[LOGO]
Scudder
Global High
Income Fund, Inc.
Semiannual Report
April 30, 2000
A non-diversified closed-end investment company seeking high current income as
its primary objective and capital appreciation as a secondary objective through
investment principally in global income securities.
<PAGE>
Scudder Global High
Income Fund, Inc.
================================================================================
Investment objectives and policies
o seeking high current income as its primary objective and capital
appreciation as its secondary objective through investment principally
in global income securities
Investment characteristics
o a non-diversified closed-end investment company investing principally
in a portfolio of global income securities and, to a limited extent,
emerging country equity securities
o a vehicle for international investment through participation in the
economies of both developed and developing countries throughout the
world
General Information
================================================================================
Executive offices
Scudder Global High Income Fund, Inc.
345 Park Avenue
New York, NY 10154
For fund information: 1-800-349-4281
Transfer Agent, Registrar and Dividend
Reinvestment Plan Agent
For account information: 1-800-426-5523
EquiServe
Investor Relations Department
P.O. Box 8200
Boston, MA 02266-8200
Custodian
Brown Brothers Harriman & Co.
Legal Counsel
Willkie Farr & Gallagher
Independent Accountants
PricewaterhouseCoopers LLP
New York Stock Exchange Symbol -- LBF
Contents
================================================================================
In Brief .................................................. 3
Letter to Shareholders .................................... 4
Investment Summary ........................................ 7
Portfolio Summary ......................................... 8
Investment Portfolio ...................................... 9
Financial Statements ...................................... 13
Financial Highlights ...................................... 17
Notes to Financial Statements ............................. 18
Report of Independent Accountants ......................... 21
Dividend Reinvestment and
Cash Purchase Plan ..................................... 22
Investment Manager ........................................ 24
Directors and Officers .................................... 24
Net Asset Value
The fund's net asset value is listed in the following publications:
The Wall Street Journal (Mondays)
The New York Times
Barron's
The Financial Times
--------------------------------------------------------------------------------
This report is sent to the shareholders of Scudder Global High Income Fund, Inc.
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 the report.
--------------------------------------------------------------------------------
2
<PAGE>
Scudder Global High Income Fund, Inc.
In Brief
================================================================================
o Scudder Global High Income Fund's return based on net asset value for
the six-month period ended April 30, 2000, was 12.71%. The focus of the
fund continued to be on credit quality -- investing in those countries
that have improving fundamentals warranting credit upgrades. The J.P.
Morgan Emerging Markets Bond Global Constrained Index returned 9.16%
during the same period. The fund's return based on its market price was
6.44%.
o The global economic cycle appears to be gaining momentum and emerging
market fundamentals have continued to improve, highlighted by numerous
credit upgrades from the ratings agencies during the first quarter.
o The fund benefited from its increased position in Latin America. We
added to Brazil and Argentina, two countries continuing to gain ground
on economic reform.
Letter to Shareholders
================================================================================
Dear Shareholders,
During the six-month period ended April 30, 2000, credit fundamentals continued
to improve as economies gained strength around the world. Even Asia, which was
in economic turmoil not too long ago, has recovered to the point that many of
its debt securities now fairly reflect the momentum of these economies. At the
same time, Mexico, South Africa, and Turkey, among others, have received credit
upgrades from major bond-rating agencies. These improving fundamentals are
reflected in the stronger performance of the emerging market debt asset class.
However, volatility from developed country equity markets and concerns over
rising inflation in the United States continue to create some risk for emerging
market debt.
Over its most recent six-month period ended April 30, 2000, the fund posted a
12.71% total return based on net asset value. The focus of the fund continues to
be on credit quality -- investing in those countries that have improving
fundamentals warranting credit upgrades. This strategy guided the fund as we
shifted assets out of Asia and into Latin America, which had begun exhibiting
signs of economic growth, fiscal reform, and strengthening currencies. The J.P.
Morgan Emerging Markets Bond Global Constrained Index returned 9.16% during the
same period. The fund ended the period with a net asset value ("NAV") of $6.11,
up from $5.77 on October 31, 1999. During the period, the fund paid $0.30 per
share in income distributions.
Over the six months ended April 30, 2000, the fund's share price on the New York
Stock Exchange remained at $4.75 for a total return based on market price of
6.44%. The $4.75 price of the shares on April 30, 2000, represented a 22.30%
discount to the fund's NAV.
A Supportive Market
The market has been quite supportive for emerging markets. The global economic
cycle appears to be gaining momentum and emerging market fundamentals have
continued to improve throughout the period, highlighted by the numerous credit
upgrades from the ratings agencies during the first quarter. Mexico, for
example, received an investment-grade rating from Moody's in March. South Africa
was also upgraded to investment grade by Standard & Poor's (S&P). In Asia, both
South Korea and Malaysia received a one notch upgrade from S&P to BBB late last
year. In Europe, Turkey also received a one-notch upgrade from S&P. These
improving fundamentals have been reflected in the performance
3
<PAGE>
Scudder Global High Income Fund, Inc.
Letter to Shareholders
================================================================================
of the asset class as well. Contrary to the corporate debt markets in the United
States, emerging market debt has been one of the best-performing fixed-income
asset classes this year. However, the external markets continue to create the
greatest risks to emerging markets. Volatility from developed equity markets as
well as inflation fears out of the United States are having the greatest
negative influence on emerging market spreads. And with the weakness in the U.S.
corporate and high yield markets, demand from investors outside of emerging
markets has slowed as these "crossover" investors have found value within their
own markets. But despite the corrections in the Dow Jones Industrial Average and
Nasdaq Composite Index, the tightening cycle of the U.S. Federal Reserve Board
(the Fed), and the significant dislocations in the U.S. high-grade corporate
market, emerging market debt has performed quite well.
For emerging market countries, the end of 1999 provided signs of a strong
economic recovery. Rising commodity prices (particularly oil), fading concerns
regarding the Y2K effects, and improving fundamentals all provided support for
emerging market bonds. The global backdrop was also favorable as the Fed began
injecting liquidity into the financial markets in an attempt to increase
investor confidence as the Y2K rollover approached. Investors' appetite for risk
returned to global asset markets as the Nasdaq soared to new highs and emerging
market debt spreads continued to rally. The world began to exhibit signs of
balanced growth, with Europe demonstrating sustainable growth with low
inflation, Japan showing signs of a recovery, while the Fed was set to slow U.S.
growth.
After the new year, governments attempted to capitalize on the positive momentum
in emerging markets through active debt management. Debt buybacks and exchanges
provided a positive backdrop for the market as did the numerous credit upgrades
throughout the emerging market investment universe. However, as the United
States continued to exhibit strong growth, concerns over inflation began to
impact credit markets. U.S. credit markets began to weaken, the U.S. Treasury
curve began to invert, with yields on shorter-term debt exceeding those of
longer-term debt (partly due to the announcement of buybacks). It soon became
clear that the appetite for credit was falling and risk aversion was returning
to credit markets. As the volatility of developed equity markets increased, the
results began to impact emerging market debt.
