(2_FIDELITY_LOGOS)FIDELITY ADVISOR
(registered trademark)
EMERGING ASIA
FUND, INC.
ANNUAL REPORT
OCTOBER 31, 1994
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.
REPORT OF INDEPENDENT 25 The auditor's opinion.
ACCOUNTANTS
DIVIDENDS & DISTRIBUTIONS 27 Dividend reinvestment and
cash purchase plan.
OTHER FUND INFORMATION 30 Changes and updates to investment
policies.
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:
The unsettling period that began for investors when the Federal Reserve
Board raised short-term interest rates in February has continued through
the third quarter of 1994. The Board raised the federal funds rate - the
rate banks charge each other for overnight loans - five times from February
through August, taking it from 3.00% to 4.75%. The Fed rate hikes were
intended to forestall inflation that could result from an improving U.S.
economy, and they led to below-average returns for many stocks and negative
returns for many bond investments.
The volatility we have witnessed this year follows a period in which there
was a nearly perfect investing environment. Although there was a
late-summer rally in stocks and, to a lesser extent in bond markets, it is
impossible to predict where interest rates might go or what might happen in
the markets in the months ahead. That's why it probably is a good time to
again review your investment portfolio and how well it matches your goals.
If you can leave your money invested over the long term, you can avoid much
of the volatility that generally accompanies the stock market in the short
term, as we have been witnessing this year. You also can help to manage
risk through diversification of investments. 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 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. As with any mutual fund, 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 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, as we have discussed here. 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
MARKET RECAP
After producing strong returns at
the end of 1993, several Asian
stock markets experienced
increased volatility during 1994.
The Morgan Stanley Far East
ex-Japan index - a measure of
Far East markets excluding
Japan - had a total return of
15.46% during the 12 months
ended October 31, 1994. Hong
Kong stocks, which performed
strongly during the last two
months of 1993, gave back most
of those gains during a severe
market correction in early 1994.
According to Morgan Stanley
Capital International, the Hong
Kong stock market returned
4.97% for the 12 months ended
October 31. However, Hong
Kong stocks were down more
than 16% in 1994 through
October 31. Most other Asian
markets outperformed Hong
Kong during the 12-month period.
In general, fast growing
economies fueled improving
corporate earnings, which helped
boost stock prices. Top
performing markets included
Taiwan, which returned 75.65% in
U.S. dollars during the 12 months
ended October 31; Korea (up
67.34%); the Philippines (up
55.65%); and India (up 54.44%).
(photo_of_portfolio_manager)An interview with Peter Phillips, Portfolio
Manager of Fidelity Advisor Emerging Asia Fund, Inc.
Q. PETER, HOW DID THE FUND PERFORM?
A. From the time the fund began trading on March 25, 1994, through October
31, 1994, it had a total return of 14.27%, based on net asset value. (See
Financial Highlights on page 19.) This compares to a total return of 19.69%
for the customized Morgan Stanley Capital International Combined Asia
ex-Japan Free including Taiwan index during the same 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. The
market value return was 0.83%. This means that if you bought a share of the
fund on March 25, 1994, at $15.00, you could sell it on October 31 for
$15.125.
Q. WHY DID THE FUND UNDERPERFORM THE INDEX?
A. For one simple reason. During the first six weeks the fund was up and
running, I was building the investment portfolio. As a result, I held more
cash than I would have ordinarily. I also missed out on some good
opportunities in emerging markets, especially in Taiwan and India, which
made up about 30% of the index. For the rest of the period, the fund's
performance was pretty much in line with that of the index.
Q. WERE YOU ABLE TO INCREASE YOUR INVESTMENTS IN TAIWAN OVER THE PAST SIX
MONTHS?
A. Yes, significantly. Six months ago, 12.2% of the fund was invested in
Taiwan, compared to 21.8% at the end of this period. Even though this
market was quite volatile during this time, the earnings story was still
strong. Taiwanese export companies benefited from the pickup in major
economies, especially the United States'. Electronics companies, which made
up a major part of the fund's exposure there, did particularly well. Taiwan
Semiconductor, a company that produces integrated chips for international
customers, was very attractive because it was quite inexpensive. I should
point out that this popular company is a joint venture between Philips and
the Taiwan government. Another exciting company was Standard Foods, a
breakfast cereal and health drink manufacturer that went public in April.
Q. HOW ABOUT THE FUND'S INVESTMENT
IN INDIA?
A. Over the past six months, I've added about 1% to 1.5% each month in
Indian investments. Now the country makes up 8.4% of the fund. During the
period, I invested mostly in small- to medium-sized companies on a
stock-by-stock basis. One interesting company was Zee Telefilms, a
successful producer of Hindi language television programs. Another example
was the software company Infosys Technology in Bangalore, a southern city
that's considered to be the software capital of India.
Q. WHY DID YOU INCREASE YOUR STAKE IN THAILAND - YOUR FOURTH LARGEST
COUNTRY HOLDING AT THE END OF THE PERIOD - IN THE PAST SIX MONTHS?
A. Because Thai banks and financial stocks turned in an exceptionally
strong performance. In fact, more than half of the fund's Thai investments
were in banks. That's because stocks such as Bangkok Bank were cheap, while
loan growth was strong. Many market watchers thought that higher U.S.
interest rates would hurt financial companies there, but that didn't
happen.
Q. LET'S DISCUSS HONG KONG - STILL YOUR TOP COUNTRY. CLEARLY, THAT WAS A
ROUGH MARKET IN 1994.
