Asia Tigers Fund, Inc.
Semiannual Report
April 30, 1999
ADVANTAGE ADVISERS, INC.
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The Asia Tigers Fund, Inc.
May 20, 1999
Dear Shareholder,
We are pleased to present you with the unaudited financial statements of the
Asia Tigers Fund, Inc. (the "Fund") for the six-month period ended April 30,
1999. In the following pages, the Investment Adviser provides a detailed look at
the Fund's portfolio, as well as a discussion of the economic and market
conditions of the region.
The Fund's net asset value (NAV) closed at $9.92 per share on April 30, 1999,
increasing 31.4% for the 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, 1999, the Fund was invested
in 12 countries. Four of these countries account for approximately 75% of the
Fund's investments: Hong Kong, Korea, Taiwan, and Singapore.
The region in general has seen a significant turnaround over the past six
months, with the MSCI AC Asia Ex Japan Free Index appreciating 41%. As a result
of changing market conditions, the Fund has shifted the geographic allocation of
its investments. The largest changes included an increase in Korea and Hong Kong
and a decrease in Taiwan and India. In addition, the Investment Adviser
significantly decreased the Fund's cash and cash equivalent position of net
assets in order to increase exposure to bottoming out economics.
Advantage Advisers, Inc., the Fund's Investment Manager, will assume the direct
responsibility for the day-to-day portfolio management of the Fund in accordance
with its Investment Management Agreement, effective July 1, 1999. Ms. Punita
Kumar-Sinha, PhD, CFA, of Advantage Advisers, will be responsible for managing
the Fund's portfolio.
The Investment Manager continues to believe that Asia offers excellent growth
opportunities and that recent indicators suggest a recovery in most of Asia.
On behalf of the Board of Directors, I thank you for your participation in the
Fund.
Sincerely,
/s/ Alan Rappaport
Alan Rappaport
Chairman
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THE ASIA TIGERS FUND, INC.
Report of the Investment Adviser
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PERFORMANCE
The six-month period ended April 30, 1999 will be remembered as the time when
the "Asian Crisis" ended. For the Asia Ex-Japan equity investor, strong gains
were made. The regional benchmark that the Asia Tigers Fund, Inc. (the "Fund")
uses for comparison purposes, the MSCI AC Asia Ex Japan Free Index, jumped
41.0%. During the same period, the Fund's net asset value (NAV) increased 31.4%.
The Fund's underperformance was due primarily to its defensive positioning at
the depth of the crisis in terms of sectors, stocks and cash weighting.
Two of the strongest markets in which the Fund invests were up more than 50% in
U.S. dollar terms. Korea was the standout performer, rising 76% while Malaysia
gained 54% and Pakistan rose 43.5%. India (up 34.5%) as well as Indonesia (up
38.0%) were also very strong. Hong Kong, the largest component of the Fund,
gained 27.9%. China was the only market in the region to fall. The MSCI China
Free Index lost 16.2% during the six-month period.
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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
toll-free (800) 421-4777. This number provides a recorded monthly review as well
as specific details about the Fund, its portfolio and performance.
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THE ASIA TIGERS FUND, INC.
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COUNTRY ALLOCATION
During the six-month period, the Fund shifted its geographic allocation.
Allocations are made between countries in the region based on the changing
underlying economic conditions and relative equity valuations. Since the end of
October 1998, larger changes in the Fund's country weights include an increase
in Korea and Hong Kong as well as a decrease in Taiwan and India. The Fund's
investments in cash equivalent securities was decreased from 10.0% to 2.0%. The
charts below indicate the Fund's breakdown at the end of April 1999 and October
1998.
COUNTRY HOLDINGS
April 30, 1999
% of Investments [GRAPHIC OMITTED]
- -------------------------------------
Hong Kong 34.1%
Korea 16.1
Taiwan 13.1
Singapore 12.1
India 11.4
Thailand 4.1
Philippines 2.8
Indonesia 2.0
Malaysia 1.2
Pakistan 0.6
China 0.4
Sri Lanka 0.1
USA (Cash Equivalents) 2.0
October 31, 1998
% of Investments [GRAPHIC OMITTED]
- -------------------------------------
Hong Kong 29.3%
Korea 7.2
Taiwan 16.9
Singapore 11.6
India 14.4
Thailand 4.8
Philippines 1.9
Indonesia 0.3
Malaysia 1.8
Pakistan 0.6
China 1.0
Sri Lanka 0.2
USA (Cash Equivalents) 10.0
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THE ASIA TIGERS FUND, INC.
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REGIONAL OUTLOOK
In recent months, we have seen more indicators suggesting a recovery in Japan
and throughout Asia. The close economic links within the region have exacerbated
the downturn in Asia during the crisis that began in July 1997. When the
economies in the region begin to recover, we believe these close economic links
will help accelerate recovery.
Liquidation of inventory is part of the adjustment process in Asia and among the
different economies; South Korea has taken the lead. We believe that the
de-stocking process in South Korea is complete. In Singapore, export prices have
been firming up, signaling the conclusion of the process. Other economies are
still in the process of liquidating their inventories, but the prospect of most
economies completing inventory adjustment by year-end is positive.
Early signs of a pick-up in intra-regional activities have been quite
encouraging. During the first two months of 1999, tourist arrivals in Hong Kong
increased by 13.9% and tourism from the rest of Asia grew significantly.
Tourists from Korea increased by 56.8%, Japan by 7.5% and Taiwan by 4.9%. In
Taiwan, exports to the Asian economies grew by 6.2% during that period. This was
the first increase since the Asian crisis deepened in November 1997. Exports to
Hong Kong also grew by 3.6%, compared to declines of more than 20% last year. In
South Korea, exports to the Asian economies appear to be recovering as well
(except exports to Singapore, which saw sharp declines in February). In the
first two months of 1999, exports to Malaysia grew by 42.9%, the Philippines by
20.7%, Thailand by 15.2% and Indonesia by 10.8%. Although it is too early to
conclude that the pick-up in intra-regional activities is sustainable, this
activity is encouraging. If the turn is real, Asia may be entering the next
stage of recovery.
