FIRST QUARTER REPORT
MARCH 31, 2002
[MORGAN STANLEY LOGO]
MORGAN STANLEY EMERGING
MARKETS FUND, INC.
MORGAN STANLEY
INVESTMENT MANAGEMENT INC.
INVESTMENT ADVISER
MORGAN STANLEY EMERGING MARKETS FUND, INC.
DIRECTORS AND OFFICERS
Barton M. Biggs William G. Morton, Jr.
CHAIRMAN OF THE DIRECTOR
BOARD OF DIRECTORS
Michael Nugent
Ronald E. Robison DIRECTOR
PRESIDENT AND DIRECTOR
Fergus Reid
John D. Barrett Ii DIRECTOR
DIRECTOR
Stefanie V. Chang
Thomas P. Gerrity VICE PRESIDENT
DIRECTOR
Lorraine Truten
Gerard E. Jones VICE PRESIDENT
DIRECTOR
James W. Garrett
Joseph J. Kearns TREASURER
DIRECTOR
Mary E. Mullin
Vincent R. McLean SECRETARY
DIRECTOR
Belinda A. Brady
C. Oscar Morong, Jr. ASSISTANT TREASURER
DIRECTOR
INVESTMENT ADVISER
Morgan Stanley Investment Management Inc.
1221 Avenue of the Americas
New York, New York 10020
ADMINISTRATOR
JPMorgan Chase Bank
73 Tremont Street
Boston, Massachusetts 02108
CUSTODIAN
JPMorgan Chase 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.
MORGAN STANLEY EMERGING MARKETS FUND, INC.
OVERVIEW
LETTER TO SHAREHOLDERS
For the three months ended March 31, 2002, the Morgan Stanley Emerging Markets
Fund, Inc. (the "Fund") had a total return, based on net asset value per share,
of 13.11% compared with 11.34% for the Morgan Stanley Capital International
(MSCI) Emerging Markets Free Net Index. On March 31, 2002, the closing price of
the Fund's shares on the New York Stock Exchange was $10.42, representing a
15.9% discount to the Fund's net asset value per share.
MARKET REVIEW
Overall, country and stock selection were both positive contributors. Argentina,
South Africa, Israel, South Korea and India were the primary contributors to
relative performance. Stock selection in South Africa, Israel and India
contributed positively to performance while selection in Russia, Brazil and
Mexico detracted from performance. On a country allocation basis our underweight
position in Argentina and Chile coupled with our overweight stance in South
Korea and Indonesia contributed positively to performance.
Global Emerging Market equities continued to outperform other asset classes
posting a relatively strong 11.3% return during the first quarter of 2002
despite continued weakness in developed international markets. Quarter to date,
the Emerging Markets have outperformed both the developed international markets
(MSCI EAFE) and the S&P 500 returning 0.5% and 0.3%, respectively.
Overall, Emerging Markets performance was supported by increasing evidence of a
U.S. led economic recovery and positive economic data from select emerging
market countries. The U.S. economy expanded by a better than expected 1.7%
during the fourth quarter, reflecting stronger consumer demand and the largest
government spending increase in recent history. A recent stream of figures,
including data from the U.S. manufacturing and housing sector, have supported
expectations that the U.S. economy is starting a broad based recovery from last
year's mild recession.
South Korea (+29.3%), Mexico (+17.3%), Taiwan (+8.6%) and Brazil (+7.1%) led
Emerging Markets higher. South Korea, led by cyclical sectors such as
information technology (+37.9%), consumer discretionary (+61.3%) and materials
(+29.8%), continued to dominate Emerging Market performance due to improving
corporate and economic fundamentals, Moody's credit upgrade and more importantly
the improved prospects of a U.S. led economic recovery. Taiwan, led by
export-oriented stocks such as semi-conductors and chemicals, weathered weakness
during the beginning of the year to rebound on improved foreign and domestic
investment inflows. Mexico weathered concerns regarding the U.S. equity markets
to return +17.3% in the first quarter of 2002 after gaining 18.4% in 2001. The
market continued to be supported by the U.S. convergence story, strong Peso and
the upgrade to investment grade by credit agencies Fitch and S&P. Brazil was
supported by local currency strength, an unexpected Central Bank rate cut (first
in more than a year), positive political developments and Moody's upgrade of the
country's credit rating outlook to positive.
In terms of portfolio positioning during the quarter, no major allocation
changes were made. However, after a strong outperformance due to Rand weakness,
we reduced our South African material sector overweight. Near-term expectations
are for the Rand to stabilize and potentially strengthen reducing the
competitive position of stocks within the material sector. We reduced our
exposure to companies within the Mexican wireless industry in favor of fixed
line telecom stocks given relative valuations.
MARKET OUTLOOK
Emerging Market equities have rallied sharply (up nearly 50%) from an
undervalued and oversold extreme on Sept. 21st, 2002. This strong and quick
performance may lead to a consolidation phase in the near-term as market
participants' question the robustness of second half growth, particularly in the
U.S. Medium-term fundamentals, however, are intact. We believe that strong
liquidity, cheap valuations and corporate restructuring should continue to
support earnings growth and select markets within the Emerging Markets universe.
Although the cyclical recovery now underway may turn out to be less strong than
the market believes, there will be pockets of opportunity. We are focusing on
earnings visibility as a driver of medium-term returns.
