<PAGE>
MARTIN CURRIE BUSINESS TRUST
GLOBAL EMERGING MARKETS FUND
SEMI-ANNUAL REPORT
OCTOBER 31, 2000
(Unaudited)
<PAGE>
MCBT GLOBAL EMERGING MARKETS FUND
--------------------------------------------------------------------------------
PROFILE AT OCTOBER 31, 2000 (Unaudited)
OBJECTIVE Long-term capital appreciation through active
management of a diversified portfolio of equities
in countries with emerging markets and developing
economies.
LAUNCH DATE February 14, 1997
FUND SIZE $132.9m
PERFORMANCE Total return from May 1, 1999 through October 31, 2000
o MCBT - Global Emerging Markets Fund
(excluding all transaction fees) -20.1%
o Morgan Stanley Capital International -
Emerging Markets Free Index -19.9%
Annualized total return from February 14, 1997
through April 30, 2000
o MCBT - Global Emerging Markets Fund (excluding
all transaction fees) - 5.1%
o MCBT - Global Emerging Markets Fund
(including all transaction fees) - 5.3%
o Morgan Stanley Capital International -
Emerging Markets Free Index - 7.2%
1
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MCBT GLOBAL EMERGING MARKETS FUND
--------------------------------------------------------------------------------
PROFILE AT OCTOBER 31, 2000 (Unaudited)
PORTFOLIO Over the six months ended October 31, 2000 the
COMMENTS fund lost 20.1%, compared to a fall of 19.9% from
the MSCI Emerging Markets Free index. As the
performance indicates, this has been a
particularly challenging time for emerging markets
with few places to hide. Uncertainty about the
slowdown in the US economy has continued, leading
to increased risk aversion on the part of global
investors.
In relative terms, our fund suffered from a bias
towards higher liquidity, higher Beta stocks,
particularly in the technology and telecom areas.
But we compensated for this, in part, with good
asset allocation. In particular, our underweight
position in Asia and overweight position in Latin
America were very helpful.
Within Asia, we reduced our holdings in South
Korea and Taiwan to very low levels. We
anticipated that these markets would be affected
seriously by any slowdown in US imports. We also
avoided the smaller ASEAN markets. Our only
consistent overweight position within the region
was China, which outperformed in relative terms.
But our stock selection detracted from our
performance, particularly in India and Taiwan
Within EMEA, our asset allocation was broadly
neutral. Both Israel and South Africa were
relative outperformers. But because of our stock
selection, we did not fully benefit from these. In
particular, we did not own two relatively large
index stocks in Israel - Check Point and Teva -
which rose by more than 50%. In South Africa,
Softline disappointed, and was down by 60%.
In Latin America, the larger markets of Brazil and
Mexico outperformed the rest of the region.
Liquidity and visibility remained key requirements
for investors. We benefited from being overweight
to both of these markets. Our stock selection in
Brazil benefited from our holdings in the banking
sector, and in the energy sector. Petrobras and
Embraer were notable winners. Our stock selection
in Mexico was dragged down by Telmex, where
earnings disappointed, and by our media holdings
in Televisa and TV Azteca.
OUTLOOK
The severe sell-off in emerging markets has
brought back valuations not seen since the
aftermath of the Asian crisis. Indicators of risk
aversion, such as US high-yield spreads, suggest
that it is reaching its peak. Meanwhile, domestic
fundamentals have remained remarkably robust in
several areas most notably Brazil, Mexico, China
and the convergence markets of emerging Europe.
Specific problem areas such as Argentina and,
potentially, Turkey should remain localised.
Conditions are therefore supportive of a strong
rebound in the next six months, once visibility
towards the US economy improves.
INVESTMENT Jean de Bolle joined Martin Currie as head of
MANAGER PROFILE emerging markets in January 2000 from Global
Asset Management where he was senior
portfolio manager. He had previously worked for
Goldman Sachs in Hong Kong, Foreign and Colonial
Emerging Markets, where he was deputy chief
investment officer, and National Economic Research
Associates. Jean is a member of the International
Strategy Group.
