JARDINE FLEMING CHINA REGION FUND, INC.
Semiannual Report
June 30, 1996
Contents
Page
Objectives 1
Management 1
Market Information 1
Highlights 2
Investment Review 3
Major Holdings 4
Investment Portfolio 6
Statement of Assets and Liabilities 12
Statement of Operations 13
Statements of Changes in Net Assets 14
Financial Highlights 15
Notes to Financial Statements 16
Dividend Reinvestment and Cash Purchase Plan 19
Directors and Administration 20
Objectives
Jardine Fleming China Region Fund, Inc. ("the Fund") seeks to achieve
long-term capital appreciation through investments primarily in equity
securities of companies with substantial assets in, or revenues derived from,
the People's Republic of China (PRC or China), Hong Kong, Taiwan, and Macau -
collectively, the China Region.
The Fund provides investors with an opportunity to participate in the growing
economies of the China Region, especially that of the PRC, although initially
investments are expected to be predominantly in securities listed on the Hong
Kong Stock Exchange. Hong Kong enterprises have made substantial investments
in the PRC, in Guangdong Province in particular, where abundant cheap labor
and land are available. Hong Kong is also the largest trading partner of the
PRC.
The economies of the PRC, Hong Kong, Taiwan, and Macau have become
increasingly linked over the past 10 years and are expected to be further
integrated as Hong Kong and Macau revert to the sovereignty of the PRC.
Investments made by the Fund will seek to take advantage of opportunities
resulting from this linkage among the China Region countries.
Management
Jardine Fleming International Management, Inc. (JFIM) is the investment
management company appointed to advise on and manage the Fund's portfolio.
JFIM is part of the Jardine Fleming group, which has a team of investment
managers in the Asia Pacific region managing funds in excess of US$22 billion
for both institutional and private clients.
A. Douglas Eu is the portfolio manager of the Fund. Mr. Eu has been involved
in analyzing China Region companies since 1987 and, since 1991, has been
portfolio manager of a number of the Jardine Fleming group's funds which
invest in China Region companies. He is the Chief Operations Officer of JFIM
and has been involved in the day-to-day management of the Fund's portfolio
since its inception.
Market Information
The Fund is listed on the New York Stock Exchange (symbol JFC). The share
price is published in
o The Wall Street Journal (daily)
o The Asian Wall Street Journal (daily)
o Reuters (page JFIC)
The net asset value is published in
o The Wall Street Journal under "Publicly Traded Funds" (every Monday)
o The Asian Wall Street Journal under "Publicly Traded Funds" (every
Monday)
o South China Morning Post in Hong Kong (first Thursday of every month)
o Reuters (page JFIC)
Highlights
June 30, 1996 December 31, 1995
US$ US$
Net Assets $110.0 million $101.6 million
Net Asset Value Per Share $12.08 $11.17
Market Data
Share Price on the
New York Stock Exchange $10.375 $10.00
Discount to Net Asset Value -14.1% -10.5%
Total Return for the Six Months
Ended June 30, 1996
Net Asset Value 8.1%
Share Price 3.8%
Hong Kong All Ordinaries Index 10.7%
Credit Lyonnais Securities Asia
All China B Index 20.5%
Peregrine Greater China Index 12.8%
Net Asset Value and Share Price vs. Target Index
Chart 1 - Net Asset Value and Share Price vs. Target Index
*Commencement of operations.
Investment Review
Dear Fellow Shareholders:
The first half of 1996 provided mixed results for China region markets,
although each market ended the period showing gains. The Hong Kong All
Ordinaries Index, influenced in the second quarter by weaker trends in
H-shares, closed up 10.7% for the period under review. The B-share markets of
Shanghai and Shenzhen improved 8.1% and 43.4% in U.S. dollar terms,
respectively, over the first half, perhaps in anticipation of better
conditions in the second half of the year. The Shenzhen market in particular
displayed the type of volatile move that has characterized China's equity
markets in the past, with a dramatic four-day gain of 60% in June followed by
a sharp correction.
