PRESIDENT'S LETTER
Dear Shareholder:
In welcoming you as a shareholder of this recently formed mutual
fund, it is with pleasure that we are able to report that a total return of
14.48% was achieved for the period from the Fund's inception on June 29,
1993 through November 30, 1993.* This compares extremely favorably
with the total return for the Standard & Poor's 500 Composite Stock Price
Index of 3.70%** or the total return of 0.42% for the Morgan Stanley
Capital International Europe, Australasia, Far East (EAFE) Index *** for
the period June 30, 1993 through November 30, 1993. The latter index is,
however, heavily weighted towards Japanese investment and declined
severely during the last few weeks of the period under review.
The world's major equity markets were generally strong, especially
those in the Far East, with the exception of Japan. A general move toward
lower interest rates helped either to accelerate growth forecasts for the
stronger economies or to heighten the prospects for recovery in the case
of those still in recession.
The allocation of funds geographically has been fairly consistent
over the period with the exception of Japan. Investments in the latter area
comprised nearly 30% of the portfolio in the early months, only to be
dramatically reduced around October as it became apparent that the
several stimulatory packages which had so far been introduced were
having little beneficial effect on the ailing Japanese economy. On
November 30th, Japanese stocks represented only 14% of the Fund's
invested assets or slightly less than the amount invested in the growing
markets of Hong Kong, Singapore and Malaysia. While the progress of
events in China will continue to influence sentiment in this region, we
remain enthusiastic about the growth prospects for the Far East (outside
of Japan). However, further stimulation by way of a tax cut could shortly
be forthcoming in Japan, which we believe could lead to a turnaround in
that economy as 1994 unfolds.
The Fund's exposure in continental Europe has been gradually built up
to around 30% of the portfolio. In addition, the Fund has about 14% of its
assets in UK stocks. Though the state of economic activity varies widely
from country to country, with the UK recovering nicely while Germany
still struggles with recession, we expect improvement in 1994 against a
background of potential further interest-rate reductions. Europe, including
the UK, represents, therefore, around 44% of the Fund's assets and
rewarding investment opportunities are still to be found, particularly
among smaller and medium-sized companies.
Another improving stock market was that of Mexico which, even
before the successful passage of the North American Free Trade
Agreement (NAFTA) through Congress, was moving ahead in anticipation of
re-expansion of the economy next year and better inflation figures. We
believe that foreign capital should continue to flow into Mexico and indeed
other Latin American countries as improved political stability and
economic management enhance the prospects for substantial wealth
creation. As of November 30th, 4.7% of the portfolio was invested in
Mexican securities.
Lastly, we should touch on the Fund's investments in Australia and
in various gold shares. These two areas of investment are somewhat
linked since the Australian economy is heavily commodity-oriented and
the nation is a large gold producer. In general terms, however, we believe
that Australia is a country that is well on the road to recovery from a long
and deep recession, and we expect that this situation will further improve
if metal prices rebound. Gold shares, on the other hand, provide a hedge
against the kind of economic, financial or monetary upsets that are
always possible in the heavily indebted and politically volatile world in
which we live.
The Fund has held approximately 5% to 15% of total assets in cash
and cash equivalents during the period under review. On the currency front,
some hedging has been introduced against a possible fall in the value of
the Japanese yen and to a lesser extent the German mark and the French
franc. This has been effected through the forward sales of these foreign
currencies against the dollar. Though the Fund has no actual investment in
the United States, it does have around a quarter of its assets currently
denominated in U.S. dollars through a combination of cash
instruments, hedged currencies and dollar-priced non-U.S. securities.
It can be seen from the structure of this Fund's portfolio of around
125 stocks spread across 17 countries that wide diversification is sought
in order to provide a core international investment with modest volatility.
We are confident that this vehicle should provide the long-term investor
with a rewarding investment and hope that you are pleased by the results
of the initial reporting period.
We look forward to serving your investment needs.
Sincerely,
(Joseph S. DiMartino Signature Logo)
Joseph S. DiMartino
President
December 14, 1993
New York, N.Y.
*** Total return represents the change during the period in a hypothetical
account with dividends reinvested.
