<PAGE>
MORGAN STANLEY ASIA-PACIFIC FUND, INC.
- ---------------------------------------------
OFFICERS AND DIRECTORS
<TABLE>
<S> <C>
Barton M. Biggs William G. Morton, Jr.
CHAIRMAN OF THE BOARD DIRECTOR
OF DIRECTORS Frederick B. Whittemore
Warren J. Olsen DIRECTOR
PRESIDENT AND DIRECTOR James W. Grisham
Peter J. Chase VICE PRESIDENT
DIRECTOR Harold J. Schaaff, Jr.
John W. Croghan VICE PRESIDENT
DIRECTOR Joseph P. Stadler
David B. Gill VICE PRESIDENT
DIRECTOR Valerie Y. Lewis
Graham E. Jones SECRETARY
DIRECTOR James R. Rooney
John A. Levin TREASURER
DIRECTOR Joanna M. Haigney
ASSISTANT TREASURER
</TABLE>
- ---------------------------------------------
INVESTMENT ADVISER
Morgan Stanley Asset Management Inc.
1221 Avenue of the Americas
New York, New York 10020
- --------------------------------------------------------
ADMINISTRATOR
The Chase Manhattan Bank, N.A.
73 Tremont Street
Boston, Massachusetts 02108
- --------------------------------------------------------
CUSTODIANS
Morgan Stanley Trust Company (International)
One Pierrepont Plaza
Brooklyn, New York 11201
The Chase Manhattan Bank, N.A. (Domestic)
770 Broadway
New York, New York 10003
- --------------------------------------------------------
SHAREHOLDER SERVICING AGENT
American Stock Transfer & Trust Company
40 Wall Street
New York, New York 10005
(800) 278-4353
- --------------------------------------------------------
LEGAL COUNSEL
Rogers & Wells
200 Park Avenue
New York, New York 10166
- --------------------------------------------------------
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
1177 Avenue of the Americas
New York, New York 10036
- --------------------------------------------------------
For additional Fund information, including the Fund's net asset value per share
and information regarding the investments comprising the Fund's portfolio,
please call 1-800-221-6726.
------------------------
MORGAN STANLEY
ASIA-PACIFIC
FUND, INC.
---------------------
THIRD QUARTER REPORT
SEPTEMBER 30, 1995
MORGAN STANLEY ASSET MANAGEMENT INC.
INVESTMENT ADVISER
<PAGE>
LETTER TO SHAREHOLDERS
- -------
For the third quarter and the nine months ended September 30, 1995, the Morgan
Stanley Asia-Pacific Fund, Inc. had a total return, based on net asset value per
share (assuming reinvestment of dividend distributions), of 3.13% and 3.76%,
respectively compared to its benchmark (as defined below) of 3.32% and -1.79%,
respectively. (The benchmark for investment performance is the weighted average
of the percentage change month-on-month of each of four Morgan Stanley Capital
International (MSCI) indices; Japan, Combined Asia Free ex-Japan, Australia, and
New Zealand, where the weights are based on the respective market
capitalizations of these indices at the beginning of the month.)
JAPAN
The critical state of Japan's fragile economy was highlighted during the third
quarter, and the need to address Japan's recovery in a meaningful way was the
subject of much attention. To this end, the central banks of Japan, the U.S. and
Germany intervened in world currency markets, coordinating their efforts to
deliberately weaken the yen over the quarter from 84 to 98 yen per dollar. In
addition to lending support to the central bank's weak yen policy, Japanese
authorities officially recognized the sluggish state of affairs by implementing
measures to stimulate the economy. In particular, Mr. Takemura facilitated
foreign investments in August by easing the regulations on the capital outflows
of local life insurance companies. In September, further measures were
undertaken to stimulate the economy, including cutting the Official Discount
Rate to a historic low of 0.5% and announcing a Y14 trillion spending program.
As a result of these dramatic and unprecedented measures to jump-start the
economy, foreign investors took an aggressive and positive stance on Japan,
evidenced by heavy purchasing of Japanese equities. Foreigners continued to buy
Japanese equities in spite of the bankruptcies of two credit unions, suggesting
that foreign investors were confident that the Japanese authorities would
adequately and effectively address the non-performing loan problem plaguing
Japanese banks. As a consequence, the market managed to return in excess of 20%
in yen terms (4.3% in U.S. dollar terms), notwithstanding the fact that Japanese
investors were largely sellers during the third quarter. Sectors relating to
semiconductors and other high-tech names registered substantial gains, owing to
the upward earnings revisions by these companies. The Fund increased its
exposure to Japanese equities during the quarter, redeploying money raised in
Malaysia.
