-----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, HLLtBQvxcM5gbUofQp/mNJjVbacLng7SOA12Zt6er/tkeAM6edmAICSq3u3s3Pq3 dB+lzgeXPMIaMh/7RbDfMQ== 0000912057-01-519180.txt : 20010611 0000912057-01-519180.hdr.sgml : 20010611 ACCESSION NUMBER: 0000912057-01-519180 CONFORMED SUBMISSION TYPE: N-30B-2 PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20010331 FILED AS OF DATE: 20010608 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MORGAN STANLEY DEAN WITTER INDIA INVESTMENT CENTRAL INDEX KEY: 0000916618 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 132838811 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30B-2 SEC ACT: SEC FILE NUMBER: 811-08238 FILM NUMBER: 1657006 BUSINESS ADDRESS: STREET 1: 1221 AVENUE OF THE AMERICAS CITY: BOSTON STATE: MA ZIP: 10020 BUSINESS PHONE: 6175578742 MAIL ADDRESS: STREET 1: 1221 AVENUE OF THE AMERICAS STREET 2: 8TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10020 FORMER COMPANY: FORMER CONFORMED NAME: MORGAN STANLEY INDIA INVESTMENT FUND INC DATE OF NAME CHANGE: 19940127 FORMER COMPANY: FORMER CONFORMED NAME: INDIA INVESTMENT FUND INC DATE OF NAME CHANGE: 19931228 N-30B-2 1 a2051214zn-30b_2.txt N-30B-2 MORGAN STANLEY INDIA INVESTMENT FUND, INC. DIRECTORS AND OFFICERS Barton M. Biggs CHAIRMAN OF THE BOARD OF DIRECTORS Ronald E. Robison PRESIDENT AND DIRECTOR John D. Barrett II DIRECTOR John S.Y. Chu DIRECTOR Gerard E. Jones DIRECTOR Graham E. Jones DIRECTOR R.M.J. Gerard La Hausse de La Louviere DIRECTOR John A. Levin DIRECTOR Andrew McNally IV DIRECTOR William G. Morton, Jr. DIRECTOR Samuel T. Reeves DIRECTOR Fergus Reid DIRECTOR Frederick O. Robertshaw DIRECTOR Stefanie V. Chang VICE PRESIDENT Arthur J. Lev VICE PRESIDENT Joseph P. Stadler VICE PRESIDENT Mary E. Mullin SECRETARY Belinda A. Brady TREASURER Robin L. Conkey ASSISTANT TREASURER INVESTMENT ADVISER Morgan Stanley Investment Management Inc. 1221 Avenue of the Americas New York, New York 10020 ADMINISTRATOR The Chase Manhattan Bank 73 Tremont Street Boston, Massachusetts 02108 CUSTODIAN The Chase Manhattan Bank 3 Chase MetroTech Center Brooklyn, New York 11245 SHAREHOLDER SERVICING AGENT American Stock Transfer & Trust company 40 Wall Street New York, New York 10005 (800) 278-4353 LEGAL COUNSEL Clifford Chance Rogers & Wells LLP 200 Park Avenue New York, New York 10166 INDEPENDENT AUDITORS Ernst & Young LLP 200 Clarendon Street Boston, Massachusetts 02116 For additional Fund information, including the Fund's net asset value per share and information regarding the investments comprising the Fund's portfolio, please call 1-800-221-6726 or visit our website at www.morganstanley.com/im. FIRST QUARTER REPORT MORGAN STANLEY INVESTMENT MANAGEMENT Morgan Stanley India Investment Fund, Inc. March 31, 2001 MORGAN STANLEY INVESTMENT MANAGEMENT INC. INVESTMENT ADVISER LETTER TO SHAREHOLDERS For the year ended March 31, 2001, the Morgan Stanley India Investment Fund, Inc. (the "Fund") had a total return, based on net asset value per share, of - -16.38% compared to -16.65% for the U.S. dollar adjusted Bombay Stock Exchange (BSE) National Index (the "Index"). For the period from the Fund's commencement of operations on February 25, 1994 through March 31, 2001, the Fund's total return, based on net asset value per share, was -4.36% compared to -43.72% for the Index. On March 31, 2001, the closing price of the Fund's shares on the New York Stock Exchange was $8.78, representing a 24.6% discount to the Fund's net asset value per share. The continued turbulence in global equity markets and some local negative developments dragged the broad Indian market down to levels not seen since May 1999 by the end of the first quarter. The speculative excesses of the past couple years, facilitated by the worldwide