-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Rf7D2zCaUsGxcJje+rBq4OIGAKuZY1D+QFJJMyyuiRHM7di6QNN02bNJEdaQ+OzO yfrJQlFij8ZbBn80IaVOfg== 0000908812-96-000015.txt : 19960725 0000908812-96-000015.hdr.sgml : 19960725 ACCESSION NUMBER: 0000908812-96-000015 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19960430 FILED AS OF DATE: 19960628 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: ASIA TIGERS FUND INC CENTRAL INDEX KEY: 0000912729 STANDARD INDUSTRIAL CLASSIFICATION: IRS NUMBER: 133735233 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-08050 FILM NUMBER: 96588620 BUSINESS ADDRESS: STREET 1: OPPENHEIMER TOWER STREET 2: 200 LIBERTY ST 38TH FL CITY: NEW YORK STATE: NY ZIP: 10281 BUSINESS PHONE: 2126674302 MAIL ADDRESS: STREET 1: OPPENHEIMER TOWER STREET 2: 200 LIBERTY STREET 38TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10281 N-30D 1 THE ASIA TIGERS FUND, INC. June 3, 1996 DEAR FUND SHAREHOLDER, We are pleased to present you with the unaudited financial statements of The Asia Tigers Fund, Inc. ("the Fund") for the first six months of the fiscal year, ending April 30, 1996. I hope you will find the Investment Adviser's report insightful; beginning on the next page, it overviews the region's performance and features a top holding in each of the 13 countries the Fund covers. Since its inception, the Fund has provided its shareholders broad exposure to the emerging equity markets of the Asian Pacific basin and the Indian subcontinent. While these markets have been volatile, as can be expected in emerging economies, active portfolio management has kept the Fund's NAV comparatively stable. Along with risk generally goes reward, and that has proved true in the six months ended April 30, 1996. In U.S. dollar terms, three markets in the region performed remarkably well: Taiwan (up over 32%), Malaysia and Indonesia (both up over 20%). The weakest market, Bangladesh, was down 7%. As of April 30, the Fund was 25% invested in the top three markets, with just 0.31% in Bangladesh. As a result, on an NAV basis, the Fund returned 13.5% over the six-month period. Going forward, the Fund's Investment Adviser believes the region's strong economic fundamentals will continue to nurture high growth rates and therefore positive market performance through the end of 1996. Many countries in the region continue to relax their restrictions on foreign investment, which, in conjunction with increasing investor interest in emerging markets, may have a stabilizing effect and enhance market liquidity in the long run. If you have questions about or would like updates on the Fund, please call our toll-free number at (800) 421-4777. Thank you for your participation in the Fund. Sincerely, /s/ Alan Rappaport Chairman REPORT OF THE INVESTMENT ADVISER PERFORMANCE The six-month period ended April 30, 1996, was a rewarding one for investors in Asian equities. Strong economic growth, low inflation and generally declining interest rates in the region provided a supportive environment for these stock markets. Nine of the thirteen markets in which The Asia Tigers Fund invests rose in U.S. dollar terms. Three markets in particular, Malaysia, Taiwan and Indonesia, increased more than 20%. Taiwan's stock market led the region by rising more than 32%. Bangladesh, Sri Lanka, South Korea and China B shares were the only markets to experience index declines during the period. Bangladesh was the worst performing market, falling more than 7%. On a total return basis, the Fund's net asset value rose 13.5% during the period. In December 1995, the Fund announced a cash dividend of $0.081 per share payable on January 12, 1996. The Fund's net asset value on April 30, 1996, closed at $13.62. COUNTRY ALLOCATIONS During the six-month period, the Fund adjusted its geographic allocation with respect to several countries, in response to changing underlying economic conditions and relative equity valuations. Since the end of October 1995, the more significant changes in the Fund's country allocations include an increase in Thailand and Indonesia, and a decrease in Hong Kong and Malaysia. The charts below indicate the changes in the Fund's country allocations in the six months since the Fund's most recent fiscal year-end. GEOGRAPHICAL ALLOCATION OCTOBER 31, 1995 GEOGRAPHICAL ALLOCATION APRIL 30, 1996 Hong Kong 26.88% Hong Kong 24.98% Malaysia 16.15% Malaysia 15.17% Thailand 12.66% Thailand 13.82% Singapore 11.73% Singapore 11.96% Indonesia 6.10% Indonesia 7.30% India 6.20% India 6.01% Korea 6.62% Korea 5.86% Taiwan 2.24% Taiwan 2.81% Philippines 2.53% Philippines 1.59% Pakistan 0.84% Pakistan 0.69% China 0.35% China 0.42% Bangladesh 0.51% Bangladesh 0.31% Sri Lanka 0.42% Sri Lanka 0.17% USA (Cash) 6.77% USA (Cash) 8.92% The changes in allocation are discussed below. FUND UPDATES The Fund's toll-free phone number, (800) 421-4777, provides callers with a recorded monthly update of the markets in which the Fund invests. It also offers details about the Fund, its portfolio and performance. The Fund's net asset value (NAV) is calculated weekly and published in The Wall Street Journal every Monday under the heading "Closed End Funds." The Fund's net asset value is also published in Barron's on Saturdays and in The New York Times on Mondays. The Fund is listed on the New York Stock Exchange under the ticker symbol GRR. REGIONAL OUTLOOK The economies of Asia generally remain on a strong growth path with the average Gross Domestic Product (GDP) growth estimated to exceed 7% in 1996 and 1997. The Investment Adviser believes the largest and most important economy in the region is China, and that after two years of slowing growth and slowing inflation, the Chinese government is once again in a position to promote economic growth, which the Investment Adviser believes will spur growth in other Asian economies. The declining interest rate environment that began with the U.S. Federal Reserve's interest rate cut in July of 1995 has begun to show signs that the friendly environment for U.S. equities may be nearing its end. While the Investment Adviser does not believe that Asian equities are currently undervalued, the Investment Adviser believes the region remains arguably the best in the world for long-term growth of equity capital, given that equity valuations are reasonable and economic growth has been strong. The following comments are intended to provide the investor with a brief summary of the Investment Adviser's view on the Fund's target markets and on some of the stocks that make up the Fund's portfolio. HONG KONG US$69.4 MILLION, 25.0% OF THE FUND'S INVESTMENT PORTFOLIO, WAS INVESTED IN HONG KONG AS OF APRIL 30, 1996. Hong Kong's economy has progressed further in the current economic cycle than most of its neighboring countries. While in the Investment Adviser's view many companies in the region will experience slowing earnings growth in 1996, Hong Kong's earnings growth is estimated to equal 1995's rate of 11%. Recent land acquisitions by property developers such as Cheung Kong and Citic Pacific signify a willingness to build land banks at current prices. Optimism will likely return to Hong Kong's property market under the lower interest rates and looser credit policy likely in China in 1996. There are signs of improving Sino-British relations, such as the PRC Foreign Minister's recent visit to London. The Fund's Hong Kong exposure has been gradually moving to a more bullish stance as a result of the better economic background. The Fund is slightly overweighted in property development