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To: marginmike who wrote (64118)	2/1/2001 10:12:18 PM
From: Joan Osland Graffius	Read Replies (1) \| Respond to of 436258

Hi, I just went out to ML's site and picked up this write up. Joan Near term, we expect FAX to cut its monthly distribution from 4.5 cents per share to 3.25 - 3.75 cents per share following the next board meeting in the second week of December. According to fund management: “The Board intends to maintain the monthly distribution of US 4.5 cents per share until March 2001, subject to review at the Board’s quarterly meeting and with regard to market conditions, with the next review to take place in December 2000.” The weak A$ and the fact that the fund’s distributions have included 35% return of capital year-to-date provide, in our opinion, compelling reasons to cut the distribution. Under a bearish outlook for the currency in the US$/A$ 0.50-0.51 range, and a flat bond market, we estimate that a sustainable monthly distribution would be 3 cents per share. The exact dividend will be decided based on the Board’s latest view of the Australian Dollar in mid-December. We shall provide a fine tuned forecast of the distribution in December. • Ironically, from a total return perspective, return of capital is not necessarily a bad thing for investors because the fund is trading at more than 20% discount to NAV. Investors effectively get their money back at NAV. This helps to close the discount. • Merrill Lynch Economics currency forecast for the US$/A$ is 0.59, 0.62 and 0.66 for 3-, 6-, and 12-month horizons, respectively (as of 10/13/2000 report by ML Sr. International Economist Michael Hartnett). The currency is currently at US$/A$ 0.5290. A one cent move in the currency moves the fund’s NAV by about 13 cents.