THIRD QUARTER REPORT
September 30, 2002
Morgan Stanley Emerging Markets Fund, Inc.
DIRECTORS AND OFFICERS
Barton M. Biggs
CHAIRMAN OF THE BOARD OF DIRECTORS
Ronald E. Robison
PRESIDENT AND DIRECTOR
John D. Barrett II
DIRECTOR
Thomas P. Gerrity
DIRECTOR
Gerard E. Jones
DIRECTOR
Joseph J. Kearns
DIRECTOR
Vincent R. McLean
DIRECTOR
C. Oscar Morong, Jr.
DIRECTOR
William G. Morton, Jr.
DIRECTOR
Michael Nugent
DIRECTOR
Fergus Reid
DIRECTOR
Stefanie V. Chang
VICE PRESIDENT
Lorraine Truten
VICE PRESIDENT
James W. Garrett
TREASURER
Mary E. Mullin
SECRETARY
Belinda A. Brady
ASSISTANT TREASURER
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
STOCKHOLDER SERVICING AGENT
American Stock Transfer & Trust Company
59 Maiden Lane
New York, New York 10030
(800) 278-4353
LEGAL COUNSEL
Clifford Chance Rogers & Wells LLP
200 Park Avenue
New York, New York 10166
INDEPENDENT AUDITOR
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.
(C) 2002 Morgan Stanley
[MORGAN STANLEY LOGO]
Morgan Stanley
Emerging Markets Fund, Inc.
Morgan Stanley
Investment Management Inc.
Investment Adviser
MORGAN STANLEY EMERGING MARKETS FUND, INC.
OVERVIEW
LETTER TO STOCKHOLDERS
For the nine months ended September 30, 2002, the Morgan Stanley Emerging
Markets Fund, Inc. (the "Fund") had a total return, based on net asset value per
share, of -12.92% compared with -14.73% for the Morgan Stanley Capital
International (MSCI) Emerging Markets Free Net Index (the "Index"). On September
30, 2002, the closing price of the Fund's shares on the New York Stock Exchange
was $7.82, representing a 15.9% discount to the Fund's net asset value per
share.
MARKET REVIEW
Outperformance relative to the Index was primarily driven by country allocation,
although stock selection also helped performance. In particular, our overweight
exposure to Indonesia (+38.1%, Index return) and South Korea (+4.7%), and our
underweight stance in Argentina (-62.1%) and Chile (-29.9%) contributed to
performance. Stock selection in South Africa, India and Taiwan was also strong.
Although the emerging markets have fallen 14.7% on a year-to-date basis, the
asset class has been successful in outperforming developed equity markets, such
as Europe, Australasia and the Far East (EAFE), which has fallen 21.0% and the
S&P 500 Index, which has declined 28.2%. Both developed and emerging markets
have been affected by concerns of a "double dip" in the developed economies,
fears of a war with Iraq, high oil prices and fraudulent corporate accounting in
the U.S. and abroad. Within the emerging markets, Latin America was the worst
performing region declining 35.7% as Argentina and Brazil tumbled 62.1% and
51.2% respectively, given financial and political woes. Asian equity markets
(-12.1%) struggled to shake off the malaise affecting most of the equity
markets. Europe, the Middle East and Africa was the best performing region,
losing 6.6%.
Most recently, we have added to the Fund's exposure in Taiwan and Turkey. In
Taiwan, following the market's recent sharp underperformance, we carefully added
chosen securities within the technology and financials sector.
MARKET OUTLOOK
While a credible case can be made that economic uncertainty should remain high,
we believe that the world markets have bottomed for this cycle. We believe the
emerging markets are well positioned to both continue to outperform global
markets and once sentiment has stabilized, to rebound sharply due to cheap
relative valuations and leveraged exposure to the pick-up in global economic
activity. Convergence opportunities, natural resource providers and domestic
demand generators are all part of the case for emerging markets. On a bottom-up
basis, we continue 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 stockholder value and reducing the discount at which the Fund's shares
traded from their net asset value. For the nine months ended September 30, 2002,
the Fund repurchased 297,579 of its shares at an average discount of 15.38% from
net asset value per share. Since the inception of the program, the Fund has
repurchased 4,282,319 of its shares at an average discount of 20.28% 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
October 2002
2
MORGAN STANLEY EMERGING MARKETS FUND, INC.
September 30, 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 (9.39)% -- (12.92)% -- (14.73)% --
One Year 15.00 15.00% 11.78 11.78% 7.93 7.93%
Five Year (33.17) (7.75) (29.74) (6.81) (40.88) (9.98)
Ten Year 31.29 2.76 53.44 4.37 10.73 1.02
Since Inception* 54.24 4.05 83.43 5.72 26.01 2.14
Past performance is not predictive of future performance.
