THE KOREAN INVESTMENT FUND
SEMI-ANNUAL REPORT
OCTOBER 31, 1996
LETTER TO SHAREHOLDERS THE KOREAN INVESTMENT FUND
_______________________________________________________________________________
December 3, 1996
Dear Shareholder:
For the quarter ended October 31, 1996, The Korean Investment Fund (KIF) had a
total return of -13.68% on a net asset value (NAV) basis. This compares with
the Fund's benchmark, the Korean Composite Stock Price Index (KOSPI), which had
a return of -9.33% over the same period. Your Fund's net asset value ended the
period at $9.02 per share and the market price was $8.125 per share as of
October 31, 1996, representing a 9.92% discount to net asset value. The primary
reason for the Fund's underperformance was overweight positions in Korea Mobile
Telecom, LG Information & Communications, Korea Exchange Bank and POSCO
relative to their weight in the Korea Composite Price Index. While these stocks
underperformed KOSPI in the recent period, we see their fundamentals as very
positive and expect the stocks to outperform in the months ahead.
The Korean stock market is very much a liquidity-driven market. Thus, the
increase in the regulatory ceiling on aggregate foreign ownership of most
companies' equities from 18% to 20%, which became effective in October, tended
to push up the KOSPI. Conversely, as soon as foreign fund inflows decreased,
the KOSPI retreated. Except for the short-term rally in the first week of
October, the local stock market suffered from heavy selling pressure from local
institutional investors as well as individual investors. Investment sentiment
deteriorated as a result of widening trade deficits and lower-than-expected GDP
growth in the third quarter. To add to these negative forces, the government
released a plan to increase new stock supply for the rest of this year.
TRADE ACCOUNT DEEP IN THE RED
Between October 1995 and October 1996, exports grew by 3.2% year-on-year to
U.S. $11.9 billion after three consecutive months of losses, thanks to a 15.4%
gain in non-semiconductor exports. Semiconductor exports declined by 44.4%
during the month, while imports rose sharply by 15.3% to U.S. $13.5 billion. As
a result, the monthly trade deficit was U.S. $1.57 billion, compared with U.S.
$207 million a year ago. For the full year, the cumulative trade deficit
ballooned by 75% year-on-year to U.S. $16.8 billion. Although we may continue
to see slight export growth, any meaningful export recovery is not likely this
year. This is expected because weaker semiconductor exports are likely to
continue and an export recovery in petrochemicals, automobiles and oil products
probably will not be sustained at the same pace as in October.
It is too early to estimate precisely when the prices of major export
items--semiconductors, steel and petrochemicals--will begin to recover.
Nonetheless, further sharp price declines are quite unlikely in the longer
term. Although the problem of excess supply will continue to prevent a quick
recovery in export prices and profitability, steady increases in export volume
and value are likely to produce signs of turnaround in the middle of next year.
On the other hand, as domestic consumption continues to decelerate and the
impact of opening the domestic retail market to foreigners dissipates, consumer
goods imports will also decelerate. Due to the heavy inventory burden, as well
as the imminent end of major industry investment plans, machinery imports are
likely to fall sharply and pull down overall imports. Moreover, stable crude
oil prices, reflecting an improvement of the situation in the Gulf, should also
curb imports starting next year. The growth in the number of import licenses
issued--a three-month leading indicator for imports--continued to drop in
October to 0.8% from 1.1% in September, 5.4% in August and 24% in July. This
will mean decreasing import growth in the future.
The economic growth is led by relatively high consumption expenditure this
year, while exports, facilities investment and construction investment should
be sluggish. In 1997, however, economic growth should be led by construction
investment and the recovery of exports. The construction industry is likely to
be one of the most important parts of the domestic economic recovery as the
government will likely use it as a boosting measure prior to the presidential
elections next year. The government has already set a budget for 1997
construction projects at 10.1 trillion won (about U.S. $12.3 billion), which is
considerably higher than the current year's budget of 8.1 trillion.
The value of Korea's currency, the won, depreciated by 8.3% against the U.S.
dollar to 826 won to the U.S. dollar for the full year (October 1996) mainly
due to the strong dollar movement against major currencies and the increase in
dollar demand caused by increased imports. Our forecast is that the won will be
traded around 840 won to the U.S. dollar by the end of this year.