companies, conglomerates and banking, and is underweighted in utilities. SUN HUNG KAI PROPERTIES (SHK Properties) is the Fund's largest holding in Hong Kong, as well as the largest holding as a percentage of total net assets. SHK Properties is Hong Kong's dominant property development company. In addition to property development and investment, the company is involved in hotel ownership, finance, insurance, property and parking management, cinema and warehouse operations, garment manufacturing, public transportation and telecommunications. MALAYSIA US$42.1 MILLION, 15.2% OF THE FUND'S INVESTMENT PORTFOLIO, WAS INVESTED IN MALAYSIA AS OF APRIL 30, 1996. The Investment Adviser believes the Malaysian market is reasonably valued, currently trading at 21.5 times 1996 forecast earnings compared to its five-year historical average of 25 times earnings. Earnings per share are expected to grow at approximately 14% in 1996. In addition, corporate results reported for calendar year 1995 tended to exceed expectations. Interest rates are expected to move higher, although the rise may be delayed by political struggles between Prime Minister Mahathir and rivals. Although Malaysia's current account deficit is approximately 9% of GDP, the Investment Adviser believes there is evidence that the gap is beginning to narrow. The Fund is overweighted in banking, gaming and consumer stocks, and is underweighted in property and utility companies. The Fund's largest Malaysian investment is GENTING BERHAD. Genting's activities include gaming, hotels and resort-related activities, plantations, property development and tour/travel related services. THAILAND US$38.4 MILLION, 13.8% OF THE FUND'S INVESTMENT PORTFOLIO, WAS INVESTED IN THAILAND AS OF APRIL 30, 1996. The Investment Adviser believes that the Thai economy remains robust, and corporate earnings are expected to grow approximately 21% in 1996. There are signs that the economy is slowing in response to monetary tightening by the Bank of Thailand. The rising current account deficit is the Bank's primary concern. The Fund is overweighted in banking, finance, energy and communication stocks, and is underweighted in the building materials and property sectors. In Thailand, the Fund's largest holding is THAI FARMER'S BANK, the country's third largest bank in terms of total assets. The bank has over 14% of the deposit market, 13% of the loan market and one of the healthiest loan portfolios of any bank in Thailand. SINGAPORE US$33.2 MILLION, 12.0% OF THE FUND'S INVESTMENT PORTFOLIO, WAS INVESTED IN SINGAPORE AS OF APRIL 30, 1996. The Singapore government continues to do an exceptional job of managing the country's economy. Singapore has been ranked by Fortune magazine as the best city for business in the world. The Fund has focused on banking and property stocks, and has remained skeptical about the possibility of an often-predicted ship repair industry recovery. The Fund's largest position in Singapore is OCBC BANK. OCBC has 57 branches in Singapore, 25 in Malaysia and an additional 20 branches around the world. The company owns one of the largest land banks in Singapore, and its stock therefore commands a premium multiple to its banking peer group. INDONESIA US$20.3 MILLION, 7.3% OF THE FUND'S INVESTMENT PORTFOLIO, WAS INVESTED IN INDONESIA AS OF APRIL 30, 1996. The Investment Adviser believes Indonesia offers the opportunity for superior profit growth and is one of the least expensive markets in Asia. The government is committed to a long-term deregulation plan and offers attractive incentives for Foreign Direct Investment (FDI). The domestic telephone operator, PT Telekom, listed its shares on the New York Stock Exchange in November of 1995 and may sponsor an additional offering in the second half of 1996. The Fund is overweighted in consumer and banking stocks and underweighted in property stocks. BANK INTERNATIONAL INDONESIA is the Fund's largest Indonesian holding. The Bank is one of Indonesia's larger private banks. INDIA US$16.7 MILLION, 6.0% OF THE FUND'S INVESTMENT PORTFOLIO, WAS INVESTED IN INDIA AS OF APRIL 30, 1996. The long-anticipated elections in India were held in May with no party winning a clear mandate. It remains to be seen whether the recently formed coalition government will be successful in formulating and implementing policies and programs in light of the disparate views represented. So far the government has indicated its support for the economic liberalization programs of the last few years. In the immediate aftermath of the elections, investors appear to be focused on the longer-term fundamentals of the economy and continued high earnings growth, and new foreign investment has continued. Indian equities were trading at approximately 22 times earnings as of April 30, 1996, while 1996 earnings are expected to grow 20%. After a long period of stability, the Indian rupee was devalued about 11% (from 31.5 to 35) in late 1995. The new rupee level has improved the competitiveness of Indian exports, which should contribute to the expected GDP growth of 6% for 1996. The Fund's largest position in India is in HINDUSTAN LEVER. The company is the largest consumer products company in India and is the market leader in all of its product categories. The company recently merged with Brook Bond and the combined company maintains strong franchises in both food and consumer products. KOREA US$16.3 MILLION, 5.9% OF THE FUND'S INVESTMENT PORTFOLIO, WAS INVESTED IN KOREA AS OF APRIL 30, 1996. Prior to 1992, foreigners were not allowed to directly invest in Korea. The ongoing process of opening the country's capital markets continues, with foreign ownership limits rising to 18% as of April 1996. Before the end of 1996, the limit is expected to be raised again to at least 20%. Korea's investment profile in Asia continues to grow. Domestic interest rates have fallen dramatically from 15.5% in May 1995 to nearly 10% by May 1996. The impact of this decline in interest rates should be especially strong given the general high level of borrowing by Korean companies. In addition to a significant investment in the world's largest producer of computer memory chips, the Fund's larger holdings are in large capitalization companies that stand to benefit from strong domestic demand, such as Korea Electric Power and Shinhan Bank. The Fund is underweighted in textile and securities companies. SAMSUNG ELECTRONICS is the world's largest producer of computer memory chips. The company's profits have increased from US$200 million in 1993 to over US$3 billion in 1995. In addition to computer memory chips, Samsung produces a wide range of consumer and industrial electronic equipment including computers, telecommunications equipment and color television sets. Samsung is one of the least expensive (in price-earnings ratio terms) stocks in Asia. Based on 1996 estimated earnings per share, the company's stock has been trading at less than six times earnings. TAIWAN US$7.8 MILLION, 2.8% OF THE FUND'S INVESTMENT PORTFOLIO, WAS INVESTED IN TAIWAN AS OF APRIL 30, 1996. Taiwan has had a challenging year with a domestic financial scandal, political uncertainty, missile tests, capital flight and a depreciating currency. Foreigners remain convinced, however, that the inexpensive valuations are compelling. During the third quarter of 1995, foreigners invested US$1.8 billion in Taiwanese stocks. Taiwan's central bank has lowered its reserve ratio and the Investment Adviser believes this should help liquidity. Inflation remains under control and