The Asia Tigers Fund, Inc.
June 11, 1998
Dear Fund Shareholder,
We are pleased to present you with the unaudited financial statements of The
Asia Tigers Fund, Inc. for the six-months ended April 30, 1998. The most recent
period has been a volatile one for the region, with most markets experiencing
negative returns. Malaysia, Korea, Pakistan and China saw sharp economic
declines, while some of the smaller markets, Sri Lanka and the Philippines, have
seen better performance. The Investment Adviser continues to monitor the overall
economic and market conditions of the region.
The effect of the Asian crisis on the region has resulted in a change of the
Fund's geographical allocation. Most notably, the Investment Adviser shifted the
country allocations towards India and Thailand and also increased the cash
position from 9.1% to 11.6%.
The Fund's net asset value ("NAV") closed at $8.80 per share at April 30, 1998,
dropping 9.1% for the six-month period, outperforming, by reference, the MSCI
Asia Free Ex-Japan Index, which was down 10.8% over the same period. The Fund
continues to provide its shareholders with broad-based exposure to the emerging
equity markets of the Asian Pacific basin and the Indian subcontinent. As of
April 30, 1998, the Fund held 101 issues in 13 Asian countries.
In the near-term, the Investment Adviser remains cautious, believing that at
some point, the region's markets will bottom and return to their secular growth.
We will maintain our defensive position until our perspective changes.
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 The Asia Tigers Fund, Inc.
Performance
The six-month period ended April 30, 1998 was disappointing and frustrating for
the Asia Ex-Japan equity investor. The MSCI AC Asia Ex-Japan regional benchmark
dropped 10.8%. During the same period, the Fund's net asset value fell 9.1%.
Volatility was felt across the region. Indonesia's stock market and currency
both collapsed during the six-month period resulting in a U.S. dollar return of
negative 61.4%. In addition, Malaysia, Korea, Pakistan and China suffered double
digit declines. The best performing markets were the relatively small markets of
Sri Lanka (up 9.4%) and Philippines (up 7.3%).
Country Allocation
During the six-month period, the Fund shifted its geographic allocation.
Allocation decisions are made based on the changing underlying economic
conditions and relative equity valuations. Since the end of October 1997,
changes in the Fund's country weightings include an increase in India and
Thailand and a decrease in Hong Kong, Indonesia and Korea. The Fund's cash level
rose from 9.1% to 11.6%. The charts below indicate the Fund's breakdown at the
Fund's most recent fiscal year end and at April 30, 1998.
[THE FOLLOWING TABLE WAS REPRESENTED BY PIE CHARTS IN THE PRINTED MATERIAL
April 30, 1998 October 31, 1997
-------------- ----------------
Hong Kong 29.3% Hong Kong 32.0%
Taiwan 15.2 Taiwan 14.5
India 13.5 India 11.0
Cash (U.S.) 11.6 Singapore 10.9
Singapore 10.5 Cash (U.S.) 9.1
Malaysia 7.7 Malaysia 6.9
Thailand 4.0 Indonesia 5.3
Korea 2.5 Korea 4.0
Pakistan 1.7 Thailand 2.0
China 1.5 Philippines 1.5
Philippines 1.4 China 1.3
Indonesia 0.9 Pakistan 1.3
Sri Lanka 0.2 Sri Lanka 0.2
Bangladesh 0.0 Bangladesh 0.0
- --------------------------------------------------------------------------------
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.
- --------------------------------------------------------------------------------
2
<PAGE>
Regional Outlook
Asia has entered its most difficult and challenging period since World War II.
What began as a currency and corporate funding crisis in Thailand in July of
1997, evolved into the end of the Asian currency dollar block and a harsh, new
economic reality in Asia.
Most Asian currencies have maintained either direct or indirect links with the
U.S. dollar. As the region's economies have historically been dominated by the
United States economy, the peg policy has strong historical merit. The peg
system has helped to provide Asia with stable currency and monetary policies.
For example, the value of a Hong Kong dollar has been maintained at between
twelve and fourteen U.S. cents for more than fourteen years. While the
Investment Adviser expects the Hong Kong dollar's peg to the U.S. dollar to
remain firm for the foreseeable future, many of Asia's U.S. dollar currency
links were broken during the second half of 1997. During the six-month period
ended April 30, 1998, the Philippine Peso and the Malaysian Ringgit each lost
more than 10% of their value against the U.S. dollar. The worst hit were the
Korean Won and the Indonesian Rupiah; both fell 28% and 55%, respectively.
Unfortunately for the U.S. dollar-based investor already invested in foreign
denominated stocks, a devaluating currency has an immediate impact by making
their portfolio worth less when translated back into U.S. dollars. On the other
hand, companies located in countries with devaluing currencies have immediately
enhanced their export competitiveness. As Asia's currencies plunged against the
U.S. dollar, the size of U.S. dollar debts conversely grew. Debt problems at
individual companies collectively exposed weaknesses in banking systems. In
particular, the banking systems of Thailand, Korea, Indonesia and Malaysia were
found to be over-extended, under-collateralized and in need of restructuring and
re-capitalization. As was the case in the Savings & Loan crisis in the United
States in the early 1990's, re-capitalization of the banking systems of Asia
will take time. As you are likely aware, the Resolution Trust Corporation or
"RTC" was a United States government-funded institution set up to purchase
non-performing assets of weak Savings & Loans. Over time, the RTC packaged and
sold off these very same distressed assets to private investors at market
prices. The time for Asia's version of a Resolution Trust Corporation has
arrived.
Asian economic momentum is slowing significantly from its rapid pace over the
past twenty years. After growing at an annual rate in excess of 6% for at least
the past 15 years, the Asia ex-Japan region will likely grow at less than 3% in
1998. In Indonesia, Thailand, and Korea, there should be significant economic
contractions. The economies of Malaysia, Singapore and Hong Kong are also likely
to see very limited growth for 1998. China, Taiwan and the countries of the
Indian sub-continent will experience the best relative economic growth in the
region in 1998.
As the region works through the challenges of the next few years, we can expect
to see common themes. In general, there will be rising levels of bankruptcy,
unemployment, non-performing loans, high real interest rates and even social
unrest in a few places. In addition, there will be falling levels of economic
output, corporate earnings growth, domestic consumption and imports. The
clearest positive economic sign has been the dramatic recoveries in trade
accounts as imports have collapsed. For example, in both Korea and Thailand
large trade account surpluses have become the norm for the past six months.
These surpluses have helped to bolster much needed foreign currency reserves.
The prolonged period of currency turmoil, structural reform implementation and
increasing realization of the harsh economic adjustments that will be required
have caused a crisis of confidence in Asian investors. We expect to see a
continuation of the very difficult investing environment in Asia
3
<PAGE>
for the remainder of 1998 before seeing the longer-term benefits of structural
reforms. Problems of inflation, high domestic interest rates, high unemployment
rates, rising bankruptcies and civil unrest will plague the markets. In
addition, the recent nuclear tests in the Indian sub-continent have raised
serious geopolitical and economic concerns for both India and Pakistan.