boom in TMT shares, were brutally washed out of the system. However, the selling frenzy extended beyond just clearing the excesses with local sentiment towards equities deteriorating markedly. Local investors, particularly at the retail level, were disillusioned by the rapid erosion in their equity market related wealth leading to both a capitulation and lack of buying interest regardless of price levels. A turn for the worse in the political situation added to the woes and overwhelmed the other positive reform initiatives announced by the government. On the policy front, the government did attempt to accelerate its privatization drive and also presented a growth-oriented budget centered on tax and interest rate cuts. Both fiscal and monetary policies moved in line with international trends to be growth-supportive as the data on the economic front suggested the economy here was also being adversely affected by the synchronized global slowdown. However, corporate profitability outside the tech sector did not show any meaningful corresponding drop, probably reflecting the continued productivity increases. The tech sector in India, which until even late last year seemed to bear no impact of the slump in global tech spending, finally did show signs of a marked deceleration in the growth profile. The debate is still live on whether the Indian tech sector can offset the drop in overall tech spending by increasing outsourcing, given the country's low-cost and low-base advantage. The bigger challenge though is for India to get its domestic act together and carry on with the reform momentum at a time when the risk appetite of investors is low. One of the main strategies of the Fund over the past few months has been to be underweight the tech sector and to keep the focus of the Fund on seeking to identify and owning well-run, high return on capital employed and reasonably valued companies. Accordingly, some of our large overweights in the Fund are HDFC Bank (India's largest private sector bank) and Cipla (one of the largest pharmaceutical companies). Following the carnage in the tech sector, we are also keenly examining any investment opportunities in that sector but still think caution is warranted. It usually takes a while for confidence to be rebuilt following the sort of devastating blow the sector has undertaken. Meanwhile, the Indian market is likely to continue keying off global trends though we do feel some of the more domestic-oriented companies are at levels that regardless of the international environment represent very good value. On most valuation parameters the Indian market is obviously cheap but at a time when psychology has come to dominate valuations it appears the market needs to go through a period of consolidation first to calm a lot of frayed nerves. On August 10, 1998, the Fund commenced a share repurchase program for purposes of enhancing shareholder value and reducing the discount at which the Fund's shares traded from their net asset value. For the three months ended March 31, 2001, there were no repurchases of Fund shares. Since the inception of the program, the Fund has repurchased 7,682,800 of its shares at an average discount of 31.03% from net asset value per share. The Fund expects to continue to repurchase its outstanding shares at such time and in such amounts as it believes will further the accomplishment of the foregoing objectives, subject to review by the Board of Directors. On March 29, 2001, the Fund completed a tender offer for its shares. The Fund accepted 8,407,288 shares for payment which represented 30% of the Fund's outstanding shares. Payment was made on April 12, 2001 at a price of $11.29 per share, representing 95% of the NAV per share of the Fund on March 29, 