2
<PAGE>
MCBT GLOBAL EMERGING MARKETS FUND
--------------------------------------------------------------------------------
PROFILE AT OCTOBER 31, 2000 (Unaudited)
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
ASSET ALLOCATION
(% of net assets)
/ / Pacific Basin - 22%
/ / Latin America - 25%
/ / Europe - 20%
/ / Other Areas - 3%
/ / Africa - 7%
/ / Middle East - 11%
/ / ST Investment - 3%
/ / North America - 2%
/ / Other Net Assets - 7%
TOP TEN HOLDINGS
BY REGION/COUNTRY
<TABLE>
<CAPTION>
% OF NET ASSETS
<S> <C> <C>
EUROPE
Lukoil, ADR (Russia) 2.1
Surgutneftegaz, ADR (Russia) 2.0
LATIN AMERICA
Telefonos de Mexico, ADR (Mexico) 5.2
Petrobras Petroleo Brasileiro SA, preferred (Brazil) 2.2
MIDDLE EAST
Near East Opportunities Fund (Investment Companies) 3.1
Orbotech (Israel) 2.0
PACIFIC BASIN
PetroChina (China) 3.3
China Unicom, ADR (Hong Kong) 2.8
Bank of East Asia (Hong Kong) 2.4
SK Telecom (South Korea) 2.2
</TABLE>
3
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MCBT GLOBAL EMERGING MARKETS FUND
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
OCTOBER 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
SHARES VALUE
<S> <C> <C>
COMMON AND PREFERRED STOCKS AND WARRANTS - 89.6%
AFRICA - 7.2%
SOUTH AFRICA - 7.2%
ANGLO AMERICAN PLATINUM 35,650 $ 1,390,792
BARLOWORLD # 240,000 1,253,686
BOE 1,500,000 763,717
COMPAREX 780,000 994,380
DE BEERS 76,500 2,104,289
SANLAM 730,000 757,832
SASOL 185,000 1,416,546
SOFTLINE* # 2,200,000 913,551
---------------
TOTAL SOUTH AFRICA - (COST $13,296,089) 9,594,793
---------------
TOTAL AFRICA - (Cost $13,296,089) 9,594,793
---------------
EUROPE - 20.4%
CZECH REPUBLIC - 0.3%
CESKE RADIOKOMUNIKACE* 12,000 451,500
---------------
TOTAL CZECH REPUBLIC - (COST $396,786) 451,500
---------------
FRANCE - 4.0%
CREDIT AGRICOLE INDOSUEZ, WARRANTS 01/25/01* 10,000 1,530,452
CREDIT AGRICOLE INDOSUEZ, WARRANTS 10/19/01* 36,000 1,211,758
INFOSYSTEMS TECHNOLOGIES* 8,500 1,300,884
RELIANCE INDUSTRIES* 200,000 1,294,268
---------------
TOTAL FRANCE - (COST $5,689,731) 5,337,362
---------------
GREECE - 4.7%
ALPHA BANK 43,000 1,589,289
COMMERCIAL BANK OF GREECE 33,000 1,475,747
NATIONAL BANK OF GREECE 50,000 1,900,490
PANAFON HELLENIC TELECOM 75,000 623,188
STET HELLAS TELECOMMUNICATIONS, ADR* 43,750 634,375
---------------
TOTAL GREECE - (COST $7,411,567) 6,223,089
---------------
HUNGARY - 0.7%
MATAV RT., ADR 38,700 909,450
---------------
TOTAL HUNGARY - (COST $1,063,800) 909,450
---------------
POLAND - 1.2%
POLSKI KONCERN NAFTOWY ORLEN, GDR, 144A 205,000 1,588,750
---------------
TOTAL POLAND - (COST $1,910,600) 1,588,750
---------------
</TABLE>
See notes to financial statements.
