value. The Fund's Board
has authorized management of the Fund to repurchase such shares in open market
transactions at prevailing market prices from time to time and in a manner
consistent with the Fund continuing to seek to achieve its investment
objectives. The Board's actions were taken in light of the significant discounts
at which the Fund's shares recently have been trading. It is intended both to
provide additional liquidity to those shareholders that elect to sell their
shares and to enhance the net asset value of the shares held by those
shareholders that maintain their investment. The repurchase program will be
subject to review by the Board of Directors of the Fund. From October 21, 1998
to December 31, 1998, the Fund repurchased 10,100 of its shares for a total of
$77,509 at a weighted average discount of 26.65% from net asset value. The
discount of individual repurchases ranged from 25.58%-26.19%. For the six months
ended June 30, 1999, the Fund repurchased 1,168,400 of its shares for a total
cost of $9,558,663 at a weighted average discount of 22.85% from net asset
value. The discount of individual repurchases ranged from 17.86-27.67%.
- --------------------------------------------------------------------------------
22
<PAGE>
RESULTS OF ANNUAL MEETING OF SHAREHOLDERS (UNAUDITED)
On May 11, 1999, the annual meeting of shareholders of The Latin America Equity
Fund, Inc. (the "Fund") was held and the following matters were voted upon:
(1) To re-elect three directors to the Board of Directors of the Fund.
<TABLE>
<CAPTION>
NAME OF DIRECTOR FOR WITHHELD NON-VOTES
- -------------------------------------------------------------------------------------- ---------- --------- ----------
<S> <C> <C> <C>
Peter A. Gordon 6,158,919 673,375 1,322,934
William W. Priest, Jr. 6,166,158 666,136 1,322,934
Martin M. Torino 6,163,590 668,704 1,322,934
</TABLE>
In addition to the directors re-elected at the meeting, Dr. Enrique R. Arzac,
James J. Cattano and George W. Landau continue to serve as directors of the
Fund.
(2) To ratify the selection of PricewaterhouseCoopers LLP as independent public
accountants for the fiscal year ending December 31, 1999.
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN NON-VOTES
---------- --------- ---------- ----------
<S> <C> <C> <C> <C>
6,671,019 132,194 29,081 1,322,934
</TABLE>
(3) To approve a shareholder proposal providing that the advisory contract
between the Fund and Credit Suisse Asset Management be terminated.
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN NON-VOTES
---------- ---------- --------- ----------
<S> <C> <C> <C> <C>
1,111,680 5,622,683 97,931 1,322,934
</TABLE>
The required votes were not received to approve the above proposal.
- --------------------------------------------------------------------------------
23
<PAGE>
DESCRIPTION OF INVESTLINK-SM-* PROGRAM
The InvestLink-SM- Program is sponsored and administered by BankBoston, N.A.,
not by The Latin America Equity Fund, Inc. (the "Fund"). BankBoston, N.A. will
act as program administrator (the "Program Administrator") of the InvestLink
Program (the "Program"). The purpose of the Program is to provide interested
investors with a simple and convenient way to invest funds and reinvest
dividends in shares of the Fund's common stock ("Shares") at prevailing prices,
with reduced brokerage commissions and fees.
An interested investor may join the Program at any time. Purchases of Shares
with funds from a participant's cash payment or automatic account deduction will
begin on the next day on which funds are invested. If a participant selects the
dividend reinvestment option, automatic investment of dividends generally will
begin with the next dividend payable after the Program Administrator receives
his enrollment form. Once in the Program, a person will remain a participant
until he terminates his participation or sells all Shares held in his Program
account, or his account is terminated by the Program Administrator. A
participant may change his investment options at any time by requesting a new
enrollment form and returning it to the Program Administrator.
A participant will be assessed certain charges in connection with his
participation in the Program. First-time investors will be subject to an initial
service charge which will be deducted from their initial cash deposit. All
optional cash deposit investments will be subject to a service charge. Sales
processed through the Program will have a service fee deducted from the net
proceeds, after brokerage commissions. In addition to the transaction charges
outlined above, participants will be assessed per share processing fees (which
include brokerage commissions.) Participants will not be charged any fee for
reinvesting dividends.
The number of Shares to be purchased for a participant depends on the amount of
his dividends, cash payments or bank account or payroll deductions, less
applicable fees and commissions, and the purchase price of the Shares. The
Program Administrator uses dividends and funds of participants to purchase
Shares of Company Common Stock in the open market. Such purchases will be made
by participating brokers as agent for the participants using normal cash
settlement practices. All Shares purchased through the Program will be allocated
to participants as of the settlement date, which is usually three business days
from the purchase date. In all cases, transaction processing will occur within
30 days of the receipt of funds, except where temporary curtailment or
suspension of purchases is necessary to comply with applicable provisions of the
Federal Securities laws or when unusual market conditions make prudent
investment impracticable. In the event the Program Administrator is unable to
purchase Shares within 30 days of the receipt of funds, such funds will be
returned to the participants.