[CHART]
Returns and Per Share Information
NINE MONTHS
ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
--------------------------------------------------------------------------------------------------------
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 $9.30
Market Value Per Share $18.13 $31.63 $21.50 $ 15.50 $13.88 $ 13.06 $ 8.13 $16.31 $ 8.75 $ 8.63 $7.82
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)% (12.92)%
Index Total Return(3) 11.40% 74.84% (7.32)% (5.21)% 6.03% (11.59)% (25.34)% 66.48% (30.97)% (2.62)% (14.73)%
(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
stockholder'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 RELATIVELY HIGHER DEGREE OF VOLATILITY.
3
MORGAN STANLEY EMERGING MARKETS FUND, INC.
September 30, 2002 (Unaudited)
Portfolio Summary
ALLOCATION OF TOTAL INVESTMENTS
[CHART]
Equity Securities 97.3%
Short-Term Investments 2.7%
INDUSTRIES
[CHART]
Other 49.5%
Semiconductor Equipment
& Products 13.8%
Banks 11.8%
Metals & Mining 10.4%
Oil & Gas 8.4%
Diversified Telecommunication
Services 6.1%
COUNTRY WEIGHTINGS
[CHART]
Other 38.0%
South Korea 22.7%
Taiwan 13.2%
South Africa 11.0%
Mexico 9.3%
China 5.8%
TEN LARGEST HOLDINGS*
PERCENT OF
NET ASSETS
----------------------------------------------------------------------
1. Samsung Electronics Co., Ltd. (South Korea) 9.2%
2. Anglo American plc (South Africa) 3.9
3. Telmex (Mexico) 2.9
4. Taiwan Semiconductor Manufacturing Co., Ltd. (Taiwan) 2.8
5. LUKoil Holdings (Russia) 2.3
6. Teva Pharmaceutical Industries Ltd. (Israel) 1.8
7. POSCO (South Korea) 1.8
8. SK Telecom Co., Ltd. (South Korea) 1.6
9. Wal-Mart de Mexico (Mexico) 1.5
10. Hyundai Motor Co., Ltd. (South Korea) 1.5
-----
29.3%
-----
* Excludes Short-Term Investments
4
MORGAN STANLEY EMERGING MARKETS FUND, INC.
STATEMENT OF NET ASSETS
September 30, 2002 (Unaudited)
Statement of Net Assets
VALUE
SHARES (000)
----------------------------------------------------------------------------------------
COMMON STOCKS (96.2%)
(UNLESS OTHERWISE NOTED)
----------------------------------------------------------------------------------------
Brazil (4.2%)
AEROSPACE & DEFENSE
Embraer ADR 32,258 $ 429
----------------------------------------------------------------------------------------
BANKS
Banco Bradesco SA ADR 15,756 167
Banco Bradesco SA (Preferred) 44,088,143 93
Banco Itau SA ADR 9,260 145
Banco Itau SA (Preferred) 13,725,000 433
Banco Nacional SA (Preferred) 61,598,720 (a,b) --@
Unibanco SA GDR 19,100 136
----------------------------------------------------------------------------------------
974
----------------------------------------------------------------------------------------
BEVERAGES
AmBev 1,346,000 148
AmBev (Preferred) ADR 139,729 1,498
----------------------------------------------------------------------------------------
1,646
----------------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES
Brasil Telecom Participacoes SA (Preferred) 12,578,445 56
Brasil Telecom Participacoes SA (Preferred) ADR 12,412 276
Brasil Telecom SA (Preferred) 8,331,048 24
----------------------------------------------------------------------------------------
356
----------------------------------------------------------------------------------------
ELECTRIC UTILITIES
CEMIG ADR 31,790 170
CEMIG (Preferred) 25,454,961 139
----------------------------------------------------------------------------------------
309
----------------------------------------------------------------------------------------
METALS & MINING
CVRD ADR 12,600 287
CVRD (Preferred) ADR 35,662 772
CVRD (Preferred), 'A' 38,351 828
----------------------------------------------------------------------------------------
1,887
----------------------------------------------------------------------------------------
MULTILINE RETAIL
Lojas Arapua SA GDR 31,540 (a,b) --@
Lojas Arapua SA (Preferred) 30,412,000 (a,b) --@
----------------------------------------------------------------------------------------
--@
----------------------------------------------------------------------------------------
OIL & GAS
Petrobras SA 3,900 42
Petrobras SA ADR 363 4
Petrobras SA (Preferred) 87,808 856
Petrobras SA (Preferred) ADR 17,648 168
----------------------------------------------------------------------------------------
1,070
----------------------------------------------------------------------------------------
PAPER & FOREST PRODUCTS
Votorantim Celulose e Papel SA ADR 20,600 288
