UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
- --------
FORM N-CSR
- --------
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
INVESTMENT COMPANY ACT FILE NUMBER 811-06115
THE SINGAPORE FUND, INC.
(Exact name of registrant as specified in charter)
- --------
c/o Daiwa Securities Trust Company
One Evertrust Plaza, 9th Floor
Jersey City, New Jersey 07302-3051
(Address of principal executive offices) (Zip code)
c/o Daiwa Securities Trust Company
One Evertrust Plaza, 9th Floor
Jersey City, New Jersey 07302-3051
(Name and address of agent for service)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (201) 915-
3054
DATE OF FISCAL YEAR END: October 31, 2004
DATE OF REPORTING PERIOD: April 30, 2004
Form N-CSR is to be used by management investment companies to
file reports with the Commission not later than 10 days after
the transmission to stockholders of any report that is
required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1).
The Commission may use the information provided on Form N-CSR
in its regulatory, disclosure review, inspection, and
policymaking roles. A registrant is required to disclose the
information specified by Form N-CSR, and the Commission will
make this information public. A registrant is not required to
respond to the collection of information contained in Form N-
CSR unless the Form displays a currently valid Office of
Management and Budget ("OMB") control number. Please direct
comments concerning the accuracy of the information collection
burden estimate and any suggestions for reducing the burden to
Secretary, Securities and Exchange Commission, 450 Fifth
Street, NW, Washington, DC 20549-0609. The OMB has reviewed
this collection of information under the clearance
requirements of 44 U.S.C. ss. 3507.
THE SINGAPORE FUND, INC.
[GRAPHIC]
SEMI-ANNUAL REPORT
APRIL 30, 2004
THE SINGAPORE FUND, INC.
GENERAL INFORMATION
THE FUND
The Singapore Fund, Inc. (the "Fund") is a non-
diversified, closed-end
management investment company. Its primary investment
objective is capital
appreciation, which it seeks through investment primarily in
Singapore equity
securities, and to a lesser degree, investment in equity
securities issued by
companies in ASEAN Group countries. The ASEAN Group currently
is composed of
Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar (formerly
Burma), the
Philippines, Singapore, Thailand and Vietnam. The Fund's
Investment Manager is
DBS Asset Management (United States) Pte. Ltd. (the
"Manager"), an indirectly
wholly-owned subsidiary of The Development Bank of Singapore,
Ltd. Daiwa SB
Investments (Singapore) Ltd. provides the Manager with advice
regarding
investments.
SHAREHOLDER INFORMATION
The Fund's shares are listed on the New York Stock
Exchange ("NYSE"). The
Fund understands that its shares may trade periodically on
certain exchanges
other than the NYSE, but the Fund has not listed its shares on
those other
exchanges and does not encourage trading on those exchanges.
The Fund's NYSE
trading symbol is "SGF". Weekly comparative net asset value
("NAV") and market
price information about the Fund is published each Monday in
THE WALL STREET
JOURNAL, each Sunday in THE NEW YORK TIMES and each Saturday
in BARRON'S, and
also in many other newspapers. The Fund's weekly NAV is also
available by
visiting www.daiwast.com or calling (800) 933-3440 or (201)
915-3020. Also, the
Fund's website includes a monthly market review, a list of the
Fund's top ten
industries and holdings, the proxy voting policies and
procedures, the code of
ethics and the audit committee charter.
INQUIRIES
Inquiries concerning your share account should be
directed to EquiServe
Trust Company, N.A. (the "Plan Agent") at the number noted
below. All written
inquiries should be directed to the Fund, c/o Daiwa Securities
Trust Company,
One Evertrust Plaza, 9th Floor, Jersey City, NJ 07302-3051.
RESTRICTION ON BENEFICIAL OWNERSHIP BY SINGAPORE RESIDENTS
The Fund expects to continue to qualify for a Singapore
income tax
exemption granted to non-Singapore resident investors with
respect to certain
types of income derived from Singapore sources. In order for
the Fund to be
treated as a non-Singapore resident, and therefore qualify for
this exemption,
not more than 5% of the Fund's issued share capital may be
beneficially owned,
directly or indirectly, by Singapore residents. For this
reason, the Fund's
Board of Directors has restricted, and in the future may
prohibit, the transfer
of the Fund's shares to residents of Singapore.
DIVIDEND REINVESTMENT AND CASH PURCHASE PLAN
A Dividend Reinvestment and Cash Purchase Plan (the
"Plan") is available to
provide Shareholders with automatic reinvestment of dividends
and capital gain
distributions in additional Fund shares. The Plan also allows
you to make
optional semi-annual cash investments in Fund shares through
the Plan Agent. A
brochure fully describing the Plan's terms and conditions is
available from the
Plan Agent by calling (800) 426-5523 or by writing The
Singapore Fund, Inc., c/o
EquiServe Trust Company, N.A., P.O. Box 43010, Providence, RI
02940-3010.
May 10, 2004
DEAR SHAREHOLDERS:
We are pleased to present the Semi-Annual Report of The
Singapore Fund,
Inc. (the "Fund") for the six months ended April 30, 2004.
PERFORMANCE REVIEW
NOV'03
FEB'04
TO
TO
US$ TERMS JAN'04
APRIL'04
- --------- --------
- --------
Singapore Fund 9.38%
- -4.70%
Straits Times Index ("STI") 9.41%
- -1.70%
Relative to Benchmark Index -0.03%
- -3.00%
Source: Bloomberg
In the first quarter of 2004, the Fund slightly under-
performed the
benchmark Straits Times Index ("STI"). The steady rotation out
of smaller-cap
technology stocks into more traditional blue chip names
continued over the
quarter. In the second quarter ended April 30, 2004, the Fund
under-performed
the benchmark by 300 basis points ("bsp"). The rotation out of
smaller-cap
technology stocks continued as investors generally became more
cautious. The
financial sector, particularly banks, continued to out-perform
over the quarter.