Nevertheless, with most markets having already been sold down aggressively,
longer-term values have appeared. We will likely see sharp rises and falls in
the near-term as investors oscillate between optimism and despair. We have
structured the portfolio in expectation of the harsh investing environment and
are using the oversold situation to carefully shop for bargains.
The following comments 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.
- --------------------------------------------------------------------------------
Bangladesh
US$0.02 million, 0.0% of the Fund's total investments, was invested in
Bangladesh as of April 30, 1998.
The Fund's Bangladesh exposure is focused on one company listed on the Dhaka
Stock Exchange. Because Bangladesh has one of the lowest per capita incomes in
the world, severe cases of poverty and curable disease occur there. On the other
hand, prospects for large leaps in prosperity are perhaps easier to achieve and
worthy of investors' attention.
Beximco Pharmaceuticals is one of the largest companies listed on the Dhaka
Stock Exchange. Beximco Pharmaceuticals dominates the local pharmaceutical
market distributing antibiotics, anti-ulcers, anti-rheumatics, anti-allergenics,
antidepressants and vitamins. The Investment Adviser considers Beximco
Pharmaceuticals as an attractive investment and a key opportunity to participate
in Bangladesh's future growth.
- --------------------------------------------------------------------------------
China
US$2.6 million, 1.5% of the Fund's total investments, was invested in China as
of April 30, 1998.
President Jiamg Zemin and Premier Zhu Rongji are leading China through a period
of great challenge. Concern has shifted from too much economic growth and
inflation to too little. China's economic growth in the first quarter of 1998
was reported at 7.2%, but it is unlikely that China's economy, the growth engine
of Asia, will be able to grow at the 8% rate the government has forecast.
Industrial production in April of 1998 grew at an annual pace of 9.7%, much
slower than the 13.6% rate reported from April 1997. China's inflation rate is
so low that there is now a risk of deflation. The national retail price index
fell for the seventh consecutive month in April 1998. In addition, millions of
Chinese will become unemployed as State Owned Enterprises are transformed into
more competitive institutions through privatizations, mergers and bankruptcies.
Most of the Fund's greater China exposure is in Hong Kong based firms that are
significantly active in China. The Fund holds one "H-share", a Chinese mainland
state-owned enterprise that has listed a minority stake on the Hong Kong stock
exchange. Beijing Datang Power Generation Company develops, constructs, owns and
operates coal-fired electric power plants in northern China. The company is in a
key position to benefit from the rapid development occurring in the metropolitan
area surrounding China's capital city. For the year ending December 1997, the
company reported net income of 1.1 billion Chinese Rinminbi (about US$138
million).
4
<PAGE>
- --------------------------------------------------------------------------------
Hong Kong
US$51.8 million, 29.3% of the Fund's total investments, was invested in Hong
Kong as of April 30, 1998.
As the Hong Kong peg to the dollar has come under speculative attack, the
authorities have made it clear that they will endure higher domestic interest
rates as well as greater economic suffering in order to defend the value of
their currency. Property prices have fallen dramatically from their peak in 1997
and will likely fall further in Hong Kong's high interest rate environment.
Bankruptcies are on the rise and, in April, unemployment hit a 14 year high of
3.9%. Given the Hong Kong market's dependence on banking and property company
earnings, overall corporate earnings growth in Hong Kong will likely be zero in
1998. Fortunately, Hong Kong's famous free market economy will likely respond
quickly to the challenges that lie ahead. In the most recent budget, the
government cut the corporate tax rate to just 16%.
Hutchison Whampoa is the Fund's largest holding in Hong Kong as well as the
biggest single holding as a percentage of total net assets. Hutchison Whampoa,
the second largest listed company in Hong Kong by market capitalization, has
operations in property, port container terminals, telecommunication, retailing,
infrastructure and investments. For the year ended December 1997, the company
earned HK$12.3 billion (approximately US$1.6 billion).
- --------------------------------------------------------------------------------
India
US$23.9 million, 13.5% of the Fund's total investments, was invested in India as
of April 30, 1998.
Southeast Asia's difficulties have made the Indian sub-continent a relatively
more insulated, attractive home for investment. India's large domestic economy
is experiencing a cyclical upturn in economic growth and strong corporate
profits in the 15% to 20% range should follow for the fiscal year ending March
of 1999. Although the Indian Rupee will experience some devaluation pressure, it
is unlikely to be as severe as in Southeast Asia. India's economy grew
approximately 5.0% in the fiscal year ended March of 1998 and will likely
accelerate to a growth rate of over 6.0% in the current fiscal year.
Unfortunately, India's recent decision to conduct nuclear tests has resulted in
economic sanctions which will have a negative impact on its domestic economy.
The Fund's largest position in India is Hindustan Lever. Hindustan Lever is
India's largest manufacturer of branded and packaged consumer products. For the
year ended December 1997, the company reported net profit growth of 39% and
return on equity of over 45%. We consider Hindustan Lever one of India's most
attractive companies.
- --------------------------------------------------------------------------------
Indonesia
US$1.6 million, 0.9% of the Fund's total investments, was invested in Indonesia
as of April 30, 1998.
Asia's crisis has led to rioting, inflation and the end of President Suharto's
32 year rule over Indonesia. As the world's fourth most populous country
replaces Suharto's government and legacy, trials and tribulations can
undoubtedly be expected. 1998 will likely be one of the most difficult years
Indonesia has seen since its independence. In the week leading up to Suharto's
resignation approximately 500 people were killed in riots across the
archipelago. The annual inflation rate in
5
<PAGE>
April was reported at 45%. Despite the serious difficulties Indonesia must face
in the coming months, the Investment Adviser believes that Indonesia has a rare
opportunity to begin building a new foundation for stability and future growth.
PT Telekomunikasi Indonesia is the Fund's largest investment in this nation of
some 200 million people. The company is the dominant provider of both local and
long distance telephone services. Over the medium term, it will continue to
benefit from its dominant market position, access-line growth and productivity
gains. The Fund holds the New York Stock Exchange listed American Depository
Receipts or ADRs.
- --------------------------------------------------------------------------------
Korea
US$4.5 million, 2.5% of the Fund's NAV, was invested in Korea as of April 30,
1998.
The Korean economy has suffered tremendously in the past six months and more
difficulties lie ahead. Over-expansion, over-indebtedness and a weak financial
system forced the world's eleventh largest economy and newest OECD member to
humble itself and seek emergency assistance from the International Monetary Fund
in December 1997. The firm policy response of newly elected President Kim Dae
Jung has earned international respect. Korea has opened its stock, bond and
money markets to foreign investors and has initiated a bold plan to address
serious structural problems in its financial system. In early 1998, Korea
successfully sold US$4 billion worth of its first ever government debt offering.
