EMERGING TIGERS
FUND, INC.
FUND LOGO
Semi-Annual Report
May 31, 1995
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
May 31, 1995
A map illustrating the following percentages:
Pakistan 0.4%
India 1.3%
Sri Lanka 0.5%
Indonesia 10.1%
Malaysia 30.8%
Thailand 14.8%
Singapore 18.4%
Hong Kong 2.9%
Vietnam 0.4%
Philippines 16.3%
[FN]
*Total may not equal 100%.
<PAGE>
DEAR SHAREHOLDER
Macroeconomic crosscurrents led to sharp shifts in the investment
outlook for the "emerging tiger" stock markets during the six-month
period ended May 31, 1995. As noted in our last report to
shareholders, the November 1994 round of US monetary policy
tightening had led to investor concerns of higher interest rates and
slower economic growth in the emerging Asian economies. As 1994 drew
to a close, the negative investor sentiment was exacerbated by
concerns about currency devaluations following the Mexican financial
crisis. However, as 1995 began, evidence increased that US economic
growth was slowing and the emerging tiger stock markets began to
stage a modest recovery. This rally was interrupted by the
earthquake in Kobe, Japan. Nevertheless, as evidence mounted of
slowing US economic growth and as the situation in Mexico
stabilized, global investors began to return to the emerging tiger
stock markets.
Improved liquidity and the prospect of stable interest rates have
restored investor confidence. The outlook is further enhanced by the
attractive valuations offered by many of the emerging Asian stock
markets, since share prices are still below their historic highs
while average corporate earnings are projected to increase at around
a 20% level. As a result, price/earnings multiples for the emerging
tiger stock markets overall have contracted to levels that are below
the historic averages for the past ten years.
These developments are reflected in Emerging Tigers Fund, Inc.'s
total investment return for the six-month period ended May 31, 1995
of +4.13%, based on a change in per share net asset value from
$14.47 to $14.88, and assuming reinvestment of $0.148 per share
income dividends. The Fund's total investment return since inception
(March 4, 1994) through May 31, 1995 was +6.26%, based on a change
in per share net asset value from $14.18 to $14.88, and assuming
reinvestment of $0.148 per share income dividends.
Investment Activities
Malaysia continues to be the Fund's largest country weighting, and
its stock market has been one of the best performers in the world
thus far in 1995. With a decline in money supply growth, investors
came to recognize that the country's interest rate increases were
not going to be as large as originally expected. In addition,
despite the increase in the current account deficit through higher
imports of capital goods associated with greater foreign direct
investments, these capital improvements ultimately will increase
Malaysia's manufacture of goods for export. However, in our view
Malaysia's current economic expansion may be peaking, and share
prices there are fairly valued to slightly expensive. Our 30.8%
position is an underweighted one relative to several market-weighted
indexes of emerging tiger stock markets.
<PAGE>
We have made some strategic changes in our Malaysian investments,
increasing holdings of large-capitalization blue chip issues.
At the same time, we increased investments in convertible bonds for
their enhanced downside price protection relative to equities. For
example, we sold part of the Fund's common stock investment in
Telekom Malaysia Bhd and purchased the company's convertible bonds.
We have also invested in the convertible bonds of Renong Bhd, a
conglomerate with exposure to infrastructure and property
development.
Our slightly underweighted 18.4% exposure in Singapore is the Fund's
next-largest country investment. Interest rates continue to fall in
Singapore, and Singapore dollars are in demand since the currency
is perceived to be relatively immune from potential devaluations.
However, this liquidity has not spilled over to the Singapore stock
market.
We believe that our investments in blue-chip companies will
outperform the Singapore stock market in the months ahead. Our
investments are primarily focused on banks and high-quality property
companies with strong managements, good income flows and
diversification among commercial and residential development.
The Fund has an overweighted 16.3% exposure to the Philippines.
