MERRILL LYNCH
EMERGING TIGERS
FUND, INC.
[FUND LOGO]
STRATEGIC
Performance
Annual Report
November 30, 1997
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 investment 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.
This report is not authorized for use as an offer of sale
or a solicitation of an offer to buy shares of the Fund unless
accompanied or preceded by the Fund's current prospectus. Past
performance results shown in this report should not be considered a
representation of future performance. Investment return and principal
value of shares will fluctuate so that shares, when redeemed, may be
worth more or less than their original cost. Statements and other
information herein are as dated and are subject to change.
Merrill Lynch
Emerging Tigers Fund, Inc.
Box 9011
Princeton, NJ
08543-9011 #17033 -- 11/97
[RECYCLE LOGO]
Printed on post-consumer recycled paper
MERRILL LYNCH EMERGING TIGERS FUND, INC.
[GRAPHIC OMITTED: MAP OF ASIA]
Asset Allocation
As a Percentage* of
Net Assets as of
November 30, 1997
INDIA -- 6.4%
INDONESIA -- 7.1%
MALAYSIA -- 7.9%
THAILAND -- 2.5%
SINGAPORE -- 17.9%
CHINA -- 19.8%
INDOCHINA -- 1.7%
PHILIPPINES -- 8.1%
* Total may not equal 100%.
Merrill Lynch Emerging Tigers Fund, Inc., November 30, 1997
DEAR SHAREHOLDER
Fiscal Year in Review
The fiscal year ended November 30, 1997 proved to be an extremely
difficult one for the Asian tiger stock markets and Merrill Lynch
Emerging Tigers Fund, Inc. The problems began in Thailand during the
summer months. Economic fundamentals in that country deteriorated as
banks began to experience an increasing number of loan defaults,
property prices declined, and the level of exports continued to drop,
hurting the current account deficit. As a result, foreign investors
began to pull their money out of Thailand. The Thai baht came under
attack by speculators and hedgers alike. Finally, after spending a
large portion of its foreign exchange reserves in an attempt to
maintain the currency's peg to the US dollar, the central bank allowed
the baht to float on July 2, 1997. Since that time, the baht had
fallen by 68% relative to the US dollar through November month-end.
Developments in Thailand had a domino effect throughout the Asian
tiger stock markets. As investor confidence rapidly deteriorated, the
currency crisis spread from one country to the next in a series of
"rolling devaluations." The Indonesian rupiah, the Philippine peso,
the Malaysian ringgit and the Korean won all declined sharply in
foreign exchange markets. The devaluations in foreign currency markets
led to dramatic declines in stock markets throughout the region. As
discussed in our August 31, 1997 report to shareholders, the negative
effects of currency devaluations have and will continue to reverberate
throughout the Asian tiger economies. Higher interest rates are needed
to support currencies until stability returns to foreign exchange
markets. These higher interest rates lead to lower corporate earnings.
These factors, along with the negative wealth effect of declining
stock markets, will likely result in lower gross domestic product
growth.
Currently, the Asian tiger countries are still in the first stages of
these developments. Liquidity is greatly diminished and the number of
non-performing loans at banks are increasing. To help bring some
liquidity back into their financial systems, Thailand, South Korea and
Indonesia have already approached the International Monetary Fund. In
the next stages, we expect to see corporations shrinking and
retrenching through layoffs. As a result, unemployment will increase.
We expect each country to reach the bottom of its economic cycle at a
different time, depending upon political and social factors. However,
it is clear that the deleveraging process is occurring much more
quickly in the Asian tiger countries than is the case in a more
developed economy like Japan. After reaching bottom, recovery in the
emerging tiger countries is likely to evolve slowly.
Government policy will be critical in the restructuring process for
the financial systems in the Asian tiger countries. Of primary
importance are the steps taken to liquidate insolvent banks and
recapitalize viable ones. At the same time, governments must free up
their economies and liberalize financial systems. Bankruptcy laws must
also be put in place, since such legislation is nonexistent in most
Asian tiger countries. The faster that governments are able to
implement such measures, the sooner their economies will recover and
investor confidence will be restored.
As disruptive as recent events have been, it is important to remember
that such developments are not unusual in emerging economies. Periods
of exceptionally rapid economic expansion are often followed by
financial crises. In turn, these crises actually serve to create a
firmer foundation for economic growth in the future. Therefore, we
believe that this is not the end of economic growth in the Asian tiger
countries. Those countries that develop credible policy responses to
the crisis will actually emerge out of it in stronger positions and
better able to function in a global economy.
We were underweighted in Thailand throughout the fiscal year, and
began increasing the Fund's cash reserve position in July. When
Malaysia placed restrictions on buying and selling stock, we sold down
our position and are now extremely underweighted in Malaysia.
Portfolio sales also resulted in a neutral weighting in the
Philippines and an underweighted position in Indonesia as of fiscal
year-end. Cash reserves made up 29.1% of the portfolio as of November
30, 1997. Despite these actions, we could not avoid the negative
effects of sharply declining tiger stock markets. However, our
investment activities provided investment returns better than those of
the unmanaged Southeast Asian Emerging Markets Index. For the fiscal
year ended November 30, 1997, Merrill Lynch Emerging Tigers Fund,
Inc.'s Class A, Class B, Class C and Class D Shares had total
investment returns of - 47.76%, - 48.29%, - 48.32% and - 47.91%,
respectively. For the same period, the unmanaged Southeast Asian
Emerging Markets Index had a total investment return of - 56.55%.
(Fund results shown do not reflect sales charges, and would be lower
if sales charges were included. Complete performance information,
including average annual total returns, can be found on pages 4 -- 7 of
this report to shareholders.)