Restrictions on the Fund's ability to invest in DBS Group
Holdings and to invest
more than 25% of its assets in banking stocks continued to
affect the Fund's
performance negatively, given the strong rebound in banking
stocks toward the
latter half of the first quarter. Nevertheless, over the
longer-term, we are
confident that we will find other opportunities to mitigate
these constraints.
MARKET REVIEW
The first two quarters of 2004 saw significant volatility
in equity prices.
Profit taking was evident across all sectors, with the small
and mid-cap stocks
falling more than their traditional blue chip counterparts.
Toward the end of 2003, despite successive new highs on
Wall Street, the
STI was range bound, trading between 1703 and 1754. The lack
of corporate news
over a traditionally quiet period resulted in a sharp decline
in trading
volumes. Activity centered on a few stocks, in particular
recent Initial Public
Offerings ("IPOs"), China plays and technology-related stocks.
The beginning of the second quarter saw some interest
returning to the
market. The corporate earnings outlook remained positive for
the current year
with revisions generally on an up-trend. Nevertheless, the
reprieve in the
market failed to last and share prices corrected in March and
April as investors
turned cautious in view of accelerating raw material prices
and signs of
inflationary pressures. In addition, the spate of negative
news globally
resulted in a further sell off in equity markets. Acts of
terrorism, political
concerns in the region and U.S. employment numbers caused
investors to take a
more cautious stance. Stronger U.S. economic data released
over the quarter
fuelled expectations of a sooner than expected rising interest
rate environment,
which the market began to discount aggressively. On top of
this, the impact of
Chinese monetary tightening raised fears of a bubble in the
economy. All these
factors resulted in panic selling in regional equities and
Singapore was not
spared.
2
Despite the poor sentiment, overall fundamentals remain
healthy. Earnings
from Singapore companies came in largely within expectations.
Technology stocks,
for example, have typically guided to the high end of their
projected earnings
range. The Budget similarly did not disappoint, with
corporations receiving a
cut in corporate tax rate from 22% to 20%. Tax incentives
targeted at small and
mid-sized companies were also announced.
Economic data continues to see broad-based strength.
Preliminary first
quarter 2004 Gross Domestic Product ("GDP") grew 7.3%, beating
market
expectations, with the expansion being broad based. In terms
of output, the
manufacturing sector was the clear growth driver, and
construction also appears
to have bottomed after eleven consecutive quarters of
contraction. Non-oil
domestic exports ("NODX") continue to reflect impressive
numbers, with the
latest March NODX pointing to a fairly broad-based strength,
particularly in
non-electronics.
Telecommunications, media and financials were the key out
performers over
the quarter. Singapore Telecom did well over the period, on
expectations of a
special dividend from the sale of its stake in Belgacom and
also the
profitability of its various associate investments, whilst
Singapore Press
Holdings was another good performer.
MARKET OUTLOOK & STRATEGY
BENCHMARK (%) PORTFOLIO
(%) COMMENTS
- --------------------------------------------------------------
- --------------------------------------------------------------
Telecommunication & Media 19.0 16.0
Defensive qualities, nevertheless, valuations less
compelling. More upside potential in Media versus
Telecommunication.
Finance 39.0 24.0
Some signs of improvement in credit growth. Valuations
however appear fair. Significant under-weight due to
25% sector limit.
Real Estate 8.2 10.5
Expectations low. Valuation fails to capture recovery
prospects.
Transport 7.9 5.0
High fuel prices and price competition remain key
concerns for the airline sector. Most positives for
shipping sector are largely discounted. Share prices
should begin to discount a roll over in shipping rates.
Consumer 4.5 4.0
Defensive qualities yet to be appreciated by market.
Under valued given healthy growth prospects.
Technology 7.0 15.0
Recent sell off unjustified. Earnings momentum still
strong and valuations now at reasonable levels.
Conglomerate 10.0 8.0
Expensive given lower than market growth prospects.
3
The correction in equity markets has been sharp over a
relatively short
period of time. A combination of negative factors, including a
slowdown in
China's economy, rising interest rate fears and heightened
global political
risk, has resulted in the recent sell-off. In the near-term,
further downside
cannot be ruled out; nevertheless, valuations should provide
some downside
protection. Within the Singapore universe, selective stocks
are now back to
attractive levels and in some cases trading significantly
below market averages.
Though earnings momentum has slowed for the general market,
the prospects for
growth remain largely intact. The recent sharp sell-off in the
domestic equity
market, particularly among the mid-cap and technology
universe, is providing
buying opportunities for the longer term investor.
PORTFOLIO MANAGEMENT
Mr. Roy Phua has been the Fund's portfolio manager since
October 12, 2000.
Mr. Phua is responsible for the day-to-day management of the
Fund's portfolio.
Mr. Phua joined DBS Asset Management Ltd., of which the Fund's
Investment
Manager, DBS Asset Management (United States) Pte. Ltd. is a
wholly owned
subsidiary, in July 2000. From 1995 to 2000, Mr. Phua worked
at Rothschild Asset
Management Pte. Ltd. Singapore as an analyst and portfolio
manager.
The Fund's management would like to thank you for your
participation in The
Singapore Fund, Inc. and would be pleased to hear from you.
