<PAGE>
THE EMERGING MARKETS
TELECOMMUNICATIONS
FUND, INC.
............................
SEMI-ANNUAL REPORT
NOVEMBER 30, 1999
[PHOTO]
<PAGE>
CONTENTS
Letter to Shareholders............................... 1
Portfolio Summary.................................... 5
Schedule of Investments.............................. 7
Statement of Assets and Liabilities..................11
Statement of Operations..............................12
Statement of Changes in Net Assets...................13
Financial Highlights.................................14
Notes to Financial Statements........................15
Results of Annual Meeting of Shareholders............20
Description of InvestLink-SM- Program................21
Recent Developments..................................24
- --------------------------------------------------------------------------------
<PAGE>
LETTER TO SHAREHOLDERS
January 10, 2000
DEAR SHAREHOLDER:
I am writing to report on the activities of The Emerging Markets
Telecommunications Fund, Inc. (the "Fund") for the six months ended November 30,
1999.
At November 30, 1999, the Fund's net asset value ("NAV") was $16.42 per share as
compared to $12.12 on May 31, 1999. At November 30, 1999, total net assets were
$119,529,356.
PERFORMANCE: POWERED BY STOCK SELECTION IN ASIA AND LATIN AMERICA
For the six months ended November 30, 1999, the Fund's total return, based on
NAV, was 35.5%.
This compared quite favorably to the broad universe of emerging markets equities
(in the form of the Morgan Stanley Capital International Emerging Markets Free
Index, or "EMF")*, which rose 17.5% over the same period. More significantly,
the Fund outperformed aggregate emerging markets telecommunications stocks by an
even wider margin; as represented by MSCI's Emerging Markets Telecommunications
Industry Index, for example, the latter group returned 9.1%.
I attribute the Fund's meaningful outperformance primarily to effective stock
selection in Asia and Latin America.
- - In Asia, returns were strongest in South Korea and, to a lesser extent, China.
Investor demand for Korean telecom equities was robust, both for existing
shares and a number of new listings that entered the market in the third and
fourth quarters of 1999. The Fund was able to ride this wave of enthusiasm
upward, and additionally benefited from my investment in several high-flying
companies not included in most broad Korean equity indices. The fact that I
chose to overweight Korea relative to EMF enhanced such performance even
further.
- - In Latin America, stock selection proved most successful in Mexico. Two of the
Fund's largest positions (I.E., Telefonos de Mexico, S.A. and Grupo Televisa
S.A.) were in Mexico, and both fared especially well during the six-month
period. The same was true for another of the large positions, Millicom
International Cellular S.A., which operates cellular franchises in Latin
America and elsewhere in the emerging world.
To some degree, the positive results in Asia and Latin America were offset by
less favorable performance in the broad Europe/Middle East/Africa ("EMEA")
region, for two reasons. First, telecom-related companies generally
underperformed most other industry sectors in EMEA countries. And second, I
reduced exposure to Greece as it became overpriced, only to see it become even
further overpriced.
THE MARKET: WHAT A DIFFERENCE A QUARTER MAKES
After posting lackluster performance in the third quarter, emerging telecoms
rebounded emphatically in the fourth. From South Korea and India to Brazil and
Mexico, these stocks staged a dynamic rally that put them among the world's best
performers for the year, not long after it looked like they might be among the
year's worst.
[Note: I single out these countries because the Fund held major positions in
each of them. Collectively, furthermore, they represented some 40% of the
portfolio's total assets at November 30, 1999.]
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1
<PAGE>
LETTER TO SHAREHOLDERS
Why did emerging telecoms do so well? The simple answer is that a tremendous
re-rating process took place, as investors all over the world cast their nets
wide in search of unrealized telecom values. And there was much to be caught in
long-undervalued emerging telecoms, especially when compared to their
developed-world counterparts.
A closer look, though, reveals a much more complex environment in which telecoms
in different nations appreciated for distinctly different reasons:
- - In South Korea, investors realized that the country's strongly recovering
economy alone was justification for significant upside in telecoms there.
Combined with the global re-rating of emerging telecoms and a government
willing to let interest rates fall to spur consumer demand, the result was an
excellent environment for growth by the incumbent telecom provider.
- - In India, there was a change in government that held out the promise of a
telecom-friendly regulatory and tariff environment.
- - And in Latin America--particularly Mexico and, to a lesser extent, Brazil--a
number of elements attracted investors to the major telecoms: greater
liquidity, better management, improved disclosure and comparatively cheap
valuations, among others.
These and several other subtle-yet-highly-positive changes in the emerging
telecom marketplace occurred throughout the year. When investors took note of
them, the stage was set for a rebound the likes of which are seldom seen.
I was fortunate to have followed and, in many cases, correctly anticipated these
changes and was thus able to position the Fund to take advantage of them
accordingly.
PORTFOLIO STRUCTURE AND STRATEGY: FOCUSED ON ASIA AND LATIN AMERICA
TOP 10 HOLDINGS, BY ISSUER*
<TABLE>
<CAPTION>
% OF
HOLDING COUNTRY NET ASSETS
------- ------- ----------
<C> <S> <C> <C>
1. Korea Telecom South Korea 7.1
2. Samsung Electronics South Korea 6.5
3. China Telecom Hong Kong 5.9
4. TelMex Mexico 4.9
5. VSNL India 4.4
6. Televisa Mexico 4.1
7. Telebras Brazil 4.0
8. Hutchison Whampoa Hong Kong 3.4
9. Millicom Intl. Cellular Global 3.1
10. Matav Hungary 3.0
----
Total 46.4
====
</TABLE>
- --------------
* Company names are abbreviations of those found in
the chart on page 6.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
COUNTRY BREAKDOWN
<S> <C>
(% of net assets)
Hong Kong 12.12
India 6.18
Israel 3.82
Mexico 11.29
South Korea 16.71
Taiwan 6.32
Cash & Other Assets 3.16
Other* 21.43
Argentina 3.97
Brazil 7.61
Global 7.39
* Other includes Central Europe, Chile,
Czech Republic, Egypt, Greece, Hungary,
Indonesia, Peru, Philippines, Portugal, Russia,
Singapore, Spain, Thailand and Venezuela.
