<PAGE>
MORGAN STANLEY
INDIA INVESTMENT FUND, INC.
- --------------------------------------------------------------------------------
DIRECTORS AND OFFICERS
Barton M. Biggs Samuel T. Reeves
CHAIRMAN OF THE BOARD DIRECTOR
OF DIRECTORS
James W. Grisham
Michael F. Klein VICE PRESIDENT
PRESIDENT AND DIRECTOR
Harold J. Schaaff, Jr.
John Chu VICE PRESIDENT
DIRECTOR
Joseph P. Stadler
Gerald la Hausse de Louviere VICE PRESIDENT
DIRECTOR
Valerie Y. Lewis
Gerard E. Jones SECRETARY
DIRECTOR
Joanna M. Haigney
John A. Levin TREASURER
DIRECTOR
Belinda A. Brady
Fergus Reid ASSISTANT TREASURER
DIRECTOR
- --------------------------------------------------------------------------------
INVESTMENT ADVISER
Morgan Stanley Asset Management Inc.
1221 Avenue of the Americas
New York, New York 10020
- --------------------------------------------------------------------------------
ADMINISTRATOR
The Chase Manhattan Bank
73 Tremont Street
Boston, Massachusetts 02108
- --------------------------------------------------------------------------------
CUSTODIANS
Morgan Stanley Trust Company
One Pierrepont Plaza
Brooklyn, New York 11201
The Chase Manhattan Bank
3 Chase MetroTech Center
Brooklyn, New York 11245
- --------------------------------------------------------------------------------
SHAREHOLDER SERVICING AGENT
American Stock Transfer & Trust Company
40 Wall Street
New York, New York 10005
(800) 278-4353
- --------------------------------------------------------------------------------
LEGAL COUNSEL
Rogers & Wells
200 Park Avenue
New York, New York 10166
- --------------------------------------------------------------------------------
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
1177 Avenue of the Americas
New York, New York 10036
- --------------------------------------------------------------------------------
For additional Fund information, including the Fund's net asset value per share
and information regarding the investments comprising the Fund's portfolio,
please call 1-800-221-6726.
-----------------------
MORGAN STANLEY
INDIA INVESTMENT
FUND, INC.
-----------------------
THIRD QUARTER REPORT
SEPTEMBER 30, 1997
MORGAN STANLEY ASSET MANAGEMENT INC.
INVESTMENT ADVISER
<PAGE>
LETTER TO SHAREHOLDERS
- ---------------
For the nine months ended September 30, 1997, the Morgan Stanley India
Investment Fund, Inc. (the "Fund") had a total return, based on net asset value
per share, of 20.77% compared to 23.10% for the U.S. dollar adjusted Bombay
Stock Exchange (BSE) National Index ("the Index"). For the one year ended
September 30, 1997, the Fund had a total return, based on net asset value per
share, of 19.55% compared to 15.50% for the Index. For the period since the
Fund's inception on February 25, 1994 through September 30, 1997, the Fund had a
total return, based on net asset value per share, of -23.40% compared with
- -27.39% for the Index. On September 30, 1997, the closing price of the Fund's
shares on the New York Stock Exchange was $11 5/16, representing a 6.3% premium
to the net asset value per share.
The third quarter saw the Indian market move southwards largely in sympathy with
the economic turmoil and stock market collapses in many of the Association of
South East Asian Nations (ASEAN) markets. Foreign inflows slowed down and most
funds cut profitable Indian positions. On the economic front, the expected
economic recovery definitely seems to be delayed furthermore, likely into the
first quarter of 1998. Corporate results for the first half of fiscal year 1998
are expected to be unexciting, though we believe the market has already
discounted them. The economic recovery has been delayed because of the severe
shock the Indian corporate system took in fiscal year 1997, some degree of
political uncertainty and lack of adequate government spending in the
infrastructure areas.