Our country allocation strategy highlights two main issues. First, the targeted
cash level is the lowest since the outbreak of the Asian economic crisis. We
believe that most Asian economies are approaching bottom or have already
bottomed out in some cases. Given the recovery seen in Japan, and now a more
stable interest rate outlook, we expect that stock market returns should be more
positive in the next twelve months. Hence, we are targeting a fully invested
position. We have decided to invest the Malaysian Ringgit cash balances (that
had been required to remain in Malaysia) back into Malaysian equities, given the
improved sentiment and falling interest rates. Nevertheless, our fundamental
cautious view towards Malaysia remains unchanged, and the mounting political
risks and ongoing system risks prevent us from taking a more aggressive stance
there.
Second, we have adopted a more neutral, fully invested strategy against the
regional benchmarks because we believe that under a general recovery scenario,
it is increasingly difficult to time the economic recovery pace for each
individual country. In most cases, market performance is likely to be affected
by policy changes in the short term and it is not possible to predict the timing
and magnitude of these policy changes. Hence, at a time when we believe Asian
economies are bottoming out, we think the best strategy is full exposure to all
of these bottoming-out economies.
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THE ASIA TIGERS FUND, INC.
The Investment Adviser believes that Asia remains the best region in the world
for long-term growth of equity capital.
The following comments summarize the Investment Adviser's view of the Fund's
target markets and the investments composing the portfolio.
CHINA
US$0.8 million, 0.4% of the Fund's total investments as of April 30, 1999.
In our opinion, the present economic reforms, which are positive long-term,
could prove to be more deflationary than authorities expect. Therefore, we are
cautious about China's growth prospects for this year. Our economic growth
forecast is lower than the consensus. First quarter figures support our view.
In the first quarter of 1999, the economy grew 8.3% year-over-year, down from
the comparable figure of 9.0% in the fourth quarter of 1998--reflecting
significant deflationary pressure. If China enters the World Trade Organization
before the end of this year, this would represent good progress following Zhu
Rongji's visit to the United States. During the same visit, the United States
and China were able to compromise on the agricultural sector. The remaining
hurdle appears to be the textile quota and the pace of full opening, which are
still under negotiation. U.S.-China relations are frayed as a result of the U.S.
accusation of Chinese spying and NATO's bombing of the Chinese Embassy in
Belgrade. Both chilling events could adversely affect negotiations on China's
World Trade Organization bid.
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. In 1998, Beijing Datang Power reported
sales of 5.1 billion Yuan and net income of 1.2 billion Yuan.
HONG KONG
US$67.4 million, 34.1% of the Fund's total investments as of April 30, 1999.
Domestic interest rates have already been cut in Hong Kong three times during
1999. We believe the coming months could bring further cuts. This trend suggests
the banking system in Hong Kong now has ample free liquidity, also evidenced by
mortgage activity. Banks are competing by offering mortgages at prime or below
prime, suggesting more room for further rate cuts and a bullish scenario for the
residential property market. We are also encouraged by the result of the recent
land auction, which has boosted confidence to the primary market. Further cuts
in prime rates would help the residential property market remain well supported.
However, we are less optimistic on investment properties due to substantial
oversupply in coming years. In previous cycles, the stock market in
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THE ASIA TIGERS FUND, INC.
Hong Kong has been able to discount recoveries six to nine months ahead. As a
service economy, Hong Kong is heavily dependent on the financial market, the
property market and China. Thus, the economy is much more sensitive to liquidity
and interest rates than other economies--and the stock market reacts
instantaneously to liquidity. We expect that when the liquidity cycle has turned
or bottomed out, the stock market should react before we see recoveries in the
real economy.
Hutchison Whampoa is the Fund's largest single holding. With a stock market
valuation of greater than USD260 billion, Hutchison Whampoa has operations in
property investment and development, container terminals, telecommunications,
infrastructure, retail and manufacturing. For the full year 1998, Hutchison
Whampoa reported sales of HKD51.4 billion and profit of HKD8.7 billion.
INDONESIA
US$3.9 million, 2.0% of the Fund's total investments as of April 30, 1999.
After months of uncertainty, Indonesia is starting to see its country risk
recede and investment outlook improve. While progress is by no means clear-cut,
we believe a turnaround is finally here. In addition, early signs of the
upcoming June election are encouraging. Support for opposition parties is
publicly and robustly expressed. Banking recapitalization is well on track
because of a stable Rupiah, which should help ease interest rates. Last month,
Standard Chartered became the first foreign bank to take strategic control of a
local bank (Bank Bali), investing USD56 million in confidence.
PT Astro Agro Lestari produces palm oil, rubber, cocoa and tea on 193,000
hectares of land on the Indonesian islands of Java, Sumatera, Sulawesi and
Kalimantan. For 1998, Astra Agro reported net sales of IDR853.7 billion and net
profits of IDR223.4 billion.
INDIA
US$22.5 million, 11.4% of the Fund's total investments as of April 30, 1999.
India's distinction of being the world's largest democracy has been a curse this
year, as the country is currently without a government. On April 26, President
Narayan disbanded the BJP as the fragile coalition government of 13 months fell
apart. To properly address India's large and persistent fiscal deficit as well
as substantial infrastructure, the country needs strong leadership. Fortunately,
it seems that regardless of the composition of the soon-to-be-formed government,
the pro-market reforms that began in 1991 will continue to move forward. The
strong-performing consumer, software and pharmaceutical sectors offer ample
opportunity for stock picking in Asia's oldest organized stock exchange.
The Fund's largest position in India is Hindustan Lever. This company is India's
largest manufacturer of branded and packaged consumer products. Hindustan Lever
produces and sells soap, detergent, personal care products and processed food.
The company has a brand portfolio of 144 products including: Lux and Pears
soaps, Surf detergent, and Sunsilk shampoo. In 1998, the company reported sales
of INR78.2 billion worth of products and net profits of 8.1 billion Indian
Rupees. These reported
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THE ASIA TIGERS FUND, INC.
figures represent year-over-year gains of 21.2% and 43.8% over the comparable
figures in 1997.
KOREA
US$31.7 million, 16.1% of the Fund's total investments as of April 30, 1999.
The Bank of Korea announced first quarter economic growth at 4.6%, the first
positive annual growth figure since the final quarter of 1997. The first
quarter's growth greatly exceeded market expectations. As a result, the
government revised its growth forecast upward to 4% for the full year of 1999
compared to 1998's economic contraction of 5.8%. In addition to the first
quarter's economic growth, the industrial production numbers have been even more
encouraging. In March 1999, industrial production expanded by an annual rate of
18.4%, its biggest monthly increase since February 1995. April's industrial
production was nearly as impressive, expanding 17.1%.