below the government's target of 4% for the full year. The Fund's largest holding in Taiwan is UNITED MICRO ELECTRONICS, a leader in Taiwan's electronics industry. The Investment Adviser believes the company should be well positioned to capitalize on the computer industry's high volume growth. The company has a competitive advantage in its flexible product line, advanced computer design capability and world class production facilities. The Investment Adviser believes that future earnings growth will be fueled by a shift to higher density production technology and capacity expansion. PHILIPPINES US$4.4 MILLION, 1.6% OF THE FUND'S INVESTMENT PORTFOLIO, WAS INVESTED IN THE PHILIPPINES AS OF APRIL 30, 1996. Poor weather has caused inflation to increase in the Philippines, which has hurt the equity market's performance in recent months. The market is trading at a discount to its historic average. In the longer term, the Investment Adviser favors sectors such as banking, property and consumer products. The Fund's top holding in the Philippines is METROPOLITAN BANK & TRUST. "Metrobank" is now the Philippines' largest private bank in terms of assets, loans and capital. The bank has strong ties to the local Chinese community and is the first Philippine bank to set up an office in Taipei. PAKISTAN US$1.9 MILLION, 0.7% OF THE FUND'S INVESTMENT PORTFOLIO, WAS INVESTED IN PAKISTAN AS OF APRIL 30, 1996. In Pakistan, fundamental valuations remain attractive, with GDP growth of 5% and corporate earnings expected to exceed 15% in 1996. While the country's trade balance remains a concern, the International Monetary Fund is working with Pakistan to control its deficit. Pakistan must maintain nine weeks of foreign currency reserves, and the government will continue with its on-going privatization plans. The Pakistan Rupee was devalued about 7% in late October, and has further devalued by less than 2% in the first four months of 1996. The Fund's largest holding in Pakistan is PAKISTAN STATE OIL, the country's largest oil marketing company, which controls approximately 80% of the domestic market and over 2,200 service stations. The company's monopoly position has allowed it to win key contracts, such as the fuel supply agreement for a 1,292 MW power station. CHINA US$1.2 MILLION, 0.4% OF THE FUND'S INVESTMENT PORTFOLIO, WAS INVESTED IN CHINA AS OF APRIL 30, 1996. The Chinese economy continues to slow gradually from its fast pace of 1993 and 1994, and is expected to achieve a soft landing in 1996. In April 1996, the government removed interest rate subsidies and signaled that it will implement a more flexible monetary policy. Signs of increasing economic growth are evident in recent data, with industrial production rising 13.7% for the 12-month period ending April 1996. Most of the Fund's China exposure is in Hong Kong- or Taiwan-based firms that are significantly active in China. The Fund holds one issue that trades on the Shanghai exchange ("China B share") and two issues that trade on the Hong Kong Stock Exchange ("China H share"). The Fund's top holding in this category is a Chinese company listed on the Hong Kong Stock Exchange, COSCO PACIFIC. COSCO Pacific leases shipping containers to its parent company, COSCO, the world's largest shipping company. In addition, COSCO Pacific owns a 50% stake in Hong Kong's Container Terminal 8. BANGLADESH US$0.9 MILLION, 0.3% OF THE FUND'S INVESTMENT PORTFOLIO, WAS INVESTED IN BANGLADESH AS OF APRIL 30, 1996. Bangladesh remains one of the world's poorest countries; however, the Investment Adviser believes the country's prospects for economic growth are beginning to appear. Over the next twelve months, the Investment Adviser expects the Bangladesh economy to grow in excess of 4%, corporate earnings to grow 10% and inflation to remain below 8%. The Fund's Bangladesh exposure is focused on select, high quality companies listed on the Dhaka Stock Exchange. BEXIMCO PHARMECEUTICALS is the fourth largest company on the Dhaka Stock Exchange, with a capitalization of US$47 million. Beximco Pharmaceuticals dominates the local pharmaceutical market with sales of US$60 million and a 14% market share. The company distributes antibiotics, anti-ulcers, anti-rheumatics, anti-allergenics, antidepressants and vitamins. At its April 30, 1996, price of 86 Taka, the stock was trading at 5.6 times 1996 estimated earnings per share. SRI LANKA US$0.5 MILLION, 0.2% OF THE FUND'S INVESTMENT PORTFOLIO, WAS INVESTED IN SRI LANKA AS OF APRIL 30, 1996. Sri Lanka continues to be affected by civil war in the north of the country. The fighting has escalated to new levels and has imposed a cost, both in terms of life and economic potential. Investors were disappointed in 1995, with lower than expected economic growth and higher than expected inflation. For 1996, the economy is expected to grow 4.5%, with the inflation rate estimated to be 13%. The Sri Lankan Rupee decreased 2% in value in the first five months of 1996. The Fund maintains modest exposure to Sri Lanka. The Investment Adviser believes that good growth possibilities exist as the country adopts market-oriented policies. At present, DEVELOPMENT FINANCE CORPORATION OF CEYLON is the Fund's only Sri Lankan holding. The company is able to access low-cost funding and offers attractive financing for companies in need of capital. The company has a dominant market share and has a market capitalization of US$170.3 million as of April 30, 1996. BZW INVESTMENT MANAGEMENT London Hong Kong June 3, 1996
SCHEDULE OF INVESTMENTS THE ASIA TIGERS FUND, INC. APRIL 30, 1996 (UNAUDITED) NUMBER PERCENT OF SHARES SECURITY OF HOLDINGS COST VALUE COMMON STOCKS 85.75% BANGLADESH 0.31% BEVERAGE & TOBACCO 0.02% 19,968 Bangladesh Tobacco $ 93,851 $ 67,590 HEALTH/PERSONAL CARE 0.19% 250,000 Beximco Pharmaceuticals 726,264 522,485 TEXTILES & APPAREL 0.10% 33,750 Padma Textile Mills 304,177 265,202 ---------- --------- TOTAL BANGLADESH 1,124,292 855,277 --------- --------- CHINA 0.42% TEXTILES & APPAREL 0.08% 874,000 Sanmao Textile Co. B 416,539 209,760 TRANSPORTATION - SHIPPING 0.22% 880,000 Cosco Pacific - Ltd. 504,200 620,039 WHOLESALE & INTERNATIONAL TRADE 0.12% 686,000 NG Fung Hong Limited 363,826 328,145 --------- --------- TOTAL CHINA 1,284,565 1,157,944 --------- --------- HONG KONG 22.91% BANKING 6.70% 496,967 Bank of East Asia 1,473,474 1,670,477 780,000 Hang Seng Bank 7,525,965 7,915,966 490,478 HSBC Holdings PLC 6,282,327 7,323,880 6,500,000 HSBC Warrants (Expiration date 6/27/97)* 2,138,232 1,722,689 ---------- ---------- 17,419,998 18,633,012 MULTI-INDUSTRY 6.43% 620,000 Citic Pacific 1,641,709 2,436,716 940,000 Hutchinson Whampoa 4,622,596 5,833,226 5,000,000 Hutchinson Whampoa Warrants (Expiration date 9/26/97)* 933,877 756,303 310,000 Jardine Matheson 2,417,229 2,480,000 740,000 Swire Pacific A 5,685,207 6,314,156 345,000 Swire Pacific A Warrants (Expiration date 6/27/97)* 76,950 52,631 --------- ---------- 15,377,568 17,873,032 SCHEDULE OF INVESTMENTS (CONTINUED) THE ASIA TIGERS FUND, INC. APRIL 30, 1996 (UNAUDITED) NUMBER PERCENT OF SHARES SECURITY OF HOLDINGS COST VALUE COMMON STOCKS: HONG KONG (CONTINUED) REAL ESTATE 6.73% 880,000 Cheung Kong Holdings $ 5,107,801 $ 6,285,714 3,820,000 Cheung Kong Warrants (Expiration date 2/10/97)* 1,391,458 1,382,805 784,766 Hong Kong Land Holdings 1,952,922 1,679,399 900,000 Sun Hung Kai Properties 7,454,278 8,581,125 2,220,000 Sun Hung Kai Properties Warrants (Expiration date 3/27/97)* 633,667 760,569 ---------- --------- 16,540,126 18,689,612 TELECOMMUNICATIONS 2.04% 