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
|
811-05082
|
|
The Malaysia Fund, Inc.
|
(Exact name of registrant as
specified in charter)
|
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522 Fifth Avenue New York, NY
|
|
10036
|
(Address of principal executive
offices)
|
|
(Zip code)
|
|
Ronald E. Robison
522 Fifth Avenue New York, New York 10036
|
(Name and address of agent for
service)
|
|
Registrants telephone number, including
area code:
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1-800-231-2608
|
|
|
Date of fiscal year end:
|
12/31
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|
|
Date of reporting period:
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6/30/08
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|
|
|
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|
|
|
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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. Section 3507.
ITEM
1. REPORTS TO STOCKHOLDERS.
The
Funds semi-annual report transmitted to shareholders pursuant to Rule 30e-1
under the Investment Company Act of 1940 is as follows:
|
2008 Semi-Annual Report
|
|
|
|
June 30, 2008
|
The Malaysia Fund, Inc. (MAY)
Morgan Stanley
Investment Management Inc.
Investment Adviser
|
The Malaysia Fund, Inc.
|
|
|
|
Overview (unaudited)
|
Letter to Stockholders
Performance
For
the six months ended June 30, 2008, the Malaysia Fund, Inc. (the
Fund) had total returns, based on net asset value and market value per
share (including reinvestment of distributions), of -15.73%, net of fees and
-15.48%, respectively, compared to its benchmark, the Kuala Lumpur
Stock Exchange Composite (KLSE) Index (the Index) expressed in U.S. dollars
which returned -16.89%. On June 30, 2008, the closing price of the Funds
shares on the New York Stock Exchange was $9.17, representing a 10.4% discount
to the Funds net asset value per share. Past performance is no guarantee of
future results.
Factors
Affecting Performance
·
The Malaysia market performed poorly in the
first six months of 2008. High costs of living weighed on both consumer and
business sentiment. The poor showing of the ruling coalition government in the
general elections held on March 8 also had a negative impact on the
markets. In addition, the ruling party losing its comfortable two-thirds
majority and threats of potential defections of several coalition members led
to concerns over the countrys political stability.
·
On the economic front, the government decided
to delay various mega projects that were to take place in states now controlled
by the opposition. This dampened sentiment, as government spending was a key
driver for the economy. A sudden decision to cut the countrys fuel subsidy
further took its toll on consumer sentiment.
Managment
Strategies
·
The Fund benefited from an overweight position
in palm oil stocks, which did well due to a strong increase in agricultural
prices. The Fund also benefited from an underweight position in various
government-linked companies, which underperformed due to disappointing
earnings.
·
Detractors from the Funds performance
included construction stocks, which were affected by the governments cut in
public spending following the elections.
·
The Fund seeks long-term capital appreciation
and integrates top-down sector allocation and bottom-up stocks selection with a
growth bias. The team utilizes a rigorous fundamental research approach that
considers dynamics, valuation, and sentiment and focuses on companies with
strong management and solid earnings.
Sincerely,
Ronald E.
Robison
|
|
|
President
and Principal Executive Officer
|
|
July 2008
|
2
|
The
Malaysia Fund, Inc.
|
|
|
|
June 30, 2008
(unaudited)
|
Investment Advisory Agreement Approval
Nature,
Extent and Quality of Services
The
Board reviewed and considered the nature and extent of the investment advisory
services provided by the Investment Adviser under the Advisory Agreement,
including portfolio management, investment research and equity and fixed income
securities trading. The Board reviewed similar information and factors
regarding the Sub-Adviser, to the extent applicable. The Board also reviewed
and considered the nature and extent of the non-advisory, administrative
services provided by the Funds Administrator under the Administration
Agreement, including accounting, clerical, bookkeeping, compliance, business
management and planning, and the provision of supplies, office space and
utilities at the Investment Advisers expense. (The Investment Adviser, Sub-Adviser
and Administrator together are referred to as the Adviser and the Advisory,
Sub-Advisory and Administration Agreements together are referred to as the
Management Agreement.) The Board also compared the nature of the services
provided by the Adviser with similar services provided by non-affiliated
advisers as reported to the Board by Lipper Inc. (Lipper).
The
Board reviewed and considered the qualifications of the portfolio managers, the
senior administrative managers and other key personnel of the Adviser who
provide the advisory and administrative services to the Fund. The Board
determined that the Advisers portfolio managers and key personnel are well
qualified by education and/or training and experience to perform the services
in an efficient and professional manner. The Board concluded that the nature
and extent of the advisory and administrative services provided were necessary
and appropriate for the conduct of the business and investment activities of
the Fund. The Board also concluded that the overall quality of the advisory and
administrative services was satisfactory.
Performance
Relative to Comparable Funds Managed by Other Advisers
On
a regular basis, the Board reviews the performance of all funds in the Morgan
Stanley Fund Complex, including the Fund, compared to their peers, paying
specific attention to the underperforming funds. In addition, the Board
specifically reviewed the Funds performance for the one-, three- and five-year
periods ended December 31, 2007, as shown in a report provided by Lipper
(the Lipper Report), compared to the performance of comparable funds selected
by Lipper. The Board also discussed with the Adviser the performance goals and
the actual results achieved in managing the Fund. The Board noted the improving
performance trend and concluded that the Funds performance was acceptable.
Fees
Relative to Other Proprietary Funds Managed by the Adviser with Comparable
Investment Strategies
The
Board noted that the Adviser did not manage any other proprietary funds with
investment strategies comparable to those of the Fund.
Fees and
Expenses Relative to Comparable Funds Managed by Other Advisers
The
Board reviewed the advisory and administrative fee (together, the management
fee) rate and total expense ratio of the Fund as compared to the average
management fee rate and average total expense ratio for funds, selected by
Lipper (the expense peer group), managed by other advisers with investment
strategies comparable to those of the Fund, as shown in the Lipper Report. The
Board concluded that the Funds management fee rate and total expense ratio
were competitive with those of its expense peer group.
Breakpoints
and Economies of Scale
The
Board reviewed the structure of the Funds management fee schedule under the
Management Agreement and noted that it includes breakpoints. The Board also
reviewed the level of the Funds management fee and noted that the fee, as a
percentage of the Funds net assets, would decrease as net assets increase
because the management fee includes breakpoints. The Board concluded that the
Funds management fee would reflect economies of scale as assets increase.
Profitability
of the Adviser and Affiliates
The
Board considered information concerning the costs incurred and profits realized
by the Adviser and affiliates during the last year from their relationship with
the Fund and during the last two years from their relationship with the Morgan
Stanley Fund Complex and reviewed with the Adviser the cost allocation
methodology used to determine the profitability of the Adviser and affiliates.
Based on its review of the information it received, the Board concluded that
the profits earned by the Adviser and affiliates were not excessive in light of
the advisory, administrative and other services provided to the Fund.
3
|
The
Malaysia Fund, Inc.
|
|
|
|
June 30, 2008
(unaudited)
|
Investment Advisory Agreement Approval (contd)
Fall-Out
Benefits
The
Board considered so-called fall-out benefits derived by the Adviser and
affiliates from their relationship with the Fund and the Morgan Stanley Fund
Complex, such as commissions on the purchase and sale of Fund shares and
float benefits derived from handling of checks for purchases and sales of
Fund shares, through a broker-dealer affiliate of the Adviser and soft dollar
benefits (discussed in the next section). The Board also considered that, from
time to time, the Adviser may, directly or indirectly, effect trades on behalf
of certain Morgan Stanley Funds through various electronic communications
networks or other alternative trading systems in which the Advisers affiliates
have ownership interests and/or board seats. The Board concluded that the sales
commissions were competitive with those of other broker-dealers and the float
benefits were relatively small.