4
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MCBT GLOBAL EMERGING MARKETS FUND
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SCHEDULE OF INVESTMENTS
OCTOBER 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
SHARES VALUE
<S> <C> <C>
RUSSIA - 5.5%
LUKOIL, ADR 52,000 $ 2,808,000
MOBILE TELESYSTEMS, ADR* 70,000 1,933,750
SURGUTNEFTEGAZ, ADR 197,000 2,610,250
---------------
TOTAL RUSSIA - (COST $6,561,641) 7,352,000
---------------
TURKEY - 4.0%
HURRIYET GAZETECILIK VE MATBAACILIK 127,217,800 1,528,511
TURKIYE GARANTI BANKASI 110,240,000 1,130,692
VESTEL 6,150,000 1,261,566
YAPI VE KREDI BANKASI 103,994,000 899,015
YAZICILAR OTOMOTIV, CLASS A 8,433,000 469,540
---------------
TOTAL TURKEY - (COST $5,799,772) 5,289,324
---------------
TOTAL EUROPE - (COST $28,833,897) 27,151,475
---------------
LATIN AMERICA - 24.5%
BRAZIL - 10.7%
BANCO ITAU, PREFERRED 9,439,566 734,298
COMPANHIA BRASILEIRA DE DISTRIBUICAO, PREFERRED, ADR 23,300 830,063
COMPANHIA DE SANEAMENTO BASICO DO ESTADO DE SAO PAULO 7,001,615 630,842
COMPANHIA PARANAENSE DE ENERGIA-COPEL 135,000 1,223,437
EMBRAER, PREFERRED, ADR 34,200 989,662
EMBRATEL PARTICIPACOES, PREFERRED 98,500 1,594,469
PETROBRAS 112,410 2,980,131
PETROLEO BRASILEIRO, ADR* 46,000 1,336,875
TELE CELULAR SUL PARTICIPACOES, PREFERRED, ADR 35,000 881,563
TELE NORTE LESTE PARTICIPACOES 41,231 912,236
TELESP CELULAR PARTICIPACOES 28,000 885,500
UNIBANCO - UNIAO DE BANCOS BRASILEIROS, GDR 49,400 1,247,350
---------------
TOTAL BRAZIL - (COST $13,610,519) 14,246,426
---------------
MEXICO - 13.8%
ALFA, CLASS A, SERIES A 158,000 316,578
CEMEX, ADR, SERIES B 27,562 582,247
FOMENTO ECONOMICO MEXICANO, ADR 22,500 859,219
GRUPO AEROPORTUARIO DEL SURESTE, ADR, SERIES B* 7,000 104,125
GRUPO CARSO, SERIES Al* 155,000 481,412
GRUPO FINANCIERO BANCOMER, SERIES O* 1,400,000 866,719
GRUPO IUSACELL, ADR* 32,000 416,000
</TABLE>
See notes to financial statements.
5
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MCBT GLOBAL EMERGING MARKETS FUND
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
OCTOBER 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
SHARES VALUE
<S> <C> <C>
MEXICO - (CONTINUED)
GRUPO MODELO, SERIES C 780,000 $ 2,080,000
GRUPO TELEVISA, ADR* 33,000 1,786,125
NUEVA GRUPO MEXICO, SERIES B* 199,000 661,773
TELEFONOS DE MEXICO, ADR 127,100 6,855,456
TV AZTECA, ADR 67,000 837,500
WAL-MART DE MEXICO, SERIES V* 1,010,653 2,430,852
---------------
TOTAL MEXICO - (COST $16,570,165) 18,278,006
---------------
TOTAL LATIN AMERICA - (COST $30,180,684) 32,524,432
---------------
MIDDLE EAST - 11.4%
EGYPT - 0.2%
EFG HERMES HOLDING SAE, GDR, 144A # 160,035 316,069
---------------
TOTAL EGYPT - (COST $522,763) 316,069
---------------
ISRAEL - 8.1%
AUDIOCODES* 28,000 1,107,750
CHECK POINT SOFTWARE TECHNOLOGIES* 9,000 1,425,375
IDB DEVELOPMENT 26,585 922,992
NICE SYSTEMS, ADR* 34,700 1,622,225
ORBOTECH* 49,200 2,604,525
RADVISION* 43,500 962,438
TEVA PHARMACEUTICAL, ADR 15,000 886,875
ZORAN* 23,500 1,177,938
---------------
TOTAL ISRAEL - (COST $10,284,706) 10,710,118
---------------
INVESTMENT COMPANIES - 3.1%
NEAR EAST OPPORTUNITIES FUND (b) 260,000 4,082,000
---------------
TOTAL INVESTMENT COMPANIES - (COST $4,028,450) 4,082,000
---------------
TOTAL MIDDLE EAST - (COST $14,835,919) 15,108,187
---------------
NORTH AMERICA - 1.1%
UNITED STATES - 1.1%
COREVEST PARTNERS INTERNATIONAL* # 495 1,500,000
---------------
TOTAL UNITED STATES - (COST $1,500,000) 1,500,000
---------------
TOTAL NORTH AMERICA - (COST $1,500,000) 1,500,000
---------------
</TABLE>
See notes to financial statements.