</TABLE>
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2
<PAGE>
LETTER TO SHAREHOLDERS
My dominant investment theme in 1999, one that likely will continue into 2000,
was that emerging markets were back from the brink, with emerging
telecommunications companies leading the charge. Yet, while the telecom rally
was global in scope, the drivers behind individual country and company
performance were quite complex, varying (sometimes substantially) from market to
market.
The following is a more detailed examination of how I managed the Fund in light
of these drivers:
BRAZIL. I materially increased the Fund's exposure to Brazilian telecoms in the
August-September period, mainly because their poor performance earlier in the
year had reduced their valuations to compellingly cheap levels. An appealing
blend of country and company fundamentals was just the right mix to ignite an
explosive rally in Brazilian telecoms during the fourth quarter.
SOUTH KOREA AND ASIA. I dramatically increased the Fund's exposure to South
Korea in the middle of the year, to around 14% of total portfolio assets, mainly
due to the highly positive conditions there previously cited. The same themes of
low interest rates, growing current accounts and stronger consumer demand, among
others, were prevalent in much of Asia, particularly Singapore and Hong Kong.
CHINA. The issue here was very much related to the incumbent telecom provider.
This company currently has very low levels of fixed-line or cellular
penetration, a condition that likely won't last much longer. I was fortunate to
buy its shares just as it was undertaking major changes to enhance revenues and
earnings. Investors generally saw this as an encouraging sign, one that paid off
handsomely for the Fund as the year progressed.
INDIA. The complex nature of the global emerging telecom marketplace I described
earlier was never so evident as in India. On the face of it, Indian telecom
stocks did not appear especially interesting. Major changes in management,
products and operations were (and are) needed to bring these companies anywhere
close to global standards. And yet, the election of a pro-business government
promising highly beneficial changes in telecom rates and regulations, combined
with low valuations and high-potential Internet-related businesses, propelled
them solidly upward during the fourth quarter.
ELSEWHERE. I lightened up on EMEA exposure, as I felt that assets could be put
to better use in other regions. I also raised the allocation to Mexico in
September, as the Mexican market had already fallen, and the nation's sovereign
risk was improving quickly enough to make its telecoms attractive buys.
As for the present, I am focusing the Fund on Asia (I.E., approximately 50% of
assets) and Latin America (I.E., 30%, primarily in Mexico and Brazil).
In Latin America, for instance, I am paying close attention to the Brazilian
cellular business. The latter has suffered for the past year, its first since
widespread privatization. Several quality players are trading at valuations
roughly 80% lower than those of their global counterparts, largely due to their
uncertain first steps into a newly competitive environment.
Cellular penetration in Brazil is quite low (about 8%), yet is forecast to grow
by 20% annually over the next few years. In my book, this makes Brazilian
cellular companies a good buy, one that should become more evident to investors
as time progresses.
- --------------------------------------------------------------------------------
3
<PAGE>
LETTER TO SHAREHOLDERS
My general stock selection approach favors larger, more liquid telecoms with
established businesses that are comparatively cheap on a global basis. In
particular, I am biased toward those companies that have access to
developed-world management expertise as they attempt to grow their businesses.
OUTLOOK: SEE POTENTIAL FOR NEAR-TERM CORRECTION, FOLLOWED BY MORE UPSIDE
I believe that the enthusiasm shown for emerging telecoms in 1999 will extend
into 2000. Nonetheless, it is clear that valuations have become quite stretched
in certain areas, so there is a reasonable possibility that there will be some
form of correction in the near term, particularly among the weaker companies and
markets.
My focus now--and in the foreseeable future--is to stick with higher-quality
securities (to the extent we can find them), the rationale being that investors
will continue to find them attractive regardless of any short-term volatility in
the general marketplace.
Respectfully,
/s/ Richard W. Watt
Richard W. Watt
President and Chief Investment Officer **
FROM CREDIT SUISSE ASSET MANAGEMENT, LLC:
I. All business units of Credit Suisse Group have successfully completed their
year end processing and reported ready for business without incident. In
addition, our systems have been incident-free with no material Y2K issues.
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 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 is described on pages 21 through
23 of this report.
- --------------------------------------------------------------------------------
* The Morgan Stanley Capital International Emerging Markets Free Index is an
unmanaged index (with no defined investment objective) of emerging-market
equities that includes reinvestment of dividends, and is the exclusive property
of Morgan Stanley Capital International Inc.
** Richard W. Watt, who is a Managing Director of Credit Suisse Asset
Management, LLC ("CSAM"), is primarily responsible for management of the Fund's
assets. He joined CSAM on August 2, 1995. Mr. Watt formerly was associated with
Gartmore Investment Limited in London, where he was head of emerging markets
investments and research. Before joining Gartmore Investment Limited in 1992,
Mr. Watt was a Director of Kleinwort Benson International Investments in London,
where he was responsible for research, analysis and trading of equities in Latin
America and other regions. Mr. Watt is President, Chief Investment Officer and a
Director of the Fund. He is also President, Chief Investment Officer and a
Director of The Chile Fund, Inc., The Emerging Markets Infrastructure Fund, Inc.
and The First Israel Fund, Inc. He is President and a Director of The Brazilian
Equity Fund, Inc., The Latin America Equity Fund, Inc. and The Latin America
Investment Fund, Inc. and is President and Chief Investment Officer of The
Portugal Fund, Inc.
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4
<PAGE>
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THE EMERGING MARKETS TELECOMMUNICATIONS FUND, INC.