The bond issue was critical in shifting some of Korea's short-term debt to one,
two and three years. The policy changes have forced hardships upon Korea. The
number of bankruptcies in March of 1998 was 115% higher than in March of 1997.
In April 1998, unemployment hit a 12-year high of 6.7% leaving more than 1.4
million Koreans out of work. The Investment Adviser expects the Korean economy,
as well as collective corporate earnings growth, to shrink in 1998. Indeed, the
government has reported that in the first quarter of 1998, the economy shrank by
3.8% and household spending had its biggest fall since statistics were first
recorded in 1953. Although Korea's economy will suffer substantially from its
restructuring, the Investment Adviser is encouraged and optimistic about the
long-term prospects for portfolio investment.
Pohang Iron & Steel is one of the world's largest and lowest-cost producers of
steel. The Korean government has a controlling stake in the company and it
enjoys a near-monopoly position in its domestic market. In addition, as the
domestic price of steel in Korea remains below the international price, a
liberalization of prices will help, not hurt, the company's bottom line. Pohang
Iron & Steel offers equity investors an excellent opportunity to benefit as the
Korean economy recovers.
- --------------------------------------------------------------------------------
Malaysia
US$13.5 million, 7.7% of the Fund's total investments, was invested in Malaysia
as of April 30, 1998.
Malaysia stands apart from the rest of the region as having the worst government
policy response to the region's currency crisis. Transactions have occurred with
little regard for minority shareholder interests and with the implicit or
explicit blessing of Prime Minister Mahathir. On the other hand, the stock
market has fallen dramatically reflecting investor concerns with the market
currently trading at less than 15x forecast earnings, we believe the market
offers attractive investment opportunities to the careful investor.
6
<PAGE>
The Fund's largest Malaysian investment is Petronas Gas. Petronas Gas is
responsible for the processing and transmission of natural gas owned and
extracted by its parent company, Petronas. The company has stable earnings
growth forecast for the foreseeable future as virtually all of its revenue is
derived from predetermined reservation and flowrate charges. For the year ended
March of 1998, the company reported a 13% increase in net profits to 942 million
Ringgit (about US$240 million).
- --------------------------------------------------------------------------------
Pakistan
US$3.1 million, 1.7% of the Fund's total investments, was invested in Pakistan
as of April 30, 1998.
The International Monetary Fund's loan assistance and administrative oversight
is providing Pakistan with necessary incentives to reduce its high current
account deficit (about 6% of Gross Domestic Product). International economic aid
is of much greater importance to Pakistan than India. Pakistan's economy will
suffer significantly as a result of Pakistan's retaliatory nuclear tests.
Pakistan has declining interest rates and inflation combined with growing
foreign currency reserves as well as manufacturing and agricultural growth. The
economic scenario described provides equity investors with many potential
attractive investment opportunities.
The Fund's largest holding in Pakistan is Hub Power Company. Hub Power Company
operates a 1,290MW power plant in Southern Pakistan. The plant supplies 20% of
Pakistan's power and the company has an exclusive contract to sell to the Water
and Power Development Authority of Pakistan.
- --------------------------------------------------------------------------------
Philippines
US$2.4 million, 1.4% of the Fund's total investments, was invested in the
Philippines as of April 30, 1998.
The Philippines newly elected President Joseph Estrada has pledged to continue
with the economic reforms of former President Ramos. The Philippines has not
seen the same degree of over-investment and over-indebtedness that occurred in
most of Asia, and, as a result, we expect to see an early recovery in the
Philippine economy.
In the Philippines, the Fund's top holding is Philippine Long Distance Telephone
Company (PLDT). PLDT is the dominant domestic and international phone service
provider. PLDT has significant U.S. dollar revenues and is less adversely
affected by the Peso devaluation than most Philippine companies.
- --------------------------------------------------------------------------------
Singapore
US$18.6 million, 10.5% of the Fund's total investments, was invested in
Singapore as of April 30, 1998.
Singapore's stock market has not been spared in Asia's downturn. Despite its
excellent infrastructure, a highly educated workforce, stable political
environment and a high domestic savings rate, Singapore is geographically
located next to an unstable Indonesia. As in Hong Kong, with the declining asset
prices and a stock market dominated by banks and property companies, economic
output and collective corporate earnings will likely not grow in 1998. The
Investment Adviser is looking beyond Asia's current economic hardships and has
found attractively priced, well-managed businesses in Singapore's stock market.
7
<PAGE>
The Fund's largest position in Singapore is Singapore Telecommunications.
Singapore Telecom is the monopoly provider of fixed line telecommunications to
Singapore's population of three million. In addition, the company provides
international and mobile telecommunication services. For the company's fiscal
year ended March 1997, return on equity was in excess of 28% and earnings were
S$1.7 billion (about US$1 billion).
- --------------------------------------------------------------------------------
Sri Lanka
US$0.0 million, 0.2% of the Fund's total investments, was invested in Sri Lanka
as of April 30, 1998.
S0ri Lanka has existed under a cloud from civil war in the north of the country
since 1983. The conflict has imposed high costs on the country, not only in
lives lost, but also in the budgetary strain of financing a significant military
effort.
The Fund maintains a modest strategic exposure in Sri Lanka in light of the good
growth possibilities as the country adopts market-oriented policies. John Keells
Holdings is a broadly diversified conglomerate with a focus on operating tourist
facilities and services.
- --------------------------------------------------------------------------------
Taiwan
US$26.9 million, 15.2% of the Fund's total investments, was invested in Taiwan
as of April 30, 1998.
Taiwan's banking system is much healthier than most of Southeast Asia. Bank
lending in recent years has been slowing and excessive bubbles of
over-investment have not become a problem. The economy is growing from a
cyclical low and Taiwan's electronics companies have provided the country with
excellent export growth.
The Fund's largest holding in Taiwan is Cathay Life Insurance. Cathay Life is
Taiwan's oldest and largest life insurance company with a dominant share of the
insurance market. The company has become Taiwan's largest landowner with assets
of NT$742 billion (about US$22.8 billion) and net profits of NT$18.4 billion
(about US$565 million) as of the end of 1997.
- --------------------------------------------------------------------------------
Thailand
US$7.0 million, 4.0% of the Fund's total investments, was invested in Thailand
as of April 30, 1998.
Thailand was the first country in Asia to spin out of control and is likely to
be one of the first to recover. The country's policy responses have been firm
and realistic. The external trade account has improved steadily while the Bank
of Thailand continues in its measures to reform in accordance with International
Monetary Fund guidelines. While we expect no economic or corporate earnings
growth for the next two years, Thailand has set the foundation for recovery.
8
<PAGE>
In Thailand, the Fund's largest holding is Thai Farmers Bank. Thai Farmers Bank
is one of Thailand's largest and most sound financial institutions. In early
April of 1998, the company was successfully able to raise additional capital by
issuing 376 million new shares at 88 Baht each. The new capital raised should
provide the company the balance sheet strength to survive one of the most
difficult periods in Thailand's history.