*** SOURCE: LIPPER ANALYTICAL SERVICES, INC. - Reflects the
reinvestment of income dividends and, where applicable, capital gain
distributions. The Standard & Poor's 500 Composite Stock Price Index is a
widely accepted unmanaged index of stock market performance.
*** SOURCE: LIPPER ANALYTICAL SERVICES, INC. - The Morgan Stanley
Capital International Europe, Australasia, Far East (EAFE) Index is an
unmanaged index composed of a sample of companies representative of the
market structure of 16 European and Pacific Basin countries. The return
indicated includes gross dividends reinvested. The Index is the property of
Morgan Stanley & Co., Incorporated.
DREYFUS INTERNATIONAL EQUITY FUND, INC. NOVEMBER 30, 1993
DIVERSIFICATION OF FOREIGN INVESTMENTS*
[Exhibit A]
(Foreign Securities equal 87.3% of Total Net Assets)
ASSET ALLOCATION*
Common Stock.................... 87.3%
Cash Equivalents................ 12.7
------
100.0%
TEN LARGEST HOLDINGS*
Plettac AG...................... 1.6%
Baloise Holdings................ 1.6
Banque Nationale de Paris....... 1.5
Edison S.P.A.................... 1.4
Placer Dome..................... 1.4
Zeneca Group PLC................ 1.4
Grupo Carso S.A., A.D.R......... 1.3
SIP............................. 1.3
Commonwealth Bank of Australia.. 1.3
Commercial Union PLC............ 1.2
* As a percentage of Total Net Assets.
<TABLE>
<CAPTION>
DREYFUS INTERNATIONAL EQUITY FUND, INC.
STATEMENT OF INVESTMENTS NOVEMBER 30, 1993 (UNAUDITED)
COMMON STOCKS--87.3% SHARES VALUE
------------ ------------
<S> <C> <C>
ARGENTINA - 1.0% YPF S.A., A.D.R. CI. D............................ 40,000 $ 990,000
AUSTRALIA - 4.5% AAPC.............................................. 700,000 397,380
Brambles Industries............................... 90,000 714,096
Commonwealth Bank of Australia.................... 200,000 1,243,628
Newcrest Mining................................... 300,000 1,023,816
News.............................................. 70,000 455,139
Queensland Metals................................. 200,000 607,292
------------
4,441,351
------------
AUSTRIA - .8% Bank fuer Oberoesterreich und Salburg............. 5,650 315,087
Bau Holding....................................... 5,000 448,548
------------
763,635
------------
CANADA - 2.8% Franco Nevada Mining.............................. 7,000 465,530
Franco Nevada Mining (Warrants)................... 7,000 47,209
Placer Dome....................................... 60,000 1,382,540
TVX Gold.......................................... 150,000 913,264
------------
2,808,543
------------
FRANCE - 8.1% Assurance Generale de France...................... 9,000 999,662
Banque Nationale de Paris......................... 31,400 1,504,440
Compagnie Signaux et
Equipements Electronique.......................... 7,500 704,987
Groupe Zannier.................................... 2,700 415,385
Imetal............................................ 9,000 849,028
Louis Vuitton..................................... 1,200 747,591
Roussel-Uclaf..................................... 9,050 1,017,456
Sidel S.A. ....................................... 10,000 929,839
Societe Generale d'Enterprise..................... 15,100 617,785
Vilmorin et Cie S.A............................... 3,700 240,828
------------
8,027,001
GERMANY - 7.9% Allianz AG Holding (Warrants)..................... 700 606,123
AVA Allgemeine Handelsgesellschaft der
Verbraucher AG.................................... 2,000 1,008,746
Bayerische Vereinsbank AG......................... 3,400 1,072,537
Deutsche Bank AG (Warrants)....................... 4,000 706,706
Etienne Aigner AG................................. 628 172,105
Felten & Guilleaume Energietechnik................ 4,200 1,053,061
Plettac AG........................................ 4,000 1,562,682
Veba AG........................................... 3,250 863,761
Weru AG........................................... 900 721,574
------------
7,767,295
------------
HONG KONG - 8.5% B & B Asia........................................ 915,000 539,002
Champion Technology Holdings...................... 535,000 484,852
Cheung Kong Holdings.............................. 152,000 698,602
China Light and Power............................. 105,600 622,061
Dah Sing Financial Holdings....................... 178,000 743,203
Dairy Farm International Holdings................. 254,000 430,787