Although the shorter term outlook seems lackluster, we are optimistic in the
longer term as change at the margin is positive. Credit growth seems to be
improving month on month and we are seeing continued robust demand from
rural-related sectors. There is empirical evidence of recovery in certain
industries. Applications for new housing loans with Housing Development Finance
Corporation (HDFC) are up 25%, paint industry volumes are up 12% in the first
half of fiscal year 1998, and aluminum inventories have fallen by 50% from
January 1997 to August 1997. Sales of motorcycles are up 15% between January and
June 1997. Hero Honda, one of our top holdings continues to register growth. We
believe that the economic up-turn, though delayed, is probably under way.
Historically, India has never experienced a prolonged recession, just cyclical
slowdowns, stretching at most to three or four quarters in a row.
The Indian currency has depreciated by 3% over the last quarter and may settle
marginally lower as import demand picks up in the second half of the fiscal
year. Inflation recently touched a ten-year low of 4%. In anticipation of the
poor first half results, earnings growth for the markets for fiscal year 1998
has been downgraded to around 15%. Yet India continues to trade at a discount to
Asia (ex-Japan) and well below its 12-year historic average of 18 times
prospective earnings. We expect that a broader re-rating of the markets can only
happen after the government undertakes tough measures on cutting the fiscal
deficit, privatizing aggressively and encouraging large investments to remove
infrastructure bottlenecks.
Although the Fund is permitted to temporarily increase its cash position during
periods of market volatility, we intend, consistent with the Fund's long-term
investment objectives, to remain invested in equity securities, even during
market downturns.
Sincerely,
/s/ Michael F. Klein
Michael F. Klein
PRESIDENT AND DIRECTOR
/s/ Vinod Sethi
Vinod Sethi
PORTFOLIO MANAGER
October 1997
2
<PAGE>
Morgan Stanley India Investment Fund, Inc.
Investment Summary as of September 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
HISTORICAL INFORMATION
TOTAL RETURN (%)
-----------------------------------------------------------
MARKET VALUE (1) NET ASSET VALUE (2) INDEX (3)
------------------- ------------------- -------------------
AVERAGE AVERAGE AVERAGE
CUMULATIVE ANNUAL CUMULATIVE ANNUAL CUMULATIVE ANNUAL
---------- ------- ---------- ------- ---------- -------
FISCAL YEAR TO DATE 19.08% -- 20.77% -- 23.10% --
ONE YEAR 29.29 29.29% 19.55 19.55% 15.50 15.50%
SINCE INCEPTION* -18.56 -5.55 -23.40 -7.14 -27.39 -8.52
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
- --------------------------------------------------------------------------------
RETURNS AND PER SHARE INFORMATION
[GRAPH]
MORGAN STANLEY INDIA INVESTMENT FUND, INC.(2)
BOMBAY STOCK EXCHANGE (BSE) NATIONAL INDEX(3)
YEARS ENDED DECEMBER 31:
NINE MONTHS
ENDED
1994* 1995 1996 SEPTEMBER 30, 1997
----- ---- ---- ------------------
Net Asset Value Per Share. . . $ 13.99 $ 8.91 $ 8.81 $ 10.64
Market Value Per Share . . . . $ 11.25 $ 9.13 $ 9.50 $ 11.31
Premium/(Discount) . . . . . . -19.6 % 2.5 % 7.8 % 6.3 %
Capital Gains Distributions. . $ 0.17 -- -- --
Fund Total Return (2). . . . . 0.72% -36.31% -1.12% 20.77%
Index Total Return (3) . . . . -7.88% -31.53% -6.49% 23.10%
(1) Assumes dividends and distributions, if any, were reinvested.
(2) Total investment return based on net asset value per share reflects the
effects of changes in net asset value on the performance of the Fund during
each period, and assumes dividends and distributions, if any, were
reinvested. These percentages are not an indication of the performance of a
shareholder's investment in the Fund based on market value due to
differences between the market price of the stock and the net asset value
per share of the Fund.