Overview of Latin America
On a relative value basis, Latin America offered attractive valuations whereas
Asian bonds fairly reflected the economic momentum they had regained since the
Asian financial crisis. As a result, we did not feel Asian bonds offered as much
upside potential as Latin America. We added to Brazil and Argentina, two
countries continuing to make significant ground on economic reform. In addition,
Brazil continued to demonstrate its renewed focus on growth as well as its
commitment to fight inflation, while Argentina was benefiting from reduced
political uncertainty and improving fundamentals. The fund's largest position
during the period was in Mexico. Mexico enjoys the benefits of a strong U.S.
economy and continues to demonstrate prudent debt management.
Outlook for Europe, Russia
In Europe, the fund maintained its exposure to Turkey, where the government has
made significant progress in reducing inflation while achieving outstanding
results on its privatization program. Also, local banks are flush with
liquidity, creating significant demand for the external debt.
The fund also increased its exposure to Russia as we became more comfortable
with the political climate. More important, economic performance continues to
improve, leading to rising reserve levels. The credit outlook also continues to
improve and there are signs that the government is serious about undertaking
deep
4
<PAGE>
Scudder Global High Income Fund, Inc.
Letter to Shareholders
================================================================================
structural and economic reform. As it became more evident that Putin would gain
a first-round victory in the March presidential elections, investors' confidence
and comfort with the political situation continued to grow. Capital flight has
begun to slow and the general economic indicators have started to improve.
Foreign exchange reserves have begun to accumulate and continue to do so. And
London Club negotiations regarding the debt of the former Soviet Union, which
had been stalled in the run-up to parliamentary elections in December, have
picked up with the possibility of the deal closing by the end of the second
quarter or early in the third quarter.
Over the near term, therefore, our outlook for Russia remains positive.
International reserves should continue to grow and it appears that Russia will
be able to finance its debt service payments for the rest of 2000 without
lending from the International Monetary Fund (IMF) or other multilateral
organizations. We would expect to see significant structural reforms going
forward -- reforms that are crucial in putting the economy on the path to
sustainable growth. We also expect to see tangible investment taking place
coupled with real wage growth. And once the London Club deal closes, we expect
President Putin to announce a reform-minded medium-term economic program as well
as start serious discussions with the IMF regarding a new adjustment program.
Other Emerging Markets
Elsewhere, as emerging market fundamentals continue to improve, governments are
attempting to capitalize on this trend through passage of important structural
adjustments. For example, in Latin America, the Argentine Senate has approved
the Labor Reform Bill which attempts to streamline the government workforce
through easing the hiring/firing of workers and the reduction of union power. In
Brazil, the government approved the Fiscal Responsibility Law which emphasizes
fiscal prudence through limiting spending, indebtedness, and financing. And in
Mexico, the Lower House passed the Bankruptcy Law which will help to simplify
and shorten the bankruptcy process. In Eastern Europe, Turkey continues to make
significant progress on its privatization front and should easily surpass the
year-end IMF target of $7.6 billion in proceeds. And in Asia, significant
progress surrounding the restructuring and recapitalization of the financial
sector continues.
Asia is the one region that the fund has not been involved with recently. This
is more a reflection of relative value than fundamentals. Since the Asian
financial crisis, most of the Asian economies have regained their economic
momentum. The economic recovery has caused Asian bond spreads to tighten,
pushing prices to the point where we felt the bonds had become overvalued. Given
the expected economic improvements elsewhere within the emerging markets
universe, we felt that we could find more attractive investments outside of
Asia. In Latin America, progress continues to be slow regarding Ecuador's
restructuring negotiations with the Paris Club and bondholders. Given the
weakness of the banking sector and the dim prospects for an economic recovery
under the dollarization plan, risks remain too high to warrant exposure in the
fund.
Looking Ahead
While risks remain, we expect emerging market fundamentals to continue to
improve. While the fundamentals warrant tighter spread levels, external markets
and technical factors will continue to impact emerging market debt. U.S.
interest rate policy has kept asset markets on edge as investors attempt to
discern whether the Fed has been active enough in its fight against inflation.
This has increased market volatility in developed countries as well as
dislocations in the U.S. credit markets -- both of which have yet to demonstrate
signs of stabilizing. Taking all these factors into account, the strategy of the
fund has become more conservative. Our focus remains on higher credit
5
<PAGE>
Scudder Global High Income Fund, Inc.
Letter to Shareholders
================================================================================
quality, countries with greater liquidity and low refinancing requirements. The
fund continues to search for opportunities within the emerging market universe
and remains poised to take advantage of the strong fundamentals in emerging
markets once the external markets stabilize.
We are pleased that you are an investor in Scudder Global High Income Fund. We
would be happy to receive any questions or comments. You can reach us at
1-800-349-4281.
Respectfully,
/s/Juris Padegs
Juris Padegs
President and
Chairman of the Board
6
<PAGE>
Scudder Global High Income Fund, Inc.
Investment Summary as of April 30, 2000
================================================================================
Historical
Information
Life of Fund
<TABLE>
<CAPTION>
Total Return (%)
----------------------------------------------------------------------------
Market Value Net Asset Value (a) Index (b)
--------------------- --------------------- -----------------------
Average Average Average
Cumulative Annual Cumulative Annual Cumulative Annual
--------------------- --------------------- -----------------------
<S> <C> <C> <C> <C> <C> <C>
Quarter 4.51 -- 6.09 -- 7.70 --
One Year (4.67) (4.67) 14.39 14.39 18.49 18.49
Three Year (46.51) (18.82) (36.84) (14.20) 24.07 7.45
Five Year (11.22) (2.35) 25.99 4.73 130.96 18.20
Life of Fund* (4.14) (0.54) 33.73 3.82 158.17 13.01
</TABLE>
--------------------------------------------------------------------------------
Per Share Information and Returns
THE PRINTED DOCUMENT CONTAINS A BAR CHART HERE
ILLUSTRATING THE FUND TOTAL RETURN
CHART DATA:
Yearly periods ended April 30
1993* 8.27
1994 6.06
1995 -7.56
1996 40.65
1997 41.83
1998 11.20
1999 -50.35
2000 14.39
<TABLE>
<CAPTION>
1993* 1994 1995 1996 1997 1998 1999 2000
-----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value .... $14.05 $13.21 $10.65 $13.26 $16.07 $13.96 $ 6.02 $ 6.11
Income Dividends ... $ .87 $ 1.53 $ 1.53 $ 1.50 $ 1.50 $ 1.50 $ 1.05 $ .30
Capital Gains
Distributions ...... $ .08 $ .34 $ .15 $ -- $ .80 $ 2.12 $ -- $ --
Total Return (%) (a) 8.27 6.06 -7.56 40.65 41.83 11.20 -50.35 14.39
</TABLE>
(a) Total investment returns reflect changes in net asset value per share
during each period and assume that dividends and capital gains
distributions, if any, were reinvested. These percentages are not an
indication of the performance of a shareholder's investment in the Fund
based on market price.