Portfolio Matters
As of November 30, 1997 we had overweighted positions only in The
People's Republic of China and India. The Chinese economy continues to
move forward in its recovery, with a corresponding improvement in its
stock market. However, if the government is slow to reflate the
economy, growth may be curtailed. As a result, our investments in
China (whose shares are traded on the Hong Kong stock exchange) are
focused on companies with strong balance sheets and good cash flows.
In India, we have discovered some companies that offer attractive
value, in our view, with good businesses and shares selling at low
price/earnings and price/cash flow ratios. However, the macroeconomic
situation in India is not the most positive. The political situation
is unstable, and the "Asian contagion" has weakened the rupee.
However, since India, like China, is still a relatively closed
economy, we expect that it will remain insulated to some degree from
the problems plaguing other Asian tiger countries.
In Conclusion
Looking ahead, we expect that our investment strategy will remain
defensive in the months ahead, with a larger-than-usual cash position.
At the same time, we will take a selective, "bottom up" approach when
we commit cash reserves to stocks. We are beginning to see some
attractive values emerge in individual companies that have strong
market positions and little debt. Such companies will be able to
survive the current financial crisis and be able to prosper when it is
over.
We thank you for your investment in Merrill Lynch Emerging Tigers Fund,
Inc., and we look forward to reviewing our outlook and strategy with
you again in our next report to shareholders.
Sincerely,
/S/ARTHUR ZEIKEL
Arthur Zeikel
President
/S/KARA TAN BHALA
Kara Tan Bhala
Senior Vice President and
Portfolio Manager
January 7, 1998
PERFORMANCE DATA
About Fund
Performance
Investors are able to purchase shares of the Fund through the Merrill
Lynch Select PricingSM System, which offers four pricing alternatives:
[bullet] Class A Shares incur a maximum initial sales charge (front-
end load) of 5.25% and bear no ongoing distribution or account
maintenance fees. Class A Shares are available only to eligible
investors.
[bullet] Class B Shares are subject to a maximum contingent deferred
sales charge of 4% if redeemed during the first year, decreasing 1%
each year thereafter to 0% after the fourth year. In addition, Class B
Shares are subject to a distribution fee of 0.75% and an account
maintenance fee of 0.25%. These shares automatically convert to Class
D Shares after approximately 8 years. (There is no initial sales
charge for automatic share conversions.)
[bullet] Class C Shares are subject to a distribution fee of 0.75% and
an account maintenance fee of 0.25%. In addition, Class C Shares are
subject to a 1% contingent deferred sales charge if redeemed within
one year of purchase.
[bullet] Class D Shares incur a maximum initial sales charge of
5.25% and an account maintenance fee of 0.25% (but no distribution fee).
None of the past results shown should be considered a representation
of future performance. Figures shown in the "Average Annual Total
Return" tables as well as the total returns and cumulative total
returns in the "Performance Summary" tables assume reinvestment of all
dividends and capital gains distributions at net asset value on the
ex-dividend date. Investment return and principal value of shares will
fluctuate so that shares, when redeemed, may be worth more or less
than their original cost. Dividends paid to each class of shares will
vary because of the different levels of account maintenance,
distribution and transfer agency fees applicable to each class, which
are deducted from the income available to be paid to shareholders.
Average Annual
Total Return
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
Year Ended 9/30/97 -30.37% -34.03%
Inception (3/4/94)
through 9/30/97 - 7.84 - 9.22
* Maximum sales charge is 5.25%.
** Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 9/30/97 -31.11% -33.86%
Inception (6/10/96)
through 9/30/97 -26.86 -28.54
* Maximum contingent deferred sales charge is 4% and is reduced to 0%
after 4 years.
** Assuming payment of applicable contingent deferred sales charge.
% Return % Return
Without CDSC With CDSC**
Class C Shares*
Year Ended 9/30/97 -31.13% -31.82%
Inception (6/10/96)
through 9/30/97 -26.91 -26.91
* Maximum contingent deferred sales charge is 1% and is reduced to 0%
after 1 year.
** Assuming payment of applicable contingent deferred sales charge.
% Return Without % Return With
Sales Charge Sales Charge**
Class D Shares*
Year Ended 9/30/97 -30.64% -34.28%
Inception (6/10/96)
through 9/30/97 -26.37 -29.34
* Maximum sales charge is 5.25%.
** Assuming maximum sales charge.
[GRAPHIC OMITTED: LINE CHART TOTAL RETURN BASED ON A $10,000
INVESTMENT]
Total Return Based on a $10,000 Investment
A line graph depicting the growth of an investment in the Fund's Class A
Shares compared to growth of an investment in the Southeast Asia
Emerging Markets Index. Beginning and ending values are:
3/04/94** 11/97
ML Emerging Tigers Fund, Inc.+--
Class A Shares* $9,475 $5,515
Southeast Asia Emerging Markets
Index++ $10,000 $4,554
A line graph depicting the growth of an investment in the Fund's Class B,
Class C & Class D Shares compared to growth of an investment in the
Southeast Asia Emerging Markets Index. Beginning and ending values are:
6/10/96** 11/97
ML Emerging Tigers Fund, Inc.+--
Class B Shares* $10,000 $4,871
ML Emerging Tigers Fund, Inc.+--
Class C Shares* $10,000 $5,164
ML Emerging Tigers Fund, Inc.+--
Class D Shares* $9,475 $4,951
Southeast Asia Emerging Markets
Index++ $10,000 $4,272
* Assuming maximum sales charge, transaction costs and other operating
expenses, including advisory fees.
** Commencement of operations.
+ ML Emerging Tigers Fund, Inc. invests primarily in equity securities
of companies in designated emerging market countries located in Asia
and the Pacific Basin.