The Company, benefiting from the moves of the China markets, posted a gain in
its net asset value of 8.1% for the period, with further advancement hindered
only by the H-shares. Our concern about the potentially negative impact of
poor results announcements by Chinese companies during the last quarter proved
well founded, and, at this stage, we are not optimistic there will be an
imminent turnaround in profitability. Further sustained gains in the China
region markets will be heavily dependent on improved profitability to rebuild
poor investor confidence.
On the macroeconomic front, the data released during the period confirmed our
expectations of an economy that has slowed considerably as a result of China's
three-year austerity program. The year-on-year growth of Gross Domestic
Product and the retail price index of 9.8% and 7.1%, respectively, were within
government expectations and were positive enough for China's Central Bank to
cut interest rates for the first time since the austerity program commenced in
June 1993. While this may not have a significant effect on the levels of
liquidity in the state-owned sector, it is a sign to equity markets that the
dismantling of austerity may have started. This move should positively impact
all China region markets and is one of the lynchpins in our optimistic
longer-term argument for them.
The Taiwan Stock Exchange index moved up a strong 25.1% in U.S. dollar terms
in the first half of 1996. These gains were driven by the peaceful resolution
to the cross straits problems, which slowed capital flight and released the
pressure from the Central Bank. This, in turn, allowed the liquidity injected
into Taiwan's economy over the past 12 months to improve equity values. The
necessary approvals to allow your Company to invest in Taiwan have recently
been secured, so we are now able to take advantage of this market and will be
increasing our exposure if and when the appropriate opportunities arise.
As we survey the area for investments for the second half of 1996, we are
increasingly optimistic that we have seen the lows in the China region markets
and that price levels should show signs of improvement on a broad front.
However, we note that the austerity measures took 16 months to make an impact
on the Chinese economy, and we therefore expect to gradually increase
weightings over the coming months in anticipation of long-term gains.
Respectfully submitted,
Martin Barrow
President
August 13, 1996
Major Holdings At June 30, 1996
% of Net
Assets
Hutchison Whampoa 9.2
One of Hong Kong's leading conglomerates. It controls 60% and 50% of the
container ports in Hong Kong and Shanghai, respectively. Hutchison should
benefit from increased PRC exports.
Cheung Kong Holdings 7.9
One of Hong Kong's premier property companies with significant property
developments in Hong Kong and increasingly in the PRC. Cheung Kong has been
discussing numerous property and infrastructure projects in China.
New World Development 5.1
The company is mainly engaged in property development and investment,
infrastructure projects, and hotel operations in Hong Kong and China. The
infrastructure and property projects in China include five toll roads and
bridges, three power plants, and home ownership projects in Wuhan.
C. P. Pokphand 4.5
C. P. Pokphand is a diversified holding company for a large number of
companies operating in the agri-business, industrial, and consumer sectors in
China. As one of the earliest investors in China, the company is one of the
oldest China plays, and we expect it to benefit from its China investments
over the next few years.
Qingling Motors 'H' 4.4
Qingling Motors is a light truck manufacturer in China with Isuzu technology.
The company used to rely heavily on imports of parts from Japan and therefore
was subjected to the fluctuations in the currency. It sped up the localization
process in 1995 with the commissioning of an engine manufacturing factory.
Want Want Holdings 3.9
The Singapore-listed manufacturer of a full range of rice crackers with a
regional distribution, primarily in China. The Want Want brand is one of the
best known in China, and the company plans to extend the product range.
Television Broadcasts (TVB) 3.7
While the company is still focused on essential broadcasting in Hong Kong, the
ability of viewers in Southern China to pick up TVB's signal has given
advertisers a new medium to develop brand names in the PRC.
