[ANNOTATED FORM N-CSR FOR ANNUAL REPORTS]
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
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811-05348
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The Thai Fund, Inc.
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(Exact name of registrant as
specified in charter)
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522 Fifth Avenue New York, NY
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10036
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(Address of principal executive
offices)
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(Zip code)
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Ronald E. Robison
522 Fifth Avenue New York, New York 10036
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(Name and address of agent for
service)
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Registrants telephone number, including
area code:
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1-800-231-2608
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Date of fiscal year end:
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12/31
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Date of reporting period:
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6/30/08
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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:
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2008
Semi-Annual Report
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June 30,
2008
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The Thai Fund, Inc. (TTF)
Morgan Stanley
Investment Management Inc.
Investment Adviser
|
The Thai Fund, Inc.
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Overview (unaudited)
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Letter to Stockholders
Performance
For
the six months ended June 30, 2008, The Thai Fund, Inc. (the Fund)
had total returns, based on net asset value and market value per share
(including reinvestment of distributions), of -7.38%, net of fees and -17.23%,
respectively, compared to its benchmark, the Securities Exchange of Thailand
(SET) Index (the Index) expressed in U.S. dollars which returned -9.76%. On June 30,
2008, the closing price of the Funds shares on the New York Stock Exchange was
$10.80, representing a 9.2% discount to the Funds net asset value per share.
Past performance is no guarantee of future results.
Factors
Affecting Performance
·
The
Thai market started the year on a positive note as political stability was
restored. Consumer and business sentiment rose sharply on optimism that the new
government would implement several pump priming policies. The recovery in
sentiment was followed by strong corporate earnings growth in the first quarter
of 2008, with banks and consumer stocks exceeding earnings projections.
·
However,
as the year progressed, sentiment was weighed down by proposed changes to the
constitution, which met strong opposition. Since then, the government has faced
a barrage of political issues which distracted them from focusing on the
economy.
·
The
economy grew by 6.1% in the first three months of the year, with domestic
consumption and investments being the main drivers of growth. Domestic
consumption was driven by a more stable political climate, higher minimum wage
and stronger agricultural prices.
Management
Strategies
·
The
Fund had an overweight position in banks and retailing stocks in the first half
of the year, which benefited returns, as these sectors outperformed the rest of
the market. Another contributor to positive performance was the underweight
position in the energy sector, which underperformed due to concerns over energy
companies ability to pass on cost increases to their customers.
·
Detractors
from the Funds performance included an overweight position in the consumer
services and media sector, as well as an underweight position in the
telecommunication services sector.
·
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,
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Ronald E.
Robison
|
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President
and Principal Executive Officer
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July 2008
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2
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The Thai Fund, Inc.
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June 30, 2008 (unaudited)
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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 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
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The Thai Fund, Inc.
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June 30, 2008 (unaudited)
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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
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The Thai Fund, Inc.