++ This unmanaged Index, which is a blend of the Financial Times/Standard
& Poor's-Actuaries World Index and IFC Investible Index, is comprised
of holdings in China, India, Indonesia, Malaysia, Pakistan, the
Philippines, Singapore, Sri Lanka and Thailand.
<TABLE>
<CAPTION>
Performance
Summary --
Class A Shares+
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<S> <C> <C> <C> <C> <C>
3/4/94 -- 12/31/94 $14.18 $14.02 -- -- + 0.12%
1995 14.02 14.09 -- $0.148 + 0.58
1996 14.09 15.79 -- 0.057 +12.40
1/1/97 -- 11/30/97 15.79 8.12 -- -- -48.58
Total $0.205
Cumulative total return as of 11/30/97: - 41.80%**
+ Performance results for per share net asset value of Class A Shares prior to June 10, 1996 are for the period when the
Fund was closed-end.
* Figures may include short-term capital gains distributions.
** Figures do not include sales charge; results would be lower if sales charge was included.
</TABLE>
<TABLE>
<CAPTION>
Performance
Summary --
Class B Shares
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<S> <C> <C> <C> <C> <C>
6/10/96 -- 12/31/96 $15.53 $15.76 -- -- + 1.48%
1/1/97 -- 11/30/97 15.76 8.03 -- -- -49.05
Cumulative total return as of 11/30/97: -48.29%**
* Figures may include short-term capital gains distributions.
** Figures do not reflect deduction of any sales charge; results would be lower if sales charge was deducted.
</TABLE>
<TABLE>
<CAPTION>
Performance
Summary --
Class C Shares
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<S> <C> <C> <C> <C> <C>
6/10/96 -- 12/31/96 $15.53 $15.74 -- -- + 1.35%
1/1/97 -- 11/30/97 15.74 8.02 -- -- -49.05
Cumulative total return as of 11/30/97: -48.36%**
* Figures may include short-term capital gains distributions.
** Figures do not reflect deduction of any sales charge; results would be lower if sales charge was deducted.
</TABLE>
<TABLE>
<CAPTION>
Performance
Summary --
Class D Shares
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<S> <C> <C> <C> <C> <C>
6/10/96 -- 12/31/96 $15.53 $15.78 -- $0.030 + 1.81%
1/1/97 -- 11/30/97 15.78 8.10 -- -- -48.67
Total $0.030
Cumulative total return as of 11/30/97: -47.74%**
* Figures may include short-term capital gains distributions.
** Figures do not reflect any sales charge; results would be lower if sales charge was included.
</TABLE>
<TABLE>
<CAPTION>
Recent
Performance
Results*
12 Month 3 Month
11/30/97 8/31/97 11/30/96 % Change % Change
<S> <C> <C> <C> <C> <C>
Class A Shares $8.12 $10.66 $15.59 -47.92% -23.83%
Class B Shares 8.03 10.57 15.53 -48.29 -24.03
Class C Shares 8.02 10.55 15.52 -48.32 -23.98
Class D Shares 8.10 10.63 15.58 -48.01 -23.80
Class A Shares -- Total Return -47.76(1) -23.83
Class B Shares -- Total Return -48.29 -24.03
Class C Shares -- Total Return -48.32 -23.98
Class D Shares -- Total Return -47.91(2) -23.80
* Investment results shown do not reflect sales charges; results shown would be lower if a sales charge was included.
(1) Percent change includes reinvestment of $0.046 per share ordinary income distributions.
(2) Percent change includes reinvestment of $0.030 per share ordinary income distributions.
</TABLE>
<TABLE>
<CAPTION>
SCHEDULE OF INVESTMENTS (in US dollars)
Shares Held/ Value Percent of
COUNTRY Industries Face Amount Long-Term Investments Cost (Note 1a) Net Assets
<S> <C> <C> <C> <C> <C> <C>
China Appliances 884,000 Guangdong Kelon Electrical
Holdings Co., Ltd. (Class H) $1,303,299 $983,518 1.3%
Conglomerates 329,000 +Beijing Enterprises Holdings
Limited 846,617 866,148 1.2
944,000 China Merchants Holdings
International Co. Ltd. 970,837 1,099,123 1.5
922,000 China Resources Enterprise Ltd. 1,142,999 1,985,989 2.7
2,699,400 Guangdong Investments, Ltd. 1,984,325 1,711,178 2.4
586,000 Shanghai Industrial Holdings
Ltd. 1,485,543 1,849,776 2.6
------------ ------------ ------
6,430,321 7,512,214 10.4
Infrastructure 263,000 +New World Infrastructure Ltd. 711,034 518,869 0.7
US$ 1,611,000 New World Infrastructure Ltd.,
5% due 7/15/2001 2,023,074 1,510,313 2.1
------------ ------------ ------
2,734,108 2,029,182 2.8
Railroads 2,830,000 Guangshen Railway Company
Limited (Class H) 1,250,523 604,091 0.8
Telecommunications 1,382,500 +China Telecom (Hong Kong)
Limited 2,100,864 2,307,207 3.2
Utilities -- Electric 2,063,000 +Beijing Datang Power Generation
Company Limited (Class H) 1,248,566 954,129 1.3
------------ ------------ ------
Total Long-Term Investments
in China 15,067,681 14,390,341 19.8
============ ============ ======
India Consumer Products 185,800 IFB Industries Ltd. 220,351 93,624 0.1
Financial Services 45,181 Housing Development Finance
Corporation Ltd. 2,812,530 3,504,755 4.8
Telecommunications 25,000 +Videsh Sanchar Nigam Ltd.
(GDR)** 387,500 331,250 0.5
56,000 +Videsh Sanchar Nigam Ltd.
