<PAGE>
THE EMERGING MARKETS
INFRASTRUCTURE FUND, INC.
.........................
SEMI-ANNUAL REPORT
MAY 31, 2000
[PHOTO]
<PAGE>
--------------------------------------------------------------------------------
CONTENTS
--------------------------------------------------------------------------------
Letter to Shareholders ....................................................... 1
Portfolio Summary ............................................................ 6
Schedule of Investments ...................................................... 8
Statement of Assets and Liabilities ..........................................12
Statement of Operations ......................................................13
Statement of Changes in Net Assets ...........................................14
Financial Highlights .........................................................15
Notes to Financial Statements ................................................16
Results of Annual Meeting of Shareholders ....................................24
Description of InvestLink-SM- Program ........................................25
<PAGE>
--------------------------------------------------------------------------------
LETTER TO SHAREHOLDERS
--------------------------------------------------------------------------------
June 28, 2000
DEAR SHAREHOLDER:
I am writing to report on the activities of The Emerging Markets Infrastructure
Fund, Inc. (the "Fund") for the six months ended May 31, 2000.
At May 31, 2000, the Fund's net asset value ("NAV") was $13.63 per share as
compared to $12.67 on November 30, 1999. Total net assets at May 31, 2000 were
$152,360,458.
PERFORMANCE: STRONG ABSOLUTE AND RELATIVE RETURNS
For the six months ended May 31, 2000, the Fund's total return, based on NAV was
7.6%. Given the lack of a comparable index of emerging markets infrastructure
stocks, I note that the broad universe of emerging markets equities (as
represented by the Morgan Stanley Capital International Emerging Markets Free
Index, or "EMF")+ rose 0.2% over the same period.
The Fund outperformed EMF due to a combination of stock selection and country
allocations that were effective across the emerging world:
- PRIVATE EQUITY. A Latin American private-equity fund whose shares we hold
enjoyed substantial gains from the sale of several of its individual equity
stakes.
- LATIN AMERICA. Latin America was the Fund's best-performing region. We fared
well in Brazil, where our holdings in the cellular telecommunications sector
benefited from the announcement that Spain's Telefonica de Espana was
consolidating its control of several such companies. In Mexico, furthermore,
we emphasized the nation's biggest telecom and media players that excelled,
and avoided the underperforming cement sector.
- ASIA. By far, South Korea and China accounted for the Fund's strong Asian
returns. South Korean exposure mainly consisted of large blue-chip telecom
providers and equipment manufacturers that benefited both from the global
trend toward outsourcing of telecom services and electronics equipment and
the revival of the Korean market as a whole.
Our main China-linked holding--and the Fund's biggest position at May 31--was
China Telecom, China's largest provider of cellular telephony. I liked China
Telecom based on my belief that it is well-positioned to take advantage of
the continuing growth of telecom and Internet applications on the Chinese
mainland. Fortunately, the market shared my optimism.
- EMEA. Country allocations were notably successful in Europe/Middle
East/Africa (EMEA). I maintained a significant overweight in Turkey, for
instance, which proved to be one of the top-performing markets in the world
during the period. I also chose to hold only minimal exposure to Greece and
South Africa, both of which fared especially poorly.
1
<PAGE>
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LETTER TO SHAREHOLDERS
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THE MARKET: A FULL CYCLE
For some time now, investing in the broad universe of emerging markets
infrastructure equities has been a problematic endeavor. Although the reasons
for this are varied, they ultimately boil down to the fact that emerging nations
have had to tighten their fiscal belts much more than in the past in order to
compete effectively for foreign capital. As a result, they have less money to
spend on traditional infrastructure projects such as roads, bridges and port
facilities.
The share prices and valuations for most companies that provide
infrastructure-related products and services in these countries have suffered
accordingly. Utilities, for example, have been virtually ignored by investors
who have chosen instead to focus on the growth potential of the world's New
Economy archetypes in the technology, media and telecommunications sectors
(collectively known as "TMT").
In line with my opinion that emerging TMTs hold greater short- and long-term
promise than their bricks-and-mortar infrastructure counterparts, I have been
moving more of the Fund's assets into those TMTs that I believe hold the
greatest promise in the years ahead. In this report, therefore, I will discuss
TMTs exclusively.
In mid-1999, TMT names in emerging markets were battling a bad case of the
blues, as investors scorned them in favor of their counterparts in the developed
world. This persisted through the year's third quarter, until a few things began
to help the picture turn brighter.
For one, emerging nations began to break the shackles of their 1997-98 financial
crisis. South Korea helped lead the way with a recovery that was nothing less
than miraculous, both in terms of depth and speed. Latin America did its part as
well, with Mexico revving up an increasingly smooth economic engine and even
Brazil taking measures few thought possible to put its economy back on track
(E.G., further privatizing its telecom sector). Elsewhere, notably in India,
governments took office that were amenable to the notion of increased
competition in their telecom markets.
Naturally, developments such as these and others began to attract the attention
of investors who had been sated by the big profits they had generated in the
developed world and were hungry for new opportunities elsewhere. Thus, in the
fourth quarter of 1999 and into the first quarter of 2000, a veritable flood of
capital flowed into emerging markets, a great deal of which was directed to
locally prominent TMT names.
In several cases, in fact, emerging TMT equities turned out to be worldbeaters
in their respective markets. Software developers excelled in India and Israel,
for instance, while Asia was home to particularly strong stocks both in
equipment manufacturing and the design and production of semiconductor chips.
The party didn't last long, however. By the end of the first quarter, fears that
potentially higher U.S. inflation might prompt the Federal Reserve to become
more aggressive in raising U.S. interest rates crushed the shares of telecoms
and other New Economy companies worldwide. It didn't help, either, that
technology investors were nervous, market pundits were questioning the
valuations of tech companies generally, and sentiment about Microsoft's
antitrust litigation started to sour. The result was that higher risk premiums
were assigned to almost all securities, and those with high
valuations--including many emerging telecoms--suffered the most.
2
<PAGE>
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LETTER TO SHAREHOLDERS
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As I write, emerging TMT stocks are down, but not out. Although the worst may
not yet be over, there are selected telecom names and a broad range of
technology-related plays whose attractiveness stands out. Several of these still
look very good from any reasonable valuation standpoint, and I am pursuing them
accordingly.
PORTFOLIO STRUCTURE: PICK AND CHOOSE
TOP 10 HOLDINGS, BY ISSUER*
<TABLE>
<CAPTION>
% OF
HOLDING COUNTRY NET ASSETS
------- ----------- ----------
<S> <C> <C>
1. China Telecom Hong Kong 5.3
2. Samsung Electronics South Korea 5.0
3. Korea Telecom South Korea 3.5
4. Hutchison Whampoa Hong Kong 3.1
5. Reliance Industries India 3.1
6. Netas Turkey 2.9
7. VSNL India 2.7
8. Tenaga Malaysia 2.7
9. Gener Chile 2.5
10. Legend Holdings Hong Kong 2.5
----
Total 33.3
====
</TABLE>
----------------
* Company names are abbreviations of those found in the chart on page 7.
COUNTRY BREAKDOWN
(% of net assets)
[PIE CHART]
<TABLE>
<S> <C>
Other* 20.58
Cash & Other Assets 11.08
Hong Kong 11.68
S. Korea 9.45
Turkey 9.04
India 8.87
Brazil 7.03
Chile 6.94
Taiwan 5.81
Malaysia 5.66
Mexico 3.86
</TABLE>
----------------
* Other includes Argentina, Canada, China, Colombia, Egypt, Europe, Global,
Indonesia, Israel, Jamaica, Latin America, Pakistan, Peru, Russia, Singapore,
South Africa, Spain and Thailand.
My investment strategy in recent months can generally be characterized as
opportunistic. This past April, for example, I elected to raise quite a bit of
cash to take advantage of a few opportunities in what I believed to be the
beginning of a major shakeout in the emerging telecommunications sector. I thus
reduced the Fund's exposure to a number of markets (notably Brazil and South
Korea) that I felt were more vulnerable than others to rapidly changing and
largely negative global and domestic market conditions.
When pullbacks eventually occurred, I reinvested a good deal of this money into
selected areas. One was the Brazilian cellular business, which had suffered from
the contagion effect of the global downdraft in telecom shares, as well as the
potential impact of rising global interest rates on Brazil's macroeconomic
environment. I also returned to South Korea, a market that was hit both by the
international factors already mentioned and new questions about the stability of
its banking sector.
A third major area of interest of mine (then and now) was certain technology
stocks in Israel and Taiwan. These, I feel, will benefit from what I anticipate
to be an elongation of the upward cycle in sales of personal computers. Such an
elongation should prove lucrative for manufacturers of integrated semiconductor
chips, producers of memory devices, and even companies that make PC cabinets.
3
<PAGE>
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LETTER TO SHAREHOLDERS
--------------------------------------------------------------------------------
Elsewhere, I see substantial promise in other parts of the infrastructure
universe such as mobile telephony, which has continued to benefit from strong
demand for handsets. Companies involved in making chips for smarter handsets,
those specializing in miniaturization and more, should do particularly well in
response to such demand. A number of these companies, both manufacturers and
technology suppliers, are located in Taiwan, South Korea and Israel, all focal
points of my current strategy.
OUTLOOK: COULD BE QUITE GOOD
Much of one's outlook for emerging equity markets these days depends on whether
you are a bull or a bear with respect to the Federal Reserve's efforts to manage
U.S. economic growth.
If you are a bear and think that the Fed is likely to raise interest rates a
great deal further and risk an abrupt "hard landing" for the robust U.S.
economy, emerging markets will hold little allure. Most, after all, are highly
dependent on the fortunes of the U.S. economy, a point that should be repeatedly
emphasized.
Indeed, a variety of elements bodes ill for emerging markets in the short term:
continuing volatility in NASDAQ, worsening debt valuation measures, investor
apprehension about what the Fed might do in coming weeks and months, etc.