Despite the narrowing of current account surplus, we expect the Korean Won to
stay strong. For the first time since 1997, first quarter net private capital
inflow reverted into a surplus (estimated to be USD2.1 billion). The inflow has
more than compensated the repayment of the maturing IMF loan. Although the
current account has narrowed, the pick-up in the capital account should result
in significant overall balance of payment surpluses. As of March 1999, usable
foreign exchange reserves stood at USD54.5 billion, up by nearly USD6 billion
since the end of last year.
With usable reserves approaching seven months of import cover, as long as
inflows continue, currency appreciation pressure will continue to build. Strong
inflows will likely keep interest rates low, and the prospect of further rate
cuts is optimistic given a zero inflation environment. The investment community
is no longer asking whether the South Korean economic recovery is sustainable.
Instead, the question is the speed of recovery.
Given the positive economic picture, we have moved to an overweight position in
South Korea. Not only has the recovery in the external sector broadened, the
economy is now experiencing across-the-board acceleration in activities at a
speed much higher than expected. The better than expected economic numbers also
suggest a good chance of pleasant earning surprises. So far, the stock market
expects bottom-line improvements coming mainly from reductions in cost.
Expectations on top-line growth have been conservative. Indeed, we expect a
significant upward revision on earnings in coming months.
Korea Electric Power (KEPCO) is Korea's dominant electricity producer. The
Korean government has a majority stake in the company and enjoys a
near-monopoly. During 1997, the company reported sales of KRW13.2 billion and
profits of KRW378.2 million.
MALAYSIA
US$2.3 million, 1.2% of the Fund's total investments as of April 30, 1999.
An improving macro-economic environment should set the stage for a quick
economic recovery in Malaysia. In February 1999, industrial production rose at
an annual rate of 3.9%. Smoothing out for
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THE ASIA TIGERS FUND, INC.
the Lunar calendar effect, industrial production for the first two months of
1999 declined 4.1%. Although industrial production remains in negative
territory, the shift is a marked improvement over the previous quarter's 10.9%
drop. The recent turnaround in industrial activity has been led by a stronger
manufacturing sector, which saw improvements from the bottom 14.7% decline
during the previous quarter. With falling interest rates and strengthening
exports, industrial production could swing into positive territory soon
especially with the gradual halt in inventory depletion. Malaysia's benign
inflationary outlook should bode well for a low interest rate environment.
Inflation continued to decline; March's rate was an annual rate of just 3% vs.
February's 3.8%. The lower inflation rate was in part due to the government's
three-month price control for the festive period. Also, March's food prices,
which account for 35% of the CPI basket, increased 4.6%, a slowdown from
February's 6.4% gain.
The Fund's only Malaysian investment is Malayan Banking. With assets in excess
of MYR11.4 billion as of June 1998, Malayan Banking is the largest bank in the
country. For the fiscal year ended June 30, 1998, the company reported profits
of MYR129.6 million.
PAKISTAN
US$1.1 million, 0.6% of the Fund's total investments as of April 30, 1999.
Pakistan reacted to India's 1998 nuclear testing with tests of its own. Both
countries have survived the worst of the internationally imposed trade
sanctions, and have built their foreign exchange reserves. Earlier this year,
India and Pakistan tested ballistic missiles in another tit-for-tat exchange.
Putting the military concerns aside, the Pakistani government is on much firmer
ground this year as Prime Minister Sharif is able to move forward with policy
implementation. The border tension with India is a grave reminder of the three
wars since 1947, two of them over the disputed Kashmir region.
The Fund's largest holding in Pakistan is convertible bonds issued by the
Republic of Pakistan. These bonds may be converted into shares of Pakistan
Telecom, the country's dominant telephone service provider. In the six months
ending December 1998, Pakistan Telecom reported revenues of 24.9 billion
Pakistan Rupees and profits of 8.5 billion Rupees.
PHILIPPINES
US$5.6 million, 2.8% of the Fund's total investments as of April 30, 1999.
As we expected, the policy makers and the stock market are now more convinced
that interest rates have started to soften. February and March inflation figures
were 9.9% and 8.7% respectively, lower than consensus forecasts. We believe that
interest rates could fall further; the benchmark 91-day T-bill rate could drop
to 9.5% in coming months.
For the third time this year, the Monetary Board cut the reserve requirement by
1%. Also, general provisions of 1.5% on new loans made after March 31, 1999 are
waived. However, special provisions would still have to be made for any new
loans that turn bad. The Philippine stock market
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THE ASIA TIGERS FUND, INC.
posted strong gains in April due to a strong regional sentiment and expectations
of rate cuts. We believe more rate cuts will occur in the coming months and the
stock market will react favorably. Liquidity is expected to remain ample, which
should lend further support to the stock market.
In the Philippines, the Fund's top holding is Manila Electric Company. The
company, also known as Meralco, is the dominant distributor of electricity in
the Philippines. In 1998, the company reported profits of 5.0 billion Philippine
Pesos on sales of 85.9 billion Pesos.
SINGAPORE
US$23.9 million, 12.1% of the Fund's total investments as of April 30, 1999.
Since the beginning of 1999, the strength in Singapore's stock market was
supported by a falling interest rate, a surge of liquidity in the banking system
from large bank spreads, and sound macro policy management by the government.
After two consecutive quarters of negative growth, Singapore posted GDP annual
economic growth of 1.2% in 1999's first quarter. Growth should continue to be
supported by an increase in housing transactions. Local banking and financial
institutions have grown increasingly aggressive in the housing mortgage sector.
Signs of consumption pick-up have emerged in the first two months of the year,
most notably with increased purchases of physical assets such as properties and
automobiles. A positive wealth effect resulting from the recovery of the stock
market and property prices should ultimately lead to increased spending. We
expect concerns over unemployment to diminish, especially with the announcement
of the first quarter's preliminary unemployment rate of 3.9% vs. 4.3% in the
previous quarter of 1998.
Overseas Chinese Bank Corporation is one of Singapore's largest banks. The
company offers retail and wholesale banking in addition to fund management,
brokerage, corporate finance, venture capital and property development. The
company reported net profits of SGD425.3 million for the year ended December 31,
1998.
SRI LANKA
US$0.3 million, 0.1% of the Fund's total investments as of April 30, 1999.