Sincerely,
/s/ Ikuo Mori
IKUO MORI
CHAIRMAN OF THE BOARD
4
PORTFOLIO OF INVESTMENTS
APRIL 30, 2004 (UNAUDITED)
COMMON STOCKS--91.23%
SHARES
VALUE
- ------------
- -------------
SINGAPORE--91.23%
AUTOMOTIVE--3.08%
3,032,000 Total Automation Ltd.
$ 1,369,933
1,880,000 YHI International Ltd.
1,246,567
- -------------
2,616,500
- -------------
BANKS & FINANCIAL SERVICES--22.31%
863,000 Oversea-Chinese Banking Corp. Ltd.
6,127,391
1,591,712 United Overseas Bank Ltd.
12,795,713
- -------------
18,923,104
- -------------
BUILDING MATERIALS--2.00%
1,597,000 Hong Leong Asia Ltd.
1,696,145
- -------------
COMMUNICATIONS--MEDIA--8.07%
555,690 Singapore Press Holdings Ltd.
6,847,489
- -------------
CONSTRUCTION ENGINEERING--1.92%
2,724,000 First Engineering Ltd.
1,630,372
- -------------
E-BUSINESS--4.54%
6,257,000 DMX Technologies Group, Ltd.*
3,855,093
- -------------
EDUCATION--3.14%
16,477,000 Horizon Education & Technology, Ltd.*
1,498,612
1,950,000 Raffles LaSalle Ltd.
1,167,117
- -------------
2,665,729
- -------------
ELECTRONIC COMPONENTS--4.04%
4,183,000 Ellipsiz Ltd.*
1,153,626
4,400,000 United Test and Assembly Center Ltd.*
2,272,034
- -------------
3,425,660
- -------------
ELECTRONICS--5.22%
4,620,000 Jurong Technologies Ltd.
3,903,767
768,000 MFS Technology Ltd.
$ 522,756
- -------------
4,426,523
- -------------
FOODS--2.27%
5,514,000 Food Junction Holdings Ltd.
1,925,144
- -------------
INDUSTRIAL--4.71%
1,975,000 Singapore Technologies Engineering Ltd.+
2,190,324
3,599,333 Wing Tai Holdings Ltd.
1,805,791
- -------------
3,996,115
- -------------
MACHINERY--2.38%
8,000,000 Tat Hong Holdings Ltd.
2,018,542
- -------------
PROPERTY DEVELOPMENT--8.33%
1,500,000 Capitaland Ltd.+
1,417,087
1,158,000 City Developments Ltd.
4,144,936
1,600,000 Keppel Land Ltd.+
1,502,171
- -------------
7,064,194
- -------------
REAL ESTATE--1.58%
2,317,000 Allgreen Properties Ltd.
1,339,189
- -------------
SHIPYARDS--3.49%
705,000 Keppel Corp. Ltd.+
2,957,839
- -------------
TELECOMMUNICATIONS--7.11%
4,395,000 Singapore Telecommunications Ltd.+
6,034,679
- -------------
TRANSPORTATION--AIR--4.81%
644,150 Singapore Airlines Ltd.+
4,082,162
- -------------
WATER TREATMENT SYSTEMS--2.23%
2,240,313 Hyflux Ltd.
1,893,000
- -------------
Total Common Stocks
(Cost--$65,036,505)
77,397,479
- -------------
5
WARRANTS--0.03%
SHARES
VALUE
- ------------
- -------------
SINGAPORE--0.03%
METAL PROCESSOR--0.03%
120,000 Seksun Corp., expires 12/16/04*
(Cost--$31,779)
$ 26,053
- -------------
TIME DEPOSITS--1.08%
PRINCIPAL
AMOUNT
(000)
- ------------
U.S. DOLLAR TIME DEPOSITS--1.08%
114 Bank of New York, 0.05%, due 5/3/04
113,782
802 Citibank Singapore, 0.50%, due 5/3/04
801,790
- -------------
Total U.S. Dollar Time Deposits
(Cost--$915,572)
915,572
- -------------
Total Investments--92.34%
(Cost--$65,983,856)
78,339,104
Other assets less liabilities--7.66%
6,498,051
- -------------
NET ASSETS (Applicable to 9,207,133 shares of capital stock
outstanding; equivalent to $9.21 per share)--100.00%
$ 84,837,155
=============
- ----------
+ Deemed to be an affiliated issuer.
* Non-income producing securities.
TEN LARGEST COMMON STOCK
POSITIONS HELD
APRIL 30, 2004 (UNAUDITED)
PERCENT OF
ISSUE
NET ASSETS
- -----
- -------------
United Overseas Bank Ltd.
15.08%
Singapore Press Holdings Ltd.
8.07
Oversea-Chinese Banking Corp. Ltd.
7.22
Singapore Telecommunications Ltd.
7.11
City Developments Ltd.
4.89
Singapore Airlines Ltd.
4.81
Jurong Technologies Ltd.
4.60
DMX Technologies Group, Ltd.
4.54
Keppel Corp. Ltd.
3.49
United Test and Assembly Center Ltd.
2.68
TEN LARGEST COMMON STOCK
CLASSIFICATIONS HELD
APRIL 30, 2004 (UNAUDITED)
PERCENT OF
INDUSTRY
NET ASSETS
- --------
- -------------
Banks & Financial Services
22.31%
Property Development
8.33
Communications--Media
8.07
Telecommunications
7.11
Electronics
5.22
Transportation--Air
4.81
Industrial
4.71
E-Business
4.54
Electronic Components
4.04
Shipyards
3.49
See accompanying notes to financial
statements.