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June 30, 2008 (unaudited)
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Portfolio of Investments
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Value
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Shares
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(000)
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THAI INVESTMENT PLAN (95.1%)
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|
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COMMON STOCKS (95.1%)
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(Unless Otherwise Noted)
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Airlines (1.3%)
|
|
|
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Thai Airways International PCL
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3,863,300
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|
$
|
2,438
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Beverages (0.6%)
|
|
|
|
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Serm Suk PCL
|
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2,252,600
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1,098
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|
Building Products (0.7%)
|
|
|
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Dynasty Ceramic PCL
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2,335,500
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|
1,257
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Capital Markets (2.5%)
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|
|
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Kim Eng Securities Thailand PCL
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8,511,600
|
|
4,735
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Commercial Banks (21.0%)
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Bangkok Bank PCL
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3,453,050
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12,290
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Bank of Ayudhya PCL
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(a)10,811,500
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|
7,114
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Kasikornbank PCL
|
|
3,376,700
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|
7,171
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|
Krung Thai Bank PCL
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4,235,700
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|
1,070
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Siam Commercial Bank PCL
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5,167,100
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11,977
|
|
|
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39,622
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Construction Materials (2.6%)
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Siam Cement PCL
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863,100
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4,982
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Consumer Finance (0.3%)
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Krungthai Card PCL
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742,200
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488
|
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Diversified Telecommunication Services (0.9%)
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|
|
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Thaicom PCL
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(a)7,737,800
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1,747
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Food & Staples Retailing (4.0%)
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|
|
|
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CP ALL PCL
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14,650,900
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4,689
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Siam Makro PCL
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1,087,600
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2,960
|
|
|
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7,649
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Hotels, Restaurants & Leisure (4.9%)
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|
|
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Minor International PCL
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22,225,700
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9,307
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Household Durables (7.8%)
|
|
|
|
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Asian Property Development PCL
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|
32,656,500
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4,932
|
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Golden Land Property PCL
|
|
9,352,900
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|
1,853
|
|
Lalin Property PCL
|
|
3,970,000
|
|
359
|
|
Land & Houses PCL
|
|
35,009,900
|
|
7,225
|
|
Quality House PCL
|
|
6,852,000
|
|
443
|
|
|
|
|
|
14,812
|
|
Insurance (1.0%)
|
|
|
|
|
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Bangkok Insurance PCL
|
|
228,065
|
|
1,883
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|
Marine (4.6%)
|
|
|
|
|
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Precious Shipping PCL
|
|
4,502,900
|
|
2,976
|
|
Thoresen Thai Agencies PCL
|
|
4,640,000
|
|
5,690
|
|
|
|
|
|
8,666
|
|
Media
(8.2%)
|
|
|
|
|
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BEC World PLC
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|
9,714,400
|
|
|
7,119
|
|
Major Cineplex Group PCL
|
|
10,836,900
|
|
4,732
|
|
MCOT PCL
|
|
5,141,200
|
|
3,629
|
|
|
|
|
|
15,480
|
|
Multiline
Retail (2.1%)
|
|
|
|
|
|
Big C Supercenter PCL
|
|
2,605,700
|
|
4,014
|
|
Oil,
Gas & Consumable Fuels (25.7%)
|
|
|
|
|
|
Banpu PCL
|
|
538,200
|
|
8,499
|
|
PTT Exploration & Production PCL
|
|
3,117,900
|
|
17,998
|
|
PTT PCL
|
|
2,449,300
|
|
22,123
|
|
|
|
|
|
48,620
|
|
Real
Estate (1.5%)
|
|
|
|
|
|
Amata Corp. PCL
|
|
2,353,800
|
|
880
|
|
MBK PCL
|
|
937,800
|
|
1,963
|
|
|
|
|
|
2,843
|
|
Textiles,
Apparel & Luxury Goods (0.0%)
|
|
|
|
|
|
Thai Rung Textile Co., Ltd.
|
|
(a)(b)(c)(d)958
|
|
|
|
|
|
|
|
|
|
Wireless
Telecommunication Services (5.4%)
|
|
|
|
|
|
Advanced Info Service PCL
|
|
3,695,600
|
|
10,224
|
|
TOTAL THAI
INVESTMENT PLAN
|
|
|
|
|
|
(Cost $137,402)
|
|
|
|
179,865
|
|
SHORT-TERM
INVESTMENT (0.9%)
|
|
|
|
|
|
Investment
Company (0.9%)
|
|
|
|
|
|
Morgan Stanley Institutional
|
|
|
|
|
|
Liquidity Money Market
|
|
|
|
|
|
Portfolio Institutional Class
|
|
|
|
|
|
(Cost $1,616)
|
|
(e)1,616,498
|
|
1,616
|
|
TOTAL
INVESTMENTS (96.0%)
|
|
|
|
|
|
(Cost $139,018)
|
|
|
|
181,481
|
|
OTHER
ASSETS IN EXCESS OF LIABILITIES (4.0%)
|
|
|
|
7,543
|
|
NET ASSETS
(100%)
|
|
|
|
$
|
189,024
|
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(a)
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Non-income
producing security.