6
<PAGE>
MCBT GLOBAL EMERGING MARKETS FUND
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
OCTOBER 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
SHARES VALUE
<S> <C> <C>
OTHER AREAS - 3.2%
INDIA - 1.2%
WIPRO, ADR* 30,300 $ 1,594,538
---------------
TOTAL INDIA - (COST $1,333,930) 1,594,538
---------------
INVESTMENT COMPANIES - 2.0%
INDIAN OPPORTUNITIES FUND* (a) 243,000 2,602,530
---------------
TOTAL INVESTMENT COMPANIES - (COST $2,022,660) 2,602,530
---------------
TOTAL OTHER AREAS - (COST $3,356,590) 4,197,068
---------------
PACIFIC BASIN - 21.8%
CHINA - 4.8%
CHINA PETROLEUM AND CHEMICAL (SINOPEC), CLASS H* 9,820,000 1,926,477
PETROCHINA 21,000,000 4,415,951
---------------
TOTAL CHINA - (COST $6,073,297) 6,342,428
---------------
HONG KONG - 8.1%
BANK OF EAST ASIA 1,400,000 3,159,380
CHINA MOBILE (HONG KONG)* 272,000 1,743,813
CHINA UNICOM, ADR* 181,590 3,722,595
DENWAY MOTORS* 13,663,000 2,207,383
---------------
TOTAL HONG KONG - (COST $11,977,911) 10,833,171
---------------
INDONESIA - 0.0%
PT BANK PAN INDONESIA, TBK, WARRANTS 7/08/2002* 5,124,000 20,803
PT TELEKOMUNIKASI INDONESIA, ADR 720 3,780
---------------
TOTAL INDONESIA - (COST $8,668) 24,583
---------------
MALAYSIA - 0.3%
KONSORTIUM LOGISTIK BERHAD 532,000 390,600
---------------
TOTAL MALAYSIA - (COST $726,527) 390,600
---------------
SOUTH KOREA - 4.8%
KOREA ELECTRIC POWER 37,400 835,130
LOCUS 37,237 838,037
SAMSUNG ELECTRONICS 14,300 1,791,429
SK TELECOM 13,679 2,916,182
---------------
TOTAL SOUTH KOREA - (COST $7,120,206) 6,380,778
---------------
</TABLE>
See notes to financial statements.