6
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 2004 (UNAUDITED)
ASSETS
Investment in securities, at value:
Unaffiliated securities (cost--$51,631,380)
$ 60,154,842
Affiliated securities (cost--$14,304,165)
18,184,262 $ 78,339,104
- ---------------
Cash denominated in foreign currency (cost--$7,129,563)
7,133,369
Receivable for securities sold
434,768
Interest and dividends receivable
144,155
Prepaid expenses
24,644
- ---------------
Total assets
86,076,040
- ---------------
LIABILITIES
Payable for securities purchased
1,045,935
Accrued expenses and other liabilities
192,950
- ---------------
Total liabilities
1,238,885
- ---------------
NET ASSETS
Capital stock, $0.01 par value per share; total 100,000,000
shares authorized;
9,207,133 shares issued and outstanding
92,071
Paid-in capital in excess of par value
106,427,849
Accumulated net investment loss
(87,398)
Accumulated net realized loss on investments
(34,004,980)
Net unrealized appreciation on investments and other assets
and liabilities
denominated in foreign currency
12,409,613
- ---------------
Net assets applicable to shares outstanding
$ 84,837,155
===============
NET ASSET VALUE PER SHARE
$ 9.21
===============
See accompanying notes to financial
statements.
7
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED APRIL 30, 2004 (UNAUDITED)
INVESTMENT INCOME:
Dividends:
Unaffiliated securities (net of withholding taxes of -
$96,367) $ 437,904
Affiliated securities (net of withholding taxes of -
$7,129) 161,437 $ 599,341
- ---------------
Interest
2,473
- ---------------
Total investment income
601,814
- ---------------
EXPENSES:
Investment management fee
316,280
Investment advisory fee
159,937
Administration fee and expenses
89,742
Custodian fees and expenses
42,752
Audit and tax services
40,528
Legal fees and expenses
32,074
Insurance expense
27,926
Reports and notices to shareholders
18,895
Directors' fees and expenses
15,223
Transfer agency fee and expenses
8,454
Other
16,230
- ---------------
Total expenses
768,041
- ---------------
Net investment loss before waivers
(166,227)
Waiver of:
Management fee
(39,984)
Advisory fee
(39,984)
- ---------------
Net investment loss after waivers
(86,259)
- ---------------
REALIZED AND UNREALIZED GAINS FROM INVESTMENT ACTIVITIES AND
FOREIGN
CURRENCY TRANSACTIONS:
Net realized gains on investments:
Unaffiliated securities
7,538,512
Affiliated securities
2,086,804 9,625,316
876:
- ---------------
Net realized foreign currency transaction gains
243,420
Net change in unrealized appreciation (depreciation) on
investments in
equity securities
(5,106,090)
Net change in unrealized appreciation (depreciation) on
other assets and
liabilities denominated in foreign currency
(110,545)
897:
- ---------------
Net realized and unrealized gains from investment activities
and foreign
currency transactions
4,652,101
- ---------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS
$ 4,565,842
===============
See accompanying notes to financial
statements.
8
STATEMENT OF CHANGES IN NET ASSETS
925:
FOR THE SIX
MONTHS
ENDED FOR THE YEAR
APRIL 30, 2004 ENDED
(UNAUDITED) OCTOBER 31, 2003
951:
- --------------- ----------------
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income (loss)
$ (86,259) $ 743,665
Net realized gain on:
Investments
9,625,316 4,913,002
Foreign currency transactions
243,420 138,072
Net change in unrealized appreciation (depreciation) on:
Investments in equity securities
(5,106,090) 15,888,202
Translation of short-term investments and other assets and
liabilities denominated in foreign currency
(110,545) 72,914
- --------------- ----------------
Net increase in net assets resulting from operations
4,565,842 21,755,855
- --------------- ----------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
(874,505) (55,231)
- --------------- ----------------
FROM CAPITAL STOCK TRANSACTIONS:
Sale of capital stock resulting from:
Reinvestment of dividends
13,496 966
- --------------- ----------------
Net increase in net assets
3,704,833 21,701,590
NET ASSETS:
Beginning of period
81,132,322 59,430,732
- --------------- ----------------
End of period
$ 84,837,155 $ 81,132,322
=============== ================
See accompanying notes to financial
statements.
9
NOTES TO FINANCIAL STATEMENTS
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
The Singapore Fund, Inc. (the "Fund") was incorporated in
Maryland on May
31, 1990 and commenced operations on July 31, 1990. It is
registered with the
Securities and Exchange Commission as a closed-end, non-
diversified management
investment company.
The following significant accounting policies are in
conformity with
generally accepted accounting principles in the Unites States
of America for
investment companies. Such policies are consistently followed
by the Fund in the
preparation of its financial statements. The preparation of
financial statements
in accordance with accounting principles generally accepted in
the United States
of America requires management to make estimates and
assumptions that affect the
amounts and disclosures in the financial statements. Actual
reporting results
could differ from those estimates.
VALUATION OF INVESTMENTS--Securities which are listed on
foreign stock
exchanges and for which market quotations are readily
available are valued at
the last sale price on the exchange on which the securities
are traded, as of
the close of business on the day the securities are being
valued or, lacking any
sales on such day, at the closing price quoted for such
securities. However, if
bid and asked quotations are available, such securities are
valued at the mean
between the last current bid and asked prices, rather than at
such quoted
closing price. Securities that are traded over-the-counter, if
bid and asked
price quotations are available, are valued at the mean between
the current bid
and asked prices, or, if such quotations are not available,
are valued as
determined in good faith by the Board of Directors (the
"Board") of the Fund. In
instances where quotations are not readily available or where
the price as
determined by the above procedures is deemed not to represent
fair market value,
fair value will be determined in such manner as the Board may
prescribe.