(b) The unmanaged J.P. Morgan Emerging Markets Bond Index Plus (EMBI+)
tracks total returns for traded external debt instruments in the
emerging markets. Included in the index are U.S. dollar- and other
external-currency-denominated Brady bonds, loans, Eurobonds, and local
market instruments. The EMBI+ Index began on December 31, 1993. Prior
index returns are based on the J.P. Morgan Emerging Markets Bond Index
(EMBI). Index returns assume reinvested dividends, and unlike Fund
returns, do not reflect any fees or expenses.
* The Fund commenced operations on July 31, 1992.
On November 14, 1997, the Fund adopted its current name and investment
policies. Prior to that date the Fund was known as The Latin America
Dollar Income Fund, Inc. and its investment objective was to provide
income and appreciation through investment in U.S. dollar denominated
Latin American debt instruments. Performance prior to November 14, 1997
should not be considered representative of the present Fund. Since
adopting its current objective, the cumulative return is -35.80%.
Past results are not necessarily indicative of future performance of
the Fund.
7
<PAGE>
Scudder Global High Income Fund, Inc.
Portfolio Summary as of April 30, 2000
================================================================================
Investment Allocation (Excludes 1% Cash Equivalents)
A GRAPH IN THE FORM OF A PIE CHART APPEARS HERE, ILLUSTRATING THE EXACT DATA
POINTS IN THE TABLE BELOW.
Sovereign Bonds (1) 99%
Equity Securities 1%
----
100%
====
(1) Includes 45% investments in Brady Bonds
--------------------------------------------------------------------------------
Interest Rate Sensitivity (Excludes 1% Cash Equivalents)
A GRAPH IN THE FORM OF A PIE CHART APPEARS HERE, ILLUSTRATING THE EXACT DATA
POINTS IN THE TABLE BELOW.
Fixed Rate Bonds 62%
Floating Rate Bonds 47%
Equity 1%
----
100%
====
--------------------------------------------------------------------------------
Geographical (Excludes 1% Cash Equivalents)
A GRAPH IN THE FORM OF A PIE CHART APPEARS HERE, ILLUSTRATING THE EXACT DATA
POINTS IN THE TABLE BELOW.
Mexico 20%
Brazil 18%
Argentina 16%
Russia 12%
Venezuela 6%
Bulgaria 4%
Turkey 4%
Philippines 4%
Colombia 3%
Other 13%
----
100%
====
8
<PAGE>
Scudder Global High Income Fund, Inc.
Investment Portfolio as of April 30, 2000
<TABLE>
<CAPTION>
===================================================================================================================
Principal
Amount ($) Value ($)
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Repurchase Agreements 1.2%
Donaldson, Lufkin & Jenrette, 5.68%, to be repurchased at $764,362 on 5/1/2000**
(Cost $764,000) ....................................................................... 764,000 764,000
----------
-------------------------------------------------------------------------------------------------------------------
Bonds -- 97.9%
Argentina 15.9%
Argentine Republic, 11%, 12/4/2005 ...................................................... 1,090,000 1,065,474
Argentine Republic, 11.75%, 4/7/2009 (b) ................................................ 1,100,000 1,079,375
Argentine Republic, 12.125%, 2/25/2019 .................................................. 675,000 668,250
Argentine Republic, 12%, 2/1/2020 ....................................................... 1,720,000 1,701,080
Argentine Republic, Collateralized Discount Floating Rate Bond, Series L, LIBOR
plus .8125% (6.875%), 3/31/2023 ....................................................... 2,700,000 2,295,000
Argentine Republic, Collateralized Par Bond, Series L, Step-up Coupon, 6%, 3/31/2023 .... 1,095,000 765,130
Argentine Republic, Floating Rate Bond, Series L, LIBOR plus .8125% (7.375%),
3/31/2005 ............................................................................. 3,156,000 2,939,024
----------
10,513,333
----------
Brazil 17.1%
Federative Republic of Brazil, 11.625%, 4/15/2004 ....................................... 2,830,000 2,810,190
Federative Republic of Brazil, 9.375%, 4/7/2008 (b) ..................................... 905,000 751,150
Federative Republic of Brazil, 12.75%, 1/15/2020 ........................................ 435,000 416,948
Federative Republic of Brazil C Bond, 8%, 4/15/2014 ..................................... 2,351,992 1,687,554
Federative Republic of Brazil, Collateralized Discount Bond, Floating Rate Bond, LIBOR
plus .8125% (7.375%), 4/15/2024 ....................................................... 1,160,000 896,100
Federative Republic of Brazil, Debt Conversion Bond, Floating Rate Bond, Series L, LIBOR
plus .875% (7.438%), 4/15/2012 ........................................................ 1,710,000 1,233,338
Federative Republic of Brazil, Eligible Interest, Floating Rate Bond, LIBOR plus .8125%
(7.375%), 4/15/2006 (b) ............................................................... 3,436,350 3,066,942
Federative Republic of Brazil, "New" Money Bond, Floating Rate Bond, LIBOR plus
.875% (7.438%), 4/15/2009 ............................................................. 540,000 446,850
----------
11,309,072
----------
Bulgaria 4.1%
Republic of Bulgaria, Collateralized Discount Bond, Series A, LIBOR plus .8125% (7.063%),
7/28/2024 ............................................................................. 375,000 285,937
Republic of Bulgaria, Collateralized Floating Rate Interest Reduction Bond, Series A,
Step-up Coupon, 2.75%, 7/28/2012 ...................................................... 410,000 284,950
Republic of Bulgaria, Interest Arrears Bond, LIBOR plus .8125% (7.063%), 7/28/2011 ...... 2,875,000 2,170,625
----------
2,741,512
----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
9
<PAGE>
Scudder Global High Income Fund, Inc.