(GDR)** (b) 924,000 742,000 1.0
------------ ------------ ------
1,311,500 1,073,250 1.5
Total Long-Term Investments in
India 4,344,381 4,671,629 6.4
============ ============ ======
Indochina Mutual Funds 75,000 +Southeast Asia Frontier Fund 772,500 487,500 0.7
141,300 +Vietnam Frontier Fund 1,455,390 777,150 1.0
------------ ------------ ------
Total Long-Term Investments in
Indochina 2,227,890 1,264,650 1.7
============ ============ ======
Indonesia Building &
Construction 4,707,000 P.T. Citra Marga Nusaphala
Persada 2,150,446 1,035,928 1.4
Food 2,166,000 P.T. Davomas Abadi 'Foreign' 1,889,664 610,770 0.9
607,100 P.T. Fiskaragung Perkasa 715,913 162,840 0.2
------------ ------------ ------
2,605,577 773,610 1.1
Oil - Domestic 83,700 +Gulf Indonesia Resources Ltd. 1,833,115 1,888,481 2.6
Retail 1,017,000 P.T. Great River International
'Foreign' 665,749 118,906 0.2
Telecommunications 56,600 P.T. Telekomunikasi Indonesia
(Persero) (ADR)* 1,178,424 827,775 1.1
Tobacco 373,500 P.T. Hanjaya Mandala Sampoerna
'Foreign' 755,012 498,343 0.7
------------ ------------ ------
Total Long-Term Investments in
Indonesia 9,188,323 5,143,043 7.1
============ ============ ======
Malaysia Building &
Construction 1,766,000 I.J.M. Corp. BHD 3,074,469 658,577 0.9
Consumer Products 340,500 Amway (Malaysia) Holdings BHD 2,073,026 639,781 0.9
Industrial 482,475 O.Y.L. Industries BHD 2,684,830 1,314,834 1.8
Insurance 576,000 MNI Holdings BHD 3,132,208 541,962 0.8
Leisure 694,000 Berjaya Sports Toto BHD 1,260,735 1,522,978 2.1
Publishing 807,000 Star Publications (Malaysia)
BHD 2,992,748 1,018,589 1.4
------------ ------------ ------
Total Long-Term Investments in
Malaysia 15,218,016 5,696,721 7.9
============ ============ ======
Philippines Conglomerates 307,860 +Benpres Holdings Corp. (GDR)**
(b) 2,423,778 1,096,012 1.5
International Trade 7,348,274 +International Container
Terminal Services, Inc. 3,128,793 1,208,807 1.7
Real Estate US$ 1,315,000 AC International Finance, 1.74%
due 12/08/2000 (a) 1,245,881 973,100 1.3
1,478,125 Ayala Land, Inc. 'B' 1,256,677 586,558 0.8
------------ ------------ ------
2,502,558 1,559,658 2.1
Retail 7,486,346 SM Prime Holdings, Inc. 1,229,712 1,188,309 1.6
7,370,000 +Uniwide Holdings, Inc. 1,365,817 187,175 0.3
------------ ------------ ------
2,595,529 1,375,484 1.9
Utilities -- Electric 174,956 Manila Electric Co. (MERALCO)
'B' 983,374 610,957 0.9
------------ ------------ ------
Total Long-Term Investments in
the Philippines 11,634,032 5,850,918 8.1
============ ============ ======
Singapore Airlines 234,000 Singapore Airlines Ltd.
'Foreign' 2,304,198 1,528,835 2.1
Banking 75,000 Development Bank of Singapore
Ltd. 769,579 706,747 1.0
429,400 United Overseas Bank Ltd.
'Foreign' 3,440,067 2,562,696 3.5
------------ ------------ ------
4,209,646 3,269,443 4.5
Electronics 415,000 Elec & Eltek International
Company Ltd. 2,050,708 3,050,250 4.2
Industrial 635,000 Clipsal Industries Ltd. 1,767,649 1,498,600 2.1
Publishing &
Broadcasting 150,800 Singapore Press Holdings Ltd.
'Foreign' 2,269,422 2,065,234 2.8
Real Estate 134,000 City Developments Ltd. 1,014,063 660,824 0.9
555,000 DBS Land Ltd. 1,570,489 944,874 1.3
------------ ------------ ------
2,584,552 1,605,698 2.2
------------ ------------ ------
Total Long-Term Investments in
Singapore 15,186,175 13,018,060 17.9
============ ============ ======
Thailand Oil-Related 160,300 PTT Exploration and Production
Public Company Ltd.
'Foreign' 1,300,797 1,780,667 2.5
------------ ------------ ------
Total Long-Term Investments in
Thailand 1,300,797 1,780,667 2.5
============ ============ ======
Total Long-Term Investments 74,167,295 51,816,029 71.4
============ ============ ======
<CAPTION>
Face
Amount Short-Term Securities
<S> <C> <C> <C> <C> <C> <C>
United States Commercial Paper*** US$ 2,800,000 Atlantic Asset Securitization
Corporation, 5.61% due
12/05/1997 2,797,382 2,797,382 3.9
3,000,000 Caterpillar Inc., 5.53% due
12/16/1997 2,992,166 2,992,166 4.1
1,500,000 Delaware Funding Corp., 5.55%
due 12/05/1997 1,498,613 1,498,613 2.1
2,860,000 General Motors Acceptance
Corp., 5.75% due 12/01/1997 2,859,086 2,859,086 3.9
------------ ------------ ------
10,147,247 10,147,247 14.0
US Government Agency 10,000,000 Federal Home Loan Mortgage
Obligations*** Corp., 5.48% due 12/11/1997 9,981,733 9,981,733 13.7
------------ ------------ ------
Total Investments in Short-Term
Securities 20,128,980 20,128,980 27.7
============ ============ ======
Total Investments $94,296,275 71,945,009 99.1
============
Unrealized Depreciation on Forward Foreign Exchange Contracts**** (28,646) 0.0
Time Deposit++ 1,000,000 1.4
Liabilities in Excess of Other Assets (342,801) (0.5)
------------ ------
Net Assets $72,573,562 100.0%
============ ======
(a) Represents a zero coupon bond; the interest rate shown is the
effective yield at the time of purchase by the Fund.