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(b)
|
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Restricted
security not registered under the Securities Act of 1933. Acquired 4/89 at a
cost of $49,000. At June 30, 2008, this security had a market value of
less than $500, representing less than 0.05% of net assets.
|
(c)
|
|
Security
has been deemed illiquid at June 30, 2008.
|
(d)
|
|
Security
was valued at fair value At June 30, 2008, the Fund held less than
$500 of fair valued securities, representing less than 0.05% of net assets.
|
(e)
|
|
See
Note G within the Notes to Financial Statements regarding investments in
Morgan Stanley Institutional Liquidity Money Market Portfolio Institutional
Class.
|
The accompanying notes are an integral part of the financial
statements.
|
5
|
|
The Thai 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 Thai
Fund, Inc.
|
|
|
|
Financial Statements
|
Statement of Assets and Liabilities
|
|
June 30, 2008
|
|
(unaudited)
|
|
(000)
|
Assets:
|
|
|
|
Investments in Securities of Unaffiliated Issuers, at Value (Cost
$137,402)
|
|
$
|
179,865
|
|
Investment in Security of Affiliated Issuer, at Value (Cost $1,616)
|
|
1,616
|
|
Total Investments in Securities, at Value (Cost $139,018)
|
|
181,481
|
|
Foreign Currency, at Value (Cost $8,436)
|
|
8,017
|
|
Dividend Receivable
|
|
4
|
|
Receivable from Affiliate
|
|
@
|
|
Other Assets
|
|
12
|
|
Total Assets
|
|
189,514
|
|
Liabilities:
|
|
|
|
Payable For:
|
|
|
|
Thai Repatriation Tax
|
|
219
|
|
U.S. Investment Advisory Fees
|
|
105
|
|
Thai Investment Advisory Fees
|
|
60
|
|
Dividend Declared
|
|
27
|
|
Custodian Fees
|
|
13
|
|
Administration Fees
|
|
6
|
|
Other Liabilities
|
|
60
|
|
Total Liabilities
|
|
490
|
|
Net Assets
|
|
|
|
Applicable to 15,890,623, Issued and Outstanding $0.01 Par Value
Shares (30,000,000 Shares Authorized)
|
|
$
|
189,024
|
|
Net Asset
Value Per Share
|
|
$
|
11.90
|
|
Net Assets
Consist of:
|
|
|
|
Common Stock
|
|
$
|
159
|
|
Paid-in Capital
|
|
140,607
|
|
Undistributed (Distributions in Excess of) Net Investment Income
|
|
2,889
|
|
Accumulated Net Realized Gain (Loss)
|
|
3,253
|
|
Unrealized Appreciation (Depreciation) on Investments and Foreign
Currency Translations
|
|
42,116
|
|
Net Assets
|
|
$
|
189,024
|
|
@ Amount is less than $500.
The accompanying notes are an integral part of the financial
statements.
|
7
|
|
The Thai
Fund, Inc.