1
THE KOREAN INVESTMENT FUND
_______________________________________________________________________________
PORTFOLIO STRATEGY
KIF's portfolio is overweight in telecommunications stocks. The
telecommunication and information services industry is becoming the leading
industry in Korea, accounting for over 12.4% of GDP in 1995, compared to 1.4%
in 1990. We continue to add to companies that are trading at a discount to our
estimate of intrinsic value. During the reporting period, we added to holdings
in Shin Woo Co., Ltd., Tri Gem Computer Inc. and Oriental Fire & Marine
Insurance Co. We reduced positions in Saehan Precision, Samsung Securities,
Hanil Cement and Moon Bae Steel Co., Ltd. As of October 31, 1996, the Fund's
cash position was 0.46% of total net assets.
Thank you for your continued interest in The Korean Investment Fund. We look
forward to reporting to you again on market activity and the Fund's investment
results in the coming periods.
Sincerely,
John D. Carifa
Chairman and Chief Executive Officer
A. Rama Krishna
Vice President
In Kee Oh
Vice President
2
TEN LARGEST HOLDINGS
OCTOBER 31, 1996 (UNAUDITED) THE KOREAN INVESTMENT FUND
_______________________________________________________________________________
COMPANY U.S. $ VALUE PERCENT OF NET ASSETS
- -------------------------------------------------------------------------------
LG Information & Communications
(common & new shares) $ 6,435,534 8.4%
Korea Mobile Telecom Corp. (ADR) 5,243,750 6.9
Korea Exchange Bank 4,760,779 6.3
Namhae Chemical 4,726,778 6.2
Korea Electric Power Corp. 4,646,778 6.1
Pohang Iron & Steel Co. (ADR) 2,822,000 3.7
Kookmin Bank 2,542,660 3.3
Keum Kang Development 2,523,449 3.3
Samsung Display Devices 2,517,398 3.3
Tri Gem Computer, Inc. 2,303,046 3.0
$38,522,172 50.5%
3
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1996 (UNAUDITED) THE KOREAN INVESTMENT FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------
COMMON STOCKS-100.5%
FINANCIAL SERVICES-27.7%
BANKING-20.1%
Cho Hung Bank 210,630 $ 2,064,875
Daegu Bank, Ltd. 49,490 598,971
Hana Bank 106,912 1,617,428
new #1 18,512 266,618
Hyundai International Merchant Bank 67,139 1,462,635
Kookmin Bank 159,157 2,542,660
Korea Exchange Bank 485,030 4,760,779
Korea Housing Bank
new #1 (a) 27,300 525,349
Shinhan Bank 90,514 1,456,988
------------
15,296,303
BROKERAGE & MONEY MANAGEMENT-2.7%
Daewoo Securities (a) 64,523 1,296,317
Dongwon Securities (a) 50,000 780,635
------------
2,076,952
INSURANCE-4.9%
Korea Reinsurance Co. 25,780 801,871
new #1 6,058 183,298
Oriental Fire & Marine Insurance Co. (a) 35,000 1,020,877
Samsung Fire & Marine Insurance Co. 3,700 1,724,054
------------
3,730,100
------------
21,103,355
CAPITAL GOODS-15.5%
ELECTRICAL EQUIPMENT-8.8%
LG Industrial Systems 34,510 881,284
Saehan Precision 30,000 1,005,749
Samsung Display Devices (a) 40,000 2,517,398
Tri Gem Computer, Inc. (a) 62,186 2,303,046
------------
6,707,477
ENGINEERING & CONSTRUCTION-6.7%
Dong-Ah Construction 59,144 1,682,159
new #1 5,211 135,596
Hyundai Engineering & Construction (a) 44,880 1,303,625
new #1 (a) 2,612 73,657
Sambu Construction Co., Ltd. (a) 40,000 1,239,334
Sungwon Construction Co. 36,992 564,114
new #1 7,222 97,896
------------
5,096,381
------------
11,803,858