2,800,000 Hong Kong Telecom 5,540,681 5,339,367 10,000,000 Hong Kong Telecom Warrants (Expiration date 7/30/97)* 373,424 329,670 --------- --------- 5,914,105 5,669,037 UTILITIES & ELECTRIC GAS 1.01% 330,000 China Light & Power 1,751,636 1,557,207 750,000 Consolidated Electric Power 1,279,536 1,241,112 --------- --------- 3,031,172 2,798,319 ---------- --------- TOTAL HONG KONG 58,282,969 63,663,012 ---------- ---------- INDIA 5.84% AUTOMOBILES 1.09% 60,000 Bajaj Auto Ltd. 1,405,826 1,512,139 250,000 Patheja Forgings 613,690 599,711 65,000 Tata Engineering 948,467 920,520 --------- --------- 2,967,983 3,032,370 BUILDING MATERIALS & COMPONENTS 0.70% 93,000 Gujarat Ambuja Cement 794,370 948,815 84,000 Gujarat Ambuja Cement GDR 904,375 987,000 --------- --------- 1,698,745 1,935,815 BUSINESS/PUBLIC SERVICE 0.45% 170,000 NIIT Ltd. 860,441 1,265,173 CHEMICALS 0.47% 20,000 Grasim Industries GDS 516,250 387,500 55,000 Reliance Industries GDR 790,000 914,375 --------- --------- 1,306,250 1,301,875 ELECTRICALS & ELECTRONICS 0.49% 195,000 Crompton Greaves 1,351,169 1,352,603 SCHEDULE OF INVESTMENTS (CONTINUED) THE ASIA TIGERS FUND, INC. APRIL 30, 1996 (UNAUDITED) NUMBER PERCENT OF SHARES SECURITY OF HOLDINGS COST VALUE COMMON STOCKS: INDIA (CONTINUED) ENERGY SOURCES 0.62% 160,000 Hindustan Petroleum $ 1,605,257 $ 1,710,983 HEALTH CARE 1.32% 100,000 Hindustan Lever 2,043,029 2,297,688 72,000 Ranbaxy Labs 1,514,594 1,373,410 3,557,623 3,671,098 METALS - NON FERROUS 0.28% 100,000 Indian Aluminum GDR 633,750 787,500 TEXTILES & APPAREL 0.42% 275,000 Arvind Mills GDR 1,008,750 1,168,750 ---------- ---------- TOTAL INDIA 14,989,968 16,226,165 ---------- ---------- INDONESIA 7.30% AUTOMOBILES 0.16% 300,000 PT Astra International-Foreign 560,939 443,635 BANKING 1.02% 617,000 Panin Bank-Foreign 728,109 628,108 450,000 PT Bank International Indonesia-Foreign 1,693,588 2,213,352 --------- --------- 2,421,697 2,841,460 BEVERAGE & TOBACCO 1.37% 294,000 Gudang Garam-Foreign 588,518 2,110,801 155,000 Hanjaya Mandal Sampoerna-Foreign 978,150 1,710,780 --------- --------- 1,566,668 3,821,581 BUILDING MATERIALS & COMPONENTS 1.12% 340,000 Indocement Tunggal Prakarsa-Foreign 1,285,865 1,311,616 520,000 Semen Gresik-Foreign 1,034,167 1,799,829 --------- --------- 2,320,032 3,111,445 FOOD & HOUSEHOLD PRODUCTS 0.35% 210,000 PT Indofoods-Foreign 985,245 965,388 FOREST PRODUCTS & PAPER 0.37% 829,534 Indah Kiat Paper-Foreign 694,277 862,246 344,883 Indah Kiat Paper Rights (Expiration date 5/14/96)* 0 173,697 206,930 Indah Kiat Paper Warrants (Expiration date 4/13/01)* 0 0 --------- --------- 694,277 1,035,943 SCHEDULE OF INVESTMENTS (CONTINUED) THE ASIA TIGERS FUND, INC. APRIL 30, 1996 (UNAUDITED) NUMBER PERCENT OF SHARES SECURITY OF HOLDINGS COST VALUE COMMON STOCKS: INDONESIA (CONTINUED) INDUSTRIAL COMPONENT 0.18% 450,000 PT Sucaco-Foreign $ 1,134,913 $ 511,144 MACHINERY & ENGINEERING 0.31% 440,000 United Tractors-Foreign 1,053,575 853,408 MULTI-INDUSTRY 0.69% 1,350,500 Bimantara Citra-Foreign* 1,029,209 1,924,737 RECREATION/CONSUMER GOODS 0.20% 110,000 Modern Photo Film-Foreign 690,523 542,220 TELECOMMUNICATIONS 1.39% 355,000 Indo Satellite Corp.-Foreign 1,419,587 1,232,533 550,000 PT Telekomunikasi 848,014 913,523 50,000 Telekomunikasi ADR 1,423,750 1,706,250 3,691,351 3,852,306 WHOLESALE/INTERNATIONAL TRADE 0.14% 130,000 Wickaksana Overseas International 381,679 376,822 ---------- ---------- TOTAL INDONESIA 16,530,108 20,280,089 ---------- ---------- KOREA 5.86% APPLIANCES/HOUSE 1.61% 23,051 Samsung Electric Co 3,516,312 3,139,818 9,960 Samsung Electric Co. - New 1,282,150 1,324,672 --------- --------- 4,798,462 4,464,490 AUTOMOBILES 0.26% 13,000 Hyundai Motor Co 663,277 730,479 BANKING 1.14% 122,500 Shinhan Bank 2,760,486 3,159,688 CHEMICALS 0.46% 60,980 L.G. Chemicals 1,214,971 1,295,766 CONSTRUCTION & HOUSING 0.20% 10,528 Hyundai Engineering 543,027 546,031 SCHEDULE OF INVESTMENTS - (CONTINUED) THE ASIA TIGERS FUND, INC. APRIL 30, 1996 (UNAUDITED) NUMBER PERCENT OF SHARES SECURITY OF HOLDINGS COST VALUE COMMON STOCKS: KOREA (CONTINUED) MACHINERY & ENGINEERING 0.15% 38,000 Daewoo Heavy Industries $ 469,190 $ 422,385 METALS - STEEL 0.75% 22,000 Pohang Iron & Steel Co 2,008,063 2,086,353 TELECOMMUNICATIONS 0.35% 6,900 Korea Mobile Telecommunications 577,691 968,816 TRANSPORTATION - AIR 0.11% 9,100 Korean Air Lines Co 344,728 297,627 UTILITIES ELECTRIC & GAS 0.83% 49,000 Korea Electric Power 2,071,591 2,313,950 ---------- ---------- TOTAL KOREA 15,451,486 16,285,585 ---------- ---------- MALAYSIA 14.01% BANKING 2.36% 465,000 DCB Holdings Berhad 1,102,676 1,697,489 500,000 Malayan Banking 3,828,240 4,874,037 --------- --------- 4,930,916 6,571,526 BEVERAGE & TOBACCO 1.04% 910,000 RJ Reynolds 2,168,793 2,883,906 FINANCIAL SERVICES 1.23% 170,000 Arab Malaysian Finance-Foreign 661,076 784,259 389,000 Hong Leong Credit 1,672,180 1,935,013 200,000 Rashid Hussain 636,984 706,033 --------- --------- 2,970,240 3,425,305 LEISURE & TOURISM 3.38% 780,000 Genting Berhad 7,612,059 7,008,986 1,375,000 Magnum Corp. Berhad 2,037,903 2,382,863 --------- --------- 9,649,962 9,391,849 MACHINERY & ENGINEERING 0.74% 355,000 UMW Holdings 999,180 1,167,763 130,000 United Engineers 911,832 891,768 --------- --------- 1,911,012 2,059,531 SCHEDULE OF INVESTMENTS - (CONTINUED) THE ASIA TIGERS FUND, INC. APRIL 30, 1996 (UNAUDITED) NUMBER PERCENT OF SHARES SECURITY OF HOLDINGS COST VALUE COMMON STOCKS: MALAYSIA (CONTINUED) MULTI-INDUSTRY 1.00% 1,000,000 Sime Darby Berhad $ 2,732,932 $ 2,767,972 TELECOMMUNICATIONS 1.73% 510,000 Telekom Malaysia Berhad 4,189,888 4,807,846 TRANSPORTATION - AIR 0.62% 1,100,000 Malaysian Helicopter 1,877,892 1,712,131 TRANSPORTATION - SHIPPING 0.69% 600,000 Malaysian International Shipping-Foreign 1,857,939 1,925,545 UTILITIES ELECTRIC & GAS 1.22% 800,000 Tenaga Nasional Berhad 3,246,402 3,401,797 ---------- ---------- TOTAL MALAYSIA 35,535,976 38,947,408 ---------- ---------- PAKISTAN 0.69% BUILDING MATERIALS & COMPONENTS 0.00% 12,700 DG Khan Cement 30,079 6,768 ENERGY SOURCES 0.39% 117,000 Pakistan State Oil 1,004,444 1,081,867 FOREST PRODUCTS & PAPER 0.16% 125,000 Packages 719,337 428,489 MULTI-INDUSTRY 0.14% 60,000 Pakistan Investment Fund 625,475 397,500 --------- --------- TOTAL PAKISTAN 2,379,335 1,914,624 --------- --------- PHILIPPINES 1.25% BANKING 0.10% 19,000 Philippine National Bank 259,227 283,691 CONSTRUCTION & HOUSING 0.27% 1,100,000 D M Consunji Holdings 502,154 736,983 SCHEDULE OF INVESTMENTS - (CONTINUED) THE ASIA TIGERS FUND, INC. APRIL 30, 1996 (UNAUDITED) NUMBER PERCENT OF SHARES SECURITY OF HOLDINGS COST VALUE COMMON STOCKS: PHILIPPINES (CONTINUED) REAL ESTATE 0.45% 1,200,200 Filinvest Land-B* $ 525,399 $ 620,318 2,707,000 Robinson's Land Corp.* 419,035 632,186 944,434 1,252,504 RECREATION & CONSUMER GOODS 0.10% 340,000 Mondragon International 189,199 276,608 TELECOMMUNICATIONS 0.16% 9,000 Philippine Long Distance Telephone ADR 502,648 452,250 UTILITIES ELECTRIC & GAS 0.17% 50,000 Manila Electric Company B 375,025 467,075 --------- --------- TOTAL PHILIPPINES 2,772,687 3,469,111 --------- --------- SINGAPORE 11.96% AUTOMOBILES 0.57% 130,000 Cycle & Carriage 1,414,592 1,572,618 BANKING 4.62% 260,000 Development Bank of Singapore-Foreign 2,717,522 3,293,247 440,000 Overseas Chinese Bank Corp.