<PAGE>
MARTIN CURRIE BUSINESS TRUST
GLOBAL GROWTH FUND
SEMI-ANNUAL REPORT
OCTOBER 31, 1995
(UNAUDITED)
<PAGE>
MCTB GLOBAL GROWTH FUND
- -----------------------------------------------------------------------------
PROFILE AT OCTOBER 31, 1995 (Unaudited)
OBJECTIVE Long-term capital appreciation through active management of a
diversified portfolio of global equities.
LAUNCH DATE June 15, 1994
FUND SIZE $39.3m
PERFORMANCE
SINCE LAUNCH Total return from June 15, 1994 through October 31, 1995
- MCBT - Global Growth Fund (excluding all
transaction fees) +6.8%
- MCBT - Global Growth Fund (including all
transaction fees) +5.2%
- The Morgan Stanley Capital International World Index
(from June 30, 1994 through October 31, 1995) +15.7%
PORTFOLIO Further advances on Wall Street have been fuelled by
COMMENTS considerable take over activity in the banking, railroad and
media industries and by continued gains in technology stocks. A
turn in interest rates came in July with a 25 basis point
reduction in short term rates. We expect that economic growth
will be modest over the next few months, but will pick up in
1996 without further interest rate reductions. However we are
concerned that the profits cycle may be at its peak, and are
therefore underweight against the global index, believing that
we can capture better growth elsewhere.
We reduced exposure to the UK as the market strengthened. Stocks
such as GKN (manufacturer of auto parts) responded to better
than expected results, although those with disappointing
earnings such as Ladbroke (hotels and gaming) suffered set
backs. We favour general industrials on low valuations and have
started to buy selected consumer stocks at distressed levels.
Politics will be highlighted during 1996 as the UK approaches a
general election. The strong possibility of a change in
government may provoke some nervousness.
In CONTINENTAL EUROPE, the strong Deutschemark led to some
disappointment in reported earnings from German companies. We
are underweight in Germany, on valuation grounds, preferring to
obtain our hard currency exposure through The Netherlands and
Austria. Our stock selection in the region was good, with
Telecom Italia Mobile (cellular communications) contributing
strongly.
In July the JAPANESE authorities indicated a major shift in
policy, signalling a determination to address the problem of
deflation. Interest rates are now at an historic low and the
Economic Planning Agency has called for an increase in money
supply. Intervention in the currency markets has brought the
Yen down to the Y/$100 rate. We believe that it may weaken
further from here and have put in place a hedge to protect 50%
of the funds Yen assets. Good stock selection, with focus on
the technology sector, has enabled us to outperform the local
index.
Over the six month period we have added to holdings in the
PACIFIC BASIN in an attempt to capture superior growth. We were
rewarded by a good move in the Hong Kong stock market following
the reduction in US interest rates. Taiwan weakened markedly as
China flexed her muscles by conducting naval exercises close to
the coast, and we used the weakness to add to our holdings in
what we believe to be a very exciting region.
1
<PAGE>
MCTB GLOBAL GROWTH FUND
- -----------------------------------------------------------------------------
PROFILE AT OCTOBER 31, 1995 (Unaudited)
Our investments in the emerging markets of LATIN AMERICA and
INDIA held back overall performance, though SOUTH AFRICA has
been rewarding. Some recovery in confidence in Latin America
led to a bounce in some markets. We re-entered the Mexican
market at the end of October, concentrating on infrastructure
stocks and exporters.
As we move into 1996 we are confident that we can still find
opportunities for growth. As the US returns to trend line
growth and the European economies make only modest advances, we
expect the less developed regions to provide us with the best
opportunities. Although the prospects for growth in Japan are
limited, the change in direction by the authorities is
significant and could lead to a stronger market.
INVESTMENT All members of the investment team report directly to Joe Scott
MANAGER Plummer (Chief Investment Officer), who has 26 years of
PROFILE investment experience. All funds are managed on a team basis
with a named director heading each team.
Tony Hanlon has managed the MCBT Global Growth Fund since
inception.
He graduated from Glasgow University in 1984 with a degree in
Public Law and completed a MBA degree at Manchester Business
school in 1986. Worked for Salomon Brothers International in
New York and London as an intitutional bond salesman. Joined
Martin Currie in 1988, working in the North American team.
Appointed investment manager in 1991 and promoted to director in
1993. As head of the Asset Control & Treasury team, he has
responsibility for communicating and monitoring investment
strategy.
2
<PAGE>
MCTB GLOBAL GROWTH FUND
- -----------------------------------------------------------------------------
PROFILE AT OCTOBER 31, 1995 (Unaudited)
ASSET ALLOCATION
(% of net assets)
Europe 30%
Japan 23%
North America 21%
Pacific Basin 17%
Other Areas 5%
Cash 4%
LARGEST
HOLDINGS
BY REGION/COUNTRY % OF NET ASSETS
EUROPE
Elsevier (Netherlands) 1.2
Veba (Germany) 1.1
Nestle (Switzerland) 1.1
JAPAN
Rohm 1.2
Mitsubishi Heavy Industries 1.2
Hitachi 1.0
NORTH AMERICA
Philip Morris 1.3
Union Pacific 1.3
Dean Witter Discover 1.2
PACIFIC BASIN
HSBC (Hong Kong) 1.6
Taiwan Opportunities Fund (Taiwan) 1.2
Swire Pacific (Hong Kong) 1.2
OTHER AREAS
Himalayan Fund (India) 0.9
3
<PAGE>
MCTB GLOBAL GROWTH FUND
- -----------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
OCTOBER 31, 1995 (Unaudited)
SHARES VALUE
---------- -----------
LONG TERM INVESTMENTS - 96.5%
EUROPE - 30.4%
AUSTRIA - 0.7%
FLUGHAFEN WIEN 2,600 $ 167,005
OESTER ELEKTRIZITA (VERBUND) 1,600 97,763
-----------
TOTAL AUSTRIA - (COST $198,313) 264,768
-----------
BELGIUM - 0.4%
KREDIETBANK 700 175,605
-----------
TOTAL BELGIUM - (COST $173,754) 175,605
-----------
FRANCE - 4.2%
AXA 5,000 277,704
ELF AQUITAINE 2,717 185,019
IMETAL 1,000 117,789
L'OREAL 1,300 317,682
PEUGEOT 2,100 273,553
SAINT GOBAIN 22 2,623
SCHNEIDER 6,800 262,260
SEITA 6,100 212,061
-----------
TOTAL FRANCE - (COST $1,653,786) 1,648,691
-----------
GERMANY - 2.5%
HOECHST 659 173,083
MANNESMANN 1,100 362,056
VEBA 11,000 451,613
-----------
TOTAL GERMANY -(COST $863,877) 986,752
-----------
ITALY - 1.4%
LA RINASCENTE 43,000 254,925
TELECOM ITALIA MOBILE 175,000 293,679
-----------
TOTAL ITALY - (COST $370,012) 548,604
-----------
LUXEMBOURG - 0.2%
MILLICOM INTERNATIONAL CELLULAR * 1,900 62,700
-----------
TOTAL LUXEMBOURG - (COST $54,954) 62,700
-----------
NETHERLANDS - 3.6%
ELSEVIER 35,500 458,993
INTERNATIONALE NEDERLANDEN 6,740 401,974
KONINKIJKE PTT NEDERLANDEN 9,500 334,168
POLYGRAM 3,800 237,229
-----------
TOTAL NETHERLANDS - (COST $1,147,416) 1,432,364
-----------
SPAIN - 1.4%
BANCO SANTANDER 7,000 305,108
FOM DE CONST. Y CONTRATAS 1,200 84,749
REPSOL PETROLEO 5,200 155,291
-----------
TOTAL SPAIN - (COST $508,403) 545,148
-----------
SWEDEN - 0.9%
ERICSSON L.M. TELEPHONE CL B 8,300 176,234
See notes to financial statements.
4
<PAGE>
MCTB GLOBAL GROWTH FUND
- -----------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
OCTOBER 31, 1995 (Unaudited)
SHARES VALUE
---------- -----------
EUROPE - CONTINUED
SWEDEN - CONTINUED
STORA KOPPARBERG 16,500 $ 200,020
-----------
TOTAL SWEDEN - (COST $395,754) 376,254
-----------
SWITZERLAND - 2.6%
NESTLE 400 419,273
ROCHE HOLDINGS 50 363,340
ZURICH VERSICHERUNG 800 229,014
-----------
TOTAL SWITZERLAND - (COST $860,582) 1,011,627
-----------
UNITED KINGDOM - 12.5%
ARGYLL 40,000 203,320
BARRATT DEVELOPMENT 90,000 276,047
BRITISH AIRWAYS 26,000 187,036
BRITISH TELECOM 36,000 214,008
BTR, WARRANTS, 1995/1996 * 65,000 76,047
DIXONS 42,000 254,324
EAST MIDLANDS ELECTRICITY 19,122 262,569
GKN 24,000 306,213
GLAXO 25,000 337,154
GRANADA 25,000 267,589
LADBROKE 84,000 220,459
LEX SERVICE 26,833 139,998
MCKECHNIE 22,000 151,652
NFC 100,000 245,059
RECKITT & COLMAN 28,000 297,929
TOMKINS 90,000 355,020
TSB 54,000 318,451
UNILEVER 18,000 349,755
WASSALL 35,000 149,891
WOLSELEY 48,000 297,486
-----------
TOTAL UNITED KINGDOM - (COST $4,341,138) 4,910,007
-----------
TOTAL EUROPE - (COST $10,567,987) 11,962,520
-----------
LATIN AMERICA - 3.5%
ARGENTINA - 0.3%
BUENOS AIRES EMBOTELLADORA, ADS 1,100 25,162
CAPEX, GDR (e) 3,200 38,400
COMPANHIA NAVIERA PEREZ COMPAC 9,324 41,115
YPF SOCIEDAD ANONIMA, ADS 1,400 23,975
-----------
TOTAL ARGENTINA - (COST $161,733) 128,652
-----------
BRAZIL - 1.5%
CENTRAIS ELETRICAS BRASILEIRAS, ADR * 6,800 96,507
COMPANHIA ENERGETICA DE MINAS, ADR * 3,500 75,693
COMPANHIA VALE DO RIO DOCE, ADR 3,300 132,955
RHODIA STER, GDS 5,176 69,876
TELEBRAS, ADS 3,950 159,144
USIMINAS, ADS 4,900 46,361
-----------
TOTAL BRAZIL - (COST $558,409) 580,536
-----------
See notes to financial statements.
5
<PAGE>
MCTB GLOBAL GROWTH FUND
- -----------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
OCTOBER 31, 1995 (Unaudited)
SHARES VALUE
---------- -----------
LATIN AMERICA - CONTINUED
CHILE - 0.5%
MADECO, ADR 2,600 $ 64,675
MADERAS Y SINTETICOS, ADS 3,400 60,775
SOCIEDAD QUIMICA Y MINERA, ADR 2,000 86,750
-----------
TOTAL CHILE - (COST $213,727) 212,200
-----------
COLOMBIA - 0.2%
CEMENTOS DIAMANTE, GDS (e) 4,700 68,577
-----------
TOTAL COLOMBIA - (COST $115,150) 68,577
-----------
ECUADOR - 0.2%
LA CEMENTO NACIONAL DE ECUADOR, GDS 410 85,280
-----------
TOTAL ECUADOR--(COST $113,280) 85,280
-----------
MEXICO - 0.5%
CORPORATION INDUSTRIAL ALFA, CL A 3,700 42,063
EMPRESAS ICA SOCIEDAD, ADR 4,500 42,750
GRUPO CARSO, ADS * (e) 4,500 47,520
GRUPO FINANCE BANAMEX, CL B 22,000 37,670
KIMBERLY CLARKE, ADR 1,600 41,635
-----------
TOTAL MEXICO - (COST $207,921) 211,638
-----------
PERU - 0.3%
PERU REAL ESTATE, CL B * 180,000 94,444
-----------
TOTAL PERU - (COST $81,818) 94,444
-----------
TOTAL LATIN AMERICA - (COST $1,452,038) 1,381,327
-----------
NORTH AMERICA - 21.0%
UNITED STATES - 21.0%
ALLIED SIGNAL 8,500 361,250
ARCHER DANIELS MIDLAND 20,671 333,320
BRISTOL MYERS SQUIBB 5,500 419,375
CAREMARK INTERNATIONAL 17,000 350,625
COLGATE PALMOLIVE 5,300 367,025
DEAN WITTER DISCOVER 9,700 482,575
DILLARD DEPARTMENT STORES 13,600 368,900
EASTMAN KODAK 6,500 407,063
FREEPORT MCMORAN COPPER & GOLD 2,833 105,883
FREEPORT MCMORAN COPPER & GOLD, CL A 10,736 245,586
FREEPORT MCMORAN COPPER & GOLD, CL B 11,929 271,385
GENERAL ELECTRIC 7,300 461,725
INTEL 6,400 447,200
LORAL 16,000 474,000
MARSH & MCLENNAN 5,700 466,687
PHILIP MORRIS 6,100 515,450
SCHLUMBERGER 6,800 423,300
SEARS ROEBUCK 6,000 204,000
TEXACO 4,700 320,188
UNION PACIFIC 7,800 509,925
UNION PACIFIC RESOURCES * 13,000 295,750
See notes to financial statements.
6
<PAGE>
MCTB GLOBAL GROWTH FUND
- -----------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
OCTOBER 31, 1995 (Unaudited)
SHARES VALUE
---------- -----------
NORTH AMERICA - CONTINUED
UNITED STATES - CONTINUED
WALT DISNEY 7,200 $ 414,900
-----------
TOTAL UNITED STATES - (COST $6,706,252) 8,246,112
-----------
TOTAL NORTH AMERICA - (COST $6,706,252) 8,246,112
-----------
PACIFIC BASIN - 16.7%
AUSTRALIA - 1.5%
BROKEN HILL PROPRIETARY 31,900 432,040
QANTAS AIRWAYS 90,200 159,403
-----------
TOTAL AUSTRALIA - (COST $545,744) 591,443
-----------
HONG KONG - 5.9%
AMOY PROPERTIES 300,000 289,070
CHINA LIGHT & POWER 55,000 293,079
CITIC PACIFIC 69,000 215,522
HSBC HOLDINGS 43,600 634,401
HUTCHISON WHAMPOA 78,000 429,763
SWIRE PACIFIC, CL A 60,500 453,846
-----------
TOTAL HONG KONG - (COST $2,136,562) 2,315,681
-----------
MALAYSIA - 3.3%
AMMB HOLDINGS 28,000 347,108
EDARAN OTOMOBILE NASIONAL 23,000 181,031
GENTING BERHAD 44,500 383,530
RESORTS WORLD BERHAD 24,000 117,119
UNITED ENGINEERS BERHAD 45,000 279,811
-----------
TOTAL MALAYSIA - (COST $1,324,227) 1,308,599
-----------
SINGAPORE - 3.0%
DEVELOPMENT BANK SINGAPORE 31,000 355,414
FIRST CAPITAL CORPORATION 73,000 197,353
JARDINE MATHESON 43,000 249,266
SINGAPORE PRESS 24,000 375,371
-----------
TOTAL SINGAPORE - (COST $1,237,297) 1,177,404
-----------
SOUTH KOREA - 0.8%
CITC SEOUL EXEL TRUST, IDR * 7(a) 78,820
KOREA PREFERRED FUND * 22,000 245,300
-----------
TOTAL SOUTH KOREA - (COST $307,000) 324,120
-----------
TAIWAN - 1.2%
TAIWAN OPPORTUNITIES FUND (c) * 58,500 464,490
-----------
TOTAL TAIWAN - (COST $552,213) 464,490
-----------
THAILAND - 1.0%
THAI MILITARY BANK 96,000 377,667
-----------
TOTAL THAILAND - (COST $425,990) 377,667
-----------
TOTAL PACIFIC BASIN - (COST $6,529,033) 6,559,404
-----------
See notes to financial statements.
7
<PAGE>
MCTB GLOBAL GROWTH FUND
- -----------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
OCTOBER 31, 1995 (Unaudited)
SHARES VALUE
---------- -----------
OTHER AREAS - 2.1%
INDIA - 1.0%
HIMALAYAN FUND * 29,031 $ 371,597
HIMALAYAN FUND, WARRANTS, 12/31/1996 * 3,406 1,703
-----------
TOTAL INDIA--(COST $506,643) 373,300
-----------
SOUTH AFRICA - 1.0%
ISCOR 39,000 39,564
MALBAK 13,000 86,434
MURRAY & ROBERTS 9,000 62,923
POLIFIN * 1,350 2,906
SAFMARINE & RENNIE 21,000 73,410
SASOL 9,000 77,729
SOUTH AFRICAN BREWERY 2,100 68,948
-----------
TOTAL SOUTH AFRICA - (COST $345,063) 411,914
-----------
TOTAL OTHER AREAS - (COST $851,706) 785,214
-----------
JAPAN - 22.9%
AMANO 12,000 145,462
ASAHI CHEMICAL 48,000 336,908
ASAHI DIAMOND 10,000 128,061
CANON 24,000 410,577
DAIFUKU 11,000 131,189
DDI 37 299,849
EIDEN SAKAKIYA 10,000 116,330
HITACHI 40,000 410,577
HITACHI METALS 25,000 307,933
ITO YOKADO 5,000 273,229
ITOCHU 55,000 325,822
KAMIGUMI 24,000 217,019
KIRIN BEVERAGE 8,000 121,218
KYOCERA 5,000 409,600
MABUCHI MOTOR 2,000 121,023
MARUI 11,000 190,332
MASPRO DENKOH 6,000 85,048
MBL INT'L FINANCE (BERMUDA), EXCH. GTD NOTES,
3.00%, 11/30/2002 $ 290,000(b) 298,315
MITSUBISHI HEAVY INDUSTRIES 62,000 478,205
MITSUI FUDOSAN 27,000 308,813
NIPPON EXPRESS 41,000 332,665
NOMURA SECURITIES 19,000 347,329
ORGANO 10,000 102,644
RISO KAGAKU 1,000 80,551
ROHM 8,000 485,654
SANKYO 18,000 395,914
SEKISUI HOUSE, NO 4 WARRANTS, 1997 * 60 77,250
SHIN ETSU CHEMICAL 17,000 347,329
SONY 6,000 269,808
SUMITOMO ELECTRIC 25,000 288,382
SUMITOMO FORESTRY 22,000 309,693
SUMITOMO TRUST & BANKING 28,000 322,988
See notes to financial statements.
8
<PAGE>
MCTB GLOBAL GROWTH FUND
- -----------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
OCTOBER 31, 1995 (Unaudited)
SHARES VALUE
---------- -----------
JAPAN - CONTINUED
TAISHO PHARMACEUTICAL 5,000 $ 90,425
TOKIO MARINE & FIRE 33,000 338,726
YURTEC 4,200 76,367
-----------
TOTAL JAPAN - (COST $9,796,283) 8,981,235
-----------
TOTAL LONG TERM INVESTMENTS - (COST $35,903,200) + 37,915,812
-----------
PRINCIPAL
AMOUNT
---------
SHORT TERM INVESTMENT - 3.6%
STATE STREET BANK & TRUST, REPURCHASE AGREEMENT,
5.25%, 11/01/1995 (d) $1,390,000 1,390,000
-----------
TOTAL SHORT TERM INVESTMENT - (COST $1,390,000) 1,390,000
-----------
TOTAL INVESTMENTS - (COST $37,293,200) - 100.1% 39,305,812
-----------
CASH, RECEIVABLES AND OTHER ASSETS, LESS LIABILITIES - (0.1)% (21,280)
-----------
NET ASSETS - 100.0% $39,284,532
-----------
* Non-income producing security.
(a) Reflected in units. 1 IDR Unit = 1000 shares.
(b) Reflected at par value and denominated in U.S. dollars.
(c) The Taiwan Opportunities Fund is managed by Martin Currie Investment
Management Ltd., which owns Martin Currie Inc.
(d) The repurchase agreement, dated 10/31/95, $1,390,203 due 11/1/95, is
collateralized by $910,000 United States Treasury Notes, 11.25%, 2/15/15.
(e) 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 $154,497 or 0.4% of net
assets.