President Ramos' policies to liberalize the economy are likely to
find even greater support since his party gained a majority in the
Philippine senate in the recent elections, which were peaceful by
historic standards. Early in 1995, investors feared that a Mexican-
style currency crisis would take place in the Philippines, although
these concerns have abated in recent weeks following the elections
and with improving economic fundamentals. Interest rates are
declining with inflation under control, and we believe that this
trend will continue as the central bank eases monetary policy.
<PAGE>
With increasing purchasing power in the Philippines and greater
demand for its goods abroad, we are especially positive regarding
consumer and export-oriented stocks. In the consumer sector, we have
purchased shares of companies such as the brewer San Miguel Corp.
and the snack-food manufacturer Universal Robina Corp. In the export
sector, we believe that the Fund's investment in International
Container Terminals will benefit from increasing export activity.
This company virtually controls containerized shipping in Manila,
and its earnings growth has been directly correlated with Philippine
export growth.
Our 14.8% position in Thailand is a slightly overweighted one. Our
investments are primarily concentrated in banks and finance
companies, which are selling at the most attractive valuations in
this market. Although corporate earnings growth is likely to reach a
strong 22% this year, concerns are rising that the rate of inflation
will increase rapidly. We plan to keep a close watch on developments
in Thailand and will alter our investment strategy, if necessary.
The Indonesian stock market is still attractive on a valuation
basis, in our view, since price/earnings ratios are low and
corporate earnings gains are high. However, a lack of liquidity in
the stock market remains a problem. The recent announcement of
tariff reductions and economic deregulation are positive, but such
developments are not occurring as rapidly as investors would like.
Our Indonesian holdings are largely in consumer stocks such as the
cigarette company P.T. Hanjaya Mandala Sampoerna, which is the
Fund's largest holding. The Fund's 10.1% Indonesian investment is an
overweighted position.
In India valuations have fallen to historically low levels, but a
lack of liquidity is creating uncertainty about investing there.
Since the Fund is only able to purchase convertible securities and
global depositary receipts, we have not expanded our 1.3%
investment even though valuations are now at very attractive levels.
The People's Republic of China's economy is still in a protracted
slowdown. The investment outlook has been clouded further by the
leadership power struggle taking place as Deng Xiao Ping's condition
worsens. Until corporate accounting standards improve for Chinese
companies issuing B shares traded on Chinese stock exchanges, we
plan to continue to invest in China solely through the purchase of H
shares, which are traded in Hong Kong, and through investment in
Hong Kong-based companies whose revenues are largely earned in
China.
<PAGE>
In Conclusion
Over the past ten years, Asian stock markets (excluding Japan) have
had average total returns of about 15%--20% per year. In 1993 we
experienced a positive departure from this trend as stock prices
rose sharply for the emerging tiger stock markets, only to plummet
in 1994. With attractive earnings growth prospects, there is a
possibility that 1995 investment returns may begin to move toward
the historic norm. However, we would not be surprised if the recent
rally in most emerging tiger markets is followed by a correction as
investors continue to evaluate the region's prospects. At present,
we plan to keep the Fund's cash position at a relatively low 5.2% of
net assets given the more positive longer-term outlook.
We thank you for your continued investment in Emerging Tigers Fund,
Inc., and we look forward to reviewing the Fund's fiscal year with
you in our upcoming annual report to shareholders.
