THE ASIA TIGERS FUND, INC.
November 11, 1996
DEAR FUND SHAREHOLDER,
We are pleased to present you with the audited financial statements of The Asia
Tigers Fund, Inc. (the "Fund") for the fiscal year ended October 31, 1996.
Beginning on page two, the Fund's Investment Adviser provides a detailed look
at the Fund's allocations and investments, as well as the economic and market
conditions of the Asian region.
Since its inception, the Fund has provided its shareholders with dollar-based,
broad exposure to the emerging equity markets of the Asian Pacific basin and
the Indian subcontinent. As of October 31, 1996, the Fund held 104 issues in
12 Asian countries.
In U.S. dollar terms, the Asian markets' performance was mixed over the 12
months, as can be expected from emerging countries. The tiny stock market
of Bangladesh grew 250%, for example, while the Korean market declined 36%.
In spite of the volatility these markets have experienced in the last year,
we remain optimistic about the region's long-term growth potential. The
macroeconomic fundamentals that initially attracted us, such as the region's
over 7% annual growth rate, remain in place and have been reinforced by other
positives, such as declining rates of inflation.
On behalf of the Board of Directors, thank you for your participation in the
Fund.
Sincerely,
/s/ALAN RAPPAPORT
Alan Rappaport
Chairman
<PAGE>
REPORT OF THE INVESTMENT ADVISER
PERFORMANCE
The 12-month period ended October 31, 1996, was mixed for Asian equity
investors. Overall, this 12-month period was supported by sound economic
growth (despite lower-than-expected export growth), lower-than-expected
inflation as well as a stable interest rate environment in Asia. In U.S. dollar
terms, six of the 12 markets where The Asia Tigers Fund, Inc. (the "Fund")
invests rose while six fell. Four markets in particular, Hong Kong, Malaysia,
Taiwan and Bangladesh increased more than 25%. Bangladesh, which is one of the
smallest markets in the world, has had extraordinary performance and increased
250% over the last twelve months. Taiwan's market returned 38%, while Hong Kong
and Malaysia rose between 25% and 30%. Four markets experienced double-digit
declines: Korea (36%), Thailand (29%), Sri Lanka (18%) and Pakistan (14%).
India and Singapore also fell, though by less than 10%.
The Fund's net asset value per share ("NAV") on October 31, 1996, was $12.49,
rising 3.39% during the period.
COUNTRY ALLOCATION
During the 12-month period, various geographic allocation changes have been
made between countries in the region based on the changing underlying economic
conditions and relative equity valuations. Since the end of October 1995, the
larger changes in the Fund's country weightings include an increase in Taiwan
and Hong Kong and a decrease in Thailand and Korea. Our increasingly positive
investment view towards Hong Kong and Taiwan is a reflection of the improved
fundamentals we see for China. The reductions to Korea and Thailand reflect our
lowered expectations, in the near term, for an export-led recovery. The pie
charts on page 3 indicate the Fund's breakdown at the end of the Fund's last
two fiscal years.
REGIONAL OUTLOOK
Although Asia's economic growth is still strong compared to other regions of
the world, relative to its own history, the past year has been one of slowing
growth largely due to a sharp slowdown in exports. We continue to believe the
region's economic output will grow by more than 7% in both 1996 and 1997. For
China, the largest economy in the region, we anticipate that growth will
accelerate from 10% this year to 11% in 1997, based on figures published by the
Asian Development Bank. Furthermore, we believe China's economic strength will
have a stimulative effect on all the economies in the region.
Over the last year, the region's slower economic growth has led to lower
inflation. Because most of Asia's currencies are either directly or indirectly
linked to the United States dollar, inflation in Asia has not typically been as
big a problem as in many of the world's emerging countries.
- -------------------------------------------------------------------------------
/ /
/ The Fund's net asset value is calculated weekly and published in The Wall /
/ Street Journal every Monday under the heading, "Closed End Funds." The /
/ Fund's NAV is also published in The New York Times on Mondays and in /
/ Barron's on Saturdays. The Fund is listed on the New York Stock Exchange /
/ under ticker symbol GRR. /
/ /
/ If you have any questions or would like an update on the Fund, please call /
/ our toll-free phone number, (800) 421-4777. This number provides a /
/ recorded monthly market review as well as specific details about the Fund, /
/ its portfolio and performance. /
/ /
- -------------------------------------------------------------------------------
<PAGE>
OCTOBER 31, 1996 OCTOBER 31, 1995
[PIE CHART] [PIE CHART]
Calendar year 1996 is proving to be an especially low inflation year even by
Asian standards. In the Philippines, for example, inflation rates hit a seven
year low in September of just 4.4%. We believe Singapore's inflation will be
below 2% in 1996. Thailand, Indonesia, Hong Kong and China have all seen
inflation rates fall significantly to recent year lows. (For example, China's
inflation has fallen from more than 23% in 1993 to approximately 10% in 1996.)
As Asia's growth rates heat up again, however, investors can expect rising
inflation as a natural consequence.
In addition, with U.S. interest rates trending downwards (the 30-year Treasury
bond yield had fallen to 6.4% at the time this report was written), and the
U.S. stock market hitting higher and higher record levels (the Dow Jones
Industrial Index has broken through 6,300), we believe the investment value of
Asian equities is very attractive.
The following comments attempt to provide the investor with a brief summary
of the Investment Adviser's view on the Fund's target markets and on some of
the stocks that make up the portfolio.
GEORGRAPHIC ALLOCATION AS OF OCTOBER 31, 1996
- -------------------------------------------------------------------------------
HONG KONG
US$74.9 MILLION, 29.8% OF THE FUND'S INVESTMENT PORTFOLIO
As the largest country weight in the Fund during the past 12 months, we are
pleased with the Hong Kong market's strong 28% rise (in U.S. dollar terms).
The stock market is sending a clear signal to the world that Hong Kong's change
to Chinese sovereignty on July 1, 1997, is on the right path. The new Chief
Executive is due to be appointed by the end of 1996, and residential property
prices have moved up 20% over the last 12 months. In addition, the
macroeconomic outlook for Hong Kong is improving. Inflation in Hong Kong hit
a low annual rate of 4.4% in August. Corporate earnings reported during the
past six months have been at the high end of investors' expectations and we
expect this growth rate to accelerate in 1997 to 14%. With the stock market
trading at 12.6 times our forecast 1997 earnings, we view the market as
attractively valued. The five-year average price/earnings ratio of the market
in Hong Kong is 15.6 times. In addition, the new China-related listings that
have been issued this year and those due to list in the next six to nine months
will broaden the market and reduce the Hong Kong market's sensitivity to U.S.
interest rates. In summary, looking forward we remain comfortable having Hong
Kong as the Fund's single largest country weighting.
<PAGE>
HUTCHISON WHAMPOA is the Fund's largest holding in Hong Kong as well as the
Fund's biggest holding as a percentage of total net assets (3.1% of NAV) as of
10/31/96. The conglomerate has a diverse group of businesses, including:
property investment and development, container terminal operations, retail,
telecommunications, media, energy, finance and investment services. In 1995,
Hutchison reported earnings per share growth of over 19% on sales of US$4.5
billion. We believe the company's stock is currently undervalued and expect
strong outperformance, especially considering Hutchison's early positioning
as a major force in China's container terminal industry.
- -------------------------------------------------------------------------------
MALAYSIA
US$46.5 MILLION, 18.5% OF THE FUND'S INVESTMENT PORTFOLIO
At this time last year, one of our biggest concerns about the Malaysian economy
was the size of its current account deficit, which at that time represented
about 9% of the country's economic output. The country seemed to be at great
risk of trying to grow too quickly and igniting inflation. During 1996,
Malaysia has surprised economic forecasters by the degree to which the current
account has been improving; the government has forecast that the current
account deficit will shrink to just 4.4% of economic output by the end of next
year. In addition, inflation has been falling while corporate earnings have
been generally exceeding investors' expectations. Although some of the
improvement in the current account deficit can be attributed to the Japanese
yen's appreciation versus the Malaysian ringgit rather than an improvement in
fundamentals, economic growth is slowing to a more sustainable rate. Looking
forward, we are likely to maintain our current Malaysia country weighting.
