(2_FIDELITY_LOGOS)FIDELITY ADVISOR
(registered trademark)
EMERGING ASIA
FUND, INC.
SEMIANNUAL REPORT
APRIL 30, 1995
CONTENTS
PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.
FUND TALK 4 The manager's review of fund
performance, strategy and outlook.
INVESTMENT CHANGES 7 A summary of major shifts in the
fund's investments over the past six
months.
INVESTMENTS 8 A complete list of the fund's
investments with their market
values.
FINANCIAL STATEMENTS 16 Statements of assets and liabilities,
operations, and changes in net
assets,
as well as financial highlights.
NOTES 20 Notes to the financial statements.
NOTICE IS HEREBY GIVEN IN ACCORDANCE WITH SECTION 23(C) OF THE INVESTMENT
COMPANY
ACT OF 1940 THAT FROM TIME TO TIME THE FUND MAY PURCHASE AT MARKET PRICES
SHARES OF
ITS COMMON STOCK IN THE OPEN MARKET.
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR
THE GENERAL
INFORMATION OF THE SHAREHOLDERS OF THE FUND. IT IS NOT A PROSPECTUS,
CIRCULAR OR
REPRESENTATION INTENDED FOR USE IN THE PURCHASE OR SALE OF SHARES OF THE
FUND OR OF ANY
SECURITIES MENTIONED
IN THE REPORT.
PRESIDENT'S MESSAGE
DEAR SHAREHOLDER:
Although there have been some positive market indications so far in 1995,
no one can predict what lies ahead for investors. Last year, stocks posted
below-average returns and bonds had one of the worst years in history. This
downturn followed a period in which the investing environment was generally
very positive.
These market ups and downs are a normal part of investing, and there are
some basic principles that are helpful for investors to remember in
different types of markets.
If you can leave your money invested over the long term, you can avoid the
results of the volatility that generally accompanies the stock market in
the short term, as we witnessed last year. You also can help to manage some
of the risks of investing through diversification. A stock fund is already
diversified because it invests in many issues. You can diversify even
further by placing some of your money in several different types of stock
funds or in other investment categories, such as bonds.
If you have a short investment time horizon, you might want to consider
moving some of your investment into a money market fund, which seeks income
and a stable share price by investing in high-quality, short-term
investments. Of course, there is no assurance that a money market fund will
achieve its goal, and it is important to remember that money market funds
are not insured or guaranteed by any agency of the U.S. government.
Finally, no matter what your investment horizon or portfolio diversity, it
makes good sense to follow a regular investment plan - investing a certain
amount of money at the same time each month or quarter - and to review your
portfolio periodically. A periodic investment plan will not, of course,
assure a profit or protect against a loss.
Remember to contact your investment professional if you need help with your
investments.
Best regards,
Edward C. Johnson 3d
FUND TALK: THE MANAGER'S OVERVIEW
An interview with Peter Phillips, Portfolio Manager of Fidelity
Advisor Emerging Asia Fund, Inc.
Q. HOW HAS THE FUND PERFORMED, PETER?
A. For the six months ended April 30, 1995, the fund had a total return of
- -12.29%, based on net asset value. (See Financial Highlights on page 19.)
This compares to a total return of -13.90% for the customized Morgan
Stanley Capital International Combined Asia ex-Japan Free including Taiwan
index during the same time period. Remember, however, that this is a
closed-end fund that trades on the New York Stock Exchange. So we also need
to look at the fund's market value return, which reflects gains or losses
in the fund's share price over the period, as well as reinvestment of any
dividends or capital gains. The market value return was -17.29% for the
six-month period. Shares of the fund held six months ago at $15.125 could
have been sold on April 30, 1995, for $12.25.
Q. WHAT'S BEEN HAPPENING SINCE THE LAST REPORT?
A. Generally the Asian emerging economies are still very strong. The export
side has performed very well, benefiting from the pickup in the U.S.
economy and the beginning of a recovery in Europe. The valuations in the
region are generally attractive. Hong Kong is trading at the lower end of
its trading range. Singapore and Malaysia are less attractive and are
trading near historic highs, although selected stock picking opportunities
still exist.
Q. HOW WOULD YOU DESCRIBE THE ENVIRONMENT YOU FOUND YOURSELF INVESTING IN?
A. The Asian securities markets were adversely affected by very poor
sentiment after the buoyant performance during 1991-1993. Increases in U.S.
interest rates in 1994 burst the bubble that had built up in Asian markets.
Sentiment deteriorated further during the late 1994 crisis in Mexico. This
devaluation of the peso further spurred U.S. investors to retreat from
emerging markets. The emphasis changed from focusing on the high returns to
the significant risk factors in Asia such as the slow down in the Chinese
economy, the health of Deng Xiao Ping and high inflation rates. Although
the economies in Asia have experienced some slowing in economic growth,
they are still strong. Exports have picked up and the strength of the yen
has helped.
Q. HOW HAVE THE HONG KONG MARKETS BEEN HOLDING UP?
A. Given the downturn in markets, some securities reached levels that
attracted renewed investor interest. The Hong Kong equity market reached a
low price/earnings multiple of 8 times earnings in 1995. This low valuation
coupled with renewed optimism in the residential property market helped the
market rally. We still have significant holdings in Hong Kong. The market
experienced a strong rally in March and April. Property prices are
stabilizing and end-user demand remains strong. The economy is slowing down
and I expect to see slower growth in 1995. I am concentrating on companies
like JCG Holdings and New World Development that are likely to benefit from
the long-term growth opportunities in Hong Kong and China.
