EMERGING TIGERS
FUND, INC.
FUND LOGO
Annual Report
November 30, 1994
Investing in emerging market securities involves a number of risk
factors and special considerations, including restrictions on
foreign investments and on repatriation of capital invested in
emerging markets, currency fluctuations, and potential price
volatility and less liquidity of securities traded in emerging
markets. In addition, there may be less publicly available
information about the issuers of securities, and such issuers may
not be subject to accounting, auditing and financial reporting
standards and requirements comparable to those to which US companies
are subject. Therefore, the Fund is designed as a long-term invest-
ment for investors capable of assuming the risks of investing in
emerging markets. The Fund should be considered as a vehicle for
diversification and not as a complete investment program. Please
refer to the prospectus for details.
<PAGE>
This report, including the financial information herein, is
transmitted to the shareholders of Emerging Tigers Fund, Inc. for
their information. It is not a prospectus, circular or
representation intended for use in the purchase of shares of the
Fund or any securities mentioned in the report. Past performance
results shown in this report should not be considered a
representation of future performance.
Emerging Tigers Fund, Inc.
Box 9011
Princeton, NJ
08543-9011
EMERGING TIGERS FUND, INC.
Asset Allocation
As a Percentage* of
Net Assets as of
November 30, 1994
GRAPHIC MATERIAL APPEARS HERE. SEE APPENDIX,
GRAPHIC AND IAMGE MATERIAL, ITEM 1.
DEAR SHAREHOLDER
Midway through the six-month period ended November 30, 1994, the
"emerging tiger" stock markets rallied on increasing investor recog-
nition that their economic and corporate fundamentals were positive.
However, investor sentiment had become less optimistic early in
November, and share prices began to decline. With the latest round
of monetary policy tightening by the US Federal Reserve Board in mid-
November, the sell-offs in the emerging tiger stock markets
accelerated, eroding the price gains achieved in the summer. These
developments are reflected in Emerging Tigers Fund, Inc.'s total
investment return for the six-month period ended November 30, 1994
of -0.62%, based on a change in per share net asset value from
$14.56 to $14.47. The Fund's total investment return since inception
(March 4, 1994) through November 30, 1994 was +2.05%, based on a
change in per share net asset value from $14.18 to $14.47.
<PAGE>
Investment Activities
Malaysia remains the Fund's largest single-country exposure at 28.3%
of net assets. However, this position is an underweighted one
relative to several market-weighted indexes of the emerging tigers
stock markets. Our Malaysian investments are concentrated in
financial and infrastructure-related companies, two areas in which
we are finding the most attractive valuations. In the latter
category, two of our largest Malaysian investments are Leader
Universal Cable Bhd, a manufacturer of electric cable, and Land &
General Bhd, the property developer that should benefit from the
strong demand for residential property with Malaysia's increasing
wealth.
Despite investor concerns, it appears as if the rate of inflation in
Malaysia has been contained at about 4% annually. Inflationary
pressures remain relatively subdued because the government has
allowed the currency to appreciate and has cut tariffs on a number
of imported goods. The government's latest budget proposes cutting
still more tariffs, primarily on food, which is a very important
factor in the inflation outlook. The latest budget also proposes tax
cuts for both individuals and corporations and is mildly
expansionary, especially regarding public development expenditures.
The consensus forecast for Malaysian economic growth is 8% for 1995.
Although this does suggest that inflationary pressures will
increase, we believe that the government's strong anti-inflation
stance will continue to be successful. We believe that another area
of investor concern, the country's large current account deficit,
will also become more manageable over the next several years with
the significant increase in exports resulting from strong capacity
expansion.
The Fund's second-largest weighting is in Singapore, although our
17.9% exposure represents a neutral weighting. Gross domestic
product growth was an impressive 10% for the third calendar quarter,
spurred on by strong export growth, especially in electronics.
Singapore is perceived as a somewhat defensive stock market, since
shares of many large, blue-chip companies are traded there and the
country is relatively stable politically.
<PAGE>
Our 16.9% investment in the Philippines represents a very
overweighted exposure. We believe that both Philippine economic
growth and corporate earnings will show strong upward momentum in
1995 as they continue to benefit from the market liberalization and
pro-business policies of the Ramos administration. Foreign direct
investment has increased sharply in 1994, and the power supply
situation has improved considerably.