|
|
|
|
Financial Statements
|
Statement of Operations
|
|
Six Months Ended
|
|
June 30, 2008
|
|
(unaudited)
|
|
(000)
|
Investment
Income
|
|
|
|
Dividends from Securities of Unaffiliated Issuers
|
|
$
|
4,455
|
|
Dividends from Security of Affiliated Issuer
|
|
31
|
|
Interest from Securities of Unaffiliated Issuers
|
|
24
|
|
Total Investment Income
|
|
4,510
|
|
Expenses
|
|
|
|
U.S. Investment Advisory Fees (Note B)
|
|
666
|
|
Thai Repatriation Tax Expense
|
|
483
|
|
Thai Investment Advisory Fees (Note B)
|
|
251
|
|
Administration Fees (Note C)
|
|
83
|
|
Custodian Fees (Note D)
|
|
71
|
|
Professional Fees
|
|
65
|
|
Stockholder Reporting Expenses
|
|
15
|
|
Stockholder Servicing Agent Fees
|
|
4
|
|
Directors Fees and Expenses
|
|
2
|
|
Other Expenses
|
|
24
|
|
Total Expenses
|
|
1,664
|
|
Waiver of Administration Fees (Note C)
|
|
(46
|
)
|
Rebate from Morgan Stanley Affiliated Cash Sweep (Note G)
|
|
(1
|
)
|
Expense Offset (Note D)
|
|
(@
|
)
|
Net Expenses
|
|
1,617
|
|
Net
Investment Income (Loss)
|
|
2,893
|
|
Net
Realized Gain (Loss) on:
|
|
|
|
Investments
|
|
13,634
|
|
Foreign Currency Transactions
|
|
594
|
|
Net Realized Gain (Loss)
|
|
14,228
|
|
Change in
Unrealized Appreciation (Depreciation) on:
|
|
|
|
Investments
|
|
(31,822
|
)
|
Foreign Currency Translations
|
|
(375
|
)
|
Change in Unrealized Appreciation (Depreciation)
|
|
(32,197
|
)
|
Net
Realized Gain (Loss) and Change in Unrealized Appreciation (Depreciation)
|
|
(17,969
|
)
|
Net Increase (Decrease) in Net Assets Resulting from Operations
|
|
$
|
(15,076
|
)
|
8
|
The accompanying notes are an integral part of the financial
statements.
|
|
The Thai
Fund, Inc.
|
|
|
|
Financial Statements
|
Statements of Changes in Net Assets
|
|
Six Months Ended
|
|
|
|
|
June 30, 2008
|
|
Year Ended
|
|
|
(unaudited)
|
|
December 31, 2007
|
|
|
(000)
|
|
(000)
|
|
Increase
(Decrease) in Net Assets
|
|
|
|
|
|
Operations:
|
|
|
|
|
|
Net Investment Income (Loss)
|
|
$
|
2,893
|
|
$
|
3,072
|
|
Net Realized Gain (Loss)
|
|
14,228
|
|
15,168
|
|
Change in Unrealized Appreciation (Depreciation)
|
|
(32,197
|
)
|
46,642
|
|
Net Increase (Decrease) in Net Assets Resulting from
Operations
|
|
(15,076
|
)
|
64,882
|
|
Distributions from and/or
in Excess of:
|
|
|
|
|
|
Net Investment Income
|
|
(27
|
)
|
(3,747
|
)
|
Capital Share Transactions:
|
|
|
|
|
|
Reinvestment of Distributions (5,051 and 6,662 shares, respectively)
|
|
59
|
|
54
|
|
Total Increase (Decrease)
|
|
(15,044
|
)
|
61,189
|
|
Net Assets:
|
|
|
|
|
|
Beginning of Period
|
|
204,068
|
|
142,879
|
|
End of Period (Including Undistributed (Distributions
in Excess of) Net Investment Income
of $2,889 and $23,
respectively)
|
|
$
|
189,024
|
|
$
|
204,068
|
|
The accompanying notes are an integral part of the financial
statements.