BASIC INDUSTRIES-14.7%
CHEMICALS-6.8%
Korea Chemical 6,000 482,179
Namhae Chemical (a) 73,000 4,726,778
------------
5,208,957
MINING & METALS-6.0%
Dongkuk Steel Mill (a) 85,811 1,713,623
Pohang Iron & Steel Co. (ADR) 136,000 2,822,000
------------
4,535,623
PAPER & FOREST PRODUCT-1.9%
Hansol Paper Manufacturing Co. 30,000 965,809
new #1 6,087 178,282
Korea Export Packaging 10,000 266,263
new #1 2,849 69,307
------------
1,479,661
------------
11,224,241
4
THE KOREAN INVESTMENT FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------
CONSUMER MANUFACTURING-13.7%
AUTO & RELATED-6.8%
Hyundai Motor Co., Ltd. 20,000 $ 622,088
Hyundai Motor Service Co. 60,000 1,938,880
new #1 5,940 185,479
Samsung Radiator Industries 24,000 1,876,430
Yoosung Enterprise 15,000 579,123
------------
5,202,000
BUILDING & RELATED-2.1%
Keum Kang, Ltd. 29,000 1,600,484
TEXTILE PRODUCTS-4.8%
Baikyang Co. (a) 2,880 334,620
Cheil Industries 120,000 1,800,908
Shin Woo Co., Ltd. (a) 70,000 1,524,962
------------
3,660,490
------------
10,462,974
UTILITY-13.0%
ELECTRIC POWER-6.1%
Korea Electric Power Corp. 158,000 4,646,778
TELEPHONE UTILITY-6.9%
Korea Mobile Telecom Corp. (ADR) (b) 419,500 5,243,750
------------
9,890,528
TECHNOLOGY-11.0%
COMMUNICATION EQUIPMENT-8.4%
LG Information & Communications 51,000 5,184,871
new #1 12,917 1,250,663
------------
6,435,534
SEMI-CONDUCTOR-2.6%
Samsung Electronics 23,559 1,656,615
new #1 4,689 320,640
------------
1,977,255
------------
8,412,789
CONSUMER SERVICES-3.8%
AIRLINES-0.5%
Korean Air Lines 20,000 372,769
OTHER-3.3%
Keum Kang Development 150,000 2,523,449
------------
2,896,218
TRANSPORTATION-1.1%
AIR FREIGHT-1.1%
Global Enterprise 10,000 798,790
TOTAL INVESTMENTS-100.5%
(cost $87,141,695) 76,592,753
Other assets less liabilities-(0.5%) (367,237)
NET ASSETS-100% $76,225,516
(a) Non-income producing security
(b) Security is exempt from registration under Rule 144A of the Securities
Exchange Act of 1933. This security may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At October 31, 1996,
this security was valued at $5,243,750 representing 6.9% of net assets.
Glossary of Terms:
ADR - American Depository Receipt.
See notes to financial statements.
5
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1996 (UNAUDITED) THE KOREAN INVESTMENT FUND
_______________________________________________________________________________
ASSETS
Investments in securities, at value (cost $87,141,695) $76,592,753
Cash, at value (cost $346,179) 347,415
Deferred organization expense and other assets 13,967
Total assets 76,954,135
LIABILITIES
Payable for investment securities purchased 373,139
Management fee payable 58,378
Co-Manager fee payable 27,472
Accrued expenses and other expenses 269,630
Total liabilities 728,619
NET ASSETS $76,225,516
COMPOSITION OF NET ASSETS
Capital stock, at par $ 84,507
Additional paid-in capital 90,842,591
Accumulated net investment loss (1,003,783)
Accumulated net realized loss on investments and foreign
currency transactions (3,149,619)
Net unrealized depreciation of investments and foreign
currency denominated assets and liabilities (10,548,180)
$76,225,516
NET ASSET VALUE PER SHARE (based on 8,450,704 shares outstanding) $9.02
See notes to financial statements.