7
<PAGE>
MCBT GLOBAL EMERGING MARKETS FUND
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
OCTOBER 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
SHARES VALUE
<S> <C> <C>
TAIWAN - 2.6%
CATHAY LIFE INSURANCE 399,000 $ 716,471
COMPAL ELECTRONICS 1 1
QUANTA COMPUTER 199,000 677,709
SYNNEX TECHNOLOGY INTERNATIONAL 312,000 656,842
TAIWAN SEMICONDUCTOR MANUFACTURING 408,000 1,237,895
UNITED WORLD CHINESE COMMERCIAL BANK 254,903 165,726
---------------
TOTAL TAIWAN - (COST $3,451,968) 3,454,644
---------------
INVESTMENT COMPANIES - 1.2%
THE CHINA HEARTLAND FUND* # (b) 184,944 1,610,862
---------------
TOTAL INVESTMENT COMPANIES - (COST $1,000,000) 1,610,862
---------------
TOTAL PACIFIC BASIN - (COST $30,358,577) 29,037,066
---------------
TOTAL COMMON AND PREFERRED STOCKS AND WARRANTS - (COST $122,361,756) + 119,113,021
---------------
PRINCIPAL
AMOUNT
SHORT TERM INVESTMENT - 3.1%
STATE STREET BANK AND TRUST, 5.500%, 11/01/2000 (c) $ 4,106,000 4,106,000
---------------
TOTAL SHORT TERM INVESTMENT - (COST $4,106,000) 4,106,000
---------------
TOTAL INVESTMENTS - (COST $126,467,756) - 92.7% 123,219,021
CASH, RECEIVABLES AND OTHER ASSETS, LESS LIABILITIES - 7.3% 9,686,275
---------------
NET ASSETS - 100.0% $ 132,905,296
---------------
---------------
</TABLE>
# Illiquid security. Some restrictions may apply to the resale of this
security due to limited trading volume.
* Non-income producing security.
144A Securities 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.
(a) The Indian Opportunities Fund is managed by Martin Currie Bermuda
Ltd., an affiliate of Martin Currie Inc. Martin Currie Inc. does not
receive advisory fees on the portion of net assets represented by
affiliated investment companies.
(b) Martin Currie Investment Management Ltd., which is affiliated to Martin
Currie Inc., provides investment management services to the Near East
Opportunities and China Heartland Funds. Martin Currie Inc. does not
receive advisory fees on the portion of net assets represented by
affiliated investment companies.
(c) The repurchase agreement, dated 10/31/2000, $4,106,000 par due 11/1/2000,
is collateralized by United States Treasury Bond, 6.25%, due 8/15/2023
with a market value of $4,193,312.
+ Percentages of long term investments are presented in the portfolio by
country. Percentages of long term investments by industry are as follows:
Aerospace 0.7%, Auto Parts 1.7%, Banks 9.8%, Breweries 1.6%, Broadcasting
2.3%, Cement 0.4%, Commercial Services 0.1%, Computers 1.3%, Computers
Services 1.8%, Conglomerates 1.6%, Diversified 5.7%, Drugs & Health Care
0.7%, Electric Utilities 1.5%, Electronics 5.6%, Financial Services 4.1%,
Food & Beverages 0.6%, Insurance 1.1%, Investment Companies 6.2%, Mining
1.5%, Newspapers 1.2%, Oil & Gas 14.4%, Retail Trade 1.8%, Semi-Conductor
Manufacturing Equipment 0.9%, Software 1.7%, Telecommunications 20.8%,
Water Utilities 0.5%.
ADR American Depositary Receipts.
GDR Global Depositary Receipts.
See notes to financial statements.
8
<PAGE>
MCBT GLOBAL EMERGING MARKETS FUND
--------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 2000 (Unaudited)
<TABLE>
<S> <C>
ASSETS
Investments in securities, at value (cost $122,361,756) (Note B) $ 119,113,021
Investments in repurchase agreements, at value (Note B) 4,106,000
-----------------
Total Investments 123,219,021
Cash 869
Foreign currency, at value (cost $4,798,241) (Note B) 4,779,840
Receivable for investments sold 5,782,872
Dividend and interest receivable 243,018
Foreign tax reclaims receivable 87
Deferred Organization expense 3,248
-----------------
TOTAL ASSETS 134,028,955
-----------------
LIABILITIES
Payable for investments purchased 736,115
Payable for currency purchased 847
Management fee payable (Note C) 294,594
Administration fee payable (Note C) 8,545
Trustees fees payable (Note C) 1,575
Accrued expenses and other liabilities 81,983
-----------------
TOTAL LIABILITIES 1,123,659
-----------------
TOTAL NET ASSETS $ 132,905,296
-----------------
-----------------
COMPOSITION OF NET ASSETS:
Paid-in-capital $ 137,745,558
Distributions in excess of net investment income (2,655,878)
Accumulated net realized gain on investment and foreign currency transactions 1,097,296
Net unrealized depreciation on investments and foreign currency translations (3,281,680)
------------------
TOTAL NET ASSETS $ 132,905,296
-----------------
-----------------
NET ASSET VALUE PER SHARE $ 7.89
($132,905,296 / 16,843,280 shares of beneficial interest outstanding) -----------------
-----------------
</TABLE>
See notes to financial statements.