+ Percentages of long term investments are presented in the portfolio
by country. Percentages of net assets by industry are as follows:
Aerospace 0.9%, Air Travel 1.3%, Automobiles 1.5%, Banks 8.1%, Cement
0.4%, Chemicals 3.3%, Conglomerates4.7%, Construction Materials 2.0%,
Construction & Mining Equipment 0.1%, Containers & Glass 0.1%, Cosmetics
& Toiletries0.8%, Drugs & Health Care 4.0%, Electric Utilities 4.1%,
Electrical Equipment 2.9%, Electronics 5.6%, Engineering 0.9%,Financial
Services 2.1%, Food & Beverages 2.2%, Home Builders 1.1%, Hotels &
Restaurants 0.6%, Household Products 2.9%,Industrial Machinery 4.6%,
Insurance 4.5%, Investment Companies 3.0%, Leisure 3.6%, Liquor 0.2%,
Metals 0.1%, Mining2.3%, Oil & Gas 1.9%, Paper 0.6%, Petroleum Services
1.2%, Photography 2.1%, Pollution Control 0.4%, Publishing
2.1%,Railroads & Equipment 2.1%, Real Estate 3.4%, Retail Trade 4.8%,
Semi-Conductor 0.3%, Steel 0.9%, Telephone 3.9%, Textile0.8%, Tobacco
1.9%, Transportation 2.2%.
ADR American Depositary Receipts.
ADS American Depositary Shares.
GDR Global Depositary Receipts.
GDS Global Depositary Shares.
IDR International Depositary Receipts.
See notes to financial statements.
9
<PAGE>
MCTB GLOBAL GROWTH FUND
- -----------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1995 (Unaudited)
<TABLE>
<S> <C>
ASSETS
Investments in securities, at value (cost - $35,903,200) (Note B) $37,915,812
Investments in repurchase agreements, at cost and value (Note B) 1,390,000
Cash 81
Foreign currency, at value (cost - $144,367) (Note B) 144,175
Receivable for investments sold 139,328
Receivable for foreign currency sold 97,530
Dividend and interest receivable 72,568
Foreign income tax reclaim receivable 43,111
Prepaid insurance expense 2,351
Deferred organization expenses (Note B) 9,221
-----------
TOTAL ASSETS 39,814,177
-----------
LIABILITIES
Payable for investments purchased 346,833
Payable for foreign currency purchased 97,431
Management fee payable (Note C) 45,547
Administration fees payable (Note C) 3,590
Trustees fees payable (Note C) 1,232
Accrued expenses and other liabilities 35,012
-----------
TOTAL LIABILITIES 529,645
-----------
TOTAL NET ASSETS $39,284,532
-----------
-----------
COMPOSITION OF NET ASSETS:
Paid-in-capital $37,269,962
Undistributed net investment income 414,150
Accumulated net realized loss on investment and foreign currency transactions (413,209)
Net unrealized appreciation on investment and foreign currency transactions 2,013,629
-----------
TOTAL NET ASSETS $39,284,532
-----------
-----------
NET ASSET VALUE PER SHARE
($39,284,532 / 3,728,209 shares of beneficial interest) $ 10.54
-----------
-----------
</TABLE>
See notes to financial statements.
10
<PAGE>
MCBT GLOBAL GROWTH FUND
- ------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
SIX MONTHS ENDED OCTOBER 31, 1995
(Unaudited)
INVESTMENT INCOME
Interest income $ 27,678
Dividend income 467,011
Foreign taxes witheld (46,569)
----------
TOTAL INVESTMENT INCOME 448,120
----------
EXPENSES
Management fee (Note C) 135,623
Custodian fee 50,272
Administration fee 31,799
Audit fee 12,465
Legal fees 2,303
Transfer agent fee 3,254
Trustees fees (Note C) 1,232
Amortization of deferred organization expenses 1,283
Miscellaneous expenses 5,164
Fees and expenses waived by the investment manager (Note C) (49,648)
----------
TOTAL EXPENSES 193,747
----------
NET INVESTMENT INCOME 254,373
----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENT AND FOREIGN CURRENCY
Net realized loss on investment transactions (165,520)
Net realized gain on foreign currency transactions 826,675
Net increase in unrealized appreciation(depreciation) on:
Investments 1,229,452
Foreign currency transactions (119,824)
----------
NET GAIN ON INVESTMENT AND FOREIGN CURRENCY TRANSACTIONS 1,770,783
----------
NET INCREASE IN NET ASSETS FROM OPERATIONS $2,025,156
----------
----------
See notes to financial statements.
11
<PAGE>
MCBT GLOBAL GROWTH FUND
- ------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
(Unaudited)
<TABLE>
<CAPTION>
Six Months June 15, 1994 *
Ended through
October 31, 1995 April 30, 1995
---------------- --------------
<S> <C> <C>
NET ASSETS at beginning of period $37,259,376 $ 0
----------- -----------
INCREASE IN NET ASSETS FROM OPERATIONS:
Net investment income 254,373 295,769
Net realized gain(loss) on investment transactions (165,520) (1,095,274)
Net realized gain(loss) on foreign currency transactions 826,675 338,945
Net increase in unrealized appreciation(depreciation) on:
Investments 1,229,452 782,967
Foreign currency transactions (119,824) 121,034
----------- -----------
Net increase in net assets from operations 2,025,156 443,441
----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income 0 (149,783)
In excess of net realized loss on investments 0 (304,244)
----------- -----------
Total distributions 0 (454,027)
----------- -----------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares 0 37,000,000
Reinvestment of dividends and distributions to shareholders 0 269,962
----------- -----------
Total increase in net assets from capital share transactions 0 37,269,962
----------- -----------
NET INCREASE IN NET ASSETS 2,025,156 37,259,376
----------- -----------
NET ASSETS at end of period (includes undistributed net investment income of $39,284,532 $37,259,376
$414,150 and $159,777) ----------- -----------
----------- -----------
OTHER INFORMATION:
CAPITAL SHARE TRANSACTIONS:
Shares sold 0 3,700,000
Shares issued in reinvestment of distributions to shareholders 0 28,209
----------- -----------
Net share transactions 0 3,728,209
----------- -----------
----------- -----------
</TABLE>
* Commencement of investment operations.
See notes to financial statements.
12
<PAGE>
MCBT GLOBAL GROWTH FUND
- ------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING FOR THE PERIOD
(Unaudited)
<TABLE>
<CAPTION>
Six Months June 15, 1994 *
Ended through
October 31, 1995 April 30, 1995
---------------- --------------
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $ 9.990 $ 10.000
Net investment income 0.068 0.079
Net realized and unrealized gain on investment and foreign currency transactions 0.482 0.033
----------- -----------
Total from investment operations 0.550 0.112
----------- -----------
Less distributions:
Dividends from net investment income 0.000 (0.040)
Distributions from net realized capital gains 0.000 (0.082)
----------- -----------
Total distributions 0.000 (0.122)
----------- -----------
Net asset value, end of period $ 10.540 $ 9.990
----------- -----------
----------- -----------
TOTAL INVESTMENT RETURN (1) (2) 5.51% 1.18%
----------- -----------
----------- -----------
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $39,284,532 $37,259,376
Operating expenses, net, to average net assets (Note C) 1.00%(3) 1.00%(3)
Operating expenses, gross, to average net assets (Note C) 1.26%(3) 1.25%(3)
Net investment income to average net assets 1.31%(3) 0.94%(3)
Portfolio turnover rate 29% 44%
Per share amount of fees waived (Note C) $ 0.013 $ 0.022
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
* Commencement of investment operations.
(1) Total return at net asset value assuming all distributions reinvested
and no purchase premiums or redemption fees. Total return would have
been lower had certain expenses not been waived.
(2) Not annualized.
(3) Annualized.
See notes to financial statements.
13
<PAGE>
MCBT GLOBAL GROWTH FUND
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
NOTE A - ORGANIZATION
Martin Currie Business Trust ("MCBT") (the "Trust") is registered under the
Investment Company Act of 1940, as amended (the 1940 Act), as an open-end
management investment company organized as a Massachusetts business trust on
May 20, 1994. The Trust offers six funds which have differing investment
objectives and policies: Global Growth Fund, Opportunistic EAFE Fund, Global
Emerging Markets Fund, Japan Small Companies Fund, Emerging Americas Fund and
Emerging Asia Fund, (the "Funds"). As of October 31, 1995 the Global
Emerging Markets Fund had not commenced operations. The MCBT Global Growth
Fund (the "Fund") commenced investment operations on June 15, 1994.
NOTE B - SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by the
Fund in the preparation of its financial statements.
VALUATION OF INVESTMENTS - The Fund's portfolio securities traded on a
securities exchange are valued at the last quoted sale price, or, if no sale
occurs, at the mean of the most recent quoted bid and asked prices.
Unlisted securities for which market quotations are readily available are
valued at the mean of the most recent quoted bid and asked prices. Prices
for securities which are primarily traded in foreign markets are furnished
by quotation services expressed in the local currency's value and are
translated into U.S. dollars at the current rate of exchange. Short-term
securities and debt securities with a remaining maturity of 60 days or less
are valued at their amortized cost. Options and futures contracts are
valued at the last sale price on the market where any such options or
futures contract is principally traded. Options traded over-the-counter are
valued based upon prices provided by market makers in such securities or
dealers in such currencies. Securities for which current market quotations
are unavailable or for which quotations are not deemed by the investment
adviser to be representative of market values are valued at fair value as
determined in good faith by the Trustees of the Fund, or by persons acting
pursuant to procedures established by the Trustees.
REPURCHASE AGREEMENTS - In connection with transactions in repurchase
agreements, the Fund's custodian takes possession of the underlying
collateral securities, the value or market price of which is at least equal
to the principal amount, including interest, of the repurchase transaction.
To the extent that any repurchase transaction exceeds one business day, the
value of the collateral is marked-to-market on a daily basis to ensure the
adequacy of the collateral. In the event of default of the obligation to
repurchase, the Fund has the right to liquidate the collateral and apply the
proceeds in satisfaction of the obligation. Under certain circumstances, in
the event of default or bankruptcy by the other party to the agreement,
realization and/or retention of the collateral or proceeds may be subject to
legal proceedings.
INVESTMENT TRANSACTIONS - Investment security transactions are recorded on
the date of purchase or sale. Realized gains and losses from security
transactions are determined on the basis of identified cost.
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, which includes accretion of original
issue discount, is accrued as earned. Investment income is recorded net of
foreign taxes withheld where recovery of such taxes is uncertain.
FOREIGN CURRENCY TRANSLATIONS - The records of the Fund are maintained in
U.S. dollars. Foreign currency amounts are translated into U.S. dollars at
a current rate of exchange of such currency to determine the value of
investments, other assets and liabilities on the date of any determination
of net asset value of the Fund. Purchases and sales of securities and
income and expenses are converted at the prevailing rate of exchange on the
respective dates of such transactions.
The Fund may realize currency gains or losses between the trade and
settlement dates on security transactions. To minimize such currency gains
or losses, the Fund may enter into a foreign currency exchange contract for
the purchase or sale, for a fixed amount of U.S. dollars, of an amount of
the foreign currency required to settle the security transaction.
The net U.S. dollar value of foreign currency underlying all contractual
commitments held by the Fund on each day and the resulting net unrealized
appreciation, depreciation and related net receivable or payable amounts are
determined by using forward currency exchange rates supplied by a quotation
service.
14
<PAGE>
MCBT GLOBAL GROWTH FUND
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
FOREIGN CURRENCY TRANSLATIONS (CONTINUED) - Reported 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 security 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 prices of those securities, but are
included with the net realized and unrealized gain or loss on investment
securities.
FORWARD CURRENCY CONTRACTS - A forward foreign currency contract ("Forward")
is an agreement between two parties to buy and sell a currency at a set
price on a future date. The market value of the Forward fluctuates with
changes in currency exchange rates. The Forward is marked-to-market daily
and the change in the market value is recorded by the Fund as an unrealized
gain or loss. When the Forward is closed, the Fund records a realized gain
or loss equal to the difference between the value at the time it was opened
and the value at the time it was closed. The Fund could be exposed to risk
if a counterparty is unable to meet the terms of the contract or if the
value of the currency changes unfavorably. The Fund may enter into Forwards
in connection with planned purchases and sales of securities, to hedge
specific receivables or payables against changes in future exchange rates or
to hedge the U.S. dollar value of portfolio securities denominated in a
foreign currency.
CURRENCY CALL AND PUT OPTIONS - A call option written by the Fund obligates
the Fund to sell specified currency to the option holder at a specified
price at any time before the expiration date. A put option written by the
Fund obligates the Fund to purchase specified currency from the option
holder at a specified price at any time before the expiration date. These
transactions involve a risk that a Fund may, upon exercise of the option, be
required to sell currency at a price that is less than its market value or
be required to purchase currency at a price that exceeds its market value.
The Fund may also realize gains or losses by entering into closing purchase
transactions identical to call or put options that have been written by the
Fund in order to terminate its obligation under a call or put option. In
determining the amount of gain or loss realized, the option premium paid and
related transaction costs are added to the exercise price.
EXPENSES - Expenses directly attributable to the Fund are charged to the
Fund. Expenses not directly attributable to a Fund are split evenly among
the affected Funds, allocated on the basis of relative average net assets,
or otherwise allocated among the Funds as the Board of Trustees may direct
or approve. Certain costs incurred in connection with the organization of
the Trust and each Fund have been deferred and are being amortized on a
straight line basis over a five year period starting on each Fund's
commencement of operations.
DISTRIBUTIONS TO SHAREHOLDERS - The Fund declares and distributes dividends
from net investment income, if any, and distributes its net realized capital
gains, if any, at least annually. All distributions will be paid in shares
of the Fund at the net asset value unless the shareholder elects in the
subscription agreement to receive cash. Income and capital gain
distributions are determined in accordance with income tax regulations which
may differ from generally accepted accounting principals. These differences
are primarily due to differing treatments for market discount, foreign
currency transactions, losses deferred due to wash sales, post October 31
losses and excise tax regulations. Permanent book and tax differences
relating to shareholder distributions will result in reclassifications to
paid-in-capital. Distributions are recorded on the ex-dividend date.
PURCHASES AND REDEMPTIONS OF FUND SHARES - There is a purchase premium for
cash investments into the Fund of 0.75% of the amount invested and a
redemption fee on cash redemptions of 0.75% of the amount redeemed. All
purchase premiums and redemption fees are paid to, and recorded as
paid-in-capital to the Fund, subject to being waived by Martin Currie. For
the period ended October 31, 1995, there were no purchase premiums or
redemption fees collected.
INCOME TAXES - Each Fund of the Trust is treated as a separate entity for
federal tax purposes. Each Fund intends to qualify each year as a regulated
investment company under Subchapter M of the Internal Revenue Code of 1986,
as amended. By so qualifying, the Funds will not be subject to federal
income taxes to the extent that they distribute all of their taxable income,
including realized capital gains, for the fiscal year. In addition, by
distributing substantially all of their net investment income, capital gains
and certain other amounts, if any, during the calendar year, the Funds will
not be subject to a federal excise tax.
15
<PAGE>
MCBT GLOBAL GROWTH FUND
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
INCOME TAXES (CONTINUED) - The Fund may be subject to foreign taxes on
income, gains on investments or currency repatriation. As of April 30, 1995
the Fund has elected for Federal income tax purposes to defer a $1,052,489
current year post October 31 loss as though the loss was incurred on the
first day of the next fiscal year.
NOTE C - AGREEMENTS AND FEES
The Fund has entered into a Management Contract with Martin Currie, Inc. (the
"Investment Manager"), a wholly owned subsidiary of Martin Currie Ltd. which
is controlled by the Executive Directors of the various subsidiaries of
Martin Currie Ltd. Under the Management Contract, the Fund pays the
Investment Manager a quarterly management fee at the annual rate of 0.70% of
the average net assets.
The Investment Manager has agreed with the Fund to reduce its fee until
further notice to the extent necessary to limit the Fund's annual expenses
(including the management fee but excluding brokerage commissions, transfer
taxes, and extraordinary expenses) to 1.00% of the Fund's average net assets
on an annualized basis. For the six months ended October 31, 1995, the
Investment Manager has waived $49,648 of its fees.
State Street Bank and Trust Company (the "Administrator") serves as
administrator of the Fund. The Administrator performs certain
administrative services for the Fund. The Fund pays the Administrator a fee
at the rate of 0.08% of the Fund's average net assets up to $125 million,
0.06% of the next $125 million, and 0.04% of those assets in excess of $250
million, subject to certain minimum requirements which have been waived for
the first six months of the Fund's operation, plus certain out of pocket
costs. State Street Bank and Trust Company also receives fees and
compensation of expenses for certain custodian and transfer agent services.
Trustees of the Trust who are not interested persons receive annual fees of
$20,000. Each Fund pays a pro-rata share based on its respective net assets.
NOTE D - INVESTMENT TRANSACTIONS
Purchases and proceeds from sales and maturities of investments, excluding
short-term securities for the Fund for the period ended October 31, 1995 were
as follows:
NON-U.S. U.S. NON-U.S. U.S.
GOVERNMENT GOVERNMENT GOVERNMENT GOVERNMENT
PURCHASES PURCHASES SALES SALES
---------- ---------- ---------- ----------
$10,661,685 $ 0 $11,275,576 $ 0
The identified cost of investments in securities and repurchase agreements
owned by the Fund for federal income tax purposes and their respective gross
unrealized appreciation and depreciation at October 31, 1995 were as follows:
NET UNREALIZED
IDENTIFIED GROSS UNREALIZED APPRECIATION
COST APPRECIATION (DEPRECIATION) (DEPRECIATION)
----------- ------------ -------------- --------------
$37,293,200 $4,481,173 $(2,468,561) $2,012,612
NOTE E - FORWARD FOREIGN CURRENCY CONTRACTS
At October 31, 1995, there were no outstanding forward exchange currency
contracts.
NOTE F - PRINCIPAL SHAREHOLDERS
As of October 31, 1995, 100% of the Fund's outstanding shares were held by
two shareholders, each holding in excess of 10% of the Fund's outstanding
shares.
16
<PAGE>
MCBT GLOBAL GROWTH FUND
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
NOTE G - CONCENTRATION OF RISK
The Fund will invest extensively in foreign securities (i.e., those which are
not listed on a United States securities exchange). Investing in foreign
securities involves risks not typically found in investing in U.S. markets.
These include risks of adverse change in foreign economic, political,
regulatory and other conditions, and changes in currency exchange rates,
exchange control regulations (including currency blockage), expropriation of
assets or nationalization, imposition of withholding taxes on dividend or
interest payments, and possible difficulty in obtaining and enforcing
judgments against foreign entities. Furthermore, issuers of foreign
securities are subject to different, and often less comprehensive,
accounting, reporting and disclosure requirements than domestic issuers. The
securities of some foreign companies and foreign securities markets are less
liquid and at times more volatile than securities of comparable U.S.
companies and U.S. securities markets.
17
<PAGE>
MARTIN CURRIE BUSINESS TRUST
_____________
TRUSTEES AND OFFICERS
C. James P. Dawnay, TRUSTEE AND PRESIDENT *
Simon D. Eccles, TRUSTEE
Patrick R. Wilmerding, TRUSTEE
W. Stewart Coghill, VICE PRESIDENT AND TREASURER
J. Grant Wilson, VICE PRESIDENT
Julian M.C. Livingston, CLERK
* INTERESTED TRUSTEE
_____________
INVESTMENT MANAGER
Martin Currie, Inc.
Saltire Court
20 Castle Terrace
Edinburgh EH1 2ES
Scotland
011-44-131-229-5252
member of IMRO
Registered Investment Adviser
_____________
The information contained in this report is intended for general
informational purposes only. This report is not authorized for distribution
to prospective investors unless preceded or accompanied by a current Private
Placement Memorandum which contains important information concerning the
Fund and its current offering of shares.
<PAGE>
MARTIN CURRIE BUSINESS TRUST
OPPORTUNISTIC EAFE FUND
SEMI-ANNUAL REPORT
OCTOBER 31, 1995
(UNAUDITED)
<PAGE>
MCBT OPPORTUNISTIC EAFE FUND
- ------------------------------------------------------------------------------
PROFILE AT OCTOBER 31, 1995
OBJECTIVE Long term capital appreciation through active management
of a diversified portfolio of international equities
outside the USA and Canada.