|
9
|
|
The Thai
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
|
|
$
|
12.85
|
|
$
|
9.00
|
|
$
|
8.32
|
|
$
|
8.32
|
|
$
|
8.93
|
|
$
|
4.02
|
|
Net Investment Income (Loss)
|
|
0.18
|
|
0.19
|
|
0.24
|
|
0.23
|
|
0.13
|
|
0.06
|
|
Net Realized and Unrealized Gain (Loss) on Investments
|
|
(1.13
|
)
|
3.90
|
|
0.76
|
|
(0.01
|
)
|
(0.62
|
)
|
4.94
|
|
Total from Investment Operations
|
|
(0.95
|
)
|
4.09
|
|
1.00
|
|
0.22
|
|
(0.49
|
)
|
5.00
|
|
Distributions from and/or in Excess of:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Investment Income
|
|
(0.00
|
)#
|
(0.24
|
)
|
(0.26
|
)
|
(0.22
|
)
|
(0.12
|
)
|
(0.09
|
)
|
Dilutive Effect of Shares Issued through Rights Offering and Offering
Costs
|
|
|
|
|
|
(0.06
|
)
|
|
|
|
|
|
|
Net Asset Value, End of Period
|
|
$
|
11.90
|
|
$
|
12.85
|
|
$
|
9.00
|
|
$
|
8.32
|
|
$
|
8.32
|
|
$
|
8.93
|
|
Per Share Market Value, End of Period
|
|
$
|
10.80
|
|
$
|
13.05
|
|
$
|
11.00
|
|
$
|
9.49
|
|
$
|
8.95
|
|
$
|
10.40
|
|
TOTAL INVESTMENT RETURN:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Market Value
|
|
(17.23
|
)%*
|
21.02
|
%
|
18.97
|
%
|
8.26
|
%
|
(12.91
|
)%
|
201.95
|
%
|
Net Asset Value (1)
|
|
(7.38
|
)%*
|
45.65
|
%
|
11.03
|
%
|
2.10
|
%
|
(5.71
|
)%
|
124.42
|
%
|
RATIOS, SUPPLEMENTAL DATA:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Assets, End of Period (Thousands)
|
|
$
|
189,024
|
|
$
|
204,068
|
|
$
|
142,879
|
|
$
|
110,432
|
|
$
|
110,396
|
|
$
|
118,480
|
|
Ratio of Expenses to Average Net Assets
(2)
|
|
1.57
|
%+**
|
1.49
|
%+
|
1.74
|
%
|
1.76
|
%
|
1.73
|
%
|
1.92
|
%
|
Ratio of Net Investment Income (Loss) to
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Net Assets
(2)
|
|
2.80
|
%+**
|
1.76
|
%+
|
2.66
|
%
|
2.79
|
%
|
1.62
|
%
|
1.18
|
%
|
Portfolio Turnover Rate
|
|
12
|
%*
|
24
|
%
|
43
|
%
|
26
|
%
|
36
|
%
|
32
|
%
|
(2)
Supplemental Information
on the Ratios to Average Net Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratios Before Expenses Waived by Administrator:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratio of Expenses to Average Net Assets
|
|
1.61
|
%+**
|
1.53
|
%+
|
1.78
|
%
|
1.79
|
%
|
1.74
|
%
|
N/A
|
|
Ratio of Net Investment Income (Loss) to Average Net Assets
|
|
2.76
|
%+**
|
1.72
|
%+
|
2.62
|
%
|
2.76
|
%
|
1.61
|
%
|
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.
|
*
|
|
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 Thai
Fund, Inc.
|
|
|
|
June 30,
2008 (unaudited)
|
Notes to Financial Statements
The Thai Fund, Inc. (the Fund) was incorporated on June 10,
1987 and is registered as a non-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 primarily in equity securities of companies organized under the laws
of the Kingdom of Thailand. The Fund makes its investments in Thailand through
the Thai Investment Plan (the Plan) established in conformity with Thai law.
The Fund is the sole unit holder of the Plan. The accompanying financial
statements are prepared on a consolidated basis and present the financial position
and results of operations of the Plan and the Fund.
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.
Amounts denominated in Thai Baht are translated into U.S. dollars at the mean
of the bid and asked prices of such currency against U.S. dollars last quoted
by a major bank as follows:
·
investments, other assets and liabilities at
the prevailing rate 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 rate 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 rate 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 the foreign exchange rate 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, dispositions of foreign currency, currency gains
or losses realized between the trade and settlement dates on securities
transactions, and the difference between the amount of investment income
recorded on the Funds books and the U.S. dollar equivalent amounts actually
received or paid.
11
|
The Thai
Fund, Inc.
|
|
|
|
June 30,
2008 (unaudited)
|
Notes to Financial
Statements (contd)
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 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 investments in
Thai equity securities, which may be subject to greater price volatility, lower
liquidity and less diversity than equity securities of companies based in the
United States. In addition, Thai equity securities may be subject to
substantial governmental involvement in the economy and greater social,
economic and political uncertainty.