HSBC Holdings PLC................................. 46,800 518,048
Hongkong Electric Holdings........................ 115,000 388,594
Lamex Holdings.................................... 1,546,000 610,474
</TABLE>
<TABLE>
<CAPTION>
DREYFUS INTERNATIONAL EQUITY FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) NOVEMBER 30, 1993 (UNAUDITED)
COMMON STOCKS (CONTINUED) SHARES VALUE
------------ ------------
<S> <C> <C>
HONG KONG (CONTINUED) New Island Printing Holdings...................... 3,648,000 $ 547,861
Shaw Brothers..................................... 359,000 608,869
Sun Hung Kai Properties........................... 100,100 622,061
Swire Pacific, Cl. A. ............................ 80,000 554,117
Tsingtao Brewery.................................. 572,000 529,492
Vtech Holdings.................................... 437,000 495,048
------------
8,393,071
------------
ITALY - 3.7% Edison S.P.A. .................................... 340,000 1,407,316
Parmalat Finanziaria S.P.A. ...................... 800,000 960,310
SIP .............................................. 720,000 1,300,642
------------
3,668,268
------------
JAPAN - 14.0% Amway Japan....................................... 10,000 312,213
Asahi Concrete Works.............................. 26,000 489,440
Canon............................................. 50,000 629,017
DDI............................................... 12 611,570
Enix.............................................. 21,000 696,143
Hitachi Credit.................................... 20,000 348,944
Hogy Medical...................................... 6,000 388,981
Honda Motor....................................... 40,000 503,214
JCR Pharmaceutical................................ 10,000 560,147
Jusco............................................. 4,000 76,400
Kandenko.......................................... 23,000 477,319
Kissei Pharmaceutical............................. 14,000 714,784
Mitsubishi Bank................................... 15,000 358,127
Nippon Express.................................... 37,000 315,978
Nippon Steel...................................... 110,000 304,040
Nippon Telegraph & Telephone...................... 66 414,545
Nissan Chemical Industries........................ 130,000 574,197
Pioneer Electronic................................ 25,000 528,007
Rinnai............................................ 21,000 551,515
Secom............................................. 12,000 697,521
Seven Eleven Japan................................ 10,000 780,533
Sharp............................................. 52,000 649,403
Sony.............................................. 15,000 643,251
Sumitomo Bank..................................... 30,000 490,358
Sumitomo Metal Mining............................. 30,000 202,204
Tokio Marine & Fire Insurance..................... 50,000 509,642
Tokyo Electron.................................... 20,000 442,608
Toshoku........................................... 75,000 540,634
------------
13,810,735
MALAYSIA - 3.4% Bedford Berhad.................................... 105,000 205,303
Berjaya Singer Berhad............................. 251,400 663,597
Berjaya Singer Berhad - T.S.R. ................... 28,000 31,534
Leader Universal Holdings Berhad.................. 133,000 665,728
Malaysian Helicopter Services..................... 100,000 633,505
Multi-Purpose Holdings Berhad..................... 440,000 1,118,411
------------
3,318,078
------------
MEXICO - 4.7% Cifra S.A. de C.V., A.D.R. ....................... 280,000 865,200
Grupo Carso S.A., A.D.R. Ser. B..................(a) 75,000 1,331,250
</TABLE>
<TABLE>
<CAPTION>
DREYFUS INTERNATIONAL EQUITY FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) NOVEMBER 30, 1993 (UNAUDITED)
COMMON STOCKS (CONTINUED) SHARES VALUE
------------ ------------
<S> <C> <C>
MEXICO (CONTINUED) Panamerican Beverages, Cl. A..................... 15,000 $ 545,625
Telefonos De Mexico S.A., A.D.R. ................. 19,000 1,059,250
Transportacion Maritima
Mexicana S.A., A.D.R. ............................ 75,000 825,000
------------
4,626,325
------------
NETHERLANDS - 1.7% Akzo N.V.......................................... 8,570 795,099
Internationale Nederlanden Groep N.V. ............ 20,900 917,747
------------
1,712,846
------------