OTHER DEVELOPMENTS
On July 30, 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, 2002,
the Fund repurchased 129,520 of its shares at an average discount of 16.19% from
net asset value per share. Since the inception of the program, the Fund has
repurchased 4,114,260 of its shares at an average discount of 20.48% 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.
Sincerely,
/s/ Ronald E. Robison
Ronald E. Robison
President and Director
April 2002
2
MORGAN STANLEY EMERGING MARKETS FUND, INC.
MARCH 31, 2002
INVESTMENT SUMMARY
Historical Information (Unaudited)
TOTAL RETURN (%)
---------------------------------------------------------------------------
MARKET VALUE(1) NET ASSET VALUE(2) INDEX(3)
---------------------------------------------------------------------------
AVERAGE AVERAGE AVERAGE
CUMULATIVE ANNUAL CUMULATIVE ANNUAL CUMULATIVE ANNUAL
--------------------------------------------------------------------------------------------
Year to Date 20.74% -- 13.11% -- 11.34% --
One Year 25.09 25.09% 19.25 19.25% 14.74 14.74%
Five Year -2.47 -0.50 2.05 0.41 -24.01 -5.34
Ten Year 61.67 4.92 97.42 7.04 24.13 2.19
Since Inception* 105.52 7.16 138.25 8.70 63.88 4.86
Past performance is not predictive of future performance.
[CHART]
MORGAN STANLEY EMERGING MSCI EMERGING MARKETS FREE
MARKETS FUND, INC.(2) NET INDEX(3)
1992 13.94% 11.40%
1993 95.22%+ 74.84%
1994 -5.33% -7.32%
1995 -16.30%+ -5.21%
1996 13.84% 6.03%
1997 -0.97% -11.59%
1998 -19.61% -25.34%
1999 105.81% 66.48%
2000 -36.74% -30.97%
2001 -3.17% -2.62%
2002 13.11% 11.34%
Returns and Per Share Information
THREE
MONTHS
ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
--------------------------------------------------------------------------------------------------------
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
------------------------------------------------------------------------------------------------------------------------------------
Net Asset Value Per Share $ 16.74 $ 28.20 $ 20.30 $ 14.69 $ 15.69 $ 15.52 $ 10.33 $ 21.26 $ 11.03 $ 10.68 $12.08
------------------------------------------------------------------------------------------------------------------------------------
Market Value Per Share $ 18.13 $ 31.63 $ 21.50 $ 15.50 $ 13.88 $ 13.06 $ 8.13 $ 16.31 $ 8.75 $ 8.63 $10.42
------------------------------------------------------------------------------------------------------------------------------------
Premium/(Discount) 8.3% 12.2% 5.9% 5.5% -11.5% -15.9% -21.3% -23.3% -20.7% -19.2% -15.9%
------------------------------------------------------------------------------------------------------------------------------------
Income Dividends $ 0.01 -- -- -- $ 0.05 $ 0.01 $ 0.11 -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Capital Gains Distributions $ 0.01 $ 1.49 $ 6.50 $ 1.29 $ 0.98 $ 0.01 $ 2.18 -- $ 2.31 -- --
------------------------------------------------------------------------------------------------------------------------------------
Fund Total Return(2) 13.94% 95.22%+ -5.33% -16.30%+ 13.84% -0.97% -19.61% 105.81% -36.74% -3.17% 13.11%
------------------------------------------------------------------------------------------------------------------------------------
Index Total Return(3) 11.40% 74.84% -7.32% -5.21% 6.03% -11.59% -25.34% 66.48% -30.97% -2.62% 11.34%
------------------------------------------------------------------------------------------------------------------------------------
(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 Morgan Stanley Capital International Emerging Markets Free Net Index is
a market capitalization weighted index comprised of companies that are
representative of the market structure of developing countries in Latin
America, Asia, Eastern Europe, the Middle East and Africa. Dividends are
assumed to be reinvested after deduction of withholding tax, applying the
rate applicable to non-resident individuals who do not benefit from double
taxation treaties.
* The Fund commenced operations on November 1, 1991.
+ This return does not include the effect of the rights issued in connection
with the rights offering.
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. IN ADDITION, INVESTING IN EMERGING
MARKETS MAY INVOLVE A RELATIVE HIGHER DEGREE OF VOLATILITY.
3
MORGAN STANLEY EMERGING MARKETS FUND, INC.
MARCH 31, 2002
PORTFOLIO SUMMARY
Allocation of Total Investments
[CHART]
Equity Securities 98.0%
Short-Term Investments 2.0%
Industries
[CHART]
Banks 13.3%
Semiconductor Equipment & Products 13.2
Metals & Mining 9.4
Wireless Telecommunication Services 7.4
Diversified Telecommunication Services 7.0
Oil & Gas 4.9
Electric Utilities 3.8
Household Durables 2.7
Pharmaceuticals 2.7
Beverages 2.5
Other 33.1
Country Weightings
[CHART]
South Korea 22.7%
Taiwan 13.3
Mexico 11.3
South Africa 9.0
Brazil 8.6
India 6.2
China/Hong Kong 5.5
Russia 5.2
Malaysia 3.5
Israel 2.8
Other 11.9
Ten Largest Holdings*
PERCENT OF
NET ASSETS
--------------------------------------------------------------------
1. Samsung Electronics Co., Ltd. (South Korea) 6.4%
2. Taiwan Semiconductor Manufacturing Co., Ltd. (Taiwan) 3.8
3. Telmex (Mexico) 3.5
4. Anglo American plc (South Africa) 3.3
5. Petrobras SA (Brazil) 2.3
6. SK Telecom Co., Ltd. (South Korea) 2.2%
7. China Mobile (Hong Kong) Ltd. (China/Hong Kong) 2.2
8. United Microelectronics Corp. (Taiwan) 1.9
9. Unified Energy Systems (Russia) 1.8
10. Kookmin Bank (South Korea) 1.6
----
29.0%
====
* Excludes short-term investments
4
MORGAN STANLEY EMERGING MARKETS FUND, INC.