6
STATEMENT OF OPERATIONS
SIX MONTHS ENDED OCTOBER 31, 1996 (UNAUDITED) THE KOREAN INVESTMENT FUND
_______________________________________________________________________________
INVESTMENT INCOME
Dividends (net of foreign taxes withheld of $3,242) $ 10,000
Interest 514 $ 10,514
EXPENSES
Management fee 378,344
Co-Manager fee 178,044
Custodian 156,811
Audit and legal 56,479
Directors' fees and expenses 39,036
Transfer agency 19,926
Printing 19,084
Amortization of organization expenses 11,592
Registration 8,828
Miscellaneous 79,270
Total expenses 947,414
Net investment loss (936,900)
REALIZED AND UNREALIZED LOSS ON INVESTMENTS AND
FOREIGN CURRENCY TRANSACTIONS
Net realized loss on investment transactions (1,303,918)
Net realized loss on foreign currency transactions (200,002)
Net change in unrealized appreciation of:
Investments (25,748,409)
Foreign currency denominated assets and liabilities (6,369)
Net loss on investments and foreign currency denominated
assets and liabilities (27,258,698)
NET DECREASE IN NET ASSETS FROM OPERATIONS $(28,195,598)
See notes to financial statements.
7
STATEMENT OF CHANGES IN NET ASSETS THE KOREAN INVESTMENT FUND
_______________________________________________________________________________
SIX MONTHS ENDED YEAR ENDED
OCT. 31,1996 APRIL 30,
(UNAUDITED) 1996
-------------- -------------
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS
Net investment loss $ (936,900) $ (486,002)
Net realized loss on investments and foreign
currency transactions (1,503,920) (1,643,451)
Net change in unrealized appreciation
(depreciation) of investments and foreign
currency denominated assets and liabilities (25,754,778) 8,142,874
Net increase (decrease) in net assets from
operations (28,195,598) 6,013,421
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net realized gain on investments and foreign
currency transactions -0- (2,470,881)
CAPITAL STOCK TRANSACTIONS
Proceeds from sale of shares of common stock
in rights offering -0- 25,898,597
Offering costs charged to additional paid-in
capital -0- (515,887)
Reinvestment of dividends resulting in issuance
of common stock -0- 34,966
Total increase (decrease) (28,195,598) 28,960,216
NET ASSETS
Beginning of period 104,421,114 75,460,898
End of period $ 76,225,516 $104,421,114
See notes to financial statements.
8
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1996 (UNAUDITED) THE KOREAN INVESTMENT FUND
_______________________________________________________________________________
NOTE A: SIGNIFICANT ACCOUNTING POLICIES
The Korean Investment Fund (the "Fund") was incorporated in the State of
Maryland on November 1, 1991 as a non-diversified, closed-end management
investment company. The following is a summary of significant accounting
policies followed by the Fund.
1. SECURITY VALUATION
Investments are stated at value. Investments for which market quotations are
readily available are valued at the closing price on the Korea Stock Exchange
on the day of valuation or if no such closing price is available, at the last
bid price quoted on such day. Securities for which market quotations are not
readily available and restricted securities are valued in good faith at fair
value using methods determined by the Board of Directors. In determining fair
value, consideration is given to cost, operating and other financial data.
Securities that mature in 60 days or less are valued at amortized cost, which
approximates market value, unless this method does not represent fair value.
2. CURRENCY TRANSLATION
Assets and liabilities denominated in foreign currencies are translated into
U.S. dollars at the mean of the quoted bid and asked price of the respective
currency against the U.S. dollar on the valuation date. Purchases and sales of
portfolio securities are translated at the rates of exchange prevailing when
such securities were acquired or sold. Income and expenses are translated at
rates of exchange prevailing when earned or accrued.
Net realized loss on foreign currency transactions represents net foreign
exchange gains and losses from holding of foreign currencies, currency gains or
losses realized between the trade and settlement dates on security
transactions, and the difference between the amounts of dividends and foreign
taxes recorded on the Fund's books and the U.S. dollar equivalent amounts
actually received or paid. Net unrealized currency gains and losses from
valuing foreign currency denominated assets and liabilities at period end
exchange rates are reflected as a component of net unrealized appreciation of
investments and foreign currency denominated assets and liabilities. The Fund
does not isolate that portion of the results of operations arising as a result
of changes in the foreign exchange rates from the fluctuations arising from
changes in the market prices of securities during the fiscal six months.
The exchange rate for the Korean Won at October 31, 1996 was Won 826.25 to U.S.
$1.00.