ASIA EX-JAPAN
Asian markets were exceptionally quiet during the third quarter of 1995 for two
basic reasons. First, foreign institutional investors opted for the sidelines,
focusing instead on Japanese and U.S. equity markets. They also shied away given
the sensitivity of Asian markets to movements in U.S. interest rates, the
direction of which remained unclear for much of the quarter. The modest decline
of 2.0% in Asian markets did not reflect, as a result, a change in fundamentals;
rather the absence of foreign liquidity compounded the depressing effects of
sell orders. Second, domestic investors exercised caution given mounting
concerns about inflation, widening current account deficits, less than banner
earnings and political instability.
Despite earnings that were in line with expectations, confidence in Malaysian
stocks (down 5.4%) was undermined by the first half of 1995 GDP growth of 9.5%,
which re-ignited concerns that the economy was overheating, an unexpectedly
large trade deficit of MR5.5 billion, which posed a real risk of currency
devaluation in the absence of higher interest rates, and infighting among the
political elites. The Fund trimmed its exposure to Malaysia to raise cash for
Japanese equity investments. The Fund overweighted the gaming and infrastructure
sectors
1
<PAGE>
and underweighted sunset industries such as plantations and mining. Core
holdings like United Engineers and Genting were adversely affected, the former
by its inability to procure an increase in tolls and the latter by mudslides
that reduced patronage.
Thai equities lost 7.8% over the quarter as investor sentiment was dampened by
concerns that interest rates would be raised to combat a widening current
account deficit and a weak baht, by food price inflation, by weak corporate
earnings and by fears that the Banharn government would be toppled. Foreign
share premiums contracted sharply. The Fund was overweighted in the banking,
finance and telecommunications sectors. Only the banking sector outperformed
during the period under review.
Except for Korea, Hong Kong was the region's best performing market, gaining
3.6% for the quarter despite continued tensions between Hong Kong and China
(especially after the resounding success of Hong Kong's pro-democracy candidates
in recent elections). Earnings were in line with expectations and are expected
to recover further given that corporations continue to undergo restructuring
(unemployment rates are rising). Mass-end residential property prices have
stabilized, boosting market sentiment of the property sector. The Fund continues
to follow China-play stocks, which should benefit from an easing of credit given
that China has confounded the skeptics and has apparently engineered a soft
landing.
Singapore was quiet, falling 2.1% on mixed corporate results. Korea was Asia's
best performing market, gaining 9.8%. Korea's gains were driven by a fall in the
three-year corporate bond yield (to below 12%) and the implementation of a 30%
tax on short-term fixed income dividends that caused investors to shift funds
into equities. Indonesia was listless, losing 5.8% on low volume. Not even a
reported U.S.$25 billion of approved foreign investments year-to-date and better
than expected earnings enthused investors. On the economic front, deteriorating
trade and current account deficits as well as tight monetary policies depressed
sentiment. The Philippines markets plummeted by 8.6% primarily because higher
food prices pushed inflation into double-digits. The negative real interest rate
environment discouraged foreign investors from committing funds to the
Philippines despite the fact that corporate earnings were better than expected.
AUSTRALIA
Australian share prices registered gains of 9.9% in U.S. dollar terms in the
third quarter as a result of lower interest rates worldwide, which provided a
boost to the world growth and commodity price outlook, and an improving current
account position, which helped to strengthen the Australian dollar. The Fund
continued to focus on the blue-chips, which with the exception of News Corp. and
Broken Hill Proprietary performed in line with expectations.
INDIA
The Indian market responded positively to two important events near quarter end,
namely, an ordinance establishing depositories that will greatly simplify the
stock transfer procedures and a relaxation of norms on forward trading by SEBI,
the local stock exchange watchdog. These announcements pushed prices higher in
local currency terms; however, the gains were offset by the steady devaluation
of the rupee, yielding -3.2% in U.S. dollar terms.
OUTLOOK
Looking ahead, we continue to believe that the yen/ dollar rate will stabilize
with a bias towards a weakening yen. Moreover, we maintain that interest rates
in Japan will remain low. Both factors are favorable for the Japanese economy as
is the recently announced economic stimulus package, which should begin to
2
<PAGE>
filter through the economy in the months to come. Our portfolio strategy since
earlier this year to overweight the high-tech and economic sensitive sectors
will remain unchanged, and we believe that we can expect further gains from
these stocks, contributing to favorable performance for the Fund.