LAUNCH DATE July 1, 1994
FUND SIZE $89.8 m
PERFORMANCE Total return from July 1, 1994 to October 31, 1995
SINCE LAUNCH
- MCBT - Opportunistic EAFE Fund (excluding all
transaction fees) +1.3%
- MCBT - Opportunistic EAFE Fund (including all
transaction fees) -0.2%
- The Morgan Stanley Capital International - EAFE
Index (from June 30, 1994 through
October 31, 1995) +2.4%
PORTFOLIO The behaviour of Wall Street has continued to influence
COMMENTS the direction of international markets. The turn
in US interest rates came in July, with a 25 basis
point reduction in short term rates. This, combined
with still strong share prices, led international
investors to believe that capital would begin to
flow out of the US market to seek a home in international
markets.
We reduced exposure to the UK as the market strengthened.
Stocks such as GKN (manufacturer of auto parts)
responded to better than expected results, although
those with disappointing earnings such as Ladbroke
(hotels and gaming) suffered set backs. We favour
general industrials on low valuations and have started
to buy selected consumer stocks at distressed levels.
Politics will be highlighted during 1996 as the
UK approaches a general election. The strong possibility
of a change in government may provoke some nervousness.
In CONTINENTAL EUROPE, the strong Deutschemark led
to some disappointment in reported earnings from
German companies. We are underweight in Germany,
on valuation grounds, preferring to obtain our hard
currency exposure through The Netherlands and Austria.
Our stock selection in the region was good, with
Telecom Italia Mobile (cellular communications)
contributing strongly.
In July the JAPANESE authorities indicated a major
shift in policy, signaling a determination to address
the problem of deflation. Interest rates are now
at an historic low and the Economic Planning Agency
has called for an increase in money supply. Intervention
in the currency markets has brought the Yen down
to the Y/$100 rate. We believe that it may weaken
further from here and have put in place a hedge to
protect 50% of the funds Yen assets. Good stock
selection, with a focus on the technology sector,
has enabled us to outperform the local index.
Over the six month period we have added to holdings
in the PACIFIC BASIN in an attempt to capture superior
growth. We were rewarded by a good move in the Hong
Kong stock market following the reduction in US interest
rates. Taiwan weakened markedly as China flexed
her muscles by conducting naval exercises close to
the coast, and we used the weakness to add to our
holdings in what we believe to be a very exciting
region.
Our investments in the emerging markets of LATIN AMERICA
and INDIA held back overall performance, though SOUTH
AFRICA has been rewarding. Some recovery in confidence
in Latin America led to a bounce in some markets. We
re-entered the Mexican market at the end of October,
concentrating on infrastructure stocks and exporters.
1
<PAGE>
MCBT OPPORTUNISTIC EAFE FUND
- ------------------------------------------------------------------------------
PROFILE AT OCTOBER 31, 1995
As we move into 1996 we are confident that we can still
find opportunities for growth. As the US returns to
trend line growth and the European economies make only
modest advances, we expect the less developed regions to
provide us with the best opportunities. Although the
prospects for growth in Japan are limited, the change in
direction by the authorities is significant and could
lead to a stronger market.
INVESTMENT All members of the investment team report directly to Joe
MANAGER Scott Plummer (Chief Investment Officer), who has 26 years
PROFILE of investment experience. All funds are managed on a team
basis with a named director heading each team.
Tony Hanlon has managed the MCBT Opportunistic EAFE Fund
since inception.
He graduated from Glasgow University in 1984 with a degree
in Public Law and completed a MBA degree at Manchester
Business school in 1986. Worked for Salomon Brothers
International in New York and London as an intitutional
bond salesman. Joined Martin Currie in 1988, working in
the North American team. Appointed investment manager in
1991 and promoted to director in 1993. As head of the
Asset Control & Treasury team, he has responsibility for
communicating and monitoring investment strategy.
2
<PAGE>
MCBT OPPORTUNISTIC EAFE FUND
- ------------------------------------------------------------------------------
PROFILE AT OCTOBER 31, 1995
ASSET ALLOCATION
(% of net assets)
Europe 39%
Japan 32%
Pacific Basin 20%
Other Areas 6%
Cash 3%
LARGEST HOLDINGS
BY REGION/COUNTRY % OF NET ASSETS
EUROPE
Elsevier (Netherlands) 1.5
Veba (Germany) 1.4
Nestle (Switzerland) 1.4
JAPAN
Mitsubishi Heavy Industries 1.7
Kyocera 1.5
Rohm 1.4
PACIFIC BASIN
HSBC Holdings (Hong Kong) 1.8
Broken Hill Property (Australia) 1.5
Taiwan Opportunities Fund (Taiwan) 1.4
OTHER AREAS
Indian Opportunities Fund (India) 1.2
3
<PAGE>
MCBT OPPORTUNISTIC EAFE FUND
- ------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
OCTOBER 31, 1995 (Unaudited)
SHARES VALUE
------- -----------
LONG TERM INVESTMENTS - 97.2%
EUROPE - 39.4%
AUSTRIA - 0.9%
FLUGHAFEN WIEN 7,270 $ 466,971
OESTER ELEKTRIZITA (VERBUND) 5,536 338,260
-----------
TOTAL AUSTRIA - (COST $675,461) 805,231
-----------
BELGIUM - 0.5%
KREDIETBANK 2,000 501,728
-----------
TOTAL BELGIUM - (COST $494,358) 501,728
-----------
FRANCE - 5.4%
AXA 15,200 844,220
ELF AQUITAINE 7,503 510,930
IMETAL 2,450 288,583
L'OREAL 4,100 1,001,922
PEUGEOT 5,900 768,553
SAINT GOBAIN 64 7,630
SCHNEIDER 21,000 809,922
SEITA 17,300 601,419
-----------
TOTAL FRANCE - (COST $4,869,915) 4,833,179
-----------
GERMANY - 2.8%
HOECHST 1,758 461,731
MANNESMANN 2,400 789,940
VEBA 31,000 1,272,727
-----------
TOTAL GERMANY - (COST $2,249,217) 2,524,398
-----------
ITALY - 1.7%
LA RINASCENTE 123,670 733,176
TELECOM ITALIA MOBIL 495,000 830,693
-----------
TOTAL ITALY - (COST $1,003,356) 1,563,869
-----------
LUXEMBOURG - 0.2%
MILLICOM INTERNATIONAL CELLULAR * 5,334 176,022
-----------
TOTAL LUXEMBOURG - (COST $131,188) 176,022
-----------
NETHERLANDS - 4.5%
ELSEVIER 101,030 1,306,257
INTERNATIONALE NEDERLANDEN 18,791 1,120,695
KONINKIJKE PTT NEDERLANDEN 28,500 1,002,504
POLYGRAM 9,405 587,142
-----------
TOTAL NETHERLANDS - (COST $3,495,899) 4,016,598
-----------
SPAIN - 1.7%
BANCO SANTANDER 17,480 761,899
FOM DE CONST. Y CONTRATAS 4,700 331,932
REPSOL PETROLEO 16,180 483,193
-----------
TOTAL SPAIN - (COST $1,558,006) 1,577,024
-----------
SWEDEN - 1.2%
ERICSSON L.M. TELEPHONE, CL B 23,000 488,359
See notes to financial statements.
4
<PAGE>
MCBT OPPORTUNISTIC EAFE FUND
- ------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
OCTOBER 31, 1995 (Unaudited)
SHARES VALUE
------- -----------
EUROPE - CONTINUED
SWEDEN - CONTINUED
STORA KOPPARBERG 47,000 $ 569,753
-----------
TOTAL SWEDEN - (COST $1,112,415) 1,058,112
-----------
SWITZERLAND - 3.5%
NESTLE 1,190 1,247,336
ROCHE 160 1,162,688
ZURICH VERSICHERUNG 2,450 701,356
-----------
TOTAL SWITZERLAND - (COST $2,529,267) 3,111,380
-----------
UNITED KINGDOM - 17.0%
ARGYLL 121,000 615,044
BARRATT DEVELOPMENT 265,933 815,668
BRITISH AIRWAYS 87,000 625,850
BRITISH TELECOM 103,200 613,489
BTR, WARRANTS, 1995/1996 * 281,689 329,565
DIXONS 125,320 758,855
EAST MIDLANDS ELECTRICITY 62,588 859,410
GKN 67,530 861,608
GLAXO 79,260 1,068,914
GRANADA 76,435 818,126
LADBROKE 296,000 776,854
LEX SERVICE 81,724 426,386
MCKECHNIE 74,020 510,241
NFC 318,136 779,622
RECKITT & COLMAN 90,000 957,628
TOMKINS 268,157 1,057,789
TSB 164,000 967,146
UNILEVER 49,469 961,224
WASSALL 113,250 485,005
WOLSELEY 154,426 957,075
-----------
TOTAL UNITED KINGDOM - (COST $13,361,727) 15,245,499
-----------
TOTAL EUROPE - (COST $31,480,809) 35,413,040
-----------
LATIN AMERICA - 4.3%
ARGENTINA - 0.4%
BUENOS AIRES EMBOTELLADORA, ADS 4,240 96,990
CAPEX, GDR (f) 9,434 114,728
COMPANHIA NAVIERA PEREZ COMPAC, CL B 28,587 126,056
YPF SOCIDAD ANONIMA, ADS 4,186 71,685
-----------
TOTAL ARGENTINA - (COST $371,847) 409,459
-----------
BRAZIL - 1.7%
CENTRAIS ELETRICAS BRASILEIRAS, ADR * 18,600 263,975
COMPANHIA ENERGETICA DE MINAS, ADR * 9,700 209,776
COMPANHIA VALE DO RIO DOCE, ADR 8,880 357,771
RHODIA STER, GDS 17,711 239,098
TELEBRAS, ADS 10,780 434,321
USIMINAS, ADS 14,300 135,299
-----------
TOTAL BRAZIL - (COST $1,582,778) 1,640,241
-----------
See notes to financial statements.
5
<PAGE>
MCBT OPPORTUNISTIC EAFE FUND
- ------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
OCTOBER 31, 1995 (Unaudited)
SHARES VALUE
------- -----------
LATIN AMERICA - CONTINUED
CHILE - 0.7%
MADECO, ADR 7,588 $ 188,752
MADERAS Y SINTETICOS SOCIEDAD, ADS 9,662 172,708
SOCIEDAD QUIMICA Y MINERA, ADR 5,734 248,712
-----------
TOTAL CHILE - (COST $387,961) 610,172
-----------
COLOMBIA - 0.3%
CEMENTOS DIAMANTE, GDS (f) 16,800 245,125
-----------
TOTAL COLOMBIA - (COST $368,900) 245,125
-----------
ECUADOR - 0.3%
LA CEMENTO NACIONAL DE ECUADOR, GDS 1,163 241,904
-----------
TOTAL ECUADOR - (COST $293,760) 241,904
-----------
MEXICO - 0.6%
CORPORATION INDUSTRIAL ALFA * 10,000 113,684
EMPRESAS ICA SOCIEDAD, ADR 12,500 118,750
GRUPO CARSO, ADS (f) * 12,000 126,720
GRUPO FINANCE BANAMEX, CL B 60,000 102,737
KIMBERLY CLARKE, ADR 4,300 112,875
-----------
TOTAL MEXICO - (COST $568,711) 574,766
-----------
PERU - 0.3%
CEMENTOS LIMA 10,800 150,170
PERU REAL ESTATE, CL B * 250,000 131,173
-----------
TOTAL PERU - (COST $300,764) 281,343
-----------
TOTAL LATIN AMERICA - (COST $3,874,902) 4,003,010
-----------
PACIFIC BASIN - 19.7%
AUSTRALIA - 2.0%
BROKEN HILL PROPRIETARY 97,667 1,322,760
QANTAS AIRWAYS 253,800 448,519
-----------
TOTAL AUSTRALIA - (COST $1,658,501) 1,771,279
-----------
HONG KONG - 6.8%
AMOY PROPERTIES 804,900 775,574
CHINA LIGHT & POWER 152,000 809,964
CITIC PACIFIC 185,000 577,849
HSBC HOLDINGS 112,986 1,644,001
HUTCHISON WHAMPOA 205,700 1,133,363
SWIRE PACIFIC, CL A 161,925 1,214,694
-----------
TOTAL HONG KONG - (COST $5,563,661) 6,155,445
-----------
MALAYSIA - 4.0%
AMMB HOLDINGS 77,740 963,719
EDARAN OTOMOBILE NASIONAL 63,000 495,868
GENTING BERHAD 118,550 1,021,741
RESORTS WORLD BERHAD 67,840 331,057
UNITED ENGINEERS BERHAD 120,000 746,163
-----------
TOTAL MALAYSIA - (COST $3,751,504) 3,558,548
-----------
See notes to financial statements.
6
<PAGE>
MCBT OPPORTUNISTIC EAFE FUND
- ------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
OCTOBER 31, 1995 (Unaudited)
SHARES VALUE
------- -----------
PACIFIC BASIN - CONTINUED
SINGAPORE - 3.7%
DEVELOPMENT BANK SINGAPORE 87,800 $1,006,624
FIRST CAPITAL CORPORATION 191,000 516,362
JARDINE MATHESON 139,000 805,766
SINGAPORE PRESS 65,640 1,026,641
-----------
TOTAL SINGAPORE - (COST $3,677,086) 3,355,393
-----------
SOUTH KOREA - 0.6%
CITC SEOUL EXEL TRUST, IDR * 18(a) 202,680
KOREA PREFERRED FUND * 29,000 323,350
-----------
TOTAL SOUTH KOREA - (COST $508,200) 526,030
-----------
TAIWAN - 1.4%
TAIWAN OPPORTUNITIES FUND (b) * 156,500 1,242,610
-----------
TOTAL TAIWAN - (COST $1,492,817) 1,242,610
-----------
THAILAND - 1.2%
THAI MILITARY BANK 273,100 1,074,385
-----------
TOTAL THAILAND - (COST $1,205,097) 1,074,385
-----------
TOTAL PACIFIC BASIN - (COST $17,856,866) 17,683,690
-----------
OTHER AREAS - 2.1%
INDIA - 1.2%
HIMALAYAN FUND * 3,161 40,461
HIMALAYAN FUND, WARRANTS * 243 122
INDIAN OPPORTUNITIES FUND (c) * 101,911 1,033,375
-----------
TOTAL INDIA - (COST $1,551,424) 1,073,958
-----------
SOUTH AFRICA - 0.9%
ISCOR 111,300 112,908
MALBAK 18,000 119,677
MURRAY & ROBERTS 24,500 171,291
POLIFIN * 1,950 4,197
SAFMARINE & RENNIE 30,000 104,872
SASOL 13,000 112,275
SOUTH AFRICAN BREWERIES 4,300 141,180
-----------
TOTAL SOUTH AFRICA - (COST $646,594) 766,400
-----------
TOTAL OTHER AREAS - (COST $2,198,017) 1,840,358
-----------
JAPAN - 31.7%
AMANO 37,000 448,507
ASAHI CHEMICAL 151,000 1,059,856
ASAHI DIAMOND 32,000 409,795
CANON 72,000 1,231,732
CANON APTEX 13,000 241,459
DAIFUKU 31,000 369,715
DDI 114 923,857
EIDEN SAKAKIYA 24,000 279,193
EXEDY CORPORATION 19,000 295,322
See notes to financial statements.
7
<PAGE>
MCBT OPPORTUNISTIC EAFE FUND
- ------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
OCTOBER 31, 1995 (Unaudited)
SHARES VALUE
------- -----------
JAPAN - CONTINUED
HITACHI 124,000 $ 1,272,789
HITACHI METALS 81,000 997,703
ITO YOKADO 18,000 983,626
ITOCHU 162,000 959,695
KAMIGUMI 84,000 759,568
KIRIN BEVERAGE 25,000 378,806
KURARAY, NO 7 SFR WARRANTS, 1997 * 1,320 29,067
KYOCERA 16,000 1,310,719
MABUCHI MOTOR 7,000 423,579
MARUI 35,000 605,601
MASPRO DENKOH 6,000 85,048
MBL INT'L FINANCE (BERMUDA), EXCH.
GTD NOTES, 3.00%, 11/30/2002 $ 900,000(d) 925,806
MITSUBISHI HEAVY INDUSTRIES 193,000 1,488,607
MITSUI FUDOSAN 80,000 915,001
NIPPON EXPRESS 122,000 989,882
NOMURA SECURITIES 61,000 1,115,108
ORGANO 30,000 307,933
RISO KAGAKU 4,400 354,426
ROHM 21,000 1,274,842
SANKYO 52,000 1,143,751
SEKISUI HOUSE, NO 4 WARRANTS, 1997 * 130 167,375
SHIMACHU 16,000 422,308
SHIN ETSU CHEMICAL 52,000 1,062,418
SONY 18,600 836,405
SUMITOMO ELECTRIC 80,000 922,821
SUMITOMO FORESTRY 65,000 915,001
SUMITOMO TRUST & BANKING 89,000 1,026,639
TAISHO PHARMACEUTICAL 16,000 289,359
TOKIO MARINE & FIRE 98,000 1,005,914
YURTEC 13,650 248,194
-----------
TOTAL JAPAN - (COST $29,444,042) 28,477,427
-----------
TOTAL LONG TERM INVESTMENTS - (COST $84,854,636) + 87,417,525
-----------
PRINCIPAL
AMOUNT
SHORT TERM INVESTMENT- 2.8%
STATE STREET BANK & TRUST, REPURCHASE
AGREEMENT, 5.25%, 11/01/1995 (E) $2,492,000 2,492,000
-----------
TOTAL SHORT TERM - (COST $2,492,000) 2,492,000
-----------
See notes to financial statements.
8
<PAGE>
MCBT OPPORTUNISTIC EAFE FUND
- ------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
OCTOBER 31, 1995 (Unaudited)
VALUE
-----------
TOTAL INVESTMENTS - (COST $87,346,636) - 100.0% 89,909,525
-----------
CASH, RECEIVABLES AND OTHER ASSETS, LESS LIABILITIES - 0.0% (90,418)
-----------
NET ASSETS - 100.0% $89,819,107
-----------
-----------
* Non-income producing security.
(a) Reflected in units. 1 IDR Unit = 1000 shares.
(b) The Taiwan Opportunities Fund is managed by Martin Currie Investment
Management Ltd., which owns Martin Currie Inc.
(c) The Indian Opportunities Fund is managed by Martin Currie Chescor Ltd., an
associate of Martin Currie Inc.
(d) Reflected at par value and denominated in U.S. dollars.
(e) The repurchase agreement, dated 10/31/95, $2,492,363 due 11/1/95, is
collateralized by $1,625,000 United States Treasury Note, 11.25%, 2/15/15.
(f) 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 $486,573 or 0.5% of net
assets.
+ Percentages of long term investments are presented in the portfolio by
country. Percentages of net assets by industry are as follows: Air Travel
1.7%, Automobiles 1.9%, Banks 10.0%, Cement 0.7%, Chemicals 3.1%,
Conglomerates 6.4%, Construction Materials 2.6%, Construction & Mining
Equipment 0.1%, Containers & Glass 0.1%, Cosmetics & Toiletries 1.1%, Drugs
& Health Care 5.2%, Electric Utilities 4.3%, Electrical Equipment 3.4%,
Electronics 4.3%, Engineering 1.0%, Financial Services 1.2%, Food &
Beverages 1.8%, Home Builders 1.5%, Hotels & Restaurants 0.9%, Household
Products 1.2%, Industrial Machinery 6.7%, Insurance 4.2%, Investment
Companies 3.2%, Leisure 3.1%, Liquor 0.1%, Metals 0.1%, Mining 1.9%, Oil &
Gas 1.3%, Paper 0.8%, Petroleum Services 0.1%, Photography 1.6%, Publishing
2.6%, Real Estate 3.9%, Retail Trade 4.9%, Semi-Conductor 0.3%, Steel 1.3%,
Telephone 5.0%, Tobacco 0.7%, Transportation 2.9%.
ADR American Depositary Receipts.
ADS American Depositary Shares.
GDR Global Depositary Receipts.
GDS Global Depositary Shares.
IDR International Depositary Receipts.
See notes to financial statements.