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
(Kara Tan Bhala)
Kara Tan Bhala
Vice President and Portfolio Manager
June 27, 1995
<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 $ 4,472,553 1.4%
Leisure 2,936,200 Shangri-La Asia, Ltd. 4,231,345 3,549,345 1.1
US$ 1,450,000 Shangri-La Asia, Ltd., 2.875% due
12/16/2000 1,135,227 1,160,000 0.3
------------ ------------ ------
5,366,572 4,709,345 1.4
<PAGE>
Telecommuni- 1,425,000 ++Chengdu Telecommunication Cable
cations Co. Ltd. 522,889 460,581 0.1
Total Long-Term Investments in
Hong Kong 10,554,390 9,642,479 2.9
India Cement 84,000 ++India Cements, Ltd.++++ 709,800 871,920 0.3
Conglomerates 144,260 ++Reliance Industries Ltd. (ADR)* 3,642,001 2,704,875 0.8
Steel US$ 535,000 ++Essar Gujarat Ltd., 5.50% due
8/05/1998 986,545 628,625 0.2
Total Long-Term Investments in India 5,338,346 4,205,420 1.3
Indonesia Banking 1,070,000 P.T. Bank International Indonesia 3,433,918 2,980,234 0.9
Food 900,880 P.T. Mayorah Indah 4,220,499 3,591,783 1.1
Forest Products 1,313,800 P.T. Indah Kiat Pulp & Paper Corp. 1,241,344 1,829,641 0.6
Miscellaneous-- 1,072,500 P.T. Modern Photo Film 4,824,568 5,540,768 1.7
Consumer
Oil & Gas 675,000 ++P.T. Medco Energi Corp. 1,369,628 1,576,819 0.5
Pharmaceuticals 895,000 P.T. Kalbe Farma 3,291,992 3,789,477 1.1
Telecommuni- 33,930 P.T. Indonesian Satellite (ADR)* 1,236,227 1,340,235 0.4
cations
Tobacco 1,736,250 P.T. Hanjaya Mandala Sampoerna 5,508,615 12,440,785 3.8
Total Long-Term Investments in
Indonesia 25,126,791 33,089,742 10.1
Malaysia Airlines 600,000 Malaysian Airlines System Bhd 1,673,532 2,155,032 0.7
Banking 2,325,000 ++Affin Holdings Bhd 3,729,854 3,868,709 1.2
465,000 Affin Holdings Bhd (Rights)+++ 86,135 89,263 0.0
705,000 Arab-Malaysian Merchant Bank Bhd 5,998,580 9,012,784 2.7
US$ 705,000 Arab-Malaysian Merchant Bank Bhd,
7.50% due 11/20/1999 275,015 394,846 0.1
3,481,000 Public Bank Bhd 'Foreign' 7,310,074 7,487,541 2.3
------------ ------------ ------
17,399,658 20,853,143 6.3
Building & 1,370,000 I.J.M. Corp. Bhd 4,750,479 5,282,062 1.6
Construction 263,000 ++Mancon Bhd 2,078,482 1,152,760 0.3
342,000 ++Mancon Bhd 'A' 485,206 1,401,867 0.4
------------ ------------ ------
7,314,167 7,836,689 2.3
<PAGE>
Conglomerates 1,977,000 Renong Bhd 2,734,884 3,658,734 1.1
US$ 3,930,000 Renong Bhd, 2.50% due 1/15/2005 4,197,771 4,490,025 1.4
------------ ------------ ------
6,932,655 8,148,759 2.5
Engineering & US$ 4,615,000 United Engineering, Ltd., 2.00%
Construction due 3/01/2004 5,079,750 5,330,325 1.6
Finance 1,120,000 MBF Capital Bhd 1,723,307 1,227,273 0.4
Financial 491,000 Gadek (Malaysia) Bhd 3,222,101 2,869,481 0.9
Services 360,000 Hong Leong Credit Bhd 2,500,160 1,855,519 0.6
250,000 Pan Pacific Asia Bhd 1,503,073 913,149 0.3
------------ ------------ ------
7,225,334 5,638,149 1.8
Industrial 571,250 O.Y.L. Industries Bhd 3,175,467 4,173,093 1.3
Leisure 4,050,000 Berjaya Sports TOTO Bhd 7,048,287 7,265,016 2.2
547,000 Genting Bhd 4,516,695 5,771,916 1.8
1,110,000 Resorts World Bhd 6,244,618 7,252,841 2.2
------------ ------------ ------
17,809,600 20,289,773 6.2
Manufacturing 720,000 ++Kim Hin Industry Bhd 3,792,814 3,272,727 1.0