AXA Asset Management Partenaires
Hong Kong
June 1998
- --------------------------------------------------------------------------------
AXA Asset Management Partenaires ("AAMP") has served as the Investment Adviser
to the Fund since June 8, 1998 pursuant to an investment advisory agreement
among Advantage Advisers, Inc., AAMP and the Fund (the "New Advisory
Agreement"). The New Advisory Agreement was approved by the Fund's Board of
Directors in connection with an agreement entered between AXA Investment
Managers SA ("AXA") and Barclays Bank providing for AXA to acquire (the
"Transaction") Barclays Global Investors International Hong Kong Limited
("BGIHK"). The Transaction closed on June 8, 1998.
While the Transaction did not directly involve BGI, which has served as the
Fund's investment adviser since the Fund's inception, BGI provided investment
advice to the Fund through the services of BGIHK's investment advisory
personnel. Upon consummation of the Transaction, all of BGIHK's investment
advisory personnel involved in the management of the Fund became associated with
AXA and AAMP. The New Advisory Agreement is subject to stockholder approval at a
Special Meeting of the Fund to be held on August 7, 1998. Investment advisory
fees payable to AAMP will be held in escrow pending the results of the Special
Meeting.
The Board of Directors of the Fund recently reviewed and approved various
amendments to the Fund's bylaws. For example, the provisions relating to timely
notice for proposals to be brought before an annual meeting of stockholders
(other than a proposal under Rule 14a-8 of the Securities Exchange Act of 1934
to be included in the Fund's proxy statement) have been amended. As amended, a
stockholder's notice generally must be delivered to the Fund not less than 60
days nor more than 90 days prior to the first anniversary of the preceding
year's annual meeting. The Board believes that the amended timely notice
provisions will provide greater certainty to stockholders because previously,
timely notice keyed off the date of the current year's meeting or the date
public disclosure of the current year's meeting is made. In addition, the
provisions provide that any business to be brought before a special meeting of
stockholders must be specified in the notice of meeting or otherwise properly
brought before the meeting by or at the direction of the Board of Directors.
Finally, upon recommendation of the Fund's Maryland counsel, other changes to
certain bylaw provisions were made to conform to the bylaw provisions of more
recently incorporated Maryland corporations.
- --------------------------------------------------------------------------------
9
<PAGE>
Schedule of Investments The Asia Tigers Fund, Inc.
April 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
Number Percent
of Shares Security of Holdings Cost Value
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
==========================================================================================================
COMMON STOCKS 84.01%
==========================================================================================================
BANGLADESH 0.01%
Health/Personal Care 0.01%
15,000 Beximco Pharmaceuticals ................................... $ 66,857 $ 17,614
------------ ------------
TOTAL BANGLADESH .......................................... 66,857 17,614
------------ ------------
CHINA 1.50%
Utilities - Electric & Gas 1.50%
6,500,000 Beijing Datang Power Generation ........................... 2,684,155 2,643,300
------------ ------------
TOTAL CHINA ............................................... 2,684,155 2,643,300
------------ ------------
HONG KONG 29.33%
Banking 5.28%
430,000 Hang Seng Bank ............................................ 4,628,143 3,622,192
200,200 HSBC Holdings ............................................. 2,532,107 5,711,877
------------ ------------
7,160,250 9,334,069
------------ ------------
Multi-Industry 7.45%
950,000 China Resources Enterprise ................................ 2,456,770 1,631,164
300,000 Citic Pacific ............................................. 983,149 921,766
1,400,000 Hutchison Whampoa ......................................... 9,279,662 8,657,372
570,000 Shanghai Industrial Holdings .............................. 2,918,538 1,953,718
------------ ------------
15,638,119 13,164,020
------------ ------------
Real Estate 6.75%
810,000 Cheung Kong Holdings ...................................... 5,769,849 5,385,360
700,000 New World Development ..................................... 3,614,054 1,992,641
765,000 Sun Hung Kai Properties ................................... 6,755,413 4,542,990
------------ ------------
16,139,316 11,920,991
------------ ------------
Telecommunications 7.02%
2,200,000 China Telecommunication* .................................. 4,446,706 4,175,058
4,400,090 Hong Kong Telecommunication ............................... 8,333,077 8,236,678
------------ ------------
12,779,783 12,411,736
Utilities - Electric & Gas 2.83%
1,040,000 CLP Holdings .............................................. 5,541,146 4,994,578
------------ ------------
TOTAL HONG KONG ........................................... 57,258,614 51,825,394
------------ ------------
</TABLE>
10
<PAGE>
Schedule of Investments (continued) The Asia Tigers Fund, Inc.
April 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
Number Percent
of Shares Security of Holdings Cost Value
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
==========================================================================================================
COMMON STOCKS (continued)
INDIA 13.53%
Automobiles 1.76%
70,350 Bajaj Auto ................................................ $ 1,080,501 $ 1,055,029
70,000 Mahindra & Mahindra ....................................... 801,942 509,427
40,000 Punjab Tractors ........................................... 825,702 842,039
20,000 Tata Engineering & Locomotive ............................. 168,847 139,862
40,000 TVS Suzuki ................................................ 523,680 565,387
------------ ------------
3,400,672 3,111,744
------------ ------------
Banking 1.32%
300,000 Bank of Baroda ............................................ 1,012,101 880,554
300 Oriental Bank of Commerce ................................. 738 478
200,000 State Bank of India ....................................... 1,205,602 1,453,996
------------ ------------
2,218,441 2,335,028
------------ ------------
Beverages & Tobacco 1.35%
120,000 ITC* ...................................................... 1,845,280 2,381,120
------------ ------------
Building Materials & Components 0.01%
2,000 Gujarat Ambuja Cement ..................................... 19,140 15,335
------------ ------------
Business/Public Service 1.76%
5,000 Infosys Technology ........................................ 191,821 271,177
80,000 NIIT ...................................................... 578,880 2,834,487
------------ ------------
770,701 3,105,664
Chemicals 1.29%
50,000 Castrol India ............................................. 911,318 843,298
299,636 Reliance Industries ....................................... 1,458,205 1,433,124
------------ ------------
2,369,523 2,276,422
Construction & Housing 0.38%
105,000 Larsen & Toubro Ltd ....................................... 573,158 667,797
------------ ------------
Energy Sources 1.66%
90,000 Bharat Petroleum Corp ..................................... 884,833 906,230
200,000 Hindustan Petroleum ....................................... 2,114,604 2,032,725
------------ ------------
2,999,437 2,938,955
Health/Personal Care 3.03%
10,000 Dr Reddy's Laboratories ................................... 60,214 116,866
40,000 Glaxo India ............................................... 374,822 385,651
80,000 Hindustan Lever ........................................... 2,295,384 3,175,834
100,000 Ranbaxy Labs .............................................. 1,998,118 1,670,233
------------ ------------
4,728,538 5,348,584
Metals - Non Ferrous 0.00%
1,000 Indian Aluminium .......................................... 5,093 2,812
------------ ------------
</TABLE>
11
<PAGE>
Schedule of Investments (continued) The Asia Tigers Fund, Inc.
