<PAGE>
[ART]
The Emerging Markets
Telecommunications
Fund, Inc.
--------------------
ANNUAL REPORT
MAY 31, 1999
<PAGE>
CONTENTS
Letter to Shareholders............................... 1
Portfolio Summary.................................... 7
Schedule of Investments.............................. 9
Statement of Assets and Liabilities..................13
Statement of Operations..............................14
Statement of Changes in Net Assets...................15
Financial Highlights.................................16
Notes to Financial Statements........................17
Report of Independent Accountants....................23
Results of Annual Meeting of Shareholders............24
Tax Information......................................25
Description of InvestLink-SM- Program................26
- --------------------------------------------------------------------------------
<PAGE>
LETTER TO SHAREHOLDERS
June 28, 1999
DEAR SHAREHOLDER:
I am writing to report on the activities of The Emerging Markets
Telecommunications Fund, Inc. (the "Fund") for the fiscal year ended May 31,
1999.
At May 31, 1999, the Fund's net asset value ("NAV") was $12.12 per share (net of
distributions paid of $1.961 per share), as compared to $16.36 on May 31, 1998.
Total net assets were $94,026,331.
PERFORMANCE: UNDERPERFORMANCE VS. GLOBAL EMERGING MARKETS
For the fiscal year ended May 31, 1999, the Fund's total return, based on NAV
and assuming reinvestment of dividends and distributions, was -11.7%. Given the
lack of a comparable index of emerging markets telecommunications stocks, I note
that the broad universe of emerging markets equities (as represented by the
Morgan Stanley Capital International Emerging Markets Free Index, or "EMF") rose
3.5% over the same period.
As a portfolio manager, one must be ever-cautious of assuming undue risk in
pursuit of exceptional returns. One can, however, be overly cautious and--by
focusing on capital preservation--lose a good opportunity for capital
appreciation. Such was the case with my management of the Fund during the past
fiscal year. I, along with many others, viewed the rally in emerging markets
with considerable skepticism. As a result, I kept a fairly high portion of the
Fund's assets in cash and missed what proved to be some excellent buying
opportunities.
In retrospect, I was wrong to err on the side of caution, but I cannot fully
regret such conservatism in light of the extreme and unpredictable swings in
market sentiment over the past 12 months.
I also note in this context that performance was influenced to some extent by
the program to buy back up to 15% of outstanding shares that was approved by the
Fund's directors in October 1998. In order to implement the buyback plan, I had
to sell an unusually high portion of the portfolio's holdings to raise cash.
GLOBAL EMERGING MARKETS: RAPIDLY RECOVERING
Written off just a few quarters ago as patients in need of long-term
convalescence, emerging equity markets have defied their critics and enjoyed
remarkable rallies since September of 1998. Markets' much more positive tone is
due to these factors:
- - IMPROVING EXPECTATIONS FOR GLOBAL GROWTH. This is particularly true in Japan,
whose market has shown surprising strength thus far in 1999, despite a lack of
unmistakable evidence that the ailing economy has begun to revive. Given
Japan's importance as the dominant trading partner and lender to most of its
Asian neighbors, optimism about its own economy has provided investors with
great hopefulness about macroeconomic prospects in Asia more generally.
Elsewhere in the developed world, the U.S. economy remains buoyant, with few
signs of slowing down substantially any time soon. And Europe has been
disappointingly sluggish, but there are credible indications that conditions
could start to turn around as early as the second half of this year. In both
cases, economic strength has favorable implications for the emerging world's
economies and hence, their equity markets as well.
- --------------------------------------------------------------------------------
1
<PAGE>
LETTER TO SHAREHOLDERS
- - A BONA FIDE RECOVERY IN ASIA. Among all emerging markets, the Asian recovery
has been perhaps the strongest and most surprising. It was certainly
surprising to me, as I thought it would take far longer for Asia to get its
economic house in order than it actually did.
Across the region, inflation and interest rates have sharply declined. As
rates have fallen, local investors have piled back into their respective
markets, injecting much-needed liquidity into the commercial sector and
further fueling recovery efforts. Improving economic performance in the region
has also resulted in better overall sovereign risk assessment, which serves to
increase access to global capital markets and reduce borrowing costs for
corporations as well as governments.
- - LACK OF A BRAZILIAN CONTAGION EFFECT. Investors have taken great encouragement
from the fact that something potentially dangerous that might have happened,
didn't. By this, I refer to the distinct absence of a contagion-like spillover
effect from Brazil's decision to devalue its real currency in mid-January.
Emerging equities' ability to shrug off Brazil's move stands in sharp contrast
to the full-scale global meltdowns that occurred following devaluations in
Thailand in July 1997 and Russia in August 1998. Not only was there no
meltdown from the Brazilian devaluation, but the country's prospects and those
of other emerging nations actually improved in subsequent months.
It appears that, along with the political and commercial interests in emerging
economies worldwide, investors in them have matured. Although bloodied by
extreme volatility, they have come through the process more whole and more
willing to stay the course and not stampede for the exits when trouble beckons.
As a daily participant in these markets, I take much comfort in such a shift in
investor behavior. Evidently, others feel much the same.
EMERGING TELECOMS: HAVE THEY PEAKED?
Given the macroeconomic improvement I've described in the emerging world, it's
not surprising that emerging equity markets have been strong. In the first five
months of 1999, in fact, they were dramatically stronger than those in the
developed world: EMF's 25.6% return during the period dwarfed the 3.8% generated
by aggregate developed markets (I.E., in the form of Morgan Stanley Capital
International's World Index). Within this exceptional performance, however,
returns on telecommunications stocks lagged behind those of other sectors.
RELATIVE VALUATIONS REMAIN ATTRACTIVELY LOW. Despite this year's extraordinary
rally in emerging equity markets, valuations of emerging telecoms are much more
attractive than those of their developed-world counterparts. The following
table, for example, shows that, as measured by the multiple of enterprise
value-to-cash-flow (widely used to value telecom providers), both traditional
wireline and wireless companies in the emerging world are cheap.
REGIONAL TELECOM VALUATIONS:
EMERGING MARKETS VS. DEVELOPED WORLD*
<TABLE>
<CAPTION>
WIRELINE WIRELESS
- --------------------------- EV/EBITDA ------------------ EV/EBITDA
REGION 1999E** REGION 1999E**
- --------------------------- ------------------------------------ ------------------ ------------------------------------
<S> <C> <C> <C>
Latin America 5.2x Latin America 6.0x
Emerging Europe 7.4x Emerging Asia 10.7x
Emerging Asia 7.0x
North America 10.3x North America 9.5x
Developed Europe 8.5x Developed Europe 15.9x
Developed Asia ex-Japan 12.2x Japan 9.7x
Japan 9.0x
</TABLE>
* PRICES AS OF 6/2/99
** EV/EBITDA 1999E = ENTERPRISE VALUE AS A MULTIPLE OF EARNINGS BEFORE INTEREST,
DEPRECIATION AND AMORTIZATION, ESTIMATED FOR 1999
SOURCE: MORGAN STANLEY DEAN WITTER
- --------------------------------------------------------------------------------
2
<PAGE>
LETTER TO SHAREHOLDERS
TELECOM CONSOLIDATION HAS NOT YET SPREAD TO EMERGING MARKETS. Consolidation,
which is one of the major trends driving share-price gains for developed-world
telecoms, has not yet affected the emerging telecom universe. When it does, the
good emerging telecoms will likely be snapped up at premium prices, or do a
little snapping of their own. In either instance, early investors in them will
win and, perhaps, win big.