PORTFOLIO SUMMARY - AS OF NOVEMBER 30, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
SECTOR ALLOCATION
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AS A PERCENT OF NET ASSETS NOVEMBER 30, 1999 MAY 31, 1999
<S> <C> <C>
Cellular Communications 14.20% 13.81%
Electric-Integrated 0.00% 3.90%
Electronics 12.36% 10.04%
Investment & Holding Companies 9.28% 6.28%
Local and/or Long Distance Telephone Service 22.28% 22.52%
Oil & Gas 0.00% 3.25%
Radio/Television 5.25% 2.23%
Telecommunications 27.05% 28.45%
Other 4.29% 3.58%
Cash & Cash Equivalents 5.30% 5.94%
</TABLE>
GEOGRAPHIC ASSET BREAKDOWN
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AS A PERCENT OF NET ASSETS NOVEMBER 30, 1999 MAY 31, 1999
<S> <C> <C>
Asia 46.99% 35.04%
Eastern Europe 5.93% 9.53%
Europe 3.33% 13.13%
Latin America 27.11% 22.61%
Middle East 6.09% 7.35%
Global 7.39% 7.02%
Cash & Cash Equivalents 3.16% 5.32%
</TABLE>
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5
<PAGE>
- --------------------------------------------------------------------------------
THE EMERGING MARKETS TELECOMMUNICATIONS FUND, INC.
PORTFOLIO SUMMARY - AS OF NOVEMBER 30, 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 NOVEMBER 30, 1999 MAY 31, 1999
<S> <C> <C>
Argentina 3.97% 6.69%
Brazil 7.61% 6.94%
Chile 3.21% 4.12%
Greece 0.77% 7.86%
Hong Kong 12.12% 5.77%
Hungary 2.98% 2.90%
India 6.18% 4.75%
Indonesia 1.95% 2.06%
Israel 3.82% 7.35%
Mexico 11.29% 0.00%
Peru 0.02% 3.61%
Philippines 0.70% 2.62%
Portugal 2.12% 1.83%
Russia 2.17% 1.06%
Singapore 1.32% 4.20%
South Korea 16.71% 12.07%
Taiwan 6.32% 1.74%
Global 7.39% 7.02%
Other 6.19% 12.09%
</TABLE>
TOP 10 HOLDINGS, BY ISSUER
<TABLE>
<CAPTION>
Percent of
Holding Sector Country/Region Net Assets
<C> <S> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------
1. Korea Telecom Corp. Telecommunications South Korea 7.1
- --------------------------------------------------------------------------------------------------------------
2. Samsung Electronics Co. Ltd. Electronics South Korea 6.5
- --------------------------------------------------------------------------------------------------------------
3. China Telecom (Hong Kong) Ltd. Cellular Communications Hong Kong 5.9
- --------------------------------------------------------------------------------------------------------------
4. Telefonos de Mexico, S.A. Local and/or Long Distance
Telephone Service Mexico 4.9
- --------------------------------------------------------------------------------------------------------------
5. Videsh Sanchar Nigam Ltd. Telecommunications India 4.4
- --------------------------------------------------------------------------------------------------------------
6. Grupo Televisa S.A. Radio/Television Mexico 4.1
- --------------------------------------------------------------------------------------------------------------
7. Telecomunicacoes Brasileiras S.A. Local and/or Long Distance
Telephone Service Brazil 4.0
- --------------------------------------------------------------------------------------------------------------
8. Hutchison Whampoa Ltd. Investment & Holding
Companies Hong Kong 3.4
- --------------------------------------------------------------------------------------------------------------
9. Millicom International Cellular S.A. Cellular Communications Global 3.1
- --------------------------------------------------------------------------------------------------------------
10. Magyar Tavkozlesi Rt. Local and/or Long Distance
Telephone Service Hungary 3.0
- --------------------------------------------------------------------------------------------------------------
</TABLE>
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6
<PAGE>
- --------------------------------------------------------------------------------
THE EMERGING MARKETS TELECOMMUNICATIONS FUND, INC.
SCHEDULE OF INVESTMENTS - NOVEMBER 30, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
No. of Value
Description Shares (Note A)
<S> <C> <C>
- --------------------------------------------------------------------------------------------------
EQUITY OR EQUITY-LINKED SECURITIES-94.43%
EQUITY OR EQUITY-LINKED SECURITIES OF TELECOMMUNICATION COMPANIES IN EMERGING COUNTRIES-82.12%
ARGENTINA-3.97%
CEI Citicorp Holdings S.A., Class B+.................................. 949,309 $ 3,133,190
Telecom Argentina Stet - France Telecom S.A. ADR+..................... 54,800 1,609,750
------------
TOTAL ARGENTINA (Cost $5,413,501)................................................... 4,742,940
------------
BRAZIL-7.61%
Tele Centro Sul Participacoes S.A. ADR................................ 18,600 1,269,450
Tele Norte Leste Participacoes S.A. ADR............................... 56,900 1,013,531
Telecomunicacoes Brasileiras S.A. ADR+................................ 52,500 4,764,375
Telecomunicacoes de Sao Paulo S.A. PN................................. 21,266,390 2,047,506
------------
TOTAL BRAZIL (Cost $8,064,394)...................................................... 9,094,862
------------
CHILE-0.94%
Compania de Telecomunicaciones de Chile S.A. ADR...................... 51,000 937,125
Telefonos de Coyhaique S.A............................................ 6,600 181,568
------------
TOTAL CHILE (Cost $1,234,073)....................................................... 1,118,693
------------
CZECH REPUBLIC-0.78%
SPT Telecom a.s. (Cost $903,771)...................................... 64,750 931,223
------------
EGYPT-2.27%
Egyptian Company for Mobile Services+ (Cost $2,020,572)............... 79,500 2,713,307
------------
GREECE-0.77%
STET Hellas Telecommunications S.A.+ (Cost $993,942).................. 46,400 916,400
------------
<CAPTION>
No. of Value
Description Shares (Note A)
- --------------------------------------------------------------------------------------------------
<S> <C> <C>
HONG KONG-8.70%
Asia Satellite Telecommunications Holdings Ltd........................ 534,977 $ 1,611,854
Cable & Wireless HKT Ltd.............................................. 410,800 1,118,705
China Telecom (Hong Kong) Ltd., Class H+.............................. 1,309,415 6,996,810
i-CABLE Communications Limited+....................................... 364,000 560,072
SmartTone Telecommunications Holdings Ltd............................. 22,061 108,224
------------
TOTAL HONG KONG (Cost $5,223,276)................................................... 10,395,665
------------
HUNGARY-2.98%
Magyar Tavkozlesi Rt. ADR (Cost $3,451,154)........................... 118,000 3,562,125
------------
INDIA-6.18%
Mahanagar Telephone Nigam Ltd.++...................................... 233,500 2,078,150
Videsh Sanchar Nigam Ltd. GDR++....................................... 233,500 5,312,125
------------
TOTAL INDIA (Cost $5,509,493)....................................................... 7,390,275
------------
INDONESIA-1.95%
PT Indosat ADR+##..................................................... 85,660 1,188,532
PT Telekomunikasi Indonesia........................................... 2,683,800 1,146,531
------------
TOTAL INDONESIA (Cost $2,562,724)................................................... 2,335,063
------------
ISRAEL-2.47%
Bezeq Israeli Telecommunication Corporation Ltd.+..................... 13,527 63,586
ECI Telecom Ltd.##.................................................... 46,256 1,159,291
Geotek Communications, Inc., Convertible Preferred Series M,
8.50%*+.............................................................. 100 0
Gilat Satellite Networks Ltd.+........................................ 15,900 1,223,306
Nexus Telecommunication Systems Ltd.+................................. 170,784 501,678
------------
TOTAL ISRAEL (Cost $4,675,528)...................................................... 2,947,861
------------
</TABLE>
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7
<PAGE>
- --------------------------------------------------------------------------------
THE EMERGING MARKETS TELECOMMUNICATIONS FUND, INC.
SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
No. of Value
Description Shares (Note A)
- --------------------------------------------------------------------------------------------------
<S> <C> <C>
MEXICO-11.29%
Carso Global Telecom, Class A-1+...................................... 212,000 $ 1,664,863
Grupo Televisa S.A. GDR+.............................................. 100,700 4,915,419
Nuevo Grupo Iusacell S.A. de C.V. ADR, V Shares+...................... 85,288 1,066,100
Telefonos de Mexico, S.A., Class L ADR................................ 63,200 5,849,950
------------
TOTAL MEXICO (Cost $11,041,345)..................................................... 13,496,332
------------
PERU-0.02%
Tecsur S.A.+ (Cost $20,757)........................................... 102,450 27,007
------------
PHILIPPINES-0.70%
Philippine Long Distance Telephone Co. ADR## (Cost $1,008,284)........ 41,000 840,500
------------
RUSSIA-2.17%
Golden Telecom, Inc.+................................................. 140,000 1,592,500
Independent Network Televison Series II*.............................. 1,000,000 1,000,000
------------
TOTAL RUSSIA (Cost $2,680,000)...................................................... 2,592,500
------------
SINGAPORE-1.32%
Venture Manufacturing (Singapore) Ltd.
(Cost $543,812)...................................................... 156,000 1,578,102
------------
SOUTH KOREA-16.71%
Dacom Corp............................................................ 10,691 2,674,479
Korea Telecom Corp.+.................................................. 160,500 8,506,500
LG Electronics Co..................................................... 23,250 1,040,910
Samsung Electronics Co. Ltd........................................... 37,431 7,749,355
SK Telecom Co. Ltd.................................................... 1 24
------------
TOTAL SOUTH KOREA (Cost $8,572,798)................................................. 19,971,268
------------
TAIWAN-3.31%
Acer Peripherals Inc.................................................. 297,000 937,648
Siliconware Precision
Industries Co........................................................ 63,200 838,980
<CAPTION>
No. of Value
Description Shares (Note A)
- --------------------------------------------------------------------------------------------------
TAIWAN (CONTINUED)
<S> <C> <C>
Taiwan Semiconductor Manufacturing Co. Ltd. ADR....................... 60,821 $ 2,178,152
------------
TOTAL TAIWAN (Cost $2,852,689)...................................................... 3,954,780
------------
THAILAND-1.69%
Advanced Information Services Public Co. Ltd. (Cost $1,015,848)....... 140,919 2,017,001
------------
VENEZUELA-1.01%
Venworld Telecommunications+=/ = (Cost $2,531,383).................... 125,947 1,204,531
------------
GLOBAL-5.28%
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)*+.......................................................... 1,240 0
International Wireless Communications, Inc., Warrants (expiring
08/17/07)*+.......................................................... 1 0
Millicom International Cellular S.A.+##............................... 79,735 3,747,545
Telesoft Partners Ltd.+=/=#........................................... 750,000 2,559,418
------------
TOTAL GLOBAL (Cost $3,932,702)...................................................... 6,306,963
------------
TOTAL EMERGING COUNTRIES
(Cost $74,252,046)................................................................. 98,137,398
------------
</TABLE>
- --------------------------------------------------------------------------------
8
<PAGE>
- --------------------------------------------------------------------------------
THE EMERGING MARKETS TELECOMMUNICATIONS FUND, INC.
SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
No. of Value
Description Shares (Note A)
- --------------------------------------------------------------------------------------------------
<S> <C> <C>
EQUITY SECURITIES OF TELECOMMUNICATION COMPANIES IN DEVELOPED COUNTRIES-2.56%
CENTRAL EUROPE-0.30%
Central European Media Enterprises Ltd.+## (Cost $4,578,326).......... 183,000 $ 354,562
------------
PORTUGAL-2.12%
Portugal Telecom S.A. (Registered).................................... 251,555 2,416,644
PT MULTIMEDIA - Servicos de Telecomunicacoes e Multimedia SGPS SA+.... 3,100 121,993
------------
TOTAL PORTUGAL (Cost $2,501,506).................................................... 2,538,637
------------
SPAIN-0.14%
Terra Networks, S.A.+ (Cost $67,080).................................. 5,000 172,068
------------
TOTAL DEVELOPED COUNTRIES
(Cost $7,146,912).................................................................. 3,065,267
------------
EQUITY SECURITES OF COMPANIES PROVIDING OTHER ESSENTIAL SERVICES IN THE DEVELOPMENT OF AN
EMERGING COUNTRY'S INFRASTRUCTURE-9.75%
CHILE-0.13%
Compania de Consumidores de Gas de Santiago S.A....................... 12,236 41,067
Empresa Electrica Pehuenche S.A.+..................................... 250,767 119,117
------------
TOTAL CHILE (Cost $277,150)......................................................... 160,184
------------
HONG KONG-3.42%
Hutchison Whampoa Ltd. (Cost $2,980,601).............................. 331,328 4,084,807
------------
<CAPTION>
No. of Value
Description Shares (Note A)
- --------------------------------------------------------------------------------------------------
<S> <C> <C>
ISRAEL-1.35%
Formula Ventures L.P.+=/=#............................................ 262,500 $ 256,200
K.T. Concord Sub-Fund QP L.P.+=/=#.................................... 800,000 1,361,589
------------
TOTAL ISRAEL (Cost $1,047,400)...................................................... 1,617,789
------------
TAIWAN-3.01%
Far Eastern Textile Ltd............................................... 873,000 1,502,083
Hon Hai Precision Industry Co., Ltd.+,++.............................. 74,300 1,389,410
Nan Ya Plastic Corp................................................... 370,000 712,549
------------
TOTAL TAIWAN (Cost $3,007,020)...................................................... 3,604,042
------------
GLOBAL-1.84%
Emerging Markets Ventures I, L.P.+=/=# (Cost $2,098,727).............. 2,026,720 2,203,470
------------
TOTAL OTHER ESSENTIAL SERVICES
(Cost $9,410,898).................................................................. 11,670,292
------------
TOTAL EQUITY OR
EQUITY-LINKED SECURITIES
(Cost $90,809,856)................................................................. 112,872,957
------------
FIXED RATE INVESTMENT-0.27%
GLOBAL-0.27%
<CAPTION>
Par (000)
- --------------------------------------------------------------------------------------------------
<S> <C> <C>
International Wireless Communications, Inc., Senior Secured Notes,
8/17/02*(a) (Cost $579,056).......................................... USD 385 318,659
------------
</TABLE>
- --------------------------------------------------------------------------------
9
<PAGE>
- --------------------------------------------------------------------------------
THE EMERGING MARKETS TELECOMMUNICATIONS FUND, INC.
SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
No. of Value
Description Shares (Note A)
- --------------------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS-2.14%
<S> <C> <C>
CHILEAN MUTUAL FUNDS-2.14%
Bice Manager Investment Fund.......................................... 237,425 $ 603,065
Fondo Mutuo Banco de A. Edwards....................................... 6,531 172,419
Fondo Mutuo Bancredito Redimiento..................................... 9,069 366,850
Fondo Mutuo Citicorp Cash............................................. 313,721 669,793
Fondo Mutuo Santander Money Market.................................... 84,359 366,853
Fondo Mutuo Security Check............................................ 88,918 386,557
------------
TOTAL SHORT-TERM INVESTMENTS
(Cost $2,581,598).................................................................. 2,565,537
------------
TOTAL INVESTMENTS-96.84%
(Cost $93,970,510) (Notes A,D)..................................................... 115,757,153
CASH AND OTHER ASSETS
IN EXCESS OF LIABILITIES-3.16%..................................................... 3,772,203
------------
NET ASSETS-100.00%.................................................................. $119,529,356
============
</TABLE>
<TABLE>
<S> <C>
- ----------------------------------------------------------
* Not readily marketable security.
+ 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 November 30, 1999, the Fund committed to
investing an additional $1,968,467, $200,000,
$487,500 and $500,000 of capital in Emerging Markets
Ventures I, L.P., K.T. Concord Sub-Fund QP L.P.,
Formula Ventures L.P. 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.
GDR Global Depositary Receipts.
PN Preferred Shares.
USD United States Dollars.
</TABLE>
- --------------------------------------------------------------------------------
See accompanying notes to financial statements.
10
<PAGE>
- --------------------------------------------------------------------------------
THE EMERGING MARKETS TELECOMMUNICATIONS FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES - NOVEMBER 30, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS
Investments, at value (Cost $93,970,510)
(Note A)............................... $115,757,153
Cash (including $168,168 of foreign
currencies with a cost of $163,842)
(Note A)............................... 2,305,474
Collateral received for securities
loaned (Note A)........................ 2,631,700
Receivables:
Investments sold...................... 3,999,298
Dividends and interest................ 223,024
Prepaid expenses and other assets....... 6,708
------------
Total Assets............................ 124,923,357
------------
LIABILITIES
Payables:
Payable upon return of securities
loaned (Note A)...................... 2,631,700
Investments purchased................. 2,265,469
Investment advisory fee (Note B)...... 221,844
Capital shares repurchased (Note G)... 94,727
Administration fees (Note B).......... 49,434
Other accrued expenses................ 130,827
------------
Total Liabilities....................... 5,394,001
------------
NET ASSETS (applicable to 7,279,919
shares of common stock outstanding)
(Note C)............................... $119,529,356
============
NET ASSET VALUE PER SHARE ($119,529,356
DIVIDED BY 7,279,919)................. $16.42
============
NET ASSETS CONSIST OF
Capital stock, $0.001 par value;
7,279,919 shares issued and outstanding
(100,000,000 shares authorized)........ $ 7,280
Paid-in capital......................... 104,358,980
Accumulated net investment loss......... (154,699)
Accumulated net realized loss on
investments and foreign currency
related transactions................... (6,396,799)
Net unrealized appreciation in value of
investments and translation of other
assets and liabilities denominated in
foreign currencies..................... 21,714,594
------------
Net assets applicable to shares
outstanding............................ $119,529,356
============
</TABLE>
- --------------------------------------------------------------------------------
See accompanying notes to financial statements.