A civil war has been underway in north Sri Lanka since 1983. Although there is
little hope of the conflict ending soon, the country has managed to carry on and
grow. Corporate earnings growth should be double digits for 1999 and 2000.
The Fund owns a single stock in Sri Lanka. John Keells Holdings is a broadly
diversified conglomerate with a focus on operating tourist facilities and
services. The company has strong management, and its businesses in food and
beverage as well as tea plantations should show particularly healthy growth
rates. In 1997, John Keells reported sales of 5.7 billion Sri Lankan Rupees and
profits of LKR421 million.
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THE ASIA TIGERS FUND, INC.
THAILAND
US$8.1 million, 4.1% of the Fund's total investments as of April 30, 1999.
Manufacturing production rose at an annual rate of 5.8% in March 1999, the
second consecutive month of positive growth following seventeen months of
decline. With the manufacturing production index skewed towards domestic
consumption and investment, the recent positive gains reflect improving trends
in private consumption. Electricity demand, which has a historically close
relationship with manufacturing production, has also picked up from last June's
low levels. May's inflation fell an estimated annual rate of 0.5%--Thailand's
first year-on-year decline this decade. A series of positive developments in the
banking sector led to some strong upward movements in the index. The bank of
Thailand announced that the banking system's non-performing loans (NPLs) have
peaked at 46% to 47% in February. Further progress was made in recapitalization
of the banking sector with Siam Commercial Bank's successful raising of THB1.75
billion in new capital.
In Thailand, the Fund's largest holding is Thai Farmers Bank. With more than 500
branches throughout Thailand, Thai Farmers Bank is the nation's second largest
bank. At the end of 1998, the Bank reported assets of THB75.7 billion.
TAIWAN
US$25.8 million, 13.1% of the Fund's total investments as of April 30, 1999.
Two issues have been affecting the Taiwanese economies: a slowdown in exports
due to the Asian crisis and non-performing loans in the financial sector. The
chance for further improvements in both issues in the second half of 1999 is
good, especially since we expect intra-regional trade to pick up this year. We
believe it will be much easier for Taiwan to recover from its present downturn
than for its regional peers. The central bank has been easing since the final
quarter of last year, resulting in excess liquidity in the system as reflected
by the banks' declining loan-to-deposit ratio. The low growth in money
aggregates followed lack of demand for money. With recovery in the external
sector, we believe loan demand will rise gradually in coming months.
The Fund's largest holding in Taiwan is Taiwan Semiconductor Manufacturing
Company (TSMC), the world's largest independent manufacturer of integrated
circuits. The company offers wafer manufacturing, assembly, testing, mask
production and design services used in computer, communications, consumer
electronics and industrial products. For the twelve months ended December 31,
1998, the TSMC reported sales of TWD50.4 billion and net profits of TWD 15.3
billion.
AXA Asset Management Partenaires
Hong Kong
June 1999
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THE ASIA TIGERS FUND, INC.
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Year 2000 Processing Issues
Many computer programs employed throughout the world use two digits rather than
four to identify the year. These programs, if not adapted, may not correctly
handle the change from "99" to "00" on January 1, 2000, and many not be able to
perform necessary functions. The Year 2000 issue affects virtually all companies
and organizations.
Both the Investment Manager and the Investment Adviser have advised the Fund
that they are implementing steps intended to ensure that their computer systems
are capable of Year 2000 processing. In addition, the Fund is inquiring with
third parties to assess the adequacy of their Year 2000 compliance efforts. The
Fund intends to develop contingency plans intended to ensure that third-party
non-compliance will not materially affect the Fund's operations. The Fund does
not currently anticipate that the Year 2000 issue will have an adverse effect on
the Investment Manager's or the Investment Adviser's ability to continue to
provide the services currently provided to the Fund.
Companies in which the Fund invests could be adversely affected by the Year 2000
issue, but the Fund cannot predict the consequential effect on its investment
return. To the extent the impact on a portfolio holding is negative, the Fund's
investment return could be adversely affected.
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THE ASIA TIGERS FUND, INC.
April 30, 1999
Schedule of Investments (Unaudited)
COMMON STOCKS (88.38% of holdings)
<TABLE>
<CAPTION>
Number Percent of
of Shares Security Holdings Cost Value
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
China 0.43%
Utilities - Electric & Gas 0.43%
2,800,000 Beijing Datang Power Generation ................... $ 1,198,130 $ 839,913
------------ ------------
Total China ....................................... 1,198,130 839,913
------------ ------------
Hong Kong 34.14%
Banking 4.95%
825,000 Hang Seng Bank .................................... 7,803,252 9,765,927
------------ ------------
Multi-Industry 8.58%
1,450,000 Hutchison Whampoa ................................. 9,592,653 13,001,883
700,000 Swire Pacific "A" ................................. 3,363,419 3,928,627
------------ ------------
12,956,072 16,930,510
------------ ------------
Real Estate 12.89%
1,100,000 Cheung Kong Holdings .............................. 7,746,451 10,005,419
1,000,000 Henderson Land Development Co. Limite ............. 5,021,930 6,050,988
1,070,000 Sun Hung Kai Properties ........................... 7,778,125 9,387,418
------------ ------------
20,546,506 25,443,825
------------ ------------
Telecommunications 6.09%
900,000 China Telecommunication ........................... 1,709,224 2,055,272
3,700,000 Hong Kong Telecommunication ....................... 7,059,898 9,953,166
------------ ------------
8,769,122 12,008,438
------------ ------------
Utilities - Electric & Gas 1.63%
600,000 CLP Holdings ...................................... 3,054,912 3,220,313
------------ ------------
Total Hong Kong ................................... 53,129,864 67,369,013
------------ ------------
India 11.39%
Automobiles 1.29%
1,300 Bajaj Auto ........................................ 19,967 15,798
80,000 Punjab Tractors ................................... 1,598,454 2,509,465
1,500 Tata Engineering & Locomotive ..................... 12,621 4,827
100 TVS Suzuki ........................................ 1,296 1,041
------------ ------------
1,632,338 2,531,131
------------ ------------
</TABLE>
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THE ASIA TIGERS FUND, INC.