2001. As part of an ongoing global branding initiative, Morgan Stanley Dean Witter has changed its brand name to "Morgan Stanley." In connection with this change, the name of the Fund has been changed effective May 1, 2001, to Morgan Stanley India Investment Fund, Inc. The new name appears in this quarterly report and, beginning on May 21, 2001, will be shown in the financial press and on the Fund's website. In addition to the name change, the cover of this quarterly report introduces the new look of the Fund's financial reports to shareholders. The semi-annual report to shareholders dated June 30, 2001 will present the new look throughout the report. We appreciate your continued support. If you have any questions or comments on these changes, please contact us through our website, www.morganstanley.com/im, or call us at 1-800-221-6726. Sincerely, /s/ Ronald E. Robison Ronald E. Robison PRESIDENT AND DIRECTOR April 2001 THE INFORMATION CONTAINED IN THIS OVERVIEW REGARDING SPECIFIC SECURITIES IS FOR INFORMATIONAL PURPOSES ONLY AND SHOULD NOT BE CONSTRUED AS A RECOMMENDATION TO PURCHASE OR SELL THE SECURITIES MENTIONED. FOREIGN INVESTING INVOLVES CERTAIN RISKS, INCLUDING CURRENCY FLUCTUATIONS AND CONTROLS, RESTRICTIONS ON FOREIGN INVESTMENTS, LESS GOVERNMENTAL SUPERVISION AND REGULATION, LESS LIQUIDITY AND THE POTENTIAL FOR MARKET VOLATILITY AND POLITICAL INSTABILITY. 2 Morgan Stanley India Investment Fund, Inc. Investment Summary as of March 31, 2001 (Unaudited)
===================================================================================================================== HISTORICAL TOTAL RETURN (%) INFORMATION --------------------------------------------------------------------- MARKET VALUE (1) NET ASSET VALUE (2) INDEX (3) ---------------------- --------------------- -------------------- AVERAGE AVERAGE AVERAGE CUMULATIVE ANNUAL CUMULATIVE ANNUAL CUMULATIVE ANNUAL ---------- ------- ---------- ------- ----------- ------- YEAR TO DATE -20.63% -- -16.38% -- -16.65% -- ONE YEAR -24.02 -24.02% -37.28 -37.28% -45.46 -45.46% FIVE YEAR -9.94 -2.07 28.10 5.08 -20.11 -4.39 SINCE INCEPTION* -27.86 -4.50 -4.36 -0.63 -43.72 -7.79 PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. =====================================================================================================================
RETURNS AND PER SHARE INFORMATION [CHART]
YEAR ENDED DECEMBER 31, THREE MONTHS ENDED MARCH 31, 1994* 1995 1996 1997 1998 1999 2000 2001 ------ ------ ------ ------ ------ ------ ------ ------------ Net Asset Value Per Share $13.99 $ 8.91 $ 8.81 $8.83 $ 9.19 $ 22.59 $ 13.92 $ 11.64 Market Value Per Share $11.25 $ 9.13 $ 9.50 $8.38 $ 6.75 $ 16.50 $ 11.06 $ 8.78 Premium/(Discount) -19.6% 2.5% 7.8% -5.1% -26.6% -27.0% -20.5% -24.6% Capital Gains $ 0.17 -- -- -- -- -- $ 1.60 -- Distributions Fund Total Return (2) 0.72% -36.31% -1.12% 0.23% 4.08% 145.81% -29.68% -16.38% Index Total Return (3) -7.88% -31.53% -6.49% 6.43% -20.98% 88.41% -27.73% -16.65%
(1) Assumes dividends and distributions, if any, were reinvested. (2) Total investment return based on net asset value per share reflects the effects of changes in net asset value on the performance of the Fund during each period, and assumes dividends and distributions, if any, were reinvested. These percentages are not an indication of the performance of a shareholder's investment in the Fund based on market value due to differences between the market price of the stock and the net asset value per share of the Fund. (3) The Bombay Stock Exchange (BSE) National Index is a market capitalization weighted index including the equity shares of 100 companies from the "Specified" and the "Non-specified" list of the 5 major stock exchanges, namely, Bombay, Calcutta, Delhi, Ahmedabad and Madras, expressed in U.S. dollar terms. * The Fund commenced operations on February 25, 1994. 