In evaluating the market for emerging telecoms, investors should appreciate that
many of them are just beginning to realize their very substantial potential. And
for good reason: until fairly recently, many were government-owned and/ or
- -controlled, meaning that profitability and efficiency were not their
priorities.
This is changing, however. With the wave of privatizations over the past several
years, newly public telecommunications concerns have had to become real
businesses, focusing on previously foreign concepts like return on equity and
improved productivity. And they have begun to take strides toward becoming
operationally competitive, with increasing emphasis on corporate restructuring,
cost reduction, efficiency and better serving the needs of their customers and
investors.
PORTFOLIO STRUCTURE: SOMEWHAT LESS DEFENSIVE
TOP 10 HOLDINGS, BY ISSUER*
<TABLE>
<CAPTION>
% OF
HOLDING COUNTRY NET ASSETS
--------------------- -------------- ---------------
<C> <S> <C> <C>
1. OTE Greece 5.4
2. Millicom Intl. Global
Cellular 4.6
3. Samsung Elec. S. Korea 4.2
4. ECI Telecom Israel 3.9
5. Korea Telecom S. Korea 3.5
6. CEI Citicorp Hldgs. Argentina 3.4
7. Camuzzi Argentina Argentina 3.2
8. Telebras Brazil 3.1
9. Matav Hungary 2.9
10. Telesp Brazil 2.8
</TABLE>
* Company names are abbreviations of those found in
the chart on page 8.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
COUNTRY BREAKDOWN (% OF NET ASSETS)
<S> <C>
Argentina 6.69%
Brazil 6.94%
Chile 4.12%
Global 7.02%
Greece 7.86%
Hong Kong 5.77%
India 4.75%
Israel 7.35%
Singapore 4.20%
South Korea 12.07%
Cash & Other Assets 5.32%
Other* 27.91%
* Other includes Central Europe, Czech Republic, Estonia, Europe, Hungary,
Indonesia, Peru, Philippines, Poland, Portugal, Russia, Spain, Taiwan, Thailand and
Venezuela.
</TABLE>
Since my last report, I have taken a less defensive approach and become fully
invested, using available cash to buy shares in well-managed companies with
excellent franchises that the market has yet to fully appreciate, like Greece's
Hellenic Telecommunications Organization S.A. ("OTE"), Brazil's Telecomunicoes
de Sao Paulo S.A. and others detailed in past reports.
OTE, incidentally, is a good example of how my approach to the portfolio was
relatively unsuccessful during the Fund's fiscal year. Although generally
regarded as a blue-chip surrogate for the broader Greek market, OTE actually
- --------------------------------------------------------------------------------
3
<PAGE>
LETTER TO SHAREHOLDERS
underperformed the Greek market. This was because investors chose to ignore the
company's outstanding growth prospects and, instead, heavily bought bank stocks
in anticipation of the interest-rate convergence required for Greece's eventual
acceptance into the European Monetary Union.
Among the telecommunications companies I favor at present and believe will
flourish in years to come are ECI Telecom Ltd. and Philippine Long Distance
Telephone Co.
ECI TELECOM LTD.
Israel's ECI TELECOM LTD. ("ECI") is a leading global supplier of
telecommunications equipment to network operators, serving approximately 275
customers in over 140 countries. ECI's products focus on maximizing the
efficiency of existing telecommunications networks, which allows companies to
avoid the much higher expense of investing in new equipment.
ECI faces relatively low competition, as well as strong current and projected
future demand for its products. The deregulation and privatization of the
telecommunications business in the emerging world enhances its growth prospects
even further, as many emerging telecoms must stretch the value of their aging
existing networks while they upgrade to the next generation. In many cases,
their solutions involve ECI products and services.
Yet, despite possessing very good technology in high demand, many successive
quarters of net income growth and qualified management that hits almost every
goal it sets, ECI's stock has experienced extraordinary volatility and trades at
unjustifiably low valuation levels.
I believe that ECI suffers from being in an emerging market, when most telecom
investors are focused on the developed world. Therein lies a significant
opportunity for the patient investor who can buy into companies like it at
bargain prices and await eventual recognition of their quality and value.
PHILIPPINE LONG DISTANCE TELEPHONE CO.
Another telecommunications company I like is PHILIPPINE LONG DISTANCE TELEPHONE
CO. ("PLDT"). PLDT is the dominant telecom operator in the Philippines, where it
operates the only licensed local exchange, owns the largest long-distance
network and handles approximately 70% of the country's international traffic.
Despite its relative size and market penetration, PLDT was, until recently, the
epitome of a company you love to hate. Its reputation was deservedly low as a
result of poor management, government meddling, costly and inefficient use of
capital, growing receivables, virtually non-existent financial controls and
more.
I like PLDT because it nonetheless stands to benefit from two developments that
are playing out elsewhere in the emerging telecom universe. The first is the
injection of proven developed-world management practices and financial controls.
In November 1998, for instance, First Pacific Corp. (a first-class
telecommunications company based in Hong Kong) bought a controlling stake in
PLDT. First Pacific's management has an admirable record of gaining operational
control of companies like PLDT, getting them into shape and selling them for
handsome profits.
The second development is industry consolidation. At present, there are too many
telecom providers in the Philippines, many of which are on poor financial
footing. My feeling is that only a handful of providers will be around when the
dust settles and, owing partly to its size and partly to its highly qualified
management, PLDT is likely to be one of them.
- --------------------------------------------------------------------------------
4
<PAGE>
LETTER TO SHAREHOLDERS
OUTLOOK: UPBEAT
I am very impressed with the recovery so far achieved in several emerging
markets, notably in Asia, and I hope that this enthusiasm will spill over into
other sectors such as telecommunications. The overall future of emerging equity
markets looks brighter for several reasons:
- - IMPROVING INVESTOR SENTIMENT. Both domestic and international investors are
returning to markets long abandoned.
- - IMPROVING ECONOMIES. The numbers bear it out. In emerging country after
emerging country, productivity is improving and interest rates and inflation
are falling, or beginning to fall.
- - IMPROVING SOVEREIGN RISK ASSESSMENT. The belief is growing that emerging
nations will be able to continue to improve and get back on track much more
quickly than was believed possible.
I see considerable upside for the telecommunications arena as well:
- - Valuations are still well below where they should be--and will be once again,
in my opinion.
- - The long-term growth story is very much intact, as teledensity (I.E., the
extent to which telephone service reaches a country's population) is much
lower than in the developed world.
- - Newly privatized telecoms will focus as never before on profitability,
productivity and satisfying long pent-up demand.
- - The arrival of competitors and consolidators, who will merge with and acquire
quality emerging telecoms that have thus far been ignored, is inevitable.
All of these factors should serve to create significant support for telecom
share prices over the medium term, and I intend to do my best to position the
Fund to capitalize on them accordingly.