For my part, I don't think we will see a hard landing for the U.S. economy; I
view a less painful "soft" landing as most probable. If I'm right, the outlook
for TMTs and other infrastructure stocks in the emerging world should be quite
good in the medium term. Several are poised to profit, regardless of the U.S.
economic climate. I have invested in those i feel have the best prospects of
weathering the current storm and becoming the leaders in the next global market
cycle.
Respectfully,
/s/ Richard W. Watt
Richard W. Watt
President and Chief Investment Officer *
4
<PAGE>
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LETTER TO SHAREHOLDERS
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FROM CREDIT SUISSE ASSET MANAGEMENT, LLC:
We wish to remind shareholders whose shares are registered in their own name
that they automatically participate in the Fund's dividend reinvestment program
which is known as the InvestLink-SM- Program (the "Program"). The Program can be
of value to shareholders in maintaining their proportional ownership interest in
the Fund in an easy and convenient way. A shareholder whose shares are held in
the name of a broker/dealer or nominee should contact the Fund's Transfer Agent
for details about participating in the Program. The Program also provides for
additional share purchases. The Program is described on pages 25 through 27 of
this report.
--------------------------------------------------------------------------------
+ The Morgan Stanley Capital International Emerging Markets Free Index is an
unmanaged index (with no defined investment objective) of emerging-market
equities that includes reinvestment of dividends, and is the exclusive property
of Morgan Stanley Capital International Inc.
* Richard W. Watt, who is a Managing Director of Credit Suisse Asset Management,
LLC ("CSAM"), is primarily responsible for management of the Fund's assets. He
joined CSAM on August 2, 1995. Mr. Watt formerly was associated with Gartmore
Investment Limited in London, where he was head of emerging markets investments
and research. Before joining Gartmore Investment Limited in 1992, Mr. Watt was a
Director of Kleinwort Benson International Investments in London, where he was
responsible for research, analysis and trading of equities in Latin America and
other regions. Mr. Watt is President, Chief Investment Officer and a Director of
the Fund. He is also President, Chief Investment Officer and a Director of The
Chile Fund, Inc., The Emerging Markets Telecommunications Fund, Inc. and The
First Israel Fund, Inc. He is President and a Director of The Brazilian Equity
Fund, Inc., The Latin America Equity Fund, Inc. and The Latin America Investment
Fund, Inc. and Chief Investment Officer of The Portugal Fund, Inc.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
5
<PAGE>
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THE EMERGING MARKETS INFRASTRUCTURE FUND, INC.
PORTFOLIO SUMMARY - AS OF MAY 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
SECTOR ALLOCATION
--------------------------------------------------------------------------------
[GRAPH]
<TABLE>
<CAPTION>
AS A PERCENT OF NET ASSETS
May 31, 2000 November 30, 1999
------------ -----------------
<S> <C> <C>
Broadcast 1.85% 0.00%
Cellular Communications 8.83% 8.55%
Chemicals 4.28% 0.96%
Computers 3.61% 0.00%
Consumer 2.89% 0.00%
Electric Distribution 6.62% 5.86%
Electric Generation 7.45% 5.83%
Holding Companies 6.69% 5.54%
Infrastructure and Construction 8.41% 6.48%
Local and/or Long Distance Telephone Service 13.97% 15.99%
Gas & Oil 2.41% 2.88%
Other Infrastructure 1.31% 12.57%
Telecommunications 17.96% 18.96%
Other 2.64% 12.89%
Cash & Cash Equivalents 11.08% 3.49%
</TABLE>
--------------------------------------------------------------------------------
GEOGRAPHIC ASSET BREAKDOWN
--------------------------------------------------------------------------------
[GRAPH]
<TABLE>
<CAPTION>
AS A PERCENT OF NET ASSETS
May 31, 2000 November 30, 1999
------------ -----------------
<S> <C> <C>
Africa 0.58% 1.50%
Asia 46.70% 39.05%
Caribbean 1.69% 1.00%
Eastern Europe 10.62% 7.72%
Europe 2.54% 7.12%
Latin America 20.93% 35.91%
Middle East 3.86% 4.86%
North America 0.10% 0.03%
Global 1.90% 1.68%
Cash & Cash Equivalents 11.08% 1.13%
</TABLE>
6
<PAGE>
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THE EMERGING MARKETS INFRASTRUCTURE FUND, INC.
PORTFOLIO SUMMARY - AS OF MAY 31, 2000 (UNAUDITED) (CONTINED)
--------------------------------------------------------------------------------
[GRAPH]
<TABLE>
<CAPTION>
AS A PERCENT OF NET ASSETS
May 31, 2000 November 30, 1999
------------ -----------------
<S> <C> <C>
Argentina 2.84% 2.71%
Brazil 7.03% 11.24%
Chile 6.91% 10.55%
Hong Kong 11.68% 8.70%
India 8.87% 6.34%
Israel 2.87% 4.62%
Jamaica 1.69% 0.00%
Malaysia 5.66% 0.00%
Mexico 3.86% 11.40%
Russia 1.58% 0.00%
Singapore 1.74% 4.65%
South Korea 9.45% 8.80%
Spain 1.87% 0.00%
Taiwan 5.81% 6.92%
Thailand 2.53% 2.21%
Turkey 9.04% 5.08%
Global 1.90% 1.68%
Other 3.56% 10.54%
</TABLE>
TOP 10 HOLDINGS, BY ISSUER
<TABLE>
<CAPTION>
Percent of
Holding Sector Country Net Assets
---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. China Telecom (Hong Kong) Ltd. Cellular Communications Hong Kong 5.3
---------------------------------------------------------------------------------------------------------------------
2. Samsung Electronics Co., Ltd. Telecommunications South Korea 5.0
---------------------------------------------------------------------------------------------------------------------
3. Korea Telecom Corp. Local and/or Long Distance Telephone Service South Korea 3.5
---------------------------------------------------------------------------------------------------------------------
4. Hutchison Whampoa Ltd. Infrastructure & Construction Hong Kong 3.1
---------------------------------------------------------------------------------------------------------------------
5. Reliance Industries Ltd. Chemicals India 3.1
---------------------------------------------------------------------------------------------------------------------
6. Netas Northern Electric Telekomunikasyon A.S. Telecommunications Turkey 2.9
---------------------------------------------------------------------------------------------------------------------
7. Videsh Sanchar Nigam Ltd. Telecommunications India 2.7
---------------------------------------------------------------------------------------------------------------------
8. Tenaga Nasional Berhad Electric Distribution Malaysia 2.7
---------------------------------------------------------------------------------------------------------------------
9. Gener S.A. Electric Generation Chile 2.5
---------------------------------------------------------------------------------------------------------------------
10. Legend Holdings Ltd. Computers Hong Kong 2.5
---------------------------------------------------------------------------------------------------------------------
</TABLE>
7
<PAGE>
--------------------------------------------------------------------------------
THE EMERGING MARKETS INFRASTRUCTURE FUND, INC.
SCHEDULE OF INVESTMENTS - MAY 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
No. of Value
Description Shares/Units (Note A)
--------------------------------------------------------------------------------
<S> <C> <C>
EQUITY OR EQUITY-LINKED SECURITIES-88.89%
EQUITY OR EQUITY-LINKED SECURITIES OF
INFRASTRUCTURE COMPANIES IN EMERGING
COUNTRIES-74.27%
ARGENTINA-2.84%
CEI Citicorp Holdings S.A.,
Class B+ ......................................... 627,952 $ 2,304,883
Exxel Capital Partners+= .......................... 2,000,001 2,021,537
-----------
TOTAL ARGENTINA (Cost $4,582,278) ............................... 4,326,420
-----------
BRAZIL-7.03%
Brasil Telecom Participacoes
S.A. ADR## ....................................... 24,700 1,482,000
Companhia Riograndense de
Telecomunicacoes PNA+ ............................ 1,330,242 408,072
Companhia Vale do Rio Doce
ADR .............................................. 31,700 790,103
Eletropaulo Metropolitana-
Eletricidade de Sao Paulo
S.A.PN+ .......................................... 25,403,416 1,426,376
Embratel Participacoes S.A. ADR ................... 80,100 1,677,094
Petrleo Brasileiro S.A. ......................... 95,400 2,253,597
Tele Celular Sul Participacoes
S.A. ADR## ....................................... 12,600 426,825
Tele Nordeste Celular
Participacoes S.A. ADR ........................... 9,200 487,600
Tele Norte Leste Participacoes
S.A. ADR ......................................... 89,642 1,759,224
-----------
TOTAL BRAZIL (Cost $10,718,729) ................................. 10,710,891
-----------
CHILE-6.91%
Besalco S.A. ...................................... 250,882 703,676
Chilectra S.A. .................................... 80,566 345,876
Compania de Consumidores de
Gas de Santiago S.A. ............................. 40,000 148,827
Compania de Petroleos de Chile
S.A. ............................................. 221,895 965,313
Compania de Telecomunicaciones
de Chile S.A., Class A ........................... 101,591 503,981
Compania de Telecomunicaciones
de Chile S.A. ADR## .............................. 82,000 1,619,500
<CAPTION>
No. of Value
Description Shares/Units (Note A)
--------------------------------------------------------------------------------
<S> <C> <C>
CHILE (CONTINUED)
Empresa Nacional de Electricidad
S.A.+ ............................................ 1,434,282 $ 563,067
Empresa Nacional de
Telecomunicaciones S.A. .......................... 57,814 521,771
Enersis S.A.+ ..................................... 1,431,330 611,750
Gener S.A. ADR+## ................................. 278,727 3,832,496
Puerto Ventanas S.A. .............................. 288,453 385,264
Sociedad Austral de Electricidad
S.A. ............................................. 20,600 326,236
-----------
TOTAL CHILE (Cost $12,324,231) .................................. 10,527,757
-----------
CHINA-0.25%
Beijing Datang Power Generation
Co., Ltd.