Property & 2,599,500 Land & General Bhd (Ordinary) 6,123,665 8,176,187 2.5
Forest
Products
Telecommuni- 2,218,333 Leader Universal Cable Bhd 6,441,541 7,742,558 2.4
cations 479,000 Telekom Malaysia Bhd 3,653,965 3,674,148 1.1
US$ 2,465,000 Telekom Malaysia Bhd, 4.00% due
10/03/2004 2,143,415 2,304,775 0.7
------------ ------------ ------
12,238,921 13,721,481 4.2
Total Long-Term Investments in
Malaysia 90,488,870 100,822,631 30.8
Pakistan Telecommuni- 11,619 ++Pakistan Telecommunications
cations (GDS)**++++ 2,088,748 1,278,090 0.4
Total Long-Term Investments in
Pakistan 2,088,748 1,278,090 0.4
<PAGE>
Philippines Banking 269,311 Metropolitan Bank & Trust Company 5,415,007 5,920,650 1.8
Beverages 1,911,000 San Miguel Corp. 'B' 6,266,549 7,881,946 2.4
Conglomerates 475,200 ++Benpres Holdings Corp.++++ 4,665,600 3,863,376 1.2
1,367,998 First Philippine Holdings Corp. 4,493,099 3,938,983 1.2
11,200,000 ++JG Summit Holdings 4,138,875 3,660,700 1.1
------------ ------------ ------
13,297,574 11,463,059 3.5
Food & Beverage 7,588,000 Universal Robina Corp. 6,452,681 4,945,486 1.5
International 9,520,000 International Container Terminals 8,623,792 6,852,918 2.1
Trade
Oil Service 2,765,000 Petron Corp. 2,346,789 2,286,235 0.7
Retail 12,980,350 ++SM Prime Holdings, Inc. 2,934,587 4,495,141 1.4
Telecommuni- 62,300 Philippine Long Distance Telephone
cations Co. (ADR)* 3,947,892 4,477,813 1.4
Utilities-- 567,000 Manila Electric Co. (MERALCO) 'B' 4,835,445 4,941,946 1.5
Electric
Total Long-Term Investments in the
Philippines 54,120,316 53,265,194 16.3
Singapore Airlines 800,000 Singapore Airlines 'Foreign' Ltd. 6,909,839 7,639,288 2.3
Banking 862,000 Development Bank of Singapore Ltd. 8,490,069 10,088,024 3.1
1,190,400 United Overseas Bank Ltd. 8,386,382 11,880,069 3.6
------------ ------------ ------
16,876,451 21,968,093 6.7
Conglomerates 292,000 Keppel Corporation Ltd. 2,342,401 2,662,550 0.8
Electronics 4,473,000 I.P.C. Corp. 4,406,775 2,537,098 0.8
Industrial 1,000,000 Clipsal Industries Ltd. 2,776,748 2,250,000 0.7
</TABLE>
<PAGE>
<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 Marine/Offshore 918,000 Sembawang Maritime Ltd. $ 4,104,038 $ 4,185,310 1.3%
(concluded) Oil Services
Publishing & 394,000 Singapore Press Holdings Ltd. 6,335,231 7,354,968 2.2
Broadcasting
Real Estate 2,593,000 DBS Land Ltd. 7,468,172 8,675,603 2.6
Ship Repair 398,000 Jurong Shipyard Ltd. 3,525,503 3,286,186 1.0
Total Long-Term Investments in
Singapore 54,745,158 60,559,096 18.4
Sri Lanka Finance 194,500 Developing Finance Corp. 2,049,710 1,616,257 0.5
Total Long-Term Investments in
Sri Lanka 2,049,710 1,616,257 0.5
Thailand Banking 865,000 Bangkok Bank Company Ltd. 'Foreign' 6,815,606 9,466,964 2.9
2,580,000 Siam City Bank 2,508,343 3,268,139 1.0
817,000 The Thai Farmers Bank, Ltd. 'Foreign' 5,008,884 7,749,412 2.4
------------ ------------ ------
14,332,833 20,484,515 6.3
Building & 402,000 Land & House Public Co. 'Foreign' 8,497,026 8,082,367 2.5
Construction
Communications 105,000 Advanced Info Services Plc 1,639,895 1,625,861 0.5
Financial 1,182,600 Finance One Co., Ltd. 'Foreign' 6,874,800 7,909,566 2.4
Services