Given the strong fundamental picture and reasonable valuation (prospective PE of
11-12x) for the broad market, it is our opinion that it is an opportune time for
medium and long-term investors to be invested in India, despite continuing
political uncertainty.
Provided that inflationary pressures are contained and that the current account
deficit moderates, we expect Australia to continue its upward trend,
particularly the resource sector, in light of the growth momentum exhibited by
many OECD economies. We will continue to concentrate the Fund's holdings in the
blue-chips.
Going forward, we expect to maintain a neutral weighting for Hong Kong, which is
still attractive at 13x '95 estimated earnings. In the event that either
Malaysia and/or Thailand corrects significantly, however, we will shift
additional funds to Hong Kong, which should benefit from an easing of credit in
China. We will underweight Malaysia, which we believe will be trading range
bounded because of lingering economic/currency concerns and because of credit
controls that are likely to be implemented in the upcoming Budget. The Fund will
focus on major cap stocks with defensive attributes. We expect to market weight
Thailand, recognizing that the Kingdom should enjoy strong institutional support
given the country's strong growth prospects and relatively cheap valuations
vis-a-vis the rest of the region. We will maintain our focus on the banking,
telecommunications and finance sectors. We will underweight Singapore given our
view that foreign demand will decrease as the prospects for near-term currency
appreciation wane. We will continue to be neutral relative to the benchmark in
Indonesia, where we intend to participate in the upcoming privatization of PT
Telkom, a good proxy to growth in the underlying economy. The widening current
account deficit may create bouts of weakness in the market. In the Philippines
we will remain slightly overweight, limiting ourselves to the market's
bluechips. We intend to underweight Korea, wary that the weakened yen may hurt
Korea's ability to export.
Sincerely,
[SIG]
Barton M. Biggs
CHAIRMAN
[SIG]
Ean Wah Chin
SENIOR PORTFOLIO MANAGER
November 2, 1995
3
<PAGE>
Morgan Stanley Asia-Pacific Fund, Inc.
Investment Summary as of September 30, 1995
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
HISTORICAL
INFORMATION
TOTAL RETURN (%)
----------------------------------------------------------------------------
MARKET VALUE (1) NET ASSET VALUE (2) INDEX (3)
------------------------ ------------------------ ------------------------
AVERAGE AVERAGE AVERAGE
CUMULATIVE ANNUAL CUMULATIVE ANNUAL CUMULATIVE ANNUAL
------------------------ ------------------------ ------------------------
<S> <C> <C> <C> <C> <C> <C>
CURRENT QUARTER 1.32% -- 3.13% -- 3.32% --
FISCAL YEAR TO DATE -7.99 -- 3.76 -- -1.79 --
ONE YEAR -8.49 -8.49% -1.85 -1.85% -4.83 -4.83%
SINCE INCEPTION* -19.68 -17.19 -2.33 -2.01 -5.20 -4.49
</TABLE>
PAST PERFORMANCE IS NOT PRODUCTIVE OF FUTURE PERFORMANCE
- --------------------------------------------------------------------------------
RETURNS AND PER SHARE INFORMATION (2)
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
PERIODS ENDED SEPTEMBER 30: 1994* 9 MONTHS ENDED 9/30/95 (UNAUDITED)
<S> <C> <C>
Net Asset Value $ 13.20 $ 13.68
Income Dividends 0.04 0.04
Capital Gains and Other Distributions 0.01 0.03
Fund Total Return (2) (5.94%) 3.76%
Index total Return (3) (5.90%) (1.79%)
</TABLE>
(1)Assumes dividends and distributions, if any, were reinvested.
(2)Total investment return based on per share net asset value reflects the
effects of changes in net asset value on the performance of the Fund during
each period, and assumes dividends and distributions, if any, were
reinvested. These percentages are not an indication of the performance of a
shareholder's investment in the Fund based on market value due to differences
between the market price of the stock and the net asset value of the Fund.
(3)The benchmark for investment performance is the weighted average of the
percentage change month-on-month of each of four Morgan Stanley Capital
International (MSCI) indices; Japan, Combined Asia Free ex-Japan, Australia,
and New Zealand, where the weights are based on the respective market
capitalizations of these indices at the beginning of the month.
*The Fund commenced operations on August 2, 1994.
4
<PAGE>
Morgan Stanley Asia-Pacific Fund, Inc.