NEW ZEALAND - 1.0% Brierley Investments.............................. 1,500,000 960,336
------------
SINGAPORE - 2.6% Fraser and Neave.................................. 55,300 529,137
Haw Par Brothers International.................... 220,000 465,040
IPCO International................................ 101,000 636,300
Keppel............................................ 79,600 490,344
Robinson & Co. ................................... 101,000 505,316
------------
2,626,137
------------
SPAIN - 3.2% Centros Commercial Pryca.......................... 58,250 629,225
Hidroelectrica del Cantabrico S.A. ............... 26,600 635,365
Iberdrola S.A. ................................... 125,000 813,725
Repsol S.A. ...................................... 18,200 513,882
Viscofan Industria Navarra De
Envolturas Celulosicas S.A. ................... 36,000 545,455
------------
3,137,652
------------
SWITZERLAND - 4.7% Ateliers De Charmilles S.A., Cl. A. .............. 165 402,115
Baloise Holdings.................................. 900 1,534,743
Hilti AG.......................................... 1,600 949,580
SBC Bank Basket (Warrants)........................ 10,000 90,635
Sece Cortaillod Holdings S.A. .................... 180 592,145
Winterthur Schweiz Vers (Warrants)................ 8,000 226,922
Zurich Versicherungs.............................. 900 862,840
------------
4,658,980
------------
UNITED KINGDOM - 14.7% BAT Industries PLC................................ 135,000 1,055,032
BBA Group......................................... 300,000 786,720
Bemrose PLC....................................... 22,000 120,958
Blue Circle Industries PLC........................ 113,000 540,468
Booker PLC........................................ 50,000 300,235
British Gas PLC................................... 165,000 802,700
Commercial Union PLC.............................. 135,000 1,219,975
Cookson Group PLC................................. 200,000 596,000
Hammerson Property Investment &
Development, Cl. A. ...................... 175,000 983,028
Johnson, Matthey PLC.............................. 120,000 892,212
Lloyds Bank PLC................................... 100,000 883,570
Lucas Industries PLC.............................. 450,000 1,176,727
Saatchi & Saatchi................................. 300,000 800,130
Storehouse PLC.................................... 300,000 934,230
Welsh Water PLC................................... 95,000 900,258
Westland Group PLC................................ 300,000 1,054,920
</TABLE>
<TABLE>
<CAPTION>
DREYFUS INTERNATIONAL EQUITY FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) NOVEMBER 30, 1993 (UNAUDITED)
COMMON STOCKS (CONTINUED) SHARES VALUE
------------ ------------
<S> <C> <C>
UNITED KINGDOM (CONTINUED) Wolstenholme Rink PLC............................. 7,500 $ 60,121
Zeneca Group PLC.................................. 120,000 1,366,032
------------
14,473,316
------------
TOTAL COMMON STOCKS
(cost $83,959,002) $ 86,183,569
============
PREFERRED STOCK - .0%
AUSTRIA - .0% Bank fuer Oberoesterreich und Salburg
(cost $5,945).................................. 154 $ 7,924
============
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
SHORT-TERM INVESTMENTS - 9.1% AMOUNT
------------
<S>
UNITED STATES - 9.1% U.S. TREASURY BILLS: <C> <C>
3.06%, 1/20/1994............................... $ 1,478,000 $ 1,471,718
3.04%, 1/27/1994............................... 476,000 473,709
3.104%, 2/10/1994.............................. 3,493,000 3,471,615
3.093%, 2/17/1994.............................. 3,576,000 3,552,033
------------
TOTAL SHORT-TERM INVESTMENTS
(cost $8,969,075).............................. $ 8,969,075
============
TOTAL INVESTMENTS (cost $92,934,022)..................................................... 96.4% $ 95,160,568
====== ============
CASH AND RECEIVABLES (NET)............................................................... 3.6% $ 3,538,091
====== ============
NET ASSETS............................................................................... 100.0% $ 98,698,659
====== ============
</TABLE>
NOTE TO STATEMENT OF INVESTMENTS;
(a) Security Exempt from registration under Rule 144A of the Securities
Act of 1933. These securities may be resold in transactions exempt
from registration, normally to qualified institutional buyers. At
November 30, 1993, this security amounted to $1,331,250, or 1.4% of
net assets.