Pohang Iron and Steel (POSCO) 3.2
Korea's premier integrated steel company with annual capacity exceeding 20.8
million metric tons, POSCO is the largest Korean exporter of steel to China.
Given the closer economic ties between Korea and China, POSCO's steel exports
should continue to grow dramatically this decade.
Chiwan Petroleum Supply Base 'B' 3.1
The company provides logistic support services to oil and gas exploration
development and production activities in the South China Sea. Services
provided included wharf and yard services, marine logistics, storage,
engineering, fabrication, and office rental.
Samsung Fire and Marine Insurance 2.9
The leading non-life insurance company in Korea, with a market share of over
25%. One of three foreign insurance companies with representative offices in
Beijing and the ability to offer limited insurance coverage for foreign joint
ventures in China.
Investment Portfolio At June 30, 1996 (unaudited)
Holdings Market
(in shares Value
Description or par) (in US$)
Common Stocks (unless otherwise noted)
CHINA (17.6%)
Shanghai Equities (USD) (9.7%)
Autos and Transportation Equipment (3.0%)
China Yuchai International 105,500 804,437
Ek Chor China Motorcycle 50,900 687,150
* Shanghai Diesel Engine 'B' 4,200,000 1,764,000
3,255,587
Building Materials (1.0%)
* Huaxin Cement 'B' 4,300,000 1,057,800
Chemicals (0.8%)
* Shanghai Tyre and Rubber 'B' 3,443,680 860,920
Commercial and Industrial (0.1%)
* Shanghai Phoenix Bicycle 'B' 440,000 62,480
Electronics and Components (1.6%)
! Shanghai Refrigerator Compressor 'B' 3,900,000 1,801,800
Hotels and Tourism (2.1%)
Shanghai Dazhong Taxi 'B' 2,600,000 1,898,000
* Shanghai Jin Jiang Tower 'B' 1,662,499 472,150
2,370,150
Textiles (1.1%)
Inner Mongolia Erdos Cashmere 'B' 2,500,000 1,215,000
Total Shanghai Equities 10,623,737
Shenzhen Equities (HKD) (7.9%)
Autos and Transportation Equipment (1.4%)
* Shenzhen North Jianshe Motorcycle 'B'4,332,000 1,511,007
Commercial and Industrial (1.9%)
China Southern Glass 'B' 2,031,900 1,194,340
Shenzhen China Bicycles 'B' 3,691,600 853,654
2,047,994
Energy (3.1%)
!*Chiwan Petroleum Supply Base 'B' 7,690,400 3,447,407
Textiles (0.3%)
Shenzhen Textile 'B' 1,260,000 320,664
Transportation Services (1.2%)
Shekou Zhaosheng Harbour Service 'B' 3,138,960 1,378,729
Total Shenzhen Equities 8,705,801
TOTAL CHINA 19,329,538
HONG KONG (64.4%)
Agribusiness (4.5%)
C. P. Pokphand 12,582,000 4,998,146
Autos and Transportation
Equipment (4.4%)
Qingling Motors 'H' 14,508,000 4,872,985
Building and Construction (1.5%)
* New World Infrastructure 750,000 1,598,672
Building Materials (0.9%)
Luoyang Glass 'H' 3,958,000 940,823
Chemicals (1.3%)
Zhenhai Refining and Chemical 'H' 5,000,000 1,421,042
Conglomerates (10.1%)
Hutchison Whampoa 1,600,000 10,066,143