Portfolio Summary as of September 30, 1995
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INVESTMENTS DIVERSIFICATION
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Equity Securities 98.6%
Cash Equivalents 1.4%
</TABLE>
- --------------------------------------------------------------------------------
SECTORS
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Electrical & Electronics 14.8%
Real Estate 10.4%
Banking 9.3%
Multi-Industry 7.4%
Machinery & Engineering 7.3%
Telecommunications 6.9%
Chemicals 5.0%
Financial Services 4.3%
Construction & Housing 4.1%
Other 30.5%
</TABLE>
- --------------------------------------------------------------------------------
TEN LARGEST HOLDINGS
<TABLE>
<C> <S>
1. Western Mining Corp.
2. HSBC Holdings plc
3. Broken Hill Proprietary Co. Ltd.
4. Lend Lease Corp. Ltd.
5. Toshiba Corp.
6. Hitachi Ltd.
7. National Australia Bank Ltd.
8. New World Development Co. Ltd.
9. Cheung Kong (Holdings) Ltd.
10. Hutchison Whampoa Ltd.
</TABLE>
- --------------------------------------------------------------------------------
COUNTRY WEIGHTINGS
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Japan 40.8%
Hong Kong 13.8%
Australia 8.7%
Malaysia 8.0%
Singapore 6.8%
Thailand 6.4%
India 4.8%
Indonesia 3.4%
Korea 3.0%
Philippines 2.2%
Other 1.6%
China 0.5%
</TABLE>
5
<PAGE>
INVESTMENTS (UNAUDITED)
- ---------
SEPTEMBER 30, 1995
<TABLE>
<CAPTION>
VALUE
SHARES (000)
<S> <C> <C>
- ----------------------------------------------------------------
- -------------
COMMON STOCKS (98.4%)
(Unless otherwise noted)
- ----------------------------------------------------------------
- -------------
AUSTRALIA (8.7%)
BANKING
National Australia Bank Ltd. 1,284,614 U.S.$ 11,359
------------
BROADCASTING & PUBLISHING
News Corp. Ltd. 1,404,740 7,813
News Corp., Ltd. (Preferred) 3,393 17
------------
7,830
------------
ENERGY SOURCES
Broken Hill Proprietary Co. Ltd. 966,045 13,317
------------
METALS -- NON-FERROUS
Western Mining Corp. 2,544,750 16,655
------------
REAL ESTATE
Lend Lease Corp. Ltd. 923,862 13,056
------------
TRANSPORTATION -- AIRLINES
Quantas Airways Ltd. 1,169,000 2,085
------------
64,302
------------
- ----------------------------------------------------------------
- -------------
CHINA (0.5%)
AUTOMOBILES
Shenzen North Jianshe Motorcycle
'B' 2,420,000 1,487
------------
CHEMICALS
Jilin Chemical Industrial Co. ADR 68,000 1,513
------------
UTILITIES -- ELECTRICAL & GAS
Shandong Huaneng Power Co. Ltd.
ADR 132,000 1,172
------------
4,172
------------
- ----------------------------------------------------------------
- -------------
HONG KONG (13.8%)
BANKING
HSBC Holdings plc 975,373 13,561
------------
FINANCIAL SERVICES
Peregrine Investment Holdings 900,000 1,350
------------
FOOD & HOUSEHOLD PRODUCTS
Charoen Pokphand Co. Ltd. 1,076,000 438
------------
MULTI-INDUSTRY
Citic Pacific Ltd. 1,299,000 3,923
Guangdong Investments Ltd. 12,300,000 7,358
Hutchison Whampoa Ltd. 2,000,000 10,838
Swire Pacific Ltd. 'A' 950,000 7,526
------------
29,645
------------
REAL ESTATE
Cheung Kong (Holdings) Ltd. 2,000,000 10,890
Hopewell Holdings 9,500,000 6,451
New World Development Co. Ltd. 2,800,000 11,045
Sun Hung Kai Properties Ltd. 1,000,000 8,116
Wharf (Holdings) Ltd. 390,000 1,216
------------
37,718
------------
TELECOMMUNICATIONS
Hong Kong Telecom Ltd. 4,800,000 8,723
------------
UTILITIES -- ELECTRICAL & GAS
China Light & Power Ltd. 1,900,000 9,830
------------
101,265
------------
- ----------------------------------------------------------------
- -------------