Among its Malaysia holdings, the Fund is overweight in banking, gaming and
consumer stocks while underweight in property and utility companies. The
Fund's largest Malaysian investment is MALAYAN BANKING. With assets in excess
of US$37 billion, Malayan Banking is the largest bank in Malaysia. In addition,
for the fiscal year ended June 1996, the company was able to report earnings
per share growth of 24%. We consider Malayan Banking a key stock for the Fund.
- -------------------------------------------------------------------------------
TAIWAN
US$26.5 MILLION, 10.6% OF THE FUND'S INVESTMENT PORTFOLIO
During the past 12 months, Taiwan's importance to the Fund grew from being one
of the smaller country weights to one of the largest. The Taiwanese have been
raising the limits on the amount of stock foreigners may own. As a result of
these market opening measures, Taiwan was added to an important set of stock
market indices earlier this year by Morgan Stanley Capital International. In
addition to being recognized as an essential stock market within the region,
the economy has benefited from falling inflation and rising domestic liquidity.
Taiwan's central bank has cut reserve requirements in order to stimulate
economic activity. In addition, we believe the property market, which has been
in a correction phase for the past few years, has bottomed and will improve
from current levels. In recent weeks, Taiwan's central bank has been sending
signals that their monetary policy will be less stimulative and we will likely
trim the country exposure. Given sensitive China/Taiwan relations, political
risk is always a concern for investors. We anticipate that corporate earnings
will recover in 1997.
The Fund's largest holding in Taiwan is CHINA STEEL GDR. The company is
Taiwan's largest steel producer and ranks among the largest and most efficient
producers of steel in the world. In the year ended June 1996, the company
reported pre-tax profit growth of 12% on net sales of US$3.2 billion.
<PAGE>
- -------------------------------------------------------------------------------
SINGAPORE
US$23.4 MILLION, 9.3% OF THE FUND'S INVESTMENT PORTFOLIO
Singapore has been described as the Switzerland of Asia. Its politics have
been stable for decades, its currency has been appreciating against the U.S.
dollar, inflation is very low (we estimate a rate below 2% for both 1996 and
1997) and the government's financial position is one of the strongest in the
world. The country has a savings rate of over 50% and has excellent
infrastructure. Singapore's telecommunications, power, road, port and airport
facilities rival the best in the world. After a decade of seeing the economy
grow an average of 9% per year, Singapore is slowing. The government has set a
target of 5%-7% growth for both 1996 and 1997. Slowing economic growth has not
gone unnoticed, and the market has fallen 8.1% during the first ten months of
1996. We believe this drop in the market is overdone and may add to the Fund's
Singapore investments in the future.
The Fund's largest position in Singapore is OVERSEAS CHINESE BANKING
CORPORATION. OCBC has over 50 branches in Singapore, 25 in Malaysia and a
further 20 overseas branches in other countries around the world. With assets
of over US$44 billion, the bank is among Asia's largest. In addition, the
company is one of the largest owners of prime real estate in Singapore. The
company's stock commands a premium multiple to its banking peer group given
the hidden values on its balance sheet, and we believe OCBC's stock will
outperform the broader market.
- -------------------------------------------------------------------------------
INDIA
US$18.0 MILLION, 7.2% OF THE FUND'S INVESTMENT PORTFOLIO
With over 7,000 listed companies, nearly one billion people, a transparent and
democratic political system, and market-oriented liberalization, India's stock
market offers investors one of the largest investment opportunities in the
world today. The Congress Party, which had dominated politics since India's
independence in 1947, lost power earlier this year to a coalition government.
Although this change has meant some upheaval and transition, we view this as a
result of India's democratic process in action. As the country overcomes some
of its infrastructure challenges (power, roads, ports and airports, for
example), we believe this country will see tremendous gains across all sectors.
We estimate that the Indian economy will grow in the 6%-7% range in 1996 and
1997 with corporate earnings growth over the same period of between 10%-15%.
We will likely leave the Fund's Indian exposure near its current level.
The Fund's largest position in India is in HINDUSTAN LEVER. The company is
the largest consumer products company in India and is the market leader in
soaps, detergents and personal care products. With a market capitalization of
over US$3.1 billion, the company is one of the largest listed companies in
India. The company has maintained a high return on equity and is a core,
long-term Indian holding for the Fund.
- -------------------------------------------------------------------------------
THAILAND
US$17.2 MILLION, 6.9% OF THE FUND'S INVESTMENT PORTFOLIO
Thailand's stock market has fallen a dramatic 29% during the past 12 months.
The country has experienced political turmoil that resulted in a no-confidence
motion and new general elections, which are scheduled for November. In addition
to the political uncertainty, exports have fallen sharply and there are
concerns about domestic interest rates moving higher given the Bank of
Thailand's new restrictive policy regarding offshore borrowing.
<PAGE>
On the positive side, inflation has slowed dramatically, the current account
deficit appears to have peaked and equity valuations look attractive. We expect
corporate earnings growth to pick up from 6% this year to 10% in 1997. With the
stock market trading at just 14.2 times our 1996 earnings forecast, the Thai
market has significant appreciation potential especially considering that the
five-year average price/earnings ratio is 19.9 times. We expect to remain
guardedly optimistic on the Thai market and expect outperformance from the
current depressed levels.
In Thailand, the Fund's largest holding is BANGKOK BANK. With 465 domestic
branches and offices in 13 countries, Bangkok Bank is a major presence in
Thailand's banking industry. With over US$40 billion in assets, Bangkok Bank
was able to report earnings per share growth of nearly 14% in 1995 and has
grown earnings a further 7.8% in the nine months ended September 30, 1996.
- -------------------------------------------------------------------------------
KOREA
US$10.3 MILLION, 4.1% OF THE FUND'S INVESTMENT PORTFOLIO
Korea's economy is suffering from cyclical downturns in nearly all of its major
industries (semiconductors, petrochemicals, steel, autos and machinery) and the
stock market has not been spared. For the 12 months ended October 31, 1996, the
Korean stock market declined more than 36% in U.S. dollar terms. The country's
current account deficit during the first nine months of 1996 has exploded to
US$17.1 billion. Korea will need to operate in this very difficult environment
until 1) there is a global recovery in its cyclical industries and/or 2)
further depreciation of the won improves Korea's export competitiveness. On the
positive front, domestic interest rates are heading lower.
On November 8, the Bank of Korea reduced reserve requirements by 1.9%. As
domestic interest rates fall, domestic stocks become better investment
alternatives. Korea has been accepted to join the Organization for Economic
Cooperation and Development and Korea's National Assembly is likely to approve
membership before the end of this year. This is a significant achievement and
will recognize Korea for its past economic success and further push
liberalizing reforms. The Korean government raised the foreign stock ownership
limit to 20% on October 1 and will increase it further to 23% by the end of
1997. In the near term, we do not believe the Korean market can move
convincingly higher.
KOREA ELECTRIC POWER CORPORATION is Korea's monopoly integrated electric
utility company. With a market capitalization of over US$21 billion, the
company's capitalization dominates the 700 other companies listed on the
Korean Stock Exchange. We believe the utility's monopoly position is one
of the safest in Asia given the government's protective policies.
- -------------------------------------------------------------------------------
INDONESIA
US$9.5 MILLION, 3.8% OF THE FUND'S INVESTMENT PORTFOLIO
Indonesia, the world's fourth most populous country, has had three decades of
political stability with President Suharto's strong leadership. Earlier this
year, the stock market stumbled under widespread rumors that the 74-year-old
President was having heart trouble. The stock market recovered just as quickly
when those rumors were proven false, but investors in Indonesia can expect
leadership-succession concerns to flare up from time to time. Indonesia is the
only economy in Asia (where the Fund invests) that benefits from rising oil
prices. The price of oil has risen more than 40% during the past 12 months.
In addition, the depreciation of the yen helps the country's indebtedness
position, since much of Indonesia's debt is being paid off in less valuable
yen. In 1997, we expect corporate earnings growth to accelerate to 19% from
1996's growth rate
<PAGE>
of 14%. Indonesia is a country of enormous investment potential and is likely
to grow as a percentage of the Fund's assets in the long term.
Within Indonesia, the Fund is overweighted in consumer and banking stocks and
underweighted in property stocks. BANK INTERNATIONAL INDONESIA is one of the
Fund's largest Indonesian holdings. The Bank is one of Indonesia's larger
private banks with a proven track record of superior profit growth. For 1995,
the company reported earnings growth of 29%. With the stock currently trading
at a price/earnings ratio of less than 13 times our 1997 forecast earnings, we
believe the stock has significant upside potential.