Q. TAIWAN IS NOW THE SECOND LARGEST COUNTRY WEIGHTING IN THE FUND . . .
A. Yes. Within the fund I have emphasized electronics, banks, and real
estate investments. This is where I feel Taiwan has a competitive
advantage. The electronics industry, in particular, is benefiting from the
strength of the personal computer industry in the U.S., which has begun to
spread throughout the world. The market in Taiwan is becoming more mature,
with greater involvement of foreigners fueling this trend. Gradually,
foreign investment restrictions are being removed, which provides for
greater liquidity and ease of investment.
Q. WHAT CHARACTERISTICS DO YOU LOOK FOR IN THE STOCKS YOU BUY?
A. I like companies with strong cash flow generation. I am constantly
looking for companies that have cash remaining after capital expenditure -
and also have reasonable growth prospects. Indonesian cigarette companies
like Sampoerna Hanjaya Mandala are a good example. These companies continue
to experience strong growth as rising wages help fuel increasing
consumption, while cash flow helps fund expanding production.
Q. WHAT ABOUT SOME OF THE FUND'S SPECIFIC HOLDINGS. WHERE ARE YOU FINDING
OPPORTUNITIES?
A. While I have reduced Hong Kong holdings slightly, I believe there are
opportunities in Hong Kong real estate. Residential prices have come down
20-25% from their peak. However, recent land auctions indicate reasonably
strong demand from end-users at current prices. In Taiwan, Taiwan
Semiconductor Manufacturing is an attractive investment. The company
manufactures integrated circuits for other electronics companies. With
large scale volume production, margins remain high despite a continual
lowering of prices.
Q. WHAT'S YOUR OUTLOOK FOR THE NEXT SIX MONTHS?
A. My outlook for the next six months is that the stock markets are likely
to be less volatile than they were during the past 18 months. International
investors who were new to emerging markets seem to have retreated to their
home markets, thereby decreasing volatility. I'm currently optimistic since
economic growth in the region remains strong with the export sector likely
to benefit from the recent weakness of the U.S. dollar. In the long-term
the fund should yield strong results, but in the short term anything can
happen.
FUND FACTS
GOAL: to achieve long-term
capital appreciation through
investments in equity and
debt securities of Asian
emerging market issuers
START DATE: March 25, 1994
SIZE: as of April 30, 1995,
more than $116 million
MANAGER: Peter Phillips,
since March 1994; joined
Fidelity in 1987
(checkmark)
PETER PHILLIPS ON INVESTING IN
CHINA:
"China continues to represent
both a risk and an opportunity,
and only a fraction of the
fund's assets are invested
there. Instability among the
top leadership, the
relationship between the
central and provincial
governments and high
inflation are problematic.
However, the commitment to
economic reform remains
strong and the progress of
economic deregulation is
significant. This is best
represented by the continued
high level of direct foreign
investment.
"However, I don't expect to be
mak- ing new investments in
Chinese companies. Instead,
I will continue to receive the
benefit of exposure to China
by investing through Hong
Kong and Taiwan securities.
These companies have long
track records, better
disclosure and lower
exposure to risk."
INVESTMENT CHANGES
TOP TEN STOCKS AS OF APRIL 30, 1995
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE STOCKS
6 MONTHS AGO
Hutchison Whampoa Ltd. Ord. 4.1 3.5
Hong Kong Telecommunications 3.4 2.9
Ltd.
Bangkok Bank Ltd. (For. Reg.) 2.4 2.8
Sun Hung Kai Properties Ltd. 2.3 2.6
Singapore International Airlines 2.2 0.0
Ltd.
Malaysian Banking BHD 2.0 1.7
Genting BHD 1.9 1.6
Swire Pacific Ltd. Class A 1.9 1.8
Sampoerna Hanjaya Mandala 1.8 1.2
(For. Reg.)
Korea Electric Power Corp. 1.8 1.5
TOP FIVE MARKET SECTORS AS OF APRIL 30, 1995
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE MARKET SECTORS
6 MONTHS AGO
Banks 14.0 21.4
Real Estate 7.8 5.9
Electronics 6.7 4.4
Telephone Services 6.4 3.3
Electrical Equipment 5.6 4.7
ASSET ALLOCATION
AS OF APRIL 30, 1995 AS OF OCTOBER 31, 1994
Row: 1, Col: 1, Value: 2.2
Row: 1, Col: 2, Value: 1.5
Row: 1, Col: 3, Value: 46.3
Row: 1, Col: 4, Value: 50.0
Row: 1, Col: 1, Value: 2.3
Row: 1, Col: 2, Value: 1.7
Row: 1, Col: 3, Value: 46.0
Row: 1, Col: 4, Value: 50.0
Stocks 98.3%
Bonds 0.5%
Short-term
Investments 1.2%
Stocks 98.0%
Bonds 0.7%
Short-term
Investments 1.3%
INVESTMENTS APRIL 30, 1995 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 98.3%