(3) The Bombay Stock Exchange (BSE) National Index is a market capitalization
weighted index including the equity shares of 100 companies from the
"Specified" and the "Non-specified" list of the 5 major stock exchanges,
namely, Bombay, Calcutta, Delhi, Ahmedabad and Madras. Prior to fiscal year
1997, the Fund used the Bombay Stock Exchange Sensitive Index as its
benchmark for performance purposes. Beginning in 1997, the Fund is using
the Bombay Stock Exchange National Index for the purpose of performance
comparisons. This index more closely represents the investment strategy of
the Fund.
* The Fund commenced operations on February 25, 1994.
3
<PAGE>
Morgan Stanley India Investment Fund, Inc.
Portfolio Summary as of September 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
PORTFOLIO INVESTMENTS DIVERSIFICATION
[CHART]
Fixed Income Securities (0.2%)
Equity Securities (98.2%)
Short-Term Investments (1.6%)
- --------------------------------------------------------------------------------
SECTORS
[CHART]
Other (12.5%)
Transportation - Road & Rail (6.1%)
Textiles & Apparel (2.7%)
Machinery & Engineering (5.7%)
Health & Personal Care (11.3%)
Financial Services (8.6%)
Automobiles (15.0%)
Banking (5.4%)
Chemicals (4.7%)
Electronic Components & Instruments (7.8%)
Energy Equipment & Services (20.2%)
- --------------------------------------------------------------------------------
TEN LARGEST HOLDINGS
PERCENT OF
NET ASSETS
----------
1. Bharat Heavy Electricals Ltd. 18.8%
2. Housing Development Finance Corp. Ltd. 8.3
3. Infosys Technology Ltd. 6.5
4. Container Corp. of India Ltd. 6.2
5. State Bank of India Ltd. 4.6
6. MRF Ltd. 2.3
7. Sundaram Fasteners Ltd. 2.2
8. Hoechst Schering Agrevo Ltd. 2.0
9. Mahanagar Telephone Nigam Ltd. 2.0
10. Hero Honda Ltd. 1.9
----
54.8%
----
----
4
<PAGE>
INVESTMENTS (UNAUDITED)
- ---------------
SEPTEMBER 30, 1997
VALUE
SHARES (000)
- --------------------------------------------------------------------------------
COMMON STOCKS (98.2%)
(Unless otherwise noted)
- --------------------------------------------------------------------------------
APPLIANCES & HOUSEHOLD DURABLES (0.8%)
Bharat Pipes & Fittings Ltd. 150 U.S.$ --@
Blow Plast Ltd. 434,600 481
Phillips India Ltd. 692,150 1,268
Punjab Anand Lamp Industries Ltd. 227,000 135
Supreme Industries Ltd. 220,950 971
VIP Industries Ltd. 161,900 125
------------
2,980
------------
- --------------------------------------------------------------------------------
AUTOMOBILES (15.0%)
Apollo Tyres Ltd. 491,775 1,037
Apollo Tyres Ltd. (Rights) 170 --@
Apollo Tyres Ltd. (Warrants), expiring 2/28/98 141,758 40
Ashok Leyland Ltd. 4,900 9
Autolec Industries Ltd. 241,045 294
Autolite Ltd. 132,670 169
Baja Auto Ltd. 13,900 212
Bajaj Tempo Ltd. 51,081 346
Bajaj Tempo Ltd. (Rights) 851 3
Castrol (India) Ltd. 108,088 1,919
Ceat Ltd. 833,547 599
Denso India Ltd. 647,900 1,129
Elgi Tyres & Tread Ltd. 273,400 3,213
Engine Values Ltd. 185,700 1,104
Escorts Ltd. 150 --@
GKN Invel Transmissions Ltd. 100 --@
Harig Crankshafts Ltd. 6,000 --@
Hero Honda Ltd. 369,135 7,250
LML Ltd. 1,300 2
Lumax Automatic Parts Industries Ltd. 373,600 754
Modi Rubber Ltd. 300 --@
Motherson Sumi Systems Ltd. 223,938 489
Motherson Sumi Systems Ltd. (Rights) 40 --@