FINANCIAL STATEMENTS
MARCH 31, 2002 (UNAUDITED)
STATEMENT OF NET ASSETS
VALUE
SHARES (000)
--------------------------------------------------------------------------------
COMMON STOCKS (97.4%)
(UNLESS OTHERWISE NOTED)
================================================================================
BRAZIL (8.6%)
AEROSPACE & DEFENSE
Embraer ADR 19,401 $ 391
Empresa Brasileira de
Aeronautica SA ADR 2,757 56
--------------------------------------------------------------------------------
447
--------------------------------------------------------------------------------
BANKS
Banco Bradesco
(Preferred) 68,995,143 421
Banco Brandesco SA 15,756 477
Banco Itau SA (Preferred) 19,348,000 1,556
Banco Itau SA ADR 3,360 135
Banco Nacional SA
(Preferred) 61,598,720(b) --@
Unibanco SA (Preferred)
GDR 29,185 713
--------------------------------------------------------------------------------
3,302
--------------------------------------------------------------------------------
BEVERAGES
Companhia de Bebidas das
Americas 1,346,000 262
Companhia de Bebidas das
Americas ADR 68,860 1,344
--------------------------------------------------------------------------------
1,606
--------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES
Brasil Telecom
Participacoes SA
(Preferred) 62,441,445 497
Brasil Telecom
Participacoes SA
(Preferred) ADR 1,612 64
Brasil Telecom SA
(Preferred) 8,331,048 47
Embratel SA
(Preferred) 59,379,000 194
Tele Norte Leste
Participacoes SA
(Preferred) ADR 31,000 389
Telebras SA (Preferred) ADR 2,800 93
Telemar Norte Leste SA 17,397,000 374
--------------------------------------------------------------------------------
1,658
--------------------------------------------------------------------------------
ELECTRIC UTILITIES
Cemig SA
(Preferred) 47,208,127 $ 701
Cemig SA ADR 36,663 546
Eletrobras 18,074,000 302
Eletrobras (Preferred) 'B' 63,551,000 938
Eletrobras (Preferred) ADR 20,900 154
--------------------------------------------------------------------------------
2,641
--------------------------------------------------------------------------------
METALS & MINING
CIA Vale de Rio Doce ADR 12,600 345
CVRD (Preferred) 'A' 38,351 1,011
CVRD (Preferred) ADR 52,662 1,396
--------------------------------------------------------------------------------
2,752
--------------------------------------------------------------------------------
MULTILINE RETAIL
Lojas Arapua SA (Preferred) 30,412,000(b) --@
Lojas Arapua SA (Preferred) ADR 31,540(b) --@
--------------------------------------------------------------------------------
--@
--------------------------------------------------------------------------------
OIL & GAS
Petrobras 3,900 103
Petrobras SA
(Preferred) 86,103 2,135
Petrobras SA (Preferred)
ADR 46,070 1,148
Petrobras SA ADR 71,630 1,896
--------------------------------------------------------------------------------
5,282
--------------------------------------------------------------------------------
PAPER & FOREST PRODUCTS
Votorantim Celulose e
Papel SA ADR 32,300 605
--------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES
Celular CRT (Preferred) 'A' 3,612,547 723
Tele Celular Sul ADR 6,432 86
Telemig Celular SA ADR 1,873 53
Telesp Celular SA ADR 13,733 87
Telesp Celular SA (Preferred) 'B' 60,534,935 150
--------------------------------------------------------------------------------
1,099
--------------------------------------------------------------------------------
19,392
================================================================================
CHILE (0.4%)
DIVERSIFIED TELECOMMUNICATION SERVICES
Telefonica CTC Chile ADR 49,740 744
--------------------------------------------------------------------------------
ELECTRIC UTILITIES
Enersis SA ADR 12,900 117
--------------------------------------------------------------------------------
861
================================================================================
5
MORGAN STANLEY EMERGING MARKETS FUND, INC.