Swire Pacific Ltd. 'A' 120,000 1,027,025
11,093,168
Consumer Products (2.5%)
Climax International 15,870,000 2,788,239
Electricals (0.3%)
Chengdu Telecommunications Cable 'H' 1,914,000 279,405
Fishery and Foods (2.6%)
* Tingyi (Caymen Island) Holdings 10,425,000 2,861,865
Food and Beverages (1.6%)
Dairy Farms International (USD) 2,000,000 1,690,000
Tsingtao Brewery 'H' 350,000 126,602
1,816,602
Media (5.0%)
* Asia Satellite Telecommunications
Holdings 74,000 219,396
Pico Far East Holdings 5,000,000 1,162,671
Television Broadcasts 1,094,000 4,105,609
5,487,676
Packaging (1.0%)
* Concordia Paper Holdings ADR (USD) 150,000 1,068,750
Property and Real Estate (17.9%)
Cheung Kong Holdings 1,200,000 8,642,518
Guangdong Investment 1,620,000 1,025,475
Henderson Capital, CB,
VR, 5.00%, 3/28/97 (USD) 1,200,000 1,008,000
* Henderson China Holdings 114,500 255,897
Hopewell Holdings 2,750,000 1,492,094
New World Development 1,200,000 5,565,316
Seapower Resources 15,000,000 1,647,117
19,636,417
Retail (4.9%)
Giordano Holdings 1,398,000 1,354,511
* Goldlion Holdings 1,850,000 1,589,306
Lamex Holdings 7,000,000 2,441,608
5,385,425
Shipping and Marine (1.2%)
Guangzhou Shipyard
International 'H' 5,338,000 1,296,434
Steel (2.1%)
Maanshan Iron and Steel 'H' 13,236,000 2,325,465
Trading and Commerce (0.4%)
!*Ultronics International Holdings 15,000,000 436,001
Transportation Services (1.8%)
* Guangshen Railway 'H' 3,466,000 1,309,690
Shanghai Haixin Shipping 'H' 10,555,000 695,413
2,005,103
Utilities (0.4%)
Harbin Power Equipment 'H' 3,000,000 449,566
TOTAL HONG KONG 70,761,784
KOREA (8.9%)
Electricals (2.2%)
* Samsung Electro-Mechanics Warrants,
9/8/97 (USD) 750 468,750
Samsung Electronics, New '3' 24,001 2,026,712
2,495,462
Insurance (3.4%)
* Dongbu Insurance 10,500 515,163
Samsung Fire and Marine Insurance 5,000 3,205,128
3,720,291
Steel (3.2%)
Pohang Iron and Steel 56,000 3,513,807
Transportation (0.1%)
Hanjin Transportation 2,877 74,124
TOTAL KOREA 9,803,684
SINGAPORE (3.9%)
Food and Beverages (3.9%)
* Want Want Holdings (USD) 1,600,000 4,304,000
TOTAL SINGAPORE 4,304,000
TIME DEPOSITS (4.7%)
Citibank, N.A., 5.125%,
7/01/96 (HKD) 40,300,000 5,206,180
TOTAL TIME DEPOSITS 5,206,180
TOTAL INVESTMENTS
(99.5% of Net Assets) (Cost $116,274,449) 109,405,186
Other assets less liabilities 578,362
NET ASSETS 109,983,548
Aggregate cost is the same for Federal income tax purposes.
The aggregate net unrealized loss for all securities is as follows:
Excess of market value over cost 15,954,322
Excess of cost over market value (22,823,585)
Net unrealized loss (6,869,263)
(HKD) Hong Kong dollar
(USD) U.S. dollar
CB Convertible Bond
VR Variable Rate
* Non-income producing
! Affiliated company
See accompanying notes to financial statements.