(b) The security may be offered and sold to "qualified institutional
buyers" under Rule 144A of the Securities Act of 1933.
+ Non-income producing security.
++ Time deposit bears interest at 5.375% and matures on
12/01/1997.
* American Depositary Receipts (ADR).
** Global Depositary Receipts (GDR).
*** 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 purchase by the Fund.
**** Forward foreign exchange contracts sold as of November 30, 1997 were
as follows:
Unrealized
Foreign Expiration Depreciation
Currency Sold Date (Note 1c)
MYR 19,506,685 May 1998 $(2,136)
SGD 12,896,000 November 1998 (26,510)
--------
Total Unrealized Depreciation on
Forward Foreign Exchange Contracts
-- Net (US$Commitment --
$13,500,000) $(28,646)
========
See Notes to Financial Statements.
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
As of November 30, 1997
<S> <C> <C> <C>
Assets: Investments, at value (identified cost -- $94,296,275) (Note 1a) $71,945,009
Cash 114
Foreign cash (Note 1b) 15,858
Time deposit 1,000,000
Receivables:
Securities sold $542,191
Capital shares sold 63,430
Dividends 55,294
Interest 30,137 691,052
------------
Deferred organization expenses (Note 1f) 12,520
Prepaid registration fees and other assets (Note 1f) 19,557
------------
Total assets 73,684,110
------------
Liabilities: Unrealized depreciation on forward foreign exchange contracts (Note 1c) 28,646
Payables:
Capital shares redeemed 425,102
Securities purchased 264,759
Investment adviser (Note 2) 60,842
Distributor (Note 2) 6,412 757,115
------------
Accrued expenses and other liabilities 324,787
------------
Total liabilities 1,110,548
------------
Net Assets: Net assets $72,573,562
============
Net Assets Class A Common Stock, $0.10 par value, 100,000,000 shares authorized $785,053
Consist of: Class B Common Stock, $0.10 par value, 150,000,000 shares authorized 60,850
Class C Common Stock, $0.10 par value, 50,000,000 shares authorized 35,774
Class D Common Stock, $0.10 par value, 100,000,000 shares authorized 13,054
Paid-in capital in excess of par 113,067,529
Accumulated distributions in excess of investment income -- net
(Note 1g) (596,457)
Accumulated realized capital losses on investments and foreign currency
transactions -- net (Note 6) (18,407,861)
Unrealized depreciation on investments and foreign currency transactions
-- net (22,384,380)
------------
Net assets $72,573,562
============
Net Asset Class A -- Based on net assets of $63,760,100 and 7,850,529 shares
Value: outstanding $8.12
============
Class B -- Based on net assets of $4,886,736 and 608,498 shares
outstanding $8.03
============
Class C -- Based on net assets of $2,869,519 and 357,744 shares
outstanding $8.02
============
Class D -- Based on net assets of $1,057,207 and 130,543 shares
outstanding $8.10
============
See Notes to Financial Statements.
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
For the Year Ended November 30, 1997
<S> <C> <C> <C>
Investment Income Dividends (net of $91,395 foreign withholding tax) $1,253,295
(Notes 1d & 1e): Interest and discount earned 901,192
------------
Total income 2,154,487
------------
Expenses: Investment advisory fees (Note 2) 1,509,163
Custodian fees 313,916
Transfer agent fees -- Class A (Note 2) 260,927
Printing and shareholder reports 145,744
Accounting services (Note 2) 97,001
Professional fees 79,354
Registration fees (Note 1f) 66,852
Directors' fees and expenses 37,437
Account maintenance and distribution fees -- Class B (Note 2) 34,079
Account maintenance and distribution fees -- Class C (Note 2) 11,228
Amortization of organization expenses (Note 1f) 10,731
Pricing fees 9,953
Transfer agent fees -- Class B (Note 2) 7,631
Transfer agent fees -- Class C (Note 2) 2,759
Account maintenance fees -- Class D (Note 2) 1,859
Transfer agent fees -- Class D (Note 2) 1,453
Other 16,790
------------
Total expenses 2,606,877
------------
Investment loss -- net (452,390)
------------
Realized & Realized loss from:
Unrealized Loss on Investments -- net $(17,292,855)
Investments & Foreign currency transactions -- net (108,933) (17,401,788)
Foreign Currency Change in unrealized appreciation/depreciation on: ------------
Transactions -- Net Investments -- net (51,822,980)
(Notes 1b,1c,
1e & 3):
Foreign currency transactions -- net (39,721) (51,862,701)
------------ ------------
Net realized and unrealized loss on investments and foreign currency
transactions (69,264,489)
------------
Net Decrease in Net Assets Resulting from Operations $(69,716,879)
============
See Notes to Financial Statements.
</TABLE>
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
For the Year Ended November 30,
Increase (Decrease) in Net Assets: 1997 1996
<S> <C> <C> <C>
Operations: Investment income (loss) -- net $(452,390) $625,383
Realized gain (loss) on investments and foreign currency transactions
-- net (17,401,788) 12,974,980
Change in unrealized appreciation/depreciation on investments and
foreign currency transactions -- net (51,862,701) 32,164,571
-------------- --------------
Net increase (decrease) in net assets resulting from operations (69,716,879) 45,764,934
-------------- --------------
Dividends to Investment income -- net:
Shareholders Class A (75,491) (248,019)
(Note 1g): Class D (126) --
In excess of investment income -- net:
Class A (486,711) --
Class D (813) --
-------------- --------------
Net decrease in net assets resulting from dividends to shareholders (563,141) (248,019)
-------------- --------------
Capital Share Net decrease in net assets derived from capital share transactions (56,250,234) (141,243,207)
Transactions -------------- --------------
(Note 4):
Net Assets: Total decrease in net assets (126,530,254) (95,726,292)
Beginning of year 199,103,816 294,830,108
-------------- --------------
End of year* $72,573,562 $199,103,816
============== ==============
* Undistributed (accumulated distributions in excess of) investment
income -- net (Note 1h) $(596,457) $528,007
============== ==============
See Notes to Financial Statements.