SHARES VALUE (NOTE 1)
BANGLADESH - 0.2%
Advanced Chemical Industries (a) 50,000 $ 162,296
CHINA (PEOPLES REP.) - 0.3%
New World China Investment Ltd. (a) 26,000 275,600
HONG KONG - 22.6%
Cheung Kong Holdings Ltd. 334,000 1,406,407
China Light & Power Co. Ltd. 305,000 1,437,935
Citic Pacific Ltd. Ord. 297,000 726,964
Consolidated Electric Power Asia Ltd. 310,000 678,702
Dah Sing Financial Holdings Ltd. 256,800 464,377
First Pacific Co. Ltd. 883,299 724,482
Great Eagle Holdings Ltd. (a) 156,000 280,082
Henderson Investment Ltd. 200,000 142,082
Hong Kong & China Gas Co. Ltd. 726,052 1,055,033
Hong Kong Land Holdings Ltd. 352,712 663,099
Hong Kong Telecommunications Ltd. 1,898,000 3,714,120
Hutchison Whampoa Ltd. Ord. 1,040,000 4,513,558
International Bank of Asia Ltd. 4,000 1,808
JCG Holdings Ltd. 1,344,000 755,153
Manhattan Card Co. Ltd. 810,000 334,797
New World Development Co. Ltd. 449,000 1,165,707
Peregrine Investments Holdings Ltd. (warrants) (a) 2,400,000 133,296
Pokphand C.P. Co. Ltd. Ord. (HK Reg.) 634,000 202,677
South China Morning Post Holdings 246,000 146,163
Sun Hung Kai Properties Ltd. 406,000 2,590,597
Swire Pacific Ltd. Class A 314,000 2,098,876
Union Bank of Hong Kong 575,000 427,053
Varitronix International Ltd. 180,000 262,723
Wharf Holdings Ltd. (d) 312,000 934,952
Wing Hang Bank Ltd. 16,000 35,083
24,895,726
INDIA - 7.8%
Alacrity Housing Ltd. (a) 90,000 103,793
Apollo Hospitals Enterprises Ltd. (a) 100,000 116,122
Ashok Leyland Ltd. GDR (a) 9,000 112,500
Bajaj Auto Ltd. GDR (a)(d) 6,000 153,000
Bajaj Auto Ltd. GDR 8,000 203,040
BPL Ltd. (a) 22,000 108,486
Cosmo Films Ltd. (a) 27,000 117,509
Crompton Greaves Ltd. (a) 25,000 123,280
Digital Equipment Ltd. (a) 70,000 178,160
East India Hotels Ltd. (a) 12,000 148,890
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
INDIA - CONTINUED
Essel Packaging Ltd. (a) 12,000 $ 81,978
Essel Packaging Ltd. (rights)(a) 4,000 -
Finolex Pipes Ltd. (a) 500 637
Grasim Industries Ltd. GDS (a)(d) 25,000 506,250
Gujarat Gas Co. Ltd. (a) 30,000 114,831
Himachal Futuristic Communications Ltd. (a) 13,200 41,155
Himachal Telematics Ltd. (a) 60,000 103,061
Himalayan Fund NV (a) 137,717 1,886,723
Himalayan Fund NV (warrants)(a) 12,943 9,707
Housing Development Finance Corp. Ltd. (a) 4,000 253,814
India Cements Ltd. (a) 25,000 189,692
Indian Rayon & Industries, Inc. GDR (a)(d) 17,000 248,710
Indian Rayon & Industries, Inc. GDR (a) 4,000 58,520
Industrial Credit & Investments Corp. of India Ltd. (a) 90,000 270,580
Infosys Technologies Ltd. (a) 22,000 314,961
JCT Ltd. GDR (a) 20,000 355,000
Jaiprakash Industries Ltd. (a) 80,000 167,979
Kotak Mahindra Finance Ltd. (a) 19,000 117,394
Larsen and Toubro Ltd. GDR (a) 17,900 295,350
Mahindra & Mahindra Ltd. GDR 20,000 212,600
Maral Overseas Ltd. (a) 45,000 54,116
Mukand Ltd. (a) 15,000 120,846
RS Software Ltd. (a) 30,000 66,810
Reliance Industries Ltd. GDS (a) 10,000 157,500
Shyam Telecom Ltd. (a) 34,500 185,493
TVS Suzuki (a) 18,000 128,848
Tata Engineering & Locomotive Ltd. (a) 20,000 259,127
Unitech Ltd. (a) 35,000 135,847
Zee Telefilms Ltd. (a) 136,000 895,045
8,597,354
INDONESIA - 5.6%
Astra International PT (For. Reg.) 51,000 65,092
Bank Dagang Nas Indonesia PT (For. Reg.)(a) 124,000 154,097
Bank International Indonesia PT Ord. (For. Reg.) 157,000 323,422
Bukaka Teknik Utama (For. Reg.)(a) 125,000 247,705
Gudang Garam PT Perusahaan 132,000 777,340
Indah Kiat Pulp & Paper (For. Reg.) 163,600 181,329
Indocement Tungaal Prakarsa PT (For. Reg.) 123,000 407,613
Indofood Sukses Makmur (For. Reg.)(a) 70,000 247,649
Indosat (Indonesia Satellite) sponsored ADR (a) 22,400 809,200
Inti Indorayon Utama PT (For. Reg.) 70,000 141,066
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
INDONESIA - CONTINUED
Panca Wiratama Sakti PT (For. Reg.)(a)(b) 78,000 $ 181,639
Panin Bank PT (For. Reg.) 186,000 183,251
Sampoerna Hanjaya Mandala (For. Reg.) 335,000 1,965,294
Semen Cibinong PT (For. Reg.) 53,000 142,409
Tempo-Scan Pacific (For. Reg.) 55,000 238,916
Tjiwa Kimia Pabrik Kertas PT (For. Reg.) 112,000 157,994
6,224,016
KOREA (SOUTH) - 4.1%
Hyundai Engineering & Construction Co. Ltd. 100 4,499
Hyundai Motor Co. Ltd. sponsored GDR 7,500 153,750
Hyundai Motor Service Co. Ltd. (a) 2,200 127,246
Keum Kang Ltd. (a) 2,000 171,948
Korea Electric Power Corp. 52,000 1,960,154
Korea Iron & Steel Co Ltd. (a) 7,000 125,795
Korea Mobile Telecommunications Corp. (a) 390 285,459
LG Chemical Ltd. (a) 648 18,463
LG Electronics (a) 6,000 267,560
Samsung Electronics Co. Ltd. (a) 732 113,302
Samsung Electronics Co. Ltd. (issued 3/95) 4,991 862,140