I would like to close my report with a brief update on the share buyback
program. To date, the buyback program has proceeded smoothly, with about 900,000
shares (or roughly two-thirds of the shares included in the program) repurchased
at typical discounts to NAV of 15-20%. I continue to move prudently and
deliberately to complete the buyback at the widest possible discounts to NAV.
Respectfully,
/s/ Richard W. Watt
Richard W. Watt
President and Chief Investment Officer *
- --------------------------------------------------------------------------------
5
<PAGE>
LETTER TO SHAREHOLDERS
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 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 26 through
28 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. In this capacity, he led a team of four portfolio managers and was
manager of a closed-end fund focusing on smaller Latin American companies.
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 First Israel Fund, Inc.; The Latin America Equity
Fund, Inc.; The Latin America Investment Fund, Inc.; and The Portugal Fund, Inc.
- --------------------------------------------------------------------------------
6
<PAGE>
- --------------------------------------------------------------------------------
THE EMERGING MARKETS TELECOMMUNICATIONS FUND, INC.
PORTFOLIO SUMMARY - AS OF MAY 31, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
SECTOR ALLOCATION
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AS A PERCENT OF NET ASSETS
<S> <C> <C>
May 31, 1999 May 31, 1998
Cellular Communications 13.81% 17.89%
Electric-Integrated 3.90% 3.16%
Electronics 10.04% 0.05%
Investment & Holding Companies 6.28% 2.74%
Local and/or Long Distance Telephone
Service 22.52% 27.57%
Oil & Gas 3.25% 3.12%
Radio/Television 2.23% 3.38%
Telecommunications 28.45% 17.88%
Other 3.58% 4.41%
Cash & Cash Equivalents 5.94% 19.80%
</TABLE>
GEOGRAPHIC ASSET BREAKDOWN
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AS A PERCENT OF NET ASSETS
<S> <C> <C>
May 31, 1999 May 31, 1998
Asia 35.04% 5.98%
Eastern Europe 9.53% 27.68%
Europe 13.13% 5.71%
Latin America 22.61% 33.28%
Middle East 7.35% 3.32%
North America 0.00% 2.52%
Global 7.02% 4.41%
Cash & Cash Equivalents 5.32% 17.10%
</TABLE>
- --------------------------------------------------------------------------------
7
<PAGE>
- --------------------------------------------------------------------------------
THE EMERGING MARKETS TELECOMMUNICATIONS FUND, INC.
PORTFOLIO SUMMARY - AS OF MAY 31, 1999 (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
SUMMARY OF SECURITIES BY COUNTRY/REGION
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AS A PERCENT OF NET ASSETS
<S> <C> <C>
May 31, 1999 May 31, 1998
Argentina 6.69% 5.29%
Brazil 6.94% 15.45%
Canada 0.00% 2.52%
Chile 4.12% 2.02%
Europe 2.13% 9.24%
Greece 7.86% 3.25%
Hong Kong 5.77% 2.13%
Hungary 2.90% 4.27%
India 4.75% 3.80%
Israel 7.35% 3.32%
Mexico 0.00% 4.17%
Peru 3.61% 0.82%
Phillippines 2.62% 0.00%
Russia 1.06% 10.50%
Singapore 4.20% 0.00%
South Korea 12.07% 0.05%
Venezuela 1.25% 5.53%
Global 7.02% 4.41%
Other 14.34% 6.13%
</TABLE>
TOP 10 HOLDINGS, BY ISSUER
<TABLE>
<CAPTION>
Percent of Net
Holding Sector Country/Region Assets
<C> <S> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------------
1. Hellenic Telecommunications Organization S.A. Telecommunications Greece 5.4
- --------------------------------------------------------------------------------------------------------------------------------
2. Millicom International Cellular S.A. Cellular Communications Global 4.6
- --------------------------------------------------------------------------------------------------------------------------------
3. Samsung Electronics Co. Ltd. Electronics South Korea 4.2
- --------------------------------------------------------------------------------------------------------------------------------
4. ECI Telecom Ltd. Telecommunications Israel 3.9
- --------------------------------------------------------------------------------------------------------------------------------
5. Korea Telecom Corp. Telecommunications South Korea 3.5
- --------------------------------------------------------------------------------------------------------------------------------
6. CEI Citicorp Holdings S.A. Investment Companies Argentina 3.4
- --------------------------------------------------------------------------------------------------------------------------------
7. Camuzzi Argentina S.A. Oil & Gas Argentina 3.2
- --------------------------------------------------------------------------------------------------------------------------------
8. Telecomunicacoes Brasileiras S.A. Local and/or Long Distance
Telephone Service Brazil 3.1
- --------------------------------------------------------------------------------------------------------------------------------
9. Magyar Tavkozlesi Rt. Local and/or Long Distance
Telephone Service Hungary 2.9
- --------------------------------------------------------------------------------------------------------------------------------
10. Telecomunicacoes de Sao Paulo S.A. Local and/or Long Distance
Telephone Service Brazil 2.8
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
8
<PAGE>
- --------------------------------------------------------------------------------
THE EMERGING MARKETS TELECOMMUNICATIONS FUND, INC.
SCHEDULE OF INVESTMENTS - MAY 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
No. of Value
Description Shares (Note A)
<S> <C> <C>
- -------------------------------------------------------------------------------------------------
EQUITY OR EQUITY-LINKED SECURITIES-93.72%
EQUITY OR EQUITY-LINKED SECURITIES OF TELECOMMUNICATION COMPANIES IN EMERGING COUNTRIES-66.98%
ARGENTINA-3.44%
CEI Citicorp Holdings S.A., Class B (Cost $3,738,676)................. 949,309 $ 3,230,202
-----------
BRAZIL-6.94%
Tele Centro Sul Participacoes S.A. ADR................................ 10,100 545,400
Tele Norte Leste Participacoes S.A. ADR............................... 26,700 437,212
Telecomunicacoes Brasileiras S.A. ADR+................................ 34,820 2,907,470
Telecomunicacoes Brasileiras S.A. ADR PN##............................ 71,820 4,489
Telecomunicacoes de Sao Paulo S.A. PN................................. 21,266,390 2,600,316
Telecomunicacoes de Sao Paulo S.A., PN Receipts+...................... 287,893 35,202
-----------
TOTAL BRAZIL (Cost $5,427,700)...................................................... 6,530,089
-----------
CHILE-1.80%
Compania de Telecomunicaciones de Chile S.A. ADR...................... 35,000 761,250
Compania de Telecomunicaciones de Chile S.A., Class A................. 23,234 126,387
Compania de Telecomunicaciones de Chile S.A., Class B................. 48,195 171,297
Empresa Nacional de Telecomunicaciones S.A............................ 125,700 423,550
Telefonos de Coyhaique S.A............................................ 6,600 208,992
-----------
TOTAL CHILE (Cost $1,682,634)....................................................... 1,691,476
-----------
CZECH REPUBLIC-2.29%
SPT Telecom a.s. (Cost $1,834,996).................................... 129,500 2,149,895
-----------
<CAPTION>
No. of Value
Description Shares (Note A)
- -------------------------------------------------------------------------------------------------
<S> <C> <C>
ESTONIA-1.33%
Estonian Telecom+,++ (Cost $1,255,368)................................ 55,711 $ 1,247,926
-----------
EUROPE-2.13%
Global TeleSystems Group, Inc.+ (Cost $1,198,379)..................... 26,338 2,001,688
-----------
GREECE-7.86%
Hellenic Telecommunications Organization S.A.+........................ 471,347 5,096,439
Panafon S.A.+......................................................... 75,820 1,883,591
STET Hellas Telecommunications S.A.+.................................. 18,200 414,050
-----------
TOTAL GREECE (Cost $7,328,746)...................................................... 7,394,080
-----------
HONG KONG-4.59%
Asia Satellite Telecommunications Holdings Ltd........................ 948,070 2,011,096
China Telecom (Hong Kong) Ltd. Class H+............................... 1,095,415 2,302,464
-----------
TOTAL HONG KONG (Cost $3,733,920)................................................... 4,313,560
-----------
HUNGARY-2.90%
Magyar Tavkozlesi Rt. ADR (Cost $2,789,355)........................... 97,400 2,727,200
-----------
INDIA-4.75%
Mahanagar Telephone Nigam Ltd.++...................................... 233,500 2,130,687
Videsh Sanchar Nigam Ltd. GDR++....................................... 205,200 2,334,150
-----------
TOTAL INDIA (Cost $4,940,705)....................................................... 4,464,837
-----------
INDONESIA-2.06%
PT Indosat ADR+##..................................................... 39,860 789,726
PT Telekomunikasi Indonesia........................................... 2,485,000 1,151,028
-----------
TOTAL INDONESIA (Cost $1,585,005)................................................... 1,940,754
-----------
ISRAEL-4.35%
ECI Telecom Ltd....................................................... 105,156 3,641,026
</TABLE>
- --------------------------------------------------------------------------------
9
<PAGE>
- --------------------------------------------------------------------------------
THE EMERGING MARKETS TELECOMMUNICATIONS FUND, INC.