3 Morgan Stanley India Investment Fund, Inc. Portfolio Summary as of March 31, 2001 (Unaudited) =============================================================================== ALLOCATION OF TOTAL INVESTMENTS [CHART] Short-Term Investments (17.6%) Equity Securities (82.4%) =============================================================================== INDUSTRIES [CHART] Other (29.0%) Machinery (3.5%) Road & Rail (4.2%) Oil & Gas (4.2%) Diversified Financials (5.3%) Chemicals (5.9%) Food Products (6.1%) Banks (7.5%) Automobiles (9.5%) Pharmaceuticals (10.4%) IT Consulting & Services (14.4%) =============================================================================== TEN LARGEST HOLDINGS*
PERCENT OF NET ASSETS ---------- 1. Infosys Technologies Ltd. 8.1% 2. Hero Honda Motors Ltd. 7.6 3. Housing Development Finance Corp., Ltd. 5.1 4. Wipro Ltd. 4.4 5. Container Corp. of India Ltd. 4.2 6. State Bank of India Ltd. 4.0 7. Cipla Ltd. 4.0 8. HDFC Bank Ltd. 3.5 9. Bharat Heavy Electricals Ltd. 2.6 10. Dabur India Ltd. 2.4 ------ 44.7% ======
* Excludes short-term investments. 4 INVESTMENTS (UNAUDITED) MARCH 31, 2001
VALUE SHARES (000) - ------------------------------------------------------------------------------------------ COMMON STOCKS (94.4%) (Unless otherwise noted) - ------------------------------------------------------------------------------------------ AUTO COMPONENTS (2.5%) Apollo Tyres Ltd. 2,075 U.S.$ 2 Motherson Sumi Systems Ltd. 600 2 Motor Industries Co., Ltd. 24,204 1,397 MRF Ltd. 138,230 2,330 Rane (Madras) Ltd. 213,100 128 Sundaram Fasteners Ltd. 421,280 1,894 ------------ 5,753 ------------ - ------------------------------------------------------------------------------------------ AUTOMOBILES (9.5%) Hero Honda Motors Ltd. 5,778,025 17,361 Patheja Forgings & Auto Parts Ltd. 450,000 --@ Tata Engineering & Locomotive Co., Ltd. 3,002,440 4,181 TVS Suzuki Ltd. 28,532 84 ------------ 21,626 ------------ - ------------------------------------------------------------------------------------------ BANKS (7.5%) HDFC Bank Ltd. 1,603,012 7,893 State Bank of India Ltd. 2,153,553 9,233 ------------ 17,126 ------------ - ------------------------------------------------------------------------------------------ BROADCASTING & CABLE TV (0.0%) Television Eighteen India Ltd. 31,885 86 ------------ - ------------------------------------------------------------------------------------------ CHEMICALS (5.9%) Asian Paints (India) Ltd. 721,780 3,804 Aventis Cropscience India Ltd. 557,060 1,324 Colour-Chem Ltd. 646,020 737 ICI (India) Ltd. 25,000 33 Indo Gulf Corp., Ltd. 3,454,545 2,555 Monsanto India Ltd. 29,635 454 Reliance Industries Ltd. 533,000 4,461 ------------ 13,368 ------------ - ------------------------------------------------------------------------------------------ COMMERCIAL SERVICES & SUPPLIES (0.4%) Modi Xerox Ltd. 718,225 901 ------------ - ------------------------------------------------------------------------------------------ COMMUNICATIONS EQUIPMENT (0.0%) MRO-TEK Ltd. 179,625 96 ------------ - ------------------------------------------------------------------------------------------ CONSTRUCTION MATERIALS (1.9%) Gujarat Ambuja Cements Ltd. 1,155,211 3,811 India Cements Ltd. 810,000 642 ------------ 4,453 ------------ - ------------------------------------------------------------------------------------------ DIVERSIFIED FINANCIALS (5.3%) Housing Development Finance Corp., Ltd. 1,007,076 11,747 Tata Finance Ltd. 355,000 305 UTI Mastergain 1,600 --@ ------------ 12,052 ------------ - ------------------------------------------------------------------------------------------ DIVERSIFIED TELECOMMUNICATION