A. It was. I have reduced our holdings there notably over the past six
months, from 30.7% to 23.4%, because of Hong Kong's relative
underperformance. Its poor showing was largely due to the overheated
economy in China - which is closely linked to Hong Kong's economy - and a
drop in the Hong Kong property market.
Q. WHAT COMPANIES DID YOU LIKE IN HONG KONG?
A. One property company that still looked good was Sun Hung Kai, a
well-managed company that owns some income-producing shopping centers.
Another Hong Kong company that looked good was Hutchison Whampoa, a
conglomerate that was benefiting from the overall pickup of the global
economy. This company was also interesting because it was expanding its
container handling operations into Southern China and Shanghai. Another
fund holding, Hong Kong Telecommunications, is also expanding in China,
where it's attempting to take part in building China's communication
infrastructure.
Q. EVEN THOUGH INFLATION WAS HIGH IN CHINA, IT SOUNDS LIKE YOU STILL HAD A
LOT INVESTED THERE INDIRECTLY.
A. That's because there is tremendous growth potential in China. But right
now inflation is still too high, and the government is trying to slow the
economy down. In addition, it can be a pretty tough investment environment.
Many companies find it difficult to make money there because costs in China
are much higher than they expected.
Q. WHAT'S THE OUTLOOK FOR THE FUND
GOING FORWARD?
A. It's hard to make a broad statement about all of the Southeast Asian
markets. For example, India and Taiwan have different economic market
cycles compared to the rest of the region. I can say, however, that the
fund is positioned to benefit assuming demand for exports picks up in the
region and around the globe. We also have structured the fund so that it
should benefit from a rise in consumer consumption in the region, which
looks like it could be a major theme in 1995.
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 October 31, 1994,
more than $135 million
MANAGER: Peter Phillips,
since March 1994; joined
Fidelity in 1987
(checkmark)
PETER PHILLIPS ON THE STRONG
LINKS BETWEEN HONG KONG AND
CHINA:
"It's clear that China has a lot
to gain when it takes over
Hong Kong in 1997. However,
we often don't think about
how much Hong Kong gains
every day from its connection
to China, its major trading
partner. On the most basic
level, Hong Kong gets all its
water and much of its food
from China. In addition,
there's a close connection
between the people of Hong
Kong and China. There are 19
million visits each year to
China by Hong Kong
residents - even though
Hong Kong only has six
million people.
"In terms of economies, I see
the two countries as pretty
integrated, and the
distinctions between them are
becoming increasingly
blurred. For instance, a lot of
jobs in Hong Kong now
require proficiency in the
Mandarin language and many
more Hong Kong-based
companies are opening
offices in China."
(solid bullet) The fund's closed-end
charter allows it to invest in
many attractive illiquid
markets. In developing
Southeast Asian countries,
liquidity - or the ability to buy or
sell a stock on a daily basis -
can sometimes be an issue. In
addition, it takes quite a while to
build up meaningful positions in
these countries. The fund can
do this because its assets
can't be depleted by
shareholder redemptions.
INVESTMENT CHANGES
TOP TEN STOCKS AS OF OCTOBER 31, 1994
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE STOCKS
6 MONTHS AGO
Hutchison Whampoa Ltd. Ord. 3.5 3.3
Hong Kong Telecommunications 2.9 2.8
Ltd.
Bangkok Bank Ltd. (For. Reg.) 2.8 2.1
Sun Hung Kai Properties Ltd. 2.6 2.7
Resorts World BHD 2.1 2.4
United Overseas Bank (For. Reg.) 2.0 -
Hang Seng Bank Ltd. 1.9 -
Swire Pacific Class A 1.8 1.8
Himalayan Fund NV, ISI 1.8 -
Development Bank of Singapore
(For. Reg.) 1.7 1.7
TOP FIVE INDUSTRIES AS OF OCTOBER 31, 1994
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE INDUSTRIES
6 MONTHS AGO
Banks 21.4 17.1
Real Estate 5.9 9.5
Chemicals & Plastics 4.8 2.1
Electrical Equipment 4.7 6.0
Lodging & Gaming 4.4 4.2
ASSET ALLOCATION
AS OF OCTOBER 31, 1994 AS OF APRIL 30, 1994
Row: 1, Col: 1, Value: 2.0
Row: 1, Col: 2, Value: 1.0
Row: 1, Col: 3, Value: 48.0
Row: 1, Col: 4, Value: 50.0
Row: 1, Col: 1, Value: 16.1
Row: 1, Col: 2, Value: 1.5
Row: 1, Col: 3, Value: 42.8
Row: 1, Col: 4, Value: 40.0
Stocks 98.0%
Bonds 0.7%
Short-term
Investments 1.3%
Stocks 82.8%
Bonds 1.1%
Short-term
Investments 16.1%
INVESTMENTS OCTOBER 31, 1994