</TABLE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
Class A
For the
Period
The following per share data and ratios have been derived March 4,
from information provided in the financial statements. For the Year Ended 1994+ to
November 30, Nov. 30,
1997++ 1996 1995 1994
Increase (Decrease) in Net Asset Value:
<S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $15.59 $13.40 $14.47 $14.18
Operating ---------- ---------- ---------- ----------
Performance: Investment income (loss) -- net (.04) .05 .03 .12
Realized and unrealized gain (loss) on investments and
foreign currency transactions -- net (7.38) 2.15 (.96) .19
---------- ---------- ---------- ----------
Total from investment operations (7.42) 2.20 (.93) .31
---------- ---------- ---------- ----------
Less dividends and distributions:
Investment income -- net (.01) (.01) (.12) --
In excess of investment income -- net (.04) -- -- --
Realized gain on investments -- net -- -- (.02) --
---------- ---------- ---------- ----------
Total dividends and distributions (.05) (.01) (.14) --
---------- ---------- ---------- ----------
Capital charge resulting from issuance of Common Stock -- -- --+++++ (.02)
---------- ---------- ---------- ----------
Net asset value, end of period $8.12 $15.59 $13.40 $14.47
========== ========== ========== ==========
Total Investment Based on net asset value per share (47.76%) 16.43% (6.23%) 2.05%++++
Return:** ========== ========== ========== ==========
Ratios to Average Expenses 1.69% 1.36% 1.32% 1.32%*
Net Assets: ========== ========== ========== ==========
Investment income (loss) -- net (.27%) .23% .24% 1.12%*
========== ========== ========== ==========
Supplemental Net assets, end of period (in thousands) $63,760 $193,545 $294,830 $318,414
Data: ========== ========== ========== ==========
Portfolio turnover 35.63% 44.09% 18.84% 9.10%
========== ========== ========== ==========
Average commission rate paid+++ $.0085 $.0086 -- --
========== ========== ========== ==========
<CAPTION>
Class B Class C Class D
For the For the For the
For the Period For the Period For the Period
The following per share data Year June 10, Year June 10, Year June 10,
and ratios have been derived Ended 1996+ to Ended 1996+ to Ended 1996+ to
from information provided in Nov. 30 Nov. 30 Nov. 30, Nov. 30, Nov. 30, Nov. 30,
the financial statements. 1997++ 1996 1997++ 1996 1997++ 1996
Increase (Decrease) in Net
Asset Value:
<S> <C> <C> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of
Operating period $15.53 $15.53 $15.52 $15.53 $15.58 $15.53
Performance: --------- --------- --------- --------- --------- ---------
Investment loss -- net (.15) (.05) (.11) (.05) (.04) (.01)
Realized and unrealized gain
(loss) on investments and foreign
currency transactions -- net (7.35) .05 (7.39) .04 (7.41) .06
--------- --------- --------- --------- --------- ---------
Total from investment operations (7.50) -- (7.50) (.01) (7.45) .05
--------- --------- --------- --------- --------- ---------
Less dividends:
Investment income -- net -- -- -- -- --+++++ --
In excess of investment income
-- net -- -- -- -- (.03) --
--------- --------- --------- --------- --------- ---------
Total dividends -- -- -- -- (.03) --
--------- --------- --------- --------- --------- ---------
Net asset value, end of period $8.03 $15.53 $8.02 $15.52 $8.10 $15.58
========= ========= ========= ========= ========= =========
Total Based on net asset
Investment value per share
Return:** (48.29%) .00%++++ (48.32%) (.06%)++ (47.91%) .32%++++
========= ========= ========= ========= ========= =========
Ratios to Expenses 2.75% 2.67%* 2.83% 2.68%* 2.01% 1.88%*
Average ========= ========= ========= ========= ========= =========
Net Assets: Investment loss -- net (1.20%) (.99%)* (1.01%) (.98%)* (.30%) (.34%)*
========= ========= ========= ========= ========= =========
Supplemental Net assets, end of period
Data: in thousands) $4,887 $3,719 $2,870 $887 $1,057 $953
========= ========= ========= ========= ========= =========
Portfolio turnover 35.63% 44.09% 35.63% 44.09% 35.63% 44.09%
========= ========= ========= ========= ========= =========
Average commission rate paid+++ $.0085 $.0086 $.0085 $.0086 $.0085 $.0086
========= ========= ========= ========= ========= =========
* Annualized.
** Total investment returns exclude the effects of sales loads.
+ Commencement of operations.
++ Based on average shares outstanding.
+++ For fiscal years beginning on or after September 1, 1995, the Fund
is required to disclose its average commission rate per share for
purchases and sales of equity securities. The "Average Commission
Rate Paid" includes commissions paid in foreign currencies, which
have been converted into US dollars using the prevailing exchange
rate on the date of the transaction. Such conversions may significantly
affect the rates shown.
++++ Aggregate total investment return.
+++++ Amount is less than $0.01 per share.