Investment Portfolio
<TABLE>
<CAPTION>
===============================================================================================================
Principal
Amount ($) Value ($)
---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Colombia 3.3%
Republic of Colombia, 7.625%, 2/15/2007 ............................................ 1,305,000 952,650
Republic of Colombia, 8.625%, 4/1/2008 ............................................. 130,000 96,850
Republic of Colombia, 9.75%, 4/23/2009 ............................................. 340,000 268,600
Republic of Colombia, 8.375%, 2/15/2027 (b) ........................................ 1,325,000 834,750
----------
2,152,850
----------
Jamaica 1.6%
Government of Jamaica, 10.875%, 6/10/2005 .......................................... 1,095,000 1,078,575
----------
Mexico 19.4%
Banco Nacional de Comercio Exterior S.N.C., 7.25%, 2/2/2004 ........................ 955,000 910,831
Petroleos Mexicanos S.A., 9.5%, 9/15/2027 .......................................... 3,485,000 3,397,875
United Mexican States, 11.5%, 5/15/2026 ............................................ 190,000 223,963
United Mexican States, Collateralized Par Bond, Series A, 6.25%, 12/31/2019 ........ 2,230,000 1,831,388
United Mexican States, Collateralized Par Bond, (Detachable Oil Priced Indexed Value
Recovery Rights), Series B, 6.25%, 12/31/2019 .................................... 1,260,000 1,034,775
United Mexican States, Floating Rate Discount Note (Detachable Oil Priced Indexed
Value Recovery Rights), Series B, LIBOR plus .8125% (6.943%), 12/31/2019 ......... 750,000 734,063
United Mexican States, Floating Rate Discount Bond (Detachable Oil Priced Indexed
Value Recovery Rights), Series D, LIBOR plus .8125% (6.902%), 12/31/2019 ......... 4,045,000 3,959,044
United Mexican States Global Bond, 11.375%, 9/15/2016 .............................. 670,000 757,938
----------
12,849,877
----------
Morocco 2.4%
Kingdom of Morocco, Restructuring and Consolidation Agreement, Tranche A, Floating
Rate Bond, LIBOR plus .8125% (6.844%), 1/1/2009 .................................. 1,770,000 1,575,300
----------
Panama 2.6%
Republic of Panama, 7.875%, 2/13/2002 .............................................. 450,000 442,125
Republic of Panama, Interest Reduction Bond, Step-up Coupon, 4.25%, 7/17/2014 ...... 535,000 421,313
Republic of Panama, Past Due Interest Bond, LIBOR plus .8125% (7.063%), 7/17/2016 .. 1,025,885 825,837
----------
1,689,275
----------
Peru 1.6%
Republic of Peru, Floating Rate Interest Reduction Bond, Step-up Coupon, 3.75%,
3/7/2017 ......................................................................... 1,087,000 661,711
Republic of Peru, Past Due Interest Bond, Step-up Coupon, 4.5%, 3/7/2017 ........... 660,000 441,375
----------
1,103,086
----------
Philippines 3.5%
Republic of the Philippines, 8.875%, 4/15/2008 ..................................... 375,000 344,063
Republic of the Philippines, 10.625%, 3/16/2025 .................................... 2,120,000 1,961,000
----------
2,305,063
----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
10
<PAGE>
Scudder Global High Income Fund, Inc.
Investment Portfolio
<TABLE>
<CAPTION>
=================================================================================================================
Principal
Amount ($) Value ($)
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Russia 12.3%
City of Moscow, 9.5%, 5/31/2000 ........................................................ 1,400,000 1,386,000
Russian Federation, 9.25%, 11/27/2001 .................................................. 1,305,000 1,220,175
Russian Federation, 11.75%, 6/10/2003 .................................................. 1,605,000 1,420,425
Russian Federation, 10%, 6/26/2007 ..................................................... 4,455,000 3,185,325
Russian Federation, 11%, 7/24/2018 (b) ................................................. 555,000 396,825
Russian Federation, Step-up Coupon, 2.25%, 3/31/2030* (c) .............................. 1,500,000 506,250
----------
8,115,000
----------
Slovak Republic 1.5%
Slovak Republic, 9.5%, 5/28/2003 ....................................................... 965,000 978,269
----------
South Africa 3.0%
Republic of South Africa, 8.375%, 10/17/2006 ........................................... 610,000 572,638
Republic of South Africa, 9.125%, 5/19/2009 .......................................... 1,010,000 972,125
Republic of South Africa, 8.5%, 6/23/2017 .............................................. 515,000 450,007
----------
1,994,770
----------
Turkey 4.0%
Republic of Turkey, 11.875%, 11/5/2004 ................................................. 1,675,000 1,746,188
Republic of Turkey, 12%, 12/15/2008 .................................................... 490,000 523,075
Republic of Turkey, 12.375%, 6/15/2009 ................................................. 337,000 363,539
----------
2,632,802
----------
Venezuela 5.6%
Republic of Venezuela, Debt Conversion, Floating Rate Bond, Series DL, LIBOR plus .875%
(7%), 12/18/2007 ..................................................................... 3,238,088 2,533,804
Republic of Venezuela, Floating Rate Interest Reduction Bond, Series A, LIBOR plus .875%
(7.437%), 3/31/2007 .................................................................. 1,499,987 1,162,490
----------
3,696,294
----------
Total Bonds (Cost $63,535,206) ......................................................... 64,735,078
----------
-----------------------------------------------------------------------------------------------------------------
Shares
----------
Common Stocks -- 0.9%
Brazil 0.3%
Tele Celular Sul Participacoes S.A. (pfd.) (ADR) (Provider of cellular telecommunication
services) ............................................................................ 1,000 38,625
Tele Centro Oeste Celular Participacoes S.A. (pfd.) (ADR) (Provider of cellular
telecommunication services) .......................................................... 5,000 57,500
</TABLE>
The accompanying notes are an integral part of the financial statements.
11
<PAGE>
Scudder Global High Income Fund, Inc.
Investment Portfolio
<TABLE>
<CAPTION>
================================================================================================================
Shares Value ($)
----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Tele Norte Leste Participacoes S.A. (ADR) (Provider of local telecommunication services) 5,585 99,483
Telesp Celular Participacoes S.A. (pfd.) (ADR) (Provider of cellular telecommunication
services) ............................................................................ 1,000 44,125
----------
239,733
----------
Mexico 0.6%
Apasco, S.A. de C.V. (Cement producer) ................................................. 11,000 66,737
Coca-Cola Femsa S.A. "L" (ADR) (Bottler and distributor of soft drinks) ................ 7,000 129,938
Fomento Economico Mexicano, S.A. de C.V. (ADR) (Producer of beer, soft drinks and
mineral water) ....................................................................... 1,500 61,874
Grupo Carso, S.A. de C.V. "A1" (Diversified industrial group) .......................... 9,000 30,654
Telefonos de Mexico S.A. "L" (ADR) (Provider of telecommunication services) ............ 1,500 88,219
----------
377,422
----------
Total Common Stocks (Cost $660,068) .................................................... 617,155
----------
----------------------------------------------------------------------------------------------------------------
Total Investment Portfolio -- 100.0% (Cost $64,959,274) (a) ............................. 66,116,233
==========
----------------------------------------------------------------------------------------------------------------
</TABLE>
* Non-income producing security.
** Repurchase agreements are fully collateralized by U.S. Treasury or
Government agency securities.
(a) The cost of the investment portfolio for federal income tax purposes
was $65,221,165. At April 30, 2000, net unrealized appreciation for all
securities based on tax cost was $895,068. This consisted of aggregate
gross unrealized appreciation for all securities in which there was an
excess of market value over tax cost of $2,009,492 and aggregate gross
unrealized depreciation for all securities in which there was an excess
of tax cost over market value of $1,114,424.
(b) At April 30, 2000 these securities, in whole or in part, are subject to
repurchase under reverse repurchase agreements.