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 97.8%
SHARES VALUE (NOTE 1)
CHINA - 0.2%
New World China Investment Ltd. (a) 26,000 $ 275,600
HONG KONG - 23.4%
China Light & Power Co. Ltd. 42,000 218,507
Consolidated Electric Power Asia Ltd. 310,000 724,148
Credit Lyonnais Finance Ltd. (a) 6,520,000 700,378
Dah Sing Financial Holdings Ltd. 201,800 514,489
Esprit Asia Holdings Ltd. 150,000 70,855
First Pacific Co. Ltd. 1,032,000 727,890
Great Eagle Holdings Ltd. 392,000 223,217
Hang Seng Bank Ltd. 350,000 2,536,559
Henderson Investment Ltd. 400,000 367,544
Henderson Land Development Co. Ltd. 90,000 588,197
Hong Kong & China Gas Co. Ltd. 382,377 724,968
Hong Kong & China Gas Co. Ltd. (warrants) (a) 50,000 18,119
Hong Kong Electric Holdings Ltd. Ord. 448,000 1,408,879
Hong Kong Land Holdings Ltd. 352,712 903,803
Hong Kong Telecommunications Ltd. 1,792,000 3,838,177
Hutchison Whampoa Ltd. Ord. 986,000 4,555,478
Hysan Development Co. Ltd. 101,000 269,264
JCG Holdings Ltd. 1,120,000 731,976
Jardine Matheson Holdings Ltd. Ord. 7,147 59,427
Ka Wah Bank Ltd. 1,456,000 772,568
Mandarin Oriental International Ltd. Ord. 270,000 356,414
Manhattan Card Co. Ltd. 1,790,000 729,711
New World Development Co. Ltd. 230,000 733,725
Peregrine Investments Holdings Ltd. (warrants) (a) 4,400,000 694,716
South China Morning Post Holdings Ltd. 550,000 343,437
Sun Hung Kai Properties Ltd. 450,000 3,436,002
Swire Pacific Ltd. Class A 314,000 2,397,566
Television Broadcast Ltd. Ord. 134,000 619,101
Varitronix International Ltd. 180,000 266,728
Vitasoy International Holdings Ltd. (a) 480,000 195,677
Wing Hang Bank Ltd. 142,000 368,462
Wing Lung Bank Ltd. 89,400 645,017
30,740,999
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
INDIA - 8.4%
Alacrity Housing Ltd. (a) 90,000 $ 172,104
Apollo Hospitals Enterprises Ltd.(a) 100,000 137,046
Bajaj Auto Ltd. GDR (c) 6,000 151,980
BPL Ltd. (a) 22,000 161,269
Cosmo Films Ltd. 27,000 146,289
Crompton Greaves Ltd. (a) 25,000 175,292
Digital Equipment Ltd. (a) 70,000 167,324
East India Hotels Ltd. (a) 12,000 158,719
Essel Packaging Ltd. (a) 12,000 149,158
Finolex Pipes Ltd. (a) 47,000 113,844
Grasim Industries Ltd. (RFD) GDR (a)(c) 25,000 600,000
Gujarat Gas Co. Ltd. (a) 30,000 133,859
Himachal Futuristic Communications Ltd. (a) 13,200 63,105
Himachal Telematics Ltd. (a) 60,000 172,105
Himalayan Fund NV (a) 137,717 2,357,715
Himalayan Fund NV (warrants) (a) 12,943 32,358
Hindalco Industries Ltd. (RFD) GDR (a)(c) 11,000 379,500
Housing Development Finance Corp. Ltd. (a) 4,000 350,584
India Magnum Fund NV, Series B (a) 7,900 474,000
Indian Rayon & Industries, Inc. GDR (a) 4,000 75,000
Indian Rayon & Industries, Inc. GDR (a)(c) 17,000 318,750
Industrial Credit & Investments Corp. of India Ltd. (a) 9,000 413,051
Infosys Technologies Ltd. (a) 22,000 322,537
JCT Ltd. GDR (a) 20,000 440,000
JCT Electronics Ltd. (a) 50,000 147,405
Jai Prakash Industries Ltd. (a) 80,000 211,625
Kotak Mahindra Finance Ltd. (a) 6,500 129,477
Mahindra & Mahindra Ltd. GDR (a) 20,000 217,600
Maral Overseas Ltd. (a) 45,000 93,223
Mukand Ltd. (a) 15,000 167,324
RS Software Ltd. (a) 30,000 95,614
Reliance Industries Ltd. GDS (a) 58,000 1,464,500
Shyam Telecom Ltd. (a) 34,500 203,418
Unitech Ltd. 35,000 139,437
Zee Telefilms Ltd. (a) 66,000 525,875
11,061,087
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
INDONESIA - 5.4%
Argha Karya Prima PT (For. Reg.) 152,000 $ 196,027
Astra International PT (For. Reg.) 404,000 893,179
Bank Dagang Nas Indonesia PT (For Reg.) (a) 224,000 433,324
Bank International Indonesia PT Ord. (For. Reg.) 190,000 643,215
Dharmala International Land PT (For. Reg.) 288,000 394,635
Fastfood Indonesia PT (For. Reg.) 134,000 231,447
Indah Kiat Pulp & Paper (For. Reg.) 163,600 194,033
Indofood Sukses Makmur (For. Reg.) (a) 120,000 530,600
Indosat (Indonesia Satellite) sponsored ADR 2,300 90,275
Inti Indorayon Utama PT (For. Reg.) 70,000 190,224
Panca Wiratama Sakti PT (For. Reg.) (a)(d) 78,000 197,594
Panin Bank PT (For. Reg.) 336,000 588,084
Sampoerna, Hanjaya Mandala (For Reg.) 335,000 1,620,130
Tempo-Scan Pacific (For. Reg.) 55,000 291,324
Tjiwa Kimia Pabrik Kertas PT (For. Reg.) 112,000 288,883
United Tractors PT (For Reg.) 100,000 257,931
7,040,905
KOREA (SOUTH) - 4.0%
Cho Hung Bank Co. Ltd. (New) (a) 38,000 614,941
Daewoo Corp. (a) 16,000 325,981
Gold Star Co. Ltd. 6,000 309,879
Hyundai Engineering & Construction Co. Ltd. 5,000 275,983
Korea Electric Power Corp. 52,000 1,976,541
Korea Fund, Inc. 34,688 841,184