Soft Dollar
Benefits
The
Board considered whether the Adviser realizes any benefits as a result of
brokerage transactions executed through soft dollar arrangements. Under such arrangements,
brokerage commissions paid by the Fund and/or other funds managed by the
Adviser would be used to pay for research that a securities broker obtains from
third parties, or to pay for both research and execution services from
securities brokers who effect transactions for the Fund. The Board recognized
that the receipt of such research from brokers may reduce the Advisers costs
but concluded that the receipt of such research strengthens the investment
management resources of the Adviser, which may ultimately benefit the Fund and
other funds in the Morgan Stanley Fund Complex.
Adviser
Financially Sound and Financially Capable of Meeting the Funds Needs
The
Board considered whether the Adviser is financially sound and has the resources
necessary to perform its obligations under the Management Agreement. The Board
concluded that the Adviser has the financial resources necessary to fulfill its
obligations under the Management Agreement.
Historical
Relationship Between the Fund and the Adviser
The
Board also reviewed and considered the historical relationship between the Fund
and the Adviser, including the organizational structure of the Adviser, the
policies and procedures formulated and adopted by the Adviser for managing the
Funds operations and the Boards confidence in the competence and integrity of
the senior managers and key personnel of the Adviser. The Board concluded that
it is beneficial for the Fund to continue its relationship with the Adviser.
Other
Factors and Current Trends
The
Board considered the controls and procedures adopted and implemented by the
Adviser and monitored by the Funds Chief Compliance Officer and concluded that
the conduct of business by the Adviser indicates a good faith effort on its
part to adhere to high ethical standards in the conduct of the Funds business.
General
Conclusion
After
considering and weighing all of the above factors, the Board concluded that it
would be in the best interest of the Fund and its shareholders to approve
renewal of the Management Agreement for another year.
4
|
The
Malaysia Fund, Inc.
|
|
|
|
June 30, 2008
(unaudited)
|
Portfolio of Investments
|
|
|
|
Value
|
|
|
|
Shares
|
|
(000)
|
|
COMMON
STOCKS (94.1%)
|
|
|
|
|
|
(Unless
Otherwise Noted)
|
|
|
|
|
|
Automobiles
(1.2%)
|
|
|
|
|
|
Proton Holdings Bhd
|
|
(a)512,000
|
|
$
|
476
|
|
TAN Chong Motor Holdings Bhd
|
|
1,309,000
|
|
725
|
|
|
|
|
|
1,201
|
|
Commercial
Banks (14.5%)
|
|
|
|
|
|
Bumiputra-Commerce Holdings Bhd
|
|
1,908,296
|
|
4,672
|
|
Malayan Banking Bhd
|
|
2,199,475
|
|
4,746
|
|
Public Bank Bhd
|
|
1,544,790
|
|
4,917
|
|
|
|
|
|
14,335
|
|
Construction &
Engineering (4.8%)
|
|
|
|
|
|
Gamuda Bhd
|
|
882,200
|
|
632
|
|
IJM Corp. Bhd
|
|
2,449,600
|
|
4,123
|
|
|
|
|
|
4,755
|
|
Construction
Materials (0.7%)
|
|
|
|
|
|
Lafarge Malayan Cement Bhd
|
|
548,100
|
|
718
|
|
Diversified
Telecommunication Services (5.2%)
|
|
|
|
|
|
Telekom Malaysia Bhd
|
|
1,636,000
|
|
1,592
|
|
TM International Bhd
|
|
(a)1,899,300
|
|
3,575
|
|
|
|
|
|
5,167
|
|
Electric
Utilities (4.9%)
|
|
|
|
|
|
Tenaga Nasional Bhd
|
|
1,941,650
|
|
4,843
|
|
Food
Products (24.0%)
|
|
|
|
|
|
IOI Corp. Bhd
|
|
5,296,250
|
|
12,075
|
|
Kuala Lumpur Kepong Bhd
|
|
1,225,500
|
|
6,601
|
|
Wilmar International Ltd.
|
|
1,340,300
|
|
4,985
|
|
|
|
|
|
23,661
|
|
Hotels,
Restaurants & Leisure (6.4%)
|
|
|
|
|
|
Genting Bhd
|
|
2,373,400
|
|
4,068
|
|
Resorts World Bhd
|
|
2,793,500
|
|
2,223
|
|
|
|
|
|
6,291
|
|
Independent
Power Producers & Energy Traders (1.3%)
|
|
|
|
|
|
Tanjong plc
|
|
314,000
|
|
1,317
|
|
Industrial
Conglomerates (10.0%)
|
|
|
|
|
|
MMC Corp. Bhd
|
|
1,334,000
|
|
1,127
|
|
Sime Darby Bhd
|
|
3,092,910
|
|
8,756
|
|
|
|
|
|
9,883
|
|
Insurance
(0.4%)
|
|
|
|
|
|
MAA Holdings Bhd
|
|
1,174,000
|
|
338
|
|
Marine
(3.3%)
|
|
|
|
|
|
Malaysia International Shipping
Corp. Bhd
|
|
1,271,000
|
|
3,209
|
|
Multi-Utilities
(4.1%)
|
|
|
|
|
|
YTL Corp. Bhd
|
|
1,955,733
|
|
4,040
|
|
Real
Estate (8.3%)
|
|
|
|
|
|
Bandar Raya Developments Bhd
|
|
1,050,000
|
|
543
|
|
Glomac Bhd
|
|
1,763,000
|
|
518
|
|
IGB Corp. Bhd
|
|
3,024,000
|
|
1,333
|
|
IOI Properties Bhd
|
|
830,000
|
|
1,194
|
|
Naim Cendera Holdings Bhd
|
|
789,000
|
|
845
|
|
SP Setia Bhd
|
|
3,350,248
|
|
3,014
|
|
YNH Property Bhd
|
|
1,338,200
|
|
721
|
|
|
|
|
|
8,168
|
|
Wireless
Telecommunication Services (5.0%)
|
|
|
|
|
|
Digi.com Bhd
|
|
670,200
|
|
4,902
|
|
TOTAL
COMMON STOCKS
|
|
|
|
|
|
(Cost $58,287)
|
|
|
|
92,828
|
|
|
|
No. of
|
|
|
|
|
|
Rights
|
|
|
|
RIGHTS
(0.0%)
|
|
|
|
|
|
Real
Estate (0.0%)
|
|
|
|
|
|
IOI Properties Bhd, expiring
7/14/08 (Cost $)
|
|
(a)207,500
|
|
|
|
|
|
No. of
|
|
|
|
|
|
Warrants
|
|
|
|
WARRANTS
(0.1%)
|
|
|
|
|
|
Construction &
Engineering (0.0%)
|
|
|
|
|
|
IJM Corp. Bhd, expiring 7/7/10
|
|
(a)148,600
|
|
55
|
|
Real Estate
(0.1%)
|
|
|
|
|
|
SP Setia Bhd, expiring 1/21/13
|
|
(a)558,425
|
|
73
|
|
TOTAL
WARRANTS
(Cost $53)
|
|
|
|
128
|
|
|
|
Shares
|
|
|
|
SHORT-TERM
INVESTMENT (1.8%)
|
|
|
|
|
|
Investment
Company (1.8%)
|
|
|
|
|
|
Morgan Stanley Institutional
Liquidity Money Market Portfolio Institutional Class
(Cost $1,734)
|
|
(b)1,734,494
|
|
1,734
|
|
TOTAL
INVESTMENTS (96.0%)
|
|
|
|
|
|
(Cost $60,074)
|
|
|
|
94,690
|
|
OTHER
ASSETS IN EXCESS OF LIABILITIES
(4.0%)
|
|
|
|
3,991
|
|
NET ASSETS
(100%)
|
|
|
|
$
|
98,681
|
|
(a)
|
|
Non-income
producing security.
|
(b)
|
|
See
Note G within the Notes to Financial Statements regarding investment in
Morgan Stanley Institutional Liquidity Money Market Portfolio Institutional
Class.
|
|
The accompanying notes are an integral part of the financial
statements.
|
5
|
|
The
Malaysia Fund, Inc.
|
|
|
|
June 30, 2008
(unaudited)
|
Portfolio of Investments (contd)
Graphic
Presentation of Portfolio Holdings
The
following graph depicts the Funds holdings by industry and/or security type,
as a percentage of total investments.