FINANCIAL STATEMENTS
MARCH 31, 2002 (UNAUDITED)
STATEMENT OF NET ASSETS
VALUE
SHARES (000)
--------------------------------------------------------------------------------
CHINA/HONG KONG (5.5%)
AIRLINES
Beijing Capital International
Airport Co., Ltd. 813,000 $ 198
China Eastern Airlines- H
Shares 2,518,000 346
--------------------------------------------------------------------------------
544
--------------------------------------------------------------------------------
CHEMICALS
Sinopec Shanghai
Petrochemical Co., Ltd.-
H Shares 3,104,000 422
--------------------------------------------------------------------------------
COMPUTERS & PERIPHERALS
Legend Holdings Ltd. 1,042,000 451
--------------------------------------------------------------------------------
ELECTRIC UTILITIES
Huaneng Power
International, Inc., 'H' 902,000 601
--------------------------------------------------------------------------------
FOOD PRODUCTS
People's Food Holdings Ltd. 1,131,000 574
--------------------------------------------------------------------------------
INDUSTRIAL CONGLOMERATES
China Merchants Holdings
International Co., Ltd. 533,000 420
Citic Pacific Ltd. 239,000 497
Shanghai Industrial
Holdings Ltd. 212,000 428
--------------------------------------------------------------------------------
1,345
--------------------------------------------------------------------------------
MEDIA
MediaNation, Inc. 930,000 244
--------------------------------------------------------------------------------
METALS & MINING
Aluminum Corporation of
China Ltd. 2,822,000 637
--------------------------------------------------------------------------------
OIL & GAS
CNOOC Ltd. 1,227,000 1,526
PetroChina Company Ltd. 2,892,000 597
--------------------------------------------------------------------------------
2,123
--------------------------------------------------------------------------------
SOFTWARE
Travelsky Technology Ltd. 538,000 410
--------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES
China Mobile (Hong Kong)
Ltd. ADR 1,635,000 5,052
--------------------------------------------------------------------------------
12,403
================================================================================
HUNGARY (2.0%)
BANKS
OTP Bank Rt. 191,860 1,476
OTP Bank Rt. GDR 37,000 579
--------------------------------------------------------------------------------
2,055
--------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES
Matav Rt. 100,736 $ 350
Matav Rt. ADR 23,699 414
--------------------------------------------------------------------------------
764
--------------------------------------------------------------------------------
INTEGRATED OIL & GAS
MOL Magyar Olaj-es
Gazipari Rt. 25,357 449
MOL Magyar Olaj-es
Gazipari Rt. GDR 710 13
--------------------------------------------------------------------------------
462
--------------------------------------------------------------------------------
PHARMACEUTICALS
Gedeon Richter Rt. 13,748 883
Gedeon Richter Rt. GDR 6,273 401
--------------------------------------------------------------------------------
1,284
--------------------------------------------------------------------------------
4,565
================================================================================
INDIA (5.8%)
AUTOMOBILES
Hero Honda Motors Ltd. 164,300 1,124
--------------------------------------------------------------------------------
BANKS
HDFC Bank Ltd. 46,700 225
HDFC Bank Ltd. ADR 23,700 364
State Bank of India Ltd. 246,550 1,111
State Bank of India Ltd. GDR 2,700 33
--------------------------------------------------------------------------------
1,733
--------------------------------------------------------------------------------
CHEMICALS
Reliance Industries
Ltd. 54,933 338
--------------------------------------------------------------------------------
CONSTRUCTION MATERIALS
Gujarat Ambuja Cements
Ltd. 100,500 413
--------------------------------------------------------------------------------
DIVERSIFIED FINANCIALS
Housing Development
Finance Corp., Ltd. 43,210 607
Housing Development
Finance Corp., Ltd. ADR 90 1
--------------------------------------------------------------------------------
608
--------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES
Bharti Tele-Ventures
Ltd. 221,000 174
Mahanagar Telephone
Nigam Ltd. 176,430 533
Mahanagar Telephone
Nigam Ltd. GDR 11,800 70
--------------------------------------------------------------------------------
777
--------------------------------------------------------------------------------
ELECTRIC UTILITIES
Tata Power Co., Ltd. 51,514 120
--------------------------------------------------------------------------------
6
MORGAN STANLEY EMERGING MARKETS FUND, INC.
FINANCIAL STATEMENTS
MARCH 31, 2002 (UNAUDITED)
STATEMENT OF NET ASSETS
VALUE
SHARES (000)
--------------------------------------------------------------------------------
INDIA (CONTINUED)
ELECTRICAL EQUIPMENT
Bharat Heavy Electricals
Ltd. 140,700 $ 487
--------------------------------------------------------------------------------
HOUSEHOLD PRODUCTS
Colgate-Palmolive (India)
Ltd. 73,190 211
Hindustan Lever Ltd. 267,000 1,234
--------------------------------------------------------------------------------
1,445
--------------------------------------------------------------------------------
INTERNET SOFTWARE & SERVICES
India Info.com PCL 116,052(b) --@
--------------------------------------------------------------------------------
IT CONSULTING & SERVICES
Infosys Technologies Ltd. 12,200 934
Wipro Ltd. 7,500 262
Wipro Ltd. ADR 6,000 223
--------------------------------------------------------------------------------
1,419
--------------------------------------------------------------------------------
MEDIA
Zee Telefilms Ltd. 79,600 274
--------------------------------------------------------------------------------
METALS & MINING
Hindalco Industries
Ltd. 28,100 444
Tata Iron & Steel Co., Ltd. 214,000 428
--------------------------------------------------------------------------------
872
--------------------------------------------------------------------------------
OIL & GAS
Bharat Petroleum Corp., Ltd. 72,850 493
Hindustan Petroleum Corp., Ltd. 89,500 533
--------------------------------------------------------------------------------
1,026
--------------------------------------------------------------------------------
PHARMACEUTICALS
Cipla Ltd. 18,050 377
Dabur India Ltd. 134,000 153
Dr. Reddy's Laboratories
Ltd. 24,500 551
Ranbaxy Laboratories Ltd. 34,500 621
--------------------------------------------------------------------------------
1,702
--------------------------------------------------------------------------------
ROAD & RAIL
Container Corporation of
India Ltd. 107,600 550
--------------------------------------------------------------------------------
TOBACCO
ITC Ltd. 8,800 126
ITC Ltd. GDR 14,750 219
--------------------------------------------------------------------------------
345
--------------------------------------------------------------------------------
13,233
================================================================================
INDONESIA (1.9%)