April 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
Number Percent
of Shares Security of Holdings Cost Value
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
==========================================================================================================
COMMON STOCKS (continued)
INDIA (continued)
Telecommunications 0.97%
270,000 Mahanagar Telephone Nigam* ................................ 2,114,030 1,712,7
------------ ------------
Textiles & Apparel 0.00%
4,600 Arvind Mills .............................................. 15,345 7,637
------------ ------------
TOTAL INDIA ............................................... 21,059,358 23,903,873
------------ ------------
INDONESIA 0.90%
Beverage & Tobacco 0.14%
200,000 Gudang Garam .............................................. 829,684 238,750
------------ ------------
Energy Sources 0.22%
25,000 Gulf Indonesia Resources ADR* ............................. 571,426 384,375
------------ ------------
Food & Household Products 0.19%
250,000 Daya Guna Samudera ........................................ 380,493 228,906
250,000 Indofoods Sukses Makmur ................................... 395,342 106,250
------------ ------------
775,835 335,156
------------ ------------
Insurance 0.08%
3,000,000 Asuransi Lippo Life* ...................................... 1,665,686 150,000
------------ ------------
Telecommunications 0.27%
60,000 Telekomunikasi Indonesia ADR .............................. 1,418,825 480,000
------------ ------------
TOTAL INDONESIA ........................................... 5,261,456 1,588,281
------------ ------------
KOREA 2.52%
Appliance & Household Durables 0.38%
26,000 LGElectronics ............................................. 401,194 309,316
6,300 Samsung Electronics ....................................... 280,563 348,822
501 Samsung Electronics Rights (Expiration date 6/1/98)* ...... 0 9,671
------------ ------------
681,757 667,809
------------ ------------
Metals - Steel 1.11%
36,000 Pohang Iron & Steel ....................................... 1,968,056 1,952,862
------------ ------------
</TABLE>
12
<PAGE>
Schedule of Investments (continued) The Asia Tigers Fund, Inc.
April 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
Number Percent
of Shares Security of Holdings Cost Value
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
==========================================================================================================
COMMON STOCKS (continued)
Telecommunications 1.03%
3,054 SK Telecom ................................................ $ 1,538,925 $ 1,842,580
------------ ------------
TOTAL KOREA ............................................... 4,188,738 4,463,251
------------ ------------
MALAYSIA 6.75%
Banking 0.44%
265,000 Malayan Banking ........................................... 2,083,802 786,244
------------ ------------
Beverage & Tobacco 0.66%
140,000 Rothmans of Pall Mall ..................................... 1,279,340 1,161,160
------------ ------------
Construction &Housing 0.20%
400,000 YTLPower International* ................................... 307,356 364,666
------------ ------------
Leisure & Tourism 0.42%
1,100,000 Magnum .................................................... 1,775,042 741,740
------------ ------------
Misc. Materials & Commodities 0.66%
500,000 Kuala Lumpur Kepong ....................................... 1,172,694 1,166,554
------------ ------------
Multi-Industry 0.85%
490,000 Berjaya Sports Toto ....................................... 2,158,902 1,169,656
373,000 Sime Darby ................................................ 1,094,211 332,003
------------ ------------
3,253,113 1,501,659
------------ ------------
Telecommunications 0.26%
150,000 Telekom Maylasia .......................................... 426,194 453,136
------------ ------------
Transportation - Shipping 0.38%
380,000 Malaysian International Shipping .......................... 728,821 666,217
------------ ------------
Utilities Electric & Gas 2.88%
550,000 Malakoff .................................................. 2,071,726 1,453,810
880,000 Petronas Gas .............................................. 2,591,750 2,136,210
750,000 Tenaga Nasional ........................................... 2,751,051 1,507,080
------------ ------------
7,414,527 5,097,100
------------ ------------
TOTAL MALAYSIA ............................................ 18,440,889 11,938,476
------------ ------------
</TABLE>
13
<PAGE>
Schedule of Investments (continued) The Asia Tigers Fund, Inc.
April 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
Number Percent
of Shares Security of Holdings Cost Value
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
==========================================================================================================
COMMON STOCKS (continued)
PAKISTAN 1.35%
Energy Sources 1.15%
1,500,000 Hub Power ................................................. $ 1,958,737 $ 1,528,944
100,000 Pakistan State Oil ........................................ 654,136 504,881
------------ ------------
2,612,873 2,033,825
------------ ------------
Telecommunications 0.20%
500,000 Pakistan Telecom* ......................................... 330,725 349,603
------------ ------------
TOTAL PAKISTAN ............................................ 2,943,598 2,383,428
------------ ------------
PHILIPPINES 1.38%
Beverage & Tobacco 0.35%
380,000 San Miguel-B .............................................. 959,288 624,658
------------ ------------
Real Estate 0.57%
1,183,200 Ayala Land ................................................ 551,396 464,144
3,000,000 SM Prime .................................................. 619,640 537,983
------------ ------------
1,171,036 1,002,127
------------ ------------
Telecommunications 0.46%
30,000 Philippine Long Distance Telephone ADR .................... 905,261 810,000
------------ ------------
TOTAL PHILIPPINES ......................................... 3,035,585 2,436,785
------------ ------------
SINGAPORE 10.50%
Banking 2.21%
739,224 Overseas Chinese Bank Corporation ......................... 5,403,389 3,900,486
------------ ------------
Broadcasting/Publishing 0.76%
------------ ------------
121,220 Singapore Press Holdings .................................. 1,620,738 1,340,506
------------ ------------
Electronic Components & Instruments 2.54%
105,000 Creative Technology* ...................................... 2,320,780 2,182,938
330,000 Elec & Eltek International ................................ 1,469,768 1,914,000
200,000 Natsteel Electronics* ..................................... 292,462 391,785
------------ ------------
4,083,010 4,488,723
------------ ------------
</TABLE>
14
<PAGE>
Schedule of Investments (continued) The Asia Tigers Fund, Inc.