(c) When-issued or forward delivery securities.
The accompanying notes are an integral part of the financial statements.
12
<PAGE>
Scudder Global High Income Fund, Inc.
Financial Statements
<TABLE>
<CAPTION>
=========================================================================================
-----------------------------------------------------------------------------------------
Statement of Assets and Liabilities
as of April 30, 2000
-----------------------------------------------------------------------------------------
ASSETS
<S> <C>
Investments in securities, at value (cost $64,959,274) ................. $ 66,116,233
Dividends receivable ................................................... 4,143
Interest receivable .................................................... 1,555,668
Receivable for investments sold ........................................ 716,256
Other assets ........................................................... 52
-----------
Total assets ........................................................... 68,392,352
LIABILITIES
Due to custodian bank .................................................. 1,432,429
Reverse repurchase agreements .......................................... 4,728,187
Payable for investments purchased ...................................... 975,977
Payable for when-issued and forward delivery securities ................ 581,250
Interest payable for reverse repurchase agreements ..................... 20,089
Accrued management fee ................................................. 71,636
Other accrued expenses and payables .................................... 74,684
-----------
Total liabilities ...................................................... 7,884,252
-----------
Net assets, at value ................................................... $ 60,508,100
=============
NET ASSETS
Net assets consist of:
Accumulated distributions in excess of net investment income ........... (826,117)
Net unrealized appreciation (depreciation) on investments .............. 1,156,959
Accumulated net realized gain (loss) ................................... (71,177,514)
Paid-in capital ........................................................ 131,354,772
-----------
Net assets, at market value ............................................ $ 60,508,100
=============
Net asset value per share ($60,508,100B 9,898,627 shares of common stock
outstanding, $.01 par value, 100,000,000 shares authorized) ......... $6.11
=====
</TABLE>
The accompanying notes are an integral part of the financial statements.
--------------------------------------------------------------------------------
13
<PAGE>
Scudder Global High Income Fund, Inc.
Financial Statements
================================================================================
--------------------------------------------------------------------------------
Statement of Operations
Six Months Ended April 30, 2000
--------------------------------------------------------------------------------
Investment Income
Income:
Dividends ..................................................... $ 5,072
Interest ...................................................... 3,781,657
-----------
Total income .................................................. 3,786,729
Expenses:
Management fee ................................................ 363,542
Services to shareholders ...................................... 13,863
Custodian and accounting fees ................................. 76,337
Auditing ...................................................... 38,538
Legal ......................................................... 3,926
Directors' fees and expenses .................................. 26,469
Reports to shareholders ....................................... 22,297
Interest expense .............................................. 178,764
Other ......................................................... 15,798
-----------
739,534
-----------
Net investment income (loss) .................................. 3,047,195
-----------
Realized and unrealized gain (loss) on investment transactions
Net realized gain (loss) from:
Investments ................................................... 3,851,024
Foreign currency related transactions ......................... (183)
-----------
3,850,841
-----------
Net unrealized appreciation (depreciation) on:
Investments ................................................... (512,817)
-----------
Net gain (loss) on investment transactions .................... 3,338,024
-----------
Net increase (decrease) in net assets resulting from operations $ 6,385,219
===========
The accompanying notes are an integral part of the financial statements.
--------------------------------------------------------------------------------
14
<PAGE>
Scudder Global High Income Fund, Inc.
Financial Statements
<TABLE>
<CAPTION>
======================================================================================================
------------------------------------------------------------------------------------------------------
Statements of Changes in Net Assets
------------------------------------------------------------------------------------------------------
Six Months Year Ended
Ended October 31,
Increase (Decrease) in Net Assets April 30, 2000 1999
------------------------------------------------------------------------------------------------------
<S> <C> <C>
Operations:
Net investment income (loss) ........................................ $ 3,047,195 $ 5,032,566
Net realized gain (loss) from investment transactions ............... 3,850,841 (6,486,272)
Net unrealized appreciation (depreciation) on investment transactions
during the period ................................................ (512,817) 10,530,466
------------ ------------
Net increase (decrease) in net assets resulting from operations ..... 6,385,219 9,076,760
------------ ------------
Distributions to shareholders from:
Net investment income ............................................... (2,964,257) (5,900,443)
------------ ------------
Reinvestment of distributions ...................................... 192,080 265,247
------------ ------------
Increase (decrease) in net assets ................................... 3,613,042 3,441,564
Net assets at beginning of period ................................... 56,895,058 53,453,494
------------ ------------
Net assets at end of period (including accumulated distributions in
excess of net investment income of $826,117 and $909,055,
respectively) .................................................... $ 60,508,100 $ 56,895,058
============ ============
Other Information
Shares outstanding at beginning of period ........................... 9,858,276 9,807,807
Shares issued to shareholders in reinvestment of distributions ...... 40,351 50,469
------------ ------------
Shares outstanding at end of period ................................. 9,898,627 9,858,276
============ ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
--------------------------------------------------------------------------------
15
<PAGE>
Scudder Global High Income Fund, Inc.
Financial Statements
<TABLE>
<CAPTION>
==================================================================================================
--------------------------------------------------------------------------------------------------
Statement of Cash Flows
Six Months Ended April 30, 2000
--------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------
<S> <C>
Cash flows from operating activities:
Investment income received ..................................................... $ 2,993,532
Payment of expenses ............................................................ (754,128)
Proceeds from sales and maturities of investments .............................. 95,210,274
Purchases of investments ....................................................... (101,471,619)
Net maturities of short-term investments ....................................... 2,071,000
-------------
Cash used for operating activities ............................................. (1,950,941)
-------------
Cash flows from financing activities:
Net increase (decrease) in reverse repurchase agreements ....................... 4,728,187
Distributions paid (net of reinvestment of dividends) .......................... (4,250,918)
Cash provided by borrowings from custodian ..................................... 1,432,429
-------------
Cash provided by financing activities .......................................... 1,909,698
-------------
Increase (decrease) in cash .................................................... (41,243)
Cash at beginning of period .................................................... 41,243
-------------
Cash at end of period .......................................................... $ 0
=============
Reconciliation of net increase (decrease) in net assets from operations to cash
provided by operating activities:
Net increase (decrease) in net assets resulting from operations ................ 6,385,219
Net (increase) decrease in cost of investments ................................. (8,331,752)
Net (increase) decrease in unrealized appreciation (depreciation) on investments 512,817
(Increase) decrease in interest receivable ..................................... (122,976)
(Increase) decrease in receivable for investments sold ......................... 5,540,070
(Increase) decrease in other assets ............................................ 2,460
Increase (decrease) in payable for investments purchased ....................... (5,878,583)
Increase (decrease) in accrued expenses ........................................ (78,285)
Increase (decrease) in interest payable ........................................ 20,089
-------------
Cash used for operating activities ............................................. $ (1,950,941)
=============
</TABLE>
The accompanying notes are an integral part of the financial statements.