Mutual Funds 10,101,400 Ruam Pattana Fund II 6,657,773 6,551,374 2.0
Oil--Related 330,500 PTT Exploration 'Foreign' 2,616,233 3,483,178 1.1
Total Long-Term Investments in
Thailand 40,618,560 48,136,861 14.8
<PAGE>
Vietnam Mutual Funds 291,300 ++Vietnam Frontier Fund 1,543,890 1,383,675 0.4
Total Long-Term Investments in
Vietnam 1,543,890 1,383,675 0.4
Total Long-Term Investments 286,674,779 313,999,445 95.9
<CAPTION>
Face Amount Short-Term Securities
<S> <S> <C> <S> <C> <C> <C>
United Commercial $ 9,146,000 General Electric Capital Corp., 6.13%
States Paper*** due 6/01/1995 9,146,000 9,146,000 2.8
Total Commercial Paper 9,146,000 9,146,000 2.8
US Government 4,000,000 Federal Home Loan Bank, 5.87% due
& Agency 6/09/1995 3,994,782 3,994,782 1.2
Obligations*** 4,000,000 Federal National Mortgage Association,
5.87% due 7/11/1995 3,973,911 3,973,911 1.2
Total US Government & Agency
Obligations 7,968,693 7,968,693 2.4
Total Investments in Short-Term
Securities 17,114,693 17,114,693 5.2
Total Investments $303,789,472 331,114,138 101.1
============
Liabilities in Excess of Other Assets (3,601,598) (1.1)
------------ ------
Net Assets $327,512,540 100.0%
============ ======
<FN>
*American Depositary Receipt (ADR).
**Global Depositary Share (GDS).
***Commercial Paper and certain US Government & Agency Obligations
are 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.
++The rights may be exercised until November 15, 1995.
++++Restricted securities as to resale. The value of the Fund's
investment in restricted securities was approximately $6,013,000,
representing 1.84% of net assets.
<PAGE>
Acquisition Value
Issue Date Cost (Note 1a)
Benpres Holdings Corp. 10/27/1994 $4,665,600 $3,863,376
India Cements, Ltd. 10/11/1994 709,800 871,920
Pakistan Telecommunications
(GDS) 9/16/1994 2,088,748 1,278,090
Total $7,464,148 $6,013,386
========== ==========
See Notes to Financial Statements.
</TABLE>
<TABLE>
STATEMENT OF ASSETS, LIABILITIES AND CAPITAL
<CAPTION>
As of May 31, 1995
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$303,789,472) (Note 1a) $331,114,138
Cash 918
Receivables:
Securities sold $ 1,966,327
Dividends 684,287
Interest 148,777 2,799,391
------------
Deferred organization expenses (Note 1f) 36,339
Prepaid expenses and other assets 3,123
------------
Total assets 333,953,909
------------
Liabilities: Payables:
Securities purchased 5,876,939
Investment adviser (Note 2) 257,327 6,134,266
------------
Accrued expenses and other liabilities 307,103
------------
Total liabilities 6,441,369
------------
Net Assets: Net assets $327,512,540
============
<PAGE>
Capital: Common Stock, $0.10 par value, 200,000,000 shares authorized $ 2,200,706
Paid-in capital in excess of par 309,254,995
Undistributed investment income--net 112,028
Accumulated realized capital losses on investments and foreign
currency transactions--net (11,365,648)
Unrealized appreciation on investments and foreign currency
transactions--net 27,310,459
------------
Net assets--Equivalent to $14.88 per share based on 22,007,055
shares of capital stock outstanding (market price--$13.50) $327,512,540
============
See Notes to Financial Statements.