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Emerging Tigers Fund, Inc., November 30, 1997
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
Merrill Lynch Emerging Tigers Fund, Inc. (the "Fund") is registered
under the Investment Company Act of 1940 as a non-diversified, open-
end management investment company. The Fund offers four classes of
shares under the Merrill Lynch Select PricingSM System. Shares of
Class A and Class D are sold with a front-end sales charge. Shares of
Class B and Class C may be subject to a contingent deferred sales
charge. All classes of shares have identical voting, dividend,
liquidation and other rights and the same terms and conditions, except
that Class B, Class C and Class D Shares bear certain expenses related
to the account maintenance of such shares, and Class B and Class C
Shares also bear certain expenses related to the distribution of such
shares. Each class has exclusive voting rights with respect to matters
relating to its account maintenance and distribution expenditures. 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 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.
[bullet] 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.
[bullet] 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.
[bullet] 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.
[bullet] 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.
(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. Dividends from foreign securities where the ex-dividend date
may have already passed are subsequently recorded when the Fund has
determined the ex-dividend date. Interest income (including
amortization of discount) 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 prepaid registration fees --
Deferred organization expenses are charged to expense on a straight-
line basis over a five-year period beginning with the commencement of
operations. Prepaid registration fees are charged to expense as the
related shares are issued.
(g) Dividends and distributions -- Dividends and distributions paid by
the Fund are recorded on the ex-dividend dates. Distributions in
excess of net investment income are due primarily to differing tax
treatments for foreign currency transactions.
(h) Reclassification -- Generally accepted accounting principles
require that certain components of net assets be adjusted to reflect
permanent differences between financial and tax reporting.
Accordingly, current year's permanent book/tax differences of $108,933
have been reclassified between accumulated net realized capital losses
and distributions in excess of net investment income. These
reclassifications have no effect on net assets or net asset values per
share.
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. The Fund has also entered into a Distribution Agreement and
Distribution Plans with Merrill Lynch Funds Distributor, Inc. ("MLFD"
or "Distributor"), a wholly-owned subsidiary of Merrill Lynch Group,
Inc.
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 at the annual rate of 1.00% of
the average daily net assets of the Fund.
Pursuant to the Distribution Plans adopted by the Fund in accordance
with Rule 12b-1 under the Investment Company Act of 1940, the Fund
pays the Distributor ongoing account maintenance and distribution
fees. The fees are accrued daily and paid monthly at annual rates
based upon the average daily net assets of the shares as follows:
Account
Maintenance Distribution
Fee Fee
Class B 0.25% 0.75%
Class C 0.25% 0.75%
Class D 0.25% --
Pursuant to a sub-agreement with the Distributor, Merrill Lynch,
Pierce, Fenner & Smith Inc. ("MLPF&S"), a subsidiary of ML & Co., also
provides account maintenance and distribution services to the Fund.
The ongoing account maintenance fee compensates the Distributor and
MLPF&S for providing account maintenance services to Class B, Class C
and Class D shareholders. The ongoing distribution fee compensates the
Distributor and MLPF&S for providing shareholder and distribution-
related services to Class B and Class C shareholders.
For the year ended November 30, 1997, MLFD earned underwriting
discounts and direct commissions and MLPF&S earned dealer concessions
on sales of the Fund's Class A and Class D Shares as follows:
MLFD MLPF&S
Class A $4,406 $31,890
Class D $2,094 $23,457
For the year ended November 30, 1997, MLPF&S received contingent
deferred sales charges of $42,869 and $20 relating to transactions in
Class B and Class C Shares, respectively.
In addition, MLPF&S received $27,378 in commissions on the execution
of portfolio security transactions for the Fund for the year ended
November 30, 1997.
Merrill Lynch Financial Data Services, Inc. ("MLFDS"), a wholly-owned
subsidiary of ML & Co., is the Fund's transfer agent.
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, MLFD, and/or ML & Co.
3. Investments:
Purchases and sales of investments, excluding short-term securities,
for the year ended November 30, 1997 were $49,643,064 and
$129,144,149, respectively.
Net realized and unrealized gains (losses) as of November 30, 1997
were as follows:
Realized
Gains Unrealized
(Losses) Losses
Long-term investments $(17,292,535) $(22,351,266)
Short-term investments (320) --
Forward foreign exchange
contracts 146,971 (28,646)
Foreign currency transactions (255,904) (4,468)
------------- -------------
Total $(17,401,788) $(22,384,380)
============= =============
As of November 30, 1997, net unrealized depreciation for Federal
income tax purposes aggregated $23,043,491, of which $3,358,405
related to appreciated securities and $26,401,896 related to
depreciated securities. At November 30, 1997, the aggregate cost of
investments for Federal income tax purposes was $94,988,500.
4. Capital Share Transactions:
Net decrease in net assets derived from capital share transactions was
$56,250,234 and $141,243,207 for the years ended November 30, 1997 and
November 30, 1996, respectively.
Transactions in capital shares for each class were as follows:
Class A Shares for the Year Dollar
Ended November 30, 1997 Shares Amount
Shares sold 690,781 $7,889,564
Shares issued to shareholders in
reinvestment of dividends 23,243 357,947
------------- -------------
Total issued 714,024 8,247,511
Shares redeemed (5,274,309) (71,433,932)
------------- -------------
Net decrease (4,560,285) $(63,186,421)
============= =============
Class A Shares for the Year Dollar
Ended November 30, 1996 Shares Amount
Shares sold 376,008 $5,726,244
Shares redeemed (9,972,249) (152,370,175)
------------- -------------
Net decrease (9,596,241) $(146,643,931)
============= =============
Class B Shares for the Year Dollar
Ended November 30, 1997 Shares Amount
Shares sold 720,863 $7,993,947
Shares redeemed (347,593) (4,704,429)
Automatic conversion of shares (4,293) (46,751)
------------- -------------
Net increase 368,977 $3,242,767
============= =============
Class B Shares for the Period Dollar
June 10, 1996+ to November 30, 1996 Shares Amount
Shares sold 294,088 $4,450,564
Shares redeemed (52,601) (796,992)
Automatic conversion of shares (1,966) (29,132)
------------- -------------
Net increase 239,521 $3,624,440
============= =============
+ Commencement of operations.