New issues continue to come to the Philippine market through
government privatizations. One such offering in which the Fund has
participated is that of the common stock of Petron Corp., an oil
refining and marketing company privatized in one of the largest such
transactions in the Philippines. We have also purchased shares of
Benpres Holdings Corp., a conglomerate with a large exposure to the
growing mass media market through its majority ownership of the most
popular television station and some radio stations in the
Philippines.
Our 13.4% market-weighted exposure in Thailand is most heavily
concentrated in bank stocks, since they offer the lowest valuations
and the highest dividend yields. Although third calendar quarter
corporate earnings were strong, we are somewhat concerned about
rising interest rates and the political situation, since the
government may be forced to call elections once again.
The portfolio is slightly overweighted in Indonesian stocks at 10.5%
of net assets. Our focus is primarily in consumer-related issues,
since the consumer sector is the driving force behind Indonesian
economic growth. Although we are somewhat concerned that the
manufacturing sector is not picking up, the prospects for this
portion of the Indonesian economy may improve with the strong trend
in foreign direct investment. Indonesian corporate earnings are
continuing to improve because interest rates remain low by
historical standards, which result in lower borrowing costs.
Interest rates are likely to rise in 1995, however.
A new position added to the Fund was P.T. Indonesian Satellite
(Indosat). Indosat shares, which are listed on the New York Stock
Exchange, became available through an initial public offering, the
result of a government privatization. The company has the franchise
for international telecommunications in Indonesia, and we expect it
to benefit from the country's continued positive economic growth.
The Indian stock market is now correcting after a flood of new
issues came to market in 1994. We expect most of these new issues to
be absorbed by investors by the first quarter of 1995, as the
companies are still showing strong earnings per share growth.
However, recent election results suggest that a more conservative
political influence may come to the fore, potentially slowing the
market-oriented reforms of the Rao government. Accordingly, we are
maintaining an underweighted 3.8% exposure to India at this time.
<PAGE>
Economic growth has begun to slow in The People's Republic of China,
although the annual rate of inflation is still expanding at a double-
digit pace, primarily because of high food prices. The government
has undertaken credit-tightening measures to contain inflation, but
they will not be sustained if government enterprises are negatively
impacted. Nevertheless, we believe that China will successfully
engineer an economic "soft landing" during this transition period as
it moves toward a more market-oriented economy. However, more
structural reforms need to take place within the Chinese economy to
ensure continued prosperity. We have a 3.5% exposure to China
through companies listed in Hong Kong.
In Conclusion
We took advantage of stock market weakness to decrease the Fund's
cash position to 4.2% of net assets by November month-end. If share
prices continue to decline, we are likely to further reduce cash
reserves as we establish and increase equity positions at attractive
valuations. This scenario appears to be the most likely one at this
time, as ongoing interest rate increases in the United States may
keep investor sentiment negative for the emerging tiger stock
markets. However, we believe that these developments improve the