(Cost $719,084) .................................. 2,496,438 381,246
-----------
EUROPE-0.67%
Global TeleSystems Group, Inc.+
(Cost $2,090,162) ................................ 91,876 1,022,120
-----------
HONG KONG-9.18%
China Telecom (Hong Kong)
Ltd. ADR+## ...................................... 55,200 8,114,400
City Telecom (HK) Ltd. ............................ 1,204,000 248,765
Hutchison Whampoa Ltd. ............................ 409,200 4,713,106
Li & Fung Ltd. .................................... 32,000 137,162
Pacific Century CyberWorks Ltd.+ .................. 395,000 773,044
-----------
TOTAL HONG KONG (Cost $9,615,444) ............................... 13,986,477
-----------
INDIA-5.75%
Bharat Heavy Electricals Ltd. ..................... 210,355 571,637
BSES Ltd.++ ....................................... 158,800 3,025,140
Hindustan Corp. ................................... 100,600 302,364
Larsen & Toubro Ltd. GDR++ ........................ 77,000 704,550
Videsh Sanchar Nigam Ltd. GDR++ ................... 266,300 4,160,938
-----------
TOTAL INDIA (Cost $11,123,126) .................................. 8,764,629
-----------
INDONESIA-0.70%
PT Telekomunikasi Indonesia ADR
(Cost $1,785,609) ................................ 158,000 1,066,500
-----------
8
<PAGE>
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THE EMERGING MARKETS INFRASTRUCTURE FUND, INC.
SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
<CAPTION>
No. of Value
Description Shares/Units (Note A)
--------------------------------------------------------------------------------
<S> <C> <C>
ISRAEL-2.60%
Concord Ventures Fund II, L.P.+=# ................. 240,000 $ 240,000
Geotek Communications, Inc.+ ...................... 49,501 772
Geotek Communications, Inc.,
Convertible Preferred Series M,
8.50%*+ .......................................... 100 0
Geotek Communications, Inc.,
Convertible Preferred Series N*+(a) .............. 1,584 0
Gilat Satellite Networks Ltd.+## .................. 15,800 1,272,888
Giza GE Venture Fund III, L.P.+=# ................. 300,000 289,164
K.T. Concord Venture Fund LP+=# ................... 850,000 1,165,906
Nexus Telecommunication Systems
Ltd.+ ............................................ 210,283 473,137
The Renaissance Fund LDC+= ........................ 160 527,834
-----------
TOTAL ISRAEL (Cost $7,492,945) .................................. 3,969,701
-----------
JAMAICA-1.69%
Jamaican Assets I, L.P.+=
(Cost $1,249,729) ................................ 1,156,324 2,573,226
-----------
LATIN AMERICA-0.24%
J.P. Morgan Latin America Capital
Partners L.P.+##*
(Cost $401,354) .................................. 371,803 371,803
-----------
MALAYSIA-4.63%
Digi.com Berhad+ .................................. 997,000 2,020,263
Telecom Malaysia Berhad ........................... 243,800 891,806
Tenaga Nasional Berhad ............................ 1,133,000 4,144,449
-----------
TOTAL MALAYSIA (Cost $6,536,108) ................................ 7,056,518
-----------
MEXICO-3.86%
Cemex S.A. de CV ADR+(b) .......................... 102,200 2,165,363
Grupo Televisa S.A. GDR+ .......................... 27,300 1,520,269
Telefonos de Mexico S.A. de CV
ADR, Class L ..................................... 45,000 2,190,938
-----------
TOTAL MEXICO (Cost $6,182,670) .................................. 5,876,570
-----------
PAKISTAN-0.21%
The Hub Power Company Ltd.+
(Cost $1,209,434) ................................ 957,600 316,410
-----------
<CAPTION>
No. of Value
Description Shares/Units (Note A)
--------------------------------------------------------------------------------
<S> <C> <C>
PERU-0.01%
Tecsur S.A.+
(Cost $24,216) ................................... 119,535 $ 7,848
-----------
RUSSIA-1.58%
RAO Unified Energy Systems ........................ 97,500 1,335,750
Rostelecom ADR+.................................... 71,000 1,078,313
-----------
TOTAL RUSSIA (Cost $3,587,453) .................................. 2,414,063
-----------
SINGAPORE-1.74%
Datacraft Asia Ltd. ............................... 98,000 681,100
NatSteel Electronics Ltd.+ ........................ 538,000 1,583,129
ST Assembly Test Services Ltd.+ ................... 128,000 380,348
-----------
TOTAL SINGAPORE (Cost $2,259,273) ............................... 2,644,577
-----------
SOUTH AFRICA-0.58%
Imperial Holdings Ltd.+
(Cost $1,372,166) ................................ 119,173 880,199
-----------
SOUTH KOREA-9.45%
Dacom Corp.+ ...................................... 8,710 1,160,562
Hanaro Telecom Inc.+ .............................. 38,469 253,395
Korea Telecom Corp. ADR ........................... 146,100 5,405,700
Samsung Electronics Co., Ltd. ..................... 27,787 7,577,154
-----------
TOTAL SOUTH KOREA (Cost $10,882,979) ............................ 14,396,811
-----------
SPAIN-1.87%
Telefonica S.A. ADR+
(Cost $3,206,137). ............................... 46,700 2,842,863
-----------
TAIWAN-1.70%
Hon Hai Precision Industry Co.,
Ltd. GDR+,++ ..................................... 30,000 682,500
Winbond Electronics Corp.+ ........................ 357,420 1,078,872
Yageo Corp.++ ..................................... 95,400 834,750
-----------
TOTAL TAIWAN (Cost $1,944,209) .................................. 2,596,122
-----------
THAILAND-2.53%
Advanced Information Service
Public Co., Ltd.+ ................................ 77,900 894,146
TelecomAsia Corp.
Public Co., Ltd.+(c) ............................. 2,978,400 2,962,826
-----------
TOTAL THAILAND (Cost $5,366,687) ................................ 3,856,972
-----------
9
<PAGE>
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THE EMERGING MARKETS INFRASTRUCTURE FUND, INC.
SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
<CAPTION>
No. of Value
Description Shares/Units (Note A)
--------------------------------------------------------------------------------
<S> <C> <C>
TURKEY-6.35%
Cimsa Cimento Sanayi ve Ticaret
A.S. ............................................. 87,089,000 $ 1,768,233
Eregli Demir ve Celik Fabrikalari
TAS+ ............................................. 74,707,000 3,458,377
Netas Northern Electric
Telekomunikasyon A.S. ............................ 32,591,000 4,446,754
-----------
TOTAL TURKEY (Cost $6,266,929) .................................. 9,673,364
-----------
GLOBAL-1.90%
Emerging Markets Ventures I,
L.P.+=# .......................................... 2,602,830 2,888,699
International Wireless
Communications Holdings
Corp.* ........................................... 7,546 0
-----------
TOTAL GLOBAL (Cost $2,908,065) .................................. 2,888,699
-----------
TOTAL EMERGING COUNTRIES
(Cost $113,849,017) ............................................ 113,151,786
-----------
EQUITY OR EQUITY-LINKED SECURITIES OF
NON-INFRASTRUCTURE COMPANIES-12.52%
<CAPTION>
CANADA-0.10%
Par (000)
-----------
<S> <C> <C>
Officeland Inc., Senior
Unsecured Convertible Notes,
12%, 12/31/25* ................................... 571 80,672
<CAPTION>
Units (000)
-----------
<S> <C> <C>
Officeland Inc., Class C* ......................... 134 64,154
-----------
TOTAL CANADA (Cost $638,256) ...................... USD 144,826
-----------
<CAPTION>
No. of Value
Description Shares/Units (Note A)
--------------------------------------------------------------------------------
<S> <C> <C>
HONG KONG-2.50%
Legend Holdings Ltd.
(Cost $3,751,613) 3,760,000 $ 3,811,993
-----------
INDIA-3.12%
Reliance Industries Ltd. GDR 190,000 4,650,250
SSI Ltd. GDR+,++ 14,300 100,100
-----------
TOTAL INDIA (Cost $3,744,045) 4,750,350
-----------
ISRAEL-0.27%
Formula Ventures L.P.+=#
(Cost $433,923) 423,738 402,474
-----------
MALAYSIA-1.03%
Resorts World Berhad
(Cost $1,859,580) 502,200 1,572,700
-----------
TAIWAN-2.81%
D-Link Corp. 295,000 976,631
Nan Ya Plastic Corp. 785,000 1,719,815
Via Technologies Inc.+ 92,000 1,588,575
-----------
TOTAL TAIWAN (Cost $3,834,326) 4,285,021
-----------
TURKEY-2.69%
Dogan Yayin Holding A.S.+ 70,044,702 1,279,953
Vestel Elektronik Sanayi ve Ticaret
A.S.+ 9,033,000 2,824,417
-----------
TOTAL TURKEY (Cost $4,364,167) 4,104,370
-----------
TOTAL NON-INFRASTRUCTURE COMPANIES
(Cost $18,625,910) 19,071,734
-----------
10
<PAGE>
--------------------------------------------------------------------------------
THE EMERGING MARKETS INFRASTRUCTURE FUND, INC.
SCHEDULE OF INVESTMENTS - (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
<CAPTION>
No. of Value
Description Shares/Units (Note A)
--------------------------------------------------------------------------------
<S> <C> <C>
EQUITY SECURITES OF COMPANIES PROVIDING OTHER
ESSENTIAL SERVICES IN THE DEVELOPMENT OF AN
EMERGING COUNTRY'S INFRASTRUCTURE-2.10%
COLOMBIA-0.01%
Cementos Paz del R'o S.A. ADR++
(Cost $29,089) 2,135 $ 12,370
------------
EGYPT-0.79%
Nile Growth Company+
(Cost $2,020,000) 200,000 1,200,000
------------
TAIWAN-1.30%
Taiwan Semiconductor
Manufacturing Co., Ltd.+
(Cost $1,282,116) 390,400 1,989,380
------------
TOTAL OTHER ESSENTIAL SERVICES
(Cost $3,331,205) 3,201,750
------------
TOTAL EQUITY OR EQUITY-LINKED SECURITIES
(Cost $135,806,132) 135,425,270
------------
SHORT-TERM INVESTMENT-0.03%
CHILEAN MUTUAL FUND-0.03%
Fondo Mutuo Security Check
(Cost $50,199) 10,513 49,925
------------
TOTAL INVESTMENTS-88.92%
(Cost $135,856,331) (Notes A,D) 135,475,195
CASH AND OTHER ASSETS IN EXCESS OF
LIABILITIES-11.08% 16,885,263
------------
NET ASSETS-100.00% $152,360,458
============
</TABLE>
--------------------------------------------------------------------------------
* Not readily marketable security.