See notes to financial statements.
<TABLE>
<CAPTION>
DREYFUS INTERNATIONAL EQUITY FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES NOVEMBER 30, 1993 (UNAUDITED)
ASSETS:
<S> <C> <C>
Investments in securities, at value
(cost $92,934,022)-see statement.................................................... $ 95,160,568
Cash................................................................................... 2,758,989
Receivable for investment securities sold.............................................. 908,109
Net unrealized appreciation on forward currency exchange
contracts-Note 3(a)................................................................. 470,817
Dividends and interest receivable...................................................... 354,762
Receivable for subscriptions to Common Stock........................................... 281,353
Prepaid expenses-Note 1(e)............................................................. 105,710
------------
100,040,308
LIABILITIES:
Due to The Dreyfus Corporation......................................................... $ 73,980
Payable for investment securities purchased............................................ 1,151,978
Payable for Common Stock redeemed...................................................... 3,006
Accrued expenses....................................................................... 112,685 1,341,649
---------- ------------
NET ASSETS............................................................................... $ 98,698,659
REPRESENTED BY:
Paid-in capital........................................................................ $ 95,566,359
Accumulated undistributed investment income-net........................................ 249,619
Accumulated undistributed net realized gain on investments............................. 185,318
Accumulated net unrealized appreciation on investments and forward
currency exchange contracts-Note 3(b)............................................... 2,697,363
------------
NET ASSETS at value applicable to 6,894,917 outstanding shares of
Common Stock, equivalent to $14.31 per share (300 million shares
of $.001 par value authorized)......................................................... $ 98,698,659
============
</TABLE>
See notes to financial statements.
<TABLE>
<CAPTION>
DREYFUS INTERNATIONAL EQUITY FUND, INC.
STATEMENT OF OPERATIONS
FROM JUNE 29, 1993 (COMMENCEMENT OF OPERATIONS) TO NOVEMBER 30, 1993 (UNAUDITED)
INVESTMENT INCOME:
INCOME:
<S> <C> <C>
Cash dividends (net of $71,228 foreign taxes withheld at source)................... $ 460,682
Interest........................................................................... 120,875
----------
TOTAL INCOME................................................................... $ 581,557
EXPENSES:
Management fee-Note 2(a)........................................................... 145,054
Shareholder servicing costs-Note 2(b,c)............................................ 158,742
Custodian fees..................................................................... 55,695
Registration fees.................................................................. 33,373
Professional fees.................................................................. 20,414
Prospectus and shareholders' reports-Note 2(b)..................................... 13,994
Organization expenses-Note 1(e).................................................... 8,925
Directors' fees and expenses-Note 2(d)............................................. 6,110
Miscellaneous...................................................................... 968
----------
443,275
Less-reduction in management fee due to
undertakings-Note 2(a)........................................................ 111,337
----------
TOTAL EXPENSES............................................................. 331,938
----------
INVESTMENT INCOME-NET...................................................... 249,619
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments-Note 3(a)......................................... $ 185,318
Net unrealized appreciation on investments and forward currency
exchange contracts............................................................ 2,697,363
----------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS............................ 2,882,681
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS..................................... $3,132,300
==========
</TABLE>
See notes to financial statements.
<TABLE>
<CAPTION>
DREYFUS INTERNATIONAL EQUITY FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
FROM JUNE 29, 1993 (COMMENCEMENT OF OPERATIONS) TO NOVEMBER 30, 1993 (UNAUDITED)
OPERATIONS:
<S> <C>
Investment income-net............................................................ $ 249,619
Net realized gain on investments................................................. 185,318
Net unrealized appreciation on investments for the period........................ 2,697,363
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS..................... 3,132,300
------------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold.................................................... 126,021,140
Cost of shares redeemed.......................................................... (30,554,781)
------------
INCREASE IN NET ASSETS FROM CAPITAL STOCK TRANSACTIONS................... 95,466,359
------------
TOTAL INCREASE IN NET ASSETS..................................... 98,598,659
NET ASSETS:
Beginning of period-Note 1....................................................... 100,000
------------
End of period (including undistributed investment income-net of $249,619)........ $ 98,698,659
SHARES
------------
CAPITAL SHARE TRANSACTIONS:
Shares sold...................................................................... 9,040,642
Shares redeemed.................................................................. (2,153,725)
------------
NET INCREASE IN SHARES OUTSTANDING....................................... 6,886,917
============
</TABLE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS (UNAUDITED)
Contained below is per share operating performance data for a share
of Common Stock outstanding, total investment return, ratios to average
net assets and other supplemental data for the period June 29, 1993
(commencement of operations) to November 30, 1993. This information
has been derived from information provided in the Fund's financial
statements.