Shinhan Bank (a) 10,100 214,593
Shinhan Bank (New)(a) 1,854 34,534
Tae Young Corp. (a) 3,000 179,445
4,518,888
MALAYSIA - 12.1%
EON (Edaran Otomobil Nasional) BHD 115,000 819,434
Genting BHD 235,500 2,145,243
Kian Joo Can Factory BHD 81,000 280,385
Kian Joo Can Factory BHD Class A (a) 40,500 134,454
Land & General BHD 253,500 733,817
Leader Universal Holdings BHD Class A (a) 86,666 271,928
Lion Land BHD 122,000 140,770
MGR Corp. BHD 40,000 99,595
Malayawata Steel BHD 14,000 25,733
Malaysian Airlines Systems BHD 410,000 1,269,840
Malaysian Banking BHD 325,000 2,223,686
New Straits Times Press BHD 65,000 188,158
Resorts World BHD 96,000 505,263
Rothmans of Pallmall Malysia BHD Ord. 190,000 1,315,385
Sime Darby BHD 410,000 1,045,750
Sungei Way Holdings BHD 157,000 622,915
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
MALAYSIA - CONTINUED
Sungei Way Holdings BHD (warrants)(a) 51,000 $ 68,138
Tan & Tan Development BHD 200,000 212,956
Technology Resources Industries BHD (a) 135,000 344,332
United Engineers BHD 160,000 919,838
13,367,620
PAKISTAN - 0.9%
Askari Commercial Bank (a) 86,250 92,324
Askari Commercial Bank (rights)(a) 37,500 15,813
Askari Leasing Ltd. (a) 71,700 125,589
DG Kahn Cement Ltd. 105,000 142,195
Hub Power Co. Ltd. GDR 21,000 265,230
Ibrahim Fibres Ltd. (a)(c) 200,000 70,064
National Development Leasing Corp. (a) 125,002 115,558
Nishat Tek Ltd. (a) 1,630 1,732
Packages Ltd. (a) 10,000 43,466
Pak Electron Ltd. (a) 18,750 33,451
Sui Southern Gas Pipelines Ltd. (a) 114,000 136,818
1,042,240
PHILLIPINES - 2.0%
Benpres Holdings Corp. GDR (a)(d) 6,300 45,675
Benpres Holdings Corp. GDR (a) 14,000 98,000
First Phillipines Holdings Corp. 259,200 646,756
Meralco Class B 29,000 300,576
Philippine Long Distance Telephone Co. sponsored ADR 18,200 1,160,250
2,251,257
SINGAPORE - 11.6%
Berger International 370,000 237,555
British American Tobacco Ltd. (Loc. Reg.) 47,000 198,924
City Developments Ltd. 75,000 441,176
DBS Land Ltd. 80,000 220,373
Development Bank of Singapore Ltd. (For. Reg.) 158,000 1,688,810
Hong Leong Finance Ltd. (For. Reg.) 110,000 348,780
Jardine Matheson Holdings Ltd. Ord. 123,000 977,850
Keppel Corp. Ltd. 127,000 1,029,484
Mandarin Oriental International Ltd. 540,000 745,200
Singapore Finance Ltd. 92,000 139,254
Singapore Finance Ltd. (warrants)(a) 11,000 5,366
Singapore International Airlines Ltd. 254,000 2,441,608
Singapore Land Ltd. 86,000 555,237
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
SINGAPORE - CONTINUED
Singapore Press Holdings Ltd. (For. Reg.) 90,000 $ 1,549,498
Singmarine Industries Ltd. 77,000 183,386
Superbowl Holdings Ltd. 136,000 58,049
United Overseas Bank Ltd. (For. Reg.) 187,000 1,945,122
12,765,672
TAIWAN (FREE CHINA) - 22.6%
Acer, Inc. (a) 562,420 1,870,935
Asia Cement Corp. (a) 400,000 803,104
Cathay Construction Co. Ltd. (a) 207,500 303,880
Cathay Life Insurance Co. Ltd. (a) 280,000 1,548,728
Chang Hwa Bank (a) 325,000 1,349,823
China Development (a) 151,481 748,415
China Steel Corp. 310,000 300,220
Evergreen Marine (a) 450,000 938,921
Far Eastern Textile Ltd. 530,000 794,952
First International Computer, Inc. 6,000 13,700
Formosa Chemical & Fibre 1,310,400 1,784,922
Formosa Plastic 482,640 969,025
Hon Hai Precision Industry Co. (a) 98,980 440,318
Kindo Electronics, Inc. (a) 38 64
Nan Ya Plastics Corp. 773,500 1,613,900
Phoenixtec Power Co. (a) 180,000 527,922
Siliconware Precision Industries Co. Ltd. (a) 180,567 675,310
Standard Foods Taiwan Ltd. (a) 294,000 792,827
Sun Home Leather Corp. (a) 400 1,071
Taiching Business Bank (a) 127,400 446,375
Taiwan Glass 423,500 900,302
Taiwan Polypropylene Co. Ltd. (a) 228,040 632,909
Taiwan Secom Co. (a) 150,000 599,375
Taiwan Semiconductor Manufacturing Co. Ltd. (a) 270,000 1,849,497
Taiwan Styrene Monomer (a) 100,000 395,646
United Micro Electronics Corp. (a) 390,000 1,919,178
Walsin Lihwa Corp. (a) 748,800 1,291,163
Yageo Corp. (a) 267,388 1,100,016
Yung Shin Pharmaceutical Industries Co. Ltd. 115,170 276,573
24,889,071
THAILAND - 8.2%
Bangkok Bank Ltd. (For. Reg.) 276,000 2,672,417
Finance One PCL (For. Reg.) 84,000 461,351
Krung Thai Bank (For. Reg.) 120,000 363,710
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
THAILAND - CONTINUED
Matichon Newspaper Group PCL 26,900 $ 142,270
Robinson Department Store PCL (For. Reg.)(a) 50,000 88,487
Siam Cement PCL (For. Reg.) 25,000 1,438,161
Telecomasia Corp. PCL (For. Reg.) 90,000 335,029
Thai Farmers Bank PCL (For. Reg.) 96,000 843,612
Thai Military Bank Ltd. (For. Reg.) 336,000 1,079,904