AUTOMOBILES
PT Astra International Tbk 3,054,000 793
--------------------------------------------------------------------------------
BANKS
PT Bank Central Asia Tbk 2,640,500 692
--------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES
PT Telekomunikasi Indonesia 3,058,500 $ 1,268
--------------------------------------------------------------------------------
TOBACCO
PT Hanjaya Mandala
Sampoerna Tbk 3,580,000 1,649
--------------------------------------------------------------------------------
4,402
================================================================================
ISRAEL (2.8%)
AEROSPACE & DEFENSE
Elbit Systems Ltd. 1 --@
--------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT
ECI Telecom Ltd. 180,332 734
--------------------------------------------------------------------------------
INTERNET SOFTWARE & SERVICES
RADVision Ltd. 56,814 389
RADWARE Ltd. 31,391 360
--------------------------------------------------------------------------------
749
--------------------------------------------------------------------------------
IT CONSULTING & SERVICES
Check Point Software
Technologies Ltd. 29,300 891
--------------------------------------------------------------------------------
PHARMACEUTICALS
Taro Pharmaceutical
Industries, Ltd. 6,100 173
Teva Pharmaceutical
Industries Ltd. 12,420 686
Teva Pharmaceutical
Industries Ltd. ADR 36,833 2,014
--------------------------------------------------------------------------------
2,873
--------------------------------------------------------------------------------
SOFTWARE
TTI Team Telecom
International Ltd. 35,737 1,025
--------------------------------------------------------------------------------
6,272
================================================================================
MALAYSIA (3.4%)
AUTO COMPONENTS
UMW Holdings
Berhad 99,000 224
--------------------------------------------------------------------------------
AUTOMOBILES
Perusahaan Otomobil
Nasional 76,000 220
Tan Chong Motor Holdings
Bhd 96,000 39
--------------------------------------------------------------------------------
259
--------------------------------------------------------------------------------
BANKS
Malayan Banking Bhd 563,900 1,350
Public Bank Bhd 854,300 684
--------------------------------------------------------------------------------
2,034
--------------------------------------------------------------------------------
CONSTRUCTION & ENGINEERING
Gamuda Bhd 604,000 938
--------------------------------------------------------------------------------
7
MORGAN STANLEY EMERGING MARKETS FUND, INC.
FINANCIAL STATEMENTS
MARCH 31, 2002 (UNAUDITED)
STATEMENT OF NET ASSETS
VALUE
SHARES (000)
--------------------------------------------------------------------------------
MALAYSIA (CONTINUED)
DIVERSIFIED TELECOMMUNICATION SERVICES
Technology Resources
Industries Bhd 1,112,000 $ 670
Telekom Malaysia
Bhd 249,000 613
--------------------------------------------------------------------------------
1,283
--------------------------------------------------------------------------------
ELECTRIC UTILITIES
Tenaga Nasional Bhd 118,000 341
--------------------------------------------------------------------------------
HOTELS RESTAURANTS & LEISURE
Magnum Corp. Bhd 1,035,000 755
Resorts World Bhd 240,000 625
--------------------------------------------------------------------------------
1,380
--------------------------------------------------------------------------------
SEMICONDUCTOR EQUIPMENT & PRODUCTS
Malaysian Pacific Industries
Bhd 118,000 668
--------------------------------------------------------------------------------
TOBACCO
British American Tobacco
(Malaysia) Bhd 44,200 404
--------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES
Digi.com Bhd 88,995 113
--------------------------------------------------------------------------------
7,644
================================================================================
MEXICO (11.3%)
BANKS
Bancomer 'O' 2,169,781 2,377
--------------------------------------------------------------------------------
BEVERAGES
FEMSA ADR 14,398 679
FEMSA UBD 449,775 2,094
Grupo Modelo SA 'C' 61,000 156
--------------------------------------------------------------------------------
2,929
--------------------------------------------------------------------------------
CONSTRUCTION MATERIALS
Cemex SA ADR 20,636 610
Cemex SA CPO 254,234 1,495
--------------------------------------------------------------------------------
2,105
--------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES
Telmex 'L' ADR 192,775 7,786
--------------------------------------------------------------------------------
INDUSTRIAL CONGLOMERATES
Alfa SA 'A' 299,555 475
Grupo Carso SA 'A1' 112,074 450
--------------------------------------------------------------------------------
925
--------------------------------------------------------------------------------
MEDIA
Grupo Televisa CPO
GDR 35,350 1,715
--------------------------------------------------------------------------------
MULTILINE RETAIL
Grupo Sanborns SA 'B1' 18,550 $ 36
Wal-mart de Mexico 'C' 297,233 855
Wal-mart de Mexico 'V' 266,419 875
Wal-mart de Mexico ADR 28,162 925
--------------------------------------------------------------------------------
2,691
--------------------------------------------------------------------------------
PAPER & FOREST PRODUCTS
Kimberly-Clark de Mexico
SA 'A' 344,958 1,164
--------------------------------------------------------------------------------
TRANSPORTATION INFRASTRUCTURE
Grupo Aeroportuario del
Sureste ADR 38,250 578
Grupo Aeroportuario del
Sureste-B 149,200 218
--------------------------------------------------------------------------------
796
--------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES
America Movil SA de CV
ADR 153,427 3,047
--------------------------------------------------------------------------------
25,535
================================================================================
POLAND (1.6%)
BANKS
Bank Polska Kasa Opieki SA 49,549 1,248
--------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES
Telekomunikacja Polska SA 36,751 119
Telekomunikacja Polska SA GDR 115,117 371
--------------------------------------------------------------------------------
490
--------------------------------------------------------------------------------
METALS & MINING
KGHM Polska Miedz SA 56,819 204
--------------------------------------------------------------------------------
MULTILINE RETAIL
Eastbridge 33,600(b) 1,506
--------------------------------------------------------------------------------
OIL & GAS
Polski Koncern Naftowy 36,581 166
--------------------------------------------------------------------------------
3,614
================================================================================
RUSSIA (5.1%)
ELECTRIC UTILITIES
Unified Energy Systems
GDR 253,116 4,098
--------------------------------------------------------------------------------
ENERGY SOURCES
LUKoil Holdings ADR 36,631 2,116
--------------------------------------------------------------------------------
8
MORGAN STANLEY EMERGING MARKETS FUND, INC.