*
Industries
which do not appear in the above graph, as well as those which represent
less than 5% of total investments, if applicable, are included in the category
labeled Other.
6
|
The accompanying notes are an integral part of the financial
statements.
|
|
|
The
Malaysia Fund, Inc.
|
|
|
|
Financial Statements
|
Statement of Assets and Liabilities
|
|
June 30, 2008
(unaudited)
(000)
|
Assets:
|
|
|
|
Investments in Securities of Unaffiliated Issuers, at Value (Cost
$58,340)
|
|
$
|
92,956
|
|
Investment in Security of Affiliated Issuer, at Value (Cost $1,734)
|
|
1,734
|
|
Total Investments in Securities, at Value (Cost $60,074)
|
|
94,690
|
|
Foreign Currency, at Value (Cost $4,080)
|
|
4,066
|
|
Dividends Receivable
|
|
67
|
|
Tax Reclaim Receivable
|
|
2
|
|
Receivable from Affiliate
|
|
@
|
|
Other Assets
|
|
11
|
|
Total Assets
|
|
98,836
|
|
Liabilities:
|
|
|
|
Payable
For:
|
|
|
|
U.S. Investment Advisory Fees
|
|
66
|
|
Professional Fees
|
|
31
|
|
Custodian Fees
|
|
18
|
|
Bank Overdraft
|
|
16
|
|
Stockholder Reporting Expenses
|
|
13
|
|
Administration Fees
|
|
4
|
|
Other
Liabilities
|
|
7
|
|
Total Liabilities
|
|
155
|
|
Net Assets
|
|
|
|
Applicable to 9,649,549, Issued and Outstanding $0.01 Par Value Shares
(20,000,000 Shares Authorized)
|
|
$
|
98,681
|
|
Net Asset
Value Per Share
|
|
$
|
10.23
|
|
Net Assets
Consist of:
|
|
|
|
Common Stock
|
|
$
|
96
|
|
Paid-in Capital
|
|
55,972
|
|
Undistributed (Distributions in Excess of) Net Investment Income
|
|
4,581
|
|
Accumulated Net Realized Gain (Loss)
|
|
3,431
|
|
Unrealized Appreciation (Depreciation) on Investments and Foreign
Currency Translations
|
|
34,601
|
|
Net Assets
|
|
$
|
98,681
|
|
@ Amount is less than $500.
|
|
|
|
|
The accompanying notes are an integral part of the financial
statements.
|
7
|
|
The
Malaysia Fund, Inc.
|
|
|
|
Financial Statements
|
Statement of Operations
|
|
Six Months Ended
June 30, 2008
(unaudited)
(000)
|
Investment
Income
|
|
|
|
Dividends from Securities of Unaffiliated Issuers
|
|
$
|
5,125
|
|
Dividends from Security of Affiliated Issuer
|
|
20
|
|
Total Investment Income
|
|
5,145
|
|
Expenses
|
|
|
|
Investment Advisory Fees (Note B)
|
|
423
|
|
Administration Fees (Note C)
|
|
44
|
|
Custodian Fees (Note D)
|
|
38
|
|
Professional Fees
|
|
30
|
|
Stockholder Reporting Expenses
|
|
15
|
|
Stockholder Servicing Agent Fees
|
|
3
|
|
Directors Fees and Expenses
|
|
1
|
|
Other Expenses
|
|
23
|
|
Total Expenses
|
|
577
|
|
Waiver of Administration Fees (Note C)
|
|
(18
|
)
|
Rebate from Morgan Stanley Affiliated Cash Sweep (Note G)
|
|
(1
|
)
|
Expense Offset (Note D)
|
|
@
|
|
Net Expenses
|
|
558
|
|
Net
Investment Income (Loss)
|
|
4,587
|
|
Net
Realized Gain (Loss) on:
|
|
|
|
Investments
|
|
6,563
|
|
Foreign Currency Transactions
|
|
83
|
|
Net Realized Gain (Loss)
|
|
6,646
|
|
Change in
Unrealized Appreciation (Depreciation) on:
|
|
|
|
Investments
|
|
(30,008
|
)
|
Foreign Currency Translations
|
|
(26
|
)
|
Change in Unrealized Appreciation (Depreciation)
|
|
(30,034
|
)
|
Net
Realized Gain (Loss) and Change in Unrealized Appreciation (Depreciation)
|
|
(23,388
|
)
|
Net Increase (Decrease) in Net Assets Resulting from
Operations
|
|
$
|
(18,801
|
)
|
@ Amount is less than $500.
|
|
|
|
8
|
The accompanying notes are an integral part of the financial
statements.
|
|
|
The
Malaysia Fund, Inc.
|
|
|
|
Financial
Statements
|
Statements of Changes in Net Assets
|
|
Six Months Ended
June 30, 2008
(unaudited)
(000)
|
|
Year Ended
December 31, 2007
(000)
|
Increase (Decrease) in Net Assets
|
|
|
|
|
|
Operations:
|
|
|
|
|
|
Net Investment Income (Loss)
|
|
$ 4,587
|
|
$ 1,542
|
|
Net Realized Gain (Loss)
|
|
6,646
|
|
2,935
|
|
Change in Unrealized Appreciation
(Depreciation)
|
|
(30,034
|
)
|
40,235
|
|
Net Increase (Decrease) in Net Assets
Resulting from Operations
|
|
(18,801
|
)
|
44,712
|
|
Distributions from and/or in Excess of:
|
|
|
|
|
|
Net Investment Income
|
|
|
|
(1,748
|
)
|
Capital Share Transactions:
|
|
|
|
|
|
Repurchase of Shares (12,580 and 23,828
shares, respectively)
|
|
(132
|
)
|
(237
|
)
|
Voluntary Contribution from U.S. Adviser
(Note B)
|
|
341
|
|
|
|
Total Increase (Decrease)
|
|
(18,592
|
)
|
42,727
|
|
Net Assets:
|
|
|
|
|
|
Beginning of Period
|
|
117,273
|
|
74,546
|
|
End of Period (Including Undistributed (Distributions
in Excess of) Net
Investment Income of $4,581 and $(6), respectively)
|
|
$ 98,681
|
|
$ 117,273
|
|
|
The accompanying notes are an integral part of the financial
statements.
|
9
|
|
The
Malaysia Fund, Inc.