9
<PAGE>
MCBT OPPORTUNISTIC EAFE FUND
- ------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1995 (Unaudited)
ASSETS
Investments in securities, at value (cost - $84,854,636) (Note B) $87,417,525
Investments in repurchase agreements, at cost and value (Note B) 2,492,000
Cash 885
Foreign currency, at value (cost - $326,021)(Note B) 323,679
Receivable for investments sold 385,493
Receivable for foreign currency sold 352,811
Dividend and interest receivable 162,602
Foreign income tax reclaim receivable 73,086
Prepaid insurance expense 2,351
Deferred organization expenses (Note B) 9,340
-----------
TOTAL ASSETS 91,219,772
-----------
LIABILITIES
Payable for investments purchased 824,675
Payable for foreign currency purchased 354,813
Payable for fund shares purchased 13,070
Management fee payable (Note C) 146,661
Administration fee payable (Note C) 5,730
Trustees fees payable (Note C) 2,549
Accrued expenses and other liabilities 53,167
-----------
TOTAL LIABILITIES 1,400,665
-----------
TOTAL NET ASSETS $89,819,107
-----------
-----------
COMPOSITION OF NET ASSETS:
Paid-in-capital $87,964,079
Undistributed net investment income 699,143
Accumulated net realized gain(loss) on investment and foreign
currency transactions (1,403,888)
Net unrealized appreciation on investment and foreign
currency transactions 2,559,773
-----------
TOTAL NET ASSETS $89,819,107
-----------
-----------
NET ASSET VALUE PER SHARE $ 10.13
($89,819,107 / 8,865,004 shares of beneficial interest outstanding) -----------
-----------
See notes to financial statements.
10
<PAGE>
MCBT OPPORTUNISTIC EAFE FUND
- ------------------------------------------------------------------------------
STATEMENT OF OPERATIONSS
SIX MONTHS ENDED OCTOBER 31, 1995 (Unaudited)
INVESTMENT INCOME
Interest income $ 149,227
Dividend income 1,022,800
Foreign taxes witheld (132,416)
----------
TOTAL INVESTMENT INCOME 1,039,611
----------
EXPENSES
Management fee (Note C) 314,945
Custodian fee 86,218
Administration fee 36,976
Audit fee 12,328
Legal fees 4,698
Transfer agent fee 3,254
Trustees fees (Note C) 2,553
Amortization of deferred organization expenses 1,283
Miscellaneous expenses 5,163
Fees and expenses waived by the investment manager (Note C) (17,558)
----------
TOTAL EXPENSES 449,860
----------
NET INVESTMENT INCOME 589,751
----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENT AND FOREIGN CURRENCY
Net realized loss on investment transactions (506,757)
Net realized gain on foreign currency transactions 1,107,048
Net increase in unrealized appreciation(depreciation) on:
Investments 1,597,046
Foreign currency transactions (292,148)
----------
NET GAIN ON INVESTMENT AND FOREIGN CURRENCY TRANSACTIONS 1,905,189
----------
NET INCREASE IN NET ASSETS FROM OPERATIONS $2,494,940
----------
----------
See notes to financial statements.
11
<PAGE>
MCBT OPPORTUNISTIC EAFE FUND
- ------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
(Unaudited)
<TABLE>
<CAPTION>
Six Months July 1, 1994*
Ended through
October 31, 1995 April 30, 1995
---------------- --------------
<S> <C> <C>
NET ASSETS at beginning of period $72,660,677 $ 0
----------- -----------
INCREASE(DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income 589,751 401,984
Net realized loss on investment transactions (506,757) (2,066,233)
Net realized gain(loss) on foreign currency transactions 1,107,048 (230,538)
Net increase in unrealized appreciation(depreciation) on:
Investments 1,597,046 963,500
Foreign currency transactions (292,148) 291,374
----------- -----------
Net increase(decrease) in net assets from operations 2,494,940 (639,913)
----------- -----------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares 22,066,947 73,000,541
Cost of shares repurchased (7,627,302) (112,434)
Paid in capital from subscription and redemption fees 223,845 412,483
----------- -----------
Total increase in net assets from capital share transactions 14,663,490 73,300,590
----------- -----------
NET INCREASE IN NET ASSETS 17,158,430 72,660,677
----------- -----------
NET ASSETS at end of period (includes undistributed net investment income $89,819,107 $72,660,677
of $699,143 and $109,392 respectively) ----------- -----------
OTHER INFORMATION:
CAPITAL SHARE TRANSACTIONS:
Shares sold 2,240,376 7,382,111
Less shares repurchased (745,686) (11,797)
----------- -----------
Net share transactions 1,494,690 7,370,314
----------- -----------
----------- -----------
</TABLE>
* Commencement of investment operations.
See notes to financial statements.
12
<PAGE>
MCBT OPPORTUNISTIC EAFE FUND
- ------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING FOR THE PERIOD
(Unaudited)
<TABLE>
<CAPTION>
Six Months July 1, 1994 *
Ended through
October 31, 1995 April 30, 1995
---------------- --------------
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $ 9.860 $ 10.000
Net investment income 0.066 0.055
Net realized and unrealized loss on investment and foreign currency transactions (1) 0.204 (0.195)
----------- -----------
Total from investment operations 0.270 (0.140)
----------- -----------
Net asset value, end of period $ 10.130 $ 9.860
----------- -----------
----------- -----------
TOTAL INVESTMENT RETURN (2) (3) 2.74% (1.40)%
----------- -----------
----------- -----------
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $89,819,107 $72,660,677
Operating expenses, net, to average net assets (Note C) 1.00%(4) 1.00%(4)
Operating expenses, gross, to average net assets (Note C) 1.04%(4) 1.37%(4)
Net investment income to average net assets 1.31%(4) 1.32%(4)
Portfolio turnover rate 29% 39%
Per share amount of fees waived (Note C) $ 0.002 $ 0.015
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Commencement of investment operations.
(1) Includes purchase premiums and redemption fees. (Note B)
(2) Total return at net asset value assuming all distributions reinvested
and no purchase premiums or redemption fees. Total return would have
been lower had certain expenses not been waived.
(3) Not annualized.
(4) Annualized.
See notes to financial statements.
13
<PAGE>
MCBT OPPORTUNISTIC EAFE FUND
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
NOTE A - ORGANIZATION
Martin Currie Business Trust ("MCBT") (the "Trust") is registered under the
Investment Company Act of 1940, as amended (the 1940 Act), as an open-end
management investment company organized as a Massachusetts business trust on
May 20, 1994. The Trust offers six funds which have differing investment
objectives and policies: Global Growth Fund, Opportunistic EAFE Fund, Global
Emerging Markets Fund, Japan Small Companies Fund, Emerging Americas Fund and
Emerging Asia Fund, (the "Funds"). As of October 31, 1995 the Global
Emerging Markets Fund had not commenced operations. The MCBT Opportunistic
EAFE Fund (the "Fund") commenced investment operations on July 1, 1994.
NOTE B - SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by the
Fund in the preparation of its financial statements.
VALUATION OF INVESTMENTS - The Fund's portfolio securities traded on a
securities exchange are valued at the last quoted sale price, or, if no sale
occurs, at the mean of the most recent quoted bid and asked prices.
Unlisted securities for which market quotations are readily available are
valued at the mean of the most recent quoted bid and asked prices. Prices
for securities which are primarily traded in foreign markets are furnished
by quotation services expressed in the local currency's value and are
translated into U.S. dollars at the current rate of exchange. Short-term
securities and debt securities with a remaining maturity of 60 days or less
are valued at their amortized cost. Options and futures contracts are
valued at the last sale price on the market where any such options or
futures contract is principally traded. Options traded over-the-counter are
valued based upon prices provided by market makers in such securities or
dealers in such currencies. Securities for which current market quotations
are unavailable or for which quotations are not deemed by the investment
adviser to be representative of market values are valued at fair value as
determined in good faith by the Trustees of the Fund, or by persons acting
pursuant to procedures established by the Trustees.
REPURCHASE AGREEMENTS - In connection with transactions in repurchase
agreements, the Fund's custodian takes possession of the underlying
collateral securities, the value or market price of which is at least equal
to the principal amount, including interest, of the repurchase transaction.
To the extent that any repurchase transaction exceeds one business day, the
value of the collateral is marked-to-market on a daily basis to ensure the
adequacy of the collateral. In the event of default of the obligation to
repurchase, the Fund has the right to liquidate the collateral and apply the
proceeds in satisfaction of the obligation. Under certain circumstances, in
the event of default or bankruptcy by the other party to the agreement,
realization and/or retention of the collateral or proceeds may be subject to
legal proceedings.
INVESTMENT TRANSACTIONS - Investment security transactions are recorded on
the date of purchase or sale. Realized gains and losses from security
transactions are determined on the basis of identified cost.
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, which includes accretion of original
issue discount, is accrued as earned. Investment income is recorded net of
foreign taxes withheld where recovery of such taxes is uncertain.
FOREIGN CURRENCY TRANSLATIONS - The records of the Fund are maintained in
U.S. dollars. Foreign currency amounts are translated into U.S. dollars at
a current rate of exchange of such currency to determine the value of
investments, other assets and liabilities on the date of any determination
of net asset value of the Fund. Purchases and sales of securities and
income and expenses are converted at the prevailing rate of exchange on the
respective dates of such transactions.
The Fund may realize currency gains or losses between the trade and
settlement dates on security transactions. To minimize such currency gains
or losses, the Fund may enter into a foreign currency exchange contract for
the purchase or sale, for a fixed amount of U.S. dollars, of an amount of
the foreign currency required to settle the security transaction.
The net U.S. dollar value of foreign currency underlying all contractual
commitments held by the Fund on each day and the resulting net unrealized
appreciation, depreciation and related net receivable or payable amounts are
determined by using forward currency exchange rates supplied by a quotation
service.
14
<PAGE>
MCBT OPPORTUNISTIC EAFE FUND
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
FOREIGN CURRENCY TRANSLATIONS (CONTINUED) - Reported 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 security 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 prices of those securities, but are
included with the net realized and unrealized gain or loss on investment
securities.
FORWARD CURRENCY CONTRACTS - A forward foreign currency contract ("Forward")
is an agreement between two parties to buy and sell a currency at a set
price on a future date. The market value of the Forward fluctuates with
changes in currency exchange rates. The Forward is marked-to-market daily
and the change in the market value is recorded by the Fund as an unrealized
gain or loss. When the Forward is closed, the Fund records a realized gain
or loss equal to the difference between the value at the time it was opened
and the value at the time it was closed. The Fund could be exposed to risk
if a counterparty is unable to meet the terms of the contract or if the
value of the currency changes unfavorably. The Fund may enter into Forwards
in connection with planned purchases and sales of securities, to hedge
specific receivables or payables against changes in future exchange rates or
to hedge the U.S. dollar value of portfolio securities denominated in a
foreign currency.
CURRENCY CALL AND PUT OPTIONS - A call option written by the Fund obligates
the Fund to sell specified currency to the option holder at a specified
price at any time before the expiration date. A put option written by the
Fund obligates the Fund to purchase specified currency from the option
holder at a specified price at any time before the expiration date. These
transactions involve a risk that a Fund may, upon exercise of the option, be
required to sell currency at a price that is less than its market value or
be required to purchase currency at a price that exceeds its market value.
The Fund may also realize gains or losses by entering into closing purchase
transactions identical to call or put options that have been written by the
Fund in order to terminate its obligation under a call or put option. In
determining the amount of gain or loss realized, the option premium paid and
related transaction costs are added to the exercise price.
EXPENSES - Expenses directly attributable to the Fund are charged to the
Fund. Expenses not directly attributable to a Fund are split evenly among
the affected Funds, allocated on the basis of relative average net assets,
or otherwise allocated among the Funds as the Board of Trustees may direct
or approve. Certain costs incurred in connection with the organization of
the Trust and each Fund have been deferred and are being amortized on a
straight line basis over a five year period starting on each Fund's
commencement of operations.
DISTRIBUTIONS TO SHAREHOLDERS - The Fund declares and distributes dividends
from net investment income, if any, and distributes its net realized capital
gains, if any, at least annually. All distributions will be paid in shares
of the Fund at the net asset value unless the shareholder elects in the
subscription agreement to receive cash. Income and capital gain
distributions are determined in accordance with income tax regulations which
may differ from generally accepted accounting principals. These differences
are primarily due to differing treatments for market discount, foreign
currency transactions, losses deferred due to wash sales, post October 31
losses and excise tax regulations. Permanent book and tax differences
relating to shareholder distributions will result in reclassifications to
paid-in-capital. Distributions are recorded on the ex-dividend date.
PURCHASES AND REDEMPTIONS OF FUND SHARES - There is a purchase premium for
cash investments into the Fund of 0.75% of the amount invested and a
redemption fee on cash redemptions of 0.75% of the amount redeemed. All
purchase premiums and redemption fees are paid to, and recorded as
paid-in-capital to the Fund, subject to being waived by Martin Currie. For
the six months ended October 31, 1995, $166,656 was collected in purchase
premiums and $57,189 was collected in redemption fees.
INCOME TAXES - Each Fund of the Trust is treated as a separate entity for
federal tax purposes. Each Fund intends to qualify each year as a regulated
investment company under Subchapter M of the Internal Revenue Code of 1986,
as amended. By so qualifying, the Funds will not be subject to federal
income taxes to the extent that they distribute all of their taxable income,
including realized capital gains, for the fiscal year. In addition, by
distributing substantially all of their net investment income, capital gains
and certain other amounts, if any, during the calendar year, the Funds will
not be subject to a federal excise tax.
15
<PAGE>
MCBT OPPORTUNISTIC EAFE FUND
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
INCOME TAXES (CONTINUED) - The Fund may be subject to foreign taxes on
income, gains on investments or currency repatriation. As of April 30, 1995
the Fund had a capital loss carry forward of $31,328 which expires in the
year 2003. As of April 30, 1995 the Fund has elected for Federal income tax
purposes to defer a $1,927,248 current year post October 31 loss as though
the loss was incurred on the first day of the next fiscal year.
NOTE C - AGREEMENTS AND FEES
The Fund has entered into a Management Contract with Martin Currie, Inc. (the
"Investment Manager"), a wholly owned subsidiary of Martin Currie Ltd. which
is controlled by the Executive Directors of the various subsidiaries of
Martin Currie Ltd. Under the Management Contract, the Fund pays the
Investment Manager a quarterly management fee at the annual rate of 0.70% of
the average net assets.
The Investment Manager has agreed with the Fund to reduce its fee until
further notice to the extent necessary to limit the Fund's annual expenses
(including the management fee but excluding brokerage commissions, transfer
taxes, and extraordinary expenses) to 1.00% of the Fund's average net assets
on an annualized basis. As of October 31, 1995, the Investment Manager has
waived $17,558 of its fees.
State Street Bank and Trust Company (the "Administrator") serves as
administrator of the Fund. The Administrator performs certain
administrative services for the Fund. The Fund pays the Administrator a fee
at the rate of 0.08% of the Fund's average net assets up to $125 million,
0.06% of the next $125 million, and 0.04% of those assets in excess of $250
million, subject to certain minimum requirements which have been waived for
the first six months of the Fund's operation, plus certain out of pocket
costs. State Street Bank and Trust Company also receives fees and
compensation of expenses for certain custodian and transfer agent services.
Trustees of the Trust who are not interested persons receive annual fees of
$20,000. Each Fund pays a pro-rata share based on its respective net assets.
NOTE D - INVESTMENT TRANSACTIONS
Purchases and proceeds from sales and maturities of investments, excluding
short-term securities for the Fund for the six months ended October 31, 1995
were as follows:
NON-U.S. U.S. NON-U.S. U.S.
GOVERNMENT GOVERNMENT GOVERNMENT GOVERNMENT
PURCHASES PURCHASES SALES SALES
---------- ---------- ---------- ----------
$41,462,366 $ 0 $24,713,288 $ 0
The identified cost of investments in securities and repurchase agreements
owned by the Fund for federal income tax purposes and their respective gross
unrealized appreciation and depreciation at October 31, 1995 were as follows:
NET UNREALIZED
IDENTIFIED GROSS UNREALIZED APPRECIATION
COST APPRECIATION (DEPRECIATION) (DEPRECIATION)
---------- ------------ ------------- --------------
$87,346,636 $7,257,771 $(4,694,882) $2,562,889
NOTE E - FORWARD FOREIGN CURRENCY CONTRACTS
At October 31, 1995, there were no outstanding forward exchange currency
contracts.
NOTE F - PRINCIPAL SHAREHOLDERS
As of October 31, 1995, 22% of the Fund's outstanding shares were held by two
shareholders, each holding in excess of 10% of the Fund's outstanding shares.
16
<PAGE>
MCBT OPPORTUNISTIC EAFE FUND
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
NOTE G - CONCENTRATION OF RISK
The Fund will invest extensively in foreign securities (i.e., those which are
not listed on a United States securities exchange). Investing in foreign
securities involves risks not typically found in investing in U.S. markets.
These include risks of adverse change in foreign economic, political,
regulatory and other conditions, and changes in currency exchange rates,
exchange control regulations (including currency blockage), expropriation of
assets or nationalization, imposition of withholding taxes on dividend or
interest payments, and possible difficulty in obtaining and enforcing
judgments against foreign entities. Furthermore, issuers of foreign
securities are subject to different, and often less comprehensive,
accounting, reporting and disclosure requirements than domestic issuers. The
securities of some foreign companies and foreign securities markets are less
liquid and at times more volatile than securities of comparable U.S.
companies and U.S. securities markets.
17
<PAGE>
MARTIN CURRIE BUSINESS TRUST
____________
TRUSTEES AND OFFICERS
C. James P. Dawnay, TRUSTEE AND PRESIDENT *
Simon D. Eccles, TRUSTEE
Patrick R. Wilmerding, TRUSTEE
W. Stewart Coghill, VICE PRESIDENT AND TREASURER
J. Grant Wilson, VICE PRESIDENT
Julian M.C. Livingston, CLERK
* INTERESTED TRUSTEE
____________________
INVESTMENT MANAGER
Martin Currie, Inc.
Saltire Court
20 Castle Terrace
Edinburgh EH1 2ES
Scotland
011-44-131-229-5252
member of IMRO
Registered Investment Adviser
____________________
The information contained in this report is intended for general
informational purposes only. This report is not authorized for distribution
to prospective investors unless preceded or accompanied by a current
Private Placement Memorandum which contains important information concerning
the Fund and its current offering of shares.
<PAGE>
MARTIN CURRIE BUSINESS TRUST
JAPAN SMALL COMPANIES FUND
SEMI-ANNUAL REPORT
OCTOBER 31, 1995
(UNAUDITED)
<PAGE>
MCBT JAPAN SMALL COMPANIES FUND
- ------------------------------------------------------------------------------
PROFILE AT OCTOBER 31, 1995 (Unaudited)
OBJECTIVE Long-term capital appreciation through active management of a
diversified portfolio of equities in Japanese companies with
relatively small capitalization, which may not have wide market
recognition.
LAUNCH DATE August 15, 1994
FUND SIZE $60.6m
PERFORMANCE Total return from August 15, 1994 through October 31, 1995
SINCE LAUNCH
- MCBT - Japan Small Companies Fund (excluding all
transaction fees) -7.4%
- MCBT - Japan Small Companies Fund (including all
transaction fees) -9.2%
- The Tokyo Stock Exchange - Second Section Index
(from August 31, 1994 thru October 31, 1995) -24.6%
PORTFOLIO Although the fund declined by 3.6% over the six month period,
COMMENTS it has performed significantly better than the benchmark index,
the TSE Second Section, which fell by 9.4%.
Pressure on the Japanese economy, from the very strong currency
and domestic deflation, finally led the authorities to
implement a major shift in policy in July. Interest rates are
now at an historic low (overnight rates are only 0.5%) as a
result of a more expansionary monetary policy. The recent
fiscal package amounting to some $80bn of real spending is
sufficient to add 1.7% to GDP in fiscal year ending March 1997.
Intervention in the currency markets has brought the yen down
to the Y/$100 rate. We believe that it may weaken further from
here, and have, since the end of October, reinstated the hedge
protecting 50% of the fund's Yen assets.
The problems in the banking sector, whilst commanding the
headlines in the newspapers, do not, in our view, constitute a
crisis. The level of operating profits in the banking sector
is at an historic peak, which is enabling the balance sheet
adjustments to occur more rapidly than previously expected. It
will, however, take time for the bad debts to be worked out of
the financial system, and we can expect further failures among
smaller institutions.
Smaller stocks have generally fared better in the market than
larger ones, and our technology-orientated stocks have
performed particularly well. As a result of new subscriptions,
the fund size has increased from $45.0m to $60.6m. A
subscription late in October temporarily inflated the cash
balance, which has now been invested. We have favoured
retailers, electronics manufacturers and companies that will
benefit from the reconstruction of Kobe.