+ Security is non-income producing.
++ SEC Rule 144A security. Such securities are traded only among "qualified
institutional buyers."
= Restricted security, not readily marketable (See Note F).
# As of May 31, 2000, the Fund committed to investing an additional
$1,760,000, $1,200,000, $150,000, $3,098,646, $1,364,949 and $326,262 of
capital in Concord Ventures Fund II, L.P., Giza GE Venture Fund III, L.P.,
K.T. Concord Venture Fund LP, J.P. Morgan Latin America Capital Partners
L.P., Emerging Markets Ventures I, L.P. and Formula Ventures L.P.,
respectively.
## Security or a portion thereof is out on loan.
(a) With an additional 1,584 warrants attached, expiring 06/20/01, with no
market value.
(b) With an additional 12,740 rights attached, expiring 12/25/49, with no
market value.
(c) With an additional 940,547 warrants attached, expiring 12/31/49, with no
market value.
ADR American Depositary Receipts.
GDR Global Depositary Receipts.
PN Preferred Shares.
PNA Preferred Shares, Class A.
USD United States Dollars.
See accompanying notes to financial statements. 11
<PAGE>
--------------------------------------------------------------------------------
THE EMERGING MARKETS INFRASTRUCTURE FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES - MAY 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
--------------------------------------------------------------------------------------------
ASSETS
--------------------------------------------------------------------------------------------
<S> <C>
Investments, at value (Cost $135,856,331) (Note A) .......................................... $135,475,195
Cash (including $54,333 of foreign currencies with a cost of $53,004) (Note A) .............. 19,441,502
Collateral received from securities loaned (Note A) ......................................... 6,232,895
Receivables:
Dividends ................................................................................ 408,184
Interest ................................................................................. 2,121
Prepaid expenses and other assets ........................................................... 15,601
------------
Total Assets ................................................................................ 161,575,498
------------
--------------------------------------------------------------------------------------------
LIABILITIES
--------------------------------------------------------------------------------------------
Payables:
Payable upon return of securities loaned (Note A) ........................................ 6,232,895
Investments purchased .................................................................... 2,340,924
Investment advisory fee (Note B) ......................................................... 358,611
Administration fees (Note B) ............................................................. 36,362
Other accrued expenses ................................................................... 246,248
------------
Total Liabilities ........................................................................... 9,215,040
------------
NET ASSETS (applicable to 11,175,955 shares of common stock outstanding) (Note C) ........... $152,360,458
============
NET ASSET VALUE PER SHARE ($152,360,458 DIVIDED BY 11,175,955) .............................. $13.63
============
--------------------------------------------------------------------------------------------
NET ASSETS CONSIST OF
--------------------------------------------------------------------------------------------
Capital stock, $0.001 par value; 11,175,955 shares issued and outstanding
(100,000,000 shares authorized) ............................................................ $ 11,176
Paid-in capital ............................................................................. 173,332,794
Undistributed net investment income ......................................................... 930,254
Accumulated net realized loss on investments and foreign currency related transactions ...... (21,532,798)
Net unrealized depreciation in value of investments and translation of other assets and
liabilities denominated in foreign currencies .............................................. (380,968)
------------
Net assets applicable to shares outstanding ................................................. $152,360,458
============
</TABLE>
12 See accompanying notes to financial statements.
<PAGE>
--------------------------------------------------------------------------------
THE EMERGING MARKETS INFRASTRUCTURE FUND, INC.
STATEMENT OF OPERATIONS - FOR THE SIX MONTHS ENDED MAY 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
--------------------------------------------------------------------------------------------
INVESTMENT INCOME
--------------------------------------------------------------------------------------------
<S> <C>
Income (Note A):
Dividends ............................................................................... $ 1,235,089
Interest ................................................................................ 534,047
Less: Foreign taxes withheld ............................................................ (112,821)
------------
Total Investment Income ................................................................. 1,656,315
------------
Expenses:
Investment advisory fees (Note B) ....................................................... 1,139,344
Consulting fees (Note I) ................................................................ 189,836
Administration fees (Note B) ............................................................ 147,785
Custodian fees .......................................................................... 141,466
Audit and legal fees .................................................................... 100,436
Printing ................................................................................ 85,095
Accounting fees ......................................................................... 67,161
Transfer agent fees ..................................................................... 22,788
Directors' fees ......................................................................... 20,825
NYSE listing fees ....................................................................... 12,164
Insurance ............................................................................... 5,807
Other ................................................................................... 12,717
Brazilian taxes (Note A) ................................................................ 39,634
Chilean repatriation taxes (Note A) ..................................................... 162,897
------------
Total Expenses .......................................................................... 2,147,955
------------
Net Investment Loss ..................................................................... (491,640)
------------
--------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS AND FOREIGN CURRENCY
RELATED TRANSACTIONS
--------------------------------------------------------------------------------------------
Net realized gain/(loss) from:
Investments ............................................................................. 27,319,015
Foreign currency related transactions ................................................... (183,270)
Net changed in unrealized appreciation in value of investments and translation of other
assets and liabilities denominated in foreign currencies .................................. (15,893,562)
------------
Net realized and unrealized gain on investments and foreign currency related transactions .. 11,242,183
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ....................................... $ 10,750,543
============
</TABLE>
See accompanying notes to financial statements. 13
<PAGE>
--------------------------------------------------------------------------------
THE EMERGING MARKETS INFRASTRUCTURE FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Six Months For the Fiscal Year
Ended May 31, 2000 Ended
(unaudited) November 30, 1999
------------------ -------------------
--------------------------------------------------------------------------------
INCREASE/(DECREASE) IN NET ASSETS
--------------------------------------------------------------------------------
<S> <C> <C>
Operations:
Net investment loss ......................................................... $ (491,640) $ (598,372)
Net realized gain on investments and foreign currency
related transactions ....................................................... 27,135,745 10,985,147
Net change in unrealized appreciation/(depreciation) in value of
investments and translation of other assets and liabilities denominated
in foreign currencies ...................................................... (15,893,562) 28,903,656
------------ ------------
Net increase in net assets resulting from operations ...................... 10,750,543 39,290,431
------------ ------------
Dividends to shareholders:
Net investment income ....................................................... -- (1,927,497)
------------ ------------
Capital share transactions:
Cost of 3,011,714 shares repurchased under Tender Offer (Note H) ............ -- (31,984,403)
Cost of 688,200 shares and 1,231,300 shares repurchased,
respectively, under the Share Repurchase Program (Note G) .................. (8,752,183) (9,686,792)
------------ ------------
Total capital share transactions .......................................... (8,752,183) (41,671,195)
------------ ------------
Total increase/(decrease) in net assets ................................... 1,998,360 (4,308,261)
------------ ------------
--------------------------------------------------------------------------------
NET ASSETS
--------------------------------------------------------------------------------
Beginning of period ............................................................ 150,362,098 154,670,359
------------ ------------
End of period (includes undistributed net investment income of $930,254
and $1,421,894, respectively) ................................................. $152,360,458 $150,362,098
============ ============
</TABLE>
14 See accompanying notes to financial statements.
<PAGE>
--------------------------------------------------------------------------------
THE EMERGING MARKETS INFRASTRUCTURE FUND, INC.
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
Contained below is per share operating performance data for a share of common
stock outstanding, total investment return, ratios to average net assets and
other supplemental data for each period indicated. This information has been
derived from information provided in the financial statements and market price
data for the Fund's shares.
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the
Period
December 29,
For the Six 1993*
Months Ended For the Fiscal Years Ended November 30, through
May 31, 2000 --------------------------------------- November 30,
(unaudited) 1999 1998 1997 1996 1995 1994
------------ ------ ------ ------ ------ ------ ------------
------------------------------------------
PER SHARE OPERATING
PERFORMANCE
------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period .......... $12.67 $9.60 $14.69 $13.39 $11.60 $14.17 $13.89**
-------- -------- -------- -------- -------- -------- --------
Net investment income/(loss) .................. (0.04)+ (0.05)+ 0.08 0.07 0.12 0.07 (0.01)
Net realized and unrealized gain/(loss)
on investments and foreign currency
related transactions ........................ 0.79 2.97 (4.71) 1.32 1.76 (2.59) 0.29
-------- -------- -------- -------- -------- -------- --------
Net increase/(decrease) in net assets
resulting from operations ................... 0.75 2.92 (4.63) 1.39 1.88 (2.52) 0.28
-------- -------- -------- -------- -------- -------- --------
Dividends and distributions to shareholders:
Net investment income ....................... -- (0.16) (0.03) (0.09) (0.09) (0.03) --
Net realized gain on investments and
foreign currency related transactions ..... -- -- (0.43) -- -- (0.02) --
-------- -------- -------- -------- -------- -------- --------
Total dividends and distributions to
shareholders ................................ -- (0.16) (0.46) (0.09) (0.09) (0.05) --
-------- -------- -------- -------- -------- -------- --------
Anti-dilutive effect of Tender Offer .......... -- 0.14 -- -- -- -- --
Anti-dilutive effect of the Share Repurchase
Program ..................................... 0.21 0.17 -- -- -- -- --
-------- -------- -------- -------- -------- -------- --------
Total anti-dilutive effect of Tender Offer
and the Share Repurchase Program ............ 0.21 0.31 -- -- -- -- --
======== ======== ======== ======== ======== ======== ========
Net asset value, end of period ................ $13.63 $12.67 $9.60 $14.69 $13.39 $11.60 $14.17
======== ======== ======== ======== ======== ======== ========
Market value, end of period ................... $11.00 $9.563 $7.440 $11.250 $10.750 $9.750 $11.880
======== ======== ======== ======== ======== ======== ========
Total investment return (a) ................... 15.03% 30.93% (29.60)% 5.46% 11.11% (17.49)% (14.87)%
======== ======== ======== ======== ======== ======== ========
------------------------------------------
RATIOS/SUPPLEMENTAL DATA
------------------------------------------
Net assets, end of period (000 omitted) ....... $152,360 $150,362 $154,670 $236,536 $215,735 $186,921 $228,171
Ratio of expenses to average net assets# ...... 2.45%(b) 2.33% 2.07% 2.02% 1.81% 1.83% 2.02%(b)
Ratio of expenses to average net assets,
excluding taxes ............................. 2.22%(b) 2.31% 1.91% 1.83% -- -- 1.96%(b)
Ratio of net investment income/(loss) to
average net assets .......................... (0.56)%(b) (0.40)% 0.72% 0.46% 0.90% 0.65% (0.13)%(b)
Portfolio turnover rate ....................... 68.82% 109.09% 169.85% 108.68% 23.89% 13.73% 24.63%
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Commencement of investment operations.
