TKF Turkish Investment Fund (The) (delisted)

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM N-Q

 

 

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS

OF REGISTERED MANAGEMENT INVESTMENT COMPANY

Investment Company Act file number: 811-05921

 

 

The Turkish Investment Fund, Inc.

(Exact name of registrant as specified in charter)

 

 

 

522 Fifth Avenue, New York, New York		10036
(Address of principal executive offices)		(Zip code)

 

 

John Gernon

522 Fifth Avenue, New York, New York 10036

(Name and address of agent for service)

 

 

Registrant’s telephone number, including area code: 212-296-0289

Date of fiscal year end: October 31, 2013

Date of reporting period: July 31, 2013

 

 

 

Item 1. Schedule of Investments.

The Fund’s schedule of investments as of the close of the reporting period prepared pursuant to Rule 12-12 of Regulation S-X is as follows:

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The Turkish Investment Fund, Inc.

Portfolio of Investments

Third Quarter Report

July 31, 2013 (unaudited)

 

		Shares				Value (000)
Common Stocks (97.7%)
Airlines (3.1%)
Pegasus Hava Tasimaciligi AS (a)			218,418			$	3,159
Automobiles (1.3%)
Tofas Turk Otomobil Fabrikasi AS			202,072				1,341
Beverages (9.4%)
Anadolu Efes Biracilik Ve Malt Sanayii AS			697,135				9,615
Building Products (1.5%)
Trakya Cam Sanayi AS			1,166,104				1,512
Commercial Banks (28.1%)
Turkiye Garanti Bankasi AS			4,314,071				16,891
Turkiye Halk Bankasi AS			985,262				7,405
Turkiye Vakiflar Bankasi Tao, Class D			1,113,402				2,433
Yapi ve Kredi Bankasi AS			958,849				2,090
							28,819
Commercial Services & Supplies (3.1%)
Adel Kalemcilik Ticaret ve Sanayi AS			103,668				3,173
Construction Materials (2.2%)
Akcansa Cimento AS			396,579				2,233
Containers & Packaging (1.7%)
Kartonsan Karton Sanayi ve Ticaret AS			15,084				1,730
Diversified Financial Services (8.2%)
Haci Omer Sabanci Holding AS			1,680,308				8,384
Food Products (6.3%)
TAT Konserve Sanayii AS (a)			1,699,222				2,124
Ulker Biskuvi Sanayi AS			645,111				4,365
							6,489
Hotels, Restaurants & Leisure (1.8%)
DO & Co., AG			40,233				1,870
Industrial Conglomerates (9.1%)
Enka Insaat ve Sanayi AS			1,722,889				4,770
Turkiye Sise ve Cam Fabrikalari AS			3,171,184				4,554
							9,324
Insurance (4.9%)
Aksigorta AS			2,642,934				3,358
Anadolu Hayat Emeklilik AS			867,808				1,659
							5,017
Machinery (2.0%)
Turk Traktor ve Ziraat Makineleri AS			64,547				2,017
Oil, Gas & Consumable Fuels (7.1%)
Tupras Turkiye Petrol Rafinerileri AS			342,305				7,320

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The Turkish Investment Fund, Inc.

Portfolio of Investments

Third Quarter Report

July 31, 2013 (unaudited)(cont’d)

 

		Shares				Value (000)
Textiles, Apparel & Luxury Goods (2.9%)
Altinyildiz Mensucat ve Konfeksiyon Fabrikalari AS (a)			55,208			$	1,497
Yunsa Yunlu Sanayi VE Ticare			591,743				1,529
							3,026
Wireless Telecommunication Services (5.0%)
Turkcell Iletisim Hizmetleri AS (a)			886,611				5,175
Total Common Stocks (Cost $77,797)							100,204
Short-Term Investment (2.9%)
Investment Company (2.9%)
Morgan Stanley Institutional Liquidity Funds - Money Market Portfolio - Institutional Class (b) (Cost $2,950)			2,950,325				2,950
Total Investments (100.6%) (Cost $80,747) +							103,154
Liabilities in Excess of Other Assets (-0.6%)							(607	)
Net Assets (100.0%)						$	102,547

 

(a)	Non-income producing security.

(b)

The Fund invests in the Morgan Stanley Institutional Liquidity Funds - Money Market Portfolio - Institutional Class (the “Liquidity Funds”), an open-end management investment company managed by the Adviser. Advisory fees paid by the Fund are reduced by an amount equal to the advisory and administrative service fees paid by the Liquidity Funds with respect to assets invested by the Fund in the Liquidity Funds.

+

At July 31, 2013, the U.S. Federal income tax cost basis of investments was approximately $80,747,000 and, accordingly, net unrealized appreciation for U.S. Federal income tax purposes was approximately $22,407,000 of which approximately $24,503,000 related to appreciated securities and approximately $2,096,000 related to depreciated securities.

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The Turkish Investment Fund, Inc.