- -------------------------------------------------------------------------------
PHILIPPINES
US$8.1 MILLION, 3.2% OF THE FUND'S INVESTMENT PORTFOLIO
We believe that, on average, companies in the Philippines will be able to grow
earnings at 28% and 30% in 1996 and 1997, respectively. In addition, during
this past September inflation fell to a seven-year low and food prices have
come down steadily. Although we expect an increase in inflation as the
government implements gasoline price increases, we believe the Philippines
offers attractive investment opportunities. We do not have plans at this time
to change the Philippines' weighting in the Fund from its current level.
In the Philippines, the Fund's top holding is DM CONSUNJI HOLDINGS. DMCI is a
construction company and its projects include high-rise commercial buildings,
urban housing, infrastructure and property development. In 1995, the company
reported earnings of US$15 million, which represented an increase of more than
45% over 1994's earnings.
- -------------------------------------------------------------------------------
PAKISTAN
US$0.9 MILLION, 0.3% OF THE FUND'S INVESTMENT PORTFOLIO
Although the recent removal of Prime Minister Benazir Bhutto and the
dissolution of regional and national governments has been turbulent for
Pakistan, these changes may pave the way for improved economic and political
reform. We remain cautious on increasing the Fund's minor Pakistan exposure
until we feel the risk justifies the potential rewards.
The Fund's only holding in Pakistan is PAKISTAN STATE OIL, the country's
largest oil marketing company with control of the domestic market and over
2,200 service stations. The company has a market capitalization of over US$450
million which makes it the eleventh largest company on the Karachi Stock
Exchange. Pakistan State Oil's monopoly position has allowed it to win key
contracts such as the fuel supply agreement for a 1,292 MW Hub power station.
- -------------------------------------------------------------------------------
BANGLADESH
US$0.6 MILLION, 0.2% OF THE FUND'S INVESTMENT PORTFOLIO
Although not a large country exposure for the Fund, Bangladesh's incredible
250% rise over the past 12 months has helped the Fund increase its net asset
value. That same spectacular rise has made us increasingly cautious about the
near term appreciation potential of the market. We have trimmed the Fund's
investments to just one holding in Bangladesh.
BEXIMCO PHARMACEUTICALS is the fourth largest company on the Dhaka Stock
Exchange with a capitalization of US$309 million. The company dominates the
local pharmaceutical market and distributes antibiotics, anti-ulcers, anti-
rheumatics, anti-allergenics, anti-depressants and vitamins.
<PAGE>
With the stock price appreciating 477% during the first 10 months of 1996, we
are an ongoing seller rather than buyer of the stock. As a reference, in the
Fund's April 30 semiannual report, the stock closed at a price that was 5.6
times our 1996 earnings forecast and at October 31, the stock closed at over
30 times our 1997 forecast.
- -------------------------------------------------------------------------------
SRI LANKA
US$0.1 MILLION, 0.1% OF THE FUND'S INVESTMENT PORTFOLIO
Sri Lanka's civil war in the North has intensified. The cost both in terms of
human life and economic potential continues to rise. During 1996, the economy
grew by less than 5% and the inflation rate is expected to be 13% this year and
15% in 1997. The Fund maintains a small strategic exposure in Sri Lanka. We
believe that good growth possibilities exist while the country adopts market-
oriented policies, but we remain cautious for the time being.
At present DEVELOPMENT FINANCE CORPORATION OF CEYLON is the Fund's only
Sri Lankan holding. The company is able to access low-cost funding and can
offer attractive financing for companies in need of capital. The company has a
dominant market share and a market capitalization of US$175 million as of
October 31, 1996.
- -------------------------------------------------------------------------------
CHINA
NO CURRENT, DIRECT HOLDINGS
As of the end of the fiscal year, the Fund had no holdings in China.
Historically, we have had a cautious view regarding investing directly on the
listed exchanges in China (Shenzen and Shanghai). We believe the Chinese
exchanges are currently weak in terms of liquidity, size (market
capitalization), transaction transparency and quality information, and
transaction costs are high. Chinese companies listed in Hong Kong, Taiwan and
New York tend to have above average management skills. At this time we believe
better alternative China exposures exist on the listed exchanges in Taiwan and
Hong Kong, both of which have significant China exposure.
- -------------------------------------------------------------------------------
BARCLAYS GLOBAL INVESTORS
London
Hong Kong
November 19, 1996
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS THE ASIA TIGERS FUND, INC.
OCTOBER 31, 1996
<CAPTION>
NUMBER PERCENT
OF SHARES SECURITY OF HOLDINGS COST VALUE
- ---------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
COMMON STOCKS 85.11%
BANGLADESH 0.22%
HEALTH/PERSONAL CARE 0.22%
62,500 Beximco Pharmaceuticals............................... $ 173,227 $ 560,212
----------- -----------
TOTAL BANGLADESH...................................... 173,227 560,212
----------- -----------
HONG KONG 27.37%
BANKING 7.06%
609,967 Bank of East Asia..................................... 1,886,184 2,382,530
610,000 Hang Seng Bank........................................ 5,924,859 7,238,706
363,000 HSBC Holdings......................................... 4,159,742 7,394,557
1,500,000 HSBC Warrants (Exp. date 10/06/97)*................... 340,143 455,915
1,000,000 HSBC Warrants (Exp. date 10/15/97)*................... 267,124 267,082
----------- -----------
12,578,052 17,738,790
----------- -----------
MULTI-INDUSTRY 6.67%
670,000 Citic Pacific......................................... 2,123,238 3,258,274
3,300,000 Guangdong Investments................................. 2,219,331 2,368,819
2,000,000 Hutchison Warrants (Exp. date 1/16/98)*............... 326,638 333,691
2,500,000 Hutchison Warrants (Exp. date 11/24/97)*.............. 367,549 358,912
1,150,000 Hutchison Whampoa..................................... 6,020,806 8,031,869
270,000 Swire Pacific A....................................... 1,925,053 2,383,370
----------- -----------
12,982,615 16,734,935
----------- -----------
REAL ESTATE 11.77%
1,000,000 Cheung Kong Holdings.................................. 6,076,322 8,018,935
2,000,000 Cheung Kong Warrants (Exp. date 10/30/97)*............ 236,361 219,874
2,700,000 China Resources Enterprise............................ 2,672,677 3,038,142
400,000 Henderson Land Development............................ 3,200,372 3,556,786
440,000 New World Development................................. 2,279,304 2,560,886
700,000 Sun Hung Kai Properties............................... 5,801,580 7,967,200
3,000,000 Sun Hung Kai Properties Warrants (Exp. date 7/10/97)*. 890,332 989,433
776,255 Wharf Holdings........................................ 2,810,930 3,202,728
----------- -----------
23,967,878 29,553,984
----------- -----------
UTILITIES ELECTRIC & GAS 1.87%
1,010,000 China Light & Power................................... 4,948,320 4,689,654
----------- -----------
TOTAL HONG KONG....................................... 54,476,865 68,717,363
----------- -----------
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (CONTINUED) THE ASIA TIGERS FUND, INC.