1
<PAGE>
MCBT JAPAN SMALL COMPANIES FUND
- ------------------------------------------------------------------------------
PROFILE AT OCTOBER 31, 1995 (Unaudited)
INVESTMENT All members of the investment team report directly to Joe Scott
MANAGER Plummer (Chief Investment Officer), who has 26 years of
PROFILE investment experience. All funds are managed on a team basis
with a named director heading each team.
Michael Thomas assisted by James Salter has managed the MCBT
Japan Small Companies Fund since inception.
Michael graduated from Bristol University with a degree in
Economics and joined stockbrokers Vickers da Costa in 1973.
He began covering the Japanese market in 1975 and became
director of its Japanese department in 1982. A specialist on
Japan, he joined Martin Currie in 1989 as a director and head
of the Far East investment team. Became head of the Japan team
in 1993 following the restructure of the Far East team.
James graduated from Reading University. in 1988 in Classics
and Anthropology and went on to complete the Japan studies MA
course at the School of Oriental and African Studies. Joined
Foreign & Colonial in 1989 and was seconded to Japan with The
Long Term Credit Bank of Japan. Joined Martin Currie in July
1992 as a member of the Pacific Basin and latterly the Japan
team. He was promoted to director in 1995.
LARGEST HOLDINGS % OF NET ASSETS
Maezawa Industries 3.0
Ryosan 3.0
Io Data Device 2.8
Kirin Beverage 2.8
Promise 2.7
2
<PAGE>
MCBT JAPAN SMALL COMPANIES FUND
- ------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
OCTOBER 31, 1995 (Unaudited)
SHARES VALUE
------ -----
LONG TERM INVESTMENTS - 87.4%
COMMON STOCK - 80.5%
AIPHONE 33,000 $ 532,284
ASIA SECURITIES PRINTING 20,000 742,949
CANON APTEX 54,000 1,002,982
CHAIN STORE OKUWA 24,000 330,808
CHIYODA 52,000 1,021,751
CHIYODA FIRE & MARINE 130,000 692,605
CHUGOKU BANK 55,000 876,387
CIRCLE K JAPAN * 30,000 1,143,751
COCO'S JAPAN 67,000 654,968
DAIFUKU 90,000 1,073,366
DAIWA KOSHO LEASE 138,000 1,241,116
DAIWA LOGISTICS * 60,000 1,231,732
DDI 100 810,401
DOWA FIRE & MARINE 120,000 558,385
EIDEN SAKAKIYA 30,000 348,991
EXEDY CORPORATION 60,000 932,597
FUJI MACHINE MANUFACTURING 33,000 1,241,996
FUJITSU BUSINESS SYSTEMS 40,000 1,008,847
GEOMATEC 14,000 665,135
GLORY 30,000 1,052,837
HIGASHI NIHON HOUSE 30,000 401,779
HIROSE ELECTRIC 16,800 1,072,428
IO DATA DEVICE 24,000 1,712,694
IZUMI 30,000 568,943
KIRIN BEVERAGE 110,000 1,666,748
MABUCHI MOTOR 24,000 1,452,270
MAEZAWA INDUSTRIES 76,000 1,820,226
MASPRO DENKOH 24,000 340,193
MELCO 3,000 162,765
MIRAI INDUSTRY 20,000 432,084
NATIONAL HOUSE INDUSTRIAL 70,000 1,190,674
NICHICON 60,000 809,424
NIPPON KOEI 42,000 427,000
NIPPON SYSTEM DEVELOPMENT 13,000 158,854
NISSHA PRINTING 100,000 1,221,956
NISSIN FOOD PRODUCTS 60,000 1,349,040
NTN 90,000 549,880
ORGANO 90,000 923,799
ORIENTAL CONSTRUCTION 35,000 739,039
PCA 14,000 396,891
PROMISE 41,000 1,615,230
RISO KAGAKU 12,000 966,616
RYOSAN 65,000 1,804,585
SANKYO 21,300 1,036,942
SANTEN PHARMACEUTICAL 60,000 1,419,424
SHIMACHU 40,000 1,055,770
SHOWA 77,000 583,362
SONY MUSIC ENTERTAINMENT 28,000 1,198,886
TAISHO PHARMACEUTICAL 70,000 1,265,947
TEN ALLIED 10,000 130,016
TOKAI LEASE 47,000 411,672
XEBIO 35,000 1,300,161
See notes to financial statements.
3
<PAGE>
MCBT JAPAN SMALL COMPANIES FUND
- ------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
OCTOBER 31, 1995 (Unaudited)
COMMON STOCK - CONTINUED
YOKOGAWA BRIDGE 59,000 $ 824,771
YORK BENIMARU 15,000 475,097
YURTEC 9,450 171,827
------------
TOTAL COMMON STOCK - (COST $49,582,063) 48,820,881
------------
PRINCIPAL
AMOUNT
----------
CONVERTIBLE BONDS - 6.6%
IZUMI, NO 3, 4.5%, 02/28/2001 Y 60,000,000 680,385
JONAS, NO 1, 1.4%, 12/30/1999 Y100,000,000 1,045,995
KATO DENKI, SWISS FRANC CONVERTIBLE,
1.375%, 09/30/1999 f 900,000 903,726
MATSUSHITA ELECTRIC, NO 8, 2.7%, 05/31/2002 Y100,000,000 1,116,379
NITTO DENKO, NO 4, 3.9%, 03/30/2001 Y 20,000,000 247,128
-----------
TOTAL CONVERTIBLE BONDS - (COST $4,199,041) 3,993,613
-----------
WARRANTS - 0.3%
KURARAY * 400 164,000
-----------
TOTAL WARRANTS - (COST $198,200) 164,000
-----------
TOTAL LONG TERM INVESTMENTS - (COST $53,979,303) + 52,978,494
-----------
PRINCIPAL
AMOUNT
---------
SHORT TERM INVESTMENT- 18.6%
STATE STREET BANK & TRUST, REPURCHASE AGREEMENT,
5.25%, 11/01/1995 (a) $11,269,000 11,269,000
-----------
TOTAL SHORT TERM - (COST $11,269,000) 11,269,000
-----------
TOTAL INVESTMENTS - (COST $65,248,303) - 106.0% 64,247,494
-----------
CASH, RECEIVABLES AND OTHER ASSETS, LESS LIABILITIES - (6.0)% (3,640,597)
-----------
NET ASSETS - 100.0% $60,606,897
-----------
-----------
* Non-income producing security.
f Denominated in Swiss francs.
Y Denominated in Japanese yen.
(a) The repurchase agreement, dated 10/31/95, $11,270,643 due 11/1/95, is
collaterized by $7,340,000 United States Treasury Notes, 11.25%, 2/15/15.
+ Percentages of long term net assets by industry are as follows:
Automobiles 1.0%, Banks 1.4%, Building Construction 4.7%, Commercial
Services 2.7%, Computers & Business Equipment 3.1%, Copier Equipment
1.7%, Drugs & Health Care 6.1%, Electrical Equipment 9.9%, Electronics
5.3%, Entertainment 2.0%, Finance 2.7%, Financial Services 2.1%, Food &
Beverages 6.9%, Forest Products 2.0%, Industrial Machinery 11.7%, Metals
1.2%, Office Furnishings & Supplies 3.9%, Publishing 1.2%, Retail Trade
14.0%, Semi-Conductor 1.5%, Textiles 0.3%, Transportation 2.0%.
See notes to financial statements.
4
<PAGE>
MCBT JAPAN SMALL COMPANIES FUND
- ------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1995 (Unaudited)
<TABLE>
<CAPTION>
<S> <C>
ASSETS
Investments in securities, at value (cost $53,979,303) (Note B) $52,978,494
Investments in repurchase agreements, at cost and value (Note B) 11,269,000
Cash 217
Receivable for investments sold 631,031
Dividend and interest receivable 121,067
Prepaid insurance expense 2,351
Deferred organization expenses 9,654
-----------
TOTAL ASSETS 65,011,814
-----------
LIABILITIES
Payable for investments purchased 4,127,240
Due to Custodian 112,672
Management fee payable (Note C) 129,309
Administration fee payable (Note C) 3,420
Trustees fees payable (Note C) 1,448
Accrued expenses and other liabilities (Note B) 30,828
-----------
TOTAL LIABILITIES 4,404,917
-----------
TOTAL NET ASSETS $60,606,897
-----------
-----------
COMPOSITION OF NET ASSETS:
Paid-in-capital $61,778,228
Undistributed net investment loss (218,806)
Accumulated net realized gain on investment and foreign currency transactions 28,866
Net unrealized depreciation on investment and foreign currency transactions (981,391)
-----------
TOTAL NET ASSETS $60,606,897
-----------
-----------
NET ASSET VALUE PER SHARE $ 9.26
($60,606,897 / 6,547,656 shares of beneficial interest outstanding) -----------
-----------
</TABLE>
See notes to financial statements.
5
<PAGE>
MCBT JAPAN SMALL COMPANIES FUND
- ------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
SIX MONTHS ENDED OCTOBER 31, 1995
(Unaudited)
INVESTMENT INCOME
Interest income $ 83,081
Dividend income 136,436
Foreign taxes witheld (23,352)
-----------
TOTAL INVESTMENT INCOME 196,165
-----------
EXPENSES
Management fee (Note C) 248,628
Custodian fee 37,931
Administration fee 31,798
Audit fee 12,328
Legal fees 2,692
Transfer agent fee 3,254
Trustees fees (Note C) 1,448
Amortization of deferred organization expenses 1,283
Miscellaneous expenses 5,106
-----------
TOTAL EXPENSES 344,468
-----------
NET INVESTMENT INCOME (148,303)
-----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENT AND FOREIGN CURRENCY
Net realized loss on investment transactions (1,020,386)
Net realized gain on foreign currency transactions 1,161,208
Net increase in unrealized depreciation on:
Investments (1,662,084)
Foreign currency transactions (456,004)
-----------
NET LOSS ON INVESTMENT AND FOREIGN CURRENCY TRANSACTIONS (1,977,266)
-----------
NET DECREASE IN NET ASSETS FROM OPERATIONS $(2,125,569)
-----------
See notes to financial statements.
6
<PAGE>
MCBT JAPAN SMALL COMPANIES FUND
- ------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
(Unaudited)
<TABLE>
<CAPTION>
Six Months August 15, 1994 *
Ended through
October 31, 1995 April 30, 1995
---------------- -----------------
<S> <C> <C>
NET ASSETS at beginning of period $44,969,083 $ 0
----------- -----------
INCREASE(DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income(loss) (148,303) 54,959
Net realized loss on investment transactions (1,020,386) (239,637)
Net realized gain on foreign currency transactions 1,161,208 10,618
Net increase in unrealized appreciation(depreciation) on:
Investments (1,662,084) 661,299
Foreign currency transactions (456,004) 475,398
----------- -----------
Net increase(decrease) in net assets from operations (2,125,569) 962,637
----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income 0 (4,024)
In excess of net realized loss on investments 0 (4,375)
----------- -----------
Total distributions 0 (8,399)
----------- -----------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares 17,683,759 43,727,477
Reinvestment of dividends and distributions to shareholders 0 8,399
Cost of shares repurchased (100,000) 0
Paid in capital from subscription and redemption fees 179,624 278,969
----------- -----------
Total increase in net assets from capital share transactions 17,763,383 44,014,845
----------- -----------
NET INCREASE IN NET ASSETS 15,637,814 44,969,083
----------- -----------
NET ASSETS at end of period (net of accumulated net investment losses $60,606,897 $44,969,083
of $218,806 and $70,503) ----------- -----------
----------- -----------
OTHER INFORMATION:
CAPITAL SHARE TRANSACTIONS:
Shares sold 1,876,711 4,680,605
Shares issued in reinvestment of distributions to shareholders 0 833
Less shares repurchased (10,493) 0
----------- -----------
Net share transactions 1,866,218 4,681,438
----------- -----------
----------- -----------
</TABLE>
* Commencement of investment operations.
See notes to financial statements.
7
<PAGE>
MCBT JAPAN SMALL COMPANIES FUND
- ------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING FOR THE PERIOD
(Unaudited)
<TABLE>
<CAPTION>
Six Months August 15, 1994*
Ended through
October 31, 1995 April 30, 1995
---------------- -----------------
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $ 9.610 $ 10.000
Net investment income (0.023) 0.013
Net realized and unrealized loss on investment and foreign currency transactions (1) (0.327) (0.398)
----------- ----------
Total from investment operations (0.350) (0.385)
----------- ----------
Less distributions:
Dividends from net investment income 0.000 (0.002)
Distributions from net realized capital gains 0.000 (0.003)
----------- ----------
Total distributions 0.000 (0.005)
----------- ----------
Net asset value, end of period 9.260 $ 9.610
----------- ----------
----------- ----------
TOTAL INVESTMENT RETURN (2) (3) (3.64)% (3.85)%
----------- ----------
----------- ----------
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $60,606,897 $44,969,083
Operating expenses, net, to average net assets (Note C) 1.39%(4) 1.50%(4)
Operating expenses, gross, to average net assets (Note C) 1.39%(4) 1.72%(4)
Net investment income to average net assets (0.60)%(4) 0.37%(4)
Portfolio turnover rate 26% 33%
Per share amount of fees waived (Note C) $ 0.000 $ 0.008
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Commencement of investment operations.
(1) Includes purchase premiums and redemption fees. (Note B)
(2) Total return at net asset value assuming all distributions reinvested
and no purchase premiums or redemption fees. Total return would have
been lower had certain expenses not been waived.
(3) Not annualized.
(4) Annualized.
See notes to financial statements.
8
<PAGE>
MCBT JAPAN SMALL COMPANIES FUND
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
NOTE A - ORGANIZATION
Martin Currie Business Trust ("MCBT") (the "Trust") is registered under the
Investment Company Act of 1940, as amended (the 1940 Act), as an open-end
management investment company organized as a Massachusetts business trust on
May 20, 1994. The Trust offers six funds which have differing investment
objectives and policies: Global Growth Fund, Opportunistic EAFE Fund, Global
Emerging Markets Fund, Japan Small Companies Fund, Emerging Americas Fund and
Emerging Asia Fund, (the "Funds"). As of October 31, 1995 the Global
Emerging Markets Fund had not commenced operations. The MCBT Japan Small
Companies Fund (the "Fund") commenced investment operations on August 15,
1994.
NOTE B - SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by the
Fund in the preparation of its financial statements.
VALUATION OF INVESTMENTS - The Fund's portfolio securities traded on a
securities exchange are valued at the last quoted sale price, or, if no sale
occurs, at the mean of the most recent quoted bid and asked prices.
Unlisted securities for which market quotations are readily available are
valued at the mean of the most recent quoted bid and asked prices. Prices
for securities which are primarily traded in foreign markets are furnished
by quotation services expressed in the local currency's value and are
translated into U.S. dollars at the current rate of exchange. Short-term
securities and debt securities with a remaining maturity of 60 days or less
are valued at their amortized cost. Options and futures contracts are
valued at the last sale price on the market where any such options or
futures contract is principally traded. Options traded over-the-counter are
valued based upon prices provided by market makers in such securities or
dealers in such currencies. Securities for which current market quotations
are unavailable or for which quotations are not deemed by the investment
adviser to be representative of market values are valued at fair value as
determined in good faith by the Trustees of the Fund, or by persons acting
pursuant to procedures established by the Trustees.
REPURCHASE AGREEMENTS - In connection with transactions in repurchase
agreements, the Fund's custodian takes possession of the underlying
collateral securities, the value or market price of which is at least equal
to the principal amount, including interest, of the repurchase transaction.
To the extent that any repurchase transaction exceeds one business day, the
value of the collateral is marked-to-market on a daily basis to ensure the
adequacy of the collateral. In the event of default of the obligation to
repurchase, the Fund has the right to liquidate the collateral and apply the
proceeds in satisfaction of the obligation. Under certain circumstances, in
the event of default or bankruptcy by the other party to the agreement,
realization and/or retention of the collateral or proceeds may be subject to
legal proceedings.
INVESTMENT TRANSACTIONS - Investment security transactions are recorded on
the date of purchase or sale. Realized gains and losses from security
transactions are determined on the basis of identified cost.
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, which includes accretion of original
issue discount, is accrued as earned. Investment income is recorded net of
foreign taxes withheld where recovery of such taxes is uncertain.
FOREIGN CURRENCY TRANSLATIONS - The records of the Fund are maintained in
U.S. dollars. Foreign currency amounts are translated into U.S. dollars at
a current rate of exchange of such currency to determine the value of
investments, other assets and liabilities on the date of any determination
of net asset value of the Fund. Purchases and sales of securities and
income and expenses are converted at the prevailing rate of exchange on the
respective dates of such transactions.
The Fund may realize currency gains or losses between the trade and
settlement dates on security transactions. To minimize such currency gains
or losses, the Fund may enter into a foreign currency exchange contract for
the purchase or sale, for a fixed amount of U.S. dollars, of an amount of
the foreign currency required to settle the security transaction.
The net U.S. dollar value of foreign currency underlying all contractual
commitments held by the Fund on each day and the resulting net unrealized
appreciation, depreciation and related net receivable or payable amounts are
determined by using forward currency exchange rates supplied by a quotation
service.
9
<PAGE>
MCBT JAPAN SMALL COMPANIES FUND
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
FOREIGN CURRENCY TRANSLATIONS (CONTINUED) - Reported 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 security 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 prices of those securities, but are
included with the net realized and unrealized gain or loss on investment
securities.
FORWARD CURRENCY CONTRACTS - A forward foreign currency contract ("Forward")
is an agreement between two parties to buy and sell a currency at a set
price on a future date. The market value of the Forward fluctuates with
changes in currency exchange rates. The Forward is marked-to-market daily
and the change in the market value is recorded by the Fund as an unrealized
gain or loss. When the Forward is closed, the Fund records a realized gain
or loss equal to the difference between the value at the time it was opened
and the value at the time it was closed. The Fund could be exposed to risk
if a counterparty is unable to meet the terms of the contract or if the
value of the currency changes unfavorably. The Fund may enter into Forwards
in connection with planned purchases and sales of securities, to hedge
specific receivables or payables against changes in future exchange rates or
to hedge the U.S. dollar value of portfolio securities denominated in a
foreign currency.
CURRENCY CALL AND PUT OPTIONS - A call option written by the Fund obligates
the Fund to sell specified currency to the option holder at a specified
price at any time before the expiration date. A put option written by the
Fund obligates the Fund to purchase specified currency from the option
holder at a specified price at any time before the expiration date. These
transactions involve a risk that a Fund may, upon exercise of the option, be
required to sell currency at a price that is less than its market value or
be required to purchase currency at a price that exceeds its market value.
The Fund may also realize gains or losses by entering into closing purchase
transactions identical to call or put options that have been written by the
Fund in order to terminate its obligation under a call or put option. In
determining the amount of gain or loss realized, the option premium paid and
related transaction costs are added to the exercise price.
EXPENSES - Expenses directly attributable to the Fund are charged to the
Fund. Expenses not directly attributable to a Fund are split evenly among
the affected Funds, allocated on the basis of relative average net assets,
or otherwise allocated among the Funds as the Board of Trustees may direct
or approve. Certain costs incurred in connection with the organization of
the Trust and each Fund have been deferred and are being amortized on a
straight line basis over a five year period starting on each Fund's
commencement of operations.
DISTRIBUTIONS TO SHAREHOLDERS - The Fund declares and distributes dividends
from net investment income, if any, and distributes its net realized capital
gains, if any, at least annually. All distributions will be paid in shares
of the Fund at the net asset value unless the shareholder elects in the
subscription agreement to receive cash. Income and capital gain
distributions are determined in accordance with income tax regulations which
may differ from generally accepted accounting principals. These differences
are primarily due to differing treatments for market discount, foreign
currency transactions, losses deferred due to wash sales, post October 31
losses and excise tax regulations. Permanent book and tax differences
relating to shareholder distributions will result in reclassifications to
paid-in-capital. Distributions are recorded on the ex-dividend date.
PURCHASES AND REDEMPTIONS OF FUND SHARES - There is a purchase premium for
cash investments into the Fund of 1.00% of the amount invested and a
redemption fee on cash redemptions of 1.00% of the amount redeemed. All
purchase premiums and redemption fees are paid to, and recorded as
paid-in-capital to the Fund, subject to being waived by Martin Currie. For
the period ended October 31, 1995, $178,624 in purchase premiums and $1,000
in redemption fees were collected.