----------------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES
Celular CRT (Preferred), 'A' 3,512,547 299
Tele Celular Sul ADR 6,432 42
Telesp Celular SA ADR 3,200 (a) 6
----------------------------------------------------------------------------------------
347
----------------------------------------------------------------------------------------
7,306
========================================================================================
Chile (0.3%)
DIVERSIFIED TELECOMMUNICATION SERVICES
Telefonica CTC Chile ADR 49,740 435
----------------------------------------------------------------------------------------
ELECTRIC UTILITIES
Enersis SA ADR 8,500 (a) 38
----------------------------------------------------------------------------------------
473
========================================================================================
China (5.8%)
AIRLINES
China Southern Airlines Co., Ltd. 1,536,000 382
----------------------------------------------------------------------------------------
CHEMICALS
Sinopec Shanghai Petrochemical Co., Ltd., 'H' 4,632,000 (a) 511
----------------------------------------------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES
Travelsky Technology Ltd. 525,000 315
----------------------------------------------------------------------------------------
COMPUTERS & PERIPHERALS
TPV Technology Ltd. 1,290,000 373
----------------------------------------------------------------------------------------
DISTRIBUTORS
China Resources Enterprise Ltd. 136,000 126
----------------------------------------------------------------------------------------
ELECTRIC UTILITIES
Huaneng Power International, Inc., 'H' 1,632,000 1,276
----------------------------------------------------------------------------------------
ELECTRONIC EQUIPMENT & INSTRUMENTS
Byd Co., Ltd. 201,000 (a) 407
----------------------------------------------------------------------------------------
FOOD PRODUCTS
People's Food Holdings Ltd. 1,010,000 537
----------------------------------------------------------------------------------------
METALS & MINING
Aluminum Corp. of China Ltd. 1,088,000 108
Yanzhou Coal Mining Co., Ltd. 'H' 1,412,000 466
----------------------------------------------------------------------------------------
574
----------------------------------------------------------------------------------------
OIL & GAS
CNOOC Ltd. 1,008,000 1,402
PetroChina Co., Ltd. 2,892,000 586
----------------------------------------------------------------------------------------
1,988
----------------------------------------------------------------------------------------
TEXTILES & APPAREL
Texwinca Holdings Ltd. 278,000 187
----------------------------------------------------------------------------------------
TRANSPORTATION INFRASTRUCTURE
Cosco Pacific Ltd. 1,158,000 809
----------------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES
China Mobile (Hong Kong) Ltd. 1,097,000 (a) 2,532
----------------------------------------------------------------------------------------
10,017
========================================================================================
5
MORGAN STANLEY EMERGING MARKETS FUND, INC.
STATEMENT OF NET ASSETS
September 30, 2002 (Unaudited)
Statement of Net Assets (Cont'd)
VALUE
SHARES (000)
----------------------------------------------------------------------------------------
Czech Republic (0.2%)
BANKS
Komercni Banka AS 4,200 $ 238
Komercni Banka AS GDR 8,100 152
----------------------------------------------------------------------------------------
390
----------------------------------------------------------------------------------------
Hungary (1.6%)
BANKS
OTP Bank Rt. 143,441 1,176
OTP Bank Rt. GDR 24,200 397
----------------------------------------------------------------------------------------
1,573
----------------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES
Matav Rt. 100,736 307
Matav Rt. ADR 23,699 367
----------------------------------------------------------------------------------------
674
----------------------------------------------------------------------------------------
OIL & GAS
MOL Magyar Olaj-es Gazipari Rt. 25,357 543
MOL Magyar Olaj-es Gazipari Rt. GDR 710 15
----------------------------------------------------------------------------------------
558
----------------------------------------------------------------------------------------
2,805