|
|
|
|
Financial Highlights
|
Selected Per Share Data and Ratios
|
|
Six Months Ended
June 30, 2008
|
|
Year Ended December 31,
|
|
|
|
(unaudited)
|
2007
|
|
2006
|
|
2005
|
|
2004
|
|
2003
|
|
Net Asset Value, Beginning of Period
|
|
$
12.14
|
|
$ 7.70
|
|
$
5.48
|
|
$
6.09
|
|
$ 5.76
|
|
$ 4.63
|
|
Net Investment Income (Loss)
|
|
0.51
|
|
0.16
|
|
0.07
|
|
0.11
|
|
0.08
|
|
0.06
|
|
Net Realized and Unrealized Gain (Loss) on
Investments
|
|
(2.46
|
)
|
4.46
|
|
2.23
|
|
(0.59
|
)
|
0.31
|
|
1.22
|
|
Total from Investment Operations
|
|
(1.95
|
)
|
4.62
|
|
2.30
|
|
(0.48
|
)
|
0.39
|
|
1.28
|
|
Distributions from and/or in Excess of:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Investment Income
|
|
|
|
(0.18
|
)
|
(0.08
|
)
|
(0.13
|
)
|
(0.06
|
)
|
(0.15
|
)
|
Anti-Dilutive Effect of Share Repurchase
Program
|
|
0.00
|
#
|
0.00
|
#
|
0.00
|
#
|
|
|
|
|
0.00
|
#
|
Voluntary Contribution from U.S. Adviser
|
|
0.04
|
|
|
|
|
|
|
|
|
|
|
|
Net Asset Value, End of Period
|
|
$ 10.23
|
|
$ 12.14
|
|
$
7.70
|
|
$
5.48
|
|
$ 6.09
|
|
$ 5.76
|
|
Per Share Market Value, End of Period
|
|
$
9.17
|
|
$ 10.85
|
|
$
7.09
|
|
$
5.18
|
|
$ 6.21
|
|
$ 6.01
|
|
TOTAL INVESTMENT RETURN:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Market Value
|
|
(15.48
|
)%*
|
55.48
|
%
|
38.41
|
%
|
(14.60
|
)%
|
4.40
|
%
|
60.33
|
%
|
Net Asset Value (1)
|
|
(15.73
|
)%*
|
60.19
|
%
|
42.09
|
%
|
(7.87
|
)%
|
6.83
|
%
|
27.67
|
%
|
RATIOS, SUPPLEMENTAL DATA:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Assets, End of Period (Thousands)
|
|
$98,681
|
|
$117,273
|
|
$74,546
|
|
$53,043
|
|
$59,017
|
|
$55,758
|
|
Ratio of Expenses to Average Net Assets
(2)
|
|
1.03
|
%+**
|
1.24
|
%+
|
1.49
|
%
|
1.57
|
%
|
1.50
|
%
|
1.78
|
%
|
Ratio of Net Investment Income (Loss) to
Average Net Assets(2)
|
|
8.41
|
%+**
|
1.56
|
%+
|
1.08
|
%
|
1.80
|
%
|
1.38
|
%
|
1.16
|
%
|
Portfolio Turnover Rate
|
|
8
|
%*
|
7
|
%
|
28
|
%
|
25
|
%
|
24
|
%
|
29
|
%
|
(2)
Supplemental Information on the Ratios
to Average Net Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratio Before Expenses Waived by Administrator:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratio of Expenses to Average Net Assets
|
|
1.06
|
%+**
|
1.27
|
%+
|
1.51
|
%
|
1.58
|
%
|
1.50
|
%
|
N/A
|
|
Ratio of Net Investment Income (Loss)
to Average Net Assets
|
|
8.38
|
%+**
|
1.53
|
%+
|
1.06
|
%
|
1.79
|
%
|
1.38
|
%
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
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. This
percentage is not an indication of the performance of a stockholders
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.
|
|
|
Per
share amounts are based on average shares outstanding.
|
#
|
|
Amount is less than $0.005
per share.
|
|
|
If the U.S. Adviser had not
made a voluntary contribution to the Fund, the total return would have been
(16.06)%.
|
*
|
|
Not
Annualized
|
**
|
|
Annualized
|
+
|
|
Reflects
rebate of certain Fund expenses in connection with the investments in Morgan
Stanley Institutional Liquidity Money Market Portfolio Institutional
Class during the period. As a result of such rebate, the expenses as a
percentage of its net assets were effected by less than 0.005%.
|
10
|
The accompanying notes are an integral part of the financial
statements.
|
|
|
The
Malaysia Fund, Inc.
|
|
|
|
June 30, 2008
(unaudited)
|
Notes to Financial Statements
The Malaysia Fund, Inc. (the Fund) was incorporated on March 12,
1987 and is registered as a diversified, closed-end management investment
company under the Investment Company Act of 1940, as amended (the 1940 Act).
The Funds investment objective is long-term capital appreciation through
investment in equity securities of Malaysian companies.
A. Accounting Policies:
The following significant
accounting
policies are in conformity with U.S. generally accepted accounting principles.
Such policies are consistently followed by the Fund in the preparation of its
financial statements. U.S. generally accepted accounting principles may require
management to make estimates and assumptions that affect the reported amounts
and disclosures in the financial statements. Actual results may differ from
those estimates.
1.
Security Valuation:
Securities listed on a foreign
exchange
are valued at their closing price except as noted below. Unlisted securities
and listed securities not traded on the valuation date for which market
quotations are readily available are valued at the mean between the current bid
and asked prices obtained from reputable brokers. Equity securities listed on a
U.S. exchange are valued at the latest quoted sales price on the valuation
date. Equity securities listed or traded on NASDAQ, for which market quotations
are available, are valued at the NASDAQ Official Closing Price. Debt securities
purchased with remaining maturities of 60 days or less are valued at amortized
cost, if it approximates market value.
All other securities and investments for which market values are not
readily available, including restricted securities, and those securities for
which it is inappropriate to determine prices in accordance with the
aforementioned procedures, are valued at fair value as determined in good faith
under procedures adopted by the Board of Directors (the Directors), although
the actual calculations may be done by others. Factors considered in making
this determination may include, but are not limited to, information obtained by
contacting the issuer, analysts, or the appropriate stock exchange (for
exchange-traded securities), analysis of the issuers financial statements or
other available documents and, if necessary, available information concerning
other securities in similar circumstances.
Most foreign markets close before the New York Stock Exchange (NYSE).
Occasionally, developments that could affect the closing prices of securities
and other assets may
occur
between the times at which valuations of such securities are determined (that
is, close of the foreign market on which the securities trade) and the close of
business on the NYSE. If these developments are expected to materially affect
the value of the securities, the valuations may be adjusted to reflect the
estimated fair value as of the close of the NYSE, as determined in good faith
under procedures established by the Directors.
2.
Foreign Currency Translation:
The books and records of
the
Fund are maintained in U.S. dollars. Foreign currency amounts are translated
into U.S. dollars at the mean of the bid and asked prices of such currencies
against U.S. dollars last quoted by a major bank as follows:
·
investments, other assets and liabilities at
the prevailing rates of exchange on the valuation date;
·
investment transactions and investment income
at the prevailing rate of exchange on the dates of such transactions.
Although the net assets of the Fund are presented at the foreign
exchange rates and market values at the close of the period, the Fund does not
isolate that portion of the results of operations arising as a result of
changes in the foreign exchange rates from the fluctuations arising from
changes in the market prices of the securities held at period end. Similarly,
the Fund does not isolate the effect of changes in foreign exchange rates from
the fluctuations arising from changes in the market prices of securities sold
during the period. Accordingly, realized and unrealized foreign currency gains
(losses) on investments in securities are included in the reported net realized
and unrealized gains (losses) on investment transactions and balances.
Net realized gains (losses) on foreign currency transactions represent
net foreign exchange gains (losses) from sales and maturities of foreign
currency exchange contracts, disposition of foreign currencies, currency gains
or losses realized between the trade and settlement dates on securities transactions,
and the difference between the amount of investment income and foreign
withholding taxes recorded on the Funds books and the U.S. dollar equivalent
amounts actually received or paid. Net unrealized currency gains (losses) from
valuing foreign currency denominated assets and liabilities at period end
exchange rates are reflected as a component of unrealized appreciation
(depreciation) on investments and foreign currency translations in the
Statement of Assets and
11
|
The
Malaysia Fund, Inc.
|
|
|
|
June 30, 2008
(unaudited)
|
Notes to Financial
Statements (contd)
Liabilities. The change in net unrealized currency gains (losses) on
foreign currency translations for the period is reflected in the Statement of
Operations.