--------------------------------------------------------------------------------
16
<PAGE>
Scudder Global High Income Fund, Inc.
Financial Highlights
================================================================================
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
The following table includes selected data for a share outstanding throughout
each period and other performance information derived from the financial
statements and market price data.
----------------------------------------------------------------------------------------------------------------------
Six Months
Ended Years Ended October 31,
April 30, -------------------------------------------------------
2000 1999 1998 1997 1996 1995
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Per Share Operating Performance
Net asset value, beginning of period ........ $ 5.77 $ 5.45 $ 13.11 $ 15.61 $ 11.20 $ 13.41
------ ------ ------- ------- ------- -------
Net investment income (loss) (a) ............ .31 .51 1.33 1.28 1.59 1.55
Net realized and unrealized gain (loss) on
investment transactions .................. .33 .41 (7.49) .64 4.32 (2.08)
------ ------ ------- ------- ------- -------
Total from investment operations ............ .64 .92 (6.16) 1.92 5.91 (.53)
------ ------ ------- ------- ------- -------
Less distributions from:
Net investment income ....................... (.30) (.60) (1.24) (1.50) (1.50) (1.30)
Net realized gains on investment transactions -- -- -- (2.92) -- (.15)
Tax return of capital ....................... -- -- (.26) -- -- (.23)
------ ------ ------- ------- ------- -------
Total distributions ......................... (.30) (.60) (1.50) (4.42) (1.50) (1.68)
------ ------ ------- ------- ------- -------
Net asset value, end of period .............. $ 6.11 $ 5.77 $ 5.45 $ 13.11 $ 15.61 $ 11.20
====== ====== ======= ======= ======= =======
Market value, end of period ................. $ 4.75 $ 4.75 $ 6.88 $ 12.13(b) $ 13.88 $ 12.13
====== ====== ======= ======= ======= =======
Total Return
Per share market value (%) .................. 6.44** (22.49) (36.19) 19.72 27.93 5.78
Per share net asset value (%) (c) ........... 12.71** 18.78 (52.80) 14.03 55.81 (3.46)
Ratios to Average Net Assets and
Supplemental Data
Net assets, end of period ($ millions) ...... 60 57 53 81 95 67
Ratio of operating expenses (excluding
interest) (%) ............................ 1.86* 2.02 1.60 1.85 1.79 1.96
Ratio of operating expenses (%) ............. 2.45* 2.30 2.67 2.36 3.28 3.66
Ratio of net investment income (loss) (%) ... 10.08* 9.06 11.28 7.80 11.66 13.59
Portfolio turnover rate (%) ................. 285.4* 323.1 323.7 362.3 322.3 365.9
</TABLE>
(a) Based on monthly average shares outstanding during each period.
(b) Market value of $14.25 has been reduced to reflect a distribution of
$2.12 per share, relating to a due bill which entitles individuals who
purchased shares prior to November 4, 1997, the ex-date of the
dividend, to be reimbursed by the seller in the amount of the
distribution.
(c) Total investment returns reflect changes in net asset value per share
during each period and assume that dividends and capital gains
distributions, if any, were reinvested. These percentages are not an
indication of the performance of a shareholder's investment in the Fund
based on market price.
* Annualized
** Not annualized
On November 14, 1997, the Fund adopted its current name and investment policies.
Prior to that date, the Fund was known as The Latin America Dollar Income Fund,
Inc. and its investment objective was to provide income and appreciation through
investment in U.S. dollar denominated Latin American Debt Instruments. Financial
information prior to November 14, 1997 should not be considered representative
of the present Fund.
--------------------------------------------------------------------------------
17
<PAGE>
Scudder Global High Income Fund, Inc.
Notes to Financial Statements
================================================================================
A. Significant Accounting Policies
-------------------------------
Scudder Global High Income Fund, Inc. (the "Fund") is registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as a closed-end,
non-diversified management investment company.
The Fund's financial statements are prepared in accordance with generally
accepted accounting principles which require the use of management estimates.
The policies described below are followed consistently by the Fund in the
preparation of its financial statements.
Security Valuation. Portfolio debt securities purchased with an original
maturity greater than sixty days are valued by pricing agents approved by the
officers of the Fund, whose quotations reflect broker/dealer-supplied valuations
and electronic data processing techniques. If the pricing agents are unable to
provide such quotations, the most recent bid quotation supplied by a bona fide
market maker shall be used. Money market instruments purchased with an original
maturity of sixty days or less are valued at amortized cost. All other
securities are valued at their fair value as determined in good faith by the
Valuation Committee of the Board of Directors.
Foreign Currency Translations. The books and records of the Fund are maintained
in U.S. dollars. Investment securities and other assets and liabilities
denominated in a foreign currency are translated into U.S. dollars at the
prevailing exchange rates at period end. Purchases and sales of investment
securities, income and expenses are translated into U.S. dollars at the
prevailing exchange rates on the respective dates of the transactions.
Net realized and unrealized gains and losses on foreign currency transactions
represent net gains and losses between trade and settlement dates on securities
transactions, the disposition of forward foreign currency exchange contracts and
foreign currencies, and the difference between the amount of net investment
income accrued and the U.S. dollar amount actually received. That portion of
both realized and unrealized gains and losses on investments that results from
fluctuations in foreign currency exchange rates is not separately disclosed but
is included with net realized and unrealized gains and losses on investment
securities.
Repurchase Agreements. The Fund may enter into repurchase agreements with
certain banks and broker/dealers whereby the Fund, through its custodian or
sub-custodian bank, receives delivery of the underlying securities, the amount
of which at the time of purchase and each subsequent business day is required to
be maintained at such a level that the market value is equal to at least the
principal amount of the repurchase price plus accrued interest.
Reverse Repurchase Agreements. The Fund may borrow through the use of reverse
repurchase agreements whereby the Fund agrees to sell and simultaneously agrees
to repurchase certain securities at a mutually agreed date and price. At the
time the Fund enters into a reverse repurchase agreement, it is required to
pledge securities subject to repurchase. The sale of these securities is not
recorded and the Fund agrees to later repay cash plus interest. Should the
securities' value decline below the repurchase price, the Fund may be obligated
to pledge additional collateral to the lender in the form of cash or securities.
Reverse repurchase agreements involve the risk that the market value of the
securities purchased with the proceeds from the sale of securities subject to
reverse repurchase agreements may decline below the amount the Fund is obligated
to pay to repurchase these securities. The risk in borrowing, as with any
extension of credit, consists of the possible delay in the recovery of
securities or possible loss of rights in the collateral should the counterparty
fail financially. Additionally, there is the risk that the expense associated
with the transaction may be greater than the income earned from the investment
of the proceeds of the transaction.
18
<PAGE>
Scudder Global High Income Fund, Inc.