-Foreign 5,176,691 6,042,838 360,000 United Overseas Bank-Foreign 3,502,360 3,509,571 ---------- ---------- 11,396,573 12,845,656 BEVERAGE & TOBACCO 0.57% 144,000 Fraser & Neave Ltd 1,391,952 1,598,520 BROADCAST/PUBLISHING 0.68% 100,000 Singapore Press-Foreign 1,496,998 1,892,834 MACHINERY & ENGINEERING 0.67% 206,000 Keppel Corporation 1,676,340 1,861,667 REAL ESTATE 2.85% 39,000 Bukit Sembawang Estates 852,461 1,064,292 350,000 City Developments 1,626,719 3,063,403 151,000 City Developments Warrants (Expiration date 7/18/98)* 645,991 1,015,406 415,000 DBS Land 1,227,503 1,683,270 420,000 Wing Tai Holdings 1,031,368 1,087,882 --------- --------- 5,384,042 7,914,253 SCHEDULE OF INVESTMENTS - (CONTINUED) THE ASIA TIGERS FUND, INC. APRIL 30, 1996 (UNAUDITED) NUMBER PERCENT OF SHARES SECURITY OF HOLDINGS COST VALUE COMMON STOCKS: SINGAPORE (CONTINUED) TRANSPORTATION - AIR 2.00% 550,000 Singapore Airlines-Foreign $ 5,081,116 $ 5,557,532 ----------- ----------- TOTAL SINGAPORE 27,841,613 33,243,080 ----------- ----------- SRI LANKA 0.17% FINANCIAL SERVICES 0.17% 80,000 Development Finance Company of Ceylon 617,294 472,831 ----------- ----------- TOTAL SRI LANKA 617,294 472,831 TAIWAN 1.21% DATA PROCESSING 0.04% 10,000 Acer Inc. GDR 129,900 113,750 ELECTRONICS 0.37% 70,000 Advanced Semiconductor Engineering GDR* 905,250 1,024,100 METALS - STEEL 0.80% 100,000 China Steel GDR 1,943,750 2,225,000 ----------- ----------- TOTAL TAIWAN 2,978,900 3,362,850 ----------- ----------- THAILAND 13.82% BANKING 6.95% 340,000 Bangkok Bank-Foreign 3,528,488 4,942,018 345,000 Bank of Ayudhya-Foreign 1,855,979 2,041,501 685,000 Industry Finance-Foreign 2,265,300 2,774,821 285,000 Krung Thai Bank-Foreign 911,300 1,403,495 200,000 Siam Commercial Bank-Foreign 1,984,971 2,954,726 450,000 Thai Farmer's Bank-Foreign 3,306,112 5,182,685 ---------- ---------- 13,852,150 19,299,246 BUILDING MATERIALS & COMPONENTS 1.02% 55,000 Siam Cement-Foreign 3,195,403 2,839,555 ELECTRICAL & ELECTRONICS 0.76% 88,000 Shinawatra Computers-Foreign 2,585,050 2,110,882 SCHEDULE OF INVESTMENTS - (CONTINUED) THE ASIA TIGERS FUND, INC. APRIL 30, 1996 (UNAUDITED) NUMBER PERCENT OF SHARES SECURITY OF HOLDINGS COST VALUE COMMON STOCKS: THAILAND (CONTINUED) ENERGY SOURCES 0.77% 153,500 PTT Exploration-Foreign $ 1,626,709 $ 2,145,830 FINANCIAL SERVICES 2.07% 100,000 Dhana Siam 664,483 619,539 305,000 Finance One-Foreign 1,934,036 2,143,963 280,000 Nava Finance-Foreign 903,703 850,675 245,000 Phatra Thanakit-Foreign 1,049,207 2,140,588 ---------- ---------- 4,551,429 5,754,765 REAL ESTATE 0.83% 149,000 Land and House-Foreign 2,986,605 2,307,784 TELECOMMUNICATIONS 1.42% 85,000 Advanced Info Service-Foreign 553,427 1,424,543 180,000 United Communication-Foreign 2,563,579 2,516,283 ---------- ---------- 3,117,006 3,940,826 ---------- ---------- TOTAL THAILAND 31,914,352 38,398,888 ----------- ----------- TOTAL COMMON STOCKS 211,703,545 238,276,864 ----------- ----------- ----------- ----------- Par Value ($000) CONVERTIBLE BONDS 5.33% HONG KONG 2.07% LEISURE & TOURISM 0.36% 940 HSH Overseas Finance 5.00%, 01/06/01 $ 1,001,057 $ 1,017,550 REAL ESTATE 1.71% 1,500 New World 4.375%, 12/11/00 1,638,125 1,558,125 1,200 Sino Land 5.00%, 10/21/00 1,726,225 1,584,000 1,400 Wharf 144A 5.00%, 07/15/00 1,536,821 1,603,000 ----------- ----------- 4,901,171 4,745,125 ----------- ----------- TOTAL HONG KONG 5,902,228 5,762,675 ----------- ----------- SCHEDULE OF INVESTMENTS (CONTINUED) THE ASIA TIGERS FUND, INC. APRIL 30, 1996 (UNAUDITED) PAR VALUE PERCENT ($000) SECURITY OF HOLDINGS COST VALUE CONVERTIBLE BONDS (CONTINUED) INDIA 0.17% METALS - STEEL 0.17% 500 Jindal Strips 4.25%, 03/31/99 $ 552,479 $ 472,500 ---------- ---------- TOTAL INDIA 552,479 472,500 ---------- ---------- MALAYSIA 1.15% MACHINERY & ENGINEERING 1.15% 2,700 United Engineers 144A 2.00%, 03/01/04 3,000,809 3,199,500 ---------- ---------- TOTAL MALAYSIA 3,000,809 3,199,500 ---------- ---------- PHILIPPINES 0.34% BANKING 0.34% 800 Metro Bank 2.75%, 09/10/00 917,125 941,000 --------- --------- TOTAL PHILIPPINES 917,125 941,000 --------- --------- TAIWAN 1.60% DATA PROCESSING 0.17% 200 Acer 4.00%, 06/10/01 675,882 490,000 ELECTRICAL COMPONENTS 0.90% 2,000 United Micro Electronics 144A 1.25%, 06/08/04 2,564,000 2,495,000 TRANSPORTATION - SHIPPING 0.53% 1,250 Yangming 2.00%, 10/06/01 1,373,750 1,468,750 --------- --------- TOTAL TAIWAN 4,613,632 4,453,750 --------- --------- TOTAL CONVERTIBLE BONDS 14,986,273 14,829,425 ---------- ---------- ---------- ---------- SCHEDULE OF INVESTMENTS - (CONTINUED) THE ASIA TIGERS FUND, INC. April 30, 1996 (UNAUDITED) NUMBER PERCENT OF SHARES SECURITY OF HOLDINGS COST VALUE SHORT-TERM OBLIGATIONS 8.92% MUTUAL FUND 0.21% 573,419 Temporary Investment Fund, Inc $ 573,419 $ 573,419 ---------- ----------- TOTAL MUTUAL FUND 573,419 573,419 ---------- ----------- ---------- ----------- Par Value ($000) TIME DEPOSITS 3.71% 10,300 Chase Manhattan Bank London Time Deposit 5.1875%, 05/01/96 $ 10,300,000 $ 10,300,000 TOTAL TIME DEPOSITS 10,300,000 10,300,000 ------------ ----------- UNITED STATES TREASURY BILLS 5.00% 1,000 U.S. Treasury Bill 4.71143%, 05/16/96 998,037 998,037 3,000 U.S. Treasury Bill 4.89414%, 05/16/96 2,993,882 2,993,882 1,000 U.S. Treasury Bill 4.74349%, 06/13/96 994,243 994,082 1,000 U.S. Treasury Bill 4.89%, 06/13/96 994,159 994,159 3,000 U.S. Treasury Bill 4.97%, 06/13/96 2,982,191 2,982,245 5,000 U.S. Treasury Bill 4.95%, 07/25/96 4,941,563 4,940,457 TOTAL U.S. TREASURY BILLS 13,904,075 13,902,862 ----------- ----------- TOTAL SHORT-TERM OBLIGATIONS 24,777,494 24,776,281 ----------- ----------- ----------- ----------- TOTAL INVESTMENTS 100% $251,467,312 $277,882,570 ------------ ------------ ------------ ------------ FOOTNOTES AND ABBREVIATIONS: ADR: American Depositary Receipts GDS: Global Depositary Shares GDR: Global Depositary Receipts 144A: Restricted as to resale to institutional investors *Non-income producing security. **Aggregate cost for Federal income tax purposes is $252,238,981. The aggregate gross unrealized appreciation (depreciation) for all securities is as follows: Excess of value over tax cost $33,476,873 Excess of tax cost over value (7,833,284) ----------- $25,643,589 ----------- ----------- See accompanying notes to financial statements.
STATEMENT OF ASSETS AND LIABILITIES THE ASIA TIGERS FUND, INC. APRIL 30, 1996 (UNAUDITED) ASSETS Investments at value (Cost $251,467,312) $ 277,882,570 Cash (including $1,910,102 of foreign currency holdings with a cost of $1,903,739) 3,165,914 Receivables: Dividends 392,052 Interest 154,058 Securities sold 4,068,718 Unamortized organization costs 62,827 Prepaid expenses 74,931 ------------- Total assets 285,801,070 ------------- LIABILITIES Payable for securities purchased 5,942,353 Due to investment manager 226,782 Due to administrator 45,356 Accrued expenses 152,871 ------------- Total liabilities 6,367,362 ------------- NET ASSETS $279,433,708 ------------- ------------- NET ASSET VALUE PER SHARE ($279,433,708/20,514,984) $13.62 ------------- ------------- Net assets consist of: Capital stock, ($0.001 par value; 20,514,984 shares of common stock issued and outstanding, 100,000,000 shares authorized) $20,515 Paid-in capital 286,511,528 Undistributed net investment income 93,959 Accumulated net realized loss on investments and foreign currency related transactions (33,629,589) Net unrealized appreciation in value of investments and translation of assets and liabilities denominated in foreign currencies 26,437,295 ------------ $279,433,708 ------------ ------------ See accompanying notes to the financial statements. STATEMENT OF OPERATIONS THE ASIA TIGERS FUND, INC. FOR THE SIX MONTHS ENDED APRIL 30, 1996 (Unaudited) INVESTMENT INCOME Dividends (Net of taxes withheld of $181,278) $ 1,722,832 Interest 933,593 ------------ Total investment income 2,656,425 ------------ EXPENSES Management fees 1,310,946 Administration fees 262,189 Custodian fees 254,313 Transfer agent fees 19,289 Directors' fees 11,652 Legal fees 65,311 Insurance 57,532 Printing 42,677 Audit fees 39,835 NYSE fees 20,487 Amortization of organizational cost 12,138 Miscellaneous 8,925 --------- Total expenses 2,105,294 ------------ Net investment income 551,131 ------------ NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, FOREIGN CURRENCY HOLDINGS AND OTHER ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES: Net realized gain (loss) on: Security transactions 1,579,775 Foreign currency related transactions (144,689) ----------- 1,435,086 Net change in unrealized appreciation in value of investments and translation of assets and liabilities denominated in foreign currencies 31,347,957 ----------- Net realized and unrealized gain on investments, foreign currency holdings and other assets and liabilities denominated in foreign currencies 32,783,043 ----------- Net increase in net assets resulting from operations $33,334,174 ----------- ----------- See accompanying notes to the financial statements. STATEMENT OF CHANGES IN NET ASSETS THE ASIA TIGERS FUND, INC. FOR THE SIX MONTHS ENDED APRIL 30, 1996 FOR THE YEAR ENDED INCREASE (DECREASE) IN NET ASSETS (UNAUDITED) OCTOBER 31, 1995 ----------- ---------------- OPERATIONS Net investment income $ 551,131 $ 1,746,883 Net realized gain (loss) on investments and foreign currency related transactions 1,435,086 (35,295,462) Net change in unrealized appreciation in value of investments, foreign currency holdings and other assets and liabilities denominated in foreign currencies 31,347,957 1,078,455 ---------- ----------- 33,334,174 (32,470,124) ---------- ----------- DISTRIBUTIONS TO SHAREHOLDERS FROM Net investment income ($0.08 and $0.06 per share, respectively) (1,661,714) (1,169,355) Net realized gains ($0.00 and $0.17 per share) - (3,487,548) Net decrease in net assets resulting from distribution ---------- ----------- to shareholders (1,661,714) (4,656,903) ---------- ----------- CAPITAL SHARE TRANSACTIONS Offering costs charged to capital - (21,715) ---------- ----------- Net decrease in net assets resulting from capital share transactions (21,715) Total increase (decrease) in net assets 31,672,460 (37,148,742) NET ASSETS Beginning of period 247,761,248 284,909,990 ------------ ------------ End of period (including undistributed net investment income of $93,959 and $1,204,542) $279,433,708 $247,761,248 ------------ ------------ ------------ ------------ See accompanying notes to financial statements.
FINANCIAL HIGHLIGHTS THE ASIA TIGERS FUND, INC. FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD FOR THE PERIOD NOVEMBER 29, 1993 FOR THE SIX (COMMENCEMENT MONTHS FOR THE OF OPERATIONS) APRIL 30, 1996 YEAR ENDED THROUGH (UNAUDITED) OCTOBER 31, 1995 OCTOBER 31, 1994 ------------- ---------------- ------------------ Per Share Operating Performance: Net asset value, beginning of period $12.08 $13.89 $13.97 (1) -------- ------- ------- Net investment income 0.03 0.09 0.05 Net realized and unrealized loss on investments, foreign currency holdings, and other assets and liabilities denominated in foreign currencies 1.59 (1.67) (0.11) -------- ------- ------ Net decrease from investment operations 1.62 (1.58) (0.06) Less distributions: Dividends from net investment income (0.08) (0.06) (0.02) Distributions from net realized gains - (0.17) - -------- ------- ------ Total dividends and distributions (0.08) (0.23) (0.02) Net asset value, end of period $13.62 $12.08 $13.89 -------- ------- ------ -------- ------- ------ Per share market value, end of period $12.00 $10.38 $12.38 TOTAL INVESTMENT RETURN BASED ON MARKET VALUE (2) (16.29)% (14) (14.17)% (11.65)% (4) RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in 000s) $279,434 $247,761 $284,910 Ratios of expenses to average net assets 1.61% (3) 1.65% 1.60% (3) Ratios of net investment income to average net assets 0.42% (3) 0.71% 0.38% (3) Portfolio turnover 38.88% 77.88% 45.51% Average commission rate paid $0.0069 - - 1 Initial public offering price $15.00 per share less underwriting discount of $0.98 per share and offering expense of $0.05 per share. 2 Total investment return is calculated assuming a purchase of common stock at the current market price on the first day and a sale at the current market price on the last day of each period reported, except that for the period ended October 31, 1994, total investment return is based on a beginning of period price of $14.02 (initial offering price of $15.00 less sales load of $0.98). Dividends and distributions, if any, are assumed, for purposes of this calculation, to be reinvested at prices obtained under the Fund's dividend reinvestment plan. Total investment return does not reflect brokerage commissions or sales charges and is not annualized. 3 Annualized. 4 Not annualized. NOTES TO FINANCIAL STATEMENTS THE ASIA TIGERS FUND, INC. April 30, 1996 (UNAUDITED) NOTE A: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Asia Tigers Fund, Inc. (the "Fund") was incorporated in Maryland on September 23, 1993, and commenced operations on November 29, 1993. The Fund is registered under the Investment Company Act of 1940, as amended, as a closed-end non-diversified management investment company. Prior to commencing its operations on November 29, 1993, the Fund had no activities other than the sale of 3,567 shares of capital stock to Oppenheimer & Co., Inc. ("Oppenheimer") and 3,567 shares of capital stock to BZW Investment Management Inc. ("BZW"). At April 30, 1996, Oppenheimer and BZW each owned 3,567 shares of the Fund's Capital Stock. SIGNIFICANT ACCOUNTING POLICIES ARE AS FOLLOWS: PORTFOLIO VALUATION. Investments are stated at value in the accompanying financial statements. In valuing the Fund's assets, all securities for which market quotations are readily available are valued as follows: (i) at the last sale price prior to the time of determination if there was a sale on the date of determination, (ii) at the mean between the last current bid and asked prices if there was no sales price on such date and bid and asked quotations are available, and (iii) at the bid price if there was no sales price on such date and only bid quotations are available. Investments in short-term debt securities having a maturity of 60 days or less are valued at amortized cost. All other securities and assets are carried at fair value as determined in good faith by, or under the direction of, the Board of Directors. The net asset value per share of the Fund is calculated weekly and at the end of each month. INVESTMENT TRANSACTIONS AND INVESTMENT INCOME. Investment transactions are accounted for on the trade date. The cost of investments sold is determined by use of the specific identification method for both financial reporting and income tax purposes. Interest income is recorded on an accrual basis; dividend income is recorded on the ex-dividend date or when known. The collectability of income receivable from foreign securities is evaluated periodically, and any resulting allowances for uncollectible amounts are reflected currently in the determination of investment income. TAX STATUS. No provision is made for U.S. Federal income or excise taxes since it is the Fund's intention to qualify as a regulated investment company and to make the requisite distributions to its shareholders that will be sufficient to relieve it from all or substantially all Federal income