Lucky Co. Ltd. (a) 11,000 368,438
Lucky Co. Ltd. (FP) (a) 648 17,363
Pohang Iron & Steel Co. Ltd. sponsored ADR 2,700 90,450
Yukong Ltd. 7,000 438,379
5,259,139
MALAYSIA - 12.4%
Berjaya Sports Toto BHD 362,000 563,623
Econstates BHD (a) 200,000 532,030
EON (Edaran Otomobil Nasional) BHD 50,000 355,990
Genting BHD 235,500 2,164,987
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
MALAYSIA - CONTINUED
Kian Joo Can Factory BHD 81,000 $ 453,125
Land & General BHD 253,000 1,247,062
Leader Universal Holdings BHD 130,000 722,151
Malayan Banking BHD 325,000 2,212,226
New Straits Times Press BHD 130,000 508,557
Resorts World BHD 426,000 2,699,737
Rothmans of Pallmall Malysia BHD Ord. 190,000 1,248,705
Sungei Way Holdings BHD 257,000 1,015,433
Sungei Way Holdings BHD (warrants) (a) 51,000 83,396
Tan & Tan Development BHD 200,000 297,310
Technology Resources Industries BHD (a) 355,000 1,381,809
United Engineers BHD 150,000 809,780
16,295,921
PAKISTAN - 1.1%
Askari Commercial Bank (a) 75,000 166,561
Askari Leasing Ltd. (a) 71,700 147,524
DG Kahn Cement Ltd. 86,250 190,841
DG Kahn Cement Ltd. (rights) (a) 30,000 12,492
Ibrahim Fibres Ltd. (a)(b) 450,000 352,719
National Development Leasing Corp. (a) 125,000 175,543
Nishat Tek Ltd. (a) 16,300 25,286
Pak Electron Ltd. (a) 35,000 168,031
Sui Southern Gas Pipelines Ltd. (a) 95,000 213,304
1,452,301
PHILIPPINES - 1.2%
Benpres Holdings Corp. GDR (c) 6,300 68,040
First Philippines Holdings Corp. 180,000 904,342
First Philippines Holdings Corp. (rights) (a) 60,000 191,117
Meralco Class B 29,000 407,958
Philippine National Bank 97 1,520
1,572,977
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
SINGAPORE - 9.3%
Berger International (a) 370,000 $ 192,814
British-American Tobacco Co. Ltd. (Loc. Reg.) 67,000 330,892
Development Bank of Singapore Ltd. (For. Reg.) 216,000 2,295,367
Hour Glass Ltd. 40,000 45,776
Hong Leong Finance Ltd. (For. Reg.) 170,000 648,501
Keppel Corp. Ltd. 120,000 1,103,543
Overseas Chinese Banking Corp. 165,000 1,775,885
Rothmans Industries Ltd. 67,000 340,020
Shangri-La Hotel Ltd. 80,000 348,774
Singapore Finance Ltd. (warrants) (a) 11,000 10,940
Singapore Press Holdings Ltd. (For. Reg.) 120,000 2,198,910
Ssangyong Cement Ltd. 50,000 187,330
Superbowl Holdings Ltd. 160,000 94,822
United Overseas Bank Ltd. (For. Reg.) 234,000 2,566,348
12,139,922
TAIWAN - 21.8%
Acer, Inc. (a) 140,000 505,240
Cathay Construction Co. Ltd. (a) 237,500 393,903
Cathay Life Insurance Co. Ltd. (a) 280,000 2,149,924
Chang Hwa Commercial Bank (a) 250,000 1,727,645
Cheng Loong Co. Ltd. (a) 600,000 1,002,036
China Development (a) 201,481 1,106,147
China Petrochemical Development Corp. (a) 400,000 608,132
China Steel Corp. 1,510,000 1,489,887
Far East Department Stores 415,520 730,634
First International Computer, Inc. 188,400 509,933
Formosa Chemical & Fibre 1,310,400 1,796,034
Formosa Plastic 332,640 708,776
Formosa Taffeta Co. (a) 578,790 733,292
Hocheng Group Corp. (a) 294,000 1,422,199
Hon Hai Precision Industry Co. (a) 98,980 406,606
International Bills Finance (a) 52,000 82,650
Kinpo Electronics, Inc. (a) 189,600 494,983
Nan Ya Plastics Corp. 773,500 1,648,143
Phoenixtec Power Co. Ltd. (a) 180,000 525,204
Siliconware Precision Industries Co. Ltd. (a) 360,567 1,197,414
Standard Foods Taiwan Ltd. (a) 140,000 596,614
Sun Home Leather Corp. (a) 39,400 108,911
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
TAIWAN - CONTINUED
Taichung Business Bank (a) 127,400 $ 506,235
Taiwan Glass 423,500 869,861
Taiwan Polypropylene Co. Ltd. (a) 128,040 378,511
Taiwan Semiconductor Manufacturing Co. Ltd. (a) 190,000 1,159,827
Tatung Co. (a) 645,095 1,944,174
United Micro Electronics Corp. (a) 250,000 1,151,765
Walsin Lihwa Corp. (a) 298,800 400,359
Yageo Corp. (a) 136,000 537,797
Yung Shin Pharmaceutical Industrial Co. Ltd. 181,500 564,421
Yungtay Engineering Co. Ltd. (a) 242,780 1,197,728
28,654,985
THAILAND - 10.4%
Advanced Information Services (For. Reg.) (a) 48,000 847,410
Bangkok Bank Ltd. (For. Reg.) 336,000 3,640,012
Ban Pu Coal (For. Reg.) 22,400 568,021
Finance One Public Co. (For. Reg) 42,000 849,336
Krung Thai Bank (For. Reg.) 120,000 409,260
Land & House PCL (For. Reg.) 15,700 322,529
Matichon Newspaper Group PCL (a) 26,900 205,072
Safety Insurance PCL:
(For. Reg) 90,200 215,339
(Loc. Reg.) 189,800 453,119
Securities One PCL (For. Reg.) 18,000 563,335
Siam Cement PCL (For. Reg.) 25,000 1,442,443
Thai Airways International Ltd. (For. Reg.) 21,100 47,410
Thai Farmers Bank PCL (For. Reg.) 196,000 1,730,129