3. ORGANIZATION EXPENSES
Organization expenses of approximately $115,000 have been deferred and are
being amortized on a straight-line basis through February, 1997.
4. TAXES
It is the Fund's policy to meet the requirements of the U.S. Internal Revenue
Code applicable to regulated investment companies and to distribute all of its
investment company taxable income and net realized gains, if any, to its
shareholders. Therefore, no provision for U.S. income or excise taxes is
required. Withholding taxes on foreign interest and dividends have been
provided for in accordance with the applicable tax requirements.
5. INVESTMENT INCOME AND INVESTMENT TRANSACTIONS
Dividend income is recorded on the ex-dividend date. Interest income is accrued
daily. Investment transactions are accounted for on the date securities are
purchased or sold. Realized and unrealized gains and losses from investment and
currency transactions are calculated on the identified cost basis.
6. DIVIDENDS AND DISTRIBUTIONS
Dividends and distributions to shareholders are recorded on the ex-dividend
date and are determined in accordance with income tax regulations.
9
NOTES TO FINANCIAL STATEMENTS (CONTINUED) THE KOREAN INVESTMENT FUND
_______________________________________________________________________________
NOTE B: MANAGEMENT FEE, CO-MANAGER FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Under the terms of the Management and Administration Agreement, the Fund pays
Alliance Capital Management L.P. ("Alliance") a fee at an annualized rate of
.85 of 1% of the Fund's average weekly net assets. Such fee is calculated
weekly and paid monthly.
Under the terms of the Management Agreement, the Fund pays Orion Asset
Management Co., Ltd. (the "Co-Manager") a fee at an annualized rate of .40 of
1% of the Funds average weekly net assets. Such fee is calculated weekly and
paid monthly.
On February 6, 1996, the Fund entered into a Shareholder Inquiry Agency
Agreement with Alliance Fund Services, Inc. ("AFS") whereby the Fund reimburses
AFS for costs relating to servicing phone inquiries for the Fund. During the
six months ended October 31, 1996 there was no reimbursement paid to AFS.
Brokerage commissions paid on securities transactions for the six months ended
October 31, 1996 amounted to $112,628, of which $12,825 was paid to Tong Yang
Securities Co., Ltd., an affiliate of the Co-Manager.
NOTE C: INVESTMENT TRANSACTIONS
Purchases and sales of investment securities (excluding short-term and U.S.
Government securities) aggregated $15,520,283 and $14,885,272, respectively,
for the six months ended October 31, 1996. There were no purchases or sales of
U.S. Government and government agency obligations for the six months ended
October 31, 1996. At October 31, 1996, the cost of securities for federal
income tax purposes was $87,141,695. Accordingly, gross unrealized appreciation
of investments was $5,808,837 and gross unrealized depreciation of investments
was $16,357,779 resulting in net unrealized depreciation of $10,548,942
(excluding foreign currency translations). The Fund incurred and elected to
defer post October currency losses of $66,883 and capital losses of $1,189,535.
At April 30, 1996, the Fund had a net capital loss carryover of $456,162. Such
losses will be available to offset capital gains arising through April 30,
2004. To the extent that any net capital loss carryover or Post October loss is
used to offset future capital gains, it is probable that these gains will not
be distributed to shareholders.
NOTE D: CAPITAL STOCK
There are 100,000,000 shares of $.01 par value common stock authorized. Of the
8,450,704 shares outstanding at October 31, 1996, the Investment Manager owned
9,000 shares. During the six months ended October 31, 1996 the Fund issued no
shares of common stock in connection with the Fund's dividend reinvestment plan.
NOTE E: RIGHTS OFFERING
During the fiscal year ended April 30, 1996, the Fund issued 2,484,546 shares,
in connection with rights offerings of the Fund's shares. Shareholders of
record on September 25, 1995 were issued one non-transferable right for each
share of common stock owned, entitling shareholders the opportunity to acquire
one newly issued share of common stock for every three rights held at a
subscription price of $10.83 per share. Offering costs of $515,887 attributed
to the rights offering were charged to additional paid-in capital. Dealer
management and soliciting fees of $1,009,036 were netted against the proceeds
of the subscription.