Thai Military Bank Ltd. (For. Reg.)(rights)(a) 67,200 133,963
Thai Telephone & Telecommunication PCL (For. Reg.)(a) 100,000 781,123
United Communication Industry PCL (For. Reg.) 51,000 746,949
9,086,976
UNITED STATES OF AMERICA - 0.3%
Amway Asia Pacific Ltd. 10,000 358,750
TOTAL COMMON STOCKS
(Cost $105,738,399) 108,435,466
CONVERTIBLE BONDS - 0.5%
PRINCIPAL
AMOUNT
INDIA - 0.5%
Essar Gujarat Ltd. euro 5 1/2%, 8/5/98 $ 250,000 285,000
Gujarat Ambuja Cement Ltd. euro
3 1/2%, 6/30/99 210,000 267,750
TOTAL CONVERTIBLE BONDS
(Cost $852,500) 552,750
REPURCHASE AGREEMENTS - 1.2%
MATURITY
AMOUNT
Investments in repurchase agreements
(U.S. Treasury obligations) in a joint
trading account at 5.93%, dated
4/28/95 due 5/1/95 $ 1,374,679 1,374,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $107,964,899) $ 110,362,216
LEGEND
(a) Non-income producing
(b) Affiliated company (see Note 7 of Notes to Financial Statements).
(c) Restricted securities - Investment in securities not registered under
the Securities Act of 1933 (see Note 2 of Notes to Financial Statements).
Additional information on each holding is as follows:
ACQUISITION ACQUISITION
SECURITY DATE COST
Ibrahim Fibres Ltd. 8/23/94 $ 112,248
(d) Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At the period
end, the value of these securities amounted to $1,888,587 or 1.6% of net
assets.
INCOME TAX INFORMATION
At April 30, 1995, the aggregate cost of investment securities for income
tax purposes was $107,964,899. Net unrealized appreciation aggregated
$2,397,317, of which $10,870,255 related to appreciated investment
securities and $8,472,938 related to depreciated investment securities.
INDUSTRY DIVERSIFICATION (UNAUDITED)
As a Percentage of Total Value of Investment in Securities
Aerospace & Defense - 1.1%
Shipbuilding & Repair 1.1%
Basic Industries - 9.0%
Chemicals & Plastics 4.7
Iron & Steel 0.7
Nonferrous Metals & Mining 1.9
Packaging & Containers 0.4
Paper & Forest Products 1.3
Construction & Real Estate - 13.0%
Building Materials 4.3
Construction 0.5
Engineering 0.4
Real Estate 7.8
Durables - 4.3%
Autos, Tires, & Accessories 1.4
Consumer Electronics 0.2
Textiles & Apparel 2.7
Finance - 20.1%
Banks 14.0
Closed End Investment Company 0.1
Credit & Other Finance 2.2
Insurance 1.4
Securities Industry 2.4
Health - 0.6%
Drugs & Pharmaceuticals 0.5
Medical Facilities Management 0.1
Holding Companies 3.1
Industrial Machinery & Equipment - 5.9%
Electrical Equipment 5.6
Industrial Machinery &
Equipment 0.3
Media & Leisure - 6.5%
Entertainment 0.9%
Leisure Durables & Toys 0.6
Lodging & Gaming 3.2
Publishing 1.8
Nondurables - 4.9%
Foods 1.1
Tobacco 3.8
Repurchase Agreements 1.2
Retail & Wholesale - 1.4%
General Merchandise Stores 0.1
Retail & Wholesale
Miscellaneous 1.3
Services - 0.8%
Leasing & Rental 0.1
Services 0.7
Technology - 9.6%
Communications Equipment 0.2
Computer Services & Software 0.5
Computers & Office Equipment 2.1
Electronic Instruments 0.1
Electronics 6.7
Transportation - 6.1%
Air Transportation 5.3
Shipping 0.8
Utilities - 12.4%
Cellular 0.6
Electric Utility 4.2
Gas 1.2
Telephone Services 6.4
100.0%
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
APRIL 30, 1995 (UNAUDITED)
ASSETS
Investment in securities, at value (including repurchase $ 110,362,216
agreements of $1,374,000) (cost $107,964,899) -
See accompanying schedule
Cash 3,154
Foreign currency held at value: 5,038,775
New Taiwan dollars (cost $4,934,237)
Receivable for investments sold 1,437,031
Dividends receivable 315,815
Interest receivable 16,247
Deferred organization expenses 146,625
TOTAL ASSETS 117,319,863
LIABILITIES
Payable for investments purchased $ 821,914
Accrued management fee 95,712
Other payables and accrued expenses 250,975
TOTAL LIABILITIES 1,168,601
NET ASSETS $ 116,151,262
Net Assets consist of:
Paid in capital $ 118,177,524
Distributions in excess of net investment income (982,266)
Accumulated undistributed net realized gain (loss) on (3,548,769)
investments and foreign currency transactions
Net unrealized appreciation (depreciation) on 2,504,773
investments and assets and liabilities in foreign
currencies
NET ASSETS, for 8,447,093 shares outstanding $ 116,151,262
NET ASSET VALUE, ($116,151,262 (divided by) 8,447,093 shares) $13.75
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED APRIL 30, 1995 (UNAUDITED)
INVESTMENT INCOME $ 934,311
Dividends
Interest 78,317
1,012,628
Less foreign taxes withheld (88,514)
TOTAL INCOME 924,114
EXPENSES
Management fee $ 596,806
Basic fee
Performance adjustment (2,563)
Transfer agent fees 6,552
Administrative fees and expenses 119,461