<CAPTION>
VALUE
SHARES (000)
<S> <C> <C>
- ---------------------------------------------------------
- ------------
INDIA (4.8%)
APPLIANCES & HOUSEHOLD PRODUCTS
Peico Electronics & Electric 138,300 U.S.$ 856
------------
AUTOMOBILES
Apollo Tyres Ltd. 91,500 386
Apollo Tyres Ltd. (Rights)
expiring 2/15/95 261 --
Apollo Tyres Ltd. (Warrants)
expiring 2/15/96 2,595 2
Autolec Industries 145,600 442
Autolite Ltd. 72,100 425
Escorts Ltd. 101,250 331
Hero Honda 10,000 70
Jay Bharat Maruti 53,200 100
Lumax Automatic Parts Industries 40,200 149
Rico Auto 30,000 102
Sona Steering System 92,500 256
SRF Nippondenso 4,800 12
Tata Engineering & Locomotive 3,850 76
------------
2,351
------------
BANKING
State Bank of India 779,200 5,042
------------
BEVERAGES & TOBACCO
United Breweries 649,100 497
------------
BUILDING MATERIALS & COMPONENTS
Associated Cement Co. 10,055 975
Murudeshwar Ceramics Ltd. 46,000 129
------------
1,104
------------
CHEMICALS
Gujarat Narmada Valley
Fertilizers GDR 275,000 2,168
Indian Dyestuff Industries Ltd. 304,250 390
Indian Organic Chemical Ltd. 125,500 153
Jaysynth Dyechem 145,800 645
Saurashtra Cement & Chemicals,
Class B 24,200 57
------------
3,413
------------
CONSTRUCTION & HOUSING
Larsen & Toubro 400 3
------------
ELECTRICAL & ELECTRONICS
BPL Ltd. 128,300 363
Crompton Greaves 311,530 1,791
Esab India Ltd. 252,000 449
Rolta India Ltd. 1,000,000 708
------------
3,311
------------
ENERGY EQUIPMENT & SERVICES
Bharat Heavy Electricals 738,600 2,286
------------
FINANCIAL SERVICES
Housing Development Finance Corp. 33,410 2,556
------------
FOREST PRODUCTS & PAPER
Ballarpur Industries Ltd. 204,964 1,214
------------
HEALTH & PERSONAL CARE
Sol Pharma 17,400 47
------------
MACHINERY & ENGINEERING
Artson Engineering Ltd. 135,700 156
------------
METALS -- NON-FERROUS
Hindalco 5,000 145
------------
- ----------------------------------------------------------------
- -------------
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (000)
<S> <C> <C>
- ---------------------------------------------------------
- ------------
INDIA (CONTINUED)
METALS -- STEEL
Tata Iron & Steel 198,745 U.S.$ 1,424
------------
MISCELLANEOUS MATERIALS & COMMODITIES
Polyplex Ltd. 225,000 531
------------
MULTI-INDUSTRY
Bajaj Hindustan Ltd. 21,000 73
Container Corp. of India 910,000 2,106
EID Parry 64,300 248
Master Shares Ltd. 2,272,440 1,032
VXL Ltd. 743,000 783
------------
4,242
------------
RECREATION, OTHER CONSUMER GOODS
Cosmo Films Ltd. 175,000 727
Essel Packaging Ltd. 116,750 726
------------
1,453
------------
TELECOMMUNICATIONS
Infosys Technology Ltd. 9,600 131
Mahanagar Telephone Nigan 572,000 2,681
Videsh Sanchar Nigam Ltd. 4,000 100
------------
2,912
------------
TEXTILES & APPAREL
Coates of India Ltd. 56,750 410
G.T.N. Textiles 87,500 322
Indo Rama Synthetic 33,500 42
J.K. Synthetics Ltd. 73,000 69
Morajee Goculdas Spinning 125,000 645
Viniyoga Clothes Ltd. 399,000 235
------------
1,723
------------
35,266
------------
- ----------------------------------------------------------------
- -------------
INDONESIA (3.4%)
BUILDING MATERIALS & COMPONENTS
Indocement Tunggal Prakarsa
(Foreign) 120,000 437
Semen Gresik (Foreign) 587,000 1,658
------------
2,095
------------
CHEMICALS
Sorini Corp. (Foreign) 600,000 3,443
------------
FOOD & HOUSEHOLD PRODUCTS
Mayora Indah (Foreign) 13,500 21
------------
FOREST PRODUCTS & PAPER
Barito Pacific Timber (Foreign) 906,000 670
------------
HEALTH & PERSONAL CARE
Kalbe Farma (Foreign) 883,500 3,529
------------
MACHINERY & ENGINEERING