** Initial public offering price of $15.00 per share less underwriting discount
of $1.05 per share and offering expenses of $0.06 per share.
+ Based on average shares outstanding.
# Ratios shown are inclusive of Brazilian transaction and Chilean repatriation
taxes, if any.
(a) Total investment return at market value is based on the changes in market
price of a share during the period and assumes reinvestment of dividends and
distributions, if any, at actual prices pursuant to the Fund's dividend
reinvestment program. Total investment return does not reflect brokerage
commissions or initial underwriting discounts and has not been annualized.
(b) Annualized.
See accompanying notes to financial statements. 15
<PAGE>
--------------------------------------------------------------------------------
THE EMERGING MARKETS INFRASTRUCTURE FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
NOTE A. SIGNIFICANT ACCOUNTING POLICIES
--------------------------------------------------------------------------------
The Emerging Markets Infrastructure Fund, Inc. (the "Fund") was incorporated in
Maryland on October 12, 1993 and commenced investment operations on December 29,
1993. The Fund is registered under the Investment Company Act of 1940, as
amended, as a closed-end, non-diversified management investment company.
Significant accounting policies are as follows:
MANAGEMENT ESTIMATES: The preparation of financial statements in accordance with
generally accepted accounting principles requires management to make certain
estimates and assumptions that may affect the reported amounts and disclosures
in the financial statements. Actual results could differ from those estimates.
PORTFOLIO VALUATION: Investments are stated at value in the accompanying
financial statements. All securities for which market quotations are readily
available are valued at the closing price quoted for the securities prior to the
time of determination (but if bid and asked quotations are available, at the
mean between the last current bid and asked prices). Securities that are traded
over-the-counter are valued at the mean between the current bid and the asked
prices, if available. All other securities and assets are valued at the fair
value as determined in good faith by the Board of Directors. Short-term
investments having a maturity of 60 days or less are valued on the basis of
amortized cost. The Board of Directors has established general guidelines for
calculating fair value of non-publicly traded securities. At May 31, 2000, the
Fund held 6.97% of its net assets in securities valued in good faith by the
Board of Directors with an aggregate cost of $12,551,543 and fair value of
$10,625,469. The net asset value per share of the Fund is calculated on each
business day, with the exception of those days on which the New York Stock
Exchange is closed.
At the time of the Fund's organization, the Board of Directors of the Fund
adopted the following non-fundamental policies: (i) up to 30% of the Fund's
total assets may be invested in private placements of equity securities where
the fund's investment adviser anticipates that a liquid market will develop for
these securities within a period of two to five years from the date of
acquisition; and (ii) up to 10% of the Fund's total assets may be invested in
equity securities of emerging market corporate issuers that are not
infrastructure companies. As disclosed in the Fund's prospectus at that time,
these policies and percentage limitations are subject to modification by the
Board of Directors if, in the reasonable exercise of the Board's business
judgement, modification is determined to be necessary or appropriate to carry
out the Fund's investment objective of long-term capital appreciation.
The limit on non-infrastructure companies was subsequently increased from 10% to
20% and the policy was modified to permit within that 20% limit investments in
private equity funds (whether in corporate or partnership form) that invest
primarily in emerging markets without regard to whether a liquid market is
expected to develop for such investment. Any such investment continues to count
against the overall 30% limit on private placements. The Board approved these
changes on the basis that the long-term value added approach of an emerging
markets private equity strategy is well suited to the long-term capital
appreciation objective of the Fund. When investing through another investment
fund, the Fund will bear its proportionate share of the expenses incurred by
that fund, including management fees.
CASH: Deposits held at Brown Brothers Harriman & Co., the Fund's custodian, in a
variable rate account are classified as cash. At May 31, 2000, the interest rate
was 5.80% which resets on a daily basis. Amounts on deposit are generally
available on the same business day.
16
<PAGE>
--------------------------------------------------------------------------------
THE EMERGING MARKETS INFRASTRUCTURE FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
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.
TAXES: 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 U.S. federal income and excise taxes.
At November 30, 1999, the Fund had a capital loss carryforward of $48,668,543
which expires in 2006.
Income received by the Fund from sources within emerging countries and other
foreign countries may be subject to withholding and other taxes imposed by such
countries.
The Fund is subject to a 10% Chilean repatriation tax with respect to all
remittances from Chile in excess of original invested capital. For the six
months ended May 31, 2000, the Fund incurred $162,897 of such expense.
Under certain circumstances the Fund may be subject to a maximum of 36% Israeli
capital gains tax on gains derived from the sale of Israeli investments. For the
six months ended May 31, 2000, the Fund did not incur such expenses.
From January 23, 1997 through January 22, 1999, Brazil imposed a 0.20%
CONTRIBUCAO PROVISORIA SOBRE MOVIMENTACAOS FINANCIERAS ("CPMF") tax that applied
to most debit transactions carried out by financial institutions. Effective
January 23, 1999, the CPMF tax expired and was reinstated on June 17, 1999 for a
period of three years. The tax is assessed at a rate of 0.38% for the initial
year and will drop to 0.30% for the remaining two years. For the six months
ended May 31, 2000, the Fund incurred $39,634 of such expense.
FOREIGN CURRENCY TRANSACTIONS: 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 rate of exchange; 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 isolate that portion of gains and losses in investments in
equity securities which is due to changes in the foreign exchange rates from
that which is due to change in market prices of equity securities. Accordingly,
realized and unrealized foreign currency gains and losses with respect to such
securities are included in the reported net realized and unrealized gains and
losses on investment transactions balances. However, the Fund does isolate the
effect of fluctuations in foreign exchange rates when determining the gain or
loss upon the sale or maturity of foreign currency denominated debt obligations
pursuant to U.S. federal income tax regulations, with such amount categorized as
foreign exchange gain or loss for both financial reporting and income tax
reporting purposes.
Net currency gains or losses from valuing foreign currency denominated assets
and liabilities at period end exchange rates are reflected as a component of net
unrealized appreciation/(depreciation) in value of investments and translation
of other assets and liabilities denominated in foreign currencies.
17
<PAGE>
--------------------------------------------------------------------------------
THE EMERGING MARKETS INFRASTRUCTURE FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
Net realized foreign exchange losses represent foreign exchange gains and losses
from sales and maturities of debt securities, transactions in foreign currencies
and forward foreign currency contracts, exchange gains or losses realized
between the trade date and settlement dates on security transactions, and the
difference between the amounts of interest and dividends recorded on the Fund's
books and the U.S. dollar equivalent of the amounts actually received.
The Fund reports certain foreign currency related transactions and foreign taxes
withheld on security transactions as components of realized gains for financial
reporting purposes, whereas such components are treated as ordinary income for
U.S. federal income tax purposes.
SECURITIES LENDING: The market value of securities out on loan to brokers at
May 31, 2000, was $6,151,036, for which the Fund has received cash as collateral
of $6,232,895. Such cash collateral was reinvested into an overnight repurchase
agreement with Bear, Stearns & Co. Inc., which is in turn collateralized by U.S.
Government agency securities with a value of $6,360,222. Security loans are
required at all times to have collateral at least equal to 102% of the market
value of the securities on loan; however, in the event of default or bankruptcy
by the other party to the agreement, realization and/or retention of the
collateral may be subject to legal proceedings.
During the six months ended May 31, 2000, the Fund earned $910 in securities
lending income which is included under the caption INTEREST in the Statement of
Operations.
DISTRIBUTIONS OF INCOME AND GAINS: The Fund distributes at least annually to
shareholders substantially all of its net investment income and net realized
short-term capital gains, if any. The Fund determines annually whether to
distribute any net realized long-term capital gains in excess of net realized
short-term capital losses, including capital loss carryovers, if any. An
additional distribution may be made to the extent necessary to avoid the payment
of a 4% U.S. federal excise tax. Dividends and distributions to shareholders are
recorded by the Fund on the ex-dividend date.
The character of distributions made during the year from net investment income
or net realized gains may differ from their ultimate characterization for U.S.
federal income tax purposes due to U.S. generally accepted accounting
principles/tax differences in the character of income and expense recognition.
OTHER: Some countries require governmental approval for the repatriation of
investment income, capital or the proceeds of sales of securities by foreign
investors. In addition, if there is a deterioration in a country's balance of
payments or for other reasons, a country may impose temporary restrictions on
foreign capital remittances abroad. Amounts repatriated prior to the end of
specified periods may be subject to taxes as imposed by a foreign country.
The emerging countries' securities markets are substantially smaller, less
liquid and more volatile than the major securities markets in the United States.
A high proportion of the securities of many companies in emerging countries may
be held by a limited number of persons, which may limit the number of securities
available for investment by the Fund. The limited liquidity of emerging country
securities markets may also affect the Fund's ability to acquire or dispose of
securities at the price and time it wishes to do so.
18
<PAGE>
--------------------------------------------------------------------------------
THE EMERGING MARKETS INFRASTRUCTURE FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
The Fund, subject to local investment limitations, may invest up to 30% of its
assets in non-publicly traded equity securities which may involve a high degree
of business and financial risk and may result in substantial losses. Because of
the current absence of any liquid trading market for these investments, the Fund
may take longer to liquidate these positions than would be the case for publicly
traded securities. Although these securities may be resold in privately
negotiated transactions, the prices realized on such sales could be
significantly less than those originally paid by the Fund or the current
carrying values. Further, companies whose securities are not publicly traded may
not be subject to the disclosure and other investor protection requirements
applicable to companies whose securities are publicly traded.