Motor Industries Co., Ltd. 19,755 3,278
MRF Ltd. 109,280 8,914
O.E.N. Connectors Ltd. 123,676 196
Patheja Forgings and Auto Ltd. 775,000 463
Premier Instruments Ltd. 245,987 961
Punjab Tractors Ltd. 368,420 7,213
Rane Brakes and Lining Ltd. 7,500 37
Rane Madras Ltd. 213,100 996
Rico Auto Industries Ltd. 221,000 458
S.K.F. Bearings Ltd. 52,363 2,160
Subros Auto Ltd. 159,395 498
Sundaram Brake Ltd. 2,850 13
Sundaram Fasteners Ltd. 481,100 8,225
Tata Engineering & Locomotive Ltd. 123,302 1,148
TVS Suzuki Ltd. 376,550 3,852
VST Tillers & Tractors Ltd. 173,000 191
------------
57,172
------------
- --------------------------------------------------------------------------------
BANKING (5.4%)
Federal Bank Ltd. 100 --@
HDFC Bank Ltd. 1,558,700 2,996
Oriental Bank of Commerce Ltd. 100 --@
State Bank of India Ltd. 2,274,870 17,408
------------
20,404
------------
- --------------------------------------------------------------------------------
BEVERAGES & TOBACCO (1.6%)
ITC Ltd. 376,441 6,131
McDowell & Co., Ltd. 300 --@
------------
6,131
------------
- --------------------------------------------------------------------------------
BROADCASTING & PUBLISHING (1.4%)
Cosmo Films Ltd. 209,900 111
Navneet Publications Ltd. 233,100 677
New Delhi Television Ltd. 333,300 746
Tata Donnelley Ltd. 293,250 1,946
Zee Telefilms Ltd. 613,700 1,858
------------
5,338
------------
- --------------------------------------------------------------------------------
BUILDING MATERIALS & COMPONENTS (0.6%)
Associated Cement Co. Ltd. 36 1
Bell Ceramics Ltd. 524,750 103
Gujarat Sidhee Cement Ltd. 2,199,400 255
Hindustan Sanitaryware and Industries Ltd. 70,000 192
ITW Signode India Ltd. 574,950 1,463
Murudeshwar Ceramics Ltd. 346,300 201
Shree Cements Ltd. 50 --@
------------
2,215
------------
- --------------------------------------------------------------------------------
CHEMICALS (4.7%)
Atul Ltd. 808 1
Clariant (India) Ltd. 68,750 392
Colour Chem Ltd. 52,602 4,582
E.I.D. Parry Ltd. GDR 94,320 295
Gujarat Narmada Valley Fertilizers Ltd. GDR 212,000 742
Hoechst Schering Agrevo Ltd. 374,880 7,774
ICI India Ltd. 484,400 3,057
Indian Organic Chemical Ltd. 426,050 68
Indian Petro Chemical Corp. Ltd. 300 1
ITC Agrotech Co., Ltd. 100 --@
Jaysynth Dyechem Ltd. 340,500 162
MSL Industries Ltd. 62,000 62
Reliance Industries Ltd. 24,136 240
Sudarshan Chemicals Ltd. 258,907 466
------------
17,842
------------
- --------------------------------------------------------------------------------
CONSTRUCTION & HOUSING (0.1%)
Hindustan Construction Co. 350,000 213
Nagarjuna Construction Ltd. 253,600 176
Nagarjuna Construction Ltd.-New 97,500 59
------------
448
------------
5
<PAGE>
VALUE
SHARES (000)
- --------------------------------------------------------------------------------
ELECTRICAL & ELECTRONICS (0.2%)
Asian Electronics Ltd. 211,600 U.S.$ 620
BPL Ltd. 100 --@
Centrum Electronics Ltd. 67,700 25
------------
645
------------
- --------------------------------------------------------------------------------
ELECTRONIC COMPONENTS & INSTRUMENTS (7.8%)
Datar Switchgear Ltd. 275,900 368
Fujitsu ICIM Ltd. 655,215 290
Infosys Technology Ltd. 559,600 24,645
Mastek Ltd. 171,400 1,128
Modi Xerox Ltd. 859,950 2,580
Rolta India Ltd. 5,000 2
S&S Power Switchgear Ltd. 226,055 319