April 30, 1999
Schedule of Investments (continued) (Unaudited)
COMMON STOCKS (continued)
<TABLE>
<CAPTION>
Number Percent of
of Shares Security Holdings Cost Value
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
India (continued)
Banking 0.00%
9,100 Bank of Baroda .................................... $ 22,744 $ 7,709
300 Oriental Bank of Commerce ......................... 738 182
50 State Bank of India ............................... 1,480 181
------------ ------------
24,962 8,072
------------ ------------
Beverages & Tobacco 1.28%
115,000 ITC ............................................... 1,819,681 2,512,853
------------ ------------
Building Materials & Components 0.00%
100 Gujarat Ambuja Cements ............................ 864 636
------------ ------------
Business/Public Service 2.95%
41,573 Infosys Technology ................................ 1,264,801 2,550,585
10,000 Infosys Technology ADR + .......................... 425,941 413,125
76,000 NIIT .............................................. 585,736 2,863,099
------------ ------------
2,276,478 5,826,809
------------ ------------
Chemicals 1.27%
69,984 Castrol India ..................................... 1,199,336 1,333,360
389,603 Reliance Industries ............................... 1,522,552 1,174,545
------------ ------------
2,721,888 2,507,905
------------ ------------
Construction & Housing 0.06%
27,420 Larsen & Toubro ................................... 168,662 119,894
------------ ------------
Energy Sources 0.79%
390,000 Hindustan Petroleum ............................... 3,095,786 1,561,276
------------ ------------
Health/Personal Care 3.75%
2,400 Dr. Reddy's Laboratories .......................... 29,877 49,161
79,945 Glaxo India ....................................... 881,295 1,218,138
120,000 Hindustan Lever ................................... 3,924,315 5,754,616
30,000 Ranbaxy Laboratories .............................. 210,150 378,593
------------ ------------
5,045,637 7,400,508
------------ ------------
Textiles & Apparel 0.00%
4,590 Arvind Mills ...................................... 15,313 2,800
------------ ------------
Total India ....................................... 16,801,609 22,471,884
------------ ------------
</TABLE>
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THE ASIA TIGERS FUND, INC.
April 30, 1999
Schedule of Investments (continued) (Unaudited)
COMMON STOCKS (continued)
<TABLE>
<CAPTION>
Number Percent of
of Shares Security Holdings Cost Value
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Indonesia 1.98%
Beverages 0.42%
451,000 Gudang Garam ...................................... $ 673,294 $ 819,237
------------ ------------
Forest Products & Paper 1.07%
3,500,000 Astra Argo Lestari ................................ 904,937 1,074,086
2,500,000 Indah Kiat Pulp & Paper+ .......................... 915,995 1,046,187
------------ ------------
1,820,932 2,120,273
------------ ------------
Telecommunications 0.49%
110,000 Telekomunikasi Indonesia ADR ...................... 792,892 962,500
------------ ------------
Total Indonesia ................................... 3,287,118 3,902,010
------------ ------------
Korea 12.90%
Appliance & Household Durables 2.73%
70,000 Samsung Electronics ............................... 3,857,545 5,383,256
------------ ------------
Banking 2.15%
180,000 Housing & Commercial Bank of Korea ................ 2,521,262 4,240,639
------------ ------------
Chemical 0.87%
100,000 L.G. Chemical Ltd. ................................ 1,076,748 1,724,863
------------ ------------
Construction & Housing 1.34%
200,000 Hyundai Industrial & Development .................. 1,132,348 2,641,986
------------ ------------
Electronic Components & Instruments 0.78%
30,000 Samsung Display Devices Company ................... 1,436,955 1,539,756
------------ ------------
Financial Services 1.19%
100,000 Dongwon Securities + .............................. 1,577,626 2,355,911
------------ ------------
Machinery & Engineering 0.83%
50,000 Halla Climate Control+ ............................ 1,590,145 1,630,206
------------ ------------
Metals - Steel 0.87%
20,000 Pohang Iron & Steel ............................... 843,516 1,717,627
------------ ------------
Telecommunications 1.38%
30,000 Korea Telecom Corp. ............................... 1,109,815 1,568,532
1,068 SK Telecom ........................................ 562,238 1,162,354
------------ ------------
1,672,053 2,730,886
------------ ------------
</TABLE>
14
<PAGE>
THE ASIA TIGERS FUND, INC.
April 30, 1999
Schedule of Investments (continued) (Unaudited)
COMMON STOCKS (continued)
<TABLE>
<CAPTION>
Number Percent of
of Shares Security Holdings Cost Value
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Korea (continued)
Transportation - Air 0.76%
120,000 Korean Air Lines .................................. $ 1,486,558 $ 1,494,321
------------ ------------
Total Korea ....................................... 17,194,756 25,459,451
------------ ------------
Malaysia 1.19%
Banking 1.19%
1,100,000 Malayan Banking* .................................. 2,142,927 2,338,947
------------ ------------
Total Malaysia .................................... 2,142,927 2,338,947
------------ ------------
Pakistan 0.04%
Energy Sources 0.04%
49,920 Pakistan State Oil * .............................. 48,299 73,209
------------ ------------
Total Pakistan .................................... 48,299 73,209
------------ ------------
Philippines 2.82%
Banking 0.51%
100,000 Metropolitan Bank & Trust Company ................. 732,773 999,343
------------ ------------
Beverages & Tobacco 0.38%
350,000 San Miguel - B .................................... 691,597 745,562
------------ ------------
Real Estate 0.53%
1,000,000 Ayala Land ........................................ 297,304 368,179
3,000,000 SM Prime .......................................... 512,694 678,501
------------ ------------
809,998 1,046,680
------------ ------------
Telecommunications 0.65%
40,000 Philippine Long Distance Telephone ADR ............ 979,783 1,295,000
------------ ------------
Utilities - Electric & Gas 0.75%
390,000 Manila Electric Company ........................... 1,172,592 1,487,179
------------ ------------
Total Philippines ................................. 4,386,743 5,573,764
------------ ------------
Singapore 8.94%
Banking 2.68%
400,000 Overseas Chinese Bank Corporation ................. 1,917,273 3,749,337
200,000 United Overseas Bank .............................. 1,277,256 1,544,538
------------ ------------
3,194,529 5,293,875
------------ ------------
</TABLE>
15
<PAGE>
THE ASIA TIGERS FUND, INC.