========================================================================================
India (5.3%)
AUTOMOBILES
Hero Honda Motors Ltd. 131,200 705
Tata Engineering & Locomotive Co., Ltd. 82,000 (a) 225
----------------------------------------------------------------------------------------
930
----------------------------------------------------------------------------------------
BANKS
HDFC Bank Ltd. 10,700 48
HDFC Bank Ltd. ADR 18,200 258
State Bank of India Ltd. 229,550 1,121
----------------------------------------------------------------------------------------
1,427
----------------------------------------------------------------------------------------
CHEMICALS
Reliance Industries Ltd. 74,933 400
----------------------------------------------------------------------------------------
CONSTRUCTION MATERIALS
Gujarat Ambuja Cements Ltd 102,500 347
----------------------------------------------------------------------------------------
DIVERSIFIED FINANCIALS
Housing Development Finance Corp., Ltd. 29,210 363
----------------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES
Mahanagar Telephone Nigam Ltd. 157,430 358
----------------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT
Bharat Heavy Electricals Ltd. 123,700 409
----------------------------------------------------------------------------------------
ENERGY EQUIPMENT & SERVICES
Oil & Natural Gas Corp., Ltd. 53,000 374
----------------------------------------------------------------------------------------
HOUSEHOLD PRODUCTS
Colgate-Palmolive (India) Ltd. 73,190 199
Hindustan Lever Ltd. 105,000 375
----------------------------------------------------------------------------------------
574
----------------------------------------------------------------------------------------
INTERNET SOFTWARE & SERVICES
India Info.com PCL 116,052 (b) --@
----------------------------------------------------------------------------------------
IT CONSULTING & SERVICES
Infosys Technologies Ltd. 15,150 1,065
Wipro Ltd. 6,500 178
Wipro Ltd. ADR 6,000 166
----------------------------------------------------------------------------------------
1,409
----------------------------------------------------------------------------------------
METALS & MINING
Hindalco Industries Ltd. 28,100 304
Steel Authority of India Ltd. 1,105,066 (a) 147
Tata Iron & Steel Co., Ltd. 157,000 377
----------------------------------------------------------------------------------------
828
----------------------------------------------------------------------------------------
OIL & GAS
Bharat Petroleum Corp., Ltd. 52,850 188
Hindustan Petroleum Corp., Ltd. 66,500 231
----------------------------------------------------------------------------------------
419
----------------------------------------------------------------------------------------
PHARMACEUTICALS
Dr. Reddy's Laboratories Ltd. 14,000 241
Ranbaxy Laboratories Ltd. 29,000 550
----------------------------------------------------------------------------------------
791
----------------------------------------------------------------------------------------
ROAD & RAIL
Container Corp. of India Ltd. 107,600 509
----------------------------------------------------------------------------------------
9,138
========================================================================================
Indonesia (2.7%)
AUTOMOBILES
Astra International Tbk PT 4,008,500 (a) 1,192
----------------------------------------------------------------------------------------
BANKS
Bank Central Asia Tbk PT 2,635,500 652
----------------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES
Telekomunikasi Indonesia Tbk PT 4,179,500 1,731
----------------------------------------------------------------------------------------
MULTILINE RETAIL
Ramayana Lestari Sentosa Tbk PT 42,000 15
----------------------------------------------------------------------------------------
TOBACCO
Bentoel Internasional Investama Tbk PT 6,661,500 (a) 85
Hanjaya Mandala Sampoerna Tbk PT 2,627,000 986
----------------------------------------------------------------------------------------
1,071
----------------------------------------------------------------------------------------
4,661
========================================================================================
Israel (4.1%)
AEROSPACE & DEFENSE
Elbit Systems Ltd. 1 --@
----------------------------------------------------------------------------------------
6
MORGAN STANLEY EMERGING MARKETS FUND, INC.