April 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
Number Percent
of Shares Security of Holdings Cost Value
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
==========================================================================================================
COMMON STOCKS (continued)
SINGAPORE (continued)
Machinery &Engineering 0.19%
400,000 Singapore Technology* ..................................... $ 330,388 4 343,760
------------ ------------
Real Estate 1.31%
400,000 City Developments ......................................... 2,495,840 1,731,438
228,000 City Developments Warrants (Expiration date 7/18/98)* ..... 1,129,164 590,711
------------ ------------
3,625,004 2,322,149
------------ ------------
Telecommunications 2.24%
2,300,000 Singapore Telecommunications .............................. 3,744,896 3,953,239
------------ ------------
Transportation - Air 1.25%
340,000 Singapore Airlines ........................................ 3,010,583 2,212,954
------------ ------------
TOTAL SINGAPORE ........................................... 21,818,008 218,561,817
------------ ------------
SRI LANKA 0.17%
Financial Services 0.08%
30,000 DFCC Bank ................................................. 165,898 144,539
------------ ------------
Multi-Industry 0.09%
30,000 John Keells Holdings ...................................... 139,715 158,755
------------ ------------
TOTAL SRI LANKA ........................................... 305,613 303,294
------------ ------------
TAIWAN 12.09%
Banking 2.46%
1,634,000 China Trust Commercial Bank* .............................. 2,239,299 1,917,718
1,000,000 First Commercial Bank ..................................... 3,416,032 2,441,280
------------ ------------
5,655,331 4,358,998
------------ ------------
Electrical & Electronics 2.06%
361,000 Delta Electronic .......................................... 1,589,416 1,324,690
397,000 Hon Hai Precision Industry* ............................... 2,379,469 2,311,605
------------ ------------
3,968,885 3,636,295
------------ ------------
Electronic Components & Instruments 1.46%
270,000 Taiwan Semiconductor Manufacturing* ....................... 1,285,496 1,166,811
750,000 United Microelectronics* .................................. 1,769,778 1,410,181
------------ ------------
3,055,274 2,576,992
------------ ------------
</TABLE>
15
<PAGE>
Schedule of Investments (continued) The Asia Tigers Fund, Inc.
April 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
Number Percent
of Shares Security of Holdings Cost Value
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
==========================================================================================================
COMMON STOCKS (continued)
TAIWAN (continued)
Insurance 3.41%
1,507,000 Cathay Life Insurance ..................................... $ 7,490,793 $ 6,032,662
------------ ------------
Metals - Steel 0.59%
1,650,000 China Steel ............................................... 1,588,221 1,040,804
------------ ------------
Real Estate 2.11%
2,733,000 Cathay Construction ....................................... 3,997,240 2,536,196
2,100,000 Pacific Construction* ..................................... 1,907,049 1,190,920
------------ ------------
5,904,289 3,727,116
------------ ------------
TOTAL TAIWAN .............................................. 27,662,793 21,372,867
------------ ------------
THAILAND 3.98%
Banking 2.11%
720,000 Bangkok Bank .............................................. 2,307,463 1,806,986
840,000 Thai Farmer's Bank ........................................ 3,370,972 1,923,415
------------ ------------
5,678,435 3,730,401
------------ ------------
Building Materials & Components 0.62%
77,000 Siam Cement* .............................................. 1,824,360 1,087,761
------------ ------------
Electronic Components & Instruments 0.47%
58,000 Delta Electronics ......................................... 394,659 564,243
58,000 Delta Electronics Rights exp 5/15/98* ..................... 194,384 274,619
------------ ------------
589,043 838,862
------------ ------------
Energy Sources 0.41%
68,000 PTT Exploration & Production .............................. 888,080 717,827
------------ ------------
Utilities Electric & Gas 0.37%
340,000 Electricity Generating* ................................... 876,018 659,767
------------ ------------
TOTAL THAILAND ............................................ 9,855,936 7,034,618
------------ ------------
TOTAL COMMON STOCKS ....................................... 174,581,600 148,472,998
------------ ------------
</TABLE>
16
<PAGE>
Schedule of Investments (continued) The Asia Tigers Fund, Inc.
April 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
Par Value Percent
($000) Security of Holdings Cost Value
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
==========================================================================================================
CONVERTIBLE BONDS 4.42%
==========================================================================================================
MALAYSIA 0.90%
Telecommunications 0.90%
2,000 Telekom Malaysia 4.00%, 10/03/04 .......................... $ 1,862,725 $ 1,595,000
------------ ------------
TOTAL MALAYSIA BOND ....................................... 1,862,725 1,595,000
------------ ------------
PAKISTAN 0.41%
Telecommunications 0.41%
750 Republic of Pakistan 6.00%, 2/26/02 ....................... 711,449 717,750
------------ ------------
TOTAL PAKISTAN BOND ....................................... 711,449 717,750
------------ ------------
TAIWAN 3.11%
Chemicals 0.79%
1,200 Nan Ya Plastics 1.75%, 7/19/01 ............................ 1,355,553 1,398,480
------------ ------------
Electrical & Electronics 2.32%
3,600 Taiwan Semiconductors Zero Coupon Bond, 07/03/02* ......... 3,950,515 4,093,560
------------ ------------
TOTAL TAIWAN BONDS ........................................ 5,306,068 5,492,040
------------ ------------
TOTAL CONVERTIBLE BONDS ................................... 7,880,242 7,804,790
------------ ------------
==========================================================================================================
SHORT-TERM OBLIGATIONS 11.57%
==========================================================================================================
TIME DEPOSIT 5.94%
10,500 Chase Manhattan Bank London Time Deposit 5.4375%, 5/1/98 . 10,500,000 10,500,000
------------ ------------
TOTAL TIME DEPOSIT ........................................ 10,500,000 10,500,000
------------ ------------
UNITED STATES TREASURY BILL 5.63%
5,000 U.S. Treasury Bill 5.03%, 5/28/98 ......................... 4,981,138 4,980,695
5,000 U.S. Treasury Bill 5.04%, 6/25/98 ......................... 4,961,500 4,962,227
------------ ------------
TOTAL UNITED STATES TREASURY BILLS ........................ 9,942,638 9,942,922
------------ ------------
TOTAL SHORT-TERM OBLIGATIONS .............................. 20,442,638 20,442,922
------------ ------------
TOTAL INVESTMENTS** ........................... 100.00% $202,904,480 $176,720,710
------------ ------------
</TABLE>
17
<PAGE>
Schedule of Investments (continued) The Asia Tigers Fund, Inc.
April 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
Par Value Percent
($000) Security of Holdings Cost Value
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
</TABLE>
- ----------
Footnotes and Abbreviations
ADR - American Depository Receipts
* Non-income producing security
** Aggregate cost for Federal income tax purposes is $203,571,283.
The aggregate gross unrealized appreciation (depreciation) for all
securities is as follows:
Excess of value over tax cost $ 9,167,025
Excess of tax cost over value ($36,017,598)
------------
($26,850,573)
------------
See accompanying notes to financial statements.
18
<PAGE>
Statement of Assets and Liabilities The Asia Tigers Fund, Inc.
