ReformIS
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From: WEBS Index Fund, Inc.
Date: 04 May 1999
Time: 15:32:35
WILMINGTON, Del. (BUSINESS WIRE) - WEBS Index Fund, Inc. (the "Fund") announced today that it is exploring the possibility of reinstituting sales of Creation Units of its Malaysia (Free) WEBS Index Series (AMEX:EWM) (the "Malaysia Series"). As a result of applicable Malaysian restrictions, any such sales would be made exclusively for cash (U.S. Dollars). The Fund temporarily suspended sales of new Creation Units in early September 1998 in light of the capital restrictions imposed by the government of Malaysia on September 1, 1998. One of the effects of such restrictions was to preclude "in kind" creations and redemptions of Malaysia Series WEBS. In February 1999 the Fund announced that redemptions of Creation Units of Malaysia Series WEBS would be effected exclusively through the delivery of Malaysian ringgits to an investor's account at a duly licensed Malaysian financial institution, and noted that an investor receiving such proceeds would be subject to repatriation penalties under Malaysian law that involve exit levies and profit taxes.
The Fund announced today that it is working with its Malaysian sub-custodian and other service providers to try to establish a workable procedure under which it could reinstitute sales of Creation Units of Malaysia Series WEBS on a cash payment (U.S. dollars) basis. The Fund indicated that it was taking this step in light of strong investor interest in the Malaysia Series, which has resulted in Malaysia Series WEBS trading at material premiums to net asset value in recent times.
The Fund also noted that changes to the Malaysian capital controls announced in February 1999 establish different exit levy regimes applicable to the repatriation of funds depending upon whether or not funds were initially invested in Malaysia prior to February 15, 1999. The Fund is currently exploring what procedures it could put into place to address issues arising from this and other aspects of the Malaysian controls and other considerations. THERE CAN BE NO ASSURANCE THAT THE FUND WILL REINSTITUTE SALES OF CREATION UNITS OF MALAYSIAN SERIES WEBS.
The Fund noted that the continued suspension of creations, and the limitations under Malaysian law on repatriating redemption proceeds in ringgits, are likely to cause WEBS of the Malaysia Series to continue to trade at larger discounts or premiums to net asset value than they did prior to September 1, 1998, and that such discounts or premiums may be material.
Creations and redemptions of Creation Units of WEBS of the sixteen WEBS Index Series other than the Malaysia Series are not affected by this announcement and continue to be available as in the past.
Each of the WEBS Index Series invests primarily in foreign common stocks in an effort to track the performance of a specified MSCI Index.
The WEBS prospectus is available to investors by calling (800) 810-WEBS. The prospectus contains more complete information on WEBS, including charges and expenses, and on the special risks associated with international investing. The prospectus should be read carefully before investing. Further information on WEBS, including answers to frequently asked questions about WEBS, is available on the world wide web at www.websontheweb.com.