STATEMENT OF NET ASSETS
September 30, 2002 (Unaudited)
Statement of Net Assets (Cont'd)
VALUE
SHARES (000)
----------------------------------------------------------------------------------------
Israel (Cont'd)
COMMUNICATIONS EQUIPMENT
ECI Telecom Ltd. 180,332 (a) $ 306
----------------------------------------------------------------------------------------
INTERNET SOFTWARE & SERVICES
Check Point Software Technologies Ltd. 158,444 (a) 2,177
RADWARE Ltd. 42,425 (a) 281
----------------------------------------------------------------------------------------
2,458
----------------------------------------------------------------------------------------
PHARMACEUTICALS
Teva Pharmaceutical Industries Ltd. 12,420 828
Teva Pharmaceutical Industries Ltd. ADR 34,607 2,319
----------------------------------------------------------------------------------------
3,147
----------------------------------------------------------------------------------------
SEMICONDUCTOR EQUIPMENT & PRODUCTS
Zoran Corp. 68,900 (a) 758
----------------------------------------------------------------------------------------
SOFTWARE
TTI Team Telecom
International Ltd. 58,937 (a) 400
----------------------------------------------------------------------------------------
7,069
========================================================================================
Malaysia (4.6%)
AUTOMOBILES
Perusahaan Otomobil Nasional Bhd 193,000 394
Tan Chong Motor Holdings Bhd 326,000 89
----------------------------------------------------------------------------------------
483
----------------------------------------------------------------------------------------
BANKS
Commerce Asset Holdings Bhd 550,000 437
Malayan Banking Bhd 798,900 1,682
Public Bank Bhd 971,875 593
----------------------------------------------------------------------------------------
2,712
----------------------------------------------------------------------------------------
CONSTRUCTION & ENGINEERING
Gamuda Bhd 802,000 1,192
----------------------------------------------------------------------------------------
DIVERSIFIED FINANCIALS
AMMB Holdings Bhd 477,000 510
----------------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES
Technology Resources
Industries Bhd 1,853,000 (a) 1,000
----------------------------------------------------------------------------------------
HOTELS, RESTAURANTS & LEISURE
Magnum Corp. Bhd 1,288,000 807
Resorts World Bhd 240,000 568
----------------------------------------------------------------------------------------
1,375
----------------------------------------------------------------------------------------
REAL ESTATE
SP Setia Bhd 570,500 359
----------------------------------------------------------------------------------------
SEMICONDUCTOR EQUIPMENT & PRODUCTS
Malaysian Pacific Industries Bhd 118,000 354
----------------------------------------------------------------------------------------
7,985
========================================================================================
Mexico (9.3%)
BANKS
Grupo Financiero BBVA Bancomer, 'B' 2,549,181 (a) 1,810
----------------------------------------------------------------------------------------
BEVERAGES
Femsa ADR 39 1
Femsa UBD 350,775 1,189
Grupo Modelo SA, 'C' 363,800 912
----------------------------------------------------------------------------------------
2,102
----------------------------------------------------------------------------------------
CONSTRUCTION MATERIALS
Cemex SA 162,007 677
Cemex SA ADR 32,121 669
----------------------------------------------------------------------------------------
1,346
----------------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES
Telmex, 'L' ADR 176,875 4,979
----------------------------------------------------------------------------------------
HOUSEHOLD PRODUCTS
Kimberly-Clark de Mexico SA, 'A' 158,658 355
----------------------------------------------------------------------------------------
MULTILINE RETAIL
Wal-Mart de Mexico ADR 28,162 681
Wal-Mart de Mexico, 'C' 304,748 639
Wal-Mart de Mexico, 'V' 520,819 1,262
----------------------------------------------------------------------------------------
2,582
----------------------------------------------------------------------------------------
TRANSPORTATION INFRASTRUCTURE
Grupo Aeroportuario del Sureste SA ADR 26,450 291
Grupo Aeroportuario del Sureste SA, 'B' 149,200 161
----------------------------------------------------------------------------------------
452
----------------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES
America Movil SA de CV ADR 204,627 2,472
----------------------------------------------------------------------------------------
16,098
========================================================================================
Philippines (0.2%)
REAL ESTATE
Ayala Land, Inc. 2,814,500 300
----------------------------------------------------------------------------------------
Poland (1.7%)
BANKS
Bank Pekao SA 46,132 938
----------------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES
Telekomunikacja Polska SA 36,751 (a) 103
Telekomunikacja Polska
SA GDR 115,117 (a) 320
----------------------------------------------------------------------------------------
423
----------------------------------------------------------------------------------------
MULTILINE RETAIL
Eastbridge NV 33,600 (b) 1,344
----------------------------------------------------------------------------------------
7
MORGAN STANLEY EMERGING MARKETS FUND, INC.