Fund's long-term capital appreciation potential as we invest in
emerging tiger markets at attractive prices.
We thank you for your investment in Emerging Tigers Fund, Inc., and
we look forward to reviewing our outlook and strategy with you again
in our next report to shareholders.
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
(Kara Tan Bhala)
Kara Tan Bhala
Vice President and Portfolio Manager
January 5, 1995
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (in US dollars)
<CAPTION>
Shares Held/ Value Percent of
COUNTRY Industries Face Amount Long-Term Investments Cost (Note 1a) Net Assets
<S> <S> <S> <C> <S> <C> <C> <C>
Hong Kong Diversified 8,188,000 Guangdong Investments, Ltd. $ 4,664,929 $ 4,658,529 1.5 %
Leisure 3,744,000 Shangri-La Asia, Ltd. 5,344,637 5,591,600 1.8
Telecommunications 1,425,000 +++Chengdu Telecommunication
Cable Co. Ltd. 522,889 515,931 0.2
Total Long-Term Investments in
Hong Kong 10,532,455 10,766,060 3.5
India Bonds US$ 535,000 +++Essar Gujarat Ltd., 5.50% due
8/05/1998 986,545 952,300 0.3
Computer Services 84,000 +++India Cements, Ltd.* 709,800 766,920 0.2
Conglomerate 165,760 +++Reliance Industries Ltd. (ADR)* 4,115,001 3,771,040 1.2
Finance US$ 3,050,000 SCICI Ltd., 3.50% due 4/01/2004 3,760,950 2,882,250 0.9
Industrial US$ 3,180,000 Sterlite Industries, 3.50% due
6/30/1999 3,792,725 2,941,500 0.9
Tobacco 94,000 +++Indian Tobacco Company (GDS)** 1,219,500 1,034,000 0.3
Total Long-Term Investments in
India 14,584,521 12,348,010 3.8
Indonesia Banking 1,070,000 +++P.T. Bank International
Indonesia 3,433,918 3,634,861 1.1
Food 1,369,880 P.T. Mayorah Indah 6,602,509 6,728,816 2.1
Forest Products 1,493,800 P.T. Indah Kiat Pulp & Paper
Corp. 1,391,943 1,577,221 0.5
Miscellaneous-- 1,072,500 P.T. Modern Photo Film 4,824,568 5,169,624 1.6
Consumer
Oil & Gas 675,000 P.T. Medco Energi Corp. 1,367,250 1,688,778 0.5
Pharmaceuticals 895,000 P.T. Kalbe Farma 3,291,992 3,533,408 1.1
Real Estate 2,423,333 P.T. Duta Anggada Realty 3,979,910 1,807,752 0.6
Telecommunications 33,930 P.T. Indonesian Satellite (ADR)* 1,236,227 1,289,340 0.4
<PAGE>
Tobacco 1,736,250 P.T. Hanjaya Mandala Sampoerna 5,508,615 8,249,449 2.6
Total Long-Term Investments in
Indonesia 31,636,932 33,679,249 10.5
Malaysia Airlines 600,000 Malaysian Airlines System Bhd 1,673,532 1,643,643 0.5
Banking 2,325,000 Affin Holdings Bhd 3,729,854 3,530,310 1.1
705,000 Arab-Malaysian Merchant Bank Bhd 5,998,580 6,897,429 2.2
US$ 705,000 Arab-Malaysian Merchant Bank
Bhd, 7.50% due 10/05/1999 275,015 275,897 0.1
2,744,000 Public Bank Bhd 'Foreign' 5,714,479 5,798,771 1.8
------------ ------------ ------
15,717,928 16,502,407 5.2
Building & 325,000 Golden Plus Holdings Bhd 1,498,763 1,310,022 0.4
Construction 1,370,000 I.J.M. Corp. Bhd 4,750,479 4,986,107 1.6
285,000 Mancon Bhd 485,206 1,405,314 0.4
342,000 Mancon Bhd 'A' 2,252,347 1,552,538 0.5
------------ ------------ ------
8,986,795 9,253,981 2.9
Conglomerates 3,285,000 Renong Bhd 4,626,063 4,242,359 1.3
Finance 1,120,000 MBF Capital Bhd 1,723,307 1,244,785 0.4
Financial Services 491,000 Gadek (Malaysia) Bhd 3,222,101 2,978,320 0.9
360,000 Hong Leong Credit Bhd 2,500,160 1,845,576 0.6
250,000 Pan Pacific Asia Bhd 1,503,073 1,262,083 0.4
244,500 Phileo Allied Bhd 1,688,421 1,052,518 0.3
682,000 Rashid Hussain Bhd 2,130,010 1,801,550 0.6
530,000 United Merchant Group Bhd 1,537,248 1,047,431 0.3
------------ ------------ ------
12,581,013 9,987,478 3.1
Forest Products US$ 1,000,000 Aokam Perdana Bhd, 3.50%
due 6/13/2004 1,172,500 1,000,000 0.3
216,000 Aokam Perdana Bhd 'A' 1,333,040 1,487,731 0.5
260,000 Aokam Perdana Bhd (Ordinary) 1,917,520 1,923,062 0.6
------------ ------------ ------
4,423,060 4,410,793 1.4
Industrial 571,250 O.Y.L. Industries Bhd 3,175,467 3,330,969 1.0