PER SHARE DATA:
<S> <C>
Net asset value, beginning of period............................................. $ 12.50%*
-------
INVESTMENT OPERATIONS:
Investment income-net............................................................ .04
Net realized and unrealized gain on investments.................................. 1.77
-------
TOTAL FROM INVESTMENT OPERATIONS......................................... 1.81
-------
Net asset value, end of period................................................... $ 14.31
=======
TOTAL INVESTMENT RETURN 14.48%*
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets.......................................... .73%*
Ratio of net investment income to average net assets............................. .55%*
Decrease reflected in above expense ratio due to undertakings by Dreyfus......... .24%*
Portfolio Turnover Rate.......................................................... 17.65%*
Net Assets, end of period (000's Omitted)........................................ $98,699
- ---------------
*Not Annualized.
</TABLE>
See notes to financial statements.
DREYFUS INTERNATIONAL EQUITY FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES:
Dreyfus International Equity Fund, Inc. (the "Fund") was incorporated
on January 27, 1993 and had no operations until June 29, 1993
(commencement of operations) other than matters relating to its
organization and registration as a non-diversified open-end management
investment company under the Investment Company Act of 1940 ("Act")
and the Securities Act of 1933 and the sale and issuance of 8,000 shares
of Common Stock ("Initial Shares") to The Dreyfus Corporation
("Dreyfus"), the Fund's investment adviser. M&G Investment Management
Limited ("M&G") serves as the Fund's sub-investment adviser. Dreyfus
Service Corporation ("Distributor"), a wholly-owned subsidiary of
Dreyfus, acts as the distributor of the Fund's shares, which are sold to the
public without a sales load. As of November 30, 1993, the Manager held
408,000 shares. The Fund's fiscal year ends on May 31.
(A) PORTFOLIO VALUATION: Investments in securities (including
options and financial futures) are valued at the last sales price on the
securities exchange on which such securities are primarily traded or at
the last sales price on the national securities market. Securities not
listed on an exchange or the national securities market, or securities for
which there were no transactions, are valued at the average of the most
recent bid and asked prices, except for open short positions, where the
asked price is used for valuation purposes. Bid price is used when no asked
price is available. Short-term investments are carried at amortized cost,
which approximates value. Investments traded in foreign currencies are
translated to U.S. dollars at the prevailing rates of exchange.
(B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities
transactions are recorded on a trade date basis. Realized gain and loss
from securities transactions are recorded on the identified cost basis.
Dividend income is recognized on the ex-dividend date and interest
income, including, where applicable, amortization of discount on
investments, is recognized on the accrual basis.
(C) DIVIDENDS TO SHAREHOLDERS: Dividends are recorded on the ex-
dividend date. Dividends from investment income-net and dividends from
net realized capital gain are normally declared and paid annually, but the
Fund may make distributions on a more frequent basis to comply with the
distribution requirements of the Internal Revenue Code. To the extent that
net realized capital gain can be offset by capital loss carryovers, if any,
it is the policy of the Fund not to distribute such gain.
(D) FEDERAL INCOME TAXES: It is the policy of the Fund to qualify as
a regulated investment company, if such qualification is in the best
interests of its shareholders, by complying with the provisions available
to certain investment companies, as defined in applicable sections of the
Internal Revenue Code, and to make distributions of taxable income
sufficient to relieve it from all, or substantially all, Federal income
taxes.