STATEMENT OF NET ASSETS
September 30, 2002 (Unaudited)
Statement of Net Assets (Cont'd)
VALUE
SHARES (000)
----------------------------------------------------------------------------------------
Poland (Cont'd)
OIL & GAS
Polski Koncern Naftowy Orlen SA 36,581 $ 143
----------------------------------------------------------------------------------------
2,848
========================================================================================
Russia (4.7%)
METALS & MINING
MMC Norilsk Nickel ADR 7,670 126
----------------------------------------------------------------------------------------
OIL & GAS
Gazprom ADR 22,700 252
LUKoil Holdings ADR 63,819 3,882
Surgutneftegaz ADR 77,025 1,271
Surgutneftegaz ADR (Preferred) 23,039 518
Yukos ADR 15,536 2,091
----------------------------------------------------------------------------------------
8,014
----------------------------------------------------------------------------------------
PAPER & FOREST PRODUCTS
Alliance Cellulose Ltd. 'B' 156,075 (b) --@
----------------------------------------------------------------------------------------
8,140
========================================================================================
South Africa (11.0%)
BANKS
FirstRand Ltd. 537,520 334
Nedcor Ltd. 25,500 240
Standard Bank Group Ltd. 171,280 466
----------------------------------------------------------------------------------------
1,040
----------------------------------------------------------------------------------------
INDUSTRIAL CONGLOMERATES
Barloworld Ltd. 186,110 1,041
Bidvest Group Ltd. 134,715 546
----------------------------------------------------------------------------------------
1,587
----------------------------------------------------------------------------------------
INSURANCE
Liberty Group Ltd. 38,720 192
Old Mutual plc 109,700 120
Old Mutual plc (London Shares) 1,084,930 1,187
Sanlam Ltd. 682,310 485
----------------------------------------------------------------------------------------
1,984
----------------------------------------------------------------------------------------
METALS & MINING
Anglo American Platinum Corp., Ltd. 40,370 1,355
Anglo American plc 261,988 3,317
Anglo American plc (London Shares) 275,310 3,477
Gold Fields Ltd. 156,100 2,013
Gold Fields Ltd. ADR 7,700 98
Impala Platinum Holdings Ltd. 12,720 676
----------------------------------------------------------------------------------------
10,936
----------------------------------------------------------------------------------------
OIL & GAS
Sasol Ltd. 199,770 2,251
----------------------------------------------------------------------------------------
PAPER & FOREST PRODUCTS
Sappi Ltd. 66,670 766
Sappi Ltd. ADR 11,970 137
----------------------------------------------------------------------------------------
903
----------------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES
M-Cell Ltd. 206,340 (a) 162
----------------------------------------------------------------------------------------
18,863
========================================================================================
South Korea (22.7%)
AUTO COMPONENTS
Hyundai Mobis 63,400 1,244
----------------------------------------------------------------------------------------
AUTOMOBILES
Hyundai Motor Co., Ltd. 88,430 2,018
Hyundai Motor Co., Ltd. (Preferred) 47,900 533
----------------------------------------------------------------------------------------
2,551
----------------------------------------------------------------------------------------
BANKS
Kookmin Bank 38,008 1,391
Shinhan Financial Group Co., Ltd. 162,530 1,841
----------------------------------------------------------------------------------------
3,232
----------------------------------------------------------------------------------------
CHEMICALS
LG Chem Ltd. 52,940 1,407
----------------------------------------------------------------------------------------
CONSTRUCTION & ENGINEERING
Hyundai Development Co. 125,080 (a) 702
----------------------------------------------------------------------------------------
DIVERSIFIED FINANCIALS
Daishin Securities Co. 18,060 230
LG Investment & Securities Co., Ltd. 28,350 331
Samsung Securities Co., Ltd. 45,720 (a) 1,114
Seoul Securities Co., Ltd. 136,200 501
----------------------------------------------------------------------------------------
2,176
----------------------------------------------------------------------------------------
ELECTRONIC EQUIPMENT & INSTRUMENTS
Samsung Electro-Mechanics Co., Ltd. 35,447 1,276
----------------------------------------------------------------------------------------
FOOD PRODUCTS
Tongyang Confectionery Corp. 14,000 631
----------------------------------------------------------------------------------------
HOUSEHOLD DURABLES
LG Electronics Ltd. 51,857 (a) 1,414
----------------------------------------------------------------------------------------
HOUSEHOLD PRODUCTS
LG Household & Health Care Ltd. 18,400 602
----------------------------------------------------------------------------------------
INSURANCE
Hyundai Marine & Fire Insurance Co., Ltd. 20,730 456
----------------------------------------------------------------------------------------
MEDIA
CJ39 Shopping Corp. 23,504 1,080
----------------------------------------------------------------------------------------
METALS & MINING
POSCO 35,440 3,087
----------------------------------------------------------------------------------------
8
MORGAN STANLEY EMERGING MARKETS FUND, INC.