</TABLE>
<TABLE>
STATEMENT OF OPERATIONS
<CAPTION>
For the Six Months Ended May 31, 1995
<S> <S> <C> <C>
Investment Income Dividends (net of $388,417 foreign withholding tax) $ 1,595,355
(Notes 1d & 1e): Interest and discount earned (net of $2,211 foreign withholding tax) 598,865
------------
Total income 2,194,220
------------
Expenses: Investment advisory fees (Note 2) 1,468,382
Custodian fees 411,383
Transfer agent fees 41,156
Accounting services (Note 2) 38,320
Printing and shareholder reports 33,975
Professional fees 28,423
Listing fees 22,509
Directors' fees and expenses 12,854
Pricing services 2,354
Amortization of organization expenses (Note 1f) 2,112
Other 10,381
------------
Total expenses 2,071,849
------------
Investment income--net 122,371
------------
<PAGE>
Realized & Realized loss from:
Unrealized Gain Investments--net $(10,930,201)
(Loss) on Foreign currency transactions--net (49,100) (10,979,301)
Investments & ------------
Foreign Change in unrealized appreciation/depreciation on:
Currency Investments--net 23,238,880
Transactions--Net Foreign currency transactions--net (18,216) 23,220,664
(Notes 1b, 1c, ------------ ------------
1e & 3): Net Increase in Net Assets Resulting from Operations $ 12,363,734
============
See Notes to Financial Statements.
</TABLE>
<TABLE>
STATEMENTS OF CHANGES IN NET ASSETS
<CAPTION>
For the Six For the Period
Months March 4,
Ended 1994++ to
Increase (Decrease) in Net Assets: May 31, 1995 Nov. 30, 1994
<S> <S> <C> <C>
Operations: Investment income--net $ 122,371 $ 2,717,563
Realized gain (loss) on investments--net (10,979,301) 150,581
Change in unrealized appreciation/depreciation on investments--net 23,220,664 4,089,795
------------ ------------
Net increase in net assets resulting from operations 12,363,734 6,957,939
------------ ------------
Dividends & Investment income--net (2,727,906) --
Distributions to Realized gain on investments--net (536,928) --
Shareholders ------------ ------------
(Note 1g): Net decrease in net assets resulting from dividends and
distributions to shareholders (3,264,834) --
------------ ------------
Capital Stock Net proceeds from issuance of Common Stock -- 311,850,000
Transactions Offering and underwriting costs resulting from the issuance
(Notes 1f & 4): of Common Stock (96) (494,208)
------------ ------------
Net increase (decrease) in net assets resulting from
dividends and distributions to shareholders (96) 311,355,792
------------ ------------
<PAGE>
Net Assets: Total increase in net assets 9,098,804 318,313,731
Beginning of period 318,413,736 100,005
------------ ------------
End of period* $327,512,540 $318,413,736
============ ============
<FN>
*Undistributed investment income--net $ 112,028 $ 2,717,563
============ ============
++Commencement of Operations.
See Notes to Financial Statements.