FINANCIAL STATEMENTS
MARCH 31, 2002 (UNAUDITED)
STATEMENT OF NET ASSETS
VALUE
SHARES (000)
--------------------------------------------------------------------------------
RUSSIA (CONTINUED)
MEDIA
Storyfirst Communications,
Inc.'C' (Preferred) 270(b) $ 78
Storyfirst Communications,
Inc.'D' (Preferred) 720(b) 209
Storyfirst Communications,
Inc.'E' (Preferred) 780(b) 226
Storyfirst Communications,
Inc.'F' (Preferred) 139(b) 80
--------------------------------------------------------------------------------
593
--------------------------------------------------------------------------------
METALS & MINING
The Mining and
Metallurgical Company
Norilsk Nickel ADR 20,000 434
--------------------------------------------------------------------------------
OIL & GAS EXPLORATION & PRODUCTION
Gazprom ADR 76,600 1,088
Surgutneftegaz ADR
(Preferred) 20,620 454
Surgutneftegaz ADR 148,615 2,707
--------------------------------------------------------------------------------
4,249
================================================================================
PAPER & FOREST PRODUCTS
Alliance Cellulose Ltd. 'B' 156,075(b) --@
--------------------------------------------------------------------------------
11,490
================================================================================
SOUTH AFRICA (9.0%)
BANKS
FirstRand Ltd. 219,120 128
Nedcor Ltd. 7,300 74
Standard Bank Investment
Corp., Ltd. 171,280 442
--------------------------------------------------------------------------------
644
--------------------------------------------------------------------------------
BEVERAGES
South African Breweries plc 116,030 804
South African Breweries plc
(London Shares) 22,003 154
--------------------------------------------------------------------------------
958
--------------------------------------------------------------------------------
INDUSTRIAL CONGLOMERATES
Barlow Ltd. 186,110 1,017
Bidvest Group Ltd. 134,715 497
--------------------------------------------------------------------------------
1,514
--------------------------------------------------------------------------------
INSURANCE
Liberty Group Ltd. 38,720 184
Sanlam Ltd. 682,310 445
--------------------------------------------------------------------------------
629
--------------------------------------------------------------------------------
METALS & MINING
Anglo American Platinum
Corp., Ltd. 46,470 $ 2,036
Anglo American plc 202,788 3,367
Anglo American plc
(London Shares) 241,174 4,020
AngloGold Ltd. 8,443 426
AngloGold Ltd. ADR 7,940 200
Gold Fields Ltd. 165,600 1,734
Harmony Gold Mining Co.,
Ltd. 95,710 1,075
Harmony Gold Mining Co.,
Ltd. SA 4,690 53
Impala Platinum Holdings
Ltd. 14,920 793
--------------------------------------------------------------------------------
13,704
--------------------------------------------------------------------------------
OIL & GAS
Sasol Ltd. 162,770 1,808
--------------------------------------------------------------------------------
PAPER & FOREST PRODUCTS
Sappi Ltd. 49,970 652
Sappi Ltd. ADR 11,970 160
--------------------------------------------------------------------------------
812
--------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES
M-Cell Ltd. 206,340 242
--------------------------------------------------------------------------------
20,311
================================================================================
SOUTH KOREA (22.7%)
AUTO COMPONENTS
Hyundai Mobis 114,090 2,727
--------------------------------------------------------------------------------
AUTOMOBILES
Hyundai Motor Co., Ltd. 95,570 2,964
--------------------------------------------------------------------------------
BANKS
Hana Bank 45,526 704
Kookmin Bank 87,199 3,661
Shinhan Financial Group
Co., Ltd. 192,200 2,537
--------------------------------------------------------------------------------
6,902
--------------------------------------------------------------------------------
CONSTRUCTION & ENGINEERING
Hyundai Development
Company 56,390 403
LG Engineering &
Construction Co., Ltd. 89,120 1,139
--------------------------------------------------------------------------------
1,542
--------------------------------------------------------------------------------
9
MORGAN STANLEY EMERGING MARKETS FUND, INC.
FINANCIAL STATEMENTS
MARCH 31, 2002 (UNAUDITED)
STATEMENT OF NET ASSETS
VALUE
SHARES (000)
--------------------------------------------------------------------------------
SOUTH KOREA (CONTINUED)
DIVERSIFIED FINANCIALS
Good Morning Securities
Co., Ltd. 92,870 $ 454
Kookmin Credit Card Co.,
Ltd. 10,970 464
LG Investment & Securities
Co. Ltd. 43,730 708
Samsung Securities Co.,
Ltd. 19,860 799
Seoul Securities Co., Ltd. 98,110 567
--------------------------------------------------------------------------------
2,992
--------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES
Korea Telecom Corp. ADR 13,960 335
--------------------------------------------------------------------------------
ELECTRIC UTILITIES
Korea Electric Power Corp. 30,820 602
Korea Electric Power Corp.