Notes to the Portfolio of Investments n July 31, 2013 (unaudited)

Security Valuation: (1) An equity portfolio security listed or traded on an exchange is valued at its latest reported sales price (or at the exchange official closing price if such exchange reports an official closing price), if there were no sales on a given day, the security is valued at the mean between the last reported bid and asked prices; (2) all other equity portfolio securities for which over-the-counter market quotations are readily available are valued at the mean between the last reported bid and asked prices. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (3) when market quotations are not readily available, including circumstances under which Morgan Stanley Investment Management Inc. (the “Adviser”) determines that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of a security’s market value, portfolio securities are valued at their fair value as determined in good faith under procedures established by and under the general supervision of the Fund’s Board of Directors (the “Directors”). Occasionally, developments affecting 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 of the New York Stock Exchange (“NYSE”). If developments occur during such periods that are expected to materially affect the value of such securities, such valuations may be adjusted to reflect the estimated fair value of such securities as of the close of the NYSE, as determined in good faith by the Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (4) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S. dollar equivalents at the prevailing market rates prior to the close of the NYSE; (5) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value as of the close of each business day; and (6) short-term debt securities with remaining maturities of 60 days or less at the time of purchase may be valued at amortized cost, unless the Adviser determines such valuation does not reflect the securities’ market value, in which case these securities will be valued at their fair market value determined by the Adviser.

Under procedures approved by the Directors, the Fund’s Adviser has formed a Valuation Committee. The Valuation Committee provides administration and oversight of the Fund’s valuation policies and procedures, which are reviewed at least annually by the Directors. These procedures allow the Fund to utilize independent pricing services, quotations from securities and financial instrument dealers, and other market sources to determine fair value.

The Fund has procedures to determine the fair value of securities and other financial instruments for which market prices are not readily available. Under these procedures, the Valuation Committee convenes on a regular and ad hoc basis to review such securities and considers a number of factors, including valuation methodologies and significant unobservable valuation inputs, when arriving at fair value. The Valuation Committee may employ a market-based approach which may use related or comparable assets or liabilities, recent transactions, market multiples, book values, and other relevant information for the investment to determine the fair value of the investment. An income-based valuation approach may also be used in which the anticipated future cash flows of the investment are discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any restrictions on the disposition of the investments. Due to the inherent uncertainty of valuations of such investments, the fair values may differ significantly from the values that would have been used had an active market existed. The Valuation Committee employs various methods for calibrating these valuation approaches including a regular review of valuation methodologies, key inputs and assumptions, transactional back-testing or disposition analysis, and reviews of any related market activity.

Fair Value Measurement: Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820, “Fair Value Measurements and Disclosures” (“ASC 820”), defines fair value as the value that the Funds 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

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most advantageous market for the investment or liability. ASC 820 establishes a three-tier hierarchy to distinguish between (1) inputs that reflect the assumptions market participants would use in valuing 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 entity’s own assumptions about the assumptions market participants would use in valuing 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.

 

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Level 1 – unadjusted quoted prices in active markets for identical investments

 

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Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

 

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Level 3 – significant unobservable inputs including the Fund’s own assumptions in determining the fair value of investments. 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 issuer’s financial statements or other available documents and, if necessary, available information concerning other securities in similar circumstances

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities and the determination of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to each security.

The following is a summary of the inputs used to value the Fund’s investments as of July 31, 2013.

 

Investment Type		Level 1 Unadjusted quoted prices (000)				Level 2 Other significant observable inputs (000)				Level 3 Significant unobservable inputs (000)				Total (000)
Assets:
Common Stocks
Airlines		$	3,159			$	—			$	—			$	3,159
Automobiles			1,341				—				—				1,341
Beverages			9,615				—				—				9,615
Building Products			1,512				—				—				1,512
Commercial Banks			28,819				—				—				28,819
Commercial Services & Supplies			3,173				—				—				3,173
Construction Materials			2,233				—				—				2,233
Containers & Packaging			1,730				—				—				1,730
Diversified Financial Services			8,384				—				—				8,384
Food Products			6,489				—				—				6,489
Hotels, Restaurants & Leisure			1,870				—				—				1,870
Industrial Conglomerates			9,324				—				—				9,324
Insurance			5,017				—				—				5,017
Machinery			2,017				—				—				2,017
Oil, Gas & Consumable Fuels			7,320				—				—				7,320
Textiles, Apparel & Luxury Goods			3,026				—				—				3,026
Wireless Telecommunication Services			5,175				—				—				5,175
Total Common Stocks			100,204				—				—				100,204
Short-Term Investment - Investment Company			2,950				—				—				2,950
Total Assets		$	103,154			$	—			$	—			$	103,154

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment’s valuation changes. The Fund recognizes transfers between the levels as of the end of the period. As of July 31, 2013, the Fund did not have any investments transfer between investment levels.

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Item 2. Controls and Procedures.

(a) The Fund’s principal executive officer and principal financial officer have concluded that the Fund’s disclosure controls and procedures are sufficient to ensure that information required to be disclosed by the Fund in this Form N-Q was recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s 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 Fund’s internal control over financial reporting that occurred during the registrant’s fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Fund’s internal control over financial reporting.

Item 3. Exhibits.

(a) A separate certification for each principal executive officer and principal financial officer of the registrant are attached hereto.

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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.

The Turkish Investment Fund, Inc.

 

/s/ John Gernon

John Gernon

Principal Executive Officer

September 17, 2013

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.

 

/s/ John Gernon

John Gernon

Principal Executive Officer

September 17, 2013

 

/s/ Francis Smith

Francis Smith

Principal Financial Officer

September 17, 2013