</TABLE>
<TABLE>
FINANCIAL HIGHLIGHTS
<CAPTION>
The following per share data and ratios have been derived
from information provided in the financial statements For the Six For the Period
Months Ended March 4, 1994++
Increase (Decrease) in Net Asset Value: May 31, 1995 to Nov. 30, 1994
<S> <S> <C> <C>
Per Share Net asset value, beginning of period $ 14.47 $ 14.18
Operating ------------ ------------
Performance: Investment income--net .01 .12
Realized and unrealized gain on investments--net .54 .19
------------ ------------
Total from investment operations .55 .31
------------ ------------
Less dividends and distributions to shareholders:
Investment income--net (.12) --
Realized gain on investment income--net (.02) --
------------ ------------
Total dividends and distributions to shareholders (.14) --
------------ ------------
Capital charge resulting from issuance of Common Stock .00++++ (.02)
------------ ------------
Net asset value, end of period $ 14.88 $ 14.47
============ ============
Market price per share, end of period $ 13.50 $ 12.75
============ ============
Total Based on market price per share 7.21%+++ (15.00%)+++
Investment ============ ============
Return:** Based on net asset value per share 4.13%+++ 2.05%+++
============ ============
Ratios to Expenses 1.41%* 1.32%*
Average ============ ============
Net Assets: Investment income--net .08%* 1.12%*
============ ============
<PAGE>
Supplemental Net assets, end of period (in thousands) $ 327,513 $ 318,414
Data: ============ ============
Portfolio turnover 11.29% 9.10%
============ ============
<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.
++++Amount is less than $0.01 per share.
+++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. These unaudited financial statements
reflect all adjustments which are, in the opinion of management,
necessary to a fair statement of the results for the interim period
presented. All such adjustments are of a normal recurring nature.
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.
<PAGE>
(a) Valuation of investments--Portfolio securities which are traded
on stock exchanges are valued at the last sale price on the exchange
on which such securities are traded, 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 price prior to
the time of valuation. In cases where securities are traded on more
than one exchange, the securities are valued on the exchange
designated by or under the authority of the Board of Directors as
the primary market. 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. Options written are valued
at the last sale price in the case of exchange-traded options or, in
the case of options traded in the over-the-counter market, the last
asked price. Options purchased are valued at the last sale price in
the case of exchange-traded options or, in the case of options
traded in the over-the-counter market, the last bid price. Short-
term securities are valued at amortized cost, which approximates
market value. Other investments, including futures contracts and
related options, are stated at market value. Securities and assets
for which market value quotations are not available are valued at
their fair value as determined in good faith by or under the
direction of the Fund's Board of Directors.
(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.
(c) Derivative financial instruments--The Fund may engage in various
portfolio strategies to seek to increase its return by hedging its
portfolio against adverse movements in the equity, debt and currency
markets. Losses may arise due to changes in the value of the
contract or if the counterparty does not perform under the contract.
<PAGE>
* Options--The Fund is authorized to write and purchase 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 market value of the option
written.
When a security is purchased or sold through an exercise of an
option, the related premium paid (or received) is added to (or
deducted from) the basis of the security acquired or deducted from
(or added to) the proceeds 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.
* Forward foreign exchange contracts--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.
* Foreign currency options and futures--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.
* Financial futures contracts--The Fund may purchase or sell
interest rate futures contracts and options on such futures
contracts for the purpose of hedging the market risk on existing
securities or the intended purchase of securities. Futures contracts
are contracts for delayed delivery of securities at a specific
future date and at a specific price or yield. Upon entering into a
contract, the Fund deposits and maintains as collateral such initial
margin as required by the exchange on which the transaction is
effected. Pursuant to the contract, the Fund agrees to receive from
or pay to the broker an amount of cash equal to the daily
fluctuation in value of the contract. Such receipts or payments are
known as variation margin and are recorded by the Fund as unrealized
gains or losses. When the contract is closed, the Fund records a
realized gain or loss equal to the difference between the value of
the contract at the time it was opened and the value at the time it
was closed.
<PAGE>
NOTES TO FINANCIAL STATEMENTS (concluded)
(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
transactions 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 Fund
Asset Management, L.P. ("FAM"). The general partner of FAM is
Princeton Services, Inc. ("PSI"), an indirect wholly-owned
subsidiary of Merrill Lynch & Co., Inc. ("ML & Co."), which is the
limited partner.