(E) OTHER: Organization expenses paid by the Fund are included in
prepaid expenses and are being amortized to operations from June 29,
1993, the date operations commenced, over the period during which it is
expected that a benefit will be realized, not to exceed five years. At
November 30, 1993, the unamortized balance of such expenses amounted
to $102,195. In the event that any of the Initial Shares are redeemed
during the amortization period, the redemption proceeds will be reduced
by any unamortized organization expenses in the same proportion as the
number of such shares being redeemed bears to the number of such shares
outstanding at the time of such redemption.
DREYFUS INTERNATIONAL EQUITY FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
NOTE 2-INVESTMENT ADVISORY FEE, SUB-INVESTMENT ADVISORY FEE AND
OTHER TRANSACTIONS WITH AFFILIATES:
(A) Pursuant to a Management Agreement with Dreyfus, the
management fee is computed at the annual rate of .75 of 1% of the average
daily value of the Fund's net assets and is payable monthly. Dreyfus and
M&G have agreed that if in any full fiscal year the Fund's aggregate
expenses, exclusive of interest, taxes, brokerage and
extraordinary expenses, exceed the expense limitation of any state having
jurisdiction over the Fund, Dreyfus and M&G will bear the excess expense
in proportion to their management fee and sub-advisory fee to the extent
required by state law. The most stringent state expense limitation
applicable to the Fund presently requires reimbursement of expenses in
any full fiscal year that such expenses (exclusive of distribution expenses
and certain expenses as described above) exceed 2 1/2% of the first $30
million, 2% of the next $70 million and 1 1/2% of the excess over $100
million of the average value of the Fund's net assets in accordance with
California "blue sky" regulations.
However, Dreyfus had undertaken from June 29, 1993 through
January 12, 1994, to reduce the management fee paid by the Fund, by
certain specified annual percentages of the Fund's average net assets. The
reduction in management fee pursuant to the undertakings amounted to
$111,337 for the period ended November 30, 1993.
Pursuant to a Sub-Investment Advisory Agreement between Dreyfus
and M&G, the sub-advisory fee is computed at the annual rate of .30 of 1%
of the average daily value of the Fund's net assets and is payable monthly
by Dreyfus.
(B) Under the Distribution Plan (the "Plan") adopted pursuant to Rule
12b-1 under the Act, the Fund pays the Distributor, at an annual rate of
..50 of 1% of the value of the Fund's average daily net assets, for costs and
expenses in connection with advertising, marketing and distributing the
Fund's shares and for servicing shareholder accounts. The Distributor may
make payments to one or more Service Agents (a securities dealer,
financial institution, or other industry professional) based on the value of
the Fund's shares owned by clients of the Service Agent. The Plan also
separately provides for the Fund to bear the costs of preparing, printing
and distributing certain of the Fund's prospectuses and statements of
additional information and costs associated with implementing and
operating the Plan, not to exceed the greater of $100,000 or .005 of 1% of
the Fund's average daily net assets for any full fiscal year. During the
period ended November 30, 1993, the Fund was charged $108,096 pursuant
to the Plan.
(C) Pursuant to the Fund's Shareholder Services Plan, the Fund pays
the Distributor an annual rate of .25 of 1% of the value of the Fund's
average daily net assets for servicing shareholder accounts. The services
provided may include personal services relating to shareholder accounts,
such as answering shareholder inquiries regarding the Fund and providing
reports and other information, and services related to the maintenance of
shareholder accounts. During the period ended November 30, 1993, the
Fund was charged an aggregate of $48,351 pursuant to the Shareholder
Services Plan.
(D) Certain officers and directors of the Fund are "affiliated
persons," as defined in the Act, of Dreyfus and/or the Distributor. Each
director who is not an "affiliated person" receives an annual fee of
$1,000 and an attendance fee of $250 per meeting.
DREYFUS INTERNATIONAL EQUITY FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
(E) On December 5, 1993, Dreyfus entered into an Agreement and
Plan of Merger providing for the merger of Dreyfus with a subsidiary of
Mellon Bank Corporation ("Mellon").
Upon closing of the merger, it is planned that Dreyfus will retain its
New York headquarters and will be a separate subsidiary within the Mellon
organization. It is expected that Dreyfus' management team and mutual
fund managers will remain in place, and the Dreyfus mutual funds will be
operated in the same manner as they are currently.