April 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
<S> <C>
Assets
Investments, at value (Cost $202,904,480) ........................................ $ 176,720,710
Cash (including $3,586,032 of foreign currency holdings with a cost of $3,580,724) 4,941,195
Receivables:
Dividends ..................................................................... 321,321
Interest ...................................................................... 38,010
Securities sold ............................................................... 2,611,621
Unamortized organization costs ................................................... 14,192
Prepaid expenses ................................................................. 56,189
-------------
Total Assets .................................................................. 184,703,238
-------------
Liabilities
Payable for securities purchased ................................................. 3,618,493
Due to Investment Manager ........................................................ 152,762
Due to Administrator ............................................................. 30,552
Accrued expenses ................................................................. 390,299
-------------
Total Liabilities ............................................................. 4,192,106
-------------
Net Assets ....................................................................... $ 180,511,132
=============
NET ASSET VALUE PER SHARE ($180,511,132 / 20,514,984) ............................ $ 8.80
=============
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 .................................................................. 285,743,977
Undistributed net investment income .............................................. 635,231
Accumulated net realized loss on investments and
foreign currency related transactions ......................................... (79,685,424)
Net unrealized depreciation in value of investments and on translation of
other assets and liabilities denominated in foreign currencies ................ (26,203,167)
-------------
$ 180,511,132
=============
</TABLE>
See accompanying notes to financial statements.
19
<PAGE>
Statement of OperationsThe Asia Tigers Fund, Inc.
For the Six Months Ended April 30, 1998 (unaudited)
<TABLE>
<CAPTION>
<S> <C> <C>
Investment Income
Dividends (Net of taxes withheld of $44,718) ................................... $ 1,518,969
Interest ....................................................................... 670,139
-------------
Total Investment Income ..................................................... 2,189,108
-------------
Expenses
Management fees ................................................ $916,276
Custodian fees ................................................. 213,303
Administration fees ............................................ 183,255
Legal fees ..................................................... 76,425
Insurance ...................................................... 57,452
Audit fees ..................................................... 22,720
Transfer agent fees ............................................ 18,920
Printing ....................................................... 17,356
NYSE fees ...................................................... 16,037
Amortization of organizational cost ............................ 12,070
Directors' fees ................................................ 10,504
Interest expense ............................................... 4,916
Miscellaneous .................................................. 4,643
--------
Total expenses .............................................................. 1,553,877
-------------
Net Investment Income ....................................................... 635,231
-------------
Net Realized and Unrealized Gain (Loss) on Investments,
Foreign Currency Holdings and Translation of Other Assets
and Liabilities Denominated in Foreign Currencies:
Net realized loss from:
Security transactions .................................................... (45,912,737)
Foreign currency related transactions .................................... (951,789)
-------------
(46,864,526)
-------------
Net change in unrealized appreciation in value of investments, foreign
currency holdings and translation of other assets and liabilities
denominated in foreign currencies .............................................. 28,151,511
-------------
Net realized and unrealized loss on investments, foreign currency holdings
and translation of other assets and liabilities denominated in foreign
currencies ..................................................................... 18,713,015)
-------------
Net decrease in net assets resulting from operations ........................... ($18,077,784)
=============
</TABLE>
See accompanying notes to financial statements.
20
<PAGE>
Statement of Changes in Net Assets The Asia Tigers Fund, Inc.
<TABLE>
<CAPTION>
For the Six
Months Ended For the Year
April 30, 1998 Ended
(Unaudited) October 31, 1997
-------------- ----------------
<S> <C> <C>
Increase (Decrease) In Net Assets
Operations
Net investment income ........................................... $ 635,231 $ 678,838
Net realized gain (loss) on investments and foreign currency
related transactions ......................................... (46,864,526) 3,256,686
Net change in unrealized appreciation (depreciation) in value of
investments, foreign currency holdings and translation of
other assets and liabilities denominated in foreign currencies 28,151,511 (60,720,179)
------------- -------------
Net decrease in net assets resulting from operations ......... (18,077,784) (56,784,655)
Distributions to shareholders from
Net investment income ($0.00 per share) ......................... -- (53,053)
In excess of net investment income ($0.04 per share) ............ -- (767,547)
------------- -------------
Net decrease in net assets resulting from distributions ...... -- (820,600)
Total decrease in net assets .................................... (18,077,784) (57,605,255)
------------- -------------
Net Assets
Beginning of year ............................................... 198,588,916 256,194,171
------------- -------------
End of period (including undistributed net investment income
of $635,231 as of April 30, 1998) ............................ $ 180,511,132 $ 198,588,916
============= =============
</TABLE>
See accompanying notes to financial statements.
21
<PAGE>
Financial Highlights The Asia Tigers Fund, Inc.
For a Share Outstanding throughout Each Period
<TABLE>
<CAPTION>
For the For the Year For the Year For the Year For the Year
Period Ended Ended Ended Ended Ended
April 30,1998 October 31, October 31, October 31, October 31,
(Unaudited) 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C>
Per Share Operating Performance ------------- ------------ ------------ ------------ ------------
Net asset value, beginning of period ..... $ 9.68 $ 12.49 $ 12.08 $ 13.89 $ 13.97*
--------- --------- --------- --------- ---------
Net investment income .................... 0.03 0.03 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 .................. (0.91) (2.80) 0.44 (1.67) (0.11)
--------- --------- --------- --------- ---------
Net increase (decrease) from
investment operations .................. (0.88) (2.77) 0.49 (1.58) (0.06)
--------- --------- --------- --------- ---------
Less Distributions
Dividends from net investment income ... -- (0.00)++ (0.08) (0.06) (0.02)
In excess of net
investment income ................... -- (0.04) -- -- --
Distributions from net
realized gains ...................... -- -- -- (0.17) --
--------- --------- --------- --------- ---------
Total Dividends and Distributions ........ 0.00 (0.04) (0.08) (0.23) (0.02)
--------- --------- --------- --------- ---------
Net asset value, end of period .......... $ 8.80 $ 9.68 $ 12.49 $ 12.08 $ 13.89
========= ========= ========= ========= =========
Per share market value, end of period .... $ 7.56 $ 7.94 $ 10.38 $ 10.38 $ 12.38
Total Investment Return Based on
on Market Value* ....................... (4.72)% (23.23)% 0.59% (14.17)% (11.65)%
Ratios/Supplemental Data
Net assets, end of period (in 000s) ...... $ 180,511 $ 198,589 $ 256,194 $ 247,761 $ 284,910
Ratios of expenses to average net assets . 1.70%*** 1.60% 1.60% 1.65% 1.60%***
Ratios of net investment income to
average net assets ..................... 0.69%*** 0.25% 0.41% 0.71% 0.38%***
Portfolio turnover ....................... 44.38% 95.38% 91.57% 77.88% 45.51%
Average commission rate paid** ........... $ 0.0092 $ 0.0096 $ 0.0084 N/A N/A
</TABLE>
* Initial public offering price $15.00 per share less underwriting discount
of $0.98 per share and offering costs of $0.05 per share.
** 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 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. Rights offerings, 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 charge
and is not annualized.
*** Annualized
+ Computed by dividing the total amount of brokerage commissions paid by the
total number of shares or 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.