11
<PAGE>
- --------------------------------------------------------------------------------
THE EMERGING MARKETS TELECOMMUNICATIONS FUND, INC.
STATEMENT OF OPERATIONS - FOR THE SIX MONTHS ENDED NOVEMBER 30, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
INVESTMENT INCOME
Income (Note A):
Dividends............................. $ 395,115
Interest.............................. 108,536
Less: Foreign taxes withheld.......... (35,874)
-----------
Total Investment Income............... 467,777
-----------
Expenses:
Investment advisory fees (Note B)..... 638,815
Administration fees (Note B).......... 98,071
Custodian fees........................ 57,699
Printing.............................. 45,611
Accounting fees....................... 36,937
Audit and legal fees.................. 33,558
Transfer agent fees................... 16,470
Directors' fees....................... 14,079
NYSE listing fees..................... 8,266
Insurance............................. 4,692
Other................................. 12,078
-----------
Total Expenses........................ 966,276
-----------
Net Investment Loss................... (498,499)
-----------
NET REALIZED AND UNREALIZED GAIN ON
INVESTMENTS AND FOREIGN CURRENCY
RELATED TRANSACTIONS
Net realized gain/(loss) from:
Investments........................... 10,012,508
Foreign currency related
transactions......................... (164,256)
Net change in unrealized appreciation in
value of investments and translation of
other assets and liabilities
denominated in foreign currencies...... 21,448,745
-----------
Net realized and unrealized gain on
investments and foreign currency
related transactions................... 31,296,997
-----------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS........................ $30,798,498
===========
</TABLE>
- --------------------------------------------------------------------------------
See accompanying notes to financial statements.
12
<PAGE>
- --------------------------------------------------------------------------------
THE EMERGING MARKETS TELECOMMUNICATIONS FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Six Months For the Fiscal
Ended Year
November 30, 1999 Ended
(unaudited) May 31, 1999
<S> <C> <C>
-------------------------------------
INCREASE/(DECREASE) IN NET ASSETS
Operations:
Net investment loss................... $ (498,499) $ (349,880)
Net realized gain/(loss) on
investments and foreign currency
related transactions................. 9,848,252 (13,838,114)
Net change in unrealized appreciation
in value of investments and
translation of other assets and
liabilities denominated in foreign
currencies........................... 21,448,745 (6,875,847)
------------ ------------
Net increase/(decrease) in net
assets resulting from operations... 30,798,498 (21,063,841)
------------ ------------
Distributions to shareholders:
Net realized gain on investments and
foreign currency related
transactions......................... -- (16,442,826)
------------ ------------
Capital share transactions:
Cost of 477,900 and 677,100 shares
repurchased, respectively
(Note G)............................. (5,295,473) (6,489,527)
------------ ------------
Total increase/(decrease) in net
assets............................. 25,503,025 (43,996,194)
------------ ------------
NET ASSETS
Beginning of period..................... 94,026,331 138,022,525
------------ ------------
End of period........................... $119,529,356 $ 94,026,331
============ ============
</TABLE>
- --------------------------------------------------------------------------------
See accompanying notes to financial statements.
13
<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 Six
Months For the Period
Ended For the Fiscal Years Ended May 31, June 25, 1992*
November 30, 1999 --------------------------------------------------------------------- through
(unaudited) 1999 1998 1997 1996 1995 1994 May 31, 1993
----------------- --------- ---------- ---------- ---------- ---------- ---------- --------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING
PERFORMANCE
Net asset value,
beginning of period.... $12.12 $16.36 $21.53 $20.94 $19.20 $20.90 $14.95 $13.84**
-------- ------- -------- -------- -------- -------- -------- --------
Net investment
income/(loss).......... (0.07)# (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... 4.20# (2.41)# (1.40) 2.86 1.91 0.01 7.03+ 1.20
-------- ------- -------- -------- -------- -------- -------- --------
Net increase/(decrease)
in net assets resulting
from operations........ 4.13 (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 0.17 -- -- -- -- -- --
-------- ------- -------- -------- -------- -------- -------- --------
Net asset value, end of
period................. $16.42 $12.12 $16.36 $21.53 $20.94 $19.20 $20.90 $14.95
======== ======= ======== ======== ======== ======== ======== ========
Market value, end of
period................. $12.813 $9.813 $13.000 $17.375 $17.375 $17.750 $22.750 $14.500
======== ======= ======== ======== ======== ======== ======== ========
Total investment
return(a).............. 30.57% (9.99)% (4.57)% 14.31% 0.21% (13.94)% 64.74% 5.85%
======== ======= ======== ======== ======== ======== ======== ========
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000 omitted).......... $119,529 $94,026 $138,023 $181,627 $176,628 $161,925 $176,253 $125,338
Ratio of expenses to
average net assets(b).. 1.89%(c) 2.09% 2.32% 1.90% 1.77% 1.89% 1.81% 1.99%(c)
Ratio of expenses to
average net assets,
excluding taxes........ -- 2.01% 1.82% 1.82% -- -- -- --
Ratio of net investment
income/(loss) to
average net assets..... (0.98)%(c) (0.33)% (0.29)% 0.52% 1.40% 0.53% 0.63% 2.02%(c)
Portfolio turnover
rate................... 53.52% 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.
(c) Annualized.
- --------------------------------------------------------------------------------
See accompanying notes to financial statements.
14
<PAGE>
- --------------------------------------------------------------------------------
THE EMERGING MARKETS TELECOMMUNICATIONS FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
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 non-publicly traded securities. At November 30, 1999,
the Fund held 7.45% of its net assets in securities valued in good faith by the
Board of Directors with an aggregate cost of $10,429,524 and fair value of
$8,903,867. 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 November 30, 1999, the
account's interest rate was 4.90%, which resets on a daily basis. Amounts on
deposit are generally available on the same business day.
INVESTMENT TRANSACTIONS AND INVESTMENT INCOME: Investment transactions are
accounted for on the trade date. The cost of investments sold is determined by
use of the specific identification method for both financial reporting and
income tax purposes. Interest income is recorded on an accrual basis; dividend
income is recorded on the ex-dividend date.