Samtel Colour Ltd. 756,950 240
VHEL Industries Ltd. 100 --@
------------
29,572
------------
- --------------------------------------------------------------------------------
ENERGY EQUIPMENT & SERVICES (20.2%)
Bharat Heavy Electricals Ltd. 7,157,600 71,250
Crompton Greaves Ltd. 627,380 694
Jyoti Structure Ltd. 167,750 576
KEC International Ltd. 536,857 586
Kirloskar Oil Engine Ltd. 380,440 489
Modern Malleables Ltd.-New 420,000 41
Shiram Honda Power Equipment Ltd. 353,665 3,178
Uniflex Cables Ltd. 287,400 136
------------
76,950
------------
- --------------------------------------------------------------------------------
ENERGY SOURCES (0.0%)
Renewable Energy Ltd. 247,800 171
------------
- --------------------------------------------------------------------------------
FINANCIAL SERVICES (8.6%)
Canfin Homes Ltd. 959,150 358
Housing Development Finance Corp. Ltd. 348,792 31,472
ICICI Ltd.-New 1,740 4
Industrial Finance Corp. (India) Ltd. 3,900 3
Sundaram Finance Ltd. 83,150 618
UTI Master Gain 371,700 122
UTI MasterShares Ltd. 16,135 6
------------
32,583
------------
- --------------------------------------------------------------------------------
FOOD & HOUSEHOLD PRODUCTS (0.4%)
American Dry Fruits Ltd. 538,500 57
Aruna Sugars & Enterprises Ltd. 250 --@
Dhampur Sugar Mills Ltd. 100,000 219
Smithkline Beecham Consumer Health Care Ltd. 19,120 171
Thiru Arooran Sugars Ltd. 469,313 1,025
Umred Agro Complex Ltd. 124,500 2
Western Hatcheries Ltd. 237,933 138
------------
1,612
------------
- --------------------------------------------------------------------------------
FOREST PRODUCTS & PAPER (0.6%)
Ballarpur Industries Ltd. 602,842 617
Paper Products Ltd.-New 299,900 804
Pudumjee Ltd. 221,600 276
Tamilnadu Newsprint and Paper Ltd. 385,000 551
------------
2,248
------------
- --------------------------------------------------------------------------------
HEALTH & PERSONAL CARE (11.3%)
Cheminor Drugs Ltd. 243,650 852
Cipla Ltd. 318,050 6,745
E. Merck (India) Ltd. 406,275 2,390
Godrej Soaps Ltd. 573,850 571
Hindustan Ciba-Geigy Ltd. 33,102 3,432
Hindustan Lever Ltd. 292 11
Hoechst Marion Roussel India Ltd. 585,200 4,854
Indian Shaving Products Ltd. 36,363 549
Lakme Ltd. 540,857 4,393
Marico Industries Ltd. 283,200 2,663
Nicholas Piramal India Ltd. 635,240 5,441
Pfizer Ltd. 2,510 24
Ranbaxy Labs Ltd. 40,000 699
Rhone Poulenc (India) Ltd. 100 2
Sandoz (India) Ltd. 67,000 382
Searle (India) Ltd. 300,000 460
Smithkline Beecham Pharmaceutical Ltd. 434,700 5,205
Sun Pharmaceutical Industries Ltd. 443,900 3,713
TTK Biomed Ltd. 143,700 48
Unichem Labs Ltd. 162,700 585
------------
43,019
------------
- --------------------------------------------------------------------------------
INDUSTRIAL COMPONENTS (0.8%)
Carborundum Universal Ltd. 493,300 1,424
Chicago Pneumatic India Ltd. 324,940 1,617
------------
3,041
------------
- --------------------------------------------------------------------------------
LEISURE & TOURISM (0.2%)
Indian Hotels Co., Ltd. 50 1
ITC Hotels Ltd. 251,725 804
------------
805
------------
- --------------------------------------------------------------------------------
MACHINERY & ENGINEERING (5.7%)
Advani-Oerlikon Ltd. 450,027 414
Ahmednagar Forgings Ltd. 166,100 124