++ Less than $0.01 per share.
22
<PAGE>
Notes to Financial Statements The Asia Tigers Fund, Inc.
April 30, 1998 (Unaudited)
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 common stock to CIBC Oppenheimer Corp. ("CIBC
Oppenheimer"), formerly known as Oppenheimer & Co., Inc., and 3,567 shares of
capital stock to Barclays Global Investors International, Inc. ("BGI"). At April
30, 1998, CIBC Oppenheimer and BGI each owned 3,567 shares of the Fund's common
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 financial 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 generally 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.
Securities for which sales prices and bid and asked quotations are not available
on the date of determination may be valued at the most recently available prices
or quotations under policies adopted by the Board of Directors. Investments in
short-term debt securities having a maturity of 60 days or less are valued at
amortized cost which approximates market value. 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, 1997, the Fund had a net capital loss carryover of $32,519,420,
which is available to offset future net realized gains on securities
transactions to the extent provided for in the Internal Revenue Code.
23
<PAGE>
Notes to Financial Statements (continued) The Asia Tigers Fund, Inc.
April 30, 1998 (Unaudited)
Of the aggregate capital losses, $30,627,532 will expire in the year 2003 and
$1,846,888 will expire in the year 2004.
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.
The Fund does not generally isolate the effect of fluctuations in foreign
currency 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 included in or
are a reduction of ordinary income for Federal income tax purposes.
Securities denominated in currencies other than U.S. dollars are subject to
changes in value due to fluctuations in foreign exchange. Foreign security and
currency transactions 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, the fact
that foreign securities markets may be smaller and less developed, and the fact
that securities, tax and corporate laws may have only recently developed or are
in developing stages, and laws may not exist to cover all contingencies or to
protect investors adequately.
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.
24
<PAGE>
Notes to Financial Statements (continued) The Asia Tigers Fund, Inc.
April 30, 1998 (Unaudited)
During the year ended October 31, 1997, the Fund reclassified $877,675 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, foreign
withholding taxes and gains on sales of passive foreign investment companies. In
addition, the Fund reclassified ($767,547) from distribution in excess of net
investment income to paid-in capital. Net investment income and net assets were
not affected by the change.
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
On November 3, 1997, CIBC Wood Gundy Securities Corp., the broker-dealer
subsidiary of The Canadian Imperial Bank of Commerce, acquired all of the stock
of Oppenheimer Holdings, the indirect parent of Advantage Advisers, Inc., the
Fund's Investment Manager. In connection with the acquisition, CIBC Wood Gundy
Securities Corp. was merged into Oppenheimer & Co., Inc., whose name was changed
to CIBC Oppenheimer Corp.
Advantage Advisers, Inc. serves as the Fund's Investment Manager under the terms
of a management agreement (the "Management 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.
AXA Asset Management Partenaires ("AAMP") has served as the Investment Adviser
to the Fund since June 8, 1998 pursuant to an investment advisory agreement
among Advantage, AAMP and the Fund (the "New Advisory Agreement"). The New
Advisory Agreement was approved by the Fund's Board of Directors in connection
with an agreement entered between AXA Investment Managers SA ("AXA") and
Barclays Bank providing for AXA to acquire (the "Transaction") Barclays Global
Investors International Hong Kong Limited ("BGIHK"). The Transaction closed on
June 8, 1998.
While the Transaction did not directly involve BGI, which has served as the
Fund's investment adviser since the Fund's inception, BGI provided investment
advice to the Fund through the services of BGIHK's investment advisory
personnel. Upon consummation of the Transaction, all of BGIHK's investment
advisory personnel involved in the management of the Fund became associated with
AXA and AAMP. The New Advisory Agreement is subject to stockholder approval at a
Special Meeting of the Fund to be held on August 7, 1998. Investment advisory
fees payable to AAMP will be held in escrow pending the results of the Special
Meeting.
Pursuant to the New Advisory Agreement, AAMP is responsible for (and BGI was
previously responsible 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 is
entitled to receive from the Investment Manager monthly fees at an annual rate
of 0.50% of the Fund's average weekly net assets. For the six months ended April
30, 1998, fees paid to the Investment Manager amounted to $916,276, of which the
Investment Manager informed the Fund it paid $458,138 to BGI.
25
<PAGE>
Notes to Financial Statements (concluded) The Asia Tigers Fund, Inc.
April 30, 1998 (Unaudited)
CIBC 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 six months ended
April 30, 1998, these fees amounted to $183,255.
The Administrator subcontracts certain of the services it is required to perform
under the Administration Agreement to PFPC Inc.
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. For the period ended April 30, 1998, the Fund paid
$6,050 to its directors. 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
$71,234,431 and $77,025,664, respectively, for the six months ended April 30,
1998.
NOTE D: Other
At April 30, 1998, substantially all of the Fund's assets were invested in Asian
securities. The Asian securities markets are substantially smaller, less
developed, 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 and
Pakistan valued at approximately $7,702,786 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.
26
<PAGE>
Notes to Financial Statements (concluded) The Asia Tigers Fund, Inc.
April 30, 1998 (Unaudited)
Results of Annual Shareholder Meeting
Annual Meeting
The Fund held its Annual Shareholders Meeting on February 20, 1998. At the
meeting, shareholders elected each of the nominees proposed for election to the
Fund's Board of Directors, and ratified the selection and approval of Price
Waterhouse LLP as the independent accountants of the Fund for the fiscal year
ending October 31, 1998. The following table provides information concerning the
matters voted on at the meeting:
I. Election of Directors
Nominee Votes For Votes Abstained Total Voting Shares
------- --------- --------------- -------------------
Alan H. Rappaport 14,580,604 1,366,761 15,947,365
Charles F. Barber 15,384,971 562,394 15,947,365
At April 30, 1998, in addition to Alan H. Rappaport and Charles F. Barber, the
other directors of the Fund were as follows:
Jeswald W. Salacuse
Leslie H. Gelb
II. Ratification of Price Waterhouse LLP as the Independent Accountants of the
Fund
Votes For Votes Against Votes Abstained Total Voting Shares
--------- ------------- --------------- -------------------
14,531,806 323,271 1,092,288 15,947,365
27
<PAGE>
THE ASIA TIGERS FUND, INC.
INVESTMENT MANAGER:
ADVANTAGE ADVISERS, INC.
THE ASIA TIGERS FUND, INC.
Semiannual Report
INVESTMENT ADVISER: April 30, 1998
AXA ASSET MANAGEMENT PARTENAIRES
(FORMERLY
BARCLAY GLOBAL INVESTORS)
ADMINISTRATOR:
CIBC OPPENHEIMER CORP.
SUB-ADMINISTRATOR:
PFPC INC.
TRANSFER AGENT:
PNC BANK, NATIONAL ASSOCIATION
CUSTODIAN:
THE CHASE MANHATTAN BANK