TAXES: No provision is made for U.S. federal income or excise taxes as it is the
Fund's intention to continue to qualify as a regulated investment company and to
make the requisite distributions to its shareholders which will be sufficient to
relieve it from all or substantially all U.S. federal income and excise taxes.
For U.S. federal income tax purposes, realized foreign currency losses and net
realized capital losses from investments incurred after October 31, 1998, within
the Fund's prior fiscal year, are deemed to arise on the first day of the
current fiscal year. The Fund incurred and elected to defer 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.
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 six
months ended
- --------------------------------------------------------------------------------
15
<PAGE>
- --------------------------------------------------------------------------------
THE EMERGING MARKETS TELECOMMUNICATIONS FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
November 30, 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. Effective
January 23, 1999, the CPMF tax expired and was reinstated on June 17, 1999 for a
period of three years. The tax is assessed at a rate of 0.38% for the initial
year and will drop to 0.30% for the remaining two years. For the six months
ended November 30, 1999, the Fund incurred $462 of such expense.
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 changes in market prices of equity securities. Accordingly,
realized and unrealized foreign currency gains and losses with respect to such
securities are included in the reported net realized and unrealized gains and
losses on investment transactions balances. However, the Fund does isolate the
effect of fluctuations in foreign exchange rates when determining the gain or
loss upon the sale or maturity of foreign currency denominated debt obligations
pursuant to U.S. federal income tax regulations, with such amount categorized as
foreign exchange gain or loss for both financial reporting and 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
November 30, 1999, was $2,499,600, for which the Fund has received cash as
collateral of $2,631,700. 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 $2,686,274.
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 agreement, realization and/or
retention of the collateral may be subject to legal proceedings.
- --------------------------------------------------------------------------------
16
<PAGE>
- --------------------------------------------------------------------------------
THE EMERGING MARKETS TELECOMMUNICATIONS FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
During the six months ended November 30, 1999, the Fund earned $6,861 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 November 30, 1999, the Fund reclassified within the composition of net assets
permanent book/tax differences from accumulated net realized loss on investments
and foreign currency related transactions relating to gains from the sale of
Passive Foreign Investment Companies of $840,876 to accumulated net investment
loss.
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
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
- --------------------------------------------------------------------------------
17
<PAGE>
- --------------------------------------------------------------------------------
THE EMERGING MARKETS TELECOMMUNICATIONS FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
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 November 30, 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, LLC ("CSAM"), 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 six months ended November 30, 1999, CSAM earned $638,815
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 six months ended November 30, 1999, CSAM was
reimbursed $7,020 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 six months
ended November 30, 1999, BSFM earned $61,463 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 7,279,919 shares outstanding at November 30, 1999, CSAM
owned 7,169 shares.
NOTE D. INVESTMENT IN SECURITIES
For U.S. federal income tax purposes, the cost of securities owned at
November 30, 1999 was $93,990,520. Accordingly, the net unrealized appreciation
of investments (including investments denominated in foreign currencies) of
$21,766,633, was composed of gross appreciation of $33,312,439 for those
investments having an excess of value over cost and gross depreciation of
$11,545,806 for those investments having an excess of cost over value.
For the six months ended November 30, 1999, total purchases and sales of
securities, other than short-term investments, were $52,187,623 and $59,122,642,
respectively.
NOTE E. CREDIT AGREEMENT
The Fund, along with 10 other U.S. registered management investment companies
for which CSAM serves as investment adviser, had a credit agreement with
BankBoston, N.A. The agreement provided that each fund was 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 bore
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
above credit agreement was terminated as of June 30, 1999 and the Fund had no
amounts outstanding under the credit agreement for the one month ended June 30,
1999.
- --------------------------------------------------------------------------------
18
<PAGE>
- --------------------------------------------------------------------------------
THE EMERGING MARKETS TELECOMMUNICATIONS FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
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 November 30, 1999, value per share of such securities and
percent of net assets which the securities comprise.
<TABLE>
FAIR VALUE PERCENT
NUMBER AT OF
OF ACQUISITION NOVEMBER 30, VALUE PER NET
SECURITY SHARES DATES COST 1999 SHARE ASSETS
- ---------------------------------------- ------- -------- ---------- ---------- ----- ----
<S> <C> <C> <C> <C> <C> <C>
Emerging Markets Ventures I, L.P........ 159,653 01/22/98 $ 163,926 $ 173,576 $1.09 0.14
Emerging Markets Ventures I, L.P........ 3,525 03/05/98 3,662 3,833 1.09 0.00
Emerging Markets Ventures I, L.P........ 586,127 05/05/98 601,816 637,243 1.09 0.53
Emerging Markets Ventures I, L.P........ 361,637 07/07/98 371,316 393,175 1.09 0.33
Emerging Markets Ventures I, L.P........ 42,334 08/13/98 44,675 46,026 1.09 0.04
Emerging Markets Ventures I, L.P........ 296,812 10/27/98 304,757 322,697 1.09 0.27
Emerging Markets Ventures I, L.P........ 170,989 02/26/99 172,334 185,901 1.09 0.16
Emerging Markets Ventures I, L.P........ 69,256 04/19/99 97,208 75,296 1.09 0.06
Emerging Markets Ventures I, L.P........ 39,575 08/24/99 39,886 43,026 1.09 0.04
Emerging Markets Ventures I, L.P........ 296,812 10/01/99 299,147 322,697 1.09 0.27
Formula Ventures, L.P................... 262,500 08/06/99 272,685 256,200 0.98 0.22
K.T. Concord Sub-Fund QP L.P............ 250,000 12/08/97 243,672 425,496 1.70 0.36
K.T. Concord Sub-Fund QP L.P............ 100,000 12/28/98 96,553 170,199 1.70 0.14
K.T. Concord Sub-Fund QP L.P............ 150,000 03/12/99 144,830 255,298 1.70 0.21
K.T. Concord Sub-Fund QP L.P............ 100,000 08/03/99 96,553 170,199 1.70 0.14
K.T. Concord Sub-Fund QP L.P............ 50,000 08/25/99 48,277 85,099 1.70 0.07
K.T. Concord Sub-Fund QP L.P............ 150,000 10/12/99 144,830 255,298 1.70 0.21
Telesoft Partners Ltd................... 125,000 07/22/97 106,825 426,570 3.41 0.36
Telesoft Partners Ltd................... 125,000 02/05/98 106,825 426,570 3.41 0.36
Telesoft Partners Ltd................... 125,000 06/02/98 114,748 426,570 3.41 0.36
Telesoft Partners Ltd................... 125,000 05/17/99 114,748 426,569 3.41 0.36
Telesoft Partners Ltd................... 250,000 10/20/99 239,629 853,139 3.41 0.71
Venworld Telecommunications............. 125,947 05/18/95 2,531,383 1,204,531 9.56 1.01
</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 objective.