United Tractors (Foreign) 716,500 1,439
------------
MISCELLANEOUS MATERIALS & COMMODITIES
Charoen Pokphand Indonesia
(Foreign) 2,510,000 5,540
------------
REAL ESTATE
Duta Pertiwi Property (Foreign) 280,000 346
------------
RECREATION, OTHER CONSUMER GOODS
Asiana IMI Industries (Foreign) 360,000 151
Modern Photo Film (Foreign) 204,000 1,171
------------
1,322
------------
TELECOMMUNICATIONS
Indosat (Foreign) 1,810,000 6,311
------------
24,716
------------
- ----------------------------------------------------------------
- -------------
<CAPTION>
VALUE
SHARES (000)
<S> <C> <C>
- ---------------------------------------------------------
- ------------
JAPAN (40.8%)
AEROSPACE & MILITARY TECHNOLOGY
Daibiru Corp. 308,000 U.S.$ 3,514
Mitsubishi Heavy Industries Ltd. 1,220,000 9,360
------------
12,874
------------
AUTOMOBILES
Asahi Tec Corp. 360,000 2,326
Kansei Corp. 170,000 1,338
Nissan Motor Co. 900,000 6,487
Suzuki Motor Co. Ltd. 660,000 7,129
------------
17,280
------------
BUILDING MATERIALS & COMPONENTS
Amada Co. Ltd. 500,000 4,957
------------
BUSINESS & PUBLIC SERVICES
Dai Nippon Printing Co. Ltd. 280,000 4,438
------------
CHEMICALS
Daicel Chemical Industries 750,000 4,315
Fuji Photo Film Ltd. 160,000 3,990
Ito Yokado Co. Ltd. 80,000 4,426
Kaneka Corp. 999,000 6,354
Okura Industrial Co. Ltd. 434,000 2,804
Sekisui Chemical Co. 520,000 6,615
------------
28,504
------------
CONSTRUCTION & HOUSING
Kyudenko Co. Ltd. 349,000 4,722
Matsui Construction 171,000 1,350
Nishio Rent All Co. 111,000 2,633
Nishio Rent All Co. (Warrants),
expiring 2/20/98 1,055 448
Taisei Corp. Ltd. 1,240,000 8,237
Takasago Thermal Engineering 240,000 3,610
Yahagi Construction 238,000 1,917
------------
22,917
------------
ELECTRICAL & ELECTRONICS
Canon Inc. 90,000 1,608
Hitachi Ltd. 1,085,000 11,830
Kyocera Corp. 40,000 3,287
Kyocera Corp. (Warrants),
expiring 1/23/98 1,450 2,693
Matsushita Communication
Industries 191,000 4,608
Matsushita Electric Industries
Ltd. 555,000 8,516
Mitsumi Electric Co. Ltd. 388,000 8,696
NEC Corp. 775,000 10,797
Nintendo Ltd. 115,000 8,417
Nitto Denko Corp. 182,000 2,774
Ricoh Co. Ltd. 700,000 7,010
Secom Co. 94,000 6,263
Sony Corp. 140,000 7,265
Stanley Electric Co. 750,000 4,770
Toshiba Corp. 1,630,000 11,930
------------
100,464
------------
ELECTRONIC COMPONENTS & INSTRUMENTS
TDK Corp. 135,000 6,951
------------
ENERGY EQUIPMENT & SERVICES
Kurita Water Industries 136,000 3,707
------------
FINANCIAL SERVICES
Hitachi Credit Corp. 118,000 2,001
Nikko Securities Co. 700,000 6,933
Nomura Securities Co. 335,000 6,561
Sumitomo Lease 102,000 515
------------
16,010
------------
- ----------------------------------------------------------------
- -------------
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (000)
<S> <C> <C>
- ---------------------------------------------------------
- ------------
JAPAN (CONTINUED)
HEALTH & PERSONAL CARE
Inabata & Co. 249,000 U.S.$ 1,483
Sankyo Co. Ltd. 217,000 4,951
Santen Pharmaceutical Co. 55,000 1,383
Yamanouchi Pharmaceutical Co. 240,000 5,185
------------
13,002
------------
INSURANCE
Nichido Fire & Marine Insurance
Co. 205,000 1,685
Sumitomo Marine & Fire 600,000 4,549
------------
6,234
------------
MACHINERY & ENGINEERING
Daifuku 450,000 5,497
Daikin Kogyo Co. 600,000 5,112
Fuji Machine Co. 256,000 10,156
Nifco 283,000 3,486
Obayashi Corp. 250,000 1,969
Teijin Seiki Co. 431,000 1,819
Tsubakimoto Chain 817,000 4,132
------------
32,171
------------
METALS -- STEEL
Sanwa Shutter Corp. Ltd. 48,000 368
Sanwa Shutter Corp. Ltd.