SERVICES (1.5%) Mahanagar Telephone Nigam Ltd. 903,000 2,558 Videsh Sanchar Nigam Ltd. 129,000 806 Videsh Sanchar Nigam Ltd., ADR 8,000 95 ------------ 3,459 ------------ - ------------------------------------------------------------------------------------------ ELECTRIC UTILITIES (2.0%) BSES Ltd. 395,000 1,588 Tata Power Co., Ltd. 1,392,933 2,957 ------------ 4,545 ------------ - ------------------------------------------------------------------------------------------ ELECTRICAL EQUIPMENT (2.6%) Bharat Heavy Electricals Ltd. 1,968,226 5,983 ------------ - ------------------------------------------------------------------------------------------ ELECTRONIC EQUIPMENT & INSTRUMENTS (0.7%) Siemens India Ltd. 311,825 1,642 ------------ - ------------------------------------------------------------------------------------------ FOOD PRODUCTS (6.1%) Britannia Industries Ltd. 314,132 4,641 Nestle India Ltd. 151,575 1,642 SmithKline Beecham Consumer Healthcare Ltd. 489,855 3,874 Syngenta India Pvt Ltd. 250,530 351 Tata Tea Ltd. 640,610 3,209 Tata Tea Ltd., GDR 25,000 125 ------------ 13,842 ------------ - ------------------------------------------------------------------------------------------ HEALTH CARE BIOTECHNOLOGY (1.1%) Shantha Biotechnics Pvt Ltd. 500,000 2,408 ------------ - ------------------------------------------------------------------------------------------ HOTELS RESTAURANTS & LEISURE (1.5%) Indian Hotels Co., Ltd. 637,254 3,475 ------------ - ------------------------------------------------------------------------------------------ HOUSEHOLD DURABLES (0.4%) Carrier Aircon Ltd. 479,019 695 Samtel Colour Ltd. 559,300 284 ------------ 979 ------------ - ------------------------------------------------------------------------------------------ HOUSEHOLD PRODUCTS (3.2%) Colgate-Palmolive (India) Ltd. 698,468 2,310 Hindustan Lever Ltd. 608,897 2,852 Reckitt Benckiser (India) Ltd. 478,366 2,082 ------------ 7,244 ------------ - ------------------------------------------------------------------------------------------ INTERNET SOFTWARE & SERVICES (0.1%) India-Info.com PCL 532,875 228 ------------ - ------------------------------------------------------------------------------------------ IT CONSULTING & SERVICES (14.4%) HCL Technologies Ltd 280,554 2,215 Infosys Technologies Ltd. 210,745 18,421 SSI Ltd. 102,000 1,638 Subex Systems Ltd. 353,968 527 Wipro Ltd. 93,900 2,682 Wipro Ltd., ADR 229,260 7,359 ------------ 32,842 ------------ - ------------------------------------------------------------------------------------------
5
VALUE SHARES (000) - ------------------------------------------------------------------------------------------ LEISURE EQUIPMENT & PRODUCTS (0.7%) Titan Industries Ltd. 1,812,262 U.S.$ 1,612 ------------ - ------------------------------------------------------------------------------------------ MACHINERY (3.5%) Alfa-Laval (India) Ltd. 454,515 1,319 Atlas Copco (India) Ltd. 113,837 200 Cummins India Ltd. 3,346,873 4,156 Lakshmi Synthetic Machinery Manufacturers Ltd. 137,700 12 Punjab Tractors Ltd. 229,094 1,040 Revathi-CP Equipment Ltd. 277,750 833 Thermax India Ltd 286,687 355 ------------ 7,915 ------------ - ------------------------------------------------------------------------------------------ MEDIA (1.0%) Creative Eye Ltd. 1,200,000 468 New Delhi Television Ltd. 333,300 963 Zee Telefilms Ltd. 288,919 752 ------------ 2,183 ------------ - ------------------------------------------------------------------------------------------ METALS & MINING (1.1%) Tata Iron & Steel Co., Ltd. 996,000 2,609 ------------ - ------------------------------------------------------------------------------------------ OIL & GAS (4.2%) Bharat Petroleum Corp., Ltd. 747,738 3,051 Castrol (India) Ltd. 444,434 2,187 Hindustan Petroleum Corp., Ltd. 1,299,211 4,467 ------------ 9,705 ------------ - ------------------------------------------------------------------------------------------ PERSONAL PRODUCTS (0.5%) Procter & Gamble Hygiene and Health Care Ltd. 87,026 1,055 ------------ - ------------------------------------------------------------------------------------------ PHARMACEUTICALS (10.4%) Aurobindo Pharmaceuticals Ltd. 103,781 655 Cipla Ltd. 426,885 9,128 Dabur India Ltd. 4,123,567 5,376 E. Merck (India) Ltd. 182,599 1,822 Glenmark Pharmaceuticals Ltd. 89,343 229 Hoechst Marion Roussel Ltd. 150,425 1,465 Lupin Laboratories Ltd. 349,495 1,151 Novartis India Ltd. 243,065 1,404 Parke Davis (India) Ltd. 92,100 305 Pfizer Ltd. 90,247 1,082 Strides Arcolab Ltd. 585,000 1,215 ------------ 23,832 ------------ - ------------------------------------------------------------------------------------------ ROAD & RAIL (4.2%) Container Corp. of India Ltd. 3,167,922 9,641 ------------ - ------------------------------------------------------------------------------------------ SOFTWARE (1.0%) Hughes Software Systems Ltd. 114,000 1,586 Polaris Software Lab Ltd. 64,616 346 VisualSoft Technologies Ltd. 67,360 322 ------------ 2,254 ------------ - ------------------------------------------------------------------------------------------ TEXTILES & APPAREL (0.0%) Bata India Ltd. 3 -- @ Delta International Ltd. 570,000 -- @ Mahavir Spinning Mills Ltd. 10,000 10 ------------ 10 ------------ - ------------------------------------------------------------------------------------------ TOBACCO (1.2%) ITC Ltd. 159,341 2,778 ------------ - ------------------------------------------------------------------------------------------ TOTAL COMMON STOCKS (Cost U.S.$286,921) 215,702 ------------ - ------------------------------------------------------------------------------------------ FACE AMOUNT (000) - ------------------------------------------------------------------------------------------ SHORT-TERM INVESTMENTS (19.5%) - ------------------------------------------------------------------------------------------ REPURCHASE AGREEMENT (19.5%) (a) Chase Securities, Inc., 4.90% dated 03/30/01, due 04/02/01 (Cost U.S.$44,495) U.S.$ 44,495 44,495 ------------ - ------------------------------------------------------------------------------------------ FOREIGN CURRENCY ON DEPOSIT WITH CUSTODIAN (0.7%) Indian Rupee (Cost U.S.$1,637) INR 73,155 1,566 ------------ - ------------------------------------------------------------------------------------------ TOTAL INVESTMENTS (114.6%) (Cost $333,053) U.S.$ 117,650 261,763 ------------ - ------------------------------------------------------------------------------------------ OTHER ASSETS AND LIABILITIES (-14.6%) Other Assets 106,966 Liabilities (140,312) (33,346) ------------ ------------ - ------------------------------------------------------------------------------------------ NET ASSETS (100%) Applicable to 19,617,004, issued and outstanding U.S.$0.01 par value shares (100,000,000 shares authorized) U.S.$228,417 ============ - ------------------------------------------------------------------------------------------ NET ASSET VALUE PER SHARE U.S.$ 11.64 ============ - ------------------------------------------------------------------------------------------
(a) -- The repurchase agreement is fully collateralized by U.S. government and/or agency obligations based on market prices at the date of this schedule of investments. The investment in the repurchase agreement is through participation in a joint account with affiliated funds. @ -- Value is less than U.S.$500. March 31, 2001 exchange rate - Indian Rupee (INR) 46.615= U.S.$ 1.00. 6 -----END PRIVACY-ENHANCED MESSAGE-----