The Fund may enter into repurchase agreements ("repos") on U.S. Government
securities with primary government securities dealers recognized by the Federal
Reserve Bank of New York and member banks of the Federal Reserve System and on
securities issued by the governments of foreign countries, their
instrumentalities and with creditworthy parties in accordance with established
procedures. Repos are contracts under which the buyer of a security
simultaneously buys and commits to resell the security to the seller at an
agreed upon price and date. Repos are deposited with the Fund's custodian and,
pursuant to the terms of the repurchase agreement, the collateral must have an
aggregate market value greater than or equal to the repurchase price plus
accrued interest at all times. If the value of the underlying securities fall
below the value of the repurchase price plus accrued interest, the Fund will
require the seller to deposit additional collateral by the next business day. If
the request for additional collateral is not met, or the seller defaults on its
repurchase obligation, the Fund maintains the right to sell the underlying
securities at market value and may claim any resulting loss against the seller;
collectibility of such claims may be limited. At May 31, 2000, the Fund had no
such agreements, other than the cash collateral received that was reinvested in
a repo under the Fund's securities lending program.
--------------------------------------------------------------------------------
NOTE B. AGREEMENTS
--------------------------------------------------------------------------------
Credit Suisse Asset Management, LLC ("CSAM") serves as the Fund's investment
adviser with respect to all investments. As compensation for its advisory
services, CSAM receives from the Fund an annual fee, calculated weekly and paid
quarterly, equal to 1.30% of the Fund's average weekly net assets. For the six
months ended May 31, 2000, CSAM earned $1,139,344 for advisory services. CSAM
also provides certain administrative services to the Fund and is reimbursed by
the Fund for costs incurred on behalf of the Fund (up to $20,000 per annum). For
the six months ended May 31, 2000, CSAM was reimbursed $10,027 for
administrative services rendered to the Fund.
Bear Stearns Funds Management Inc. ("BSFM") serves as the Fund's U.S.
administrator. The Fund pays BSFM a fee for its services rendered that is
computed at an annual rate of 0.12% of the Fund's average weekly net assets. For
the six months ended May 31, 2000, BSFM earned $105,170 for administrative
services.
BankBoston, N.A., Sao Paulo ("BBNA") and CELFIN Administradora de Fondos de
Inversion de Capital Extranjero S.A. ("Chilean administrator") serve as the
Fund's administrators with respect to Brazilian and Chilean investments,
respectively. BBNA is paid for its services out of the custody fee payable to
Brown Brothers Harriman & Co., the Fund's accounting agent and custodian, a
quarterly fee based on an annual rate of 0.10% of average month end Brazilian
net assets of the Fund. In return for services rendered, the Chilean
administrator's fee is paid quarterly at an annual rate of 0.10% of the Fund's
average weekly net assets invested in Chile, subject to certain minimum annual
fees and reimbursement for a predefined limit of their expenses.
19
<PAGE>
--------------------------------------------------------------------------------
THE EMERGING MARKETS INFRASTRUCTURE FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
NOTE C. CAPITAL STOCK
--------------------------------------------------------------------------------
The authorized capital stock of the Fund is 100,000,000 shares of common stock,
$0.001 par value. Of the 11,175,955 shares outstanding at May 31, 2000, CSAM
owned 7,169 shares.
--------------------------------------------------------------------------------
NOTE D. INVESTMENT IN SECURITIES
--------------------------------------------------------------------------------
For U.S. federal income tax purposes, the cost of securities owned at May 31,
2000 was $135,947,464. Accordingly, the net unrealized depreciation of
investments (including investments denominated in foreign currencies) of
$472,269, was composed of gross appreciation of $22,776,150 for those
investments having an excess of value over cost and gross depreciation of
$23,248,419 for those investments having an excess of cost over value.
For the six months ended May 31, 2000, total purchases and sales of securities,
other than short-term investments, were $112,079,347 and $132,203,567,
respectively.
--------------------------------------------------------------------------------
NOTE E. CREDIT AGREEMENTS
--------------------------------------------------------------------------------
Effective December 15, 1999, the Fund, together with other funds advised by CSAM
established a $250 million committed, unsecured, line of credit facility
("Credit Facility") with Deutsche Bank AG as administrative agent, State Street
Bank and Trust Company as operations agent, Bank of Nova Scotia as syndication
agent as well as certain other lenders, for temporary or emergency purposes.
Under the terms of the Credit Facility, the funds with access to the Credit
Facility pay an aggregate commitment fee at a rate of 0.075% per annum on the
average daily balance of the Credit Facility that is undisbursed and uncanceled
during the preceding quarter allocated among the participating funds in such
manner as is determined by the governing Boards of the various funds. In
addition, the participating funds will pay interest on borrowing at the Federal
Funds rate plus 0.50%.
Previously, the Fund, along with 10 other U.S. regulated investment companies
for which CSAM serves as investment adviser, had a credit agreement with
BankBoston, N.A. The agreement provided that each fund was permitted to borrow
an amount equal to the lesser of $25,000,000 or 25% of the net assets of the
fund. However, at no time did the aggregate outstanding principal amount of all
loans to any of the 11 funds exceed $25,000,000. The line of credit bore
interest at (i) the greater of the bank's prime rate or the Federal Funds
Effective Rate plus 0.50% or (ii) the Adjusted Eurodollar Rate plus 1.50%. The
above credit agreement was terminated as of June 30, 1999.
At May 31, 2000 and during the six months ended May 31, 2000, the Fund had no
borrowings under either the Credit Facility or the credit agreement.
20
<PAGE>
--------------------------------------------------------------------------------
THE EMERGING MARKETS INFRASTRUCTURE FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
NOTE F. RESTRICTED SECURITIES
--------------------------------------------------------------------------------
Certain of the Fund's investments are restricted as to resale and are valued at
the direction of the Fund's Board of Directors in good faith, at fair value,
after taking into consideration appropriate indications of value. The table
below shows the number of units/shares held, the acquisition dates, aggregate
costs, fair value as of May 31, 2000, value per unit/share of such securities
and percentage of net assets which the securities comprise.
<TABLE>
<CAPTION>
VALUE
NUMBER OF FAIR VALUE PER UNIT/ PERCENT OF
SECURITY UNITS/SHARES ACQUISITION DATES COST AT MAY 31, 2000 SHARE NET ASSETS
-------- ------------ ----------------- -------- --------------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
Concord Ventures Fund II, L.P. ......... 240,000 03/29/00 $244,076 $240,000 $1.00 0.16
Emerging Markets Venture I, L.P. ....... 159,653 01/22/98 163,925 177,188 1.11 0.12
Emerging Markets Venture I, L.P. ....... 3,525 03/05/98 3,662 3,912 1.11 --
Emerging Markets Venture I, L.P. ....... 586,127 05/05/98 629,217 650,501 1.11 0.43
Emerging Markets Venture I, L.P. ....... 361,637 07/07/98 371,313 401,356 1.11 0.26
Emerging Markets Venture I, L.P. ....... 42,334 08/17/98 44,675 46,984 1.11 0.03
Emerging Markets Venture I, L.P. ....... 296,812 10/27/98 304,754 329,411 1.11 0.22
Emerging Markets Venture I, L.P. ....... 170,989 02/26/99 172,332 189,769 1.11 0.12
Emerging Markets Venture I, L.P. ....... 69,256 04/19/99 69,800 76,862 1.11 0.05
Emerging Markets Venture I, L.P. ....... 39,575 08/24/99 39,886 43,922 1.11 0.03
Emerging Markets Venture I, L.P. ....... 296,812 10/01/99 299,144 329,410 1.11 0.22
Emerging Markets Venture I, L.P. ....... 279,299 12/21/99 306,706 309,973 1.11 0.20
Emerging Markets Venture I, L.P. ....... 296,811 03/24/00 296,812 329,411 1.11 0.22
Exxel Capital Partners ................. 1,787,688 05/11/98 1,881,335 1,806,938 1.01 1.19
Exxel Capital Partners ................. 111,520 07/07/98 114,476 112,721 1.01 0.07
Exxel Capital Partners ................. 34,610 09/01/98 34,977 34,983 1.01 0.02
Exxel Capital Partners ................. 66,183 12/03/98 66,885 66,895 1.01 0.04
Formula Ventures L.P. .................. 262,500 08/06/99 272,685 249,327 0.95 0.16
Formula Ventures L.P. .................. 52,500 03/22/00 52,500 49,865 0.95 0.03
Formula Ventures L.P. .................. 108,738 04/18/00 108,738 103,282 0.95 0.07
Giza GE Venture Fund III, L.P. ......... 60,000 01/31/00 60,000 57,833 0.96 0.04
Giza GE Venture Fund III, L.P. ......... 90,000 02/24/00 90,000 86,749 0.96 0.06
Giza GE Venture Fund III, L.P. ......... 150,000 03/22/00 150,000 144,582 0.96 0.09
Jamaican Assets I, L.P. ................ 578,162 07/29/97 624,865 1,286,613 2.23 0.84
Jamaican Assets I, L.P. ................ 578,162 10/20/97 624,864 1,286,613 2.23 0.84
K.T. Concord Venture Fund LP ........... 250,000 12/08/97 227,622 342,914 1.37 0.23
K.T. Concord Venture Fund LP ........... 100,000 12/28/98 94,131 137,165 1.37 0.09
K.T. Concord Venture Fund LP ........... 150,000 03/12/99 141,196 205,748 1.37 0.14
K.T. Concord Venture Fund LP ........... 100,000 08/03/99 94,131 137,165 1.37 0.09
K.T. Concord Venture Fund LP ........... 50,000 08/25/99 47,065 68,583 1.37 0.05
K.T. Concord Venture Fund LP ........... 150,000 10/12/99 141,196 205,748 1.37 0.14
K.T. Concord Venture Fund LP ........... 50,000 02/28/00 48,789 68,583 1.37 0.05
The Renaissance Fund LDC ............... 160 03/30/94 1,028,359 527,834 3,298.96 0.35
</TABLE>
The Fund may incur certain costs in connection with the disposition of the above
securities.