INCOME TAXES - Each Fund of the Trust is treated as a separate entity for
federal tax purposes. Each Fund intends to qualify each year as a regulated
investment company under Subchapter M of the Internal Revenue Code of 1986,
as amended. By so qualifying, the Funds will not be subject to federal
income taxes to the extent that they distribute all of their taxable income,
including realized capital gains, for the fiscal year. In addition, by
distributing substantially all of their net investment income, capital gains
and certain other amounts, if any, during the calendar year, the Funds will
not be subject to a federal excise tax. The Fund may be subject to foreign
taxes on income, gains on investments or currency repatriation. As of April
30, 1995 the Fund has elected for Federal income tax purposes to defer a
$73,631 current year post October 31 loss as though the loss was incurred on
the first day of the next fiscal year.
10
<PAGE>
MCBT JAPAN SMALL COMPANIES FUND
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
NOTE C - AGREEMENTS AND FEES
The Fund has entered into a Management Contract with Martin Currie, Inc. (the
"Investment Manager"), a wholly owned subsidiary of Martin Currie Ltd. which
is controlled by the Executive Directors of the various subsidiaries of
Martin Currie Ltd. Under the Management Contract, the Fund pays the
Investment Manager a quarterly management fee at the annual rate of 1.00% of
the average net assets.
The Investment Manager has agreed with the Fund to reduce its fee until
further notice to the extent necessary to limit the Fund's annual expenses
(including the management fee but excluding brokerage commissions, transfer
taxes, and extraordinary expenses) to 1.50% of the Fund's average net assets
on an annualized basis. For the six months ended October 31, 1995, the
Investment Manager did not waive any of its fees.
State Street Bank and Trust Company (the "Administrator") serves as
administrator of the Fund. The Administrator performs certain
administrative services for the Fund. The Fund pays the Administrator a fee
at the rate of 0.08% of the Fund's average net assets up to $125 million,
0.06% of the next $125 million, and 0.04% of those assets in excess of $250
million, subject to certain minimum requirements which have been waived for
the first six months of the Fund's operation, plus certain out of pocket
costs. State Street Bank and Trust Company also receives fees and
compensation of expenses for certain custodian and transfer agent services.
Trustees of the Trust who are not interested persons receive annual fees of
$20,000. Each Fund pays a pro-rata share based on its respective net assets.
NOTE D - INVESTMENT TRANSACTIONS
Purchases and proceeds from sales and maturities of investments, excluding
short-term securities for the Fund for the period ended October 31, 1995 were
as follows:
NON-U.S. U.S. NON-U.S. U.S.
GOVERNMENT GOVERNMENT GOVERNMENT GOVERNMENT
PURCHASES PURCHASES SALES SALES
----------- ---------- ----------- -----------
$25,868,093 $ 0 $12,581,864 $ 0
The identified cost of investments in securities owned by the Fund for
federal income tax purposes and their respective gross unrealized
appreciation and depreciation at October 31, 1995 were as follows:
NET UNREALIZED
IDENTIFIED GROSS UNREALIZED APPRECIATION
COST APPRECIATION (DEPRECIATION) (DEPRECIATION)
---------- ------------ -------------- --------------
$65,248,303 $3,443,664 $(4,444,473) $1,000,809
NOTE E - FORWARD FOREIGN CURRENCY CONTRACTS
At October 31, 1995, there were no outstanding forward exchange currency
contracts.
NOTE F - PRINCIPAL SHAREHOLDERS
As of October 31,1995, 34% of the Fund's outstanding shares were held by one
shareholder.
11
<PAGE>
MCBT JAPAN SMALL COMPANIES FUND
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
NOTE G - CONCENTRATION OF RISK
Investment in foreign securities generally involves special risks.
Additional risks are present in the case of a fund such as the Japan Small
Companies Fund which will invest most of its assets in the issuers of a
single foreign country. This means that the Fund's performance will be
directly affected by political, economic and market conditions in Japan. In
addition, since the Japanese economy depends to some extent on foreign trade,
the relationships between Japan and its trading partners and between the yen
and other currencies are expected to have a significant impact on particular
Japanese companies and on the Japanese economy generally. The Fund is
designed for investors who are willing to accept the risks associated with
changes in such conditions and relationships.
12
<PAGE>
MARTIN CURRIE BUSINESS TRUST
________________
TRUSTEES AND OFFICERS
C. James P. Dawnay, TRUSTEE AND PRESIDENT *
Simon D. Eccles, TRUSTEE
Patrick R. Wilmerding, TRUSTEE
W. Stewart Coghill, VICE PRESIDENT AND TREASURER
J. Grant Wilson, VICE PRESIDENT
Julian M.C. Livingston, CLERK
* INTERESTED TRUSTEE
________________
INVESTMENT MANAGER
Martin Currie, Inc.
Saltire Court
20 Castle Terrace
Edinburgh EH1 2ES
011-44-131-229-5252
member of IMRO
Registered Investment Adviser
________________
The information contained in this report is intended for general
informational purposes only. This report is not authorized for distribution
to prospective investors unless preceded or accompanied by a current
Private Placement Memorandum which contains important information concerning
the Fund and its current offering of shares.
<PAGE>
MARTIN CURRIE BUSINESS TRUST
EMERGING AMERICAS FUND
SEMI-ANNUAL REPORT
OCTOBER 31, 1995
(UNAUDITED)
<PAGE>
MCBT EMERGING AMERICAS FUND
- -----------------------------------------------------------------------------
PROFILE AT OCTOBER 31, 1995
OBJECTIVE Long-term capital appreciation through active management of a
diversified portfolio of equities in countries of the Western
Hemisphere with emerging markets and developing economies.
LAUNCH DATE September 19, 1994
FUND SIZE $54.4m
PERFORMANCE Total return from September 19, 1994 through October 31, 1995
SINCE LAUNCH
- MCBT - Emerging Americas Fund (excluding all
transaction fees) -32.4%
- MCBT - Emerging Americas Fund (including all
transaction fees) -34.7%
- The Morgan Stanley Capital International Latin
America (Free) Index (from September 30, 1994
through October 31, 1995) -34.7%
PORTFOLIO The fund price declined by 1.3% over the six month period,
COMMENTS exactly in line with the decline in the MSCI Latin America
(Free) Index.
Markets have generally recovered some poise following the
major dislocation suffered in December 1994 in the wake of the
Mexican devaluation, although GDP forecasts have been
downgraded across the region.
In Mexico, the market has bounced from the lows seen earlier
in the year, although returns to the US investor have been
eroded by the weak, and still volatile, Peso. This has kept
interest rates extremely high, causing a severe cash flow
squeeze in the private sector. However, we are encouraged by
the higher than expected level of foreign direct investment, a
faster than expected privatization programme, the
restructuring of the savings system and a very positive trade
balance. We added to positions during October, concentrating
our buying on stocks with US Dollar earnings, exporters and
companies with low debt.
In Brazil, the economy is slowing sharply following the
successful attempt by the government to control inflation and
reduce the trade deficit. The political agenda is moving
forward and gives us confidence for the future. Major
purchases included the utilities Eletrobras and Telebras and
also Acesita (stainless steel). Over the period we lifted our
weighting in Brazil from 32.5% of the fund to 38.0%.
We reduced positions in Argentina. Carlos Menem was
re-elected President, with a majority for his party, the
Peronists. An increasing rift between Menem and his Finance
Minister, Cavallo, gives rise to some concerns although
inflation is falling, the trade surplus is rising and
restructuring in the financial sector continues. We bought
Banco Frances in anticipation of renewed lending.
Elsewhere President Fujimori was re-elected in Peru and his
policies remain orthodox and on course. The market has been
restrained by the level of foreign ownership. In Chile the
market has been depressed by the potential introduction of gas
competition to the local energy market, continued fierce
competition in the telecom sector, rising interest rates and
selling by the GT Chile Growth Fund in order to defend itself
from a hostile bid.
The fund has increased in size from $39.8m to $54.4m as a
result of new subscriptions. Confidence is gradually
returning to the Latin American region as US interest rates
decline and we expect to see advances from these levels.
1
<PAGE>
MCBT EMERGING AMERICAS FUND
- -----------------------------------------------------------------------------
PROFILE AT OCTOBER 31, 1995
INVESTMENT All members of the investment team report directly to Joe
MANAGER Scott Plummer (Chief Investment Officer), who has 26 years of
PROFILE investment experience. All funds are managed on a team basis
with a named director heading each team.
James Fairweather assisted by Nicholas Morse has managed the
MCBT Emerging Americas fund since inception.
James spent three years with Montague Loebl Stanley & Co. as
an institutional sales and economics assistant. Moved into
Eurobond sales for 18 months with Kleinwort Benson before
joining Martin Currie in 1984. Has worked in the Far East and
North American investment teams. Appointed director in 1987
and became head of the Continental Europe team in 1992. Is a
member of the asset allocation committee. Appointed Deputy
Chief Investment Officer (investments) in 1994 with overall
responsibility for the company's investments in emerging
markets. He became head of the Pacific Basin team in 1995.
Nicholas graduated from University of Exeter in 1986 with a
degree in Social and Economic History. Spent five years with
Foreign & Colonial and Singer & Friedlander concentrating
latterly on Latin American markets. After a period with WI
Carr Indosuez, he moved to Grupo Financiero Banamex Accival in
Mexico City and New York where he was manager of Latin
American research. He joined Martin Currie in 1994 as an
investment manager in the Latin American team, and was
appointed director in 1995.
2
<PAGE>
MCBT EMERGING AMERICAS FUND
- -----------------------------------------------------------------------------
PROFILE AT OCTOBER 31, 1995
ASSET ALLOCATION
(% of net assets)
Brazil 38%
Mexico 24%
Other Areas 19%
Argentina 13%
Peru 6%
LARGEST HOLDINGS
BY COUNTRY % OF NET ASSETS
BRAZIL
Telebras 8.0
Eletrobras 3.8
Companhia Vale Do Rio Doce, ADR 3.3
MEXICO
Corporacion Industrial San Luis 4.6
Grupo Carso 2.8
Grupo Modelo 2.6
ARGENTINA
Argentina Equity Investment Company 2.6
Banco Frances del Rio de la Plata 2.4
PERU
Peru Real Estate 2.1
3
<PAGE>
MCBT EMERGING AMERICAS FUND
- -----------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
OCTOBER 31, 1995 (Unaudited)
SHARES VALUE
------------- -----------
LONG TERM INVESTMENTS - 99.5%
ARGENTINA - 13.3%
ARGENTINA EQUITY INVESTMENTS * 15,000 $ 1,406,100
BANCO FRANCES DEL RIO DE LA PLATA 178,000 1,293,931
BUENOS AIRES EMBOTELLADORA, ADS 41,600 951,600
CAPEX, GDR (b) 87,000 1,044,000
COMPANHIA NAVIERA PEREZ COMPAC 274,750 1,211,526
MIRGOR, ADS 75,000 147,750
TELECOM ARGENTINA, ADR 30,000 1,151,250
-----------
TOTAL ARGENTINA - (COST $7,387,973) 7,206,157
BRAZIL - 38.0%
ACOS ESPECITABIRA, PREFERRED * 141,111,500 1,173,728
BARDELLA 6,850 997,089
BRASMOTOR 4,681,000 1,095,056
BRAZILIAN EQUITY INVESTMENTS 44,000 1,122,000
CIM PORT ITAU CIA, PREFERRED 4,316,000 1,138,907
COMPANHIA ENERGETICA DE MINAS, ADS 62,563 1,353,012
COMPANHIA VALE DO RIO DOCE, ADR 44,900 1,808,999
DIXIE TOGA * 607,000 567,998
ELETROBRAS * 7,283,000 2,067,227
LOJAS ARUPUA * 100,000,000 1,008,526
PERDIGAO * 470,000,000 850,281
RHODIA STER, GDR 66,229 894,091
TELEBRAS, ADR 107,445 4,328,905
USIMINAS, ADR 127,700 1,208,234
WHITE MARTINS 1,093,400,000 1,057,249
-----------
TOTAL BRAZIL - (COST $21,803,601) 20,671,302
-----------
CHILE - 7.5%
ANTOFAGASTA HOLDINGS 234,000 1,128,379
MADECO, ADR 39,320 978,085
MADERAS Y SINTETICOS SOCIEDAD, ADS 49,800 890,175
SANTA ISABEL, ADS * 47,600 1,076,950
-----------
TOTAL CHILE - (COST $4,156,161) 4,073,589
-----------
COLOMBIA - 5.1%
CEMENTOS DIAMANTE, GDS (b) 72,900 1,063,669
GRAN CADENA DE ALMACENES, ADR (b) * 59,500 803,250
PAPELES NACIONALES 133,000 931,000
-----------
TOTAL COLOMBIA - (COST $3,020,484) 2,797,919
-----------
ECUADOR - 1.7%
LA CEMENTO NACIONAL DE ECUADOR, GDR 4,392 913,536
-----------
TOTAL ECUADOR - (COST $1,214,553) 913,536
-----------
MEXICO - 24.3%
APASCO 320,000 1,172,211
BUFETE INDUSTRIAL * 73,000 976,375
CORPORACION INDUSTRIAL ALFA 100,000 1,136,842
GRUPO CARSO, ADS (b) * 148,000 1,543,640
GRUPO INDUSTRIAL DURANGO, ADS 157,000 1,256,000
GRUPO INDUSTRIAL SAN LUIS * 528,000 2,482,526
See notes to financial statements.
4
<PAGE>
MCBT EMERGING AMERICAS FUND
- -----------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
OCTOBER 31, 1995 (Unaudited)
SHARES VALUE
------------- -----------
MEXICO - CONTINUED
GRUPO MODELO, CL C 377,000 $1,433,923
HYLSAMEX, GDS * 64,000 1,088,000
INDUSTRIAS PENOLES 121,000 455,130
KIMBERLY CLARKE, ADR 32,000 832,704
TRANSPORT MARITIMA MEXICO, ADS * 115,000 819,375
-----------
TOTAL MEXICO - (COST $13,235,052) 13,196,726
-----------
OTHER AREAS - 1.9%
CETECO, ADS (b) 31,700 1,033,169
-----------
TOTAL OTHER AREAS - (COST $872,075) 1,033,169
-----------
PERU - 6.0%
CEMENTOS LIMA, CL C 42,553 631,541
PERU REAL ESTATE, CL B * 2,176,100 1,141,781
TELEFONICA DE PERU, CL A 508,512 896,846
TELEFONICA DE PERU, CL B 330,000 589,286
-----------
TOTAL PERU - (COST $4,371,794) 3,259,454
-----------
URUGUAY - 1.7%
BANCO COMMERCIAL, GDS (b) 54,800 931,600
-----------
TOTAL URUGUAY - (COST $885,813) 931,600
-----------
TOTAL LONG TERM INVESTMENTS (COST $56,947,506) + 54,083,452
-----------
PRINCIPAL
AMOUNT
SHORT TERM INVESTMENT - 14.3%
STATE STREET BANK AND TRUST COMPANY, 5.25%,
11/01/1995 (a) $ 7,778,000 7,778,000
-----------
TOTAL SHORT TERM INVESTMENT - (COST $7,778,000) 7,778,000
-----------
TOTAL INVESTMENTS - (COST $64,725,506) - 113.8% 61,861,452
-----------
CASH, RECEIVABLES AND OTHER ASSETS, LESS LIABILITIES - (13.8)% (7,511,375)
-----------
NET ASSETS - 100.0% $54,350,077
-----------
-----------
* Non-income producing security.
(a) The repurchase agreement, dated 10/31/95, $7,779,134 due 11/1/95, is
collateralized by $5,070,000 United States Treasury Notes, 11.25%,
2/15/15.
(b) 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 $6,227,528 or 11.4% of
net assets.
+ Percentages of long term investments are presented in the portfolio
by country. Percentages of net assets by industry are as follows: Auto
Parts 2.0%, Banks 3.4%, Cement 4.8%, Conglomerates 4.5%, Construction
Materials 6.2%, Containers & Glass 1.8%, Electric Utilities 7.9%,
Electrical Equipment 1.8%, Engineering 1.8%, Financial Services 1.9%,
Industrial Machinery 1.8%, Insurance 2.1%, Investment Companies 4.7%,
Metals 4.9%, Mining 7.9%, Miscellaneous 7.3%, Paper 3.8%, Railroads &
Equipment 1.5%, Real Estate 2.1%, Retail Trade 12.5%, Steel 2.0%,
Telephone 12.8%.
ADR American Depositary Receipts.
ADS American Depositary Shares.
GDR Global Depositary Receipts.
GDS Global Depositary Shares.
See notes to financial statements.
5
<PAGE>
MCBT EMERGING AMERICAS FUND
- -----------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1995
(Unaudited)
<TABLE>
<S> <C>
ASSETS
Investments in securities, at value (cost $56,947,506) (Note B) $ 54,083,452
Investments in repurchase agreements, at cost and value (Note B) 7,778,000
Cash 570
Foreign currency, at value (cost $553,589)(Note B) 553,589
Receivable for foreign currency sold 339,516
Dividend and interest receivable 17,190
Foreign income tax reclaim receivable 2,278
Prepaid insurance expense 2,351
Deferred organization expenses (Note B) 9,898
------------
TOTAL ASSETS 62,786,844
LIABILITIES
Payable for investments purchased 7,906,497
Payable for foreign currency purchased 347,121
Management fee payable (Note C) 149,100
Administration fee payable (Note C) 3,591
Trustees fees payable (Note C) 1,306
Accrued expenses and other liabilities 29,152
------------
TOTAL LIABILITIES 8,436,767
------------
TOTAL NET ASSETS $ 54,350,077
------------
------------
COMPOSITION OF NET ASSETS:
Paid-in-capital $ 68,410,580
Undistributed net investment loss (85,709)
Accumulated net realized loss on investment and foreign currency transactions (11,126,590)
Net unrealized depreciation on investment and foreign currency transactions (2,848,204)
------------
TOTAL NET ASSETS $ 54,350,077
------------
------------
NET ASSET VALUE PER SHARE $ 6.76
($54,350,077 / 8,044,128 shares of beneficial interest outstanding) ------------
------------
</TABLE>
See notes to financial statements.
6
<PAGE>
MCBT EMERGING AMERICAS FUND
- -----------------------------------------------------------------------------
STATEMENT OF OPERATIONS
OCTOBER 31, 1995
(Unaudited)
<TABLE>
<S> <C>
INVESTMENT INCOME
Interest income $ 81,431
Dividend income 329,344
Foreign taxes withheld (13,154)
-----------
TOTAL INVESTMENT INCOME 397,621
-----------
EXPENSES
Management fee (Note C) 287,585
Custodian fee 49,303
Administration fee 31,798
Audit fee 12,465
Legal fees 2,412
Transfer agent fee 3,254
Trustees fees (Note C) 1,306
Amortization of deferred organization expenses 1,283
Miscellaneous expenses 5,106
-----------
TOTAL EXPENSES 394,512
-----------
NET INVESTMENT INCOME 3,109
-----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENT AND FOREIGN CURRENCY
Net realized loss on investment transactions (1,458,443)
Net realized loss on foreign currency transactions (187,829)
Net increase in unrealized appreciation on:
Investments 231,930
Foreign currency transactions 16,151
-----------
NET LOSS ON INVESTMENT AND FOREIGN CURRENCY TRANSACTIONS (1,398,191)
-----------
NET DECREASE IN NET ASSETS FROM OPERATIONS $(1,395,082)
-----------
-----------
</TABLE>
* Commencement of investment operations.
See notes to financial statements.