9
<PAGE>
MCBT GLOBAL EMERGING MARKETS FUND
--------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
SIX MONTHS ENDED OCTOBER 31, 2000 (Unaudited)
<TABLE>
<S> <C>
INVESTMENT INCOME
Interest income $ 201,056
Dividend income 984,867
Foreign taxes withheld (161,469)
-----------------
TOTAL INVESTMENT INCOME 1,024,454
-----------------
EXPENSES
Management fee (Note C) 578,691
Custodian fee 143,528
Administration fee (Note C) 59,611
Audit fee 12,602
Legal fees 4,538
Transfer agent fee 2,860
Trustees fees (Note C) 1,895
Amortization of deferred organization expenses (Note B) 1,284
Miscellaneous expenses 9,340
-----------------
TOTAL EXPENSES 814,349
-----------------
NET INVESTMENT INCOME 210,105
-----------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY
Net realized loss on investments (14,238,959)
Net realized loss on foreign currency transactions (320,042)
Net unrealized depreciation on:
Investments (19,134,041)
Foreign currency translations (12)
------------------
NET LOSS ON INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS (33,693,054)
------------------
NET DECREASE IN NET ASSETS FROM OPERATIONS $ (33,482,949)
------------------
------------------
</TABLE>
See notes to financial statements.
10
<PAGE>
MCBT GLOBAL EMERGING MARKETS FUND
--------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Six Months Ended Year
October 31, 2000 Ended
(Unaudited) April 30, 2000
------------------ --------------
<S> <C> <C>
NET ASSETS, beginning of period $ 166,388,245 $ 131,628,560
--------------- ---------------
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income 210,105 495,609
Net realized gain (loss) on investment transactions (14,238,959) 39,280,611
Net realized loss on foreign currency transactions (320,042) (369,500)
Net unrealized appreciation (depreciation) on:
Investments (19,134,041) (6,425,144)
Foreign currency translations (12) 12,901
---------------- ---------------
Net increase (decrease) in net assets from operations (33,482,949) 32,994,477
---------------- ---------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income -- --
In excess of net investment income -- --
Net realized gains -- (2,061,935)
---------------- ---------------
Total distributions -- (2,061,935)
---------------- ---------------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares -- 1,908,468
Reinvestment of dividends and distributions to shareholders -- 2,061,935
Cost of shares repurchased -- (143,260)
---------------- ---------------
Total increase in net assets from capital share transactions -- 3,827,143
---------------- ---------------
NET INCREASE (DECREASE) IN NET ASSETS (33,482,949) 34,759,685
---------------- ---------------
---------------- ---------------
NET ASSETS, end of period (includes distributions in excess of net $ 132,905,296 $ 166,388,245
investment income of ($2,655,878) and ($2,865,983), respectively) ---------------- ---------------
---------------- ---------------
OTHER INFORMATION:
Capital Share transactions:
Shares sold -- 234,164
Shares issued in reinvestment of distributions to shareholders -- 192,345
Less shares repurchased -- (16,354)
---------------- ---------------
Net share transactions -- 410,155
---------------- ---------------
---------------- ---------------
</TABLE>
See notes to financial statements.