April 30, 1999
Schedule of Investments (continued) (Unaudited)
COMMON STOCKS (continued)
<TABLE>
<CAPTION>
Number Percent of
of Shares Security Holdings Cost Value
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Singapore (continued)
Broadcasting & Publishing 1.20%
160,000 Singapore Press Holdings .......................... $ 1,667,465 $ 2,358,073
------------ ------------
Electronic Components & Instruments 0.83%
300,000 Venture Manufacturing ............................. 776,919 1,644,756
------------ ------------
Real Estate 1.52%
300,000 City Developments ................................. 886,286 1,998,467
800,000 Wing Tai Holdings, Ltd.+** ........................ 967,810 995,107
------------ ------------
1,854,096 2,993,574
------------ ------------
Shipbuilding 1.08%
750,000 Keppel Corporation ................................ 1,660,901 2,139,952
------------ ------------
Transportation - Air 1.63%
350,000 Singapore Airlines ................................ 2,851,162 3,218,770
------------ ------------
Total Singapore ................................... 12,005,072 17,649,000
------------ ------------
Sri Lanka 0.14%
Multi-Industry 0.14%
100,000 John Keells Holdings .............................. 341,238 275,763
------------ ------------
Total Sri Lanka ................................... 341,238 275,763
------------ ------------
Taiwan 10.29%
Banking 1.74%
3,800,000 Bank Sinopac ...................................... 2,219,899 2,672,783
450,000 First Commercial Bank ............................. 772,913 750,000
------------ ------------
2,992,812 3,422,783
------------ ------------
Chemicals 0.45%
560,000 Nan Ya Plastic .................................... 886,580 890,520
------------ ------------
Electrical & Electronics 2.60%
470,000 Hon Hai Precision Industry + ...................... 2,126,817 2,558,410
760,000 Taiwan Semiconductor Manufacturing Co. ............ 2,555,220 2,568,196
------------ ------------
4,682,037 5,126,606
------------ ------------
Electronic Components & Instruments 1.79%
850,000 Advanced Semiconductor Engineering Inc. ........... 1,685,105 2,118,502
300,000 Compeq Manufacturing Company Ltd. ................. 1,459,503 1,422,018
------------ ------------
3,144,608 3,540,520
------------ ------------
</TABLE>
16
<PAGE>
THE ASIA TIGERS FUND, INC.
April 30, 1999
Schedule of Investments (continued) (Unaudited)
COMMON STOCKS (continued)
<TABLE>
<CAPTION>
Number Percent of
of Shares Security Holdings Cost Value
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Taiwan (continued)
Insurance 0.91%
500,000 Cathay Life Insurance ............................. $ 1,567,922 $ 1,788,991
------------ ------------
Metals - Steel 0.68%
1,700,000 China Steel ....................................... 1,153,271 1,351,682
------------ ------------
Shipping & Transport 0.69%
1,050,000 Evergreen Marine Corp. ............................ 1,098,231 1,358,257
------------ ------------
Textiles & Apparel 1.43%
2,100,000 Far Eastern Textile ............................... 1,857,670 2,819,266
------------ ------------
Total Taiwan ...................................... 17,383,131 20,298,625
------------ ------------
Thailand 4.12%
Banking 0.85%
600,000 Thai Farmers Bank ................................. 1,045,050 1,667,116
------------ ------------
Building Materials & Components 0.52%
35,000 Siam Cement + ..................................... 506,520 1,034,799
------------ ------------
Construction & Housing 0.62%
1,000,000 Bangkok Expressway Public Company - Foreign ....... 848,479 876,720
400,000 Bangkok Expressway Public Company - Local ......... 360,935 342,595
------------ ------------
1,209,414 1,219,315
------------ ------------
Energy Sources 0.72%
155,000 PTT Exploration & Production ...................... 1,641,773 1,429,997
------------ ------------
Telecommunications 0.73%
135,000 Advanced Information .............................. 761,201 1,434,853
------------ ------------
Utilities - Electric & Gas 0.68%
600,000 Electricity Generating ............................ 1,153,738 1,335,312
------------ ------------
Total Thailand .................................... 6,317,696 8,121,392
------------ ------------
TOTAL COMMON STOCKS ............................... $134,236,583 $174,372,971
------------ ------------
</TABLE>
17
<PAGE>
THE ASIA TIGERS FUND, INC.
April 30, 1999
Schedule of Investments (continued) (Unaudited)
CONVERTIBLE BONDS (9.63% of holdings)
<TABLE>
<CAPTION>
Par Value Percent of
($000) Security Holdings Cost Value
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Korea 3.15%
Utilities - Electric & Gas 3.15%
6,400 Korea Electric Power, 5.00%, 08/01/01 ............. $ 6,172,710 $ 6,202,880
------------ ------------
Total Korea ....................................... 6,172,710 6,202,880
------------ ------------
Pakistan 0.51%
Telecommunications 0.51%
1,750 Pakistan Republic Convertible Bond,
6.00%, 02/26/02 ................................... 1,497,386 1,002,750
------------ ------------
Total Pakistan .................................... 1,497,386 1,002,750
------------ ------------
Singapore 3.20%
Banking 1.55%
2,500 Finlayson Global Zero Coupon Bond,
02/19/04 .......................................... 2,656,630 3,051,500
------------ ------------
Telecommunications 1.65%
3,200 Fullerton Global Zero Coupon Bond,
04/02/03 .......................................... 2,982,776 3,266,240
------------ ------------
Total Singapore ................................... 5,639,406 6,317,740
------------ ------------
Taiwan 2.77%
Chemicals 0.89%
1,500 Nan Ya Plastics, 1.75%, 07/19/01 .................. 1,597,547 1,759,950
------------ ------------
Electrical & Electronics 1.88%
3,000 Taiwan Semiconductor Zero Coupon Bond,
07/03/02 .......................................... 3,437,813 3,714,000
------------ ------------
Total Taiwan ...................................... 5,035,360 5,473,950
------------ ------------
TOTAL CONVERTIBLE BONDS ........................... 18,344,862 $ 18,997,320
------------ ------------
</TABLE>
18
<PAGE>
THE ASIA TIGERS FUND, INC.
April 30, 1999
Schedule of Investments (concluded) (Unaudited)
SHORT-TERM OBLIGATIONS (1.99% of holdings)
<TABLE>
<CAPTION>
Par Value Percent of
($000) Security Holdings Cost Value
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
United States Treasury Bills 1.99%
2,000 U.S. Treasury Bill, 4.30%, 07/22/99 ............... $ 1,980,411 $ 1,979,596
2,000 U.S. Treasury Bill, 4.41%, 10/14/99 ............... 1,959,330 1,958,575
------------ ------------
3,939,741 3,938,171
------------ ------------
Total Short Term Obligations ...................... $ 3,939,741 $ 3,938,171
------------ ------------
Total Investments 100.0% $156,521,186 $197,308,462
============ ============
</TABLE>
Footnotes and Abbreviations
ADR - American Depository Receipts
* Security has been fair valued as determined by or under the
direction of the Board of Directors.