OCTOBER 31, 1996
<CAPTION>
NUMBER PERCENT
OF SHARES SECURITY OF HOLDINGS COST VALUE
- ---------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
COMMON STOCKS (CONTINUED)
INDIA 7.17%
AUTOMOBILES 1.04%
75,400 Bajaj Auto............................................ $ 1,859,343 $ 2,020,775
303,700 Patheja Forgings...................................... 739,031 334,087
21,800 Tata Engineering...................................... 312,878 251,115
------------ -------------
2,911,252 2,605,977
------------ -------------
BANKING 0.61%
500,000 Oriental Bank of Commerce............................. 1,302,065 1,001,962
35,000 State Bank of India GDR*.............................. 495,250 528,500
------------ -------------
1,797,315 1,530,462
------------ -------------
BUILDING MATERIALS & COMPONENTS 0.26%
93,000 Gujarat Ambuja Cement................................. 798,884 641,200
------------ -------------
BUSINESS/PUBLIC SERVICE 0.61%
260,000 NIIT.................................................. 1,515,962 1,543,021
------------ ------------
ELECTRICALS & ELECTRONICS 0.50%
320,000 Crompton Greaves...................................... 2,235,484 1,255,605
------------ ------------
ENERGY SOURCES 0.90%
255,000 Hindustan Petroleum................................... 2,655,958 2,267,342
------------ ------------
HEALTH/PERSONAL CARE 2.03%
106,300 Dr Reddy's Laboratories............................... 900,798 673,313
115,000 Hindustan Lever....................................... 2,485,679 2,543,827
108,000 Ranbaxy Labs.......................................... 2,196,601 1,875,925
------------ ------------
5,583,078 5,093,065
------------ ------------
METALS - NON FERROUS 0.35%
63,000 Indian Aluminium...................................... 321,750 241,900
155,000 Indian Aluminium GDR.................................. 1,038,750 639,375
------------ ------------
1,360,500 881,275
------------ ------------
TEXTILES & APPAREL 0.87%
402,350 Arvind Mills.......................................... 1,363,052 1,308,089
230,300 Arvind Mills GDR...................................... 950,146 886,655
------------ ------------
2,313,198 2,194,744
------------ ------------
TOTAL INDIA........................................... 21,171,631 18,012,691
------------ ------------
INDONESIA 3.78%
BANKING 0.83%
2,098,000 Bank Internasional Indonesia-Foreign.................. 1,378,648 1,689,574
400,000 Panin Bank-Foreign.................................... 459,064 399,442
------------ ------------
1,837,712 2,089,016
------------ ------------
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (CONTINUED) THE ASIA TIGERS FUND, INC.
OCTOBER 31, 1996
<CAPTION>
NUMBER PERCENT
OF SHARES SECURITY OF HOLDINGS COST VALUE
- ---------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
COMMON STOCKS (CONTINUED)
INDONESIA (CONTINUED)
BEVERAGE & TOBACCO 0.80%
500,000 Gudang Garam-Foreign.................................. $ 843,146 $ 1,997,208
----------- -------------
BUILDING MATERIALS & COMPONENTS 0.68%
300,000 Indocement Tunggal Prakarsa-Foreign................... 564,054 454,204
440,000 Semen Gresik-Foreign.................................. 940,580 1,266,187
----------- -------------
1,504,634 1,720,391
----------- -------------
FOOD & HOUSEHOLD PRODUCTS 0.30%
360,000 Indofoods-Foreign..................................... 852,066 757,651
----------- -------------
FOREST PRODUCTS & PAPER 0.19%
606,760 Indah Kiat Paper-Foreign.............................. 305,326 475,609
----------- -------------
MULTI-INDUSTRY 0.33%
730,000 Bimantara Citra-Foreign............................... 565,079 823,043
----------- -------------
TELECOMMUNICATIONS 0.65%
54,500 Telekomunikasi ADR.................................... 1,641,995 1,635,000
----------- -------------
TOTAL INDONESIA....................................... 7,549,958 9,497,918
----------- -------------
KOREA 4.12%
APPLIANCES/HOUSE 0.45%
16,615 Samsung Electronics................................... 1,785,202 1,139,257
----------- -------------
BANKING 0.99%
125,000 Shinhan Bank.......................................... 2,895,486 2,481,645
----------- -------------
CONSTRUCTION & HOUSING 0.48%
30,148 Hyundai Engineering & Construction.................... 1,532,925 878,097
11,846 Hyundai Engineering & Construction New................ 361,283 334,966
----------- -------------
1,894,208 1,213,063
----------- -------------
METALS - STEEL 0.66%
26,000 Pohang Iron & Steel................................... 2,275,877 1,661,286
----------- -------------
TELECOMMUNICATIONS 0.56%
1,400 Korea Mobile Telecommunications....................... 1,577,931 1,391,683
----------- -------------
Utilities Electric & Gas 0.98%
83,000 Korea Electric Power.................................. 3,573,213 2,447,694
----------- -------------
TOTAL KOREA........................................... 14,001,917 10,334,628
----------- -------------
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (CONTINUED) THE ASIA TIGERS FUND, INC.
OCTOBER 31, 1996
<CAPTION>
NUMBER PERCENT
OF SHARES SECURITY OF HOLDINGS COST VALUE
- ---------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
COMMON STOCKS (CONTINUED)
MALAYSIA 16.70%
BANKING 3.10%
830,000 DCB Holdings.......................................... $ 2,334,561 $ 2,842,241
500,000 Malayan Banking....................................... 4,353,085 4,948,535
----------- -------------
6,687,646 7,790,776
----------- -------------
BEVERAGE & TOBACCO 1.28%
1,100,000 RJ Reynolds........................................... 2,743,577 3,200,712
----------- -------------
CONSTRUCTION & HOUSING 0.90%
275,000 Gamuda................................................ 2,270,760 2,253,563
----------- -------------
INSURANCE 0.68%
350,000 Malaysian Assurance Alliance.......................... 1,891,056 1,718,131
----------- -------------
LEISURE & TOURISM 2.08%
420,000 Genting............................................... 3,779,327 3,142,518
1,200,000 Magnum................................................ 1,797,579 2,071,259
----------- -------------
5,576,906 5,213,777
----------- -------------
MACHINERY & ENGINEERING 1.46%
730,000 UMW Holdings.......................................... 2,282,019 3,352,336
40,000 United Engineers...................................... 280,835 316,706
----------- -------------
2,562,854 3,669,042
----------- -------------
MULTI-INDUSTRY 5.25%
730,000 Berjaya Sports Toto................................... 2,606,695 2,745,447
325,000 Gadek Malaysia........................................ 2,513,770 2,701,900
1,170,000 Hicom Holdings........................................ 3,338,606 3,126,485
1,300,000 Sime Darby............................................ 3,770,897 4,606,097
----------- -------------
12,229,968 13,179,929
----------- -------------
TELECOMMUNICATIONS 0.87%
246,000 Telekom Malaysia...................................... 2,133,885 2,171,734
----------- -------------
UTILITIES ELECTRIC & GAS 1.08%
680,000 Tenaga Nasional....................................... 2,755,778 2,718,923
----------- -------------
TOTAL MALAYSIA........................................ 38,852,430 41,916,587
----------- -------------
PAKISTAN 0.34%
ENERGY SOURCES 0.34%
100,000 Pakistan State Oil.................................... 891,845 863,295
----------- -------------
TOTAL PAKISTAN........................................ 891,845 863,295
----------- -------------
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (CONTINUED) THE ASIA TIGERS FUND, INC.
OCTOBER 31, 1996
<CAPTION>
NUMBER PERCENT
OF SHARES SECURITY OF HOLDINGS COST VALUE
- ---------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
COMMON STOCKS (CONTINUED)
PHILIPPINES 3.24%
CONSTRUCTION & HOUSING 0.94%
3,250,000 D M Consunji Holdings*................................ $ 2,108,110 $ 2,353,277
----------- -----------
REAL ESTATE 0.88%
6,500,000 Filinvest Land*....................................... 2,357,276 2,204,649
----------- -----------
TRANSPORTATION - SHIPPING 0.54%
6,269,000 William Gothong*...................................... 1,409,498 1,361,787
----------- -----------
UTILITIES ELECTRIC & GAS 0.88%
300,000 Manila Electric-B..................................... 2,278,887 2,206,555
----------- -----------
TOTAL PHILIPPINES..................................... 8,153,771 8,126,268
----------- -----------
SINGAPORE 9.33%
AUTOMOBILES 0.52%
125,000 Cycle & Carriage...................................... 1,409,469 1,313,641
----------- -----------
BANKING 4.28%
190,000 Development Bank of Singapore-Foreign................. 2,040,247 2,280,054
400,000 Overseas Chinese Bank Corp.-Foreign................... 4,621,272 4,572,889
400,000 United Overseas Bank-Foreign.......................... 3,861,614 3,891,216
----------- -----------
10,523,133 10,744,159
----------- -----------
BROADCAST/PUBLISHING 0.96%
145,000 Singapore Press-Foreign............................... 2,511,166 2,409,288
----------- -----------
MULTI-INDUSTRY 0.45%
150,000 Keppel Corporation.................................... 1,259,629 1,118,370
----------- -----------
REAL ESTATE 1.84%
25,000 Bukit Sembawang Estates............................... 546,449 584,037
210,000 City Developments..................................... 1,423,928 1,655,187
151,000 City Developments Warrants (Exp. date 7/18/98)*....... 645,991 906,021
600,000 Wing Tai Holdings**................................... 1,467,710 1,474,118
----------- -----------
4,084,078 4,619,363
----------- -----------
TRANSPORTATION - AIR 1.28%
365,000 Singapore Airlines-Foreign............................ 3,471,631 3,213,804
----------- -----------
TOTAL SINGAPORE....................................... 23,259,106 23,418,625
----------- -----------
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (CONTINUED) THE ASIA TIGERS FUND, INC.