Short-term investments having maturity of 60 days or less are
valued at
amortized cost, except where the Board determines that such
valuation does not
represent the fair value of the investment. All other
securities and assets are
valued at fair value as determined in good faith by, or under
the direction of,
the Board.
FOREIGN CURRENCY TRANSLATION--The books and records of
the Fund are
maintained in U.S. dollars as follows: (1) the foreign
currency market value of
investment securities and other assets and liabilities stated
in foreign
currencies are translated at the exchange rates prevailing at
the end of the
period; and (2) purchases, sales, income and expenses are
translated at the rate
of exchange prevailing on the respective dates of such
transactions. The
resulting exchange gains and losses are included in the
Statement of Operations.
The Fund does not isolate the effect of fluctuations in the
market price of
securities.
TAX STATUS--The Fund intends to continue to distribute
substantially all of
its taxable income and to comply with the minimum distribution
and other
requirements of the Internal Revenue Code applicable to
regulated investment
companies. Accordingly, no provision for federal income or
excise taxes is
required. During the six months ended April 30, 2004, the Fund
was subject to
withholding tax, ranging from 10% to 20%, on certain income
from its
investments.
The Fund continues to meet the conditions required to
qualify for the
exemption from Singapore income tax, available to non-
Singapore residents who
are beneficiaries of funds managed by approved fund managers,
in respect of
certain types of income. Accordingly, no provision for
Singapore income tax is
required.
10
INVESTMENT TRANSACTIONS AND INVESTMENT INCOME--Investment
transactions are
recorded on the trade date (the date upon which the order to
buy or sell is
executed). Realized and unrealized gains and losses from
security and foreign
currency transactions are calculated on the identified cost
basis. Dividend
income and corporate actions are recorded on the ex-date,
except for certain
dividends and corporate actions involving foreign securities
which may be
recorded after the ex-date, as soon as the Fund acquires
information regarding
such dividends or corporate actions. Interest income is
recorded on an accrual
basis.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS--The Fund
records dividends and
distributions payable to its shareholders 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 basis/tax
basis ("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
reclassifications. Dividends and
distributions which exceed net investment income and net
realized capital gains
for tax purposes are reported as distributions of paid-in-
capital.
FORWARD FOREIGN CURRENCY CONTRACTS--The Fund may enter
into forward foreign
currency exchange contracts in connection with planned
purchases or sales of
securities or to hedge the U.S. dollar value of its assets
denominated in a
particular currency, subject to a maximum limitation of 20% of
the value of its
total assets committed to the consummation of such forward
foreign currency
contracts. In addition, the Fund will not take positions in
foreign forward
currency contracts where the settlement commitment exceeds the
value of its
assets denominated in the currency of the contract. If the
Fund enters into
forward foreign currency contracts, its custodian or
subcustodian will maintain
cash or readily marketable securities in a segregated account
of the Fund in an
amount equal to the value of the Fund's total assets committed
to the
consummation of such contracts. Risks may arise upon entering
into these
contracts from the potential inability of counterparties to
meet the terms of
their contracts and from unanticipated movements in the value
of a foreign
currency relative to the U.S. dollar.
INVESTMENT MANAGER AND INVESTMENT ADVISER
The Fund has entered into an Investment Management
Agreement (the
"Management Agreement") with DBS Asset Management (United
States) Pte. Ltd. (the
"Manager"). Pursuant to the Management Agreement, the Manager
makes investment
management decisions relating to the Fund's assets. For such
services, the Fund
pays the Manager a monthly fee at an annual rate of 0.80% of
the first $50
million of the Fund's average weekly net assets and 0.66% of
the Fund's average
weekly net assets in excess of $50 million. Effective June 1,
2002 to May 31,
2004, the Manager has agreed to reduce the fee to 0.70% of the
first $50 million
of the Fund's average weekly net assets and 0.575% of the
Fund's average weekly
net assets in excess of $50 million. In addition, as permitted
by the Management
Agreement, the Fund reimburses the Manager for its out-of-
pocket expenses
related to the Fund. During the six months ended April 30,
2004, no such
expenses were paid to the Manager.
11
The Fund has entered into an Investment Advisory
Agreement (the "Advisory
Agreement") with Daiwa SB Investments (Singapore) Limited (the
"Adviser"), which
provides general and specific investment advice to the Manager
with respect to
the Fund's assets. The Fund pays the Adviser a monthly fee at
an annual rate of
0.40% of the first $50 million of the Fund's average weekly
net assets and 0.34%
of the Fund's average weekly net assets in excess of $50
million. Effective June
1, 2002 to May 31, 2004, the Adviser has agreed to reduce the
fee to 0.30% of
the first $50 million of the Fund's average weekly net assets
and 0.255% of the
Fund's average weekly net assets in excess of $50 million. In
addition, as
permitted by the Advisory Agreement, the Fund reimburses the
Adviser for its
out-of-pocket expenses related to the Fund. During the six
months ended April
30, 2004, no such expenses were paid to the Adviser.
At April 30, 2004, the Fund owed to the Manager and the
Adviser $46,463 and
$20,178, for management and advisory fees, respectively.
ADMINISTRATOR AND CUSTODIAN AND OTHER RELATED PARTIES
Daiwa Securities Trust Company ("DSTC"), an affiliate of
the Adviser,
provides certain administrative services to the Fund. For such
services, the
Fund pays DSTC a monthly fee at an annual rate of 0.20% of the
Fund's average
weekly net assets, with a minimum fee of $150,000. In
addition, as permitted by
the Administration Agreement, the Fund reimburses the
Administrator for its
out-of-pocket expenses related to the Fund. During the six
months ended April
30, 2004, expenses of $4,572 were paid to the Administrator,
representing
reimbursement to the Administrator of costs relating to the
attendance by its
employees at meetings of the Fund's Board.