A significant portion of the Funds net assets consist of Malaysian
equity securities and foreign currency. Future economic and political
developments in Malaysia could adversely affect the liquidity or value, or
both, of securities in which the Fund is invested. Changes in currency exchange
rates will affect the value of and investment income from such investments.
Foreign securities may be subject to greater price volatility, lower liquidity
and less diversity than equity securities of companies based in the United
States. In addition, foreign securities may be subject to substantial
governmental involvement in the economy and greater social, economic and
political uncertainty.
3.
Derivatives:
The Fund may use derivatives to achieve its
investment objectives. The Fund may engage in transactions in
futures contracts on foreign currencies, stock indices, as well as in options,
swaps and structured products. Consistent with the Funds investment objectives
and policies, the Fund may use derivatives for non-hedging as well as hedging
purposes.
Following is a description of derivative instruments that the Fund has
utilized and their associated risks:
Foreign Currency Exchange Contracts: The Fund may enter into foreign currency
exchange contracts generally to attempt to protect securities and related
receivables and payables against changes in future foreign exchange rates and,
in certain situations, to gain exposure to a foreign currency. A foreign
currency exchange contract is an agreement between two parties to buy or sell
currency at a set price on a future date. The market value of the contract will
fluctuate with changes in currency exchange rates. The contract is
marked-to-market daily and the change in market value is recorded by the Fund
as unrealized gain or loss. The Fund records realized gains or losses when the
contract is closed equal to the difference between the value of the contract at
the time it was opened and the value at the time it was closed. Risk may arise
upon entering into these contracts from the potential inability of
counterparties to meet the terms of their contracts and is generally limited to
the amount of unrealized gain on the contracts, if any, at the date of default.
Risks may also arise from unanticipated movements in the value of a foreign
currency relative to the U.S. dollar. At June 30, 2008, the
Fund did not have any outstanding foreign
currency exchange contracts.
4.
New Accounting Pronouncement:
On March 19, 2008,
Financial
Accounting Standards Board released Statement of Financial Accounting Standards
No. 161, Disclosures about Derivative Instruments and Hedging Activities
(SFAS 161). SFAS 161 requires qualitative disclosures about objectives and
strategies for using derivatives, quantitative disclosures about fair value
amounts of and gains and losses on derivative instruments, and disclosures
about credit-risk-related contingent features in derivative agreements. The
application of SFAS 161 is required for fiscal years beginning after November 15,
2008 and interim periods within those fiscal years. At this time, management is
evaluating the implications of SFAS 161 and its impact on the financial
statements has not yet been determined.
5.
Fair Value Measurement:
The Fund adopted Financial
Accounting
Standards Board Statement of Financial Accounting Standards No. 157, Fair
Value Measurements (SFAS 157), effective January 1, 2008. In accordance
with SFAS 157, fair value is defined as the price that the Fund would receive
to sell an investment or pay to transfer a liability in a timely transaction
with an independent buyer in the principal market, or in the absence of a
principal market the most advantageous market for the investment or liability.
SFAS 157 establishes a three-tier hierarchy to distinguish between (1) inputs
that reflect the assumptions market participants would use in pricing an asset
or liability developed based on market data obtained from sources independent
of the reporting entity (observable inputs) and (2) inputs that reflect
the reporting entitys own assumptions about the assumptions market
participants would use in pricing an asset or liability developed based on the
best information available in the circumstances (unobservable inputs) and to
establish classification of fair value measurements for disclosure purposes.
Various inputs are used in determining the value of the Funds investments. The
inputs are summarized in the three broad levels listed below.
Level 1 quoted prices in active markets for identical securities
Level 2 other significant observable inputs (including quoted prices
for similar investments, interest rates, prepayment speeds, credit risk, etc.)
12
|
The
Malaysia Fund, Inc.
|
|
|
|
June 30, 2008 (unaudited)
|
Notes to Financial Statements (contd)
Level
3 significant unobservable inputs (including the Funds
own assumptions in determining the fair value of investments)
The inputs or methodology used for valuing
securities are not necessarily an indication of the risk associated with investing in those
securities.
The following is a summary of the inputs used
as of June 30, 2008 in valuing the Funds investments carried at value:
|
|
|
|
Other
|
|
|
Investments
|
|
Financial
|
|
|
in Securities
|
|
Instruments*
|
Valuation Inputs
|
|
(000)
|
|
(000)
|
Level 1 - Quoted Prices
|
|
$ 92,956
|
|
$
|
Level 2 - Other Significant Observable
Inputs
|
|
1,734
|
|
|
Level 3 - Significant Unobservable Inputs
|
|
|
|
|
Total
|
|
$ 94,690
|
|
$
|
* Other financial instruments include
forwards.
At June 30, 2008 there were no Level 3
Portfolio investments for which significant unobservable inputs were used to
determine fair value.
6.
Other:
Security transactions are accounted for on
the date the securities are purchased or sold. Realized gains (losses) on the
sale of investment securities are
determined on the specific identified cost basis. Interest income is recognized
on the accrual basis. Dividend income and distributions are recorded on the
ex-dividend date (except certain dividends which may be recorded as soon as the
Fund is informed of such dividends) net of applicable withholding taxes.
B. Investment Advisory Fees:
Morgan Stanley Investment Management Inc.
(the U.S. Adviser or MS Investment Management) provides investment advisory
services to the Fund under the terms of an Investment Advisory Agreement (the
Agreement). Under the Agreement, the U.S. Adviser is paid a fee computed
weekly and payable monthly at an annual rate of 0.90% of the Funds first $50
million of average weekly net assets, 0.70% of the Funds next $50 million of
average weekly net assets and 0.50% of the Funds average weekly net assets in
excess of $100 million.
Effective December 31, 2007, the U.S. Adviser
terminated the agreement with AMMB Consultant Sdn Bhd, (the Malaysian
Adviser). In March 2008, the U.S. Adviser made a voluntary contribution to the
Fund for approximately $341,000 for advisory fees paid to the Malaysian Adviser
in 2006 and 2007.
C. Administration Fees:
MS Investment Management also serves as
Administrator to the Fund pursuant to an Administration Agreement. Under the
Administration Agreement, the administration fee is 0.08% of the Funds average
weekly net assets. MS Investment Management has agreed to limit the
administration fee so that it will be no greater than the previous
administration fee (prior to November 1, 2004) of 0.02435% of the Funds
average weekly net assets plus $24,000 per annum. This waiver is voluntary and
may be terminated at any time. For the six months ended June 30, 2008,
approximately $18,000 of administration fees were waived pursuant to this
arrangement. Under a sub-administration agreement between the Administrator and
JPMorgan Investor Services Co. (JPMIS), a corporate affiliate of JPMorgan
Chase Bank, N.A., JPMIS provides certain administrative services to the Fund.
For such services, the Administrator pays JPMIS a portion of the fee the
Administrator receives from the Fund. Administration costs (including
out-of-pocket expenses) incurred in the ordinary course of providing services
under the agreement, except pricing services and extraordinary expenses, will
be covered under the administration fee.