Thai Military Bank Ltd. PCL (For. Reg.) 336,000 1,563,858
United Communications Industries PCL (For. Reg.) 25,500 753,039
13,610,312
UNITED STATES OF AMERICA - 0.2%
Amway Asia Pacific Ltd. 10,000 295,000
TOTAL COMMON STOCKS
(Cost $112,442,815) 128,399,148
NONCONVERTIBLE PREFERRED STOCKS - 0.2%
SHARES VALUE (NOTE 1)
KOREA (SOUTH) - 0.2%
Sunkyong Securities Co. Ltd. (Cost $267,816) 20,000 $ 270,965
CONVERTIBLE BONDS - 0.7%
PRINCIPAL
AMOUNT
INDIA - 0.7%
Essar Gujarat Ltd. euro 5 1/2%, 8/5/98 $ 250,000 497,500
Gujarat Ambuja Cement Ltd. 3 1/2%,
6/30/99 210,000 371,700
TOTAL CONVERTIBLE BONDS
(Cost $852,500) 869,200
REPURCHASE AGREEMENTS - 1.3%
MATURITY
AMOUNT
Investments in repurchase agreements
(U.S. Treasury obligations), in a
joint trading account at 4.78%
dated 10/31/94 due 11/1/94 $ 1,753,233 1,753,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $115,316,131) $ 131,292,313
LEGEND
1. Non-income producing
2. 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 $252,559
3. 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 $1,518,270 or 1.1% of net
assets.
4. Affiliated company (see Note 8 of Notes to Financial Statements).
INCOME TAX INFORMATION
At October 31, 1994, the aggregate cost of investment securities for income
tax purposes was $115,419,072. Net unrealized appreciation aggregated
$15,873,241, of which $18,857,904 related to appreciated investment
securities and $2,984,663 related to depreciated investment securities.
For the period, dividends and interest from foreign countries were
$1,547,186 or $0.18 per share. Taxes paid or accrued to foreign countries
were $165,080 or $0.02 per share.
INDUSTRY DIVERSIFICATION (UNAUDITED)
As a Percentage of Total Value of Investment in Securities
Aerospace & Defense - 0.8%
Shipbuilding & Repair 0.8%
Basic Industries - 10.7%
Chemicals & Plastics 4.8
Iron & Steel 2.0
Metals & Mining 1.4
Packaging & Containers 0.3
Paper & Forest Products 2.2
Construction & Real Estate - 10.7%
Building Materials 3.7
Construction 0.5
Engineering 0.2
Real Estate 5.9
Real Estate Investment Trusts 0.4
Durables - 4.7%
Autos, Tires, & Accessories 0.3
Consumer Electronics 1.7
Textiles & Apparel 2.7
Energy - 1.2%
Coal 0.4
Oil & Gas 0.8
Finance - 30.5%
Banks 21.4
Closed End Investment Company 1.0
Credit & Other Finance 2.4
Insurance 2.2
Securities Industries 3.5
Health - 0.8%
Drugs & Pharmaceuticals 0.7
Medical Equipment & Supplies 0.1
Holding Companies 2.1
Industrial Machinery & Equipment - 5.8%
Electrical Equipment 4.7
Industrial Machinery & Equipment 1.1
Media & Leisure - 8.2%
Broadcasting 0.5%
Entertainment 0.4
Leisure Durables & Toys 0.2
Lodging & Gaming 4.4
Publishing 2.5
Restaurants 0.2
Nondurables - 3.8%
Beverages 0.2
Foods 0.9
Tobacco 2.7
Repurchase Agreements 1.3
Retail & Wholesale - 1.3%
Apparel Stores 0.1
General Merchandise Stores 0.6
Retail & Wholesale, Miscellaneous 0.3
Trading Companies 0.3
Services - 0.3%
Leasing & Rental 0.1
Services 0.2
Technology - 6.5%
Communications Equipment 0.6
Computer Services & Software 0.3
Computers & Office Equipment 1.1
Electronic Instruments 0.1
Electronics 4.4
Transportation - 2.9%
Air Transportation 2.9
Utilities - 8.4%
Cellular 0.7
Electric Utility 3.7
Gas 0.7
Telephone Services 3.3
100.0%
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
OCTOBER 31, 1994
ASSETS
Investment in securities, at value (including repurchase $ 131,292,313
agreements of $1,753,000) (cost $115,316,131) -
See accompanying schedule
Cash 313
Foreign currency held at value: 3,466,158
New Taiwan dollars (cost $3,422,508)
Receivable for investments sold 1,576,910
Dividends receivable 179,672
Interest receivable 5,697
Deferred organization expenses 165,750
TOTAL ASSETS 136,686,813
LIABILITIES
Payable for investments purchased $ 957,751
Accrued management fee 112,262
Other payables and accrued expenses 344,013
TOTAL LIABILITIES 1,414,026
NET ASSETS $ 135,272,787
Net Assets consist of:
Paid in capital $ 118,177,524
Undistributed net investment income 128,073
Accumulated undistributed net realized gain (loss) on 946,773
investments and foreign currency transactions
Net unrealized appreciation (depreciation) on 16,020,417
investments and assets and liabilities in foreign
currencies
NET ASSETS, for 8,447,093 shares outstanding $ 135,272,787
NET ASSET VALUE, ($135,272,787 (divided by) 8,447,093 shares) $16.01
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED OCTOBER 31, 1994
INVESTMENT INCOME $ 1,518,653
Dividends
Interest 208,529
1,727,182
Less foreign taxes withheld (165,080)