10
FINANCIAL HIGHLIGHTS THE KOREAN INVESTMENT FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
SIX MONTHS FEBRUARY 24,
ENDED YEAR ENDED APRIL 30, 1992(A)
OCTOBER 31, ------------------------------------------------- THROUGH
1996 1996 1995 1994 1993 APRIL 30,1992
------------- ------------ ----------- ----------- --------- -------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $12.36 $12.66 $13.09 $10.37 $11.00 $10.90(b)
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (.11) (.01)(c) (.13)(c) (.09) (.03) (.01)
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions (3.23) .86 .28 2.81 (.59) .11
Net increase (decrease) in net asset value (3.34) .85 .15 2.72 (.62) .10
LESS: DISTRIBUTIONS
Distributions from net realized gains on
investments and foreign currency
transactions -0- (.29) -0- -0- (.01) -0-
CAPITAL SHARE TRANSACTIONS
Dilutive effect of rights offering -0- (.80) (.48) -0- -0- -0-
Offering costs charged to additional
paid-in capital -0- (.06) (.10) -0- -0- -0-
Total capital share transactions .00 (.86) (.58) -0- -0- -0-
Net asset value, end of period $9.02 $12.36 $12.66 $13.09 $10.37 $11.00
Market value, end of period $8.125 $11.50 $12.375 $13.375(d) $12.125 $10.00
TOTAL RETURN
Total investment return based on: (e)
Market value (29.35)% (1.55)% (5.88)% 10.31%(d) 21.39% (10.39)%
Net asset value (27.02)% 4.00% (3.28)% 26.23% (5.62)% (1.43)%
Net assets, end of period (000's omitted) $76,226 $104,421 $75,461 $55,078 $43,663 $46,278
RATIOS/SUPPLEMENTAL DATA
Ratio of expenses to average net assets 2.11%(f) 2.09% 2.00% 2.26% 2.55% 2.37%(f)
Ratio of net investment loss to average
net assets (2.08)%(f) (.53)% (.83)% (.82)% (.27)% (.49)%(f)
Portfolio turnover rate 34% 40% 34% 14% 43% 8%
Average commission rate(g) $.1318 -- -- -- -- --
</TABLE>
(a) Commencement of operations.
(b) Net of offering costs of $.26.
(c) Based on average shares outstanding.
(d) Restated.
(e) Total investment return is calculated assuming a purchase of common stock
on the opening of the first day and a sale on the closing of the last day of
each period reported. Dividends and distributions, if any, are assumed for
purposes of this calculation, to be reinvested at prices obtained under the
Fund's dividend reinvestment plan. Rights offerings, if any, are assumed for
purposes of this calculation, to be fully subscribed under the terms of the
rights offering. Generally, total investment return based on net asset value
will be higher than total investment return based on market value in periods
where there is an increase in the discount or a decrease in the premium of the
market value to the net asset value from the beginning to the end of such
periods. Conversely, total investment return based on the net asset value will
be lower than total investment return based on market value in the market
periods where there is a decrease in the discount or an increase in the premium
of the market value to the net asset value from the beginning to the end of
such periods. Total investment return for a period of less than one year is not
annualized.
(f) Annualized
(g) For fiscal years beginning on or after September 1, 1995, a Fund is
required to disclose its average commission rate per share for trades on which
commissions are charged.