OCTOBER 31, 1996
<CAPTION>
NUMBER PERCENT
OF SHARES SECURITY OF HOLDINGS COST VALUE
- ---------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
COMMON STOCKS (CONTINUED)
SRI LANKA 0.04%
FINANCIAL SERVICES 0.04%
20,000 Development Finance Corporation of Ceylon............. $ 120,769 $ 98,992
----------- -----------
TOTAL SRI LANKA....................................... 120,769 98,992
----------- -----------
TAIWAN 5.94%
BUILDING MATERIALS & COMPONENTS 0.65%
81,500 Asia Cement GDR....................................... 1,687,875 1,630,000
----------- -----------
DATA PROCESSING 0.75%
260,000 Acer Inc. GDR......................................... 1,775,500 1,885,000
----------- -----------
ELECTRONIC COMPONENTS & INSTRUMENTS 0.95%
335,000 Advanced Semiconductor Engineering GDR 2,376,525 2,395,250
----------- -----------
METALS - STEEL 3.59%
330,000 China Steel GDR....................................... 6,995,000 6,393,750
275,000 Tung Ho Steel GDR..................................... 2,763,934 2,612,500
----------- -----------
9,758,934 9,006,250
----------- -----------
TOTAL TAIWAN.......................................... 15,598,834 14,916,500
----------- -----------
THAILAND 6.86%
BANKING 3.24%
260,000 Bangkok Bank-Foreign.................................. 2,886,012 2,779,874
600,000 Industry Finance-Foreign.............................. 2,367,163 1,768,868
150,000 Siam Commercial Bank-Foreign.......................... 1,563,411 1,367,925
290,000 Thai Farmer's Bank-Foreign............................ 2,795,952 2,222,877
53,750 Thai Farmer's Bank-Foreign Warrants
(Exp. date 9/15/02)*.................................. 53,366 0
----------- -----------
9,665,904 8,139,544
----------- -----------
BUILDING MATERIALS & COMPONENTS 0.55%
40,000 Siam Cement-Foreign................................... 2,364,588 1,371,069
----------- -----------
ENERGY SOURCES 0.57%
100,000 PTT Exploration-Foreign 1,214,517 1,438,679
----------- -----------
FINANCIAL SERVICES 0.63%
310,000 Dhana Siam Finance & Securities-Foreign............... 1,672,368 822,524
270,000 Finance One-Foreign................................... 1,704,913 764,151
----------- -----------
3,377,281 1,586,675
----------- -----------
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (CONTINUED) THE ASIA TIGERS FUND, INC.
OCTOBER 31, 1996
<CAPTION>
NUMBER PERCENT
OF SHARES SECURITY OF HOLDINGS COST VALUE
- ---------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
COMMON STOCKS (CONTINUED)
THAILAND (CONTINUED)
REAL ESTATE 0.58%
175,000 Land and House-Foreign................................ $ 2,755,193 $ 1,458,333
----------- -----------
TELECOMMUNICATIONS 0.76%
40,000 Advanced Info Service-Local........................... 530,056 544,025
165,000 United Communication-Foreign.......................... 2,359,731 1,349,057
----------- -----------
2,889,787 1,893,082
----------- -----------
UTILITIES ELECTRIC & GAS 0.29%
250,000 Electricity Generating-Foreign........................ 710,435 727,201
----------- -----------
WHOLESALE 0.24%
140,000 Siam Makro-Foreign.................................... 658,436 599,843
----------- -----------
TOTAL THAILAND........................................ 23,636,141 17,214,426
----------- -----------
TOTAL COMMON STOCKS................................... 207,886,494 213,677,505
----------- -----------
PAR VALUE
($000)
- ---------------------------------------------------------------------------------------------------------
CONVERTIBLE BONDS 8.90%
HONG KONG 2.46%
LEISURE & TOURISM 0.71%
1,600 HSH Overseas Finance 5.00%, 01/06/01.................. $ 1,712,208 $ 1,788,000
----------- -----------
REAL ESTATE 1.75%
3,500 New World 4.375%, 12/11/00............................ 3,723,125 4,392,500
----------- -----------
TOTAL HONG KONG....................................... 5,435,333 6,180,500
----------- -----------
MALAYSIA 1.81%
MACHINERY & ENGINEERING 1.08%
2,000 United Engineers 2.00%, 03/01/04...................... 2,306,440 2,695,000
----------- -----------
TELECOMMUNICATIONS 0.73%
1,750 Telekom Malaysia 4.00%, 10/03/04...................... 1,863,750 1,834,000
----------- -----------
TOTAL MALAYSIA........................................ 4,170,190 4,529,000
----------- -----------
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (CONTINUED) THE ASIA TIGERS FUND, INC.
OCTOBER 31, 1996
<CAPTION>
PAR VALUE PERCENT
($000) SECURITY OF HOLDINGS COST VALUE
- ---------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
CONVERTIBLE BONDS (CONTINUED)
TAIWAN 4.63%
DATA PROCESSING 0.98%
1,000 Acer 4.00%, 06/10/01.................................. $ 2,708,650 $ 2,450,000
----------- -----------
ELECTRONIC COMPONENTS & INSTRUMENTS 1.46%
3,000 United Micro Electronics 1.25%, 06/08/04.............. 3,787,575 3,675,000
----------- -----------
MERCHANDISING 0.86%
2,000 Far Eastern Department Stores 3.00%, 07/06/01......... 2,118,750 2,150,000
----------- -----------
TRANSPORTATION - SHIPPING 1.33%
3,000 Yangming Marine Transport 2.00%, 10/06/01............. 3,542,187 3,352,500
----------- -----------
TOTAL TAIWAN.......................................... 12,157,162 11,627,500
----------- -----------
TOTAL CONVERTIBLE BONDS............................... 21,762,685 22,337,000
----------- -----------
NUMBER PERCENT
OF SHARES SECURITY OF HOLDINGS COST VALUE
- ---------------------------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS 5.99%
MUTUAL FUND 0.02%
48,656 Temporary Investment Fund, Inc.
Temp Cash Portfolio................................. $ 48,656 $ 48,656
----------- -----------
TOTAL MUTUAL FUND..................................... 48,656 48,656
----------- -----------
PAR VALUE
($000)
- ---------------------------------------------------------------------------------------------------------
TIME DEPOSIT 0.44%
1,100 Chase Manhattan Bank
London Time Deposit 4.875%, 11/01/96.................. $ 1,100,000 $ 1,100,000
----------- -----------
TOTAL TIME DEPOSIT ................................... 1,100,000 1,100,000
----------- -----------
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (CONTINUED) THE ASIA TIGERS FUND, INC.
OCTOBER 31, 1996
<CAPTION>
PAR VALUE PERCENT
($000) OF HOLDINGS COST VALUE
- ---------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
SHORT-TERM INVESTMENTS (CONTINUED)
UNITED STATES TREASURY BILLS 5.53%
4,000 U.S. Treasury Bill 5.16%, 11/07/96.................... $ 3,996,560 $ 3,996,561
4,000 U.S. Treasury Bill 5.04%, 12/12/96.................... 3,977,040 3,977,243
3,000 U.S. Treasury Bill 5.01%, 01/23/97.................... 2,965,348 2,964,965
3,000 U.S. Treasury Bill 5.17%, 01/23/97.................... 2,964,241 2,964,965
----------- -----------
TOTAL U.S. TREASURY BILLS............................. 13,903,189 13,903,734
----------- -----------
TOTAL SHORT-TERM INVESTMENTS.......................... 15,051,845 15,052,390
----------- -----------
TOTAL INVESTMENTS*** 100% $244,701,024 $251,066,895
============ ============
- ------------------------
FOOTNOTES AND ABBREVIATIONS:
ADR: American Depositary Receipts
GDR: Global Depositary Receipts
* Non-income producing security
** Passive Foreign Investment Company
*** Aggregate cost for Federal income tax purposes is $245,560,727
The aggregate gross unrealized appreciation (depreciation) for all securities is as follows:
Excess of value over tax cost $23,923,560
Excess of tax cost over value (18,417,392)
------------
$5,506,168
============
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF ASSETS AND LIABILITIES THE ASIA TIGERS FUND, INC.