** Passive Foreign Investment Company
+ Non-income producing security
++ Aggregate cost for Federal income tax purposes is
$157,017,060.
The aggregate gross unrealized appreciation (depreciation) for
all securities is as follows:
Excess of value over tax cost $43,512,053
Excess of tax cost over value (3,220,651)
-----------
$40,291,402
===========
See accompanying notes to financial statements.
19
<PAGE>
THE ASIA TIGERS FUND, INC.
April 30, 1999
Statement of Assets and Liabilities (Unaudited)
<TABLE>
<S> <C>
ASSETS
Investments, at value (Cost $156,521,186) ....................................... $ 197,308,462
Cash (including $6,845,690 of foreign currency holdings with a cost
of $6,749,536) ............................................................. 8,864,109
Receivables:
Dividends .................................................................. 143,243
Interest ................................................................... 151,158
Securities sold ............................................................ 399,419
Prepaid expenses ................................................................ 90,095
--------------
Total Assets .................................................. 206,956,486
--------------
LIABILITIES
Payable for securities purchased ................................................ 2,959,561
Due to Investment Manager ....................................................... 156,498
Due to Administrator ............................................................ 31,300
Accrued expenses ................................................................ 311,912
--------------
Total Liabilities ............................................. 3,459,271
--------------
Net Assets .................................................... $ 203,497,215
==============
NET ASSET VALUE PER SHARE ($203,497,215/20,514,984) ........... $9.92
==============
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 ............................................. 37,765
Accumulated net realized loss on investments and foreign currency
related transactions ....................................................... (123,190,765)
Net unrealized appreciation in value of investments and on translation of
other assets and liabilities denominated in foreign currencies .............. 40,885,723
--------------
$ 203,497,215
==============
</TABLE>
See accompanying notes to financial statements.
20
<PAGE>
THE ASIA TIGERS FUND, INC.
Statement of Operations
<TABLE>
<CAPTION>
For the Six
Months Ended
April 30, 1999
(Unaudited)
<S> <C> <C>
Investment Income
Dividends (Net of taxes withheld of $34,843) ......................... $ 1,149,840
Interest ............................................................. 420,261
--------------
Total Investment Income ............................ 1,570,101
--------------
Expenses
Management fees ...................................................... $ 829,337
Custodian fees ....................................................... 184,332
Administration fees .................................................. 165,867
Legal fees ........................................................... 119,813
Audit fees ........................................................... 39,212
Insurance ............................................................ 23,537
Transfer agent fees .................................................. 18,539
NYSE fees ............................................................ 16,037
Printing ............................................................. 14,405
Directors' fees ...................................................... 11,604
Amortization of organizational costs ................................. 1,932
Interest Expense ..................................................... 1,535
Miscellaneous ........................................................ 3,720
------------
Total expenses ..................................... 1,429,870
--------------
Net Investment Income .............................. 140,231
--------------
<CAPTION>
Net Realized and Unrealized Gain (Loss) On Investments, Foreign Currency
Holdings and Translation of Other Assets and Liabilities
<S> <C>
Denominated In Foreign Currencies:
Net realized gain from:
Security transactions .......................................... 1,064,962
Foreign currency related transactions .......................... 843,686
--------------
1,908,648
--------------
Net change in unrealized appreciation in value of investments,
foreign currency holdings and translation of other assets and
liabilities denominated in foreign currencies .................. 46,707,773
--------------
Net realized and unrealized gain on investments, foreign currency
holdings and translation of other assets and liabilities
denominated in foreign currencies .............................. 48,616,421
--------------
Net increase in net assets resulting from operations ................. $ 48,756,652
==============
</TABLE>
See accompanying notes to financial statements.
21
<PAGE>
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
For the Six
Months Ended For the Year
April 30, 1999 Ended
(Unaudited) October 31, 1998
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations
Net investment income ................................................ $ 140,231 $ 1,650,943
Net realized gain (loss) on investments and foreign currency
related transactions ........................................... 1,908,648 (93,826,774)
Net change in unrealized appreciation in value of investments,
foreign currency holdings and translation of other assets and
liabilities denominated in foreign currencies .................. 46,707,773 48,532,628
------------- -------------
Net increase (decrease) in net assets resulting from operations ...... 48,756,652 (43,643,203)
------------- -------------
Distributions to shareholders from
Net investment income ($0.01 per share) .............................. (205,150) --
------------- -------------
Net decrease in net assets from distributions ........................ (205,150) --
------------- -------------
Total increase (decrease) in net assets .............................. 48,551,502 (43,643,203)
------------- -------------
NET ASSETS
Beginning of period .................................................. 154,945,713 198,588,916
------------- -------------
End of period (including undistributed net investment income of
of $37,765 and $102,684, respectively) ........................ $ 203,497,215 $ 154,945,713
============= =============
</TABLE>
See accompanying notes to financial statements.
22
<PAGE>
THE ASIA TIGERS FUND, INC.
Financial Highlights
For a Share Outstanding throughout Each Period
<TABLE>
<CAPTION>
For the Period
November 29,
1993
For the Six (Commencement
Months Ended For the Year For the Year For the Year For the Year of Operations)
April 30, Ended Ended Ended Ended Through
1999 October 31, October 31, October 31, October 31, October 31,
(Unaudited) 1998 1997 1996 1995 1994
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Per Share Operating Performance
Net asset value, beginning of period ..... $ 7.55 $ 9.68 $ 12.49 $ 12.08 $ 13.89 $ 13.97*
-------- -------- -------- -------- -------- --------
Net investment income .................... 0.01 0.08 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 ................. 2.37 (2.21) (2.80) 0.44 (1.67) (0.11)
-------- -------- -------- -------- -------- --------
Net increase (decrease) from
investment operations ................. 2.38 (2.13) (2.77) 0.49 (1.58) (0.06)
-------- -------- -------- -------- -------- --------
Less Distributions
Dividends from net investment
income .............................. (0.01) -- (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 ........ (0.01) 0.00 (0.04) (0.08) (0.23) (0.02)
-------- -------- -------- -------- -------- --------
Net asset value, end of period ........... $ 9.92 $ 7.55 $ 9.68 $ 12.49 $ 12.08 $ 13.89
======== ======== ======== ======== ======== ========
Per share market value, end of period .... $ 8.69 $ 6.13 $ 7.94 $ 10.38 $ 10.38 $ 12.38
Total Investment Return Based
on Market Value** ..................... 42.05% (22.83)% (23.23)% 0.59% (14.17)% (11.65)%
Ratios/Supplemental Data
Net assets, end of period (in 000s) ...... $203,497 $154,946 $198,589 $256,194 $247,761 $284,910
Ratios of expenses to average net
assets ................................ 1.72%*** 1.74% 1.60% 1.60% 1.65% 1.60%***
Ratios of net investment income
to average net assets ................. 0.17%*** 0.99% 0.25% 0.41% 0.71% 0.38%***
Portfolio turnover ....................... 57.14% 93.47% 95.38% 91.57% 77.88% 45.51%
</TABLE>
See page 24 for footnotes.