Leisure 2,850,000 Berjaya Sports TOTO Bhd 4,867,053 3,680,585 1.2
547,000 Genting Bhd 4,516,695 4,345,517 1.4
1,110,000 Resorts World Bhd 6,244,619 6,298,673 2.0
------------ ------------ ------
15,628,367 14,324,775 4.6
<PAGE>
Manufacturing 720,000 Kim Hin Industry Bhd 3,792,814 3,437,561 1.1
Property & Forest 650,000 Bandar Raya Developments Bhd 1,481,076 1,159,942 0.4
Products 1,733,000 Land & General Bhd (Ordinary) 6,123,665 8,002,739 2.5
408,250 Land & General Bhd (Rights) -- -- 0.0
------------ ------------ ------
7,604,741 9,162,681 2.9
Telecommunications 1,331,000 Leader Universal Cable Bhd 6,441,541 7,500,646 2.4
525,000 Telekom Malaysia Bhd 3,723,181 3,862,560 1.2
------------ ------------ ------
10,164,722 11,363,206 3.6
Total Long-Term Investments
in Malaysia 90,097,809 88,904,638 28.0
Pakistan Telecommunications 11,619 +++Pakistan Telecommunications
(GDS)** 2,088,748 1,800,945 0.6
Total Long-Term Investments
in Pakistan 2,088,748 1,800,945 0.6
Philippines Banking 109,500 Metropolitan Bank & Trust
Company 3,266,400 3,271,081 1.0
109,500 Metropolitan Bank & Trust
Company (Rights) -- -- 0.0
------------ ------------ ------
3,266,400 3,271,081 1.0
Beverages 1,470,000 San Miguel Corp. 'B' 6,266,549 8,346,610 2.6
Conglomerates 432,000 +++Benpres Holdings Corp 4,665,600 4,212,000 1.3
1,140,000 First Philippine Holdings Corp. 4,493,102 4,758,051 1.5
11,200,000 +++JG Summit Holdings 4,138,875 4,128,814 1.3
------------ ------------ ------
13,297,577 13,098,865 4.1
Food & Beverage 7,588,000 +++Universal Robina Corp. 6,452,681 5,867,839 1.8
International Trade 7,616,000 International Container Terminal 8,623,792 6,212,203 1.9
Oil Service 2,765,000 +++Petron Corp. 2,346,789 2,489,672 0.8
Retail 12,980,350 +++SM Prime Holdings, Inc. 2,939,900 4,070,110 1.3
Telecommunications 62,300 Philippine Long Distance
Telephone Co. (ADR)* 3,947,892 3,192,875 1.0
<PAGE>
Utilities--Electric 566,000 Manila Electric Co. (MERALCO) 'B' 6,793,360 7,734,534 2.4
Total Long-Term Investments in
the Philippines 53,934,940 54,283,789 16.9
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (in US dollars)
<CAPTION>
Shares Held/ Value Percent of
COUNTRY Industries Face Amount Long-Term Investments Cost (Note 1a) Net Assets
<S> <S> <C> <S> <C> <C> <C>
Singapore Airlines 400,000 Singapore Airlines 'Foreign' Ltd. $ 2,970,197 $ 3,881,107 1.2%
Banking 665,000 Development Bank of Singapore
Ltd. 6,468,642 6,634,096 2.1
792,000 United Overseas Bank Ltd. 6,428,710 8,333,994 2.6
------------ ------------ ------
12,897,352 14,968,090 4.7
Electronics 4,473,000 I.P.C. Corp. 4,406,775 3,178,627 1.0
Industrial 1,000,000 Clipsal Industries Ltd. 2,776,748 2,280,000 0.7
Marine/Offshore 918,000 Sembawang Maritime Ltd. 4,104,038 4,328,118 1.4
Oil
Services 869,000 Sembawang Shipyard Ltd. (ADR)* 6,530,375 6,234,711 2.0
------------ ------------ ------
10,634,413 10,562,829 3.4
Publishing & 307,000 Singapore Press Holdings Ltd. 4,817,984 5,705,774 1.8
Broadcasting 87,000 Singapore Press Holdings Ltd.
'A' 1,517,247 1,605,056 0.5
------------ ------------ ------
6,335,231 7,310,830 2.3
Real Estate 2,243,000 DBS Land Ltd. 6,472,554 6,927,475 2.2
1,390,000 First Capital Corporation Ltd. 4,463,730 4,539,939 1.4
------------ ------------ ------
10,936,284 11,467,414 3.6
Ship Repair 398,000 Jurong Shipyard Ltd. 3,525,503 3,154,629 1.0
Total Long-Term Investments in
Singapore 54,482,503 56,803,526 17.9
<PAGE>
Sri Lanka Finance 194,500 Developing Finance Corp. 2,049,710 2,103,048 0.7
Total Long-Term Investments in
Sri Lanka 2,049,710 2,103,048 0.7
Thailand Banking 865,000 Bangkok Bank Company Ltd.
'Foreign' 6,815,606 8,562,989 2.7
2,580,000 Siam City Bank 2,508,343 3,244,052 1.0
817,000 The Thai Farmers Bank, Ltd.