Statement of Assets and Liabilities
June 30, 1996 (unaudited)
(in US$)
Assets
Investments in securities at value (Note 2)
Affiliated companies (Cost $8,321,962) 5,685,208
Other companies (Cost $107,952,487) 103,719,978
Total investments in securities 109,405,186
Cash and foreign currencies 357,854
Receivable for securities sold 96,592
Dividends receivable 375,179
Interest receivable 8,812
Deposits in respect of insurance policy 35,713
Restricted cash (Note 6) 305,266
Unamortized organization costs (Note 1) 35,542
Total Assets 110,620,144
Liabilities
Accrued expenses payable 520,781
Due to investment adviser (Note 5) 115,815
Total Liabilities 636,596
Net Assets 109,983,548
Net assets consist of:
Common stock, $0.01 par value (100,000,000
shares authorized; 9,101,372 shares
issued and outstanding) 91,014
Paid-in capital 136,550,045
Accumulated net investment income,
net of distributions 322,113
Accumulated realized gain (loss) on investments
and foreign currency transactions,
net of distributions (20,110,276)
Accumulated net unrealized gain (loss) on
investments, foreign currency holdings,
and other assets and liabilities
denominated in foreign currencies (6,869,348)
Net Assets 109,983,548
Net asset value per share
($109,983,548 divided by 9,101,372) 12.08
See accompanying notes to financial statements.
Statement of Operations
Six Months Ended June 30, 1996 (unaudited)
(in US$)
Investment Income (Note 2)
Dividends (net of foreign taxes of $15,526) 1,254,341
Interest 291,193
Total Investment Income 1,545,534
Expenses
Investment advisory fee (Note 5) 698,717
Administration and accounting fees (Note 5) 154,153
Custodian fees 103,183
Reports and notices to shareholders 59,672
Directors' fee and expenses 47,867
Proxy expenses 37,295
Insurance 35,275
Legal fees 29,836
Audit fees 17,902
Amortization of organizational costs (Note 1) 17,627
Listing fees 12,432
Miscellaneous expenses 9,462
Total Expenses 1,223,421
Net Investment Income 322,113
Realized and Unrealized Gain (Loss) on
Investments, Foreign Currency Holdings and
Other Assets and Liabilities Denominated
in Foreign Currencies
Net realized loss on (Note 2)
Investment transactions (3,068,108)
Foreign currency transactions (14,467)
Net change in unrealized gain (loss) on (Note 2)
Investments 11,097,020
Foreign currency holdings and other
assets and liabilities
denominated in foreign currencies (122)
Net realized and unrealized gain on investments,
foreign currency holdings and other
assets and liabilities denominated in
foreign currencies 8,014,323
Net Increase in Net Assets
Resulting From Operations 8,336,436
See accompanying notes to financial statements.
Statements of Changes in Net Assets
(unaudited)
Six Months Ended Year Ended
June 30, 1996 December 31, 1995
(in US$) (in US$)
Increase (Decrease) in Net Assets
Operations
Net investment income 322,113 653,349
Net realized loss on
investment transactions (3,068,108) (8,640,290)
Net realized loss on
foreign currency
transactions (14,467) (32,040)
Net change in unrealized
gain (loss) on investments,
foreign currency holdings and
other assets and liabilities
denominated in foreign
currencies 11,096,898 (4,053,722)
Net increase (decrease)
in net assets resulting
from operations 8,336,436 (12,072,703)
Dividends to Shareholders:
From net investment income - (803,644)
Total Increase (Decrease)
in Net Assets 8,336,436 (12,876,347)
Net Assets:
Beginning of period 101,647,112 114,523,459
End of period 109,983,548 101,647,112
See accompanying notes to financial statements.