Directors' compensation 14,578
Custodian fees and expenses 134,118
Registration fees 133
Audit 48,285
Legal 16,610
Taiwan stock dividend tax 26,187
Amortization of organization expenses 19,125
Reports to shareholders 22,171
Miscellaneous 19,339
TOTAL EXPENSES 1,020,802
NET INVESTMENT INCOME (LOSS) (96,688)
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investment securities (3,424,091)
Foreign currency transactions 26,671 (3,397,420)
Change in net unrealized appreciation (depreciation) on:
Investment securities (13,578,865)
Assets and liabilities in foreign currencies 63,221 (13,515,644)
NET GAIN (LOSS) (16,913,064)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ (17,009,752)
FROM OPERATIONS
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS MARCH 25, 1994
ENDED APRIL 30, (COMMENCEMENT
1995 OF OPERATIONS) TO
(UNAUDITED) OCTOBER 31,
1994
INCREASE (DECREASE) IN NET ASSETS
Operations $ (96,688) $ 218,384
Net investment income (loss)
Net realized gain (loss) (3,397,420) 856,462
Change in net unrealized appreciation (depreciation) (13,515,644) 16,020,417
NET INCREASE (DECREASE) IN NET ASSETS RESULTING (17,009,752) 17,095,263
FROM OPERATIONS
Distributions to shareholders (335,665) -
From net investment income
In excess of net investment income (677,986) -
From net realized gain (904,869) -
In excess of net realized gain (193,253) -
TOTAL DISTRIBUTIONS (2,111,773) -
Share transactions - 118,177,524
Net proceeds from sales of shares
TOTAL INCREASE (DECREASE) IN NET ASSETS (19,121,525) 135,272,787
NET ASSETS
Beginning of period 135,272,787 -
End of period (including under (over) distribution of net $ 116,151,262 $ 135,272,787
investment income of $(982,266) and $128,073,
respectively)
OTHER INFORMATION - 8,447,093
Shares sold
</TABLE>
FINANCIAL HIGHLIGHTS E
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS MARCH 25, 1994
ENDED APRIL 30, (COMMENCEMEN
1995 T OF OPERATIONS)
TO OCTOBER 31,
(UNAUDITED) 1994
SELECTED PER-SHARE DATA
Net asset value, beginning of period $ 16.01 $ 14.10
Income from Investment Operations
Net investment income (.01) .03
Net realized and unrealized gain (loss) (2.00) 1.97
Total from investment operations (2.01) 2.00
Less Distributions (.04) -
From net investment income
In excess of net investment income (.08) -
From net realized gain (.11) -
In excess of net realized gain (.02) -
Total distributions (.25) -
Antidilution resulting from additional offering of shares - .02
Offering expenses - (.11)
Net asset value, end of period $ 13.75 $ 16.01
Market value, end of period $ 12.25 $ 15.125
TOTAL RETURN B (17.29)% .83%
Market value G C
Net asset value D (12.29)% 14.27%
F
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 116,151 $ 135,273
Ratio of expenses to average net assets 1.74% A 1.78%
A
Ratio of net investment income to average net assets (.17)% .29%
A A
Portfolio turnover rate 74% A 70%
A
</TABLE>
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C TOTAL MARKET VALUE RETURN INCLUDES THE ONE TIME SALES LOAD OF 6% PAID IN
CONNECTION WITH THE INITIAL PUBLIC OFFERING.
D TOTAL RETURN BASED ON NET ASSET VALUE REFLECTS THE EFFECTS OF CHANGES IN
NET ASSET VALUE, AND ASSUMES DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS,
IF ANY, WERE REINVESTED. THIS PERCENTAGE IS NOT AN INDICATION OF THE
PERFORMANCE OF A SHAREHOLDERS' INVESTMENT IN THE FUND BASED ON MARKET VALUE
DUE TO DIFFERENCES BETWEEN THE MARKET PRICE OF THE STOCK AND THE NET ASSET
VALUE OF THE FUND.
E NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
F TOTAL NET ASSET VALUE RETURN DOES NOT INCLUDE THE EFFECT OF ANTIDILUTION,
OFFERING EXPENSES AND THE ONE TIME SALES CHARGE.
G TOTAL RETURN BASED ON MARKET VALUE REFLECTS THE EFFECTS OF CHANGES IN THE
FUND'S MARKET VALUE AND ASSUMES DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS,
IF ANY, WERE REINVESTED.
NOTES TO FINANCIAL STATEMENTS
For the period ended April 30, 1995 (Unaudited)
1. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity Advisor Emerging Asia Fund, Inc. (the fund), a Maryland
corporation, is registered under the Investment Company Act of 1940, as
amended (the Act), as a non-diversified closed-end management investment
company. The fund issued 7,093 shares of its common stock to Fidelity
Management & Research Company (FMR) on March 17, 1994 for an aggregate
purchase price of $100,011. On March 25, 1994, and April 25, 1994, the fund
issued 7,750,000 and 690,000 shares of common stock, respectively, in its
initial public offering.
There are 100,000,000 shares of $.001 par value common stock authorized.