Governmental approval for foreign investments may be required in advance
of making an investment under certain circumstances in some countries, and the
extent of foreign investments in domestic companies may be subject to
limitation in other countries. Foreign ownership limitations also may be
imposed by the charters of individual companies to prevent, among other
concerns, violations of foreign investment limitations. As a result, an
additional class of shares (identified as Foreign in the Portfolio of
Investments) may be created and offered for investment. The local and
foreign shares market values may differ. In the absence of trading of the
foreign shares in such markets, the Fund values the foreign shares at the
closing exchange price of the local shares. Such securities, if any, are
identified as fair valued in the Portfolio of Investments.
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.
Restricted Securities:
The Fund may invest in unregistered or
otherwise restricted securities. The term restricted securities refers to
securities that are unregistered or are held by control persons of the issuer
and securities that are subject to contractual restrictions on their resale. As
a result, restricted securities may be more difficult to value and the Fund may
have difficulty disposing of such assets either in a timely manner or for a
reasonable price. In order to dispose of an unregistered security, the Fund,
where it has contractual rights to do so, may have to cause such security to be
registered. A considerable period may elapse between the time the decision is
made to sell the security and the time the security is registered so that the
Fund could sell it. Contractual restrictions on the resale of securities vary
in length and scope and are generally the result of a negotiation between the
issuer and acquiror of the securities. The Fund would, in either case, bear
market risks during that period.
5.
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
12
|
The Thai
Fund, Inc.
|
|
|
|
June 30,
2008 (unaudited)
|
Notes to Financial
Statements (contd)
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.
6.
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.)
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
|
|
$
|
178,011
|
|
$
|
|
|
Level 2
- Other Significant Observable Inputs
|
|
3,470
|
|
|
|
Level 3 - Significant Unobservable Inputs
|
|
|
|
|
|
Total
|
|
$
|
181,481
|
|
$
|
|
|
At June 30, 2008, there were no Level 3 Portfolio investments for
which significant unobservable inputs were used to determine fair value.
7.
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.
MFC
Asset Management Public Company Limited (the Thai Adviser) provides
investment advisory services to the Fund under the terms of a contract.
Effective May 1, 2008, the Thai Adviser is paid a fee computed weekly and
payable monthly at an annual rate of 0.32% of the Funds first $50 million of
average weekly net assets, 0.20% of the Funds next $50 million of average
weekly net assets and 0.16% of the Funds average weekly net assets in excess
of $100 million. Prior to May 1, 2008, the Thai Adviser is paid a fee
computed weekly and payable monthly at an annual rate of 0.40% of the Funds
first $50
13
|
The Thai
Fund, Inc.
|
|
|
|
June 30,
2008 (unaudited)
|
Notes to Financial Statements
(contd)
million of average weekly net assets, 0.25% of the Funds next $50
million of average weekly net assets and 0.20% of the Funds average weekly net
assets in excess of $100 million.
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 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 $46,000 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 administration agreement, except pricing services and
extraordinary expenses, are covered under the administration fee.
D.
Custodian Fees:
JPMorgan Chase Bank, N.A. (the Custodian)
serves as Custodian for the Funds assets held in the United States. 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 Plans assets in Thailand
are held by Kasikornbank Public Company Limited.
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.
Distributions
of income from the Plan to the Fund are subject to Thai income tax at a rate of
10% of the distribution amount, which is withheld at the time of distribution.
All distributions from the Plan to the Fund must be approved by The Bank of
Thailand (BOT) pursuant to the laws of The Kingdom of Thailand. For financial
statement purposes, the Fund accrues and allocates the Thai income tax to net
investment income, net realized gains and net unrealized appreciation on the basis
of their relative amounts. For U.S. Federal income tax purposes, the Thai
income tax is deducted, when paid, from net investment income.