7
<PAGE>
MCBT EMERGING AMERICAS FUND
- -----------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
(Unaudited)
<TABLE>
<CAPTION>
Six Months Sept. 19, 1994*
Ended Through
October 31, 1995 April 30, 1995
---------------- --------------
<S> <C> <C>
NET ASSETS at beginning of period $39,833,637 $ 0
---------------- --------------
DECREASE IN NET ASSETS FROM OPERATIONS:
Net investment income 3,109 (24,378)
Net realized loss on investment transactions (1,458,443) (7,884,575)
Net realized loss on foreign currency transactions (187,829) (1,708,570)
Net increase in unrealized appreciation(depreciation) on:
Investment 231,930 (3,095,982)
Foreign currency transactions 16,151 (303)
---------------- --------------
Net decrease in net assets from operations (1,395,082) (12,713,808)
---------------- --------------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares 15,866,584 73,445,945
Cost of shares repurchased (240,000) (21,486,720)
Paid in capital from subscription and redemption fees 284,938 588,220
---------------- --------------
Total increase in net assets from capital share transactions 15,911,522 52,547,445
---------------- --------------
NET INCREASE IN NET ASSETS 14,516,440 39,833,637
---------------- --------------
NET ASSETS at end of period (includes undistributed net investment losses of
$85,709 and $88,818 respectively) $54,350,077 $ 39,833,637
---------------- --------------
---------------- --------------
OTHER INFORMATION:
CAPITAL SHARE TRANSACTIONS:
Shares sold 2,259,075 9,100,433
Less shares repurchased (34,188) (3,281,192)
---------------- --------------
Net share transactions 2,224,887 5,819,241
---------------- --------------
---------------- --------------
</TABLE>
* Commencement of investment operations.
See notes to financial statements.
8
<PAGE>
MCBT EMERGING AMERICAS FUND
- -----------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING FOR THE PERIOD
(Unaudited)
<TABLE>
<CAPTION>
Six Months Sept. 19, 1994*
Ended Through
October 31, 1995 April 30, 1995
---------------- --------------
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $ 6.850 $ 10.000
Net investment loss 0.000 (0.004)
Net realized and unrealized loss on investment and foreign currency transactions (1) (0.090) (3.146)
---------------- --------------
Total from investment operations (0.090) (3.150)
---------------- --------------
Net asset value, end of period $ 6.760 $ 6.850
---------------- --------------
---------------- --------------
TOTAL INVESTMENT RETURN (2) (3) (1.31)% (31.50)%
---------------- --------------
---------------- --------------
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $54,350,077 $39,833,637
Operating expenses, net, to average net assets (Note C) 1.71%(4) 1.80%(4)
Net investment income to average net assets 0.01%(4) (0.11)%(4)
Portfolio turnover rate 74% 89%
</TABLE>
- -----------------------------------------------------------------------------
* Commencement of investment operations.
(1) Includes purchase premiums and redemption fees. (Note B)
(2) Total return at net asset value assuming all distributions reinvested and
no purchase premiums or redemption fees.
(3) Not annualized.
(4) Annualized.
See notes to financial statements.
9
<PAGE>
MCBT EMERGING AMERICAS FUND
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
NOTE A - ORGANIZATION
Martin Currie Business Trust ("MCBT") (the "Trust") is registered under the
Investment Company Act of 1940, as amended (the 1940 Act), as an open-end
management investment company organized as a Massachusetts business trust on
May 20, 1994. The Trust offers six funds which have differing investment
objectives and policies: Global Growth Fund, Opportunistic EAFE Fund, Global
Emerging Markets Fund, Japan Small Companies Fund, Emerging Americas Fund and
Emerging Asia Fund, (the "Funds"). As of October 31, 1995 the Global
Emerging Markets Fund had not commenced operations. The MCBT Emerging
Americas Fund (the "Fund") commenced investment operations on September 19,
1994.
NOTE B - SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by the
Fund in the preparation of its financial statements.
VALUATION OF INVESTMENTS - The Fund's portfolio securities traded on a
securities exchange are valued at the last quoted sale price, or, if no sale
occurs, at the mean of the most recent quoted bid and asked prices. Unlisted
securities for which market quotations are readily available are valued at
the mean of the most recent quoted bid and asked prices. Prices for
securities which are primarily traded in foreign markets are furnished by
quotation services expressed in the local currency's value and are translated
into U.S. dollars at the current rate of exchange. Short-term securities and
debt securities with a remaining maturity of 60 days or less are valued at
their amortized cost. Options and futures contracts are valued at the last
sale price on the market where any such options or futures contract is
principally traded. Options traded over-the-counter are valued based upon
prices provided by market makers in such securities or dealers in such
currencies. Securities for which current market quotations are unavailable
or for which quotations are not deemed by the investment adviser to be
representative of market values are valued at fair value as determined in
good faith by the Trustees of the Fund, or by persons acting pursuant to
procedures established by the Trustees.
REPURCHASE AGREEMENTS - In connection with transactions in repurchase
agreements, the Fund's custodian takes possession of the underlying
collateral securities, the value or market price of which is at least equal
to the principal amount, including interest, of the repurchase transaction.
To the extent that any repurchase transaction exceeds one business day, the
value of the collateral is marked-to-market on a daily basis to ensure the
adequacy of the collateral. In the event of default of the obligation to
repurchase, the Fund has the right to liquidate the collateral and apply the
proceeds in satisfaction of the obligation. Under certain circumstances, in
the event of default or bankruptcy by the other party to the agreement,
realization and/or retention of the collateral or proceeds may be subject to
legal proceedings.
INVESTMENT TRANSACTIONS - Investment security transactions are recorded on
the date of purchase or sale. Realized gains and losses from security
transactions are determined on the basis of identified cost.
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, which includes accretion of original
issue discount, is accrued as earned. Investment income is recorded net of
foreign taxes withheld where recovery of such taxes is uncertain.
FOREIGN CURRENCY TRANSLATIONS - The records of the Fund are maintained in
U.S. dollars. Foreign currency amounts are translated into U.S. dollars at a
current rate of exchange of such currency to determine the value of
investments, other assets and liabilities on the date of any determination of
net asset value of the Fund. Purchases and sales of securities and income
and expenses are converted at the prevailing rate of exchange on the
respective dates of such transactions.
The Fund may realize currency gains or losses between the trade and
settlement dates on security transactions. To minimize such currency gains
or losses, the Fund may enter into a foreign currency exchange contract for
the purchase or sale, for a fixed amount of U.S. dollars, of an amount of the
foreign currency required to settle the security transaction.
The net U.S. dollar value of foreign currency underlying all contractual
commitments held by the Fund on each day and the resulting net unrealized
appreciation, depreciation and related net receivable or payable amounts are
determined by using forward currency exchange rates supplied by a quotation
service.
10
<PAGE>
MCBT EMERGING AMERICAS FUND
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
FOREIGN CURRENCY TRANSLATIONS (CONTINUED) - Reported 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 security 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 prices of those securities, but are
included with the net realized and unrealized gain or loss on investment
securities.
FORWARD CURRENCY CONTRACTS - A forward foreign currency contract ("Forward")
is an agreement between two parties to buy and sell a currency at a set price
on a future date. The market value of the Forward fluctuates with changes in
currency exchange rates. The Forward is marked-to-market daily and the
change in the market value is recorded by the Fund as an unrealized gain or
loss. When the Forward is closed, the Fund records a realized gain or loss
equal to the difference between the value at the time it was opened and the
value at the time it was closed. The Fund could be exposed to risk if a
counterparty is unable to meet the terms of the contract or if the value of
the currency changes unfavorably. The Fund may enter into Forwards in
connection with planned purchases and sales of securities, to hedge specific
receivables or payables against changes in future exchange rates or to hedge
the U.S. dollar value of portfolio securities denominated in a foreign
currency.
CURRENCY CALL AND PUT OPTIONS - A call option written by the Fund obligates
the Fund to sell specified currency to the option holder at a specified price
at any time before the expiration date. A put option written by the Fund
obligates the Fund to purchase specified currency from the option holder at a
specified price at any time before the expiration date. These transactions
involve a risk that a Fund may, upon exercise of the option, be required to
sell currency at a price that is less than its market value or be required to
purchase currency at a price that exceeds its market value. The Fund may
also realize gains or losses by entering into closing purchase transactions
identical to call or put options that have been written by the Fund in order
to terminate its obligation under a call or put option. In determining the
amount of gain or loss realized, the option premium paid and related
transaction costs are added to the exercise price.
EXPENSES - Expenses directly attributable to the Fund are charged to the
Fund. Expenses not directly attributable to a Fund are split evenly among
the affected Funds, allocated on the basis of relative average net assets, or
otherwise allocated among the Funds as the Board of Trustees may direct or
approve. Certain costs incurred in connection with the organization of the
Trust and each Fund have been deferred and are being amortized on a straight
line basis over a five year period starting on each Fund's commencement of
operations.
DISTRIBUTIONS TO SHAREHOLDERS - The Fund declares and distributes dividends
from net investment income, if any, and distributes its net realized capital
gains, if any, at least annually. All distributions will be paid in shares
of the Fund at the net asset value unless the shareholder elects in the
subscription agreement to receive cash. Income and capital gain
distributions are determined in accordance with income tax regulations which
may differ from generally accepted accounting principals. These differences
are primarily due to differing treatments for market discount, foreign
currency transactions, losses deferred due to wash sales, post October 31
losses and excise tax regulations. Permanent book and tax differences
relating to shareholder distributions will result in reclassifications to
paid-in-capital. Distributions are recorded on the ex-dividend date.
PURCHASES AND REDEMPTIONS OF FUND SHARES - There is a purchase premium for
cash investments into the Fund of 1.75% of the amount invested and a
redemption fee on cash redemptions of 1.75% of the amount redeemed. All
purchase premiums and redemption fees are paid to, and recorded as
paid-in-capital to the Fund, subject to being waived by Martin Currie. For
the period ended October 31, 1995, $280,738 was collected in purchase
premiums and $4,200 in redemption fees collected.
INCOME TAXES - Each Fund of the Trust is treated as a separate entity for
federal tax purposes. Each Fund intends to qualify each year as a regulated
investment company under Subchapter M of the Internal Revenue Code of 1986,
as amended. By so qualifying, the Funds will not be subject to federal
income taxes to the extent that they distribute all of their taxable income,
including realized capital gains, for the fiscal year. In addition, by
distributing substantially all of their net investment income, capital gains
and certain other amounts, if any, during the calendar year, the Funds will
not be subject to a federal excise tax. The Fund may be subject to foreign
taxes on income, gains on investments or currency repatriation.
11
<PAGE>
MCBT EMERGING AMERICAS FUND
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
INCOME TAXES (CONTINUED) - As of April 30, 1995 the Fund had a capital loss
carry forward of $952,459 which expires in the year 2003. As of April 30,
1995 the Fund has elected for Federal income tax purposes to defer a
$8,591,456 current year post October 31 loss as though the loss was incurred
on the first day of the next fiscal year.
NOTE C - AGREEMENTS AND FEES
The Fund has entered into a Management Contract with Martin Currie, Inc. (the
"Investment Manager"), a wholly owned subsidiary of Martin Currie Ltd. which
is controlled by the Executive Directors of the various subsidiaries of
Martin Currie Ltd. Under the Management Contract, the Fund pays the
Investment Manager a quarterly management fee at the annual rate of 1.50% of
the average net assets. However, the Investment Manager has voluntarily
agreed to limit its fee to 1.25% of the Fund's average net assets until
further notice.
The Investment Manager has agreed with the Fund to reduce its fee until
further notice to the extent necessary to limit the Fund's annual expenses
(including the management fee but excluding brokerage commissions, transfer
taxes, and extraordinary expenses) to 1.85% of the Fund's average net assets
on an annualized basis. For the six months ended October 31, 1995 the
Investment Manager has not waived any of its fees under the current limit.
State Street Bank and Trust Company (the "Administrator") serves as
administrator of the Fund. The Administrator performs certain administrative
services for the Fund. The Fund pays the Administrator a fee at the rate of
0.08% of the Fund's average net assets up to $125 million, 0.06% of the next
$125 million, and 0.04% of those assets in excess of $250 million, subject to
certain minimum requirements which have been waived for the first six months
of the Fund's operation, plus certain out of pocket costs. State Street Bank
and Trust Company also receives fees and compensation of expenses for certain
custodian and transfer agent services.
Trustees of the Trust who are not interested persons receive annual fees of
$20,000. Each Fund pays a pro-rata share based on its respective net assets.
NOTE D - INVESTMENT TRANSACTIONS
Purchases and proceeds from sales and maturities of investments, excluding
short-term securities for the Fund for the period ended October 31, 1995 were
as follows:
NON-U.S. U.S. NON-U.S. U.S.
GOVERNMENT GOVERNMENT GOVERNMENT GOVERNMENT
PURCHASES PURCHASES SALES SALES
----------- ---------- ------------ ----------
$50,660,359 $ 0 $32,812,527 $ 0
The identified cost of investments in securities and repurchase agreements
owned by the Fund for federal income tax purposes and their respective gross
unrealized appreciation and depreciation at October 31, 1995 were as follows:
NET UNREALIZED
IDENTIFIED GROSS UNREALIZED APPRECIATION
COST APPRECIATION (DEPRECIATION) (DEPRECIATION)
----------- ------------ -------------- --------------
$64,725,506 $3,571,628 $(6,435,682) $(2,864,054)
NOTE E - PRINCIPAL SHAREHOLDERS
As of October 31, 1995, 35% of the Fund's outstanding shares were held by one
shareholder holding in excess of 10% of the Fund's outstanding shares.
12
<PAGE>
MCBT EMERGING AMERICAS FUND
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
NOTE F - CONCENTRATION OF RISK
The risks of investing in foreign securities may be heightened in the case of
investments in emerging markets or countries with limited or developing
capital markets. Security prices in emerging markets can be significantly
more volatile than in the more developed nations of the world, reflecting the
greater uncertainties of investing in less established markets and economies.
In particular, countries with emerging markets may have relatively unstable
governments, present the risk of nationalization of business, restrictions on
foreign ownership, or prohibitions on repatriation of assets, and may have
less protection for property rights than more developed countries. Political
change or instability may adversely affect the economies and securities
markets of such countries.
13
<PAGE>
MARTIN CURRIE BUSINESS TRUST
____________________
TRUSTEES AND OFFICERS
C. James P. Dawnay, TRUSTEE AND PRESIDENT *
Simon D. Eccles, TRUSTEE
Patrick R. Wilmerding, TRUSTEE
W. Stewart Coghill, VICE PRESIDENT AND TREASURER
J. Grant Wilson, VICE PRESIDENT
Julian M.C. Livingston, CLERK
* INTERESTED TRUSTEE
____________________
INVESTMENT MANAGER
Martin Currie, Inc.
Saltire Court
20 Castle Terrace
Edinburgh EH1 2ES
011-44-131-229-5252
member of IMRO
Registered Investment Adviser
____________________
The information contained in this report is intended for general
informational purposes only. This report is not authorized for distribution
to prospective investors unless preceded or accompanied by a current Private
Placement Memorandum which contains important information concerning the Fund
and its current offering of shares.
<PAGE>
MARTIN CURRIE BUSINESS TRUST
EMERGING ASIA FUND
SEMI-ANNUAL REPORT
OCTOBER 31, 1995
(UNAUDITED)
<PAGE>
MCBT EMERGING ASIA FUND
- ------------------------------------------------------------------------------
PROFILE AT OCTOBER 31, 1995
OBJECTIVE Long term capital appreciation through active management of
a diversified portfolio of equities in Asian countries with
emerging markets and developing economies.
LAUNCH DATE March 24, 1995
FUND SIZE $83.4m
PERFORMANCE Total return from March 24, 1995 through October 31,1995
SINCE LAUNCH
- MCBT - Emerging Asia Fund (excluding all
transaction fees) +9.4%
- MCBT - Emerging Asia Fund (including all
transaction fees) +5.6%
- The Morgan Stanley Capital International - Far
East (ex Japan) Free Index (from March 31, 1995
through October 31, 1995) +0.1%
PORTFOLIO Over the six month period the price of units has risen by
COMMENTS 9.6% reflecting good stock selection in most markets. As a
result of new subscriptions the fund has almost doubled in
size from $42.0m to $83.4m. Activity has been high to
accomodate the cash flow.
Falling US interest rates have been positive for the
region. Some Asian economies are directly linked to the US
cycle, but all will benefit from any redirection of funds
out of the US.
Our investments in MALAYSIA account for the bulk of the
fund's assets as it is the largest country in the region
(the fund does not invest in Hong Kong or Singapore). Our
stock selection has been reasonably good, with AMMB
performing particularly well. We have made new investments
in Larut (property), YTL (infrastructure) and UEM
(infrastructure). We are concerned that the economy is
overheating and do not expect to commit more money to
Malaysia until we see a change in monetary policy.
We have lifted our exposure to THAILAND to 23.1% of the
portfolio. We have concentrated our buying on
infrastructure stocks, adding a cement company (TPI Polene)
and a steel company (Sahavirya Steel). Prospects for the
market are good as the central bank has been tightening
monetary policy over the last six months which should
benefit the economy longer term. We expect share prices to
rise as investors move towards anticipating a reversal in
monetary policy. Earnings remain strong with 20% growth
forecast for next year.
In INDONESIA recent privatization programmes have provided
opportunities and are ongoing. The market is broadening out
and becoming more liquid. We have 13.4% of the portfolio
invested here and expect earnings per share growth of
around 20% next year.
We have been able to increase exposure to SOUTH KOREA over
the six month period. The markets for Korean exports have
been very strong, helped by the rise of the Yen (Japan is a
competitor). We believe the market to be fundamentally
cheap.
Growth in the region remains attractive and the long term
potential of China is very exciting.
1
<PAGE>
MCBT EMERGING ASIA FUND
- ------------------------------------------------------------------------------
PROFILE AT OCTOBER 31, 1995
INVESTMENT All members of the investment team report directly to Joe
MANAGER Scott Plummer (Chief Investment Officer), who has 26 years
PROFILE of investment experience. All funds are managed on a team
basis with a named director heading each team.
Allan MacLeod has managed the MCBT Emerging Asia Fund since
inception.
He graduated from Edinburgh University in 1989 with a
degree in Law and joined Martin Currie in 1990 as a member
of the Pacific Basin team. Appointed investment manager in
1993 and promoted to director in 1994. Member of the
Institute of Investment Management and Research.
2
<PAGE>
MCBT EMERGING ASIA FUND
- ------------------------------------------------------------------------------
PROFILE AT OCTOBER 31, 1995
ASSET ALLOCATION
(% of net assets)
Malaysia 47%
Thailand 23%
Indonesia 13%
South Korea 6%
China 1%
Cash 10%
LARGEST HOLDINGS
BY COUNTRY % OF NET ASSETS
MALAYSIA
Genting 5.9
AMMB Holdings 5.4
Edaran Otomobile 5.0
THAILAND
Bank of Ayudhya 3.4
INDONESIA
Mulia Industrindo 3.2
3
<PAGE>
MCBT EMERGING ASIA FUND
- ------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
OCTOBER 31, 1995
(Unaudited)
SHARES VALUE
------ -----
LONG TERM INVESTMENTS - 89.8%
CHINA - 1.0%
CHINA YUCHAI INTERNATIONAL 80,000 $ 840,000
-----------
TOTAL CHINA - (COST $841,850) 840,000
-----------
INDONESIA - 13.4%
BANK BIRA * 1,560,000 1,396,961
BANK INTERNATIONAL INDONESIA 1,074,000 2,459,181
GADJAH TUNGGAL 1,858,000 1,186,305
MULIA INDUSTRINDO 910,000 2,684,720
PT INDOSAT, ADR 71,000 2,351,875
SORINI 200,000 1,114,047
-----------
TOTAL INDONESIA - (COST $10,880,491) 11,193,089
-----------
KOREA - 5.9%
DAEWOO HEAVY INDUSTRIES, PREFERRED * 60,000 545,776
HYUNDAI CORPORATION * 50,000 1,424,557
KOREA FIRST BANK 135,000 1,312,684
LG INDUSTRIAL SYSTEMS * 46,500 1,628,700
-----------
TOTAL KOREA - (COST $4,870,393) 4,911,717
MALAYSIA - 46.5%
AMMB HOLDINGS 366,000 4,537,190
COMMERCE ASSET HOLDINGS 402,000 1,993,388
DCB HOLDINGS 928,000 2,629,516
EDARAN OTOMOBILE NASIONAL 528,000 4,155,844
GENTING BERHAD 572,000 4,929,870
LARUT CONSOLIDATED BERHAD 1,290,000 1,655,018
PETRONAS GAS BERHAD 900,000 3,046,045
RENONG GROUP * 1,670,000 2,550,020
RESORTS WORLD BERHAD 647,000 3,157,339
TECHNOLOGY RESOURCES INDUSTRY * 1,410,000 3,579,103
UNITED ENGINEERS MALYSIA 520,000 3,233,373
YTL CORPORATION 599,000 3,253,129
-----------
TOTAL MALAYSIA - (COST $38,369,882) 38,719,835
-----------
THAILAND - 23.0%
BANK OF AYUDHYA 497,000 2,863,700
HANA MICROELECTRONICS 465,000 1,810,848
KRUNG THAI BANK 480,040 1,907,570
NATIONAL FINANCE & SECURITIES 157,500 719,750
PRECIOUS SHIPPING CORPORATION * 350,000 2,086,231
PRECIOUS SHIPPING, RIGHTS EXPIRING 11/02/1995 * 330,700 1,708,365
SAHAVIRYA STEEL 1,650,000 3,239,618
SIAM SINDHORN, EXCHANGEABLE BOND & WARRANTS,
2.000%, 07/31/2000 2,500,000 2,356,250
TPI POLENE 370,000 2,499,502
-----------
TOTAL THAILAND - (COST $19,357,371) 19,191,834
-----------
TOTAL LONG TERM INVESTMENTS - (COST $74,319,987) + 74,856,475
-----------
See notes to financial statements.