21
<PAGE>
--------------------------------------------------------------------------------
THE EMERGING MARKETS INFRASTRUCTURE FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
NOTE G. SHARE REPURCHASE PROGRAM
--------------------------------------------------------------------------------
On October 21, 1998, the Board of Directors authorized the repurchase by the
Fund of up to 15% of the Fund's outstanding common stock, for the purposes of
enhancing shareholder value. The Fund's Board has authorized management of the
Fund to repurchase such shares in open market transactions at prevailing market
prices from time to time and in a manner consistent with the Fund continuing to
seek to achieve its investment objective. The Board's actions were taken in
light of the significant discounts at which the Fund's shares were trading. It
is intended both to provide additional liquidity to those shareholders that
elect to sell their shares and to enhance the net asset value of the shares held
by those shareholders that maintain their investment. On February 12, 1999, the
Board of Directors authorized significant enhancements to its existing share
repurchase program (the "Program"). The Fund intends to repurchase in open
market transactions at prevailing market prices no less than 10% (on a rolling
twelve-month basis) of the Fund's outstanding common stock. In addition, the 15%
"cap" imposed on repurchases has been changed to an annual rolling twelve month
cap. The Fund is committed to actively seek to repurchase its outstanding common
stock whenever the discount to net asset value is 15% or more. Effective May 18,
1999, the Fund suspended repurchases of shares under the Program and reinstated
the Program on October 14, 1999, under the same terms as previously stated. From
October 21, 1998 to November 30, 1998, the Fund did not repurchase any of its
shares. For the fiscal year ended November 30, 1999, the Fund repurchased
1,231,300 of its shares for a total cost of $9,686,793 at a weighted average
discount of 17.46% from net asset value. Through November 30, 1999, the discount
of individual repurchases ranged from 16.35% - 24.98%. For the six months ended
May 31, 2000, the Fund repurchased 688,200 of its shares for a total cost of
$8,752,183 at a weighted average discount of 22.16% from net asset value. The
discount of individual repurchases ranged from 18.76%-26.36%.
--------------------------------------------------------------------------------
NOTE H. TENDER OFFER
--------------------------------------------------------------------------------
The Fund's Board of Directors approved a tender offer on May 13, 1999 to
repurchase the outstanding Fund's shares. Pursuant to the self tender offer, the
Fund will purchase up to 3,011,714 issued and outstanding shares of its common
stock, representing 20% of its total outstanding shares, at a price per share
equal to 95% of the net asset value per share as determined by the Fund as of
the close of regular trading on the New York Stock Exchange on June 25, 1999,
the expiration date of the self tender offer. On July 1, 1999, the Fund
announced that the number of shares properly tendered and not withdrawn was
11,475,060 and during the month the Fund purchased 3,011,714 shares at a total
cost of $31,984,403 at a price of $10.62 per share.
--------------------------------------------------------------------------------
NOTE I. SUBSEQUENT EVENTS
--------------------------------------------------------------------------------
The Fund engaged an Investment Banking Firm during the year to look at various
strategic options for the Fund. As a result of such engagement, on July 24,
2000, the Fund's Board of Directors approved the merger (the "Merger") of The
Emerging Markets Telecommunications Fund, Inc. ("ETF") with and into the Fund.
As a result of the Merger, ETF will cease to exist, the Fund will be the legal
surviving corporation and each share of common stock of ETF will be converted
into an equivalent dollar amount of full shares of common stock of the Fund,
based on the net asset value of each of the Fund and ETF. The Fund will not
issue any fractional shares to ETF's shareholders. The Fund's transfer agent
will aggregate all fractional shares, sell the resulting full shares on the New
York Stock Exchange at the current market price for the shares and remit the
cash proceeds to ETF's shareholders in proportion to their fractional shares.
Upon consummation of the Merger, the Fund will change its name to "The Emerging
Markets Telecommunications
22
<PAGE>
--------------------------------------------------------------------------------
THE EMERGING MARKETS INFRASTRUCTURE FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
Fund, Inc." and will adopt ETF's investment objective and policies.
Consummation of the Merger is subject to a number of conditions, including
shareholder approval and certain regulatory approvals.
In addition, in May 2000 the Board of Directors of the Fund determined that it
was in the best interests of the Fund to initiate a tender offer to acquire up
to 50% of its shares of common stock at a price per share equal to 95% of the
Fund's net asset value per share as of the end of the tender offer period. The
tender offer is subject to approval of the Merger by the shareholders of both
the Fund and ETF and satisfaction of the other conditions to closing the Merger.
On June 27, 2000 the Board of Directors of ETF approved the overall terms of a
self-tender program that ETF intends to launch in the calendar year 2001, which
terms include the following: (i) ETF will make a tender offer to acquire at
least 15% of its outstanding shares during each calendar year of the program,
and (ii) the per share purchase price will be at least 95% of ETF's net asset
value per share. Implementation of the self-tender program is conditioned on
consummation of the Merger. Upon consummation of the Merger, the Fund as the
surviving corporation and renamed "The Emerging Markets Telecommunications
Fund, Inc." will launch the self-tender programs. The self-tender program is
subject to change based on economic or market conditions or other factors. For
example, a sustained reduction in the market discount at which the Fund's shares
trade, a risk of material adverse tax consequences, or a risk of the Fund
becoming subject to delisting may lead the Board of Directors to conclude that
it is appropriate to suspend the self-tender program.
23
<PAGE>
--------------------------------------------------------------------------------
RESULTS OF ANNUAL MEETING OF SHAREHOLDERS (UNAUDITED)
--------------------------------------------------------------------------------
On March 23, 2000, the annual meeting of shareholders of The Emerging Markets
Infrastructure Fund, Inc. (the "Fund") was held and the following matters were
voted upon:
(1) To re-elect two directors to the Board of Directors of the Fund.
<TABLE>
<CAPTION>
NAME OF DIRECTOR FOR WITHHELD NON-VOTES
---------------- --------- --------- ---------
<S> <C> <C> <C>
George W. Landau 5,727,745 3,933,552 2,098,357
Richard W. Watt 5,714,425 3,946,872 2,098,357
</TABLE>
In addition to the directors re-elected at the meeting, Dr. Enrique R. Arzac,
James J. Cattano, William W. Priest, Jr. and Martin M. Torino continue to serve
as directors of the Fund.
(2) To ratify the selection of PricewaterhouseCoopers LLP as independent public
accountants for the fiscal year ending November 30, 2000.
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN NON-VOTES
--------- --------- ------- ---------
<S> <C> <C> <C>
7,999,778 1,643,499 17,520 2,098,857
</TABLE>
24
<PAGE>
--------------------------------------------------------------------------------
DESCRIPTION OF INVESTLINK-SM-* PROGRAM (UNAUDITED)
--------------------------------------------------------------------------------
The InvestLink-SM- Program is sponsored and administered by EquiServe, L.P., not
by The Emerging Markets Infrastructure Fund, Inc. (the "Fund"). EquiServe, L.P.
will act as program administrator (the "Program Administrator") of the
InvestLink-SM- Program (the "Program"). The purpose of the Program is to provide
interested investors with a simple and convenient way to invest funds and
reinvest dividends in shares of the Fund's common stock ("Shares") at prevailing
prices, with reduced brokerage commissions and fees.
An interested investor may join the Program at any time. Purchases of Shares
with funds from a participant's cash payment or automatic account deduction will
begin on the next day on which funds are invested. If a participant selects the
dividend reinvestment option, automatic investment of dividends generally will
begin with the next dividend payable after the Program Administrator receives
his enrollment form. Once in the Program, a person will remain a participant
until he terminates his participation or sells all Shares held in his Program
account, or his account is terminated by the Program Administrator. A
participant may change his investment options at any time by requesting a new
enrollment form and returning it to the Program Administrator.
A participant will be assessed certain charges in connection with his
participation in the Program. First-time investors will be subject to an initial
service charge which will be deducted from their initial cash deposit. All
optional cash deposit investments will be subject to a service charge. Sales
processed through the Program will have a service fee deducted from the net
proceeds, after brokerage commissions. In addition to the transaction charges
outlined above, participants will be assessed per share processing fees (which
include brokerage commissions.) Participants will not be charged any fee for
reinvesting dividends.
The number of Shares to be purchased for a participant depends on the amount of
his dividends, cash payments or bank account or payroll deductions, less
applicable fees and commissions, and the purchase price of the Shares. The
Program Administrator uses dividends and funds of participants to purchase
Shares of Company Common Stock in the open market. Such purchases will be made
by participating brokers as agent for the participants using normal cash
settlement practices. All Shares purchased through the Program will be allocated
to participants as of the settlement date, which is usually three business days
from the the purchase date. In all cases, transaction processing will occur
within 30 days of the receipt of funds, except where temporary curtailment or
suspension of purchases is necessary to comply with applicable provisions of the
Federal Securities laws or when unusual market conditions make prudent
investment impracticable. In the event the Program Administrator is unable to
purchase Shares within 30 days of the receipt of funds, such funds will be
returned to the participants.
The average price of all Shares purchased by the Program Administrator with all
funds received during the time period from two business days preceding any
investment date up to the second business day preceding the next investment date
shall be the price per share allocable to a participant in connection with the
Shares purchased for his account with his funds or dividends received by the
Program Administrator during such time period. The average price of all Shares
sold by the Program Administrator pursuant to sell orders received during such
time period shall be the price per share allocable to a participant in
connection with the Shares sold for his account pursuant to his sell orders
received by the Program Administrator during such time period.