D. Custodian Fees:
JPMorgan Chase Bank, N.A. (the Custodian)
serves as Custodian for the Fund. The Custodian holds cash, securities, and
other assets of the Fund as required by the 1940 Act. Custody fees are payable
monthly based on assets held in custody, investment purchases and sales
activity and account maintenance fees, plus reimbursement for certain
out-of-pocket expenses.
The Fund has
entered into an arrangement with its Custodian whereby credits realized on
uninvested cash balances were used to offset a portion of the Funds expenses.
These custodian credits are shown as Expense Offset on the Statement of
Operations.
E. Federal Income Taxes:
It is the Funds intention to continue to
qualify as a regulated investment company and distribute all of its taxable
income. Accordingly, no provision for Federal income taxes is required in the
financial statements. The Fund files tax returns with the U.S. Internal Revenue
Service and various states. Generally, the tax authorities can examine all tax
returns filed for the last three years.
13
|
The
Malaysia Fund, Inc.
|
|
|
|
June 30, 2008
(unaudited)
|
Notes to Financial Statements (contd)
The
Fund may be subject to taxes imposed by countries in which it invests. The Fund
is currently not subject to Malaysian withholding taxes on dividends and/or
capital gains.
The
Fund adopted the provisions of the Financial Accounting Standards Boards
(FASB) Interpretation number 48
Accounting for Uncertainty in Income Taxes (the
Interpretation),
on June 30,
2007. The Interpretation is to be applied to all open tax years as of the date
of effectiveness. As of June 30, 2008, this did not result in an impact to
the Funds financial statements.
The
tax character of distributions paid may differ from the character of
distributions shown on the Statements of Changes in Net Assets due to
short-term capital gains being treated as ordinary income for tax purposes. The
tax character of distributions paid during fiscal 2007 and 2006 were as
follows:
2007
Distributions
Paid From:
(000)
|
|
2006 Distributions
Paid From:
(000)
|
Ordinary
Income
|
|
Long-term
Capital
Gain
|
|
Ordinary
Income
|
|
Long-term
Capital
Gain
|
$1,748
|
|
$
|
|
$796
|
|
$
|
The
amount and character of income and capital gain distributions to be paid by the
Fund are determined in accordance with Federal income tax regulations, which
may differ from U.S. generally accepted accounting principles. These book/tax
differences are considered either temporary or permanent in nature.
Temporary
differences are generally due to differing book and tax treatments for the
timing of the recognition of gains (losses) on certain investment transactions
and the timing of the deductibility of certain expenses.
Permanent
differences, primarily due to differing treatments of gains (losses) related to
foreign currency transactions, expired capital loss carryforward and excess
distribution, resulted in the following reclassifications among the components
of net assets at December 31, 2007:
Increase
(Decrease)
|
Accumulated
Undistributed
(Distributions in
Excess of) Net
Investment
Income (Loss)
(000)
|
|
Accumulated
Net Realized
Gain (Loss)
(000)
|
|
Paid-in
Capital
(000)
|
$179
|
|
$(43)
|
|
$(136)
|
At
December 31, 2007, the Fund had no distributable earnings on a tax basis.
At
June 30, 2008, the U.S. Federal income tax cost basis of investments was
approximately $60,074,000 and, accordingly, net unrealized appreciation for
U.S. Federal income tax purposes was $34,616,000, of which $40,023,000 related
to appreciated securities and $5,407,000 related to depreciated securities.
At
December 31, 2007, the Fund had a capital loss carryforward for U.S.
Federal income tax purposes of approximately $3,119,000 available to offset
future capital gains of which $2,005,000 will expire on December 31, 2009,
and $1,114,000 will expire on December 31, 2013. At December 31,
2007, the Fund had expired capital loss carryforward for U.S. Federal income
tax purposes of approximately $94,000. During the year ended December 31,
2007, the Fund utilized capital loss carryforwards for U.S. Federal income tax
purposes of approximately $2,625,000.
To
the extent that capital loss carryforwards are used to offset any future
capital gains realized during the carryover period as provided by U.S. Federal
income tax regulations, no capital gains tax liability will be incurred by the
Fund for gains realized and not distributed. To the extent that capital gains
are offset, such gains will not be distributed to the stockholders.
F. Contractual
Obligations:
The Fund enters into contracts
that contain a variety of indemnifications.
The Funds maximum exposure under these arrangements is unknown. However, the
Fund has not had prior claims or losses pursuant to these contracts and expects
the risk of loss to be remote.
G.
Security Transactions and
Transactions with Affiliates:
The Fund invests in the Institutional Class of
the Morgan Stanley Institutional Liquidity Money Market Portfolio, an open-end
management investment company managed by the Adviser. Investment Advisory fees
paid by the Fund are reduced by an amount equal to its pro-rata share of
advisory and administration fees paid by the Morgan Stanley Institutional
Liquidity Money Market Portfolio. For the six months ended June 30, 2008,
advisory fees paid were reduced by approximately $1,000 relating to the Funds
investment in the Morgan Stanley Institutional Liquidity Money Market
Portfolio.
14
|
The
Malaysia Fund, Inc.
|
|
|
|
June 30, 2008
(unaudited)
|
Notes to Financial
Statements (contd)
A summary of the Funds transactions in shares of the affiliated issuer
during the six months ended June 30, 2008 is as follows:
Market Value
December 31,
2007
(000)
|
|
Purchases
at Cost
(000)
|
|
Sales
Proceeds
(000)
|
|
Dividend
Income
(000)
|
|
Market Value
June 30,
2008
(000)
|
$2,269
|
|
$6,882
|
|
$7,417
|
|
$20
|
|
$1,734
|
During the six months ended June 30, 2008, the Fund made purchases
and sales totaling approximately $8,992,000 and $8,397,000, respectively, of
investment securities other than long-term U.S. Government securities and short-term
investments. There were no purchases or sales of long-term U.S. Government
securities.
H.
Other:
On July 15, 2002, the Fund commenced a
share
repurchase program for
purposes of enhancing stockholder value and reducing the discount at which the
Funds shares traded from their net asset value. During the six months ended June 30,
2008, the Fund repurchased 12,580 of its shares at an average discount of
10.32% from net asset value per share. Since the inception of the program, the
Fund has repurchased 93,381of its shares at an average discount of 13.08% 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
Directors.
I.
Supplemental Proxy
Information:
On June 19, 2008, an
annual
meeting of the Funds stockholders was held for the purpose of voting on the
following matter, the results of which were as follows:
Election
of Directors by all stockholders:
|
|
For
|
|
Withhold
|
Kathleen A. Dennis
|
|
4,774,899
|
|
1,508,649
|
Joseph J. Kearns
|
|
4,777,883
|
|
1,505,665
|
Michael E. Nugent
|
|
4,775,738
|
|
1,507,810
|
Fergus Reid
|
|
4,775,329
|
|
1,508,219
|
For More
Information About Portfolio Holdings
The
Fund provides a complete schedule of portfolio holdings in its semi-annual and
annual reports within 60 days of the end of the Funds second and fourth fiscal
quarters. The semi-annual reports and the annual reports are filed
electronically with the Securities and Exchange Commission (SEC) on Form N-CSRS
and Form N-CSR, respectively. Morgan Stanley also delivers the semi-annual
and annual reports to Fund stockholders and makes these reports available on
its public website, www.morganstanley.com/msim. Each Morgan Stanley fund also
files a complete schedule of portfolio holdings with the SEC for the Funds
first and third fiscal quarters on Form N-Q. Morgan Stanley does not
deliver the reports for the first and third fiscal quarters to stockholders,
nor are the reports posted to the Morgan Stanley public website. You may,
however, obtain the Form N-Q filings (as well as the Form N-CSR and
N-CSRS filings) by accessing the SECs website, www.sec.gov. You may also
review and copy them at the SECs public reference room in Washington, DC.