TOTAL INCOME 1,562,102
EXPENSES
Management fee $ 753,610
Transfer agent fees 12,000
Administrative fees and expenses 151,180
Directors' compensation 33,077
Custodian fees and expenses 222,458
Audit 36,000
Legal 7,162
Taiwan stock dividend tax 61,253
Amortization of organization expenses 25,500
Interest 395
Reports to shareholders 4,151
Miscellaneous 36,932
TOTAL EXPENSES 1,343,718
NET INVESTMENT INCOME 218,384
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investment securities 946,773
Foreign currency transactions (90,311) 856,462
Change in net unrealized appreciation (depreciation) on:
Investment securities 15,976,182
Assets and liabilities in foreign currencies 44,235 16,020,417
NET GAIN (LOSS) 16,876,879
NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 17,095,263
FROM OPERATIONS
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C>
MARCH 25, 1994
(COMMENCEMENT
OF OPERATIONS) TO
OCTOBER 31, 1994
INCREASE (DECREASE) IN NET ASSETS
Operations $ 218,384
Net investment income
Net realized gain (loss) 856,462
Change in net unrealized appreciation (depreciation) 16,020,417
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 17,095,263
Share transactions 118,177,524
Net proceeds from sales of shares
TOTAL INCREASE (DECREASE) IN NET ASSETS 135,272,787
NET ASSETS
Beginning of period -
End of period (including undistributed net investment income of $ 135,272,787
$128,073)
OTHER INFORMATION 8,447,093
Shares sold
</TABLE>
FINANCIAL HIGHLIGHTS D
<TABLE>
<CAPTION>
<S> <C>
MARCH 25, 1994
(COMMENCEMENT
OF OPERATIONS) TO
OCTOBER 31,
1994
SELECTED PER-SHARE DATA
Net asset value, beginning of period $ 14.10
Income from Investment Operations
Net investment income .03
Net realized and unrealized gain 1.97
Total from investment operations 2.00
Antidilution resulting from additional offering of shares .02
Offering expenses (.11)
Net asset value, end of period $ 16.01
Market value, end of period $ 15.125
TOTAL RETURN A
Market Value B .83%
Net Asset Value C 14.27% E
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 135,273
Ratio of expenses to average net assets 1.78% F
Ratio of net investment income to average net assets .29% F
Portfolio turnover rate 70% F
</TABLE>
A TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
B TOTAL MARKET VALUE RETURN INCLUDES THE ONE TIME SALES LOAD OF 6% PAID IN
CONNECTION WITH THE INITIAL PUBLIC OFFERING.
C TOTAL RETURN BASED ON NET ASSET VALUE REFLECTS THE EFFECT OF CHANGES IN
NET ASSET VALUE ON THE PERFORMANCE OF THE FUND, AND ASSUMES DIVIDENDS AND
CAPITAL GAINS DISTRIBUTIONS, IF ANY, WERE REINVESTED. THIS PERCENTAGE IS
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 OF THE FUND.
D BASED ON AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E THIS RETURN DOES NOT INCLUDE THE EFFECT OF ANTIDILUTION, OFFERING
EXPENSES OR THE ONE TIME SALES LOAD.
F ANNUALIZED
NOTES TO FINANCIAL STATEMENTS
For the period ended October 31, 1994
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.
Reported net realized gains and losses on foreign currency transactions
represent net gains and losses from 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 not segregated in the Statement of Operations from the
effects of changes in market
1. SIGNIFICANT ACCOUNTING
POLICIES - CONTINUED
FOREIGN CURRENCY TRANSLATION -
CONTINUED
prices of those securities, but are included with the net realized and
unrealized gain or loss on investment in securities.
INCOME TAXES. The fund intends to qualify as a regulated investment company
under Subchapter M of the Internal Revenue Code. By so qualifying, the fund
will not be subject to U.S. federal 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 accrues 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 (see
page 27 for unaudited additional information).
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.
1. SIGNIFICANT ACCOUNTING
POLICIES - CONTINUED
DISTRIBUTIONS TO SHAREHOLDERS - CONTINUED
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital and may
affect net investment income per share. Undistributed net investment income
may include temporary book and tax basis differences which 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 enter into forward foreign currency contracts. The
U.S. dollar value of forward foreign currency contracts is determined using
forward currency exchange rates supplied by a quotation service. Losses may
arise due to changes in the value of the foreign currency or if the
counterparty does not perform under the contract.