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
|
$3,747
|
|
$
|
|
$4,073
|
|
$
|
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, resulted in
14
|
The Thai
Fund, Inc.
|
|
|
|
June 30,
2008 (unaudited)
|
Notes to Financial
Statements (contd)
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)
|
$313
|
|
$(313)
|
|
$
|
At December 31, 2007, the components of distributable earnings on a
tax basis were as follows:
Undistributed
Ordinary Income
(000)
|
|
Undistributed
Long-term Capital Gain
(000)
|
$26
|
|
$
|
At June 30, 2008, the U.S. Federal income tax cost basis of
investments was approximately $139,018,000 and, accordingly, net unrealized
appreciation for U.S. Federal income tax purposes was $42,463,000 of which
$54,818,000 related to appreciated securities and $12,355,000 related to
depreciated securities.
At December 31, 2007, the Fund had a capital loss carryforward for
U.S. Federal income tax purposes of approximately $10,828,000 available to
offset future gains of which $6,799,000 will expire on December 31, 2009
and $4,029,000 will expire on December 31, 2010. During the year ended
December 31, 2007, the Fund utilized capital loss carryforwards for U.S.
Federal income tax purposes of approximately $13,657,000.
To the extent that capital loss carryforwards are used to offset any
future capital gains realized during the carryforward 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.
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)
|
$275
|
|
$5,797
|
|
$4,456
|
|
$31
|
|
$1,616
|
During
the six months ended June 30, 2008, the Fund made purchases and sales
totaling approximately $26,011,000 and $24,152,000 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 May 30, 2006, the Fund commenced a
rights
offering and issued to
stockholders of record as of May 23, 2006 one right for each share of common
stock held. The rights were not transferable and, consequently, were not listed
on any exchange. The rights entitled holders to subscribe for an aggregate of
3,320,650 shares of the Funds common stock. In addition, the Fund had the
option of issuing additional shares in an amount up to 25% of the shares that
were available in the primary offering, or 830,160 shares, for an aggregate
total of 4,150,810 shares. The offer expired on July 20, 2006. Pursuant to
this offering, the Fund sold 2,596,336 shares at the subscription price per
share of $8.17 (representing 95% of the average of the last reported sales
price of the Funds common stock on the New York Stock Exchange on the date the
offer expired and the four preceding trading days). The total proceeds of the
rights offering were $21,212,065 and the Fund incurred costs associated with
the offering estimated at $275,000.
On
June 19, 2007, the Directors approved a procedure whereby the Fund may,
when appropriate, purchase shares in the open market or in privately negotiated
transactions at a price not above market value or net asset value, whichever is
lower at the time of the purchase. During the six months ended June 30,
2008, the Fund did not repurchase any if its shares.
15
|
The Thai
Fund, Inc.
|
|
|
|
June 30,
2008 (unaudited)
|
Notes to Financial Statements (contd)
On
June 20, 2008, the Officers of the Fund, pursuant to authority granted by
the Directors, declared a distribution of $0.0017 per share, derived from net
investment income, payable on July 15, 2008, to stockholders of record on
June 30, 2008.
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
|
|
9,393,450
|
|
306,538
|
|
Joseph J. Kearns
|
|
9,364,882
|
|
335,106
|
|
Michael E. Nugent
|
|
9,363,221
|
|
336,767
|
|
Fergus Reid
|
|
9,361,937
|
|
338,051
|
|
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.
16
|
The Thai
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.
17
|
The Thai
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.
18
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 distributions 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
participants 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 Thai Fund, Inc.
Computershare Trust Company,
N.A.
P.O. Box 43078
Providence, Rhode Island
02940-3078
1(800) 231-2608
19
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.
20
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.
21
The Thai 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
Thai
Investment Adviser
MFC Asset Management Public Company Limited
Ground Floor and 21st-23rd Floors, Column Tower
199 Ratchadaphisek Road
Khlongtoey, Bangkok 10110
Thailand
Custodians
Kasikornbank Public Company Limited
1 Soi Kasikornthai
Ratburana Road
Bangkok 10140, Thailand
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
CETTFSAN IU08-04281I-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
None
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
Thai 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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