and excise taxes. At October 31, 1995, the Fund had a net capital loss carryover of $34,650,186, which is available to offset future net realized gains on securities transactions to the extent provided for in the Internal Revenue Code. Such capital loss carryover will expire in the year 2003. NOTES TO FINANCIAL STATEMENTS - (CONTINUED) THE ASIA TIGERS FUND, INC. APRIL 30, 1996 (UNAUDITED) Dividend and interest income from non-U.S. sources received by the Fund are generally subject to non-U.S. withholding taxes. Such withholding taxes may be reduced or eliminated under the terms of applicable U.S. income tax treaties. FOREIGN CURRENCY TRANSLATION. The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars on the following basis: (i) market value of investment securities, assets and liabilities at the current rate of exchange at the end of the period; and (ii) purchases and sales of investment securities, income and expenses at the relevant rates of exchange prevailing on the respective dates of such transactions. Securities denominated in currencies other than U.S. dollars are subject to changes in value due to fluctuations in foreign exchange. The Fund does not generally isolate the effect of fluctuations in foreign exchange rates from the effect of fluctuations in the market prices of securities. The Fund reports certain realized gains and losses on foreign currency related transactions as components of realized gains for financial reporting purposes, whereas such components are treated as ordinary income for federal income tax purposes. Foreign security and currency transactions may involve certain considerations and risks not typically associated with those of domestic origin as a result of, among other factors, the level of governmental supervision and regulation of foreign securities markets and the possibility of political or economic instability. DISTRIBUTION OF INCOME AND GAINS. The Fund intends to distribute annually to shareholders, substantially all of its net investment income, including foreign currency gains, and to distribute annually any net realized capital gains in excess of net realized capital losses (including any capital loss carryovers). An additional distribution may be made to the extent necessary to avoid payment of a 4% federal excise tax. Distributions to shareholders are recorded on the ex-dividend date. The amount of dividends and distributions from net investment income and net realized capital gains are determined in accordance with federal income tax regulations, which may differ from generally accepted accounting principles. These "book/tax" differences are either considered temporary or permanent in nature. To the extent these differences are permanent in nature, such amounts are reclassified within the capital accounts based on their federal tax-basis treatment; temporary differences do not require reclassification. Dividends and distributions that exceed net investment income and net realized capital gains for financial reporting purposes but not for tax purposes are reported as dividends in excess of net investment income or distributions in excess of net realized capital gains. To the extent they exceed net investment income and net realized capital gains for tax purposes, they are reported as distributions of paid-in-capital. NOTES TO FINANCIAL STATEMENTS - (CONTINUED) THE ASIA TIGERS FUND, INC. APRIL 30, 1996 (UNAUDITED) During the year ended October 31, 1995, the Fund reclassified $262,314 from accumulated net realized loss on investments and foreign currency related transactions to undistributed net investment income as a result of permanent book and tax differences primarily relating to foreign currency losses. Net investment income and net assets were not affected by the change. OTHER. Costs incurred by the Fund in connection with its organization are being amortized on a straight-line basis over a five-year period beginning at the commencement of operations of the Fund. NOTE B: MANAGEMENT, INVESTMENT ADVISORY AND ADMINISTRATIVE SERVICES Advantage Advisers, Inc., a subsidiary of Oppenheimer, serves as the Fund's Investment Manager under the terms of a management agreement (the "Management Agreement"), and BZW serves as the Fund's Investment Adviser under the terms of an investment advisory agreement (the "Advisory Agreement"). Pursuant to the Management Agreement, the Investment Manager supervises the Fund's investment program, including advising and consulting with the Fund's Investment Adviser. Pursuant to the Advisory Agreement, the Investment Adviser is responsible on a day-to-day basis for investing the Fund's portfolio in accordance with its investment objective and policies. For its services, the Investment Manager receives monthly fees at an annual rate of 1.00% ofthe Fund's average weekly net assets and the Investment Adviser receives from the Investment Manager monthly fees at an annual rate of 0.50% of the Fund's average weekly net assets. For the six months ended April 30, 1996,fees paid to the Investment Manager, amounted to $1,310,946, of which the Investment Manager informed the Fund it paid $655,473 to the Investment Adviser. Oppenheimer serves as the Fund's Administrator (the "Administrator"). The Administrator provides certain administrative services to the Fund. For its services, the Administrator receives a monthly fee at an annual rate of 0.20% of the value of the Fund's average weekly net assets. For the six months ended April 30, 1996, these fees amounted to $262,189. The Fund pays each of its directors who is not a director, officer or employee of the Investment Manager, the Investment Adviser, the Administrator or any affiliate thereof an annual fee of $5,000 plus up to $700 for each Board of Directors meeting attended. In addition, the Fund reimburses the directors for travel and out-of-pocket expenses incurred in connection with Board of Directors meetings. NOTE C: PORTFOLIO ACTIVITY Purchases and sales of securities other than short-term obligations, aggregated $89,218,992 and $92,859,243, respectively, for the six months ended April 30, 1996. NOTES TO FINANCIAL STATEMENTS - (CONTINUED) THE ASIA TIGERS FUND, INC. APRIL 30, 1996 (UNAUDITED) NOTE D: OTHER At April 30, 1996, substantially all of the Fund's assets were invested in Asian securities. The Asian securities markets are substantially smaller, less liquid and more volatile than the major securities markets in the United States. Consequently, acquisitions and dispositions involve special risks and considerations not present with respect to U.S. securities. Additionally, the Fund owned securities of Indian companies valued at approximately $4,679,847 which were in the process of being registered in the name of the Fund. Significant delays are common in registering the transfer of securities in India, and such transfers can take a year or longer. Indian securities regulations normally preclude the Fund from selling such securities until the completion of the registration process. DIVIDENDS AND DISTRIBUTIONS; THE ASIA TIGERS FUND, INC. DIVIDEND REINVESTMENT AND CASH PURCHASE PLAN The Fund intends to distribute annually to shareholders substantially all of its net investment income, and to distribute any net realized capital gains at least annually. Net investment income for this purpose is income other than net realized long- and short-term capital gains net of expenses. Pursuant to the Dividend Reinvestment and Cash Purchase Plan (the "Plan"), shareholders whose shares of Common Stock are registered in their own