Following the merger, Dreyfus will be either a direct or indirect
subsidiary of Mellon, whose principal banking subsidiary is Mellon Bank,
N.A. Closing of this merger is subject to a number of contingencies,
including the receipt of certain regulatory approvals and the approvals of
the stockholders of Dreyfus and of Mellon. The merger is expected to occur
in mid-1994, but could occur significantly later.
Because the merger will constitute an "assignment" of the Fund's
Management Agreement with Dreyfus under the Investment Company Act of
1940, and thus a termination of such Agreement, Dreyfus will seek prior
approval from the Fund's Board and shareholders.
NOTE 3-SECURITIES TRANSACTIONS:
(A) The aggregate amount of purchases and sales of investment
securities, excluding short-term securities and forward currency
exchange contracts, during the period ended November 30, 1993 amounted
to $90,817,515 and $7,223,205, respectively.
In addition, the following summarizes open forward currency
exchange contracts at November 30, 1993:
U.S. DOLLAR UNREALIZED
FORWARD CURRENCY SALE CONTRACTS PROCEEDS VALUE APPRECIATION
- ------------------------------- ----------- ----------- ------------
Deutsche Marks, expiring 4/12/94... $ 1,987,353 $ 1,901,763 $ 85,590
French Francs, expiring 4/12/94.... 3,306,131 3,225,537 80,594
Japanese Yen, expiring 4/12/94..... 12,654,863 12,350,230 304,633
--------
$470,817
========
When executing forward currency exchange contracts, the Fund is
obligated to buy or sell a foreign currency at a specified rate on a certain
date in the future. With respect to sales of forward currency exchange
contracts, the Fund would incur a loss if the value of the contract
increases between the date the forward contract is opened and the date
the forward contract is closed. The Fund realizes a gain if the value of the
contract decreases between those dates. With respect to purchases of
forward currency exchange contracts, the Fund would incur a loss if the
value of the contract decreases between the date the forward contract is
opened and the date the forward contract is closed.
(B) At November 30, 1993, accumulated net unrealized appreciation
on investments was $2,697,363, consisting of $6,351,831 gross
unrealized appreciation and $3,654,468 gross unrealized depreciation.
At November 30, 1993, the cost of investments for Federal income
tax purposes was substantially the same as the cost for financial
reporting purposes (see the Statement of Investments).
(Dreyfus Logo)
International
Equity
Fund, Inc.
Semi-Annual
Report
November 30, 1993
DREYFUS INTERNATIONAL EQUITY FUND, INC.
144 Glenn Curtiss Boulevard
Uniondale, NY 11556
INVESTMENT ADVISER
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
SUB-INVESTMENT ADVISER
M&G Investment Management Limited
Three Quays, Tower Hill
London, EC3R 6BQ, England
DISTRIBUTOR
Dreyfus Service Corporation
200 Park Avenue
New York, NY 10166
CUSTODIAN
The Bank of New York
110 Washington Street
New York, NY 10286
TRANSFER AGENT &
DIVIDEND DISBURSING AGENT
The Shareholder Services Group, Inc.
P.O. Box 9671
Providence, RI 02940
Further information is contained in the Prospectus,
which must precede or accompany this report.
Printed in U.S.A. 095SA9311
(Dreyfus Logo)
International
Equity
Fund,Inc.
Semi-Annual
Report
November 30,1993
(Dreyfus Lion Logo)
Dreyfus International Equity Fund, Inc. November 30, 1993
Exhibit A:
Diversification of Foreign Investments *
|----------------------------------------------------------|
|United Kingdom 14.7 % |
|Japan 14.0 % |
|Hong Kong 8.5 % |
|France 8.1 % |
|Germany 7.9 % |
|Switzerland 4.7 % |
|Mexico 4.7 % |
|Australia 4.5 % |
|Italy 3.7 % |
|Malaysia 3.4 % |
|Spain 3.2 % |
|Canada 2.8 % |
|Singapore 2.6 % |
|Netherlands 1.7 % |
|Argentina 1.0 % |
|New Zealand 1.0 % |
|Austria 0.8 % |
|----------------------------------------------------------|
(Foreign Securities equal 87.3% of Total Net Assets)