11
<PAGE>
MCBT GLOBAL EMERGING MARKETS FUND
--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING FOR THE PERIOD
<TABLE>
<CAPTION>
Six Months
Ended Year Year Year February 14, 1997*
October 31, 2000 Ended Ended Ended through
(Unaudited) April 30, 2000(4) April 30, 1999 April 30, 1998 April 30, 1997
---------------- ------------------ -------------- -------------- ------------------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $ 9.880 $ 8.010 $ 8.990 $ 10.020 $ 10.000
------------- --------------- ------------ ----------- --------------
Net investment income 0.012 0.030 0.081 0.004 0.055
Net realized and unrealized gain (loss)
on investment and foreign currency
transactions (2.002) 1.964 (1.016) (0.883) (0.035)
------------- --------------- ------------ ----------- --------------
Total from investment operations (1.990) 1.994 (0.935) (0.879) 0.020
------------- --------------- ------------ ----------- --------------
Less distributions:
Net investment income 0.000 0.000 (0.012) (0.086) 0.000
In excess of net investment income 0.000 0.000 (0.033) (0.053) 0.000
Net realized gains 0.000 (0.124) 0.000 (0.058) 0.000
------------- --------------- ------------ ----------- --------------
Total distributions 0.000 (0.124) (0.045) (0.197) 0.000
------------- --------------- ------------ ----------- --------------
Paid-in-capital from subscription and
redemption fees 0.000 0.000 0.000 0.046 0.000
------------- --------------- ------------ ----------- --------------
Net asset value, end of period $ 7.890 $ 9.880 $ 8.010 $ 8.990 $ 10.020
------------- --------------- ------------ ----------- --------------
------------- --------------- ------------ ----------- --------------
TOTAL INVESTMENT RETURN (1) (2) (20.14)% 25.00% (10.26)% (8.21)% 0.20%
------------- --------------- ------------ ----------- --------------
------------- --------------- ------------ ----------- --------------
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 132,905,296 $ 166,388,245 $131,628,560 $99,831,879 $ 50,095,856
Operating expenses, net, to average
net assets (Note C) 1.01%(3) 1.07% 1.12% 1.14% 1.33%(3)
Operating expenses, gross, to average
net assets (Note C) 1.01%(3) 1.07% 1.12% 1.14% 1.33%(3)
Net investment income to average net assets 0.26% 0.32% 1.16% 0.98% 2.83%(3)
Portfolio turnover rate (2) 93% 146% 140% 89% 0%
</TABLE>
--------------------------------------------------------------------------------
* Commencement of investment operations.
(1) Total return at net asset value assuming all distributions reinvested and
no purchase premiums or redemption fees.
(2) Periods less than one year are not annualized.
(3) Annualized.
(4) The per share amounts were computed using an average number of shares
outstanding during the year.
See notes to financial statements.
12
<PAGE>
MCBT GLOBAL EMERGING MARKETS FUND
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Unaudited)
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 five funds which have differing investment objectives
and policies: Opportunistic EAFE Fund, Global Emerging Markets Fund, Japan Small
Companies Fund, Asia Pacific ex Japan Fund (formerly "Emerging Asia Fund") and
EMEA Fund, (the "Funds"). The MCBT Global Emerging Markets Fund (the "Fund")
commenced investment operations on February 14, 1997. The Fund's Declaration of
Trust permits the Board of Trustees to issue an unlimited number of full and
fractional shares of beneficial interest, without par value.
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 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 that
could delay or increase the cost of such realization or retention.
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.
Interest income 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 forward foreign currency contracts.
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.
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MCBT GLOBAL EMERGING MARKETS FUND
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NOTES TO FINANCIAL STATEMENTS (Unaudited)(Continuted)
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, and are included with the net
realized and unrealized gain or loss on investment securities.
FORWARD FOREIGN 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 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. There were no
open forward foreign currency contracts at October 31, 2000.
Although forward currency contracts limit the risk of loss due to a decline in
the value of hedged currency, they also limit any potential gain that might
result should the value of the currency increase. In addition, the Funds could
be exposed to additional risks if the counterparties to the contracts are unable
to meet the terms of their contracts.
EXPENSES - Expenses directly attributable to the Fund are charged to the Fund.