<TABLE>
<CAPTION>
Financial Highlights (Unaudited)
For the6 MonthsYearYearYearPeriod
Ended Ended Ended Ended 7/16/92*-
6/30/96 12/31/95 12/31/94 12/31/93 12/31/92
(in US$) (in US$) (in US$) (in US$) (in US$)
<S> <C> <C> <C> <C> <C>
Per-share operating performance
Net asset value,
beginning of period 11.17 12.58 22.58 15.05 13.95**
Offering costs charged
to paid-in capital - - (0.06) - (0.11)
11.17 12.58 22.52 15.05 13.84
Net investment income 0.04 0.07 0.05 0.10 0.07
Net realized and unreal-
ized gain (loss) on
investment and foreign
currency-related
transactions 0.87 (1.39) (8.51) 10.50 1.21
Total from investment
operations 0.91 (1.32) (8.46) 10.60 1.28
Less distributions
Dividends from net
investment income - (0.09) (0.03) (0.11) (0.07)
Distributions from
capital gains - - (1.45) (1.62) -
Total distributions - (0.09) (1.48) (1.73) (0.07)
Net asset value,
end of period 12.08 11.17 12.58 23.92 15.05
Dilutive effect of
fully subscribed
rights offering - - - (1.34)*** -
Net asset value, end of period,
giving effect to fully
subscribed rights offering - - - 22.58*** -
Market value, end of period 10.38 10.00 11.25 26.00 13.88
Total Investment Return
Per share market value 3.75% (10.30%) (52.50%)# 99.30% (7.00%)
Per share net
asset value 8.15% (10.50%) (38.90%)# 72.90% 9.30%
RATIOS/SUPPLEMENTAL DATA
Net assets,
end of period 109,983,548 101,647,112 114,523,459 162,848,785 102,422,708
Ratio of expenses to
average net assets 2.25%! 2.22% 2.01% 2.17% 2.23%!
Ratio of net investment
income to average
net assets 0.59%! 0.60% 0.35% 0.59% 1.16%!
Portfolio turnover rate 12.85% 44.90% 71.20% 99.22% 1.56%
Average commission rate paid .0017 - - - -
Number of shares outstanding
at end of period
(in thousands) 9,101 9,101 9,101 6,807 6,807
<FN>
* Commencement of operations.
** Initial public offering of $13.95 per share net of underwriting discount.
*** Reflects the effect of fully subscribed rights offering completed
January 5, 1994. The fund received net proceeds of approximately $42
million in exchange for 2,269,109 shares of common stock.
! Annualized.
# Adjusted to exclude the dilutive effect of the rights offering
completed January 5, 1994.
</FN>
See accompanying notes to financial statements.
</TABLE>
<PAGE>
Notes to Financial Statements
June 30, 1996 (unaudited)
1. Organization and Capital
Jardine Fleming China Region Fund, Inc. (the "Fund") was incorporated in the
State of Maryland on May 22, 1992 and is registered as a non-diversified,
closed-end management investment company under the Investment Company Act of
1940. The Fund commenced operations on July 16, 1992.
In connection with its initial organization and offering of shares, the Fund
incurred $177,227 and $772,698 of organization and offering costs,
respectively. The organization costs are being amortized over a 60 month
period from the date the Fund commenced operations. The offering costs have
been charged to capital.
2. Significant Accounting Policies
The following significant accounting policies, which are in conformity with
generally accepted accounting principles of the United States of America for
investment companies, are consistently followed by the Fund in the preparation
of its financial statements.
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts and disclosures in the financial statements.
Actual results could differ from these estimates.
i) Security Valuation
All securities for which market quotations are readily available are
valued at the last sales price prior to the time of determination, or,
if no sales price is available at that time, at the mean between the
last current bid and asked prices. Securities that are traded
over-the-counter are valued, if bid and asked quotations are available,
at the mean between the current bid and asked prices. Investments in
short-term debt securities having a maturity of 60 days or less are
valued at amortized cost. All other securities and assets are valued at
fair value as determined in good faith by the Board of Directors. In
valuing the Fund's assets, quotations of foreign securities in a foreign
currency are translated to U.S. dollar equivalents at the exchange rate
in effect on the valuation date.
ii) U.S. Federal Income Taxes
No provision for federal income taxes is required since the Fund intends
to continue to qualify as a regulated investment company and distribute
all of its taxable income. The Fund has unused realized capital loss
carryforwards for federal income tax purposes of $13,202,833, of which
$2,287,086 expire in 2002, and $10,915,747 in 2003. The Fund intends to
retain gains realized in future periods that may be offset by available
capital loss carryforwards.