STATEMENT OF NET ASSETS
September 30, 2002 (Unaudited)
Statement of Net Assets (Cont'd)
VALUE
SHARES (000)
----------------------------------------------------------------------------------------
South Korea (Cont'd)
MULTILINE RETAIL
Shinsegae Co., Ltd. 4,520 $ 684
----------------------------------------------------------------------------------------
SEMICONDUCTOR EQUIPMENT & PRODUCTS
Samsung Electronics Co., Ltd. 54,922 13,408
Samsung Electronics Co., Ltd. (Preferred) 20,110 2,418
----------------------------------------------------------------------------------------
15,826
----------------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES
SK Telecom Co., Ltd. 14,110 2,735
----------------------------------------------------------------------------------------
39,103
========================================================================================
Taiwan (13.2%)
AIRLINES
Eva Airways Corp. 2,195,000 (a) 777
----------------------------------------------------------------------------------------
BANKS
Taipei Bank 1,386,000 (a) 1,264
Taishin Financial Holdings Co., Ltd. 3,234,000 (a) 1,298
----------------------------------------------------------------------------------------
2,562
----------------------------------------------------------------------------------------
CHEMICALS
Formosa Chemicals & Fibre Corp. 524,403 390
Formosa Plastics Corp. 157,000 150
----------------------------------------------------------------------------------------
540
----------------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT
Accton Technology Corp. 947,975 (a) 1,441
----------------------------------------------------------------------------------------
COMPUTERS & PERIPHERALS
Asustek Computer, Inc. 499,553 1,175
Benq Corp. 468,160 590
Quanta Computer, Inc. 382,200 729
----------------------------------------------------------------------------------------
2,494
----------------------------------------------------------------------------------------
CONSTRUCTION & ENGINEERING
CTCI Corp. 1,108,000 475
----------------------------------------------------------------------------------------
CONSTRUCTION MATERIALS
Taiwan Cement Corp. 1,053,200 (a) 225
----------------------------------------------------------------------------------------
DIVERSIFIED FINANCIALS
Chinatrust Financial Holding Co., Ltd. 3,267,748 (a) 2,296
Fubon Financial Holding Co., Ltd. 183,087 152
Sinopac Holdings Co. 2,522,162 (a) 1,035
----------------------------------------------------------------------------------------
3,483
----------------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT
Phoenixtec Power Co., Ltd. 585,000 354
----------------------------------------------------------------------------------------
ELECTRONIC EQUIPMENT & INSTRUMENTS
Hon Hai Precision Industry Co., Ltd. 579,300 1,936
----------------------------------------------------------------------------------------
FOOD & DRUG RETAILING
President Chain Store Corp. 4,633 7
----------------------------------------------------------------------------------------
LEISURE EQUIPMENT & PRODUCTS
Largan Precision Co., Ltd. 105,300 556
Premier Image Technology Corp. 281,000 362
----------------------------------------------------------------------------------------
918
----------------------------------------------------------------------------------------
METALS & MINING
China Steel Corp. 1,208,816 520
----------------------------------------------------------------------------------------
SEMICONDUCTOR EQUIPMENT & PRODUCTS
ASE Test Ltd. 39,500 (a) 140
Novatek Microelectronics Corp., Ltd. 282,000 554
Orient Semiconductor Electronics Ltd. 826,000 (a) 138
Siliconware Precision Industries Co. 1,102,692 (a) 572
Taiwan Semiconductor Manufacturing Co., Ltd. 3,955,334 (a) 4,662
Taiwan Semiconductor Manufacturing Co., Ltd. ADR 23,200 (a) 147
United Microelectronics Corp. 1,034,439 (a) 703
----------------------------------------------------------------------------------------
6,916
----------------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES
Taiwan Cellular Corp. 183,143 169
----------------------------------------------------------------------------------------
22,817
----------------------------------------------------------------------------------------
Thailand (1.7%)
BANKS
Bangkok Bank PCL 731,800 (a) 896
Thai Farmers Bank PCL 288,100 (a) 170
----------------------------------------------------------------------------------------
1,066
----------------------------------------------------------------------------------------
CONSTRUCTION MATERIALS
Siam Cement (The) PCL NVDR 47,800 831
----------------------------------------------------------------------------------------
HOUSEHOLD DURABLES
Land & Houses PCL 178,800 273
----------------------------------------------------------------------------------------
MEDIA
BEC World PCL (Foreign) 77,100 360
----------------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES
Advanced Info Service PCL (Foreign) 504,600 396
----------------------------------------------------------------------------------------
2,926
========================================================================================
Turkey (2.6%)
BANKS
Akbank TAS 400,498,800 (a) 1,149
Turkiye Garanti Bankasi AS 739,008,928 (a) 648
Turkiye Is Bankasi AS 'C' 105,475,000 (a) 214
----------------------------------------------------------------------------------------
2,011
----------------------------------------------------------------------------------------
9
MORGAN STANLEY EMERGING MARKETS FUND, INC.