SCHEDULE OF INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
No. of Value
Description Shares (Note A)
- -------------------------------------------------------------------------------------------------
<S> <C> <C>
ISRAEL (CONTINUED)
Geotek Communications, Inc., Convertible Preferred Series M,
8.50%*+.............................................................. 100 $ 0
Nexus Telecommunication Systems Ltd.+................................. 170,784 453,645
-----------
TOTAL ISRAEL (Cost $5,410,265)...................................................... 4,094,671
-----------
PERU-2.78%
Telefonica del Peru S.A. ADR (Cost $2,579,793)........................ 180,370 2,615,365
-----------
PHILIPPINES-2.62%
Philippine Long Distance Telephone Co. ADR## (Cost $2,165,257)........ 85,200 2,460,150
-----------
RUSSIA-1.06%
Independent Network Televison Series II* (Cost $1,000,000)............ 1,000,000 1,000,000
-----------
SINGAPORE-1.17%
Singapore Telecommunications Ltd. (Cost $890,317)..................... 650,000 1,097,986
-----------
SOUTH KOREA-6.81%
Dacom Corp............................................................ 8,800 635,224
Dacom Corp., Rights (expiring 06/09/99)+.............................. 1,891 41,461
Korea Telecom Corp.................................................... 102,500 3,260,781
SK Telecom Co. Ltd.##................................................. 173,337 2,470,052
-----------
TOTAL SOUTH KOREA (Cost $5,204,836)................................................. 6,407,518
-----------
THAILAND-1.83%
Advanced Information Services Public Co. Ltd. (Cost $1,015,849)....... 140,919 1,716,857
-----------
VENEZUELA-1.25%
Venworld Telecommunications+++ (Cost $2,531,383)...................... 125,947 1,173,082
-----------
<CAPTION>
No. of Value
Description Shares (Note A)
- -------------------------------------------------------------------------------------------------
<S> <C> <C>
GLOBAL-5.02%+
International Wireless Communications, Inc.,
Series D*+........................................................... 220,120 $ 0
International Wireless Communications, Inc.,
Series F*+........................................................... 15,440 0
International Wireless Communications, Inc., Warrants (expiring
08/17/07)*+.......................................................... 1 0
International Wireless Communications, Inc., Warrants (expiring
08/17/07)*+.......................................................... 1,240 0
Millicom International Cellular S.A.+##............................... 119,735 4,310,460
Telesoft Partners Ltd.++#............................................. 500,000 406,395
-----------
TOTAL GLOBAL (Cost $4,760,153)...................................................... 4,716,855
-----------
TOTAL EMERGING COUNTRIES
(Cost $61,073,337)................................................................. 62,974,191
-----------
EQUITY SECURITIES OF TELECOMMUNICATION COMPANIES IN DEVELOPED COUNTRIES-3.14%
CENTRAL EUROPE-1.17%
Central European Media Enterprises Ltd.+ (Cost $4,578,326)............ 183,000 1,098,000
-----------
PORTUGAL-1.83%
Portugal Telecom S.A. (Cost $1,832,007)............................... 38,000 1,717,477
-----------
SPAIN-0.14%
Telefonica S.A........................................................ 1,568 75,081
Telefonica S.A. ADR................................................... 397 57,267
-----------
TOTAL SPAIN (Cost $116,873)......................................................... 132,348
-----------
TOTAL DEVELOPED COUNTRIES
(Cost $6,527,206).................................................................. 2,947,825
-----------
</TABLE>
- --------------------------------------------------------------------------------
10
<PAGE>
- --------------------------------------------------------------------------------
THE EMERGING MARKETS TELECOMMUNICATIONS FUND, INC.
SCHEDULE OF INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
No. of Value
Description Shares (Note A)
- -------------------------------------------------------------------------------------------------
<S> <C> <C>
EQUITY SECURITES OF COMPANIES PROVIDING OTHER ESSENTIAL SERVICES IN THE DEVELOPMENT OF AN
EMERGING COUNTRY'S INFRASTRUCTURE-23.60%
ARGENTINA-3.25%
Camuzzi Argentina S.A.*+ (Cost $2,032,317)............................ 1,383,478 $ 3,054,742
-----------
CHILE-1.70%
Chilectra S.A.++...................................................... 44,615 254,477
Compania de Consumidores de Gas de Santiago S.A....................... 57,580 226,744
Compania General de Electricidad S.A.................................. 89,822 406,583
Cristalerias de Chile S.A............................................. 61,242 323,210
Empresa Electrica Pehuenche S.A....................................... 250,767 132,344
Empresa Nacional de Electricidad S.A.................................. 398,993 144,161
Enersis S.A........................................................... 296,241 113,650
-----------
TOTAL CHILE (Cost $1,603,737)....................................................... 1,601,169
-----------
HONG KONG-1.18%
Hutchison Whampoa Limited (Cost $998,034)............................. 133,328 1,108,939
-----------
ISRAEL-3.00%
K.T. Concord Venture Fund LP+=/ =#.................................... 500,000 452,488
PEC Israel Economic Corp.+............................................ 74,620 2,364,521
-----------
TOTAL ISRAEL (Cost $2,369,733)...................................................... 2,817,009
-----------
PERU-0.83%
Ontario-Quinta A.V.V.* (Cost $1,054,681).............................. 1,026,885 781,623
-----------
POLAND-1.95%
Elektrim Spolka Akcyjna S.A. (Cost $1,874,352)........................ 155,000 1,832,915
-----------
<CAPTION>
No. of Value
Description Shares (Note A)
- -------------------------------------------------------------------------------------------------
<S> <C> <C>
SINGAPORE-3.03%
Natsteel Electronics Ltd.............................................. 559,000 $ 1,865,821
Venture Manufacturing (Singapore) Ltd................................. 156,000 987,055
-----------
TOTAL SINGAPORE (Cost $1,881,807)................................................... 2,852,876
-----------
SOUTH KOREA-5.26%
LG Electronics Co..................................................... 51,550 982,443
Samsung Electronics Co. Ltd........................................... 56,322 3,918,341
Samsung Electronics Co. Ltd. Rights (expiring 06/22/99)+.............. 4,609 48,972
-----------
TOTAL SOUTH KOREA (Cost $4,920,209)................................................. 4,949,756
-----------
TAIWAN-1.74%
Taiwan Semiconductor Manufacturing Co. Ltd. ADR....................... 42,000 1,099,875
Windbond Electronics Corp. GDR+,++.................................... 45,996 540,453
-----------
TOTAL TAIWAN (Cost $1,479,424)...................................................... 1,640,328
-----------
GLOBAL-1.66%
Emerging Markets Ventures, L.P.+=/=# (Cost $1,717,783)................ 1,690,333 1,563,558
-----------
TOTAL OTHER ESSENTIAL SERVICES
(Cost $19,932,077)................................................................. 22,202,915
-----------
TOTAL EQUITY OR EQUITY-LINKED SECURITIES (Cost $87,532,620).........................