October 31, 1996
<CAPTION>
ASSETS
<S> <C>
Investments, at value (Cost $244,701,024)............................................. $251,066,895
Cash (including $2,106,938 of foreign currency holdings with a cost of $2,106,704).... 2,861,920
Collateral for securities loaned, at value............................................ 2,037,000
Receivable for collateral for securities loaned, at value............................. 625,000
Receivables:
Dividends.......................................................................... 414,987
Interest........................................................................... 157,662
Securities sold.................................................................... 5,063,764
Unamortized organization costs........................................................ 50,590
Prepaid expenses...................................................................... 112,494
------------
Total Assets.................................................................... 262,390,312
------------
LIABILITIES
Payable for securities purchased...................................................... 2,940,605
Payable upon return of securities loaned............................................. 2,662,000
Due to Investment Manager............................................................. 219,790
Due to Administrator.................................................................. 43,958
Accrued expenses...................................................................... 329,788
------------
Total Liabilities............................................................... 6,196,141
------------
NET ASSETS............................................................................ $256,194,171
============
NET ASSET VALUE PER SHARE ($256,194,171/20,514,984)................................... $12.49
============
Net assets consist of:
Capital stock, $0.001 par value; 20,514,984 shares issued
and outstanding (100,000,000 shares authorized)................................. $20,515
Paid-in capital....................................................................... 286,511,528
Undistributed net investment income................................................... 257,188
Accumulated net realized loss on investments and
foreign currency related transactions........................................... (36,960,561)
Net unrealized appreciation in value of investments and on translation of
other assets and liabilities denominated in foreign currencies.................. 6,365,501
------------
$256,194,171
============
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF OPERATIONS THE ASIA TIGERS FUND, INC.
FOR THE YEAR ENDED OCTOBER 31, 1996
<CAPTION>
<S> <C>
INVESTMENT INCOME
Dividends (Net of taxes withheld of $439,056)........................................... $ 3,764,605
------------
Interest................................................................................ 1,557,995
------------
Total Investment Income......................................................... 5,322,600
------------
<CAPTION>
<S> <C> <C>
EXPENSES
Management fees................................................. 2,644,637
Administration fees............................................. 528,927
Custodian fees.................................................. 462,460
Legal fees...................................................... 182,221
Insurance....................................................... 142,426
Transfer agent fees............................................. 74,535
Audit fees...................................................... 72,798
Printing........................................................ 40,157
NYSE fees....................................................... 33,826
Directors' fees................................................. 26,240
Amortization of organizational cost............................. 24,375
Interest expense................................................ 2,333
Miscellaneous................................................... 3,182
---------
Total expenses.................................................................. 4,238,117
---------
Net Investment Income........................................................... 1,084,483
---------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS,
FOREIGN CURRENCY HOLDINGS AND OTHER ASSETS AND LIABILITIES
DENOMINATED IN FOREIGN CURRENCIES:
Net realized gain (loss) on:
Security transactions................................................................. (1,895,886)
Foreign currency related transactions................................................. (370,123)
----------
(2,266,009)
Net change in unrealized appreciation in value of investments and translation
of other assets and liabilities denominated in foreign currencies..................... 11,276,163
----------
Net realized and unrealized gain on investments, foreign currency holdings
and translation of other assets and liabilities denominated in foreign
currencies............................................................................ 9,010,154
----------
Net increase in net assets resulting from operation..................................... $ 10,094,637
============
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF CHANGES IN NET ASSETS THE ASIA TIGERS FUND, INC.
<CAPTION>
FOR THE YEAR FOR THE YEAR
ENDED ENDED
INCREASE (DECREASE) IN NET ASSETS OCTOBER 31, 1996 OCTOBER 31, 1995
---------------- ----------------
<S> <C> <C>
OPERATIONS
Net investment income.................................................... $ 1,084,483 $ 1,746,883
Net realized loss on investments and foreign currency
related transactions.................................................. (2,266,009) (35,295,462)
Net change in unrealized appreciation in value of investments,
foreign currency holdings and translation of other assets and
liabilities denominated in foreign currencies......................... 11,276,163 1,078,455
------------ ------------
Net increase (decrease) in net assets resulting from operations.. 10,094,637 (32,470,124)
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS FROM
Net investment income ($0.08 and $0.06 per share, respectively).......... (1,661,714) (1,169,355)
Net realized gains ($0.17 per share)..................................... -- (3,487,548)
------------- -------------
Net decrease in net assets from distributions.................... (1,661,714) (4,656,903)
------------- -------------
CAPITAL SHARE TRANSACTIONS
Offering costs charged to capital........................................ -- (21,715)
------------ ------------
Net decrease in net assets resulting from capital share -- (21,715)
transactions.................................................... ------------ ------------
Total increase (decrease) in net assets.................................. 8,432,923 (37,148,742)
------------ ------------
NET ASSETS
Beginning of year........................................................ 247,761,248 284,909,990
------------ ------------
End of year (including undistributed net investment income
of $257,188 and $1,204,542 respectively).............................. $256,194,171 $247,761,248
============ ============
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS THE ASIA TIGERS FUND, INC.
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<CAPTION>
FOR THE PERIOD
NOVEMBER 29, 1993
(COMMENCEMENT
FOR THE FOR THE OF OPERATIONS)
YEAR ENDED YEAR ENDED THROUGH
OCTOBER 31, 1996 OCTOBER 31, 1995 OCTOBER 31, 1994
------------------------------------------------------
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period............................. $ 12.08 $ 13.89 $ 13.97<FN1>
--------- --------- ---------
Net investment income............................................ 0.05 0.09 0.05
Net realized and unrealized gains (losses) on investments,
foreign currency holdings, and translation of other
assets and liabilities denominated in foreign currencies....... 0.44 (1.67) (0.11)
--------- --------- ----------
Net increase (decrease) from investment operations............... 0.49 (1.58) (0.06)
--------- --------- ----------
Less Distributions:
Dividends from net investment income.......................... (0.08) (0.06) (0.02)
Distributions from net realized gains......................... -- (0.17) --
--------- --------- ----------
Total dividends and distributions................................ (0.08) (0.23) (0.02)
--------- --------- ----------
Net asset value, end of period................................... $ 12.49 $ 12.08 $ 13.89
========= ========= ==========
Per share market value, end of period............................... 10.38 10.38 12.38
TOTAL INVESTMENT RETURN BASED ON MARKET VALUE<FN2>.................. 0.59% (14.17)% (11.65)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000s).............................. $256,194 $247,761 $284,910
Ratios of expenses to average net assets......................... 1.60% 1.65% 1.60%<FN3>
Ratios of net investment income to average net assets............ 0.41% 0.71% 0.38%<FN3>
Portfolio turnover................................ 91.57% 77.88% 45.51%
Average commission rate paid<FN4> $0.0084 N/A N/A
1 Initial public offering price $15.00 per share less underwriting discount of $0.98 per share and offering costs of $0.05
per share.
2 Total investment return is calculated assuming a purchase of common stock at the current market price on the first day
and a sale at the current market price on the last day of each period reported, except that for the period ended
October 31, 1994, total investment return is based on a beginning of period price of $14.02 (initial offering price of
$15.00 less underwriting discount of $0.98). Dividends and distributions, if any, are assumed, for purposes of this
calculation, to be reinvested at prices obtained under the Fund's dividend reinvestment plan. Total investment return
does not reflect brokerage commissions or sales charges and is not annualized.
3 Annualized
4 Computed by dividing the total amount of brokerage commissions paid by the total number of shares of investment
securities purchased and sold during the period for which commissions were charged as required by the SEC for fiscal
years beginning on or after September 1, 1995.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS THE ASIA TIGERS FUND, INC.