EquiServe, L.P., as Program Administrator, administers the Program for
participants, keeps records, sends statements of account to participants and
performs
25
<PAGE>
--------------------------------------------------------------------------------
DESCRIPTION OF INVESTLINK-SM-* PROGRAM (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
other duties relating to the Program. Each participant in the Program will
receive a statement of his account following each purchase of Shares. The
statements will also show the amount of dividends credited to such participant's
account (if applicable), as well as the fees paid by the participant. In
addition, each participant will receive copies of the Fund's annual and
semi-annual reports to shareholders, proxy statements and, if applicable,
dividend income information for tax reporting purposes.
If the Fund is paying dividends on the Shares, a participant will receive
dividends through the Program for all Shares held on the dividend record date on
the basis of full and fractional Shares held in his account, and for all other
Shares of the Fund registered in his name. The Program Administrator will send
checks to the participants for the amounts of their dividends that are not to be
automatically reinvested at no cost to the participants.
Shares of the Fund purchased under the Program will be registered in the name of
the accounts of the respective participants. Unless requested, the Fund will not
issue to participants certificates for Shares of the Fund purchased under the
Program. The Program Administrator will hold the Shares in book-entry form until
a Program participant chooses to withdraw his Shares or terminate his
participation in the Program. The number of Shares purchased for a participant's
account under the Program will be shown on his statement of account. This
feature protects against loss, theft or destruction of stock certificates.
A participant may withdraw all or a portion of the Shares from his Program
account by notifying the Program Administrator. After receipt of a participant's
request, the Program Administrator will issue to such participant certificates
for the whole Shares of the Fund so withdrawn or, if requested by the
participant, sell the Shares for him and send him the proceeds, less applicable
brokerage commissions, fees, and transfer taxes, if any. If a participant
withdraws all full and fractional Shares in his Program account, his
participation in the Program will be terminated by the Program Administrator. In
no case will certificates for fractional Shares be issued. The Program
Administrator will convert any fractional Shares held by a participant at the
time of his withdrawal to cash.
Participation in any rights offering, dividend distribution or stock split will
be based upon both the Shares of the Fund registered in participants' names and
the Shares (including fractional Shares) credited to participants' Program
accounts. Any stock dividend or Shares resulting from stock splits with respect
to Shares of the Fund, both full and fractional, which participants hold in
their Program accounts and with respect to all Shares registered in their names
will be automatically credited to their accounts.
All Shares of the Fund (including any fractional share) credited to his account
under the Program will be voted as the participant directs. The participants
will be sent the proxy materials for the annual meetings of shareholders. When a
participant returns an executed proxy, all of such Shares will be voted as
indicated. A participant may also elect to vote his Shares in person at the
Shareholders' meeting.
A participant will receive tax information annually for his personal records and
to help him prepare his U.S. federal income tax return. The automatic
reinvestment of dividends does not relieve him of any income tax which may be
payable on dividends. For further information as to tax consequences of
participation in the Program, participants should consult with their own tax
advisors.
The Program Administrator in administering the Program will not be liable for
any act done in good faith or for any good faith omission to act. However, the
Program Administrator will be liable for loss or damage due to error caused by
its negligence, bad faith or willful
26
<PAGE>
--------------------------------------------------------------------------------
DESCRIPTION OF INVESTLINK-SM-* PROGRAM (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
misconduct. Shares held in custody by the Program Administrator are not subject
to protection under the Securities Investors Protection Act of 1970.
The participant should recognize that neither the Fund nor the Program
Administrator can provide any assurance of a profit or protection against loss
on any Shares purchased under the Program. A participant's investment in Shares
held in his Program account is no different than his investment in directly held
Shares in this regard. The participant bears the risk of loss and the benefits
of gain from market price changes with respect to all of his Shares. Neither the
Fund nor the Program Administrator can guarantee that Shares purchased under the
Program will, at any particular time, be worth more or less than their purchase
price. Each participant must make an independent investment decision based on
his own judgment and research.
While the Program Administrator hopes to continue the Program indefinitely, the
Program Administrator reserves the right to suspend or terminate the Program at
any time. It also reserves the right to make modifications to the Program.
Participants will be notified of any such suspension, termination or
modification in accordance with the terms and conditions of the Program. The
Program Administrator also reserves the right to terminate any participant's
participation in the Program at any time. Any question of interpretation arising
under the Program will be determined in good faith by the Program Administrator
and any such good faith determination will be final.
Any interested investor may participate in the Program. To participate in the
Program, an investor who is not already a registered owner of the Shares must
make an initial investment of at least $250.00. All other cash payments or bank
account deductions must be at least $100.00, up to a maximum of $100,000.00
annually. An interested investor may join the Program by reading the Program
description, completing and signing the enrollment form and returning it to the
Program Administrator. The enrollment form and information relating to the
Program (including the terms and conditions) may be obtained by calling the
Program Administrator at one of the following telephone numbers: First Time
Investors(800) 969-3365; Current Shareholders(800) 730-6001. All correspondence
regarding the Program should be directed to: EquiServe, L.P., InvestLink-SM-
Program, P.O. Box 8040, Boston, MA 02266-8040.
-----------------------------------------------------------------------
* InvestLink is a service mark of Boston EquiServe Limited Partnership.
27
<PAGE>
--------------------------------------------------------------------------------
SUMMARY OF GENERAL INFORMATION
--------------------------------------------------------------------------------
The Fund--The Emerging Markets Infrastructure Fund, Inc.--is a closed-end,
non-diversified management investment company whose shares trade on the New York
Stock Exchange. Its investment objective is long-term capital appreciation
through investments primarily in equity securities of infrastructure companies
in emerging countries. The Fund is managed and advised by Credit Suisse Asset
Management, LLC ("CSAM"). CSAM is a diversified asset manager, handling equity,
balanced, fixed income, international and derivative based accounts. Portfolios
include international and emerging market investments, common stocks, taxable
and non-taxable bonds, options, futures and venture capital. CSAM manages money
for corporate pension and profit-sharing funds, public pension funds, union
funds, endowments and other charitable institutions and private individuals. As
of June 30, 2000, CSAM-Americas managed approximately $70.0 billion in assets.
--------------------------------------------------------------------------------
SHAREHOLDER INFORMATION
--------------------------------------------------------------------------------
The market price is published in: THE NEW YORK TIMES (daily) under the
designation "EmgMkt" and THE WALL STREET JOURNAL (daily), and BARRON'S (each
Monday) under the designation "EmergMktInfr". The Fund's New York Stock Exchange
trading symbol is EMG. Weekly comparative net asset value (NAV) and market price
information about The Emerging Markets Infrastructure Fund, Inc.'s shares are
published each Sunday in THE NEW YORK TIMES and each Monday in THE WALL STREET
JOURNAL and BARRON'S, as well as other newspapers, in a table called "Closed-End
Funds."
--------------------------------------------------------------------------------
THE CSAM GROUP OF FUNDS
--------------------------------------------------------------------------------
LITERATURE REQUEST--Call today for free descriptive information on the
closed-end funds listed below at 1-800-293-1232 or visit our website on the
Internet: http://www.cefsource.com.
CLOSED-END FUNDS
SINGLE COUNTRY
The Brazilian Equity Fund, Inc. (BZL)
The Chile Fund, Inc. (CH)
The First Israel Fund, Inc. (ISL)
The Indonesia Fund, Inc. (IF)
The Portugal Fund, Inc. (PGF)
MULTIPLE COUNTRY
The Emerging Markets Telecommunications Fund, Inc. (ETF)
The Latin America Equity Fund, Inc. (LAQ)
The Latin America Investment Fund, Inc. (LAM)
FIXED INCOME
Credit Suisse Asset Management Income Fund, Inc. (CIK)
Credit Suisse Asset Management Strategic Global Income Fund, Inc. (CGF)
--------------------------------------------------------------------------------
Notice is hereby given in accordance with Section 23(c) of the Investment
Company Act of 1940, as amended, that The Emerging Markets Infrastructure Fund,
Inc. may from time to time purchase shares of its capital stock in the open
market.
--------------------------------------------------------------------------------
<PAGE>
--------------------------------------------------------------------------------
DIRECTORS AND CORPORATE OFFICERS
--------------------------------------------------------------------------------
Dr. Enrique R. Arzac Director
James J. Cattano Director
George W. Landau Director
Martin M. Torino Director
William W. Priest, Jr. Chairman of the Board of
Directors
Richard W. Watt President, Chief Investment
Officer and Director
Emily Alejos Investment Officer
Yarek Aranowicz Investment Officer
Robert B. Hrabchak Investment Officer
Hal Liebes Senior Vice President
Michael A. Pignataro Chief Financial Officer and
Secretary
Rocco A. Del Guercio Vice President
Robert M. Rizza Treasurer
--------------------------------------------------------------------------------
INVESTMENT ADVISER
--------------------------------------------------------------------------------
Credit Suisse Asset Management, LLC
466 Lexington Avenue
New York, NY 10017
--------------------------------------------------------------------------------
ADMINISTRATOR
--------------------------------------------------------------------------------
Bear Stearns Funds Management Inc.
575 Lexington Avenue
New York, NY 10022
--------------------------------------------------------------------------------
CUSTODIAN
--------------------------------------------------------------------------------
Brown Brothers Harriman & Co.
40 Water Street
Boston, MA 02109
--------------------------------------------------------------------------------
SHAREHOLDER SERVICING AGENT
--------------------------------------------------------------------------------
EquiServe, L.P.
P.O. Box 1865
Mail Stop 45-02-62
Boston, MA 02105
--------------------------------------------------------------------------------
INDEPENDENT ACCOUNTANTS
--------------------------------------------------------------------------------
PricewaterhouseCoopers LLP
Two Commerce Square, Suite 1700
2001 Market Street
Philadelphia, PA 19103
--------------------------------------------------------------------------------
LEGAL COUNSEL
--------------------------------------------------------------------------------
Willkie Farr & Gallagher
787 Seventh Avenue
New York, NY 10019
This report, including the financial statements herein, is sent to the
shareholders of the Fund for their information. The financial information
included herein is taken from the records of the Fund without examination by
independent accountants who do not express an opinion thereon. It is not a
prospectus, circular or representation intended for use in the purchase or sale
of shares of the Fund or of any securities mentioned in this report.
EMG
[LOGO]
3918-SA-00