23
<PAGE>
THE ASIA TIGERS FUND, INC.
Financial Highlights (concluded)
For a Share Outstanding throughout Each Period
* 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 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.
*** Annualized
+ Less than $0.01 per share.
See accompanying notes to financial statements.
24
<PAGE>
THE ASIA TIGERS FUND, INC.
Notes to Financial Statements
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.
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.
Beginning September 1, 1998 the Malaysian government implemented capital
controls for non-residents by fixing the exchange rate of its currency, the
Ringgit, and adopted stringent controls over currency and stock trading which
had the effect of forcing all offshore holdings of Malaysian currency and
securities back into the country. Effective February 4, 1999, the Malaysian
Central Bank announced a system of graduated exit levies and profit taxes that
replaced the prior repatriation restrictions.
As a result of the imposition of the above restrictions on currency and stock
trading, the Fund's Board of Directors has deemed all holdings of the Fund in
Malaysian securities and currency as illiquid.
At April 30, 1999, investments and foreign currency balances aggregating
$3,495,480 (1.72% of
25
<PAGE>
THE ASIA TIGERS FUND, INC.
April 30, 1999
Notes to Financial Statements (continued) (Unaudited)
net assets) have been fair valued in good faith by, or under the direction of,
the Fund's 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, 1998, the Fund had a net capital loss carryover of $123,452,232,
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, $30,672,532 will expire in the year 2003, $1,846,888
will expire in the year 2004 and $90,932,812 will expire in the year 2006.
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.
26
<PAGE>
THE ASIA TIGERS FUND, INC.
April 30, 1999
Notes to Financial Statements (continued) (Unaudited)
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.
During the year ended October 31, 1998, the Fund reclassified $1,548,259 from
accumulated net realized loss on investments 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.
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
Effective May 3, 1999, CIBC Oppenheimer Corp. changed its name to CIBC World
Markets Corp. CIBC Oppenheimer is a division of CIBC World Markets Corp.
Advantage Advisers, Inc., a subsidiary of CIBC World Markets Corp. serves as the
Fund's Investment Manager under the terms
27
<PAGE>
THE ASIA TIGERS FUND, INC.
April 30, 1999
Notes to Financial Statements (continued) (Unaudited)
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.
Effective June 8, 1998, AXA Asset Management Partenaires ("AAMP") has served as
the Investment Adviser to the Fund pursuant to an investment advisory agreement
among Advantage, AAMP and the Fund (the "Advisory Agreement"). Prior to June 8,
1998, Barclays Global Investors International Hong Kong Limited was the Fund's
Investment Adviser.
Pursuant to the Advisory Agreement, AAMP is responsible for investing the Fund's
portfolio in accordance with the Fund's investment objective and policies.
Effective July 1, 1999, Advantage Advisers, Inc. will assume the portfolio
management responsibilities for the Fund in accordance with the terms of its
management agreement with the Fund.
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, 1999, Investment Management fees amounted to $829,337, of which the
Investment Manager informed the Fund it paid $414,668 to the Investment Adviser.
CIBC World Markets Corp., an indirect wholly-owned subsidiary of Canadian
Imperial Bank of Commerce, 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, 1999, these fees amounted to $165,867. At April
30, 1999, CIBC Oppenheimer Corp. owned 3,567 shares of the Fund's common stock.
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
$99,794,939 and $89,066,449, respectively, for the six months ended April 30,
1999.
28
<PAGE>
THE ASIA TIGERS FUND, INC.
April 30, 1999
Notes to Financial Statements (concluded) (Unaudited)
NOTE D: OTHER
At April 30, 1999, 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 of Asian
securities involve special risks and considerations not present with respect to
U.S. securities.
Additionally, the Fund owned securities of certain companies in India and
Indonesia valued at approximately $1,046,187 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.
29
<PAGE>
THE ASIA TIGERS FUND, INC.
Results of Annual Shareholders Meeting
The Fund held its Annual Shareholders Meeting on February 19, 1999. At the
meeting, shareholders elected the nominee proposed for election to the Fund's
Board of Directors and ratified the selection and approval of
PricewaterhouseCoopers LLP as the independent accountants of the Fund for the
fiscal year ending October 31, 1999. The following table provides information
concerning the matters voted on at the meeting:
I. Election of Director
Nominee Votes For Votes Abstained Total Voting Shares
------- --------- --------------- -------------------
Leslie H. Gelb 14,857,243 1,213,605 16,070,848
At April 30, 1999, in addition to Leslie H. Gelb, the other directors of the
Fund were as follows:
Charles F. Barber
Alan H. Rappaport
Jeswald W. Salacuse
II. Ratification of PricewaterhouseCoopers LLP as the Independent Accountants of
the Fund
Votes For Votes Against Votes Abstained Total Voting Shares
--------- ------------- --------------- -------------------
15,608,835 384,404 77,609 16,070,848
30
<PAGE>
THE ASIA TIGERS FUND, INC.
Investment Manager:
Advantage Advisers, Inc., a wholly owned
subsidiary of CIBC World Markets Corp.
Investment Adviser:
AXA Asset Management Partenaires
(formerly Barclays Global Investors
International Inc.)
Administrator:
CIBC World Markets Corp.
Sub-Administrator:
PFPC Inc.
Transfer Agent:
PFPC Inc.
Custodian:
The Chase Manhattan Bank