Notes to Financial Statements
================================================================================
When-Issued/Delayed Delivery Securities. The Fund may purchase securities with
delivery or payment to occur at a later date beyond the normal settlement
period. At the time the Fund enters into a commitment to purchase a security,
the transaction is recorded and the value of the security is reflected in the
net asset value. The value of the security may vary with market fluctuations. No
interest accrues to the Fund until payment takes place. At the time the Fund
enters into this type of transaction it is required to segregate cash or other
liquid assets at least equal to the amount of the commitment.
Federal Income Taxes. The Fund's policy is to comply with the requirements of
the Internal Revenue Code, as amended, which are applicable to regulated
investment companies, and to distribute all of its taxable income to its
shareholders. Accordingly, the Fund paid no federal income taxes, and no federal
income tax provision was required. At October 31, 1999, the Fund had a net tax
basis capital loss carryforward of approximately $74,750,000, which may be
applied against any realized net taxable capital gains of each succeeding year
until fully utilized or until October 31, 2006 ($59,000,000) and October 31,
2007 ($15,750,000), the expiration dates, whichever occurs first.
Distribution of Income and Gains. Distributions of net investment income, if
any, are made quarterly. Net realized gains from investment transactions, in
excess of available capital loss carryforwards, would be taxable to the Fund if
not distributed, and, therefore, will be distributed to shareholders at least
annually.
The timing and characterization of certain income and capital gains
distributions are determined annually in accordance with federal tax regulations
which may differ from generally accepted accounting principles. These
differences primarily relate to investments in foreign denominated securities
and certain securities sold at a loss. As a result, net investment income (loss)
and net realized gain (loss) on investment transactions for a reporting period
may differ significantly from distributions during such period. Accordingly, the
Fund may periodically make reclassifications among certain of its capital
accounts without impacting the net asset value of the Fund.
Investment Transactions and Investment Income. Investment transactions are
accounted for on the trade date. Interest income is recorded on the accrual
basis. Dividend income is recorded on the ex-dividend date. Realized gains and
losses from investment transactions are recorded on an identified cost basis.
All discounts are accreted for both tax and financial reporting purposes.
Statement of Cash Flows. Information on financial transactions which have been
settled through the receipt and disbursement of cash is presented in the
Statement of Cash Flows. The cash amount shown in the Statement of Cash Flows is
the amount reported as cash in the Fund's Statement of Assets and Liabilities
and represents the cash position in its custodian bank account at April 30,
2000.
B. Purchases and Sales of Securities
---------------------------------
During the six months ended April 30, 2000, purchases and sales of investment
securities (excluding short-term investments) aggregated $95,593,036 and
$89,715,433, respectively.
Scudder Global High Income Fund, Inc.
Notes to Financial Statements
C. Related Parties
---------------
Under the Investment Management Agreement (the "Management Agreement") with
Scudder Kemper Investments, Inc. ("Scudder Kemper" or the "Adviser"), the
Adviser directs the investments of the Fund in accordance with the Fund's
investment objectives, policies, and restrictions and under the direction and
control of the Fund's Board of Directors. In addition to portfolio management
services, the Adviser provides certain
19
<PAGE>
Scudder Global High Income Fund, Inc.
Notes to Financial Statements
================================================================================
administrative services in accordance with the Management Agreement. The Fund
pays to the Adviser a monthly fee at an annualized rate of 1.20% of the average
weekly net assets of the Fund. For the six months ended April 30, 2000, the fee
pursuant to such agreements amounted to $363,542.
The Fund pays each Director not affiliated with the Adviser an annual retainer
plus specified amounts for attended board and committee meetings. For the six
months ended April 30, 2000, Directors' fees and expenses aggregated $26,469.
Scudder Fund Accounting Corporation ("SFAC"), a subsidiary of the Adviser, is
responsible for determining the daily net asset value per share and maintaining
the portfolio and general accounting records of the Fund. For the six months
ended April 30, 2000, the amount charged to the Fund by SFAC aggregated $30,798,
of which $5,123 is unpaid at April 30, 2000.
Scudder Service Corporation ("SSC"), a subsidiary of the Adviser, provides
shareholder communications services for the Fund. For the six months ended April
30, 2000, the amount charged to the Fund by SSC aggregated $7,500, of which
$2,500 is unpaid at April 30, 2000.
D. Borrowings
----------
The Fund has entered into reverse repurchase agreements with third parties
involving its holdings in foreign debt securities. The average weighted daily
balance of reverse repurchase agreements outstanding during the period ended
April 30, 2000 was $6,583,595. The weighted average interest rate was 5.66%.
E. Investing in Emerging Markets
-----------------------------
Investing in emerging markets may involve special risks and considerations not
typically associated with investing in the United States. These risks include
revaluation of currencies, high rates of inflation, repatriation restrictions on
income and capital, and future adverse political and economic developments.
Moreover, securities issued in these markets may be less liquid, subject to
government ownership controls, delayed settlements, and their prices more
volatile than those of comparable securities in the United States.
20
<PAGE>
Scudder Global High Income Fund, Inc.
Report of Independent Accountants
================================================================================
To the Board of Directors and Shareholders of Scudder Global High Income Fund,
Inc.:
In our opinion, the accompanying statement of assets and liabilities, including
the investment portfolio, and the related statements of operations, of cash
flows, and of changes in net assets and the financial highlights present fairly,
in all material respects, the financial position of Scudder Global High Income
Fund, Inc. (the "Fund") at April 30, 2000, the results of its operations, its
cash flows, the changes in its net assets and the financial highlights for each
of the periods indicated, in conformity with accounting principles generally
accepted in the United States. These financial statements and financial
highlights (hereafter referred to as "financial statements") are the
responsibility of the Fund's 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 auditing standards
generally accepted in the United States 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 April 30,
2000 by correspondence with the custodian and brokers, provide a reasonable
basis for the opinion expressed above.
Boston, Massachusetts PricewaterhouseCoopers LLP
June 16, 2000
21
<PAGE>
Scudder Global High Income Fund, Inc.
Dividend Reinvestment and Cash Purchase Plan
================================================================================
The Plan
The fund's Dividend Reinvestment and Cash Purchase Plan (the "Plan") offers
you an automatic way to reinvest your dividends and capital gains distributions
in shares of the fund. The Plan also provides for cash investments in fund
shares of $100 to $3,000 semiannually through EquiServe, the Plan Agent.
Automatic Participation
Each shareholder of record is automatically a participant in the Plan unless
the shareholder has instructed the Plan Agent in writing otherwise. Such a
notice must be received by the Plan Agent not less than 10 days prior to the
record date for a dividend or distribution in order to be effective with respect
to that dividend or distribution. A notice which is not received by that time
will be effective only with respect to subsequent dividends and distributions.
Shareholders who do not participate in the Plan will receive all
distributions in cash paid by check in dollars mailed directly to the
shareholder by EquiServe, as dividend paying agent.