OCTOBER 31, 1996
NOTE A: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Asia Tigers Fund, Inc. (the "Fund") was incorporated in Maryland on
September 23, 1993 and commenced operations on November 29, 1993. The Fund is
registered under the Investment Company Act of 1940, as amended, as a closed-
end non-diversified management investment company. Prior to commencing its
operations on November 29, 1993, the Fund had no activities other than the sale
of 3,567 shares of capital stock to Oppenheimer & Co., Inc. ("Oppenheimer")
and 3,567 shares of capital stock to Barclays Global Investors International,
Inc. ("BGI"), formerly known as BZW Investment Management, Inc. At October 31,
1996, Oppenheimer and BGI each owned 3,567 shares of the Fund's Capital Stock.
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 finacial statements.
Actual results could differ from those estimates.
SIGNIFICANT ACCOUNTING POLICIES ARE AS FOLLOWS:
PORTFOLIO VALUATION. Investments are stated at value in the accompanying
financial statements. In valuing the Fund's assets, all securities for which
market quotations are readily available are valued
(i) at the last sale price prior to the time of determination if there was
a sale on the date of determination,
(ii) at the mean between the last current bid and asked prices if there was
no sales price on such date and bid and asked quotations are
available, and
(iii) at the bid price if there was no sales price on such date and only bid
quotations are available.
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 carried at
fair value as determined in good faith by, or under the direction of, the
Board of Directors. The net asset value per share of the Fund is calculated
weekly and at the end of each month.
INVESTMENT TRANSACTIONS AND INVESTMENT INCOME. Investment transactions are
accounted for on the trade date. The cost of investments sold is determined
by use of the specific identification method for both financial reporting and
income tax purposes. Interest income is recorded on an accrual basis; dividend
income is recorded on the ex-dividend date or when known. The collectibility
of income receivable from foreign securities is evaluated periodically, and any
resulting allowances for uncollectible amounts are reflected currently in the
determination of investment income.
TAX STATUS. No provision is made for U.S. Federal income or excise taxes as it
is the Fund's intention to continue to qualify as a regulated investment
company and to make the requisite distributions to its shareholders which will
be sufficient to relieve it from all or substantially all Federal income and
excise taxes.
At October 31, 1996, the Fund had a net capital loss carryover of $36,125,028,
which is available to offset future net realized gains on securities
transactions to the extent provided for in the Internal Revenue Code. Of the
aggregate capital losses, $34,278,141 will expire in the year 2003 and
$1,846,887 will expire in the year 2004.
<PAGE>
Dividend and interest income from non-U.S. sources received by the Fund are
generally subject to non-U.S. withholding taxes. Such withholding taxes may be
reduced or eliminated under the terms of applicable U.S. income tax treaties.
FOREIGN CURRENCY TRANSLATION. The books and records of the Fund are maintained
in U.S. dollars. Foreign currency amounts are translated into U.S. dollars on
the following basis:
(i) market value of investment securities, assets and liabilities at the
current rates of exchange on the valuation date; and
(ii) purchases and sales of investment securities, income and expenses at
the relevant rates of exchange prevailing on the respective dates of such
transactions.
Securities denominated in currencies other than U.S. dollars are subject to
changes in value due to fluctuations in foreign exchange.
The Fund does not generally isolate the effect of fluctuations in foreign
exchange rates from the effect of fluctuations in the market prices of equity
securities. The Fund reports certain realized gains and losses on foreign
currency related transactions as components of realized gains and losses for
financial reporting purposes, whereas such gains and losses are treated as
ordinary income or losses for federal income tax purposes.
Foreign security and currency transactions may involve certain considerations
and risks not typically associated with those of domestic origin as a result
of, among other factors, the level of governmental supervision and regulation
of foreign securities markets and the possibilities of political or economic
instability.
DISTRIBUTION OF INCOME AND GAINS. The Fund intends to distribute annually to
shareholders, substantially all of its net investment income, including
foreign currency gains, and to distribute annually any net realized capital
gains in excess of net realized capital losses (including any capital loss
carryovers). An additional distribution may be made to the extent necessary
to avoid payment of a 4% federal excise tax.
Distributions to shareholders are recorded on the ex-dividend date. The amount
of dividends and distributions from net investment income and net realized
capital gains are determined in accordance with federal income tax regulations,
which may differ from generally accepted accounting principles. These book/tax
differences are either considered temporary or permanent in nature. To the
extent these differences are permanent in nature, such amounts are reclassified
within the capital accounts based on their federal tax-basis treatment;
temporary differences do not require reclassification. Dividends and
distributions which exceed net investment income and net realized capital gains
for financial reporting purposes but not for tax purposes are reported as
dividends in excess of net investment income or distributions in excess of net
realized capital gains. To the extent they exceed net investment income and net
realized capital gains for tax purposes, they are reported as distributions of
paid-in-capital.
During the year ended October 31, 1996, the Fund reclassified $370,123 from
accumulated net realized loss on investments and foreign currency related
transactions to undistributed net investment income as a result of permanent
book and tax differences primarily relating to foreign currency losses. Net
investment income and net assets were not affected by the change.
LOANS OF PORTFOLIO SECURITIES. The Fund, through its custodian as lending
agent, may lend portfolio securities while it continues to earn dividends on
such securities loaned. The cash collateral received is at least equal
<PAGE>
at all times to 105 percent of the market value of the securities (outside
the U.S.) loaned, which are marked-to-market daily. Such collateral is invested
in short term instruments by the lending agent and any interest income in
excess of agency fees and of a predetermined rebate to the borrowers is earned
by the lending agent as interest income.
OTHER. Costs incurred by the Fund in connection with its organization are being
amortized on a straight line basis over a five-year period beginning with the
commencement of operations of the Fund.
NOTE B: MANAGEMENT, INVESTMENT ADVISORY AND ADMINISTRATIVE SERVICES
Advantage Advisers, Inc., a subsidiary of Oppenheimer, serves as the Fund's
Investment Manager under the terms of a management agreement (the "Management
Agreement"), and BGI serves as the Fund's Investment Adviser under the terms
of an investment advisory agreement (the "Advisory Agreement"). Pursuant to the
Management Agreement, the Investment Manager supervises the Fund's investment
program, including advising and consulting with the Fund's Investment Adviser.
Pursuant to the Advisory Agreement, the Investment Adviser is responsible on a
day-to-day basis for investing the Fund's portfolio in accordance with its
investment objective and policies. For its services, the Investment Manager
receives monthly fees at an annual rate of 1.00% of the Fund's average weekly
net assets and the Investment Adviser receives from the Investment Manager
monthly fees at an annual rate of 0.50% of the Fund's average weekly net
assets. For the year ended October 31, 1996, fees paid to the Investment
Manager amounted to $2,644,637, of which the Investment Manager informed the
Fund it paid $1,322,318 to the Investment Adviser.
Oppenheimer serves as the Fund's administrator (the "Administrator"). The
Administrator provides certain administrative services to the Fund. For its
services, the Administrator receives a monthly fee at an annual rate of 0.20%
of the value of the Fund's average weekly net assets. For the year ended
October 31, 1996, these fees amounted to $528,927.
The Fund pays each of its directors who is not a director, officer or employee
of the Investment Manager, the Investment Adviser, the Administrator or any
affiliate thereof an annual fee of $5,000 plus up to $700 for each Board of
Directors meeting attended. In addition, the Fund reimburses the directors for
travel and out-of-pocket expenses incurred in connection with Board of
Directors meetings.
NOTE C: PORTFOLIO ACTIVITY
Purchases and sales of securities other than short-term obligations aggregated
$225,528,336 and $222,842,408, respectively, for the year ended
October 31, 1996.
NOTE D: PORTFOLIO SECURITIES LOANED
At October 31, 1996, the market value of the securities loaned and amount of
collateral received/receivable with respect to such loans were $2,430,432 and
$2,662,000, respectively. For the year ended October 31, 1996, net earnings to
the Fund from investment of such collateral was $4,186, after deducting
borrowers' rebate and agency fees of $30,543 and $4,186 respectively.
<PAGE>
NOTE E: OTHER
At October 31, 1996, substantially all of the Fund's assets were invested in
Asian securities. The Asian securities markets are substantially smaller,
less liquid, and more volatile than the major securities markets in the
United States. Consequently, acquisitions and dispositions involve special
risks and considerations not present with respect to U.S. securities.
Additionally, the Fund owned securities of certain companies in India,
Malaysia and the Philippines valued at approximately $6,462,287 which were
in the process of being registered in the name of the Fund. Significant
delays are common in registering the transfer of securities in these
countries, and such transfers can take a year or longer. Securities
regulations in these countries normally preclude the Fund from selling such
securities until the completion of the registration process.