ADR 15,204 160
--------------------------------------------------------------------------------
762
--------------------------------------------------------------------------------
ELECTRONIC EQUIPMENT & INSTRUMENTS
Samsung Electro -
Mechanics Co., Ltd. 30,687 1,787
--------------------------------------------------------------------------------
FOOD PRODUCTS
Tongyang Confectionery
Co. 14,000 702
--------------------------------------------------------------------------------
HOUSEHOLD DURABLES
Humax Co., Ltd. 74,276 3,360
LG Electronics Ltd. 68,830 2,343
--------------------------------------------------------------------------------
5,703
--------------------------------------------------------------------------------
HOUSEHOLD PRODUCTS
LG Household & Health
Care Ltd. 18,790 626
--------------------------------------------------------------------------------
INSURANCE
Hyundai Marine & Fire
Insurance Co., Ltd.
(HDMF) 13,680 502
--------------------------------------------------------------------------------
MEDIA
Cheil Communications, Inc. 6,120 854
--------------------------------------------------------------------------------
METALS & MINING
Pohang Iron & Steel Co.,
Ltd. 21,310 2,224
--------------------------------------------------------------------------------
MULTILINE RETAIL
Shinsegae Co., Ltd. 5,680 898
--------------------------------------------------------------------------------
PHARMACEUTICALS
Yuhan Corp. 3,883 209
--------------------------------------------------------------------------------
SEMICONDUCTOR EQUIPMENT & PRODUCTS
Samsung Electronics Co., Ltd. 49,642 $ 13,424
Samsung Electronics Co.,
Ltd. (Preferred) 7,990 1,088
--------------------------------------------------------------------------------
14,512
--------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES
SK Telecom Co., Ltd. 21,230 4,689
SK Telecom Co., Ltd. ADR 15,400 379
--------------------------------------------------------------------------------
5,068
--------------------------------------------------------------------------------
51,309
================================================================================
TAIWAN (13.3%)
BANKS
Bank Sinopac 1,548,000 669
Chinatrust Commercial
Bank 3,310,748 2,604
First Commercial
Bank 342,000 210
Fubon Financial Holding
Co., Ltd. 914,087 899
Taipei Bank 836,000 579
Taishin Financial Holdings
Co., Ltd. 1,747,000 760
--------------------------------------------------------------------------------
5,721
--------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT
Accton Technology Corp. 713,000 1,958
--------------------------------------------------------------------------------
COMPUTERS & PERIPHERALS
Ambit Microsystems Corp. 170,719 762
Asustek Computer,
Inc. 295,553 1,319
Quanta Computer,
Inc. 370,000 1,439
--------------------------------------------------------------------------------
3,520
--------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT
Phoenixtec Power Co. Ltd. 456,000 424
--------------------------------------------------------------------------------
ELECTRONIC EQUIPMENT & INSTRUMENTS
Hon Hai Precision Industry
Co., Ltd. 125,843 587
Yageo Corporation 1,091,000 973
--------------------------------------------------------------------------------
1,560
--------------------------------------------------------------------------------
FOOD & DRUG RETAILING
President Chain Store
Corp. 227,782 427
--------------------------------------------------------------------------------
METALS & MINING
China Steel Corp. 698,840 330
--------------------------------------------------------------------------------
10
MORGAN STANLEY EMERGING MARKETS FUND, INC.
FINANCIAL STATEMENTS
MARCH 31, 2002 (UNAUDITED)
STATEMENT OF NET ASSETS
VALUE
SHARES (000)
--------------------------------------------------------------------------------
TAIWAN (CONTINUED)
SEMICONDUCTOR EQUIPMENT & PRODUCTS
Advanced Semiconductor
Engineering, Inc. 497,000 $ 493
Siliconware Precision
Industries Co. 836,692 838
Sunplus Technology Co
Ltd. 135,500 523
Taiwan Semiconductor
Manufacturing Co., Ltd. 3,138,122 8,528
United Microelectronics
Corp. 2,826,730 4,285
--------------------------------------------------------------------------------
14,667
--------------------------------------------------------------------------------
TEXTILES & APPAREL
Formosa Chemicals & Fibre Corp. 494,720 530
--------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES
Taiwan Cellular Corp. 695,818 880
--------------------------------------------------------------------------------
30,017
================================================================================
THAILAND (1.3%)
CONSTRUCTION MATERIALS
Siam Cement Co. 38,900 752
--------------------------------------------------------------------------------
MEDIA
BEC World PCL 77,100 460
--------------------------------------------------------------------------------
OIL & GAS
PTT Exploration &
Production PCL 177,200 496
--------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES
Advanced Info Service PCL
(Foreign) 504,600 544
Shin Corp. PCL 1,770,000 703
--------------------------------------------------------------------------------
1,247
--------------------------------------------------------------------------------
2,955
================================================================================
TURKEY (2.4%)
BANKS
Akbank TAS 313,005,800 1,005
Turkiye Garanti Bankasi AS 156,685,000 321
Turkiye Is Bankasi 105,475,000 583
Yapi ve Kredi Bankasi AS 454,670,975 1,341
Yapi ve Kredi Bankasi AS GDR 31,350 92
--------------------------------------------------------------------------------
3,342
--------------------------------------------------------------------------------
BEVERAGES
Anadolu Efes Biracilik ve
Malt Sanayii AS 9,117,000 231