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 $352,719 or 0.3% of net assets.
3. PURCHASES AND SALES
OF SECURITIES.
Purchases and sales of securities, other than short-term securities,
aggregated $160,926,206 and $48,309,848, respectively.
At October 31, 1994, the fund owned an aggregate of $2,062,135 in
securities which were either out for transfer in the name of the fund, were
under objection for transfer in the name of the fund, or were due from
companies and/or brokers for various capital changes. Such securities are
valued in accordance with the fund's security valuation policy in Note 1
above but may not be saleable at the value shown in the portfolio as at
October 31, 1994. The fund has no intention of selling such securities
until they are transferred in the name of the fund.
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 will not take effect until 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. BANK BORROWINGS.
The fund is permitted to have bank borrowings for temporary or emergency
purposes to fund shareholder redemptions. The fund has established
borrowing arrangements with certain banks. Under the most restrictive
arrangement, the fund must pledge to the bank securities having a market
value in excess of 220% of the total bank borrowings. The interest rate on
the borrowings is the bank's base rate, as revised from time to time. The
maximum loan and the average daily loan balance during the period for which
the loan was outstanding amounted to $3,669,000. The weighted average
interest rate was 3.9%.
6. 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.
7. 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.
8. 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) $ - $ - $ - $ 197,594
(a) Non-income producing
9. QUARTERLY RESULTS OF OPERATIONS (UNAUDITED).
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
1994
For the quarters ended:
April 30, 1994 (b) $ 478,431 $ 0.06 $ 287,974 $ 0.03 $ (646,352) $ (0.09)
$ (358,378) $ (0.06)
July 29, 1994 $ 600,248 $ 0.07 $ 46,910 $ 0.01 $ 9,506,355 $ 1.12 $
9,553,265 $ 1.13
October 31, 1994 $ 483,423 $ 0.06 $ (116,500) $ (0.01) $ 8,016,876 $ 0.94
$ 7,900,376 $ 0.93
(a) NET OF FOREIGN TAXES WITHHELD.
(b) FOR THE PERIOD MARCH 25, 1994 (COMMENCEMENT OF OPERATIONS) TO APRIL 30,
1994.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Board of
Directors of Fidelity Advisor Emerging Asia Fund, Inc.:
In our opinion, the accompanying statement of assets and liabilities,
including the schedule of investments, and the related statements of
operation and of changes in net assets and the financial highlights present
fairly, in all material respects, the financial position of Fidelity
Advisor Emerging Asia Fund, Inc. at October 31, 1994, the results of its
operations, the changes in its net assets and the financial highlights for
the period March 25, 1994 (commencement of operations) to October 31, 1994,
in
conformity with generally accepted accounting principles. These financial
statements and financial highlights (hereafter referred to as "financial
statements") are the responsibility of the Fidelity Advisor Emerging Asia
Fund, Inc.'s management; our responsibility is to express an opinion on
these financial statements based on our audit. We conducted our audit of
these financial statements in accordance with generally accepted auditing
standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant
estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audit, which included
confirmation of securities owned at October 31, 1994 by correspondence with
the custodian and brokers and the application of alternative auditing
procedures where confirmations from brokers were not received, provides a
reasonable basis for the opinion expressed above.
PRICE WATERHOUSE LLP
Boston, Massachusetts
December 13, 1994
DISTRIBUTIONS
The Board of Directors of Fidelity Advisor Emerging Asia Fund, Inc. voted
to pay on January 13, 1995, to shareholders of record at the opening of
business on December 28, 1994, a distribution of $.13 derived from capital
gains realized from sales of portfolio securities and a dividend of $.12
from net investment income.
DIVIDENDS AND DISTRIBUTIONS
DIVIDEND REINVESTMENT AND CASH PURCHASE PLAN
The fund intends to distribute annually to shareholders substantially all
of its net investment income from dividends and interest earnings and
expects to distribute any net realized capital gains at least annually.
Pursuant to the Dividend Reinvestment and Cash Purchase Plan (the "Plan"),
adopted by the fund, shareholders may elect to have all distributions
automatically reinvested by State Street Bank & Trust Company (the "Plan
Agent") in fund shares, pursuant to the Plan. Shareholders who do not elect
to participate in the Plan will receive all distributions in cash paid by
check in U.S. dollars mailed directly to the shareholder by the Plan Agent.
Shareholders who would like additional information regarding the Plan or
wish to have distributions automatically reinvested should notify the fund,
c/o the Plan Agent for Fidelity Advisor Emerging Asia Fund, Inc., at Two
Heritage Drive, Quincy, Massachusetts 02171.
The Plan Agent will serve as agent for the shareholders in administering
the Plan. If the Directors of the fund declare an income dividend or a
capital gains distribution payable either in the fund's Common Stock or in
cash, as shareholders may have elected, non-participants in the Plan will
receive cash and participants in the Plan will receive Common Stock, to be
issued by the fund or purchased by the Plan Agent in the open market, as
provided below. 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 or, if the net asset value is
less than 95% of the market price on the valuation date, then new 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 day, then the next preceding trading day. If net
asset value exceeds the market price of fund shares at such time, or if the
fund should declare a dividend or capital gains distribution payable only
in cash, the Plan Agent will, as agent for the participants, buy fund
shares in the open market on the New York Stock Exchange or elsewhere, with
the cash in respect of such dividend or distribution, for the participant's
account on, or shortly after, the payment date.