iii) Affiliated Companies
Investments in companies 5% or more of whose outstanding voting
securities are held by the Fund are defined as "Affiliated Companies" in
Section 2(a)(3) of the Investment Company Act of 1940.
iv) Foreign Currency Translation
The books and records of the Fund are maintained in United States
dollars. Foreign currency amounts are translated into U.S. dollars at
the mid-market price of such currencies against U.S. dollars as follows:
o investments, other assets and liabilities at the prevailing rates of
exchange on the valuation date;
o investment transactions and investment income at the prevailing
rates of exchange on the dates of such transactions
Although the net assets of the Fund are presented at the foreign
exchange rates and market values at the close of the period, the Fund
does not isolate that portion of the results of operations arising as a
result of changes in the foreign exchange rates from the fluctuations
arising from changes in the market prices of the securities held at
period end. Similarly, the Fund does not isolate the effect of changes
in foreign exchange rates from the fluctuations arising from changes in
the market prices of securities sold during the period. Accordingly,
realized and unrealized foreign currency gains (losses) are included in
the reported net realized and unrealized gains (losses) on investment
transactions balances.
Net currency gains (losses) from valuing foreign currency denominated
assets and liabilities at period end exchange rates are reflected as a
component of unrealized gain (loss) on investments, foreign currency
holdings and other assets and liabilities denominated in foreign
currencies.
v) Distribution of Income and Gains
The Fund intends to distribute to shareholders, at least annually,
substantially all of its net investment income and expects to distribute
annually any net long-term capital gains in excess of net short-term
capital losses. An additional distribution may be made to the extent
necessary to avoid the payment of a 4% Federal excise tax.
Income and capital gain distributions are determined in accordance with
federal income tax regulations and may differ from those determined in
accordance with generally accepted accounting principles.
vi) Other
Security transactions are accounted for on the date the securities are
purchased or sold. Realized gains and losses on the sale of investment
securities are determined on the identified cost basis. Interest income
is recognized on the accrual basis. Dividend income and distributions to
shareholders are recorded on the ex-dividend date. Portfolio turnover
rate is calculated by dividing the lesser of purchases and sales of
investment securities having maturities greater than one year at the
time of acquisition by the average monthly market value of those
investment securities.
3. Investment Transactions
Consistent with its investment objective, the Fund engages in the following
practices. The investment objective, policies, program, and risk factors of
the Fund are described more fully in the Fund's Prospectus.
i) Foreign Transactions
Foreign security and currency transactions, including investments in
emerging market countries, may involve certain considerations and risks
not typically associated with those of U.S. dollar denominated
transactions as a result of, among other factors, the level of
governmental supervision and regulation of foreign securities markets
and the possibility of political or economic instability.
ii) Other
During the six months ended June 30, 1996, the Fund made purchases of
$23,195,264 and sales of $12,597,423 of investment securities other than
short-term investments. There were no purchases or sales of U.S.
Government securities.
4. Rights Offering
As of the close of business on December 8, 1993, the Fund issued to
shareholders rights entitling the holders thereof to subscribe for an
aggregate of 2,269,109 shares at a rate of one share of common stock for each
three rights held. The subscription price per share was $19.50.
The offer expired on January 5, 1994. At the expiration date the offer was
fully subscribed and 2,269,109 shares were subsequently issued. Net proceeds
(after sales loads and other expenses) received by the Fund aggregated
approximately $42,000,000. The net asset value per share at December 31, 1993,
assuming that the 2,269,109 shares had been issued as of that date, was
$22.58.