88,124,931
-----------
FIXED RATE INVESTMENT-0.34%
GLOBAL-0.34%
<CAPTION>
Par (000)
------------
<S> <C> <C>
International Wireless Communications, Inc., Senior Secured Notes,
14.00%-25.00%, 08/17/02*(a)
(Cost $543,683)...................................................... USD 385 318,659
-----------
</TABLE>
- --------------------------------------------------------------------------------
11
<PAGE>
- --------------------------------------------------------------------------------
THE EMERGING MARKETS TELECOMMUNICATIONS FUND, INC.
SCHEDULE OF INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Units Value
Description (000) (Note A)
- -------------------------------------------------------------------------------------------------
<S> <C> <C>
SHORT-TERM INVESTMENTS-0.62%
CHILEAN INFLATION-ADJUSTED TIME DEPOSITS-0.40%
Banco Citibank, 6.80%**, 06/15/99..................................... CLP 5 $ 133,975
Banco Citibank, 6.80%**, 07/26/99..................................... 3 93,373
Banco Citibank, 5.90%**, 08/30/99..................................... 5 148,178
-----------
TOTAL CHILEAN INFLATION-ADJUSTED TIME DEPOSITS (Cost $377,870)......................
375,526
-----------
CHILEAN MUTUAL FUNDS-0.22%
<CAPTION>
No. of
Shares
------------
<S> <C> <C>
Bice Manager Investment Fund.......................................... 20,161 54,536
Fondo Mutuo Security Check............................................ 32,106 148,729
-----------
TOTAL CHILEAN MUTUAL FUNDS
(Cost $204,377).................................................................... 203,265
-----------
TOTAL SHORT-TERM INVESTMENTS (Cost $582,247)........................................
578,791
-----------
TOTAL INVESTMENTS-94.68%
(Cost $88,658,550) (Notes A,D)..................................................... 89,022,381
CASH AND OTHER ASSETS IN EXCESS OF LIABILITIES-5.32%................................
5,003,950
-----------
NET ASSETS-100.00%.................................................................. $94,026,331
-----------
-----------
- ---------------------------------------------------------
* Not readily marketable security.
** Effective yield on the date of purchase.
+ Security is non-income producing.
++ SEC Rule 144A security. Such securities are traded
only among "qualified institutional buyers".
=/= Restricted security, not readily marketable (See Note
F).
# As of May 31, 1999, the Fund committed to investing
an additional $2,332,260, $500,000 and $750,000 of
capital in Emerging Markets Ventures, L.P., K.T.
Concord Venture Fund LP and Telesoft Partners Ltd.,
respectively.
## Security or a portion thereof is out on loan.
(a) As of March 31, 1998, this investment ceased accruing
interest.
ADR American Depositary Receipts.
CLP Chilean Pesos.
GDR Global Depositary Receipts.
PN Preferred Shares.
USD United States Dollars.
</TABLE>
- --------------------------------------------------------------------------------
See accompanying notes to financial statements.
12
<PAGE>
- --------------------------------------------------------------------------------
THE EMERGING MARKETS TELECOMMUNICATIONS FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES - MAY 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS
Investments, at value (Cost $88,658,550)
(Note A)............................... $ 89,022,381
Cash (including $153,134 of foreign
currencies with a cost of $153,154)
(Note A)............................... 2,100,231
Collateral received for securities
loaned (Note A)........................ 7,370,335
Receivables:
Investments sold...................... 3,305,040
Dividends............................. 346,633
Prepaid expenses and other assets....... 19,429
------------
Total Assets............................ 102,164,049
------------
LIABILITIES
Payables:
Payable upon return of securities
loaned (Note A)...................... 7,370,335
Investments purchased................. 296,356
Investment advisory fee (Note B)...... 197,840
Capital shares repurchased (Note G)... 120,420
Administration fees (Note B).......... 38,430
Other accrued expenses................ 114,337
------------
Total Liabilities....................... 8,137,718
------------
NET ASSETS (applicable to 7,757,819
shares of common stock outstanding)
(Note C)............................... $ 94,026,331
------------
------------
NET ASSET VALUE PER SHARE ($94,026,331
DIVIDED BY 7,757,819)................. $12.12
------------
------------
NET ASSETS CONSIST OF
Capital stock, $0.001 par value;
7,757,819 shares issued and outstanding
(100,000,000 shares
authorized)............................ $ 7,758
Paid-in capital......................... 109,653,975
Accumulated net investment loss......... (497,076)
Accumulated net realized loss on
investments and foreign currency
related transactions................... (15,404,175)
Net unrealized appreciation in value of
investments and translation of other
assets and liabilities denominated in
foreign currencies..................... 265,849
------------
Net assets applicable to shares
outstanding............................ $ 94,026,331
------------
------------
</TABLE>
- --------------------------------------------------------------------------------
See accompanying notes to financial statements.
13
<PAGE>
- --------------------------------------------------------------------------------
THE EMERGING MARKETS TELECOMMUNICATIONS FUND, INC.
STATEMENT OF OPERATIONS - FOR THE FISCAL YEAR ENDED MAY 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
INVESTMENT INCOME
Income (Note A):
Dividends............................. $ 1,144,378
Interest.............................. 851,773
Less: Foreign taxes withheld.......... (146,495)
------------
Total Investment Income............... 1,849,656
------------
Expenses:
Investment advisory fees (Note B)..... 1,303,309
Administration fees (Note B).......... 186,815
Custodian fees........................ 169,460
Audit and legal fees.................. 136,315
Printing.............................. 104,001
Accounting fees....................... 81,906
Directors' fees....................... 45,999
Transfer agent fees................... 33,850
NYSE listing fees..................... 16,487
Insurance............................. 14,829
Other................................. 22,068
Brazilian taxes (Note A).............. 84,497
------------
Total Expenses........................ 2,199,536
------------
Net Investment Loss................... (349,880)
------------
NET REALIZED AND UNREALIZED LOSS ON
INVESTMENTS AND FOREIGN CURRENCY
RELATED TRANSACTIONS
Net realized loss from:
Investments........................... (13,268,172)
Foreign currency related
transactions......................... (569,942)
Net change in unrealized appreciation in
value of investments and translation of
other assets and liabilities
denominated in foreign currencies...... (6,875,847)
------------
Net realized and unrealized loss on
investments and foreign currency
related transactions................... (20,713,961)
------------
NET DECREASE IN NET ASSETS RESULTING
FROM OPERATIONS........................ $(21,063,841)
------------
------------
</TABLE>
- --------------------------------------------------------------------------------
See accompanying notes to financial statements.