--------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT
Netas Northern Electric
Telekomunikasyon AS 9,595,059 251
--------------------------------------------------------------------------------
DIVERSIFIED FINANCIALS
Haci Omer Sabanci Holding AS 104,609,000 $ 492
--------------------------------------------------------------------------------
HOUSEHOLD DURABLES
Vestel Elektronik Sanayi ve
Ticaret AS 155,610,836 395
--------------------------------------------------------------------------------
INSURANCE
Aksigorta AS 57,867,000 415
--------------------------------------------------------------------------------
MEDIA
Hurriyet Gazetecilik ve
Matbaacilik AS 41,023,000 162
--------------------------------------------------------------------------------
OIL & GAS
Tupras-Turkiye Petrol
Rafinerileri AS 41,052,200 230
--------------------------------------------------------------------------------
5,518
================================================================================
VENEZUELA (0.3%)
DIVERSIFIED TELECOMMUNICATION SERVICES
Compania Anonima
Nacional Telefonos ADR 45,243 624
================================================================================
TOTAL COMMON STOCKS
(Cost $204,607) 220,145
================================================================================
NO.OF
UNITS
--------------------------------------------------------------------------------
UNITS (0.1%)
================================================================================
RUSSIA (0.1%)
Storyfirst Communications,
Inc., First Section,
Tranche I (Convertible) 639(b) 186
Storyfirst Communications,
Inc., Second Section,
Tranche II (Convertible) 152(b) 44
Storyfirst Communications,
Inc., Tranche IV
(Convertible) 207(b) 60
--------------------------------------------------------------------------------
TOTAL UNITS
(Cost $1,192) 290
================================================================================
SHARES
--------------------------------------------------------------------------------
INVESTMENT COMPANIES (0.4%)
================================================================================
INDIA (0.4%)
Morgan Stanley Growth
Fund 4,694,400 851
--------------------------------------------------------------------------------
AFRICA (0.0%)
Morgan Stanley Africa
Investment Fund, Inc. 5,121 46
--------------------------------------------------------------------------------
TOTAL INVESTMENT COMPANIES
(Cost $958) 897
================================================================================
11
MORGAN STANLEY EMERGING MARKETS FUND, INC.
FINANCIAL STATEMENTS
MARCH 31, 2002 (UNAUDITED)
STATEMENT OF NET ASSETS
NO. OF VALUE
RIGHTS (000)
--------------------------------------------------------------------------------
RIGHTS (0.1%)
================================================================================
MALAYSIA (0.1%)
Technology Research Industries
(Cost $175) 741,000 $ 252
================================================================================
FACE
AMOUNT
(000)
--------------------------------------------------------------------------------
DEBT INSTRUMENTS (0.0%)
================================================================================
INDIA (0.0%)
DCM Shriram
Investments Ltd.
0.00%, 2/12/02 INR $ 330(c) --@
DCM Shriran Industrials
0.00%, 2/21/01 335(c) --@
Shri Ishar Alloy Steels Ltd.
15.00%, 4/21/01 581(c) --@
--------------------------------------------------------------------------------
================================================================================
TOTAL DEBT INSTRUMENTS
(Cost $1,495) --@
================================================================================
SHORT-TERM INVESTMENTS (1.5%)
================================================================================
UNITED STATES (1.5%)
J.P. Morgan Securities, Inc., 1.76%, dated
3/28/02, due 4/1/02
(Cost $3,401) 3,401(a) 3,401
================================================================================
FOREIGN CURRENCY ON DEPOSIT WITH
CUSTODIAN (0.5%)
--------------------------------------------------------------------------------
Brazilian Real BRL 72 31
British Pound GBP 310 442
Czeck Koruna CZK 48 1
Euro EUR 43 37
Hong Kong Dollar HKD 1 --@
Hungarian Forint HUF 275 1
Indian Rupee INR 7,013 144
Malaysian Ringgit MYR 9 3
Mexican Peso MXN 244 27
South Korea Won KRW 185,845 141
Taiwan Dollar TWD 10,606 304
--------------------------------------------------------------------------------
TOTAL FOREIGN CURRENCY
(Cost $1,131) 1,131
--------------------------------------------------------------------------------
AMOUNT AMOUNT
(000) (000)
--------------------------------------------------------------------------------
TOTAL INVESTMENTS (100.0%)
(Cost $212,959) $ 226,116
================================================================================
OTHER ASSETS AND LIABILITIES (0.0%)
Other Assets $ 1,382
Liabilities (1,434) (52)
================================================================================
NET ASSETS
(100.0%)
Applicable to 18,710,804, issued and
outstanding $ 0.01 par value shares
(100,000,000 shares authorized) $ 226,064
================================================================================
NET ASSET VALUE PER SHARE $ 12.08
================================================================================
(a) -- The repurchase agreement is fully collateralized by U.S. government
and/or agency obligations based on market prices at the date of this
statement of net assets. The investment in the repurchase agreement is
through participation in a joint account with affiliated funds.
(b) -- Investments valued at fair value.
(c) -- Security is in default.
@ -- Value is less than $500.
ADR -- American Depositary Receipt
GDR -- Global Depositary Receipt
PCL -- Public Company Limited
12