DSTC also acts as custodian for the Fund's assets and
appoints
subcustodians for the Fund's assets held outside of the United
States. DSTC has
appointed DBS Bank Ltd. ("DBS Bank"), an affiliate of the
Manager, to act as the
subcustodian for all of the cash and securities of the Fund
held in Singapore.
As compensation for its services as custodian, DSTC receives a
monthly fee and
reimbursement of out-of- pocket expenses related to the Fund.
Such expenses
include the fees and out-of-pocket expenses of each of the
subcustodians. During
the six months ended April 30, 2004, DSTC earned $9,673 and
DBS Bank earned
$33,079 from the Fund for their respective custodial services.
At April 30, 2004, the Fund owed to DSTC $14,379 and
$16,592 for
administration and custodian fees, respectively. The latter
amount includes fees
and expenses payable to DBS Bank totaling $15,412.
During the six months ended April 30, 2004, the Fund paid
or accrued
$29,835 for legal services, in connection with the Fund's on-
going operations,
to a law firm of which the Fund's Assistant Secretary is a
partner.
INVESTMENTS IN SECURITIES AND FEDERAL INCOME TAX MATTERS
For federal income tax purposes, the cost of securities
owned at April 30,
2004 was substantially the same as the cost of securities for
financial
statement purposes. At April 30, 2004, the net unrealized
appreciation on
investments, excluding short-term securities, of $12,415,009
was composed of
gross appreciation of $13,640,685 for those investments having
an excess of
value over cost, and gross depreciation of $1,189,676 for
those investments
having an excess of cost over value. For the six months ended
April 30, 2004,
the total aggregate cost
12
of purchases and net proceeds from sales of portfolio
securities, excluding the
short-term securities, were $32,390,269 and $32,500,883,
respectively.
At October 31, 2003, the Fund had a remaining capital
loss carryover of
$43,764,295, of which $11,430,364 expires in the year 2006,
$14,066,604 expires
in the year 2008, $16,509,415 expires in the year 2009 and
$1,757,912 expires in
the year 2010, available to offset future net capital gains.
CONCENTRATION OF RISK
Investments in countries in which the Fund may invest may
involve certain
considerations and risks not typically associated with U.S.
investments as a
result of, among others, the possibility of future political
and economic
developments and the level of governmental supervision and
regulation of the
securities markets in which the Fund invests.
At April 30, 2004, the Fund had 12,142,578 Singapore
Dollars valued at
$7,125,090 on deposit with a single financial institution.
CAPITAL STOCK
There are 100,000,000 shares of $0.01 par value common
stock authorized.
During the six months ended April 30, 2004, 1,829 shares were
issued as a result
of the reinvestment of dividends paid to those shareholders
electing to reinvest
dividends. Of the 9,207,133 shares outstanding at April 30,
2004, Daiwa
Securities America, Inc., an affiliate of the Adviser and
DSTC, owned 14,745
shares.
13
FINANCIAL HIGHLIGHTS
Selected data for a share of capital stock outstanding during
each period is
presented below:
FOR THE SIX
MONTHS
ENDED
APRIL 30,
FOR THE YEARS ENDED OCTOBER 31,
2004
- --------------------------------------------------------------
(UNAUDITED)
2003 2002 2001 2000 1999
- --------------------------------------------------------------
- --------------------------------------------------------------
- ------
Net asset value, beginning of period $
8.81 $ 6.46 $ 5.76 $ 8.12 $ 10.07 $
7.09
-----------
- - ---------- ---------- ---------- ---------- ----
- ------
Net investment income (loss)
(0.01) 0.08 0.02 0.10 --*
(0.04)
Net realized and unrealized gains (losses) on
investments and foreign currency transactions
0.51 2.28 0.76 (2.46) (1.95)
3.13
-----------
- - ---------- ---------- ---------- ---------- ----
- ------
Net increase (decrease) in net asset value
resulting from operations
0.50 2.36 0.78 (2.36) (1.95)
3.09
-----------
- - ---------- ---------- ---------- ---------- ----
- ------
Less: dividends and distributions to shareholders
Net investment income
(0.10) (0.01) (0.08) -- --
- --
Net realized gains on investments and foreign
currency transactions -
- - -- -- -- --
(0.11)
-----------
- - ---------- ---------- ---------- ---------- ----
- ------
Net asset value, end of period $
9.21 $ 8.81 $ 6.46 $ 5.76 $ 8.12 $
10.07
============ ========== ========== ==========
========== ==========
Per share market value, end of period $
7.550 $ 7.620 $ 5.000 $ 4.480 $ 6.375
$ 8.938
============ ========== ========== ==========
========== ==========
Total investment return:
Based on market price at beginning and end of
period, assuming reinvestment of dividends
(13.20)% 52.59% 13.39% (29.73)% (28.68)%
42.44%
Based on net asset value at beginning and end
of period, assuming reinvestment of dividends
5.89% 36.55% 13.94% (29.06)% (19.36)%
44.30%
Ratios and supplemental data:
Net assets, end of period (in millions) $
84.8 $ 81.1 $ 59.4 $ 53.0 $ 74.7 $
92.6
Ratios to average net assets of:
Expenses, including waiver of Management and
Advisory fee applicable to net investment
income
1.61%** 1.85% 2.12% 2.15% 1.93%
1.97%
Expenses, excluding waiver of Management and
Advisory fee applicable to net investment
income
1.80%** 2.04% 2.20% -- --
- --
Net investment income (loss)
(0.20)%** 1.19% 0.23% 1.47% 0.04%
(0.42)%
Portfolio turnover
40.43% 93.13% 103.33% 152.18% 155.83%
201.76%
- ----------
* Represents less than 0.005 per share.