Artson Engineering Ltd. 204,293 45
Baharat Earth Movers Ltd. 476,200 1,560
Elgi Equipments Ltd. 107,850 1,244
Esab India Ltd. 564,850 1,847
Graphite India Ltd. 271,200 263
Indian Seamless Metal Tubes Ltd. 391,100 237
Indian Seamless Metal Tubes Ltd.-New 139,500 73
Ingersoll Rand (India) Ltd. 100 1
Kabra Extrusion Technik Ltd. 152,600 124
Kirloskar Cummins Ltd. 307,100 4,246
Lakshmi Machine Works Ltd. 8,629 1,336
6
<PAGE>
VALUE
SHARES (000)
- --------------------------------------------------------------------------------
MACHINERY & ENGINEERING (CONTINUED)
Lakshmi Synthetic Machinery Ltd. 152,400 U.S.$ 202
M.M. Forgings Ltd. 200
Praj Industries Ltd. 221,600 246
Revathi-CP Equipment Ltd. 149,300 3,114
Siemens Ltd. 138 1
Thermax Ltd. 444,100 3,500
Wartsila Diesel Ltd. 391,500 3,204
------------
21,781
------------
- --------------------------------------------------------------------------------
METALS - NON-FERROUS (0.1%)
Pennar Aluminum Co., Ltd. 1,632,800 217
------------
- --------------------------------------------------------------------------------
METALS - STEEL (0.2%)
India Seamless Steel & Alloy Ltd. 897,100 82
Isibars Ltd. 500,000 256
Mukand Iron & Steel Works Ltd. 1,440 2
Panchmahal Steels Ltd. 197,700 57
Shri Ishar Alloy Steels Ltd. 369,500 37
Tata Iron & Steel Co., Ltd. 450 2
Tata SSL Ltd.-New 76,350 59
Uttam Galva Steels Ltd. 436,250 91
------------
586
------------
- --------------------------------------------------------------------------------
MISCELLANEOUS MATERIALS & COMMODITIES (0.7%)
Essel Packaging Ltd. 368,100 1,247
Flex Industries Ltd. 50
Garware Plastics & Polyester Ltd. 397,789 376
Su-Raj Diamonds Ltd. 100
Titan Industries Ltd. 425,385 900
Uniworth International Ltd. 100
------------
2,523
------------
- --------------------------------------------------------------------------------
MULTI-INDUSTRY (0.2%)
Birla VXL Ltd. 712,680 264
JK Corp Ltd. 357,483 282
Larsen & Toubro Ltd. 1,295 8
Widia (India) Ltd. 450 34
------------
588
------------
- --------------------------------------------------------------------------------
RECREATION, OTHER CONSUMER GOODS (0.8%)
Tube Investments of India Ltd. 283,316 317
Tube Investments of India Ltd. GDR 198,133 198
Vashishti Detergents Ltd. 1,957,567 2,531
------------
3,046
------------
- --------------------------------------------------------------------------------
TELECOMMUNICATIONS (2.0%)
Indian Telephone Industries Ltd. 3,300 1
Mahanagar Telephone Nigam Ltd. 1,084,100 7,704
Punjab Wire Ltd. 500 1
------------
7,706
------------
- --------------------------------------------------------------------------------
TEXTILES & APPAREL (2.7%)
A.P. Rayon Ltd. 50 --@
Bata India Ltd. 395,602 1,493
Coates of India Ltd. 238,180 978
Coates of Viyella India Ltd. 131,300 284
Coates of Viyella India Ltd.-New 300,000 641
Cosmos Leather Exports Ltd. 325,000 3
DCL Polyesters Ltd. 899,600 129
Delta Industries Ltd. 380,000 79
G.T.N. Textiles Ltd. 257,500 351
Indo Rama Synthetics Ltd. 116,000 812
Indo Rama Synthetics Ltd. 1,852,356 1,076
Indo Rama Synthetics Ltd. - New 309,684 160
J.K. Synthetics Ltd. 2,091,958 188
Mahavir Spinning Mills Ltd. 491,000 815
Maral Overseas Ltd. 650,600 448
Precot Mills Ltd. 66,777 137
PSM Spg Mills Ltd. 200 --@
Raymond Ltd. 175,191 329