Information on the operation of the SECs Public Reference Room may be
obtained by calling the SEC at 1(800) SEC-0330. You can also request copies of
these materials, upon payment of a duplicating fee, by electronic request at the
SECs e-mail address (publicinfo@sec.gov) or by writing the public reference
section of the SEC, Washington, DC 20549-0102.
In
addition to filing a complete schedule of portfolio holdings with the SEC each
fiscal quarter, the Fund makes portfolio holdings information available by
periodically providing the information on its public website,
www.morganstanley.com/msim.
The
Fund provides a complete schedule of portfolio holdings on the public website
on a calendar-quarter basis approximately 31 calendar days after the close of
the calendar quarter. The Fund also provides Top 10 holdings information on the
public website approximately 15 business days following the end of each month.
You may obtain copies of the Funds monthly or calendar-quarter website postings,
by calling 1(800) 231-2608.
15
|
The
Malaysia Fund, Inc.
|
|
|
|
June 30, 2008
(unaudited)
|
Notes to Financial Statements (contd)
Proxy Voting
Policy and Procedures and Proxy Voting Record
A
copy of (1) the Funds policies and procedures with respect to the voting
of proxies relating to the Funds portfolio securities; and (2) how the
Fund voted proxies relating to portfolio securities during the most recent
twelve-month period ended June 30, is available without charge, upon
request, by calling 1 (800) 548-7786 or by visiting our website at
www.morganstanley.com/msim. This information is also available on the SECs
website at www.sec.gov.
16
|
The
Malaysia Fund, Inc.
|
|
|
|
June 30, 2008
|
Change in Portfolio Manager (unaudited)
As
of August 15, 2008, the Fund is managed within the Global Emerging Markets
Equity team. The team consists of portfolio managers and analysts. Current
members of the team jointly and primarily responsible for the day-to-day
management of the Funds portfolio are Munib Madni, an Executive Director of
Morgan Stanley Investment Management Inc. (MSIM), Ruchir Sharma, a Managing
Director of MSIM, and James Cheng, a Managing Director of Morgan Stanley
Investment Management Company.
Mr. Madni
is a portfolio manager for the Australian Equity and Asian ex-Japan Equity
strategies. He joined Morgan Stanley in 2005 and has 14 years of investment
experience. Prior to joining the firm, he was associate director of Australian
equities at Aberdeen Asset Management. Previously, he was a portfolio manager,
Australian equities, at Equitilink Investment Management. He received a
Bachelor of Business with Honors and Bachelor of Laws from the University of
Technology in Sydney. He holds the Chartered Financial Analyst designation.
Mr. Cheng
is the lead portfolio manager for Asian Equity strategies. He joined Morgan
Stanley in 2006 and has 20 years of investment experience. Prior to joining the
firm, he was the chief investment officer for Asia at Invesco Asia Fund
Management in Hong Kong. Prior to that, he was co-founder and portfolio manager
of Asia Strategic Investment Management, a boutique asset management firm
investing in Asian markets. Before this, he was a portfolio manager for Morgan
Stanley Investment Managements Asian Equity team where he covered both North
and South Asian markets. He received a B.S.S. in economics, accounting and
computer science from the University of Hong Kong and an M.B.A. in finance from
the University of Michigan.
Mr. Sharma
is head of the Global Emerging Markets Equity team and a member of the Global
Tactical Asset Allocation Investment Committee. He has been with Morgan Stanley
for over 5 years and has 14 years of investment experience.
The composition of the team
may change from time to time.
17
Dividend Reinvestment and Cash Purchase Plan
Pursuant to the Dividend Reinvestment and Cash Purchase Plan (the
Plan), each stockholder will be deemed to have elected, unless Computershare
Trust Company, N.A. (the Plan Agent) is otherwise instructed by the
stockholder in writing, to have all distri- butions automatically reinvested in
Fund shares. Participants in the Plan have the option of making additional
voluntary cash payments to the Plan Agent, annually, in any amount from $100 to
$3,000, for investment in Fund shares.
Dividend and capital gain distributions will be reinvested on the
reinvestment date in full and fractional shares. If the market price per share
equals or exceeds net asset value per share on the reinvestment date, the Fund
will issue shares to participants at net asset value or, if net asset value is
less than 95% of the market price on the reinvestment date, shares will be
issued at 95% of the market price. If net asset value exceeds the market price
on the reinvestment date, participants will receive shares valued at market
price. The Fund may issue shares of its Common Stock in connection with
dividend reinvestment requirements at the discretion of the Board of Directors.
Should the Fund declare a
dividend or capital gain distribution payable only in cash, the Plan Agent will
purchase Fund shares for participants in the open market as agent for the
participants.
The Plan Agents fees for the reinvestment of dividends and
distributions will be paid by the Fund. However, each participants account
will be charged a pro rata share of brokerage commissions incurred on any open
market purchases effected on such partici- pants behalf. A participant will
also pay brokerage commissions incurred on purchases made by voluntary cash
payments. Although stockholders in the Plan may receive no cash distributions,
participation in the Plan will not relieve participants of any income tax which
may be payable on such dividends or distributions.
In the case of stockholders, such as banks, brokers or nominees, that
hold shares for others who are the beneficial owners, the Plan Agent will
administer the Plan on the basis of the number of shares certified from time to
time by the stockholder as representing the total amount registered in the
stockholders name and held for the account of beneficial owners who are
participating in the Plan.
Stockholders who do not wish to have distributions automatically
reinvested should notify the Plan Agent in writing. There is no penalty for
non-participation or withdrawal from the Plan, and stockholders who have
previously withdrawn from the Plan may rejoin at any time. Requests for
additional information or any correspondence concerning the Plan should be
directed to the Plan Agent at:
The Malaysia Fund, Inc.
Computershare Trust Company,
N.A.
P.O. Box 43078
Providence, Rhode Island
02940-3078
1(800) 231-2608
18
Morgan Stanley Institutional Closed-End Funds
An Important Notice Concerning Our
U.S. Privacy Policy (unaudited)
We are required by federal
law to provide you with a copy of our Privacy Policy annually.
The
following Policy applies to current and former individual investors in Morgan
Stanley Institutional closed-end funds. This Policy is not applicable to
partnerships, corporations, trusts or other non-individual clients or account
holders. Please note that we may amend this Policy at any time, and will inform
you of any changes to this Policy as required by law.
We Respect
Your Privacy
We
appreciate that you have provided us with your personal financial information.
We strive to maintain the privacy of such information while we help you achieve
your financial objectives. This Policy describes what non-public personal
information we collect about you, why we collect it, and when we may share it
with others. We hope this Policy will help you understand how we collect and
share non-public personal information that we gather about you. Throughout this
Policy, we refer to the non-public information that personally identifies you
or your accounts as personal information.
1. What
Personal Information Do We Collect About You?
To
serve you better and manage our business, it is important that we collect and
maintain accurate information about you. We may obtain this information from
applications and other forms you submit to us, from your dealings with us, from
consumer reporting agencies, from our Web sites and from third parties and
other sources.
For example:
·
We may collect information such as your name,
address, e-mail address, telephone/fax numbers, assets, income and investment
objectives through applications and other forms you submit to us.
·
We may obtain information about account
balances, your use of account(s) and the types of products and services
you prefer to receive from us through your dealings and transactions with us
and other sources.
·
We may obtain information about your
creditworthiness and credit history from consumer reporting agencies.
·
We may collect background information from and
through third-party vendors to verify representations you have made and to
comply with various regulatory requirements.