'Foreign' 5,008,884 7,109,452 2.2
------------ ------------ ------
14,332,833 18,916,493 5.9
Building & 402,000 Land & House Public Co. 'Foreign' 8,497,026 7,253,074 2.3
Construction
Communications 105,000 Advanced Info Services Plc 1,639,895 1,601,070 0.5
Financial Services 394,200 Finance One Co., Ltd. 'Foreign' 6,402,515 6,325,579 2.0
Mutual Funds 10,101,400 Ruam Pattana Fund II 6,657,773 5,544,238 1.7
Oil--Related 330,500 PTT Exploration 'Foreign' 2,616,233 3,324,525 1.0
Total Long-Term Investments
in Thailand 40,146,275 42,964,979 13.4
Vietnam Insurance 291,300 Vietnam Frontier Fund 1,543,890 1,529,325 0.5
Total Long-Term Investments in
Vietnam 1,543,890 1,529,325 0.5
Total Long-Term Investments 301,097,783 305,183,569 95.8
<CAPTION>
Face Amount Short-Term Investments
<S> <S> <C> <S> <C> <C> <C>
United States Commercial $ 13,694,000 General Electric Capital Corp.,
Paper*** 5.70% due 12/01/1994 13,694,000 13,694,000 4.3
Total Short-Term Investments 13,694,000 13,694,000 4.3
Total Investments $314,791,783 318,877,569 100.1
============
Liabilities in Excess of Other Assets (463,833) (0.1)
------------ ------
Net Assets $318,413,736 100.0%
============ ======
<PAGE>
<FN>
*American Depositary Receipt (ADR).
**Global Depositary Share (GDS).
***Commercial Paper is traded on a discount basis; the interest rates shown
are the discount rates paid at the time of purchase by the Fund.
+++Non-income producing security.
See Notes to Financial Statements.
</TABLE>
<TABLE>
STATEMENT OF ASSETS, LIABILITIES AND CAPITAL
<CAPTION>
As of November 30, 1994
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$314,791,783) (Note 1a) $318,877,569
Cash 295
Receivables:
Securities sold $ 1,040,250
Dividends 984,392
Interest 144,199 2,168,841
------------
Deferred organization expense (Note 1f) 36,339
Prepaid expenses and other assets 3,123
------------
Total assets 321,086,167
------------
Liabilities: Payables:
Securities purchased 1,924,838
Investment adviser (Note 2) 279,379 2,204,217
------------
Accrued expenses and other liabilities 468,214
------------
Total liabilities 2,672,431
------------
Net Assets: Net assets $318,413,736
============
<PAGE>
Capital: Common Stock, $0.10 par value, 200,000,000 shares authorized $ 2,200,706
Paid-in capital in excess of par 309,255,091
Undistributed investment income--net 2,717,563
Undistributed realized capital gains on investments and foreign currency
transactions--net 150,581
Unrealized appreciation on investments and foreign currency trans-
actions--net 4,089,795
------------
Net assets--Equivalent to $14.47 per share based on 22,007,055 shares of
capital stock outstanding (market price--$12.75) $318,413,736
============
See Notes to Financial Statements.
</TABLE>
<TABLE>
STATEMENT OF OPERATIONS
<CAPTION>
For the Period March 4, 1994++ to November 30, 1994
<S> <S> <C> <C>
Investment Interest and discount earned $ 3,845,015
Income Dividends (net of $495,048 foreign withholding tax) 2,081,690
(Notes ------------
1d & 1e): Total income 5,926,705
------------
Expenses: Investment advisory fees (Note 2) 2,426,461
Custodian fees 576,434
Accounting services (Note 2) 56,670
Printing and shareholder reports 33,065
Registration fees (Note 1f) 31,400
Transfer agent fees 25,833
Directors' fees and expenses 22,225
Professional fees 21,005
Amortization of organization expenses (Note 1f) 6,413
Pricing services 4,521
Other 5,115
------------
Total expenses 3,209,142
------------
Investment income--net 2,717,563
------------
<PAGE>
Realized & Realized gain (loss) from:
Unrealized Gain Investments--net $ 632,601
(Loss) on Foreign currency transactions--net (482,020) 150,581
Investments & ------------
Foriegn Unrealized appreciation on:
Currency Investments--net 4,085,786
Transactions Foreign currency transactions--net 4,009 4,089,795
- --Net ------------ ------------
(Notes 1b, Net realized and unrealized gain on investments and foreign
1e & 3): currency transactions 4,240,376
------------
Net Increase in Net Assets Resulting from Operations $ 6,957,939
------------
<FN>
++Commencement of Operations.