The Board's actions were taken in light of the significant discounts at which
the Fund's shares were trading. It is intended both to provide additional
liquidity to those shareholders that elect to sell their shares and to enhance
the net asset value of the shares held by those shareholders that maintain their
investment. The repurchase program will be subject to review by the Board of
Directors of the Fund. From October 21, 1998 to May 31, 1999, the Fund
repurchased 677,100 of its shares for a total cost of
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19
<PAGE>
$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%. For the six
months ended November 30, 1999, the Fund repurchased 477,900 of its shares for a
total cost of $5,295,473 at a weighted average discount of 20.35% from net asset
value. The discount of individual repurchases ranged from 16.01% - 23.09%.
RESULTS OF ANNUAL MEETING OF SHAREHOLDERS (UNAUDITED)
On October 7, 1999, 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 two directors to the Board of Directors of the Fund.
<TABLE>
NAME OF DIRECTOR FOR WITHHELD NON-VOTES
- ------------------------------ --------- ------- ---------
<S> <C> <C> <C>
George W. Landau 5,344,686 276,063 1,820,170
Richard W. Watt 5,361,330 259,419 1,820,170
</TABLE>
In addition to the directors re-elected at the meeting, Dr. Enrique R. Arzac,
James J. Cattano, Peter A. Gordon, William W. Priest, Jr. and Martin M. Torino
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, 2000.
<TABLE>
FOR AGAINST ABSTAIN NON-VOTES
--------- ------ ------ ---------
<S> <C> <C> <C>
5,520,394 49,313 51,042 1,820,170
</TABLE>
(3) To consider a shareholder proposal to terminate the investment advisory
agreement with Credit Suisse Asset Management, LLC within sixty days, with a
recommendation that the Board give heavy weight to a commitment to realize
net asset value for shareholders when selecting a new advisor.
<TABLE>
FOR AGAINST ABSTAIN NON-VOTES
--------- --------- ------- ---------
<S> <C> <C> <C>
1,117,709 4,378,203 124,837 1,820,170
</TABLE>
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20
<PAGE>
DESCRIPTION OF INVESTLINK-SM-* PROGRAM
The InvestLink-SM- 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-SM- 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
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21
<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
- --------------------------------------------------------------------------------
22
<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-SM- Program, P.O. Box 8040, Boston, MA 02266-8040.
- --------------
*InvestLink is a service mark of Boston EquiServe Limited Partnership.
- --------------------------------------------------------------------------------
23
<PAGE>
RECENT DEVELOPMENTS (UNAUDITED)
Recently, the Securities and Exchange Commission (the "SEC") amended
Rule 14a-4(c) under the Securities Exchange Act of 1934, as amended (the "1934
Act") which governs the Fund's use of discretionary proxy voting authority with
respect to shareholder proposals that are not being included in the Fund's proxy
solicitation material pursuant to Rule 14a-8 of the 1934 Act. In light of these
amendments, the Fund's Board of Directors reviewed the By-laws of the Fund and
made the following material changes: 1) the percentage of ownership needed for
stockholders to request a special meeting has been increased from 25% to a
majority of the outstanding capital stock of the Fund entitled to vote at such
meeting; 2) the advance notice requirements applicable to stockholder proposals
at annual meetings and for nominations by stockholders for election to the Board
of Directors have been revised to reflect changes in Rule 14a-4(c); 3) the
Board's ultimate authority concerning reimbursement of expenses in soliciting
proxies for the election of Directors has been clarified; and 4) the power to
amend the By-laws is reserved to the Board of Directors. The Fund's By-laws are
on file with the SEC and are accessible through the SEC web site (www.sec.gov)
or may be obtained from the Secretary of the Fund upon request.
- --------------------------------------------------------------------------------
24
<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, LLC ("CSAM"). 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 December 31, 1999, CSAM-Americas managed
approximately $72.0 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
Emily Alejos Investment Officer
Yarek Aranowicz 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
Robert M. Rizza Treasurer
INVESTMENT ADVISER
Credit Suisse Asset Management, LLC
One Citicorp Center
153 East 53rd Street
New York, NY 10022
ADMINISTRATOR
Bear Stearns Funds Management Inc.
575 Lexington Avenue
New York, NY 10022
CUSTODIAN
Brown Brothers Harriman & Co.
40 Water Street
Boston, MA 02109
SHAREHOLDER SERVICING AGENT
BankBoston, N.A.
P.O. Box 1865
Mail Stop 45-02-62
Boston, MA 02105-1865
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
2400 Eleven Penn Center
Philadelphia, PA 19103
LEGAL COUNSEL
Willkie Farr & Gallagher
787 Seventh Avenue
New York, NY 10019-6099
This report, including the financial statements herein, is sent
to the shareholders of the Fund for their information. The
financial information included herein is taken from the records
of the Fund without examination by independent accountants who
do not express an opinion thereon. It is not a prospectus,
circular or representation intended for use in the purchase or
sale of shares of the Fund or of any securities mentioned in
this report.
[LOGO]
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3916-SAR-11/99