14
<PAGE>
- --------------------------------------------------------------------------------
THE EMERGING MARKETS TELECOMMUNICATIONS FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Fiscal Years Ended
May 31,
---------------------------------
1999 1998
---------------------------------
<S> <C> <C>
DECREASE IN NET ASSETS
Operations:
Net investment loss................... $ (349,880) $ (482,714)
Net realized gain/(loss) on
investments and foreign currency
related transactions................. (13,838,114) 37,528,837
Net change in unrealized appreciation
in value of investments and
translation of other assets and
liabilities denominated in foreign
currencies........................... (6,875,847) (49,357,447)
--------------- ---------------
Net decrease in net assets resulting
from operations.................... (21,063,841) (12,311,324)
--------------- ---------------
Dividends and distributions to
shareholders:
Net investment income................. -- (789,507)
Net realized gain on investments and
foreign currency related
transactions......................... (16,442,826) (30,504,043)
--------------- ---------------
Total dividends and distributions to
shareholders....................... (16,442,826) (31,293,550)
--------------- ---------------
Capital share transactions:
Cost of 677,100 shares repurchased
(Note G)............................. (6,489,527) --
--------------- ---------------
Total decrease in net assets........ (43,996,194) (43,604,874)
--------------- ---------------
NET ASSETS
Beginning of year....................... 138,022,525 181,627,399
--------------- ---------------
End of year............................. $94,026,331 $138,022,525
--------------- ---------------
--------------- ---------------
</TABLE>
- --------------------------------------------------------------------------------
See accompanying notes to financial statements.
15
<PAGE>
- --------------------------------------------------------------------------------
THE EMERGING MARKETS TELECOMMUNICATIONS 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
Period
June 25,
For the Fiscal Years Ended 1992*
May 31, through
------------------------------------------------------------------------ May 31,
1999 1998 1997 1996 1995 1994 1993
<S> <C> <C> <C> <C> <C> <C> <C>
-------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period....... $16.36 $21.53 $20.94 $19.20 $20.90 $14.95 $13.84**
-------- -------- -------- -------- -------- -------- ----------
Net investment income/(loss)............... (0.04)# (0.06) 0.10 0.27 0.11 0.13 0.16
Net realized and unrealized gain/(loss) on
investments and foreign currency related
transactions.............................. (2.41)# (1.40) 2.86 1.91 0.01 7.03+ 1.20
-------- -------- -------- -------- -------- -------- ----------
Net increase/(decrease) in net assets
resulting from operations................. (2.45) (1.46) 2.96 2.18 0.12 7.16 1.36
-------- -------- -------- -------- -------- -------- ----------
Dividends and distributions to
shareholders:
Net investment income.................... -- (0.09) (0.27) (0.04) (0.04) (0.15) (0.14)
Net realized gain on investments and
foreign currency related transactions... (1.96) (3.62) (2.10) (0.40) (1.78) (1.06) (0.11)
-------- -------- -------- -------- -------- -------- ----------
Total dividends and distributions to
shareholders.............................. (1.96) (3.71) (2.37) (0.44) (1.82) (1.21) (0.25)
-------- -------- -------- -------- -------- -------- ----------
Anti-dilutive impact due to shares of
beneficial interest repurchased........... 0.17 -- -- -- -- -- --
-------- -------- -------- -------- -------- -------- ----------
Net asset value, end of period............. $12.12 $16.36 $21.53 $20.94 $19.20 $20.90 $14.95
-------- -------- -------- -------- -------- -------- ----------
-------- -------- -------- -------- -------- -------- ----------
Market value, end of period................ $9.813 $13.000 $17.375 $17.375 $17.750 $22.750 $14.500
-------- -------- -------- -------- -------- -------- ----------
-------- -------- -------- -------- -------- -------- ----------
Total investment return(a)................. (9.99)% (4.57)% 14.31% 0.21% (13.94)% 64.74% 5.85%
-------- -------- -------- -------- -------- -------- ----------
-------- -------- -------- -------- -------- -------- ----------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000 omitted).... $94,026 $138,023 $181,627 $176,628 $161,925 $176,253 $125,338
Ratio of expenses to average net assets,
including taxes........................... 2.09%(b) 2.32%(b) 1.90%(b) 1.77% 1.89% 1.81% 1.99%(c)
Ratio of net investment income/(loss) to
average net assets........................ (0.33)% (0.29)% 0.52% 1.40% 0.53% 0.63% 2.02%(c)
Portfolio turnover rate.................... 179.66% 162.58% 42.14% 27.71% 14.29% 43.98% 22.55%
</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 $0.11 per share.
+ Includes a $0.03 per share increase to the Fund's net asset value per
share resulting from the anti-dilutive impact of shares issued
pursuant to the Fund's automatic Dividend Reinvestment Plan in January
1994.
# Based on average shares outstanding.
(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) Ratios shown are inclusive of Brazilian transaction and Chilean
repatriation taxes, if any. If such taxes had not been imposed, the
ratio of expenses to average net assets would have been 2.01% for the
fiscal year ended May 31, 1999 and 1.82% for both fiscal years ended
May 31, 1998 and May 31, 1997.
(c) Annualized.
- --------------------------------------------------------------------------------
See accompanying notes to financial statements.
16
<PAGE>
- --------------------------------------------------------------------------------
THE EMERGING MARKETS TELECOMMUNICATIONS FUND, INC.
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
NOTE A. SIGNIFICANT ACCOUNTING POLICIES
The Emerging Markets Telecommunications Fund, Inc. (the "Fund") was incorporated
in Maryland on February 11, 1992 and commenced investment operations on June 25,
1992. 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 securities for which market quotations are readily
available are valued at the closing price quoted for the securities prior to the
time of determination (but if bid and asked quotations are available, at the
mean between the last 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 May 31, 1999,
the Fund held 9.31% of its net assets in securities valued in good faith by the
Board of Directors with an aggregate cost of $12,356,475 and fair value of
$8,750,544. 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 May 31, 1999, the account's
interest rate was 4.08%, 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 fiscal year, are deemed to arise on the first day of the following
fiscal year. The Fund incurred and elected to defer realized foreign currency
losses of $386,977.
At May 31, 1999, the Fund had a capital loss carryforward of $14,940,420 which
expires in 2007.
Income received by the Fund from sources within emerging countries and other
foreign countries may be subject to withholding and other taxes imposed by such
countries.
Under certain circumstances the Fund may be subject to a maximum of 36% Israeli
capital gains tax on gains derived from the sale of certain Israeli investments.