See Notes to Financial Statements.
</TABLE>
<TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<CAPTION>
For the Period
March 4, 1994++
Increase (Decrease) in Net Assets: to November 30, 1994
<S> <S> <C>
Operations: Investment income--net $ 2,717,563
Realized gain on investments and foreign currency transactions--net 150,581
Unrealized appreciation on investments and foreign currency transactions--net 4,089,795
------------
Net increase in net assets resulting from operations 6,957,939
------------
Capital Stock Net proceeds from issuance of Common Stock 311,850,000
Transactions Offering and underwriting costs resulting from the issuance of Common Stock (494,208)
(Note 4): ------------
Net increase in net assets derived from capital stock transactions 311,355,792
------------
Net Assets: Total increase in net assets 318,313,731
Beginning of period 100,005
------------
End of period* $318,413,736
============
<FN>
*Undistributed investment income--net $ 2,717,563
============
<PAGE>
++Commencement of Operations.
See Notes to Financial Statements.
</TABLE>
<TABLE>
FINANCIAL HIGHLIGHTS
<CAPTION>
The following per share data and ratios have been derived For the Period
from information provided in the financial statements. March 4, 1994++
Increase (Decrease) in Net Asset Value: to November 30, 1994
<S> <S> <C>
Per Share Net asset value, beginning of period $ 14.18
Operating ------------
Performance: Investment income--net .12
Realized and unrealized gain on investments and foreign currency transactions--net .19
------------
Total from investment operations .31
------------
Capital charge resulting from issuance of Common Stock (.02)
------------
Net asset value, end of period $ 14.47
============
Market price per share, end of period $ 12.75
============
Total Based on market price per share (15.00%)+++
Investment ============
Return:** Based on net asset value per share 2.05%+++
============
Ratios to Expenses 1.32%*
Average ============
Net Assets: Investment income--net 1.12%*
============
Supplemental Net assets, end of period (in thousands) $ 318,414
Data: ============
Portfolio turnover 9.10%
============
<PAGE>
<FN>
*Annualized.
**Total investment returns based on market value, which can be
significantly greater or lesser than the net asset value, may
result in substantially different returns. Total investment
returns exclude the effects of sales loads.
++Commencement of Operations.
+++Aggregate total investment return.
See Notes to Financial Statements.
</TABLE>
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
Emerging Tigers Fund, Inc. (the "Fund") is registered under the
Investment Company Act of 1940 as a non-diversified, closed-end
management investment company. Prior to commencement of operations
on March 4, 1994, the Fund had no operations other than those
relating to organizational matters and the issue of 7,055 capital
shares of the Fund to Fund Asset Management, L.P. ("FAM") for
$100,005. The Fund determines and makes available the net asset
value of its Common Stock on a weekly basis. The Fund's Common Stock
is listed on the New York Stock Exchange under the symbol TGF. The
following is a summary of significant accounting policies followed
by the Fund.
(a) Valuation of investments--Portfolio securities which are traded
on stock exchanges are valued at the last sale price as of the close
of business on the day the securities are being valued or, lacking
any sales, at the last available bid price. Securities traded in the
over-the-counter market are valued at the last available bid prices
obtained from one or more dealers in the over-the-counter market
prior to the time of valuation. Portfolio securities which are
traded both in the over-the-counter market and on a stock exchange
are valued according to the broadest and most representative market.
Short-term securities are valued at amortized cost, which
approximates market value. Options written by the Fund are valued at
the last asked price in the case of exchange-traded options or, in
the case of options traded in the over-the-counter market, the
average of the last asked price as obtained from one or more
dealers. Options purchased by the Fund are valued at their last bid
price in the case of exchange-traded options or, in the case of
options traded in the over-the-counter market, the average of the
last bid price as obtained from two or more dealers, unless there is
only one dealer, in which case that dealer's price is used. Other
investments, including futures contracts and related options, are
stated at market value. Securities and assets for which market
quotations are not readily available are valued at fair value as
determined in good faith by or under the direction of the Board of
Directors of the Fund.