Commencing in the first calender quarter of 1997, and on each calendar
quarter thereafter, the Board of Directors of the fund may, under certain
circumstances, conduct a tender offer to repurchase ten percent of the
fund's outstanding shares of common stock at a price equal to the net asset
value per share at the time of repurchase.
The following summarizes the significant accounting policies of the fund:
SECURITY VALUATION. Securities for which quotations are readily available
are valued at the last sale price, or if no sale price, at the closing bid
price in the principal market in which such securities are normally traded.
Securities (including restricted securities) for which quotations are not
readily available are valued primarily using dealer-supplied valuations or
at their fair value as determined in good faith under consistently applied
procedures under the general supervision of the Board of Directors.
Short-term securities maturing within sixty days are valued at amortized
cost or original cost plus accrued interest, both of which approximate
current value.
Korean equity securities that have reached the limit for aggregate foreign
ownership and for which premiums to the local exchange prices may be paid
by foreign investors are valued at their fair value as determined in good
faith under consistently applied procedures under the general supervision
of the Board of Directors.
FOREIGN CURRENCY TRANSLATION. The accounting records of the fund are
maintained in U.S. dollars. Investment securities and other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars at the prevailing rates of exchange at period end. Purchases and
sales of securities, income receipts, and expense payments are translated
into U.S. dollars at the prevailing exchange rate on the respective dates
of the transactions.
Net realized gains and losses on foreign currency transactions represent
net gains and losses from sales and maturities of forward currency
contracts, disposition of foreign currencies, currency gains and losses
realized between the trade and settlement dates on securities transactions,
and the difference between the amount of net investment income accrued and
the U.S. dollar amount actually received. The effects of changes in foreign
currency exchange rates on investments in securities are included with the
net realized and unrealized gain or loss on investment securities.
1. SIGNIFICANT ACCOUNTING
POLICIES - CONTINUED
INCOME TAXES. As a qualified regulated investment company under Subchapter
M of the Internal Revenue Code, the fund is not subject to income taxes to
the extent that it distributes all of its taxable income for its fiscal
year. However, the fund may be subject to foreign taxes on income, gains on
investments or currency repatriation. The fund accrued such taxes as
applicable. The schedule of investments includes information regarding
income taxes under the caption "Income Tax Information."
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date,
except certain dividends from foreign securities where the ex-dividend date
may have passed, are recorded as soon as the fund is informed of the
ex-dividend date. Interest income is accrued as earned. Investment income
is recorded net of foreign taxes withheld where recovery of such taxes is
uncertain.
EXPENSES. The fund incurred organization and offering expenses in
connection with its initial issuance of shares. The organization expenses
of $191,250 are being amortized on a straight-line basis for a five-year
period beginning at the commencement of operations of the fund. The
offering expenses of $926,487 were paid from the proceeds of the offering
and charged to capital.
DISTRIBUTIONS TO SHAREHOLDERS.
Distributions are recorded on the ex-dividend date.
Pursuant to the fund's Dividend Reinvestment and Cash Purchase Plan (the
Plan), shareholders may elect to have all distributions automatically
reinvested in fund shares. Shareholders who do not participate in the Plan
will receive all distributions in cash paid by check in dollars. If the
market price per share on the valuation date equals or exceeds net asset
value per share on that date, the fund will issue new shares to
participants at net asset value. If the net asset value is less than 95% of
the market price on the valuation date, then shares will be issued at 95%
of the market price. The valuation date will be the dividend or
distribution payment date or, if that date is not a New York Stock Exchange
trading date, the next preceding trading date. If the net asset value
exceeds the market price of fund shares at such time, the Plan Agent will
purchase shares of stock valued at market price on the valuation date.
Income and capital gain distributions are determined in accordance with
income tax regulations which may differ from generally accepted accounting
principles. These differences are primarily due to differing treatments for
foreign currency transactions, passive foreign investment companies and
losses deferred due to wash sales.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital and may
affect the per-share allocation between net investment income and realized
and unrealized gain (loss). Distributions in excess of net investment
income and accumulated undistributed net realized gain (loss) on
investments and foreign currency transactions may include temporary book
and tax basis
1. SIGNIFICANT ACCOUNTING
POLICIES - CONTINUED
DISTRIBUTIONS TO SHAREHOLDERS - CONTINUED
differences that will reverse in a subsequent period. Any taxable income or
gain remaining at fiscal year end is distributed in the following year.
SECURITY TRANSACTIONS. Security transactions are accounted for as of the
trade date. Gains and losses on securities sold are determined on the basis
of identified cost.
The fund invests in new securities offered by some foreign companies by
making applications in the public offerings. The full or a portion of the
issue price is paid at the time of the application and recorded as
application money for new issues. Upon allotment, this amount plus the
remaining amount of issue price is recorded as cost of investments.
2. OPERATING POLICIES.
FORWARD FOREIGN CURRENCY
CONTRACTS. The fund may use foreign currency contracts to facilitate
transactions in foreign securities and to manage the fund's currency
exposure. Contracts to buy generally are used to acquire exposure to
foreign currencies, while contracts to sell are used to hedge the fund's
investments against currency fluctuations. Also, a contract to buy or sell
can offset a previous contract. Losses may arise from changes in the value
of the foreign currency or if the counterparties do not perform under the
contracts' terms.
The U.S. dollar value of forward foreign currency contracts is determined
using forward currency exchange rates supplied
by a quotation service. Purchases and sales of forward foreign currency
contracts having the same settlement date and broker are offset and any
realized gain (loss) is recognized on the date of offset; otherwise, gain
(loss) is recognized on settlement date.