(Warrants), expiring 1/20/98 1,400 280
------------
648
------------
MULTI-INDUSTRY
FamilyMart 147,300 6,394
------------
REAL ESTATE
Keihanshin Real Estate Co. 205,000 1,455
Mitsubishi Estate Co. Ltd. 470,000 5,267
------------
6,722
------------
TELECOMMUNICATIONS
Nippon Telephone & Telegraph 612 5,270
------------
TEXTILES & APPAREL
Japan Vilene Co. Ltd. 304,000 1,841
------------
TRANSPORTATION -- ROAD & RAIL
Nippon Konpo Unyu Soko 295,000 2,380
Tokyu Corp. 590,000 3,978
------------
6,358
------------
WHOLESALE & INTERNATIONAL TRADE
Sangetsu Co. Ltd. 100,000 2,413
------------
299,155
------------
- ----------------------------------------------------------------
- -------------
KOREA (3.0%)
APPLIANCES & HOUSEHOLD PRODUCTS
Samsung Electronics Co. (Foreign) 34,059 8,439
Samsung Electronics Co. (New) 6,642 1,636
------------
10,075
------------
CONSTRUCTION & HOUSING
Hyundai Engeering (Rights) 8,523 448
Hyundai Engineering (Foreign) 124,440 6,544
------------
6,992
------------
METALS -- STEEL
Pohang Iron & Steel ADR 43,500 1,430
------------
UTILITIES -- ELECTRICAL & GAS
Korea Electric Power (Foreign) 93,920 3,533
------------
22,030
------------
- ----------------------------------------------------------------
- -------------
<CAPTION>
VALUE
SHARES (000)
<S> <C> <C>
- ---------------------------------------------------------
- ------------
MALAYSIA (8.0%)
BANKING
Malayan Banking Bhd 1,127,000 U.S.$ 9,108
------------
LEISURE & TOURISM
Genting Bhd 513,000 4,431
Resorts World Bhd 768,000 3,822
------------
8,253
------------
MACHINERY & ENGINEERING
United Engineers, Ltd. 1,414,000 9,063
------------
MULTI-INDUSTRY
Renong Bhd 5,468,000 9,491
------------
REAL ESTATE
Bandar Raya Developments Bhd 1,640,000 3,095
------------
TELECOMMUNICATIONS
Technology Resources Industries
Bhd 1,444,000 3,765
Telekom Malaysia Bhd 1,122,000 8,442
------------
12,207
------------
UTILITIES -- ELECTRICAL & GAS
Tenaga Nasional Bhd 1,920,000 7,338
------------
58,555
------------
- ----------------------------------------------------------------
- -------------
PHILIPPINES (2.2%)
BANKING
Philippine National Bank 53,380 558
------------
BEVERAGES & TOBACCO
San Miguel Corp. 'B' 260,000 918
------------
ENERGY SOURCES
Petron Corp. 7,127,500 3,351
------------
MULTI-INDUSTRY
Ayala Corp. 'B' 205,800 201
JG Summit Holdings 'B' 5,500,000 1,625
------------
1,826
------------
REAL ESTATE
Ayala Land, Inc. 'B' 2,265,750 2,522
C&P Homes, Inc. 1,279,000 798
SM Prime Holdings, Inc. 8,031,400 2,404
------------
5,724
------------
TELECOMMUNICATIONS
Philippine Long Distance
Telephone 'B' 28,000 1,869
------------
UTILITIES -- ELECTRICAL & GAS
Manila Electric Co. 'B' 285,270 2,179
------------
16,425
------------
- ----------------------------------------------------------------
- -------------
SINGAPORE (6.8%)
BANKING
Development Bank of Singapore
(Foreign) 448,000 5,099
Oversea Chinese Banking Corp.
(Foreign) 480,000 5,430
United Overseas Bank (Foreign) 979,200 8,463
------------
18,992
------------
BEVERAGES & TOBACCO
Fraser & Neave 396,000 4,591
------------
BROADCASTING & PUBLISHING
Singapore Press Holdings
(Foreign) 120,000 1,838
------------
ELECTRICAL & ELECTRONICS
Acma Ltd. 237,000 874
------------
- ----------------------------------------------------------------
- -------------
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (000)
<S> <C> <C>
- ----------------------------------------------------------------
- -------------
SINGAPORE (CONTINUED)
MACHINERY & ENGINEERING
Keppel Corp. 912,000 U.S.$ 7,305
Sembawang Shipyards 612,000 3,204
------------
10,509
------------
MULTI-INDUSTRY
Singapore Technologies Industrial
Corp. 1,534,000 2,652
------------
REAL ESTATE
City Developments Ltd. 944,000 5,837
DBS Land Ltd. 1,560,000 4,626
------------
10,463
------------
49,919
------------
- ----------------------------------------------------------------
- -------------
THAILAND (6.4%)
BANKING
Bangkok Bank Ltd. (Foreign) 60,000 674
Bangkok Bank Ltd. (Local) 162,000 1,330
Siam Commercial Bank Co., Ltd.