<PAGE>
(b) Foreign currency transactions--Transactions denominated in
foreign currencies are recorded at the exchange rate prevailing when
recognized. Assets and liabilities denominated in foreign currencies
are valued at the exchange rate at the end of the period. Foreign
currency transactions are the result of settling (realized) or
valuing (unrealized) assets or liabilities expressed in foreign
currencies into US dollars. Realized and unrealized gains or losses
from investments include the effects of foreign exchange rates on
investments.
The Fund is authorized to enter into forward foreign exchange
contracts as a hedge against either specific transactions or
portfolio positions. Such contracts are not entered on the Fund's
records. However, the effect on operations is recorded from the date
the Fund enters into such contracts. Premium or discount is
amortized over the life of the contracts.
The Fund is also authorized to purchase or sell listed or over-the-
counter foreign currency options, foreign currency futures and
related options on foreign currency futures as a short or long hedge
against possible variations in foreign exchange rates. Such
transactions may be effected with respect to hedges on non-US dollar
denominated securities owned by the Fund, sold by the Fund but not
yet delivered, or committed or anticipated to be purchased by the
Fund.
(c) Options--The Fund has the authority to purchase and write call
and put options. When the Fund writes an option, an amount equal to
the premium received by the Fund is reflected as an asset and an
equivalent liability. The amount of the liability is subsequently
marked to market to reflect the current value of the option written.
When a security is sold or bought through an exercise of an option,
the related premium received (or paid) is deducted from (or added
to) the basis of the security sold. When an option expires (or the
Fund enters into a closing transaction), the Fund realizes a gain or
loss on the option to the extent of the premiums received or paid
(or gain or loss to the extent the cost of the closing transaction
exceeds the premium paid or received).
Written and purchased options are non-income producing investments.
<PAGE>
(d) Income taxes--It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated
investment companies and to distribute substantially all of its
taxable income to its shareholders. Therefore, no Federal income tax
provision is required. Under the applicable foreign tax law, a
withholding tax may be imposed on interest, dividends, and capital
gains at various rates.
(e) Security transactions and investment income--Security
transactions are recorded on the dates the transactions are entered
into (the trade dates). Dividend income is recorded on the ex-
dividend dates except that if the ex-dividend date has passed,
certain dividends from foreign securities are recorded as soon as
the Fund is informed of the ex-dividend date. Interest income
(including amortization of discount and premiums) is recognized on
the accrual basis. Realized gains and losses on security trans-
actions are determined on the identified cost basis.
(f) Deferred organization expenses and offering expenses--Deferred
organization expenses are charged to expense on a straight-line
basis over a five-year period beginning with the commencement of
operations. Direct expenses relating to the public offering of the
Common Stock were charged to capital at the time of issuance.
(g) Dividends and distributions--Dividends and distributions paid by
the Fund are recorded on the ex-dividend dates.
2. Investment Advisory Agreement and
Transactions with Affiliates:
The Fund has entered into an Investment Advisory Agreement with FAM.
Ultimate control of FAM is vested with Merrill Lynch & Co., Inc.
("ML & Co."). The general partner of FAM is Princeton Services, Inc.
("PSI"), an indirect wholly-owned subsidiary of ML & Co. The limited
partner is ML & Co. Prior to January 3, 1995, the limited partners
were ML & Co. and Fund Asset Management, Inc. ("FAMI"), which is
also an indirect wholly-owned subsidiary of ML & Co.
FAM is responsible for the management of the Fund's portfolio and
provides the necessary personnel, facilities, equipment and certain
other services necessary to the operations of the Fund. For such
services, the Fund pays a monthly fee of 1.00%, on an annual basis,
of the average weekly value of the Fund's net assets.
For the period ended November 30, 1994, Merrill Lynch, Pierce,
Fenner & Smith Inc. ("MLPF&S") earned $37,929 in commissions on the
execution of portfolio security transactions.
Accounting services are provided to the Fund by FAM at cost.
Certain officers and/or directors of the Fund are officers and/or
directors of FAM, FAMI, PSI, MLPF&S, and/or ML & Co.
<PAGE>
3. Investments:
Purchases and sales of investments, excluding short-term securities,
for the period March 4, 1994 to November 30, 1994 were $319,153,068
and $18,083,649, respectively.
Realized Unrealized
Gains (Losses) Gains
Long-term investments $ 627,215 $ 4,085,786
Short-term investments 5,386 --
Foreign currency transactions (482,020) 4,009
------------- ------------
Total $ 150,581 $ 4,089,795
============= ============
As of November 30, 1994, net unrealized appreciation for Federal
income tax purposes aggregated $4,085,786, of which $24,874,596
related to appreciated securities and $20,788,810 related to
depreciated securities. At November 30, 1994, the aggregate cost of
investments for Federal income tax purposes was $314,791,783.