REPURCHASE AGREEMENTS. The fund, through its custodian, receives delivery
of the underlying securities, whose market value is required to be at least
102% of the resale price at the time of purchase. The fund's investment
manager, FMR, is responsible for determining that the value of these
underlying securities remains at least equal to the resale price.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the fund, along with other affiliated
entities of FMR, may transfer uninvested cash balances into one or more
joint trading accounts. These balances are invested in one or more
repurchase agreements that mature in 60 days or less from the date of
purchase, and are collateralized by U.S. Treasury or Federal Agency
obligations.
RESTRICTED SECURITIES. The fund is permitted to invest in privately placed
restricted securities. These securities may be resold in transactions
exempt from registration or to the public if the securities are registered.
Disposal of these securities may involve time-consuming negotiations and
expense, and prompt sale at an acceptable price may be difficult. At the
end of the period, restricted securities (excluding 144A issues) amounted
to $70,064 or 0.1% of net assets.
3. PURCHASES AND SALES
OF SECURITIES.
Purchases and sales of securities, other than short-term securities,
aggregated $41,565,847 and $45,123,711, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment manager, FMR receives a fee that
is computed daily at an annual rate of 1.00% of the fund's average net
assets. The fee is subject to a performance adjustment (up to a maximum of
(plus/minus) .25%) based on the fund's investment performance as compared
to the appropriate index over a specified period of time. The fund's
performance adjustment took effect in March, 1995
ADVISER FEE. FMR and the fund entered into an investment advisory agreement
with Fidelity International Investment Advisors (FIIA), an affiliate of
FMR, pursuant to which FIIA is responsible for the management of the fund's
portfolio in accordance with the fund's investment policies and for making
decisions to buy or sell securities. FMR pays FIIA a portion of its
management fee, including any performance adjustment.
SUB-ADVISER FEE. FIIA, on behalf of the fund, has entered into a
sub-advisory agreement with Fidelity Investments Japan Limited (FIJ), an
affiliate of FMR, to provide advisory services concerning fund assets
invested in Japanese and other securities. FIIA pays FIJ a portion of its
fee based on the assets managed by FIJ.
ADMINISTRATIVE FEE. Fidelity International Limited (FIL), an affiliate of
FMR Corp., has entered into a Fund Management Agreement with the fund to
provide, or arrange to provide, administrative services to the fund
including maintaining the fund's accounting records. As the fund's
administrative manager, FIL receives a monthly fee at an annual rate of
.20% of the fund's average net assets. FIL has contracted all of these
services to Fidelity Service Co., a division of FMR Corp.
5. CONCENTRATION OF RISK.
The fund's relatively large investment in countries with limited or
developing capital markets may involve greater risks than investments in
more developed markets and the prices of such investments may be volatile.
The consequences of political, social or economic changes in these markets
may have disruptive effects on the market prices of the fund's investments
and the income they generate, as well as the fund's ability to repatriate
such amounts.
6. TAIWAN REPATRIATION
RESTRICTIONS.
Taiwan imposes a waiting period on the repatriation of both investment
income and capital. Amounts paid to Taiwan may be remitted out of Taiwan
after a waiting period, and realized capital gains and income on
investments may be remitted out of Taiwan only at the conclusion of the
fund's fiscal year.
7. TRANSACTIONS WITH AFFILIATED COMPANIES.
An affiliated company is a company in which the fund has ownership of at
least 5% of the voting securities. Transactions with companies which are or
were affiliates are as follows:
SUMMARY OF TRANSACTIONS WITH AFFILIATED COMPANIES
PURCHASE SALES DIVIDEND MARKET
AFFILIATE COST COST INCOME VALUE
Panca Wiratama Sakti PT
(For. Reg.) (a) $ - $ - $ - $ 181,639
(A) NON-INCOME PRODUCING.
8. QUARTERLY RESULTS OF OPERATIONS
NET INCREASE
NET NET (DECREASE)
INVESTMENT GAIN IN NET ASSETS
INVESTMENT INCOME (LOSS) ON RESULTING
INCOME (a) (LOSS) INVESTMENTS FROM OPERATIONS
PER PER PER PER
TOTAL SHARE TOTAL SHARE TOTAL SHARE TOTAL SHARE
1995
For the quarters ended:
January 31, 1995 $ 474,544 $ 0.06 $ (28,601) $ 0.00 $ (23,674,301) $
(2.80) $ (23,702,902) $ (2.81)
April 30, 1995 $ 449,570 $ 0.05 $ (68,087) $ (0.01) $ 6,761,237 $ 0.80 $
6,693,150 $ 0.80
(A) NET OF FOREIGN TAXES WITHHELD.
ADDRESS
Fidelity Advisor Emerging
Asia Fund, Inc.
82 Devonshire Street
Boston, MA
1-800-426-5523
INVESTMENT MANAGER
Fidelity Management &
Research Company
Boston, MA
INVESTMENT ADVISER
Fidelity International
Investment Advisors
Pembroke, Bermuda
SUB-ADVISER
Fidelity Investments Japan Limited
Tokyo, Japan
DIRECTORS AND OFFICERS
Edward C. Johnson 3d, Director and President
J. Gary Burkhead, Director and
Senior Vice President
Helmert Frans van den Hoven, Director
Bertram H. Witham, Jr., Director
David L. Yunich, Director
William Ebsworth, Vice President
Peter F. Phillips, Vice President
Arthur S. Loring, Secretary
Gary L. French, Treasurer
Stuart E. Fross, Assistant Secretary
John H. Costello, Assistant Treasurer
TRANSFER AGENT, DIVIDEND PAYING AGENT AND REGISTRAR
State Street Bank and Trust Company
Boston, MA
CUSTODIAN
Brown Brothers Harriman & Co.
Boston, MA
LEGAL COUNSEL
Rogers & Wells
New York, NY
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
Boston, MA
(registered trademark)