Participants in the Plan have the option of making additional payments to
the Plan Agent, annually, in any amount from $100 to $3,000 for investment
in the fund's Common Stock. The Plan Agent will use all such funds received
from participants to purchase fund shares in the open market on or about
February 15 of each year. Any voluntary cash payments received more than
thirty days prior to such date will be returned by the Plan Agent, and
interest will not be paid on any uninvested cash payments. To avoid
unnecessary cash accumulations, and also to allow ample time for receipt
and processing by the Plan Agent, it is suggested that participants send in
voluntary cash payments to be received by the Plan Agent approximately ten
days before an applicable purchase date as specified above. A participant
may withdraw a voluntary cash payment by written notice if the notice is
received by the Plan Agent not less than forty-eight hours before such
payment is to be invested.
The Plan Agent maintains all shareholder accounts in the Plan and furnishes
written confirmations of all transactions in the account, including
information needed by shareholders for personal and tax records. Shares in
the account of each Plan participant will be held by the Plan Agent in
non-certificated form in the name of the participant, and each
shareholder's proxy will include those shares purchased pursuant to the
Plan. In the case of shareholders such as banks, brokers or nominees, which
hold shares for others who are the beneficial owners, the Plan Agent will
administer the Plan on the basis of the number of shares certified from
time to time by the shareholder as representing the total amount registered
in the shareholder's name and held for the account of beneficial owners who
are participating in the Plan.
There is no charge to participants for reinvesting dividends or capital
gains distributions. The Plan Agent's fees for the handling of the
reinvestment of dividends and distributions and voluntary cash payments
will be paid by the fund. There will be no brokerage charges with respect
to shares issued directly by the fund as a result of dividends or capital
gains distributions payable either in stock or in cash. However, each
participant's account will be charged a prorata share of brokerage
commissions incurred with respect to the Plan Agent's open market purchases
in connection with the reinvestment of dividends or capital gains
distributions and voluntary cash payments made by the participant.
Brokerage charges for purchasing small amounts of stock for individual
accounts through the Plan are expected to be less than the usual brokerage
charges for such transactions, because the Plan Agent will be purchasing
stock for all participants in blocks and prorating the lower commission
thus attainable.
The reinvestment of dividends and distributions will not relieve
participants of any income tax which may be payable on such dividends and
distributions.
If your shares are held in your own name and you wish to receive all
dividends and capital gain distributions in cash rather than in shares, you
may withdraw from the Plan without penalty at any time by contacting the
Plan Agent. If your shares are held in nominee name, you should be able to
withdraw from the Plan without penalty at any time by sending written
notice to your nominee. If you withdraw, you will receive a share
certificate for all full shares or, if you wish, the Plan Agent will sell
your shares and send you the proceeds, after the deduction of brokerage
commissions. The Plan Agent will convert any fractional shares to cash at
the then-current market price and send you a check for the proceeds. Please
note that, if you participate in the Plan through a brokerage account, you
may not be able to continue as a participant if you transfer those shares
to another broker. Contact your broker or nominee or the Plan Agent to see
what is the best arrangement for you to participate in the Plan.
Experience under the Plan may indicate that changes are desirable.
Accordingly,
the fund reserves the right to amend or terminate the Plan as applied to
any voluntary cash payment made and any dividend or distribution paid
subsequent to notice of the change sent to members of the Plan at least 30
days before the record date for such dividend or distribution. The Plan
also may be amended by the fund or Plan Agent by at least 30 days' written
notice to all participants in the Plan. All correspondence concerning the
Plan should be directed c/o the Plan Agent for Fidelity Advisor Emerging
Asia Fund, Inc., at Two Heritage Drive, Quincy, Massachusetts 02171.
OTHER FUND INFORMATION
FMR Corp. is the ultimate parent company of Fidelity Management & Research
Company (FMR) through ownership of voting common stock and members of the
Edward C. Johnson 3d family form a controlling group with respect to FMR
Corp. Changes may occur in the Johnson family group, through death or
disability, which would result in changes in each individual family
member's holding of stock. Such changes could result in one or more family
members becoming holders of over 25% of the stock. The fund has received an
opinion of counsel that changes in the composition of the Johnson family
group under these circumstances would not result in the termination of the
fund's advisory contracts and, accordingly, would not require a shareholder
vote to continue operation under those contracts.
There follows descriptions of additional non-fundamental fund investment
policies and practices;
REAL ESTATE-RELATED INSTRUMENTS.
The fund may purchase real estate-related instruments, including real
estate investment trusts, commercial and residential mortgage-backed
securities, and real estate financings. Real estate-related instruments are
sensitive to factors such as changes in real estate values and property
taxes, interest rates, cash flow of underlying real estate assets,
overbuilding, and the management skill and creditworthiness of the issuer.
Real estate-related instruments may also be affected by tax and regulatory
requirements, such as those relating to the environment.
AFFILIATED BANK TRANSACTIONS. The fund may engage in transactions with
financial institutions that are, or may be considered to be, "affiliated
persons" of the fund under the Investment Company Act of 1940. These
transactions may include repurchase agreements with custodian banks;
short-term obligations of, and repurchase agreements with, the 50 largest
U.S. banks (measured by deposits); municipal securities; U.S. government
securities with affiliated financial institutions that are primary dealers
in these securities; short-term currency transactions; and short-term
borrowings. In accordance with exemptive orders issued by the Securities
and Exchange Commission, the Board of Directors has established and
periodically reviews procedures applicable to transactions involving
affiliated financial institutions.
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 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)