11
ADDITIONAL INFORMATION THE KOREAN INVESTMENT FUND
_______________________________________________________________________________
SUPPLEMENTAL PROXY INFORMATION
The Annual Meeting of Shareholders of The Korean Investment Fund, Inc. was held
on Tuesday, August 8, 1996. The description of each proposal and number of
shares are as follows:
SHARES
VOTED FOR
- -------------------------------------------------------------------------------
1. To elect directors: Class Two Directors
(term expires 1997)
Dong Hoon Shih 5,199,392
Class One Directors
(term expires 1999)
David H. Dievler 5,199,392
William H. Foulk, Jr. 5,199,392
Hon. James D. Hodgson 5,199,392
SHARES SHARES
SHARES FORVOTED VOTED
VOTED AGAINST ABSTAIN
- -------------------------------------------------------------------------------
2. To ratify the selection of Ernst & Young
LLP as the Fund's independent auditors for
the Fund's fiscal year ending April 30, 1997: 5,223,957 20,023 13,347
12
THE KOREAN INVESTMENT FUND
_______________________________________________________________________________
BOARD OF DIRECTORS
JOHN D. CARIFA, CHAIRMAN AND CHIEF EXECUTIVE OFFICER
WANG-HA CHO, PRESIDENT
DONG HOON SHIN, SENIOR VICE PRESIDENT
DAVID H. DIEVLER (1)
WILLIAM H. FOULK, JR. (1)
DR. JAMES M. HESTER (1)
THE HON. JAMES D. HODGSON (1)
CHOONG (JOHN) H. KOH (1)
OFFICERS
ROBERT HEISTERBERG, EXECUTIVE VICE PRESIDENT--INVESTMENTS
YUNG CHUL PARK, EXECUTIVE VICE PRESIDENT--INVESTMENTS
A. RAMA KRISHNA, VICE PRESIDENT
IN KEE OH, VICE PRESIDENT
THOMAS BARDONG, VICE PRESIDENT
EDMUND P. BERGAN, JR., SECRETARY
MARK D. GERSTEN, TREASURER & CHIEF FINANCIAL OFFICER
JOSEPH J. MANTINEO, CONTROLLER
INVESTMENT MANAGER AND
ADMINISTRATOR
ALLIANCE CAPITAL MANAGEMENT L.P.
1345 Avenue of the Americas
New York, NY 10105
CUSTODIAN
BROWN BROTHERS HARRIMAN & CO.
40 Water Street
Boston, MA 02109-3661
LEGAL COUNSEL
SEWARD & KISSEL
One Battery Park Plaza
New York, NY 10004
CO-MANAGER
ORION ASSET MANAGEMENT CO., LTD.
767 Fifth Avenue
New York, NY 10153
INDEPENDENT ACCOUNTANTS
PRICE WATERHOUSE LLP
1177 Avenue of the Americas
New York, NY 10036-2798
TRANSFER AGENT, DIVIDEND PAYING
AGENT, AND REGISTRAR
STATE STREET BANK AND TRUST COMPANY
225 Franklin Street
Boston, MA 02110-1520
(1) Member of the Audit Committee.
Notice is hereby given in accordance with Section 23(c) of the Investment
Company Act of 1940 that the Fund may purchase at market prices from time to
time shares of its common stock in the open market.
This report, including the financial statement herein is transmitted to
the shareholders of The Korean Investment Fund, Inc. for their information.
This is not a prospectus, circular or representation intended for use in the
purchase of shares of the Fund or any securities mentioned in this report.
The financial information included herein is taken from the records of the
Fund without audit by independent accountants who do not express an opinion
thereon.
13
THE KOREAN INVESTMENT FUND, INC.
Summary of General Information
POLICIES AND OBJECTIVES
The investment objective of the Fund is to seek long-term capital appreciation
through investment primarily in equity securities of Korean companies.
SHAREHOLDER INFORMATION
Daily market prices for the Fund's shares are published in the New York Stock
Exchange Composite Transaction section of newspapers under the designation
KoreanInvFd. The Fund's NYSE trading symbol is "KIF". Weekly comparative net
asset value (NAV) and market price information about the Fund is published each
Monday in THE WALL STREET JOURNAL, each Sunday in THE NEW YORKTIMES and each
Saturday in BARRON'S, and other newspapers in a table called "Closed-End
Funds". Additional information about the Fund is available by calling
1-800-221-5672.
DIVIDEND REINVESTMENT PLAN
Under the Fund's Dividend Reinvestment Plan, all shareholders will
automatically have their dividends and other distributions from the Fund
invested in additional shares of the Fund unless a shareholder elects to
receive cash. A brochure describing the Plan is available from the Plan Agent,
State Street Bank and Trust Company, by calling 1-800-219-4218.
THE KOREAN INVESTMENT FUND
1345 Avenue of the Americas
New York, New York 10105
ALLIANCE CAPITAL
INVESTING WITHOUT THE MYSTERY
R THESE REGISTERED SERVICE MARKS USED UNDER LICENSE FROM THE OWNER, ALLIANCE
CAPITAL MANAGEMENT L.P.
KORSR