- --------------------------------------------------------------------------------
17
<PAGE>
- --------------------------------------------------------------------------------
THE EMERGING MARKETS TELECOMMUNICATIONS FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
The Fund is subject to a 10% Chilean repatriation tax with respect to all
remittances from Chile in excess of original invested capital. For the fiscal
year ended May 31, 1999, the Fund did not incur such expense.
Effective January 23, 1997 through January 22, 1999, Brazil imposed a 0.20%
CONTRIBUCAO PROVISORIA SOBRE MOVIMENTACAOS FINANCIERAS ("CPMF") tax that applied
to most debit transactions carried out by financial institutions. For the fiscal
year ended May 31, 1999, the Fund incurred $84,497 of such expense. Effective
January 23, 1999, the CPMF tax expired and will be reinstated on June 17, 1999
for a period of three years. The tax will be assessed at a rate of 0.38% for the
initial year and drop to 0.30% for the remaining two years.
FOREIGN CURRENCY TRANSACTIONS: 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 change 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 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 dates 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.
The Fund reports certain foreign currency related transactions and foreign taxes
withheld on security transactions as components of realized gains for financial
reporting purposes, whereas such components are treated as ordinary income for
U.S. federal income tax purposes.
SECURITIES LENDING: The market value of securities out on loan to brokers at May
31, 1999, was $7,291,094, for which the Fund has received cash as collateral of
$7,370,335. Such cash collateral was reinvested into an overnight repurchase
agreement with Bear, Stearns & Co. Inc., which is in turn collateralized by U.S.
Government agency securities with a value of $7,521,734. Security loans are
required at all times to have collateral at least equal to 102% of the market
value of the securities on loan; however, in the event of default or bankruptcy
by the other party to the
- --------------------------------------------------------------------------------
18
<PAGE>
- --------------------------------------------------------------------------------
THE EMERGING MARKETS TELECOMMUNICATIONS FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
agreement, realization and/or retention of the collateral may be subject to
legal proceedings.
During the fiscal year ended May 31, 1999, the Fund earned $13,701 in securities
lending income which is included under the caption INTEREST in the Statement of
Operations.
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 realized
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.
At May 31, 1999, the Fund reclassified $147,196 of foreign currency losses to
accumulated net investment loss and $35,769 of foreign currency losses to
paid-in capital. In addition, the Fund reclassified distribution in excess of
net realized capital gains of $5,366 to paid-in capital.
OTHER: 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 emerging countries' securities markets are substantially smaller, less
liquid and more volatile than the major securities markets in the United States.
A high proportion of the securities of many companies in emerging countries may
be held by a limited number of persons, which may limit the number of securities
available for investment by the Fund. The limited liquidity of emerging country
securities markets may also affect the Fund's ability to acquire or dispose of
securities at the price and time it wishes to do so.
The Fund, subject to local investment limitations, may invest up to 25% 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 proceeds realized on such sales could be
significantly 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 may enter into repurchase agreements ("repos") 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. Repos are contracts under which the buyer of a security
- --------------------------------------------------------------------------------
19
<PAGE>
- --------------------------------------------------------------------------------
THE EMERGING MARKETS TELECOMMUNICATIONS FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
simultaneously buys and commits to resell the security to the seller at an
agreed upon price and date. Repos are deposited with the 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 value of 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. At May 31, 1999, the Fund had no
such agreements, other than the cash collateral received that was reinvested in
a repo under the Fund's securities lending program.
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, 1.125% of the next $100 million and 1.00% of
amounts in excess of $200 million. For the fiscal year ended May 31, 1999, CSAM
earned $1,303,309 for advisory services. CSAM also provides certain
administrative services to the Fund and is reimbursed by the Fund for costs
incurred on behalf of the Fund (up to $20,000 per annum). For the fiscal year
ended May 31, 1999, CSAM was reimbursed $14,001 for administrative services
rendered to the Fund.
Bear Stearns Funds Management Inc. ("BSFM") serves as the Fund's U.S.
administrator. The Fund pays BSFM a monthly fee that is computed weekly at an
annual rate of 0.12% of the Fund's average weekly net assets. For the fiscal
year ended May 31, 1999, BSFM earned $112,812 for administrative services.
BankBoston, N.A., Sao Paulo ("BBNA") and CELFIN Administradora de Fondos de
Inversion de Capital Extranjero S.A. ("Chilean administrator") serve as the
Fund's administrators with respect to Brazilian and Chilean investments,
respectively. BBNA is paid for its services out of the custody fee payable to
Brown Brothers Harriman & Co., the Fund's accounting agent and custodian, a
quarterly fee based on an annual rate of 0.10% of average month end Brazilian
net assets of the Fund. In return for services rendered, the Chilean
administrator receives a fee computed monthly and paid quarterly at an annual
rate of 0.10% of the Fund's average weekly net assets in Chile, subject to
certain minimum annual fees and reimbursements for a predefined limit of their
expenses.
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 7,757,819 shares outstanding at May 31, 1999, CSAM
owned 7,169 shares.
NOTE D. INVESTMENT IN SECURITIES
For U.S. federal income tax purposes, the cost of securities owned at May 31,
1999 was $89,232,404. Accordingly, the net unrealized depreciation of
investments (including investments denominated in foreign currencies) of
$210,023, was composed of gross appreciation of $10,541,789 for those
investments having an excess of value over cost and gross depreciation of
$10,751,812 for those investments having an excess of cost over value.
For the fiscal year ended May 31, 1999, total purchases and sales of securities,
other than short-term investments, were $160,993,931 and $166,671,631,
respectively.
- --------------------------------------------------------------------------------
20
<PAGE>
- --------------------------------------------------------------------------------
THE EMERGING MARKETS TELECOMMUNICATIONS FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
NOTE E. CREDIT AGREEMENT
The Fund, along with 10 other U.S. regulated 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 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 during the fiscal year ended and at May
31, 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 May 31, 1999, share value of such securities and percent of net
assets which the securities comprise.