**Annualized.
14
RESULTS OF ANNUAL MEETING OF STOCKHOLDERS (UNAUDITED)
On June 2, 2004, the Annual Meeting of Stockholders of
The Singapore Fund,
Inc. (the "Fund") was held and the following matter was voted
upon and passed.
Election of two Class I Directors to the Board of
Directors of the Fund to
serve for a term expiring on the date on which the Annual
Meeting of
Stockholders is held in the year 2007.
NUMBER OF SHARES/VOTES
----------------------
PROXY AUTHORITY
CLASS I VOTED FOR
WITHHELD
--------------- ---------
- ---------------
David G. Harmer 6,437,382
1,007,706
Oren G. Shaffer 6,439,819
1,005,269
In addition to the two Directors re-elected at the
Meeting, Austin C.
Dowling, Martin J. Gruber and Ikuo Mori were the other members
of the Board who
continued to serve as Directors of the Fund.
AN IMPORTANT NOTICE CONCERNING OUR PRIVACY POLICY
This Privacy Notice describes the types of non-public
information we
collect about you, the ways we safeguard the confidentiality
of this information
and when this information may be shared with others. In this
Privacy Notice, the
terms "we," "our" and "us" refer to the Fund. The term "you"
in this Privacy
Notice refers broadly to all of our individual stockholders
(including
prospective and former individual stockholders).
In order to provide you with services, we collect certain
non-public
information about you. We obtain this personal information
from the following
sources:
- Applications and other forms you submit to us.
- Dealings and transactions with us or others.
We do not disclose any non-public personal information
about you to anyone,
except as permitted by law. For instance, so that we may
effect transactions
that you request or authorize, we may disclose the information
we collect to
companies that perform services on our behalf, such as
printers and mailers that
assist us in the distribution of investor materials. These
companies will use
this information only for the services for which we hired
them, and are not
permitted to use or share this information for any other
purpose.
We maintain physical, electronic and procedural security
measures that
comply with federal standards to safeguard your non-public
personal information.
Access to such information is restricted to those agents of
the Fund who are
trained in the proper handling of client information and who
need to know that
information in order to provide services to stockholders.
15
BOARD OF DIRECTORS
Ikuo Mori, CHAIRMAN
Austin C. Dowling
Martin J. Gruber
David G. Harmer
Oren G. Shaffer
OFFICERS
John J. O'Keefe
VICE PRESIDENT AND TREASURER
Yuko Uchida
SECRETARY
Laurence E. Cranch
ASSISTANT SECRETARY
ADDRESS OF THE FUND
c/o Daiwa Securities Trust Company
One Evertrust Plaza, 9th Floor
Jersey City, NJ 07302-3051
INVESTMENT MANAGER
DBS Asset Management (United States) Pte. Ltd.
INVESTMENT ADVISER
Daiwa SB Investments (Singapore) Ltd.
ADMINISTRATOR AND CUSTODIAN
Daiwa Securities Trust Company
TRANSFER AGENT AND REGISTRAR
EquiServe Trust Company, N.A.
LEGAL COUNSEL
Clifford Chance US LLP
INDEPENDENT REGISTEREDPUBLIC ACCOUNTING FIRM
PricewaterhouseCoopers LLP
Notice is hereby given in accordance with Section 23(c) of the
Investment
Company Act of 1940 that from time to time the Fund may
purchase shares of its
common stock in the open market at prevailing market prices.
This report is sent to shareholders of the Fund for their
information. It is not
a prospectus, circular or represen-tation intended for use in
the purchase or
sale of shares of the Fund or of any securities mentioned in
the report. The
financial information included herein is taken from the
records of the Fund
without examination by the Independent Registered Public
Accounting Firm which
does not express an opinion thereon.
ITEM 2. CODE OF ETHICS. Not applicable for semi-annual report.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. Not applicable for
semi-annual report.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. Not applicable
for semi-annual report.
ITEMS 5-6. (RESERVED)
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR
CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable for
semi-annual report.
ITEMS 8. (RESERVED)
ITEM 9. CONTROLS AND PROCEDURES.
(a) Based on an evaluation of the registrant's disclosure
controls and procedures as of June 2, 2004, the
disclosure controls and procedures are reasonably
designed to ensure that the information required in
filings on Forms N-CSR is recorded, processed,
summarized, and reported on a timely basis.
(b) There were no significant changes in the registrant's
internal controls or in other factors that could
affect these controls subsequent to the date of our
evaluation, including any corrective actions with
regard to significant deficiencies and material
weaknesses.
ITEMS 10. EXHIBITS.
(a) Any code of ethics, or amendment thereto, that is the
subject of the disclosure required by Item 2, to the
extent that the registrant intends to satisfy the Item
2 requirements through filing of an exhibit: Not
applicable for semi-annual report.
(b) A separate certification for each principal executive
officer and principal financial officer of the
registrant as required by Rule 30a-2 under the Act (17
CFR 270.30a-2) in the exact form set forth below:
Attached hereto.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934 and the Investment Company Act of 1940, the registrant
has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
(Registrant) The Singapore Fund,
Inc.
By (Signature and Title)* \s\ John J.