(Foreign) 410,000 4,607
Thai Farmers Bank Ltd. (Foreign) 599,000 3,915
------------
10,526
------------
BUILDING MATERIALS & COMPONENTS
Siam Cement Co., Ltd. (Foreign) 62,800 3,704
------------
ELECTRICAL & ELECTRONICS
Shinawatra Computer Co. Ltd.
(Foreign) 186,800 4,615
------------
FINANCIAL SERVICES
Finance One Co. Ltd. (Foreign) 163,527 997
Finance One Co., Ltd. (Local) 728,973 3,922
National Finance & Securities
Co., Ltd. (Foreign) 649,000 3,129
National Finance & Securities
Co., Ltd.(Foreign) (Warrants),
expiring 11/15/99 73,000 --
Phatra Thanakit Co., Ltd.
(Foreign) 513,135 3,721
Phatra Thanakit Co., Ltd. (Local) 65 --
------------
11,769
------------
MISCELLANEOUS MATERIALS & COMMODITIES
Charoen Pokphand Feedmill Co.,
Ltd. (Local) 668,000 2,955
------------
TELECOMMUNICATIONS
Advanced Information Services Co.
Ltd. (Foreign) 274,200 4,327
TelecomAsia Corp. Ltd. (Foreign) 920,000 2,768
Thai Telephone and
Telecommunications Co. (Foreign) 530,000 3,696
United Communication Industry
(Foreign) 175,000 2,273
------------
13,064
------------
46,633
------------
- ----------------------------------------------------------------
- -------------
TOTAL COMMON STOCKS
(Cost U.S. $732,563) 722,438
------------
- ----------------------------------------------------------------
- -------------
<CAPTION>
FACE
AMOUNT VALUE
(000) (000)
<S> <C> <C>
- ---------------------------------------------------------
- ------------
SHORT TERM INVESTMENT (0.6%)
- ---------------------------------------------------------
- ------------
UNITED STATES (0.6%)
REPURCHASE AGREEMENT
Chase Manhattan Bank N.A., 6.00%,
dated 9/29/95, due 10/2/95, `to
be repurchased at U.S.$4,066,
collateralized by U.S.$3,290
United States Treasury Bonds
8.875% due 2/15/19, valued at
U.S.$4,150
(Cost $4,064) U.S.$ 4,064 U.S.$ 4,064
------------
- ----------------------------------------------------------------
- -------------
FOREIGN CURRENCY ON DEPOSIT WITH CUSTODIAN (0.9%)
Indian Rupee INR 182,775 5,387
Japanese Yen JPY 15,294 154
Philippine Peso PHP 13,483 518
Thai Baht THB 8,327 332
------------
(Cost U.S. $6,820) 6,391
------------
- ----------------------------------------------------------------
- -------------
TOTAL INVESTMENTS (99.9%)
(Cost U.S. $743,447) 732,893
------------
- ----------------------------------------------------------------
- -------------
OTHER ASSETS & LIABILITIES (0.1%)
Other Assets U.S.$ 3,458
Liabilities (2,376) 1,082
------------- ------------
- ----------------------------------------------------------------
- -------------
NET ASSETS (100.0%)
Applicable to 53,654,508 issued
and outstanding U.S. $.01 par
value shares (100,000,000 shares
authorized) U.S.$733,975
-------------
- ----------------------------------------------------------------
- -------------
NET ASSET VALUE PER SHARE U.S.$ 13.68
-------------
- ----------------------------------------------------------------
- -------------
</TABLE>
ADR--American Depositary Receipt
GDR--Global Depositary Receipt
Note: Prior government approval for foreign investments may be required under
certain circumstances in some emerging markets, and foreign ownership
limitations may also be imposed by the charters of individual companies in
emerging markets. As a result, an additional class of shares designated as
"foreign" may be created and offered for investment. The "local" and "foreign"
shares' market values may vary.
9