Class C Shares for the Year Dollar
Ended November 30, 1997 Shares Amount
Shares sold 458,542 $5,177,237
Shares redeemed (157,967) (2,128,264)
------------- -------------
Net increase 300,575 $3,048,973
============= =============
Class C Shares for the Period Dollar
June 10, 1996+ to November 30, 1996 Shares Amount
Shares sold 61,472 $937,156
Shares redeemed (4,303) (64,508)
------------- -------------
Net increase 57,169 $872,648
============= =============
+ Commencement of operations.
Class D Shares for the Year Dollar
Ended November 30, 1997 Shares Amount
Shares sold 204,766 $2,315,219
Automatic conversion of shares 4,265 46,751
Shares issued to shareholders in
reinvestment of dividends 48 740
------------- -------------
Total issued 209,079 2,362,710
Shares redeemed (139,676) (1,718,263)
------------- -------------
Net increase 69,403 $644,447
============= =============
Class D Shares for the Period Dollar
June 10, 1996+ to November 30, 1996 Shares Amount
Shares sold 119,709 $1,774,038
Automatic conversion of shares 1,964 29,132
------------- -------------
Total issued 121,673 1,803,170
Shares redeemed (60,533) (899,534)
------------- -------------
Net increase 61,140 $903,636
============= =============
+ Commencement of operations.
5. Commitments:
At November 30, 1997, the Fund had entered into foreign exchange
contracts, in addition to the contracts listed on the Schedule of
Investments, under which it agreed to sell various foreign currencies
with approximate values of $561,000.
6. Capital Loss Carryforward:
At November 30, 1997, the Fund had a net capital loss carryforward
of approximately $18,408,000, of which $1,115,000 expires in 2003
and $17,293,000 expires in 2005. This amount will be available to
offset like amounts of any future taxable gains.
7. Subsequent Event:
On December 1, 1997, the Fund's Board of Directors declared an
ordinary income dividend in the amount of $.012165 per Class A Share,
payable on December 30, 1997 to shareholders of record as
of December 19, 1997.
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholders,
Merrill Lynch Emerging Tigers Fund, Inc.:
We have audited the accompanying statement of assets and liabilities,
including the schedule of investments, of Merrill Lynch Emerging
Tigers Fund, Inc. as of November 30, 1997, the related statements of
operations for the year then ended and changes in net assets for each
of the years in the two-year period then ended, and the financial
highlights for each of the years in the three-year period then ended
and 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 audits.
We conducted our audits 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, 1997, 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 audits provide 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
Merrill Lynch Emerging Tigers Fund, Inc. as of November 30, 1997, the
results of its operations, the changes in its net assets, and the
financial highlights for the respective stated periods in conformity
with generally accepted accounting principles.
Deloitte & Touche LLP
Princeton, New Jersey
January 9, 1998
<TABLE>
<CAPTION>
IMPORTANT TAX INFORMATION (unaudited)
The following information summarizes all per share distributions paid by Merrill Lynch Emerging Tigers Fund, Inc. during its
taxable year ended November 30, 1997:
Domestic Foreign Total Foreign Taxes
Record Payable Non-Qualifying Source Ordinary Paid or
Date Date Ordinary Income Income Income Withheld
<S> <C> <C> <C> <C> <C> <C>
Class A Shares 12/19/96 12/30/96 $0.026395 $0.019800 $0.046195 $0.024514
Class D Shares 12/19/96 12/30/96 $0.017306 $0.012982 $0.030288 $0.024514
The foreign taxes paid or withheld represent taxes incurred
by the Fund on dividends received by the Fund from foreign
sources. Foreign taxes paid or withheld should be included
as foreign source income with an offsetting deduction from
gross income or as a credit for taxes paid to foreign governments.
You should consult your tax adviser regarding the appropriate
treatment of foreign taxes paid.
Please retain this information for your records.
</TABLE>
PORTFOLIO INFORMATION (unaudited)
As of November 30, 1997
Percent of
Ten Largest Equity Holdings Net Assets
Housing Development Finance Corporation Ltd. 4.8%
Elec & Eltek International Company Ltd. 4.2
United Overseas Bank Ltd. 'Foreign' 3.5
China Telecom (Hong Kong) Limited 3.2
Singapore Press Holdings Ltd. 'Foreign' 2.8
China Resources Enterprise Ltd. 2.7
Gulf Indonesia Resources Ltd. 2.6
Shanghai Industrial Holdings Ltd. 2.6
PTT Exploration and Production Public
Company Ltd. 'Foreign' 2.5
Guangdong Investments, Ltd. 2.4
EQUITY PORTFOLIO CHANGES (unaudited)
For the Quarter Ended November 30, 1997
Additions
China Telecom (Hong Kong) Limited
Gulf Indonesia Resources Ltd.
Deletions
China Overseas Land & Investment Ltd.
DMCI Holdings Inc.
Metropolitan Bank & Trust Company
P.T. Astra International
P.T. Bank International Indonesia
P.T. Fiskaragung Perkasa 'Foreign'
P.T. Lippo Life Insurance
Public Bank BHD 'Foreign'
Renong BHD
United Engineers (Malaysia) Ltd.
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, Senior Vice President and
Portfolio Manager
Gerald M. Richard, Treasurer
James W. Harshaw, Secretary
Custodian
Brown Brothers Harriman & Co.
40 Water Street
Boston, MA 02109
Transfer Agent
Merrill Lynch Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, FL 32246-6484
(800) 637-3863