Shares Held by a Nominee
If your shares are held in the name of a brokerage firm, bank, or other
nominee as the shareholder of record, please consult your nominee (or any
successor nominee) to determine whether it is participating in the Plan on your
behalf. Many nominees are generally authorized to receive cash dividends unless
they are specifically instructed by a client to reinvest. If you would like your
nominee to participate in the Plan on your behalf, you should give your nominee
instructions to that effect as soon as possible.
Pricing of Dividends and Distributions
If the market price per share on the payment date for the dividend or
distribution (the "Valuation Date") equals or exceeds net asset value per share
on that date, the fund will issue new shares to participants at the greater of
the following on the Valuation Date: (a) net asset value, or (b) 95% of the
market price. The Valuation Date will be the dividend or distribution payment
date or, if that date is not a New York Stock Exchange trading date, the next
preceding trading date. If the net asset value exceeds the market price of fund
shares at such time, participants in the Plan are considered to have elected to
receive shares of stock from the fund, valued at market price, on the Valuation
Date. In either case, for Federal income tax purposes, the shareholder receives
a distribution equal to the market value on Valuation Date of new shares issued.
State and local taxes may also apply. If the fund should declare an income
dividend or net capital gains distribution payable only in cash, the Plan Agent
will, as agent for the participants, buy fund shares in the open market, on the
New York Stock Exchange or elsewhere, for the participants' account on, or
shortly after, the payment date.
Voluntary Cash Purchases
Participants in the Plan have the option of making additional cash payments
to the Plan Agent, semiannually, in any amount from $100 to $3,000, for
investment in the fund's shares. The Plan Agent will use all such monies
received from participants to purchase fund shares in the open market on or
about February 15 and August 15. Any voluntary cash payments received more than
5 days after or 30 days prior to these dates will be returned by the Plan Agent,
and interest will not be paid on any uninvested cash payments. To avoid
unnecessary cash accumulations, and also to allow ample time for receipt and
processing by the Plan Agent, it is suggested that participants send in
voluntary cash payments to be received by the Plan Agent approximately 10 days
before February 15, or August 15, as the case may be. A participant may withdraw
a voluntary cash payment by written notice, if the notice is received by the
Plan Agent
22
<PAGE>
Scudder Global High Income Fund, Inc.
Dividend Reinvestment and Cash Purchase Plan
================================================================================
not less than 48 hours before such payment is to be invested.
Participant Plan Accounts
The Plan Agent maintains all participant accounts in the Plan and furnishes
written confirmation of all transactions in the account, including information
needed by participants for personal and tax records. Shares in the account of
each plan participant will be held by the Plan Agent in non-certificated form in
the name of the participant, and each participant will be able to vote those
shares purchased pursuant to the Plan at a shareholder meeting or by proxy.
No Service Fee to Reinvest
There is no service fee charged to participants for reinvesting dividends or
distributions from net realized capital gains. The Plan Agent's fees for the
handling of the reinvestment of dividends and capital gains distributions will
be paid by the fund. There will be no brokerage commissions with respect to
shares issued directly by the fund as a result of dividends or capital gains
distributions payable either in stock or in cash. However, participants will pay
a pro rata share of brokerage commissions incurred with respect to the Plan
Agent's open market purchases in connection with the reinvestment of any
dividends or capital gains distributions payable only in cash.
Costs for Cash Purchases
With respect to purchases of fund shares from voluntary cash payments, the
Plan Agent will charge $1.00 for each such purchase for a participant. Each
participant will pay a pro rata share of brokerage commissions incurred with
respect to the Plan Agent's open market purchases of fund shares in connection
with voluntary cash payments made by the participant.
Brokerage charges for purchasing small amounts of stock for individual
accounts through the Plan are expected to be less than the usual brokerage
charges for such transactions, because the Plan Agent will be purchasing stock
for all participants in blocks and pro-rating the lower commission thus
attainable.
Amendment or Termination
The fund and the Plan Agent each reserve the right to terminate the Plan.
Notice of the termination will be sent to the participants of the Plan at least
30 days before the record date for a dividend or distribution. The Plan also may
be amended by the fund or the Plan Agent, but only by giving at least 30 days'
written notice to participants in the Plan (except when necessary or appropriate
to comply with applicable law, rules or policies of a regulatory authority).
A participant may terminate his account under the Plan by written notice to
the Plan Agent. If the written notice is received 10 days before the record day
of any distribution, it will be effective immediately. If received after that
date, it will be effective as soon as possible after the reinvestment of the
dividend or distribution.
If a participant elects to sell his shares before the Plan is terminated, the
Plan Agent will deduct a $2.50 fee plus brokerage commissions from the sale
transaction.
Plan Agent Address and Telephone Number
You may obtain more detailed information by requesting a copy of the Plan
from the Plan Agent. All correspondence (including notifications) should be
directed to: Scudder Global High Income Fund, Inc., Dividend Reinvestment and
Cash Purchase Plan, c/o EquiServe, P.O. Box 8200, Boston, MA 02266-8200, (617)
328-5000, ext. 6406.
23
<PAGE>
Scudder Global High Income Fund, Inc.
Investment Manager
================================================================================
The investment manager of Scudder Global High Income Fund, Inc. is Scudder
Kemper Investments Inc. (the "Manager"), one of the most experienced investment
management firms in the world. Established in 1919, the firm manages investments
for institutional and corporate clients, retirement and pension plans, insurance
companies, mutual fund investors, and individuals. The Manager has offices
throughout the United States and has subsidiaries in the United Kingdom,
Switzerland, Hong Kong, and Japan.
The Manager has been a leader in international investment management for over
40 years. It manages Scudder International Fund, which was originally
incorporated in Canada in 1953 as the first foreign investment company
registered with the United States Securities and Exchange Commission. The
Manager's clients that invest primarily in foreign securities include thirty
open-end investment companies as well as portfolios for institutional investors.
In addition to the fund, the Manager also manages the assets of other
closed-end investment companies which invest primarily in foreign securities:
Scudder New Asia Fund, Inc., The Brazil Fund, Inc., The Korea Fund, Inc., and
The Argentina Fund, Inc.
Directors and Officers
================================================================================
JURIS PADEGS*
President, Chairman of the Board,
and Director
ROBERT J. CALLANDER
Director
GEORGE M. LOVEJOY, JR.
Director
RONALDO A. DA FROTA NOGUEIRA
Director
DR. SUSAN KAUFMAN PURCELL
Director
SUSAN E. DAHL*
Vice President
JUDITH A. HANNAWAY*
Vice President
ANN M. McCREARY*
Vice President
M. ISABEL SALTZMAN*
Vice President
JOHN MILLETTE*
Vice President and Secretary
PAUL J. ELMLINGER*
Vice President and Assistant Secretary
BRUCE H. GOLDFARB*
Vice President and Assistant Secretary
KATHRYN L. QUIRK*
Vice President and Assistant Secretary
JOHN R. HEBBLE*
Treasurer
CAROLINE PEARSON*
Assistant Secretary
* Scudder Kemper Investments, Inc.
24