·
If you interact with us through our public and
private Web sites, we may collect information that you provide directly through
online communications (such as an e-mail address). We may also collect
information about your Internet service provider, your domain name, your
computers operating system and Web browser, your use of our Web sites and your
product and service preferences, through the use of cookies. Cookies
recognize your computer each time you return to one of our sites, and help to
improve our sites content and personalize your experience on our sites by, for
example, suggesting offerings that may interest you. Please consult the Terms
of Use of these sites for more details on our use of cookies.
2.
When Do We Disclose Personal
Information We Collect About You?
To
provide you with the products and services you request, to serve you better and
to manage our business, we may disclose personal information we collect about
you to our affiliated companies and to non-affiliated third parties as required
or permitted by law.
A. Information We Disclose to Our Affiliated Companies.
We do not disclose
personal information that we collect about you
to our affiliated companies except to enable them to provide
services on our behalf or as otherwise required or permitted by law.
19
Morgan Stanley Institutional Closed-End Funds
An Important Notice Concerning Our
U.S. Privacy Policy (contd)
B. Information We Disclose to Third Parties.
We do not disclose personal information that
we collect about you to non-affiliated third parties except to enable them to
provide services on our behalf, to perform joint marketing agreements with
other financial institutions, or as otherwise required or permitted by law. For
example, some instances where we may disclose information about you to
nonaffiliated third parties include: for servicing and processing transactions,
to offer our own products and services, to protect against fraud, for
institutional risk control, to respond to judicial process or to perform
services on our behalf. When we share personal information with these
companies, they are required to limit their use of personal information to the
particular purpose for which it was shared and they are not allowed to share
personal information with others except to fulfill that limited purpose.
3. How Do We
Protect the Security and Confidentiality of Personal Information We Collect
About You?
We
maintain physical, electronic and procedural security measures to help
safeguard the personal information we collect about you. We have internal
policies governing the proper handling of client information. Third parties
that provide support or marketing services on our behalf may also receive
personal information, and we require them to adhere to confidentiality
standards with respect to such information.
20
The Malaysia Fund, Inc.
Directors
|
|
Michael E.
Nugent
|
Kevin
Klingert
|
|
Vice
President
|
Frank L.
Bowman
|
|
|
Dennis F.
Shea
|
Michael
Bozic
|
Vice President
|
|
|
Kathleen A.
Dennis
|
Amy R.
Doberman
|
|
Vice President
|
James F.
Higgins
|
|
|
Stefanie V.
Chang Yu
|
Dr. Manuel
H. Johnson
|
Vice President
|
|
|
Joseph J.
Kearns
|
James W.
Garrett
|
|
Treasurer
and Chief
|
Michael F.
Klein
|
Financial
Officer
|
|
|
W. Allen
Reed
|
Carsten Otto
|
|
Chief
Compliance Officer
|
Fergus Reid
|
|
|
Mary E.
Mullin
|
Officers
|
Secretary
|
Michael E.
Nugent
|
|
Chairman
of the Board and
|
|
Director
|
|
|
|
Ronald E.
Robison
|
|
President
and Principal
|
|
Executive
Officer
|
|
U.S.
Investment Adviser and Administrator
Morgan
Stanley Investment Management Inc.
522
Fifth Avenue
New York, New York 10036
Custodian
JPMorgan
Chase Bank, N.A.
270
Park Avenue
New
York, New York 10017
Stockholder
Servicing Agent
Computershare Trust Company,
N.A.
250 Royall Street
Canton, Massachusetts 02021
Legal
Counsel
Clifford Chance US LLP
31 West 52
nd
Street
New York, New York 10019-6131
Independent
Registered Public Accounting Firm
Ernst & Young LLP
200 Clarendon Street
Boston, Massachusetts 02116
For
additional Fund information, including the Funds net asset value per share and
information regarding the investments comprising the Funds portfolio, please
call 1(800) 231-2608 or visit our website at www.morganstanley.com/msim. All
investments involve risks, including the possible loss of principal.
© 2008 Morgan Stanley
CEMFSAN IU08-04296I-Y06/08
Item 2. Code of Ethics.
Not applicable for semiannual reports.
Item 3. Audit Committee
Financial Expert.
Not applicable for semiannual reports.
Item 4. Principal Accountant
Fees and Services
Not applicable for semiannual reports.
Item 5. Audit Committee of
Listed Registrants.
Not applicable for semiannual reports.
Item 6. Schedule of Investments
(a) Refer to Item 1.
(b) Not used.
Item 7. Disclosure of Proxy
Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable for semiannual reports.
Item 8. Portfolio Managers of
Closed-End Management Investment Companies
Applicable only to annual reports filed by closed-end funds.
Item 9. Closed-End Fund
Repurchases
The Malaysia Fund, Inc.*
|
|
|
|
|
|
TOTAL NUMBER OF
|
|
MAXIMUM NUMBER
|
|
|
|
|
|
|
SHARES PURCHASED
|
|
OF SHARES THAT MAY
|
|
|
|
|
|
|
AS
|
|
YET
|
|
|
|
|
|
|
PART OF PUBLICLY
|
|
BE PURCHASED UNDER
|
|
|
TOTAL NUMBER OF
|
|
AVERAGE PRICE
|
|
ANNOUNCED PLANS
|
|
THE PLANS OR
|
Period
|
|
SHARES PURCHASED
|
|
PAID PER SHARE
|
|
OR PROGRAMS
|
|
PROGRAMS
|
January
|
|
12,580
|
|
$
|
10.46
|
|
12,580
|
|
Unlimited
|
February
|
|
|
|
|
|
|
|
Unlimited
|
March
|
|
|
|
|
|
|
|
Unlimited
|
April
|
|
|
|
|
|
|
|
Unlimited
|
May
|
|
|
|
|
|
|
|
Unlimited
|
June
|
|
|
|
|
|
|
|
Unlimited
|
|
|
|
|
|
|
|
|
|
|
* The Share Repurchase Program
commenced on 7/15/2002.
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.
Item 10. Submission of Matters to
a Vote of Security Holders
Not applicable.
Item 11. Controls and Procedures
(a) The Funds principal
executive officer and principal financial officer have concluded that the Funds disclosure controls and
procedures are sufficient to ensure that information required to be disclosed
by the Fund in this Form N-CSR was recorded, processed, summarized and
reported within the time periods specified in the Securities and Exchange
Commissions rules and forms, based upon such officers evaluation of
these controls and procedures as of a date within 90 days of the filing date of
the report.
(b) There were no
changes in the registrants internal control over financial reporting that
occurred during the second fiscal quarter of the period that has materially affected,
or is reasonably likely to materially
affect, the registrants internal control over financial reporting.
Item 12. Exhibits
(a) Code of Ethics - Not
applicable for semiannual reports.
(b) A separate
certification for each principal executive officer and principal financial
officer of the registrant are attached hereto as part of EX-99.CERT.
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
Malaysia Fund, Inc.
|
|
By:
|
/s/
Ronald E. Robison
|
|
Name:
|
Ronald
E. Robison
|
Title:
|
Principal
Executive Officer
|
Date:
|
August
15, 2008
|
|
|
|
|
Pursuant to the requirements of the Securities
Exchange Act of 1934 and the Investment Company Act of 1940, this report has
been signed by the following persons on behalf of the registrant and in the
capacities and on the dates indicated.
By:
|
/s/
Ronald E. Robison
|
|
Name:
|
Ronald
E. Robison
|
Title:
|
Principal
Executive Officer
|
Date:
|
August
15, 2008
|
|
|
|
|
By:
|
/s/
James W. Garrett
|
|
Name:
|
James
W. Garrett
|
Title:
|
Principal
Financial Officer
|
Date:
|
August
15, 2008
|
|
|
|
|
|
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