Raymond Ltd. New 144A 7,500 35
Raymond Ltd. GDR 10,000 46
Raymond Ltd. GDR 144A 59,500 275
Sanotgen Exports Ltd. 100 --@
Shree Rajasthan Syntex Ltd. 23,950 12
SIV Industries Ltd. GDR 313,500 125
SRF Ltd. 665,119 359
Super Spinning Mills Ltd. 200,357 297
Vardhaman Polytex Ltd. 282,200 275
Vardhaman Spinning & General Mills Ltd. 373,500 736
Viral Syntex Ltd. 209,200 36
Woolworth India Ltd. 1,100 1
------------
10,120
------------
- --------------------------------------------------------------------------------
TRANSPORTATION - ROAD & RAIL (6.1%)
Container Corp. of India Ltd. 2,011,600 23,362
------------
- --------------------------------------------------------------------------------
TRANSPORTATION - SHIPPING (0.0%)
Great Eastern Shipping Ltd. 1,500 2
------------
- --------------------------------------------------------------------------------
UTILITIES - ELECTRICAL & GAS (0.0%)
Andhra Valley Power Supply Co., Ltd. 150 1
Tata Hydro Electric Power Supply Co. Ltd. 50 --@
------------
1
------------
- --------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(Cost U.S.$386,904) 373,108
------------
- --------------------------------------------------------------------------------
FACE
AMOUNT
(000)
- --------------------------------------------------------------------------------
FIXED INCOME SECURITIES (0.2%)
- --------------------------------------------------------------------------------
METALS - STEEL (0.0%)
Tata SSL Ltd. - New 14.00%, 12/6/02 U.S.$ 14 14
------------
- --------------------------------------------------------------------------------
7
<PAGE>
FACE
AMOUNT VALUE
(000) (000)
- --------------------------------------------------------------------------------
MISCELLANEOUS MATERIALS & COMMODITIES (0.2%)
Garware Plastics & Polyester
Ltd. 16.00%, 5/1/05 U.S.$ 277 U.S.$ 650
------------
- --------------------------------------------------------------------------------
TOTAL FIXED INCOME SECURITIES
(Cost U.S.$899) 664
------------
- --------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS (0.1%)
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENT (0.1%)
Chase Securities, Inc., 5.75%,
dated 9/30/97, due 10/1/97,
to be repurchased at U.S.
$434, collateralized by
United States Treasury Bond,
8.50%, due 2/15/20, valued
at U.S.$443 (Cost U.S.$434) 434 434
------------
- --------------------------------------------------------------------------------
FOREIGN CURRENCY ON DEPOSIT WITH CUSTODIAN (1.4%)
Indian Rupee (Cost U.S.$5,528) 200,754 5,551
------------
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS (99.9%)
(Cost U.S.$393,765) 379,757
------------
- --------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES (0.1%)
Other Assets U.S.$ 6,054
Liabilities (5,858) 196
--------- ------------
- --------------------------------------------------------------------------------
NET ASSETS (100.0%)
Applicable to 35,707,092 issued and
outstanding U.S.$0.01 par value shares
(100,000,000 shares authorized) U.S.$379,953
------------
------------
- --------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE U.S.$ 10.64
------------
------------
- --------------------------------------------------------------------------------
@ -- Value is less than U.S.$500.
GDR -- Global Depositary Receipt.
8