Expenses not directly attributable to a particular Fund are either 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 were deferred and are being amortized on a straight line basis
over a five year period starting on the 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 reinvested in shares of the
Fund at the net asset value unless the shareholder elects in the subscription
agreement either to receive cash in respect of all distributions or to receive
cash with respect to distributions of income and to reinvest in shares of the
Fund with respect to distributions of realized capital gains. Income and capital
gain distributions are determined in accordance with income tax regulations
which may differ from generally accepted accounting principles. These
differences are primarily due to differing treatments for passive foreign
investment companies (PFIC's), 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 - Effective through September 30 1998,
there was 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 were paid to and retained by
the Fund and are recorded as paid-in-capital. These fees were intended to offset
brokerage and transaction costs arising in connection with the purchase and
redemption. The purchase and redemption fees could be waived by the Manager,
however, if these brokerage and transaction costs are minimal or in other
circumstances at the Manager's discretion. Effective October 1, 1998, the Fund
eliminated all such fees.
INCOME TAXES - Each Fund of the Trust is treated as a separate entity for U.S.
federal income 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 substantially all of their
taxable income, including realized capital gains, if any, for the fiscal year.
In addition, by distributing substantially all of their net investment income,
realized capital gains and certain other amounts, if any, during the calendar
year, the Funds will not be subject to a federal excise tax.
14
<PAGE>
MCBT GLOBAL EMERGING MARKETS FUND
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NOTES TO FINANCIAL STATEMENTS (Unaudited)(Continued)
INCOME TAXES (CONTINUED) - The Fund may be subject to taxes imposed by countries
in which it invests. Such taxes are generally based on income and/or capital
gains earned or repatriated. Taxes are accrued and applied to net investment
income, net realized gains and unrealized appreciation as such income and/or
gains are earned.
ESTIMATES - The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
income and expenses at the date of the financial statements. Actual results
could differ from these estimates.
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. Under the
Management Contract, the Fund pays the Investment Manager a quarterly management
fee at the annual rate of 0.80% of the Fund's average net assets.
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, 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 aggregate annual
fees of $20,000 ($10,000 per Trustee).
NOTE D - INVESTMENT TRANSACTIONS
Purchases and proceeds from sales and maturities of investments, excluding
short-term securities for the six months ended October 31, 2000 were
$131,800,446 and $143,944,366, respectively.
The identified cost of investments in securities and repurchase agreements owned
for federal income tax purposes and their respective gross unrealized
appreciation and depreciation at April 30, 2000 were as follows:
Identified Gross Unrealized Net Unrealized
Cost Appreciation (Depreciation) (Depreciation)
--------------- ------------ -------------- ---------------
$ 126,467,756 $ 9,275,404 ($12,524,139) $ (3,248,735)
NOTE E - PRINCIPAL SHAREHOLDERS
As of October 31, 2000 there was one shareholder who owned greater than 10% of
the Fund's outstanding shares, representing 100% of the Fund.
NOTE F - CONCENTRATION OF RISK
The Fund will invest extensively in foreign securities (i.e., those which are
not listed on a United States securities exchange) in emerging markets.
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 capital gains, 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.
15
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MCBT GLOBAL EMERGING MARKETS FUND
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NOTES TO FINANCIAL STATEMENTS (Unaudited)(Continued)
CONCENTRATION OF RISK (CONTINUED) - 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,
restrictions on foreign ownership, imposition of withholding taxes on dividend
or interest payments and capital gains, 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. The economies of individual countries
may differ favorably or unfavorably and significantly from the U. S. economy in
such respects as growth of gross domestic product or gross national product,
diversification, rate of inflation, currency depreciation, capital reinvestment,
resource self-sufficiency, dependence on foreign assistance, vulnerability to
change in trade conditions, structural unemployment and balance of payments
position.
16
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MARTIN CURRIE BUSINESS TRUST
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TRUSTEES AND OFFICERS
Timothy J.D. Hall, TRUSTEE AND PRESIDENT *
Simon D. Eccles, TRUSTEE
Patrick R. Wilmerding, TRUSTEE
Colin Winchester, 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
Regulated by IMRO
Registered Investment Adviser with the SEC
--------------------
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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.
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