names will be deemed to have elected to have all distributions automatically reinvested by PNC Bank, National Association (the "Plan Agent") in Fund shares pursuant to the Plan, unless such shareholders elect to receive distributions in cash. Shareholders who elect to receive distributions in cash will receive all distributions in cash paid by check in dollars mailed directly to the shareholder by PNC Bank, National Association, as dividend paying agent. In the case of shareholders such as banks, brokers or nominees, that hold shares for others who are beneficial owners, the Plan Agent will administer the Plan on the basis of the number of shares certified from time to time by the shareholders as representing the total amount registered in such shareholders' names and held for the account of beneficial owners that have not elected to receive distributions in cash. Investors that own shares registered in the name of a bank, broker or other nominee should consult with such nominee as to participation in the Plan through such nominee, and may be required to have their shares registered in their own names in order to participate in the Plan. The Plan Agent serves as agent for the shareholders in administering the Plan. If the directors of the Fund declare an income dividend or a capital gains distribution payable either in the Fund's Common Stock or in cash, nonparticipants in the Plan will receive cash and participants in the Plan will receive Common Stock, to be issued by the Fund or purchased by the Plan Agent in the open market, as provided below. If the market price per share on the valuation date equals or exceeds net asset value per share on that date, the Fund will issue new shares to participants at net asset value; provided, however, that if the net asset value is less than 95% of the market price on the valuation date, then such shares will be issued at 95% of the market price. The valuation date will be the dividend or distribution payment date or, if that date is not a New York Stock Exchange trading day, the next preceding trading day. If net asset value exceeds the market price of Fund shares at such time, or if the Fund should declare an income dividend or capital gains distribution payable only in cash, the Plan Agent will, as agent for the participants, buy Fund shares in the open market, on the New York Stock Exchange or elsewhere, for the participants'accounts on, or shortly after, the payment date. If, before the Plan Agent has completed its purchases, the market price exceeds the net asset value of a Fund share, the average per share purchase price paid by the Plan Agent may exceed the net asset value of the Fund's shares, resulting in the acquisition of fewer shares than if the distribution had been paid in shares issued by the Fund on the dividend payment date. Because of the foregoing difficulty with respect to open-market purchases, the Plan provides that if the Plan Agent is unable to invest the full dividend amount in open-market purchases during the purchase period or if the market discount shifts to a market premium during the purchase period, the Plan Agent will cease making open-market purchases and will receive the uninvested portion of the dividend amount in newly issued shares at the close of business on the last purchase date. Participants have the option of making additional cash payments to the Plan Agent, annually, in any amount from $100 to $3,000, for investment in the Fund's Common Stock. The Plan Agent will use all such funds received from participants to purchase Fund shares in the open market on or about February 15. Any DIVIDENDS AND DISTRIBUTIONS; - (CONTINUED) THE ASIA TIGERS FUND, INC. DIVIDEND REINVESTMENT AND CASH PURCHASE PLAN voluntary cash payment received more than 30 days prior to this date will be returned by the Plan Agent, and interest will not be paid on any uninvested cash payment. To avoid unnecessary cash accumulations, and also to allow ample time for receipt and processing by the Plan Agent, it is suggested that participants send in voluntary cash payments to be received by the Plan Agent approximately ten days before an applicable purchase date specified above. A participant may withdraw a voluntary cash payment by written notice, if the notice is received by the Plan Agent not less than 48 hours before such payment is to be invested. The Plan Agent maintains all shareholder accounts in the Plan and furnishes written confirmations of all transactions in an account, including information needed by shareholders for personal and tax records. Shares in the account of each Plan participant will be held by the Plan Agent in the name of the participant, and each shareholder's proxy will include those shares purchased pursuant to the Plan. There is no charge to participants for reinvesting dividends or capital gains distributions or voluntary cash payments. The Plan Agent's fees for the reinvestment of dividends and capital gains distributions and voluntary cash payments will be paid by the Fund. There will be no brokerage charges with respect to shares issued directly by the Fund as a result of dividends or capital gains distributions payable either in stock or in cash. However, each participant will pay a pro rata share of brokerage commissions incurred with respect to the Plan Agent's open market purchases in connection with the reinvestment of dividends and capital gains distributions and voluntary cash payments made by the participant. Brokerage charges for purchasing small amounts of stock for individual accounts through the Plan are expected to be less than the usual brokerage charges for such transactions, because the Plan Agent will be purchasing stock for all participants in blocks and prorating the lower commission thus attainable. The receipt of dividends and distributions under the Plan will not relieve participants of any income tax that may be payable on such dividends or distributions. Experience under the Plan may indicate that changes in the Plan are desirable. Accordingly, the Fund and the Plan Agent reserve the right to terminate the Plan as applied to any voluntary cash payments made and any dividend or distribution paid subsequent to notice of the termination sent to members of the Plan at least 30 days before the record date for such dividend or distribution. The Plan also may be amended by the Fund or the Plan Agent, but (except when necessary or appropriate to comply with applicable law, rules or policies of a regulatory authority) only by at least 30 days' written notice to participants in the Plan. All correspondence concerning the Plan should be directed to the Plan Agent at 400 Bellevue Parkway, Wilmington, Delaware 19809. RESULTS OF THE ANNUAL SHAREHOLDERS MEETING THE ASIA TIGERS FUND, INC. The Fund held its annual shareholders meeting on February 23, 1996. At the meeting, shareholders elected each of the nominees proposed for election to the Fund's Board of Directors and ratified the selection of Price Waterhouse LLP as the independent accountants of the Fund for the year ending October 31, 1996. The following tables provide information concerning the matters voted on at the meeting: I. ELECTION OF DIRECTORS NOMINEE VOTES FOR VOTES ABSTAINED - - ------- --------- --------------- Leslie H. Gelb 15,319,038 386,869 II. RATIFICATION OF PRICE WATERHOUSE LLP AS THE INDEPENDENT ACCOUNTANTS OF THE FUND VOTES FOR VOTES AGAINST VOTES ABSTAINED - - ---------- ------------- --------------- 15,400,062 187,343 118,502
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