STATEMENT OF NET ASSETS
September 30, 2002 (Unaudited)
Statement of Net Assets (Cont'd)
VALUE
SHARES (000)
----------------------------------------------------------------------------------------
Turkey (Cont'd)
BEVERAGES
Anadolu Efes Biracilik ve Malt Sanayii AS 9,117,000 (a) $ 146
----------------------------------------------------------------------------------------
DIVERSIFIED FINANCIALS
Koc Holding AS 65,800,000 (a) 616
----------------------------------------------------------------------------------------
HOUSEHOLD DURABLES
Arcelik AS 84,452,000 (a) 510
----------------------------------------------------------------------------------------
MEDIA
Hurriyet Gazetecilik ve Matbaacilik AS 221,923,175 (a) 469
----------------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES
Turkcell Iletisim Hizmetleri AS 170,035,000 (a) 791
----------------------------------------------------------------------------------------
4,543
========================================================================================
Venezuela (0.3%)
DIVERSIFIED TELECOMMUNICATION SERVICES
CANTV, 'D' ADR 45,243 477
========================================================================================
TOTAL COMMON STOCKS
(Cost $197,329) 165,959
----------------------------------------------------------------------------------------
INVESTMENT COMPANIES (0.5%)
----------------------------------------------------------------------------------------
India (0.5%)
Morgan Stanley Growth Fund (Cost $891) 4,694,400 (a,c) 821
----------------------------------------------------------------------------------------
NO. OF
RIGHTS
----------------------------------------------------------------------------------------
RIGHTS (0.0%)
----------------------------------------------------------------------------------------
Malaysia (0.0%)
REAL ESTATE
SP Setia Bhd, 10/20/02 162,999 18
----------------------------------------------------------------------------------------
Mexico (0.0%)
MEDIA
Grupo Televisa SA, 10/3/02 11,029 (a,b) --@
----------------------------------------------------------------------------------------
TOTAL RIGHTS (Cost $--@) 18
----------------------------------------------------------------------------------------
FACE
AMOUNT
(000)
----------------------------------------------------------------------------------------
DEBT INSTRUMENTS (0.0%)
----------------------------------------------------------------------------------------
India (0.0%)
BUILDING PRODUCTS
DCM Shriram Investments Ltd.
0.00% INR 330 (b,d) --@
----------------------------------------------------------------------------------------
METALS & MINING
DCM Shriram Industries Ltd.
0.00% 335 (b,d) --@
Shri Ishar Alloy Steels Ltd.
15.00% 581 (b,d) --@
----------------------------------------------------------------------------------------
--@
----------------------------------------------------------------------------------------
TOTAL DEBT INSTRUMENTS
(Cost $1,495) -- @
----------------------------------------------------------------------------------------
SHORT-TERM INVESTMENT (2.1%)
----------------------------------------------------------------------------------------
United States (2.1%)
REPURCHASE AGREEMENT
J.P. Morgan Securities Inc., 1.87%,
dated 9/30/02, due 10/1/02 (Cost $3,576) $ 3,576 (e) 3,576
----------------------------------------------------------------------------------------
FOREIGN CURRENCY ON DEPOSIT WITH CUSTODIAN (0.6%)
----------------------------------------------------------------------------------------
Brazilian Real BRL 143 38
Euro EUR 43 42
Hong Kong Dollar HKD 1 --@
Hungarian Forint HUF 275 1
Indian Rupee INR 13,132 272
Malaysian Ringgit MYR 163 43
South African Rand ZAR 137 13
South Korean Won KRW 246,595 202
Taiwan Dollar TWD 15,072 432
Turkish Lira TRL 10,294 --@
----------------------------------------------------------------------------------------
TOTAL FOREIGN CURRENCIES
(Cost $1,046) 1,043
----------------------------------------------------------------------------------------
TOTAL INVESTMENTS (99.4%)
(Cost $204,337) 171,417
----------------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES (0.6%)
----------------------------------------------------------------------------------------
Other Assets $ 3,279
Liabilities (2,263) 1,016
----------------------------------------------------------------------------------------
NET ASSETS (100%)
Applicable to 18,542,025 issued and
outstanding $ 0.01 par value shares
(100,000,000 shares authorized) $ 172,433
----------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE $ 9.30
----------------------------------------------------------------------------------------
(a)--Non-income producing.
(b)--Investments valued at fair value. At September 30, 2002, the Fund held
$1,344,000 of fair-valued securities, representing 0.8% of net assets
(c)--Fund is advised by an affiliate.
(d)--Security is in default.
(e)--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.
@--Value is less than $500.
ADR--American Depository Receipts.
GDR--Global Depository Receipts.
INR--Indian Rupee.
PCL--Public Company Limited.
10