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.
<PAGE>
For the six months ended May 31, 1995, Merrill Lynch, Pierce, Fenner
& Smith Inc. ("MLPF&S") earned $1,978 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, PSI, MLPF&S, and/or ML & Co.
3. Investments:
Purchases and sales of investments, excluding short-term securities,
for the six months ended May 31, 1995 were $31,775,416 and
$35,878,616, respectively.
Net realized and unrealized gains (losses) as of May 31, 1995 were
as follows:
Realized Unrealized
Losses Gains (Losses)
Long-term investments $(10,930,201) $27,324,666
Foreign currency transactions (49,100) (14,207)
------------ -----------
Total $(10,979,301) $27,310,459
============ ===========
As of May 31, 1995, net unrealized appreciation for Federal income
tax purposes aggregated $27,324,666, of which $43,916,123 related to
appreciated securities and $16,591,457 related to depreciated
securities. At May 31, 1995, the aggregate cost of investments for
Federal income tax purposes was $303,789,472.
4. Capital Share Transactions:
At May 31, 1995, the Fund had one class of Common Stock, par value
$0.10 per share, of which 200,000,000 shares were authorized. During
six months ended May 31, 1995, shares issued and outstanding
remained constant at 22,007,055. At May 31, 1995, total paid-in
capital amounted to $311,455,701.
5. Commitments:
At May 31, 1995, the Fund had entered into forward foreign exchange
contracts under which it agreed to purchase and sell various foreign
currencies with approximate values of $19,000 and $2,000,
respectively.
<PAGE>
PER SHARE INFORMATION
<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) -- --
December 1, 1994 to February 28, 1995 .01 (.22) (.87) $.12 $.02
March 1, 1995 to May 31, 1995 -- (.28) 1.91 -- --
<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
December 1, 1994 to February 28, 1995 14.31 12.17 12.375 13.50 3,520
March 1, 1995 to May 31, 1995 14.88 12.49 10.75 10.125 2,595
<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>
PORTFOLIO CHANGES
For the Six Months Ended May 31, 1995
Additions
Affin Holdings Bhd (Rights)
Keppel Corporation Ltd.
Renong Bhd, 2.50% due 1/15/2005
Shangri-La Asia, Ltd., 2.875% due 12/16/2000
Telekom Malaysia Bhd, 4.00% due 10/03/2004
United Engineering, Ltd., 2.00% due 3/01/2004
<PAGE>
Deletions
Aokam Perdana Bhd, 3.50% due 6/13/2004
Aokam Perdana Bhd 'A'
Aokam Perdana Bhd (Ordinary)
Bandar Raya Developments Bhd
First Capital Corporation Ltd.
Golden Plus Holdings Bhd
Indian Tobacco Company (GDS)
Land & General Bhd (Rights)
Metropolitan Bank & Trust Company
(Rights)
P.T. Duta Anggada Realty
Phileo Allied Bhd
Rashid Hussain Bhd
SCICI Ltd., 3.50% due 4/01/2004
Sembawang Shipyard Ltd. (ADR)
Singapore Press Holdings Ltd. 'A'
Sterlite Industries, 3.50% due 6/30/1999
United Merchant Group Bhd
PORTFOLIO INFORMATION
As of May 31, 1995
Percent of
Ten Largest Holdings Net Assets
P.T. Hanjaya Mandala Sampoerna 3.8%
United Overseas Bank Ltd. 3.6
Development Bank of Singapore Ltd. 3.1
Bangkok Bank Company Ltd. 'Foreign' 2.9
Arab-Malaysian Merchant Bank Bhd 2.7
DBS Land Ltd. 2.6
Land & General Bhd (Ordinary) 2.5
Land & House Public Co. 'Foreign' 2.5
Finance One Co., Ltd. 'Foreign' 2.4
San Miguel Corp. 'B' 2.4
<PAGE>
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