The average price of all Shares purchased by the Program Administrator with all
funds received during the time period from two business days preceding any
investment date up to the second business day preceding the next investment date
shall be the price per share allocable to a participant in connection with the
Shares purchased for his account with his funds or dividends received by the
Program Administrator during such time period. The average price of all Shares
sold by the Program Administrator pursuant to sell orders received during such
time period shall be the price per share allocable to a participant in
connection with the Shares sold for his account pursuant to his sell orders
received by the Program Administrator during such time period.
BankBoston, N.A., as Program Administrator, administers the Program for
participants, keeps records, sends statements of account to participants and
performs other duties relating to the Program. Each participant in the Program
will receive a statement of his account following each purchase of Shares. The
statements will also show the amount of
- --------------------------------------------------------------------------------
24
<PAGE>
DESCRIPTION OF INVESTLINK-SM-* PROGRAM (CONTINUED)
dividends credited to such participant's account (if applicable), as well as the
fees paid by the participant. In addition, each participant will receive copies
of the Fund's annual and semi-annual reports to shareholders, proxy statements
and, if applicable, dividend income information for tax reporting purposes.
If the Fund is paying dividends on the Shares, a participant will receive
dividends through the Program for all Shares held on the dividend record date on
the basis of full and fractional Shares held in his account, and for all other
Shares of the Fund registered in his name. The Program Administrator will send
checks to the participants for the amounts of their dividends that are not to be
automatically reinvested at no cost to the participants.
Shares of the Fund purchased under the Program will be registered in the name of
the accounts of the respective participants. Unless requested, the Fund will not
issue to participants certificates for Shares of the Fund purchased under the
Program. The Program Administrator will hold the Shares in book-entry form until
a Program participant chooses to withdraw his Shares or terminate his
participation in the Program. The number of Shares purchased for a participant's
account under the Program will be shown on his statement of account. This
feature protects against loss, theft or destruction of stock certificates.
A participant may withdraw all or a portion of the Shares from his Program
account by notifying the Program Administrator. After receipt of a participant's
request, the Program Administrator will issue to such participant certificates
for the whole Shares of the Fund so withdrawn or, if requested by the
participant, sell the Shares for him and send him the proceeds, less applicable
brokerage commissions, fees, and transfer taxes, if any. If a participant
withdraws all full and fractional Shares in his Program account, his
participation in the Program will be terminated by the Program Administrator. In
no case will certificates for fractional Shares be issued. The Program
Administrator will convert any fractional Shares held by a participant at the
time of his withdrawal to cash.
Participation in any rights offering, dividend distribution or stock split will
be based upon both the Shares of the Fund registered in participants' names and
the Shares (including fractional Shares) credited to participants' Program
accounts. Any stock dividend or Shares resulting from stock splits with respect
to Shares of the Fund, both full and fractional, which participants hold in
their Program accounts and with respect to all Shares registered in their names
will be automatically credited to their accounts.
All Shares of the Fund (including any fractional share) credited to his account
under the Program will be voted as the participant directs. The participants
will be sent the proxy materials for the annual meetings of shareholders. When a
participant returns an executed proxy, all of such Shares will be voted as
indicated. A participant may also elect to vote his Shares in person at the
Shareholders' meeting.
A participant will receive tax information annually for his personal records and
to help him prepare his U.S. federal income tax return. The automatic
reinvestment of dividends does not relieve him of any income tax which may be
payable on dividends. For further information as to tax consequences of
participation in the Program, participants should consult with their own tax
advisors.
The Program Administrator in administering the Program will not be liable for
any act done in good faith or for any good faith omission to act. However, the
Program Administrator will be liable for loss or damage due to error caused by
its negligence, bad faith or willful misconduct. Shares held in custody by the
Program Administrator are not subject to protection under the Securities
Investors Protection Act of 1970.
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25
<PAGE>
DESCRIPTION OF INVESTLINK-SM-* PROGRAM (CONTINUED)
The participant should recognize that neither the Fund nor the Program
Administrator can provide any assurance of a profit or protection against loss
on any Shares purchased under the Program. A participant's investment in Shares
held in his Program account is no different than his investment in directly held
Shares in this regard. The participant bears the risk of loss and the benefits
of gain from market price changes with respect to all of his Shares. Neither the
Fund nor the Program Administrator can guarantee that Shares purchased under the
Program will, at any particular time, be worth more or less than their purchase
price. Each participant must make an independent investment decision based on
his own judgment and research.
While the Program Administrator hopes to continue the Program indefinitely, the
Program Administrator reserves the right to suspend or terminate the Program at
any time. It also reserves the right to make modifications to the Program.
Participants will be notified of any such suspension, termination or
modification in accordance with the terms and conditions of the Program. The
Program Administrator also reserves the right to terminate any participant's
participation in the Program at any time. Any question of interpretation arising
under the Program will be determined in good faith by the Program Administrator
and any such good faith determination will be final.