5. Related Party Transactions
i) Jardine Fleming International Management, Inc. (the "Adviser"), provides
investment advisory services to the Fund under the terms of an
investment advisory agreement. Under the investment advisory agreement,
the Adviser is paid a fee, computed weekly and payable monthly, at the
annual rate of 1.50% of the first $50 million, 1.25% of the next $25
million and 1.00% of the excess over $75 million of the Fund's weekly
net assets. The Adviser is an affiliate of the Fund. At June 30, 1996,
$115,815 was payable to the Adviser.
ii) T. Rowe Price Services, Inc. (the "Administrator") provides
administrative services to the Fund under an Administrative Services
Agreement. The Administrator receives a fee, payable monthly, at an
annual rate of 0.10% of the first $250 million, 0.075% of the next $250
million and 0.05% of the excess over $500 million of the Fund's average
weekly net assets subject to a minimum annual fee of $200,000, plus
reimbursement for certain out-of-pocket expenses. The Administrator also
receives an annual fee of $85,000 for fund accounting services pursuant
to an Accounting Services Agreement. At June 30, 1996, $47,336 was
payable to the Administrator.
iii) During the six months ended June 30, 1996, the Fund paid $49,915 in
brokerage commissions to Jardine Fleming Broking Ltd. and Jardine
Fleming Securities Ltd., affiliated brokers/dealers.
6. Restricted Cash
As part of the arrangements for insuring the Fund, a letter of credit
amounting to $305,266 was issued by Citibank N.A. in favor of the insurers. In
return, the Fund pledged deposits amounting to $305,266 to Citibank N.A. as
security for the letter of credit.
Dividend Reinvestment and Cash Purchase Plan
The Fund operates an optional Dividend Reinvestment and Cash Purchase Plan
(the "Plan") whereby:
a) shareholders may elect to receive dividend and capital gain
distributions in the form of additional shares of the Fund (the Share
Distribution Plan).
b) shareholders may make optional payments (any amount between $100 and
$3,000) which will be used to purchase additional shares in the open
market (the Share Purchase Plan).
For a copy of the Plan brochure, as well as a dividend reinvestment
authorization card, please contact:
1) State Street Bank & Trust Company (the Plan Agent):
P. O. Box 8200
Boston, Massachusetts
02266-8200
U.S.A.
Telephone No: 800-426-5523 (toll free)
or
2) T. Rowe Price Services, Inc.
Telephone No: 800-638-8540 (toll free)
For details on the Plan, see the enclosed notice.
JARDINE FLEMING
CHINA REGION FUND, INC.
Directors and Administration
Officers and Directors Martin G. Barrow - Director and President
A.B. Colayco - Director
The Rt. Hon. The Earl of Cromer - Director
Alexander R. Hamilton - Director
Emmett J. Rice - Director
Mark B. E. White - Director and Treasurer
William J. Tootill - Secretary
Investment Adviser Jardine Fleming International Management, Inc.
P.O. Box 3151
Road Town, Tortola
British Virgin Islands
Administrator T. Rowe Price Services, Inc.
100 East Pratt Street
Baltimore, Maryland 21202
U.S.A.
Custodian Citibank N.A.
New York:
111 Wall Street, 16th Floor
New York, New York 10005
U.S.A.
Hong Kong:
Citibank Tower
Citibank Plaza
3 Garden Road
Hong Kong
Independent Accountants Price Waterhouse LLP
7 Saint Paul Street
Suite 1700
Baltimore, Maryland 21202
U.S.A.
Legal Counsel Cleary, Gottlieb, Steen & Hamilton
New York:
1 Liberty Plaza, 43rd Floor
New York, New York 10006
U.S.A.
Hong Kong:
56th Floor, Bank of China Tower
1 Garden Road
Hong Kong
Registrar, Transfer Agent, State Street Bank & Trust Company
and Dividend Paying Agent P. O. Box 8200
Boston, Massachusetts 02266-8200
U.S.A.
This report, including the financial statements herein, is sent to the
shareholders of the Fund for their information. It is not a prospectus,
circular or representation intended for use in the purchase or sale of shares
of the Fund or of any securities mentioned in this report.
RPRTJFCR 6/30/96
Chart 1 - Net Asset Value and Share Price vs. Target Index - A line chart
showing the net asset value and share price vs. target index between 7/16/92
and 6/96.