O'Keefe
- ---------------------------
- --------
John J. O'Keefe, Vice
President & Treasurer
Date: June 28, 2004
Pursuant to the requirements of the Securities Exchange Act of
1934 and the Investment Company Act of 1940, this report has
been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
By (Signature and Title)* \s\ John J.
O'Keefe
- ---------------------------
- --------
John J. O'Keefe, Vice
President & Treasurer
Date: June 28, 2004
By (Signature and Title)* \s\ Ikuo Mori
- ---------------------------
- --------
Ikuo Mori, Chairman
Date: June 28, 2004
* Print the name and title of each signing officer under his
or her signature.
CERTIFICATION
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, John J. O'Keefe, certify that:
1. I have reviewed this report on Form N-CSR of The Singapore
Fund, Inc.
2. Based on my knowledge, this report does not contain any
untrue statement of a material fact or omit to state a
material fact necessary to make the statements made, in light
of the circumstances under which such statements were made,
not misleading with respect to the period covered by this
report;
3. Based on my knowledge, the financial statements, and other
financial information included in this report, fairly present
in all material respects the financial condition, results of
operations, changes in net assets, and cash flows (if the
financial statements are required to include a statement of
cash flows) of the registrant as of, and for, the periods
presented in this report;
4. The registrant's other certifying officers and I are
responsible for establishing and maintaining disclosure
controls and procedures (as defined in Rule 30a-2(c) under the
Investment Company Act of 1940) for the registrant and have:
a) designed such disclosure controls and procedures to ensure
that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us
by others within those entities, particularly during the
period in which this report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to
the filing date of this report (the "Evaluation Date"); and
c) presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures based
on our evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have
disclosed, based on our most recent evaluation, to the
registrant's auditors and the audit committee of the
registrant's board of directors (or persons performing the
equivalent functions):
a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the
registrant's ability to record, process, summarize, and report
financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves
management or other employees who have a significant role in
the registrant's internal controls; and
6. The registrant's other certifying officers and I have
indicated in this report whether or not there were significant
changes in internal controls or in other factors that could
significantly affect internal controls subsequent to the date
of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material
weaknesses.
Date: June 28, 2004
\s\John J. O'Keefe
- ---------------------------------------
John J. O'Keefe, Vice President & Treasurer
CERTIFICATION
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Ikuo Mori, certify that:
1. I have reviewed this report on Form N-CSR of The Singapore
Fund, Inc.
2. Based on my knowledge, this report does not contain any
untrue statement of a material fact or omit to state a
material fact necessary to make the statements made, in light
of the circumstances under which such statements were made,
not misleading with respect to the period covered by this
report;
3. Based on my knowledge, the financial statements, and other
financial information included in this report, fairly present
in all material respects the financial condition, results of
operations, changes in net assets, and cash flows (if the
financial statements are required to include a statement of
cash flows) of the registrant as of, and for, the periods
presented in this report;
4. The registrant's other certifying officers and I are
responsible for establishing and maintaining disclosure
controls and procedures (as defined in Rule 30a-2(c) under the
Investment Company Act of 1940) for the registrant and have:
a) designed such disclosure controls and procedures to ensure
that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us
by others within those entities, particularly during the
period in which this report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to
the filing date of this report (the "Evaluation Date"); and
c) presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures based
on our evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have
disclosed, based on our most recent evaluation, to the
registrant's auditors and the audit committee of the
registrant's board of directors (or persons performing the
equivalent functions):
a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the
registrant's ability to record, process, summarize, and report
financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves
management or other employees who have a significant role in
the registrant's internal controls; and
6. The registrant's other certifying officers and I have
indicated in this report whether or not there were significant
changes in internal controls or in other factors that could
significantly affect internal controls subsequent to the date
of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material
weaknesses.
Date: June 28, 2004
\s\ Ikuo Mori
- ---------------------------------------
Ikuo Mori, Chairman
CERTIFICATION
Pursuant to Section 906
of the Sarbanes-Oxley Act of 2002
The undersigned, the Vice President & Treasurer of The
Singapore Fund, Inc. (the "Fund"), with respect to the Form N-
CSR for the period ended April 30, 2004 as filed with the
Securities and Exchange Commission, hereby certifies, pursuant
to 18 U.S.C. Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002, that:
1. such Form N-CSR fully complies with the requirements of
section 13(a) or 15(d) of the Securities Exchange Act of 1934;
and
2. the information contained in such Form N-CSR fairly
presents, in all material respects, the financial condition
and results of operations of the Funds.
Dated: June 28, 2004
/s/ John J. O'Keefe
- ----------------------------------
John J. O'Keefe
This certification is being furnished solely pursuant to 18
U.S.C. Section 1350 and is not being filed as part of the
Report or as a separate disclosure document.
CERTIFICATION
Pursuant to Section 906
of the Sarbanes-Oxley Act of 2002
The undersigned, the Chairman of The Singapore Fund, Inc. (the
"Fund"), with respect to the Form N-CSR for the period ended
April 30, 2004 as filed with the Securities and Exchange
Commission, hereby certifies, pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002, that:
1. such Form N-CSR fully complies with the requirements of
section 13(a) or 15(d) of the Securities Exchange Act of 1934;
and
2. the information contained in such Form N-CSR fairly
presents, in all material respects, the financial condition
and results of operations of the Funds.
Dated: June 28, 2004
/s/ Ikuo Mori
- ----------------------------------
Ikuo Mori
This certification is being furnished solely pursuant to 18
U.S.C. Section 1350 and is not being filed as part of the
Report or as a separate disclosure document.
EXHIBIT B(1)
NYA 612686.1
EXHIBIT B(2)