<TABLE>
<CAPTION>
PERCENT
VALUE OF
NUMBER OF ACQUISITION FAIR VALUE AT PER NET
SECURITY SHARES DATES COST MAY 31, 1999 SHARE ASSETS
- ---------------------------------------- ---------- --------------- ---------- ------------------ -------- ---------
<S> <C> <C> <C> <C> <C> <C>
Emerging Markets Ventures, L.P.......... 159,653 01/22/98 $ 162,671 $ 147,679 $0.93 0.16
Emerging Markets Ventures, L.P.......... 3,525 03/05/98 3,634 3,261 0.93 0.00
Emerging Markets Ventures, L.P.......... 586,127 05/05/98 597,205 542,167 0.93 0.58
Emerging Markets Ventures, L.P.......... 361,637 07/07/98 368,472 334,514 0.93 0.35
Emerging Markets Ventures, L.P.......... 42,334 08/17/98 43,135 39,159 0.93 0.04
Emerging Markets Ventures, L.P.......... 296,812 10/27/98 302,422 274,551 0.93 0.29
Emerging Markets Ventures, L.P.......... 170,989 02/26/99 170,988 158,165 0.93 0.17
Emerging Markets Ventures, L.P.......... 69,256 04/19/99 69,256 64,062 0.93 0.07
K.T. Concord Venture Fund LP............ 250,000 12/08/97 252,288 226,244 0.89 0.24
K.T. Concord Venture Fund LP............ 100,000 12/28/98 100,000 90,498 0.90 0.10
K.T. Concord Venture Fund LP............ 150,000 03/12/99 150,000 135,746 0.90 0.14
Telesoft Partners Ltd................... 125,000 07/22/97 117,078 101,599 0.81 0.11
Telesoft Partners Ltd................... 125,000 02/05/98 117,077 101,599 0.81 0.11
Telesoft Partners Ltd................... 125,000 06/02/98 125,000 101,599 0.81 0.11
Telesoft Partners Ltd................... 125,000 05/17/99 125,000 101,598 0.81 0.11
Venworld Telecommunications............. 125,947 05/18/95 2,531,383 1,173,082 9.31 1.25
</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
- --------------------------------------------------------------------------------
21
<PAGE>
- --------------------------------------------------------------------------------
THE EMERGING MARKETS TELECOMMUNICATIONS FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
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 May 31, 1999, the Fund repurchased 677,100 of its shares for a total
of $6,489,527 at a weighted average discount of 18.36% from net asset value. The
discount of individual repurchases ranged from 13.26% - 20.77%.
- --------------------------------------------------------------------------------
22
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Board of Directors
of The Emerging Markets Telecommunications Fund, Inc.:
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations and of
changes in net assets and the financial highlights presents fairly, in all
material respects, the financial position of The Emerging Markets
Telecommunications Fund, Inc. (the "Fund") at May 31, 1999 and the results of
its operations, the changes in its net assets and its financial highlights for
each of the periods presented, in conformity with generally accepted accounting
principles. These financial statements and financial highlights (hereafter
referred to as "financial statements") are the responsibility of the Funds'
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these financial
statements in accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at May 31, 1999 by correspondence with the custodian,
provide a reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
2400 Eleven Penn Center
Philadelphia, Pennsylvania
July 19, 1999
- --------------------------------------------------------------------------------
23
<PAGE>
RESULTS OF ANNUAL MEETING OF SHAREHOLDERS (UNAUDITED)
On October 15, 1998, the annual meeting of shareholders of The Emerging Markets
Telecommunications 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>
Dr. Enrique R. Arzac 5,938,285 852,815 1,643,819
Peter A. Gordon 5,906,272 884,828 1,643,819
Martin M. Torino 5,910,734 880,366 1,643,819
</TABLE>
In addition to the directors re-elected at the meeting, James J. Cattano, George
W. Landau, William W. Priest, Jr. and Richard W. Watt 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 May 31, 1999.
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN NON-VOTES
- -------- ------ ------ --------
<S> <C> <C> <C>
6,708,286 47,217 35,597 1,643,819
</TABLE>
(3) To consider a shareholder proposal to have the Board of Directors implement
measures designed to enable shareholders to purchase and sell shares of the
Fund at net asset value.
<TABLE>
<CAPTION>
BROKER
FOR AGAINST ABSTAIN NON-VOTES NON-VOTES
- -------- -------- ------- -------- --------
<S> <C> <C> <C> <C>
2,151,157 1,374,782 132,311 3,132,850 1,643,819
</TABLE>
The above resolution was approved. Since the resolution was in the form of a
recommendation only, it did not require for its passage the vote generally
required under the Fund's charter (75% of outstanding shares) to open-end the
Fund. The board considered the proposal at its subsequent meeting and
unanimously voted not to implement the recommendation at this time.
On October 21, 1998, the Board authorized the repurchase by the Fund of up to
15% of the Fund's outstanding common stock, for the purposes of enhancing
shareholder value. This program is currently being implemented.
- --------------------------------------------------------------------------------
24
<PAGE>
TAX INFORMATION (UNAUDITED)
The Fund is required by Subchapter M of the Internal Revenue Code of 1986, as
amended, to advise its shareholders within 60 days of the Fund's fiscal year end
(May 31, 1999) as to the U.S. federal tax status of distributions received by
the Fund's shareholders in respect of such fiscal year. The $1.961 per share
distribution paid in respect of such fiscal year was from net realized long-term
capital gains. There were no dividends which would qualify for the dividend
received deduction available to corporate shareholders.
The Fund does not intend to make an election Section 853 to pass through foreign
taxes paid by the Fund to its shareholders. This information is given to meet
certain requirements of the Internal Revenue Code of 1986, as amended.
Shareholders should refer to their Form 1099-DIV to determine the amount
includable on their respective tax returns for 1999.
Because the Fund's fiscal year is not the calendar year, another notification
will be sent in respect of calendar year 1999. The notification will reflect the
amount, if any, that calendar year 1999 taxpayers will report on their U.S.
federal income tax returns. Such notification will be mailed with Form 1099-DIV
in January, 2000.
Foreign shareholders will generally be subject to U.S. withholding tax on the
amount of their dividends and distributions. They will generally not be entitled
to a foreign tax credit or deduction for the foreign withholding taxes paid by
the Fund.
In general, dividends and distributions received by tax-exempt recipients (e.g.,
IRAs and Keoghs) need not be reported as taxable income for U.S. federal income
tax purposes. However, some retirement trusts (e.g., corporate, Keoghs and
403(b)(7) plans) may need this information for their annual information
reporting.
Shareholders are advised to consult their own tax advisers with respect to the
tax consequences of their investment in the Fund.
- --------------------------------------------------------------------------------
25
<PAGE>
DESCRIPTION OF INVESTLINK-SM-* PROGRAM
The InvestLink Program is sponsored and administered by BankBoston, N.A., not by
The Emerging Markets Telecommunications 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 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
- --------------------------------------------------------------------------------
26
<PAGE>
DESCRIPTION OF INVESTLINK-SM-* PROGRAM (CONTINUED)
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 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
- --------------------------------------------------------------------------------
27
<PAGE>
DESCRIPTION OF INVESTLINK-SM-* PROGRAM (CONTINUED)
willful misconduct. Shares held in custody by the Program Administrator are not
subject to protection under the Securities Investors Protection Act of 1970.
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) 969-3364; 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.
- --------------------------------------------------------------------------------
28
<PAGE>
SUMMARY OF GENERAL INFORMATION
The Fund--The Emerging Markets Telecommunications 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 equity securities of telecommunications
companies in emerging countries. 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 May 31, 1999,
CSAM-Americas managed approximately $37.3 billion in assets.
SHAREHOLDER INFORMATION
The market price is published in: THE NEW YORK TIMES (daily) under the
designation "EMTel" and THE WALL STREET JOURNAL (daily), and BARRON'S (each
Monday) under the designation "EmergMktTele". The Fund's New York Stock Exchange
trading symbol is ETF. Weekly comparative net asset value (NAV) and market price
information about The Emerging Markets Telecommunications 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 Latin America Equity Fund, Inc.
(LAQ)
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 Emerging Markets Telecommunications
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 Director, President and Chief
Investment Officer
Robert B. Hrabchak Investment Officer
Hal Liebes Senior Vice President
Michael A. Pignataro Chief Financial Officer and
Secretary
Rocco A. Del Guercio Vice President
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. 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]
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3916-AR-5/99