Any interested investor may participate in the Program. To participate in the
Program, an investor who is not already a registered owner of the Shares must
make an initial investment of at least $250.00. All other cash payments or bank
account deductions must be at least $100.00, up to a maximum of $100,000.00
annually. An interested investor may join the Program by reading the Program
description, completing and signing the enrollment form and returning it to the
Program Administrator. The enrollment form and information relating to the
Program (including the terms and conditions) may be obtained by calling the
Program Administrator at one of the following telephone numbers: First Time
Investors--(800) 338-1176; Current Shareholders--(800) 730-6001. All
correspondence regarding the Program should be directed to: BankBoston, N.A.,
InvestLink Program, P.O. Box 8040, Boston, MA 02266-8040.
- ---------------------------------------------
*InvestLink is a service mark of Boston EquiServe Limited Partnership.
- --------------------------------------------------------------------------------
26
<PAGE>
SUMMARY OF GENERAL INFORMATION
The Fund--The Latin America Equity Fund, Inc.--is a closed-end, non-diversified
management investment company whose shares trade on the New York Stock Exchange.
Its investment objective is long-term capital appreciation through investments
primarily in Latin American equity securities. The Fund is managed and advised
by Credit Suisse Asset Management ("CSAM"), formerly known as BEA Associates.
CSAM is a diversified asset manager, handling equity, balanced, fixed income,
international and derivative based accounts. Portfolios include international
and emerging market investments, common stocks, taxable and non-taxable bonds,
options, futures and venture capital. CSAM manages money for corporate pension
and profit-sharing funds, public pension funds, union funds, endowments and
other charitable institutions and private individuals. As of June 30, 1999,
CSAM--Americas managed approximately $42.8 billion in assets.
SHAREHOLDER INFORMATION
The market price is published in: THE NEW YORK TIMES (daily) under the
designation "LatAEqt" and THE WALL STREET JOURNAL (daily), and BARRON'S (each
Monday) under the designation "LatinAmEqty". The Fund's New York Stock Exchange
trading symbol is LAQ. Weekly comparative net asset value (NAV) and market price
information about The Latin America Equity Fund, Inc.'s shares are published
each Sunday in THE NEW YORK TIMES and each Monday in THE WALL STREET JOURNAL and
BARRON'S, as well as other newspapers, in a table called "Closed-End Funds."
THE CSAM GROUP OF FUNDS
LITERATURE REQUEST--Call today for free descriptive information on the
closed-end funds listed below at 1-800-293-1232 or visit our website on the
Internet: http://www.cefsource.com.
CLOSED-END FUNDS
SINGLE COUNTRY
The Brazilian Equity Fund, Inc. (BZL)
The Chile Fund, Inc. (CH)
The First Israel Fund, Inc. (ISL)
The Indonesia Fund, Inc. (IF)
The Portugal Fund, Inc. (PGF)
MULTIPLE COUNTRY
The Emerging Markets Infrastructure Fund, Inc. (EMG)
The Emerging Markets Telecommunications Fund, Inc. (ETF)
The Latin America Investment Fund, Inc. (LAM)
FIXED INCOME
Credit Suisse Asset Management Income Fund, Inc. (CIK)
Credit Suisse Asset Management Strategic Global Income
Fund, Inc. (CGF)
Notice is hereby given in accordance with Section 23(c) of the Investment
Company Act of 1940, as amended, that The Latin America Equity Fund, Inc. may
from time to time purchase shares of its capital stock in the open market.
- --------------------------------------------------------------------------------
<PAGE>
DIRECTORS AND CORPORATE OFFICERS
Dr. Enrique R. Arzac Director
James J. Cattano Director
Peter A. Gordon Director
George W. Landau Director
Martin M. Torino Director
William W. Priest, Jr. Chairman of the Board of Directors
Richard W. Watt President, Chief Investment Officer
and Director
Emily Alejos Investment Officer
Hal Liebes Senior Vice President
Michael A. Pignataro Chief Financial Officer and
Secretary
Rocco A. Del Guercio Vice President
Robert M. Rizza Treasurer
INVESTMENT ADVISER
Credit Suisse Asset Management
One Citicorp Center
153 East 53rd Street
New York, NY 10022
ADMINISTRATOR
Bear Stearns Funds Management Inc.
575 Lexington Avenue
New York, NY 10022
CUSTODIAN
Brown Brothers Harriman & Co.
40 Water Street
Boston, MA 02109
SHAREHOLDER SERVICING AGENT
BankBoston, N.A.
P.O. Box 1865
Mail Stop 45-02-62
Boston, MA 02105-1865
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
2400 Eleven Penn Center
Philadelphia, PA 19103
LEGAL COUNSEL
Willkie Farr & Gallagher
787 Seventh Avenue
New York, NY 10019-6099
This report, including the financial statements herein, is sent to the
shareholders of the Fund for their information. The financial
information included herein is taken from the records of the Fund
without examination by independent accountants who do not express an
opinion thereon. It is not a prospectus, circular or representation
intended for use in the purchase or sale of shares of the Fund or of
any securities mentioned in this report. [LOGO]
- --------------------------------------------------------------------------------
3915-SAR-99