4. Capital Share Transactions:
At November 30, 1994, the Fund had one class of Common Stock, par
value $0.10 per share, of which 200,000,000 shares were authorized.
During the period March 4, 1994 to November 30, 1994, 22,000,000
shares were sold. At November 30, 1994, total paid-in capital
amounted to $311,455,798.
5. Commitments:
At November 30, 1994, the Fund had entered into forward foreign
exchange contracts under which it agreed to purchase various foreign
currencies with approximate values of $522,740.
6. Subsequent Event:
On December 20, 1994, the Board of Directors of the Fund declared
an ordinary income dividend in the amount of $0.148354 per share
payable on January 13, 1995 to shareholders of record as of December
30, 1994.
<AUDIT-REPORT>
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholders,
Emerging Tigers Fund, Inc.:
We have audited the accompanying statement of assets, liabilities
and capital, including the schedule of investments, of Emerging
Tigers Fund, Inc. as of November 30, 1994, the related statements of
operations and changes in net assets, and the financial highlights
for the period March 4, 1994 (commencement of operations) to
November 30, 1994. These financial statements and the financial
highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial
statements and the financial highlights based on our audit.
<PAGE>
We conducted our audit in accordance with generally accepted
auditing standards. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial
statements and the financial highlights are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements.
Our procedures included confirmation of securities owned at November
30, 1994, by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights
present fairly, in all material respects, the financial position of
Emerging Tigers Fund, Inc. as of November 30, 1994, the results of
its operations, the changes in its net assets, and the financial
highlights for the respective stated period in conformity with
generally accepted accounting principles.
Deloitte & Touche llp
Princeton, New Jersey
January 6, 1995
</AUDIT-REPORT>
PER SHARE INFORMATION (unaudited)
<TABLE>
Per Share
Selected Quarterly
Financial Data*
<CAPTION>
Dividends /Distributions
Net Realized Unrealized Net Investment Capital
Investment Gains Gains Income Gains
For the Period Income (Losses) (Losses) Common Common
<S> <C> <C> <C> <C> <C>
March 4, 1994++ to May 31, 1994 $.07 $(.01) $ .34 -- --
June 1, 1994 to August 31, 1994 .04 .01 .94 -- --
September 1, 1994 to November 30, 1994 .01 .01 (1.10) -- --
<PAGE>
<CAPTION>
Net Asset Value Market Price**
For the Period High Low High Low Volume***
<S> <C> <C> <C> <C> <C>
March 4, 1994++ to May 31, 1994 $14.56 $13.99 $15.125 $12.75 2,761
June 1, 1994 to August 31, 1994 15.64 14.01 14.875 12.375 2,091
September 1, 1994 to November 30, 1994 16.12 14.32 14.75 12.125 2,317
<FN>
++Commencement of Operations.
*Calculations are based upon shares of Common Stock outstanding at the end of each period.
**As reported in the consolidated transaction reporting system.
***In thousands.
</TABLE>
OFFICERS AND DIRECTORS
Arthur Zeikel, President and Director
Donald Cecil, Director
Edward H. Meyer, Director
Charles C. Reilly, Director
Richard R. West, Director
Edward D. Zinbarg, Director
Terry K. Glenn, Executive Vice President
Donald C. Burke, Vice President
Kara W.Y. Tan Bhala, Vice President and Portfolio Manager
Gerald M. Richard, Treasurer
Michael J. Hennewinkel, Secretary
Custodian
Brown Brothers Harriman & Co.
40 Wall Street
Boston, Massachusetts 02109
Transfer Agent
State Street Bank and Trust Company
Two Heritage Drive
Quincy, Massachusetts 02171
NYSE Symbol
TGF
<PAGE>
APPENDIX, GRAPHIC AND IMAGE MATERIAL.
ITEM 1:
Asset Allocation as a Percentage* of Net Assets as of November 30,
1994
A map illustrating the following percentages:
Pakistan 0.6%
India 3.8%
Sri Lanka 0.7%
Indonesia 10.5%
Malaysia 28.0%
Thailand 13.4%
Singapore 17.9%
Hong Kong 3.5%
Vietnam 0.5%
Philippines 16.9%
[FN]
*Total may not equal 100%.