4
<PAGE>
MCBT EMERGING ASIA FUND
- ------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
OCTOBER 31, 1995
(Unaudited)
PRINCIPAL
AMOUNT VALUE
--------- -----
SHORT TERM INVESTMENT - 18.7%
STATE STREET BANK & TRUST, REPURCHASE AGREEMENT,
5.25%, 11/01/1995 (a) $15,614,000 $15,614,000
-----------
TOTAL SHORT TERM--(COST $15,614,000) 15,614,000
-----------
TOTAL INVESTMENTS - (COST $89,933,987) - 108.5% 90,470,475
-----------
CASH, RECEIVABLES AND OTHER ASSETS, LESS LIABILITIES - (8.5)% (7,116,765)
-----------
NET ASSETS - 100.0% $83,353,710
-----------
-----------
* Non-income producing security.
(a) The repurchase agreement, dated 10/31/95, $15,616,277 due 11/1/95, is
collateralized by $10,170,000 United States Treasury Notes, 11.25%,
2/15/15.
+ Percentages of long term invesments are presented in the portfolio by
country. Percentages of net assets by industry are as follows: Auto
Parts 1.0%, Automobiles 5.0%, Banks 11.9%, Building Construction 3.0%,
Communication Services 2.8%, Conglomerates 9.0%, Construction Materials
3.2%, Construction & Mining Equipment 0.7%, Coprorate 2.8%, Electronics
2.2%, Engineering 7.8%, Financial Services 11.8%, Food & Beverages 1.3%,
Industrial Machinery 2.0%, Leisure Time 9.7%, Oil & Gas 3.7%, Retail
Trade 2.0%, Steel 3.9%, Tires & Rubber 1.4%, Transportation 4.6%.
ADR American Depositary Receipts.
See notes to financial statements.
5
<PAGE>
MCBT EMERGING ASIA FUND
- ------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1995
(Unaudited)
<TABLE>
<CAPTION>
<S> <C>
ASSETS
Investments in securities, at value (cost $74,319,987) (Note B) $74,856,475
Investments in repurchase agreements, at cost and value (Note B) 15,614,000
Cash 547
Foreign currency, at value (cost $106,981)(Note B) 106,641
Receivable for foreign currency sold 1,579,326
Dividend and interest receivable 82,443
Prepaid insurance expense 2,351
Deferred organization expenses 11,009
-----------
TOTAL ASSETS 92,252,792
-----------
LIABILITIES
Payable for investments purchased 7,070,779
Payable for foreign currency purchased 1,580,268
Management fee payable (Note C) 222,372
Administration fee payable (Note C) 2,345
Trustees fees payable (Note C) 4,480
Accrued expenses and other liabilities 18,838
-----------
TOTAL LIABILITIES 8,899,082
-----------
TOTAL NET ASSETS $83,353,710
-----------
-----------
COMPOSITION OF NET ASSETS:
Paid-in-capital $80,780,068
Undistributed net investment loss (62,733)
Accumulated net realized gain on investment and foreign currency transactions 2,085,638
Net unrealized appreciation on investment and foreign currency transactions 550,737
-----------
TOTAL NET ASSETS $83,353,710
-----------
-----------
NET ASSET VALUE PER SHARE $ 10.92
($83,353,710 / 7,631,271 shares of beneficial interest outstanding) -----------
-----------
</TABLE>
See notes to financial statements.
6
<PAGE>
MCBT EMERGING ASIA FUND
- ------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
SIX MONTHS ENDED OCTOBER 31, 1995
(Unaudited)
INVESTMENT INCOME
Interest income $ 185,301
Dividend income 509,588
Foreign taxes withheld (88,934)
-----------
TOTAL INVESTMENT INCOME 605,955
-----------
EXPENSES
Management fee (Note C) 398,531
Custodian fee 116,649
Administration fee 26,369
Audit fee 12,499
Legal fees 2,974
Transfer agent fee 3,254
Trustees fees (Note C) 1,625
Amortization of deferred organization expenses 1,283
Miscellaneous expenses 5,050
-----------
TOTAL EXPENSES 568,234
-----------
NET INVESTMENT INCOME 37,721
-----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENT AND FOREIGN CURRENCY
Net realized gain on investment transactions 2,337,900
Net realized loss on foreign currency transactions (252,262)
Net increase in unrealized appreciation on:
Investment 629,258
Foreign currency transactions 14,563
-----------
NET GAIN ON INVESTMENT AND FOREIGN CURRENCY TRANSACTIONS 2,729,459
-----------
NET INCREASE IN NET ASSETS FROM OPERATIONS $2,767,180
-----------
-----------
* Commencement of investment operations.
See notes to financial statements.
7
<PAGE>
MCBT EMERGING ASIA FUND
- ------------------------------------------------------------------------------
CHANGES IN NET ASSETS
(Unaudited)
<TABLE>
<CAPTION>
Six Months March 24, 1995 *
Ended through
October 31, 1995 April 30, 1995
---------------- ---------------
<S> <C> <C>
NET ASSETS at beginning of period $42,027,699 $ 0
----------- -----------
INCREASE IN NET ASSETS FROM OPERATIONS:
Net investment income 37,721 36,423
Net realized gain on investment transactions 2,337,900 0
Net realized gain(loss) on foreign currency transactions (252,262) (136,877)
Net increase in unrealized appreciation(depreciation) on:
Investments 629,258 (93,109)
Foreign currency transactions 14,563 25
----------- -----------
Net increase(decrease) in net assets from operations 2,767,180 (193,538)
----------- -----------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares 37,884,051 42,221,237
Paid in capital from subscription and redemption fees 674,780 0
----------- -----------
Total increase in net assets from capital share transactions 38,558,831 42,221,237
----------- -----------
NET INCREASE IN NET ASSETS 41,326,011 42,027,699
----------- -----------
NET ASSETS at end of period (includes undistributed net investment losses of $83,353,710 $42,027,699
$62,733 and $100,454 respectively) ----------- -----------
----------- -----------
OTHER INFORMATION:
Capital share transactions:
Shares sold 3,418,832 4,212,439
----------- -----------
Net share transactions 3,418,832 4,212,439
----------- -----------
----------- -----------
</TABLE>
* Commencement of investment operations.
See notes to financial statements.
8
<PAGE>
MCBT EMERGING ASIA FUND
- ------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING FOR THE PERIOD
(Unaudited)
<TABLE>
<CAPTION>
Six Months March 24, 1995 *
Ended through
October 31, 1995 April 30, 1995
---------------- --------------
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $ 9.980 $ 10.000
Net investment income 0.005 0.009
Net realized and unrealized loss on investment and foreign currency transactions (1) 0.935 (0.029)
----------- -----------
Total from investment operations 0.940 (0.020)
----------- -----------
Net asset value, end of period $ 10.920 $ 9.980
----------- -----------
----------- -----------
TOTAL INVESTMENT RETURN (2) (3) 9.62% (0.20)%
----------- -----------
----------- -----------
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $83,353,710 $42,027,699
Operating expenses, net, to average net assets (Note C) 1.78%(4) 1.85%(4)
Operating expenses, gross, to average net assets (Note C) 1.78%(4) 2.57%(4)
Net investment income to average net assets 0.12%(4) 0.96%(4)
Portfolio turnover rate 47% 0%
Per share amount of fees waived (Note C) $ 0.000 $ 0.007
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
* Commencement of investment operations.
(1) Includes purchase premiums (Note B).
(2) Total return at net asset value assuming all distributions reinvested
and no purchase premiums or redemption fees. Total return would have
been lower had certain expenses not been waived.
(3) Not annualized.
(4) Annualized.
See notes to financial statements.
9
<PAGE>
MCBT EMERGING ASIA FUND
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
NOTE A - ORGANIZATION
Martin Currie Business Trust ("MCBT") (the "Trust") is registered under the
Investment Company Act of 1940, as amended (the 1940 Act), as an open-end
management investment company organized as a Massachusetts business trust on
May 20, 1994. The Trust offers six funds which have differing investment
objectives and policies: Global Growth Fund, Opportunistic EAFE Fund, Global
Emerging Markets Fund, Japan Small Companies Fund, Emerging Americas Fund
and Emerging Asia Fund, (the "Funds"). As of October 31, 1995 the Global
Emerging Markets Fund had not commenced operations. The MCBT Emerging Asia
Fund (the "Fund") commenced investment operations on March 24, 1995.
NOTE B - SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by
the Fund in the preparation of its financial statements.
VALUATION OF INVESTMENTS - The Fund's portfolio securities traded on a
securities exchange are valued at the last quoted sale price, or, if no sale
occurs, at the mean of the most recent quoted bid and asked prices.
Unlisted securities for which market quotations are readily available are
valued at the mean of the most recent quoted bid and asked prices. Prices
for securities which are primarily traded in foreign markets are furnished
by quotation services expressed in the local currency's value and are
translated into U.S. dollars at the current rate of exchange. Short-term
securities and debt securities with a remaining maturity of 60 days or less
are valued at their amortized cost. Options and futures contracts are
valued at the last sale price on the market where any such options or
futures contract is principally traded. Options traded over-the-counter are
valued based upon prices provided by market makers in such securities or
dealers in such currencies. Securities for which current market quotations
are unavailable or for which quotations are not deemed by the investment
adviser to be representative of market values are valued at fair value as
determined in good faith by the Trustees of the Fund, or by persons acting
pursuant to procedures established by the Trustees.
REPURCHASE AGREEMENTS - In connection with transactions in repurchase
agreements, the Fund's custodian takes possession of the underlying
collateral securities, the value or market price of which is at least equal
to the principal amount, including interest, of the repurchase transaction.
To the extent that any repurchase transaction exceeds one business day, the
value of the collateral is marked-to-market on a daily basis to ensure the
adequacy of the collateral. In the event of default of the obligation to
repurchase, the Fund has the right to liquidate the collateral and apply the
proceeds in satisfaction of the obligation. Under certain circumstances, in
the event of default or bankruptcy by the other party to the agreement,
realization and/or retention of the collateral or proceeds may be subject to
legal proceedings.
INVESTMENT TRANSACTIONS - Investment security transactions are recorded on
the date of purchase or sale. Realized gains and losses from security
transactions are determined on the basis of identified cost.
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, which includes accretion of original
issue discount, is accrued as earned. Investment income is recorded net of
foreign taxes withheld where recovery of such taxes is uncertain.
FOREIGN CURRENCY TRANSLATIONS - The records of the Fund are maintained in
U.S. dollars. Foreign currency amounts are translated into U.S. dollars at
a current rate of exchange of such currency to determine the value of
investments, other assets and liabilities on the date of any determination
of net asset value of the Fund. Purchases and sales of securities and
income and expenses are converted at the prevailing rate of exchange on the
respective dates of such transactions.
The Fund may realize currency gains or losses between the trade and
settlement dates on security transactions. To minimize such currency gains
or losses, the Fund may enter into a foreign currency exchange contract for
the purchase or sale, for a fixed amount of U.S. dollars, of an amount of
the foreign currency required to settle the security transaction.
The net U.S. dollar value of foreign currency underlying all contractual
commitments held by the Fund on each day and the resulting net unrealized
appreciation, depreciation and related net receivable or payable amounts are
determined by using forward currency exchange rates supplied by a quotation
service.
10
<PAGE>
MCBT EMERGING ASIA FUND
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
FOREIGN CURRENCY TRANSLATIONS (CONTINUED) - Reported 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 security 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 prices of those securities, but are
included with the net realized and unrealized gain or loss on investment
securities.
FORWARD CURRENCY CONTRACTS - A forward foreign currency contract ("Forward")
is an agreement between two parties to buy and sell a currency at a set
price on a future date. The market value of the Forward fluctuates with
changes in currency exchange rates. The Forward is marked-to-market daily
and the change in the market value is recorded by the Fund as an unrealized
gain or loss. When the Forward is closed, the Fund records a realized gain
or loss equal to the difference between the value at the time it was opened
and the value at the time it was closed. The Fund could be exposed to risk
if a counterparty is unable to meet the terms of the contract or if the
value of the currency changes unfavorably. The Fund may enter into Forwards
in connection with planned purchases and sales of securities, to hedge
specific receivables or payables against changes in future exchange rates or
to hedge the U.S. dollar value of portfolio securities denominated in a
foreign currency.
CURRENCY CALL AND PUT OPTIONS - A call option written by the Fund obligates
the Fund to sell specified currency to the option holder at a specified
price at any time before the expiration date. A put option written by the
Fund obligates the Fund to purchase specified currency from the option
holder at a specified price at any time before the expiration date. These
transactions involve a risk that a Fund may, upon exercise of the option, be
required to sell currency at a price that is less than its market value or
be required to purchase currency at a price that exceeds its market value.
The Fund may also realize gains or losses by entering into closing purchase
transactions identical to call or put options that have been written by the
Fund in order to terminate its obligation under a call or put option. In
determining the amount of gain or loss realized, the option premium paid and
related transaction costs are added to the exercise price.
EXPENSES - Expenses directly attributable to the Fund are charged to the
Fund. Expenses not directly attributable to a Fund are split evenly among
the affected Funds, allocated on the basis of relative average net assets,
or otherwise allocated among the Funds as the Board of Trustees may direct
or approve. Certain costs incurred in connection with the organization of
the Trust and each Fund have been deferred and are being amortized on a
straight line basis over a five year period starting on each Fund's
commencement of operations.
DISTRIBUTIONS TO SHAREHOLDERS - The Fund declares and distributes dividends
from net investment income, if any, and distributes its net realized capital
gains, if any, at least annually. All distributions will be paid in shares
of the Fund at the net asset value unless the shareholder elects in the
subscription agreement to receive cash. Income and capital gain
distributions are determined in accordance with income tax regulations which
may differ from generally accepted accounting principals. These differences
are primarily due to differing treatments for market discount, foreign
currency transactions, losses deferred due to wash sales, post October 31
losses and excise tax regulations. Permanent book and tax differences
relating to shareholder distributions will result in reclassifications to
paid-in-capital. Distributions are recorded on the ex-dividend date.
PURCHASES AND REDEMPTIONS OF FUND SHARES - There is a purchase premium for
cash investments into the Fund of 1.75% of the amount invested and a
redemption fee on cash redemptions of 1.75% of the amount redeemed. All
purchase premiums and redemption fees are paid to, and recorded as
paid-in-capital to the Fund, subject to being waived by Martin Currie. For
the period ended October 31, 1995, there was $674,780 in purchase premiums
and no redemption fees collected.
INCOME TAXES - Each Fund of the Trust is treated as a separate entity for
federal tax purposes. Each Fund intends to qualify each year as a regulated
investment company under Subchapter M of the Internal Revenue Code of 1986,
as amended. By so qualifying, the Funds will not be subject to federal
income taxes to the extent that they distribute all of their taxable income,
including realized capital gains, for the fiscal year. In addition, by
distributing substantially all of their net investment income, capital gains
and certain other amounts, if any, during the calendar year, the Funds will
not be subject to a federal excise tax. The Fund may be subject to foreign
taxes on income, gains on investments or currency repatriation. As of April
30, 1995 the Fund has elected for Federal income tax purposes to defer a
$100,454 current year post October 31 loss as though the loss was incurred
on the first day of the next fiscal year.
11
<PAGE>
MCBT EMERGING ASIA FUND
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
NOTE C - AGREEMENTS AND FEES
The Fund has entered into a Management Contract with Martin Currie, Inc.
(the "Investment Manager"), a wholly owned subsidiary of Martin Currie Ltd.
which is controlled by the Executive Directors of the various subsidiaries
of Martin Currie Ltd. Under the Management Contract, the Fund pays the
Investment Manager a quarterly management fee at the annual rate of 1.50% of
the average net assets. However, the Investment Manager has voluntarily
agreed to limit its fee to 1.25% of the Fund's average net assets until
further notice.
The Investment Manager has agreed with the Fund to reduce its fee until
further notice to the extent necessary to limit the Fund's annual expenses
(including the management fee but excluding brokerage commissions, transfer
taxes, and extraordinary expenses) to 1.85% of the Fund's average net assets
on an annualized basis. For the six months ended October 31, 1995, the
Investment Manager did not waived any of its fees.
State Street Bank and Trust Company (the "Administrator") serves as
administrator of the Fund. The Administrator performs certain
administrative services for the Fund. The Fund pays the Administrator a fee
at the rate of 0.08% of the Fund's average net assets up to $125 million,
0.06% of the next $125 million, and 0.04% of those assets in excess of $250
million, subject to certain minimum requirements which have been waived for
the first six months of the Fund's operation, plus certain out of pocket
costs. State Street Bank and Trust Company also receives fees and
compensation of expenses for certain custodian and transfer agent services.
Trustees of the Trust who are not interested persons receive annual fees of
$20,000. Each Fund pays a pro-rata share based on its respective net assets.
NOTE D - INVESTMENT TRANSACTIONS
Purchases and proceeds from sales and maturities of investments, excluding
short-term securities for the Fund for the period ended October 31, 1995
were as follows:
NON-U.S. U.S. NON-U.S. U.S.
GOVERNMENT GOVERNMENT GOVERNMENT GOVERNMENT
PURCHASES PURCHASES SALES SALES
---------- ---------- ---------- ----------
$70,087,588 $ 0 $27,042,082 $ 0
The identified cost of investments in securities owned by the Fund for
federal income tax purposes and their respective gross unrealized
appreciation and depreciation at October 31, 1995 were as follows:
NET UNREALIZED
IDENTIFIED GROSS UNREALIZED APPRECIATION
COST APPRECIATION (DEPRECIATION) (DEPRECIATION)
---------- ------------ -------------- --------------
$89,933,987 $5,411,930 $(4,875,442) $536,488
NOTE E - PRINCIPAL SHAREHOLDERS
As of October 31, 1995, 35% of the Fund's outstanding shares was held by one
shareholder.
NOTE F - CONCENTRATION OF RISK
The risks of investing in foreign securities may be heightened in the case
of investments in emerging markets or countries with limited or developing
capital markets. Security prices in emerging markets can be significantly
more volatile than in the more developed nations of the world, reflecting
the greater uncertainties of investing in less established markets and
economies. In particular, countries with emerging markets may have
relatively unstable governments, present the risk of nationalization of
business, restrictions on foreign ownership, or prohibitions on repatriation
of assets, and may have less protection for property rights than more
developed countries. Political change or instability may adversely affect
the economies and securities markets of such countries.
12
<PAGE>
MARTIN CURRIE BUSINESS TRUST
______________
TRUSTEES AND OFFICERS
C. James P. Dawnay, TRUSTEE AND PRESIDENT *
Simon D. Eccles, TRUSTEE
Patrick R. Wilmerding, TRUSTEE
W. Stewart Coghill, VICE PRESIDENT AND TREASURER
J. Grant Wilson, VICE PRESIDENT
Julian M.C. Livingston, CLERK
* INTERESTED TRUSTEE
______________
INVESTMENT MANAGER
Martin Currie, Inc.
Saltire Court
20 Castle Terrace
Edinburgh EH1 2ES
011-44-131-229-5252
member of IMRO
Registered Investment Adviser
______________
The information contained in this report is intended for general
informational purposes only. This report is not authorized for distribution
to prospective investors unless preceded or accompanied by a current Private
Placement Memorandum which contains important information concerning the
Fund and its current offering of shares.