- -------------------------------------------------------------------------------
/ /
/ U.S. FEDERAL TAXATION NOTICE (UNAUDITED) /
/ /
/ The Fund paid foreign taxes of $439,056 during the fiscal year /
/ ended October 31, 1996, which it intends to pass through pursuant /
/ to Section 853 of the U.S. Internal Revenue Code to its shareholders. /
/ During the same year, the Fund distributed $1,661,714 of foreign /
/ source income. /
/ /
- -------------------------------------------------------------------------------
<PAGE>
REPORT OF THE ASIA TIGERS FUND, INC.
INDEPENDENT ACCOUNTANTS
TO THE BOARD OF DIRECTORS AND SHAREHOLDERS OF
THE ASIA TIGERS FUND, INC.
In our opinion, the accompanying statement of assets and liabilities,
including the schedule of investments, and the related statements of
operations and of changes in net assets and the financial highlights present
fairly, in all material respects, the financial position of The Asia Tigers
Fund, Inc. (the "Fund") at October 31, 1996, the results of its operations
for the year then ended, the changes in its net assets for each of the two
years in the period then ended and the financial highlights for each of the
two years in the period then ended and for the period November 29, 1993
(commencement of operations) to October 31, 1994, in conformity with
generally accepted accounting principles. 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 generally
accepted auditing standards which require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits, which included confirmation of securities at
October 31, 1996 by correspondence with the custodians and brokers and the
application of alternative auditing procedures where confirmations from
brokers were not received, provide a reasonable basis for the opinion
expressed above.
PRICE WATERHOUSE LLP
1177 Avenue of the Americas
New York, New York
December 20, 1996
<PAGE>
DIVIDENDS AND DISTRIBUTIONS; THE ASIA TIGERS FUND, INC.
DIVIDEND REINVESTMENT AND CASH PURCHASE PLAN
The Fund intends to distribute annually to shareholders substantially all of
its net investment income, and to distribute any net realized capital gains
at least annually. Net investment income for this purpose is income other
than net realized long- and short-term capital gains net of expenses.
Pursuant to the Dividend Reinvestment and Cash Purchase Plan (the "Plan"),
shareholders whose shares of Common Stock are registered in their own names
will be deemed to have elected to have all distributions automatically
reinvested by PNC Bank, National Association (the "Plan Agent") in Fund
shares pursuant to the Plan, unless such shareholders elect to receive
distributions in cash. Shareholders who elect to receive distributions in
cash will receive all distributions in cash paid by check in dollars mailed
directly to the shareholder by PNC Bank, National Association, as dividend
paying agent. In the case of shareholders such as banks, brokers or nominees,
that hold shares for others who are beneficial owners, the Plan Agent will
administer the Plan on the basis of the number of shares certified from time
to time by the shareholders as representing the total amount registered in
such shareholders' names and held for the account of beneficial owners that
have not elected to receive distributions in cash. Investors that own shares
registered in the name of a bank, broker or other nominee should consult
with such nominee as to participation in the Plan through such nominee, and
may be required to have their shares registered in their own names in order
to participate in the Plan.
The Plan Agent serves as agent for the shareholders in administering the Plan.
If the directors of the Fund declare an income dividend or a capital gains
distribution payable either in the Fund's Common Stock or in cash,
nonparticipants in the Plan will receive cash and participants in the Plan
will receive Common Stock, to be issued by the Fund or purchased by the Plan
Agent in the open market, as provided below. If the market price per share
on the valuation date equals or exceeds net asset value per share on that
date, the Fund will issue new shares to participants at net asset
value; provided, however, that if the net asset value is less than 95%
of the market price on the valuation date, then such shares will be issued
at 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 day, the next preceding trading day. If net asset value exceeds the
market price of Fund shares at such time, or if the Fund should declare an
income dividend or 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'
accounts on, or shortly after, the payment date. If, before the Plan Agent
has completed its purchases, the market price exceeds the net asset value
of a Fund share, the average per share purchase price paid by the Plan Agent
may exceed the net asset value of the Fund's shares, resulting in the
acquisition of fewer shares than if the distribution had been paid in
shares issued by the Fund on the dividend payment date. Because of the
foregoing difficulty with respect to open-market purchases, the Plan
provides that if the Plan Agent is unable to invest the full dividend
amount in open-market purchases during the purchase period or if the market
discount shifts to a market premium during the purchase period, the Plan
Agent will cease making open-market purchases and will receive the uninvested
portion of the dividend amount in newly issued shares at the close of
business on the last purchase date.
Participants have the option of making additional cash payments to the Plan
Agent, annually, in any amount from $100 to $3,000, for investment in the
Fund's Common Stock. The Plan Agent will use all such funds received from
participants to purchase Fund shares in the open market on or about
February 15. Any
<PAGE>
DIVIDENDS AND DISTRIBUTIONS; (CONTINUED) THE ASIA TIGERS FUND, INC.
DIVIDEND REINVESTMENT AND CASH PURCHASE PLAN
voluntary cash payment received more than 30 days prior to this date will be
returned by the Plan Agent, and interest will not be paid on any uninvested
cash payment. 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 ten days before an applicable purchase date specified
above. A participant may withdraw a voluntary cash payment by written notice,
if the notice is received by the Plan Agent not less than 48 hours before
such payment is to be invested.
The Plan Agent maintains all shareholder accounts in the Plan and furnishes
written confirmations of all transactions in an account, including
information needed by shareholders for personal and tax records. Shares in
the account of each Plan participant will be held by the Plan Agent in the
name of the participant, and each shareholder's proxy will include those
shares purchased pursuant to the Plan.
There is no charge to participants for reinvesting dividends or capital gains
distributions or voluntary cash payments. The Plan Agent's fees for the
reinvestment of dividends and capital gains distributions and voluntary cash
payments will be paid by the Fund. There will be no brokerage charges 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,
each participant 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 dividends and capital gains distributions and 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
prorating the lower commission thus attainable.
The receipt of dividends and distributions under the Plan will not relieve
participants of any income tax that may be payable on such dividends or
distributions.
Experience under the Plan may indicate that changes in the Plan are
desirable. Accordingly, the Fund and the Plan Agent reserve the right to
terminate the Plan as applied to any voluntary cash payments made and any
dividend or distribution paid subsequent to notice of the termination sent
to members of the Plan at least 30 days before the record date for such
dividend or distribution. The Plan also may be amended by the Fund or the
Plan Agent, but (except when necessary or appropriate to comply with
applicable law, rules or policies of a regulatory authority) only by at least
30 days' written notice to participants in the Plan. All correspondence
concerning the Plan should be directed to the Plan Agent at 400 Bellevue
Parkway, Wilmington, Delaware 19809.
<PAGE>
RESULTS OF THE ANNUAL SHAREHOLDERS MEETING THE ASIA TIGERS FUND, INC.
The Fund held its annual shareholders meeting on February 23, 1996. At the
meeting, shareholders elected each of the nominees proposed for election to
the Fund's Board of Directors and ratified the selection of Price Waterhouse
LLP as the independent accountants of the Fund for the year ending October
31, 1996. The following tables provide information concerning the matters
voted on at the meeting:
I. ELECTION OF DIRECTORS
NOMINEE VOTES FOR VOTES ABSTAINED
- ------- --------- ---------------
Leslie H. Gelb 15,319,038 386,869
II. RATIFICATION OF PRICE WATERHOUSE LLP AS THE
INDEPENDENT ACCOUNTANTS OF THE FUND
VOTES FOR VOTES AGAINST VOTES ABSTAINED
- --------- ------------- ---------------
15,400,062 187,343 118,502
<PAGE>
THE ASIA TIGERS FUND, INC.
INVESTMENT ADVISER:
BARCLAYS GLOBAL INVESTORS
INTERNATIONAL, INC. THE ASIA TIGERS FUND, INC.
Annual Report
INVESTMENT MANAGER: October 31, 1996
ADVANTAGE ADVISERS, INC.
ADMINISTRATOR:
OPPENHEIMER & CO., INC.
SUB-ADMINISTRATOR:
PFPC INC.
TRANSFER AGENT:
PNC BANK, NATIONAL ASSOCIATION
CUSTODIAN:
THE CHASE MANHATTAN BANK, N.A.
ADVANTAGE ADVISERS, INC.
