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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Joan Osland Graffius who wrote (91266)	6/18/2001 2:25:40 PM
From: Mark Adams	Respond to of 132070

Even if the Euro was toast, the companies in the Austria index should have some value. So that should put a floor in place. When I saw that graph, I assumed they had done a poor choice of stock seletion. It may be that the chart fails to account for the high distribution rate though, making it look worse than it really is.

To: Joan Osland Graffius who wrote (91266)	6/18/2001 8:16:52 PM
From: Mark Adams	Read Replies (2) \| Respond to of 132070

I did a little more poking around on OST. First- a glance at the Austria macro picture. Don't know how this has resolved itself- but might be why ATX underperformed 00-01. Since Jan 01, the index itself has done quite well. "diplomatic ostracism of Austria" rferl.org From SEC on OST- letter to shareholders; secinfo.com The Fund's performance suffered relative to the ATX 50 Index as a result of its focus on smaller growth stocks. Although exposure to this area has been reduced, liquidity conditions have inhibited more meaningful portfolio shifts. At the same time, however, we remain confident that these smaller growth companies will provide relatively superior returns over the long-term. The current portfolio is dominated by companies that we believe to be able to survive the current downturn and that are well placed to benefit from any recovery in sentiment. Despite the poor performance of global equity markets, the Austrian market has succeeded in putting in one of the best performances of all developed markets since the beginning of the year. This relative performance is long overdue as the ATX 50 Index has been Europe's worst performer over the past 5 years. The reason for this outperformance is a result of investors' greater appetites for value stocks (which dominate the Austrian market) relative to growth companies which tend to display higher rates of earnings growth but typically have more demanding valuation multiples. The macroeconomic situation for the country remains relatively positive. Although gross domestic product (GDP) growth estimates have been coming down in recent months, we still anticipate that Austrian growth will reach around 2.5% for the year following the 1999 3.5% increase. At the same time, nflationary expectations remain subdued and we would expect inflation to fall below 2% in the current year. This performance for both growth and inflation exceeds the expected European average and reflects Austria's long-term growth attractions. Despite this relatively strong macro-performance, Austria's stock market remains relatively undervalued against other markets in Europe. With a prospective price-to-earnings multiple of below 10 times for 2001, which compares with a European average forecast multiple of 19 times and earnings growth of 12% relative to Europe's 11%, the Austrian market offers both superior growth and considerable better value. However, the Austrian market, with a total market capitalization of approximately $22 billion dollars, has failed to attract the attention of both international and domestic investors and the recent acquisition of Bank Austria by Germany's Hypo Bank has removed Austria's largest company from the Vienna exchange. Although the new listings market has remained fairly vibrant, the recent shakeout in technology companies throughout the globe has had a severely debilitating effect on the market capitalization of this area. As a result, any substantial revaluation of the Austrian market is likely to depend upon the government providing fiscal incentives to domestic investors for long-term savings. Austria's social security and pensions deficit remains extremely high and as a result reform will be necessary in order to promote the idea of individuals accepting some of this burden by saving for themselves. We hope to see some legislation before the Viennese market retreats to being a permanent backwater. A change in sub manager, with no new sub manager indicated despite a proxy vote just weeks prior... Curious. The Austria Fund, Inc. Accepts Resignation of Sub-Adviser NEW YORK, May 24 /PRNewswire/ -- The Austria Fund, Inc., (NYSE: OST) (the "Fund") announced today that the Fund's Board of Directors accepted, as of May 11, 2001, the resignation of BAI Fondsberatung Ges. m.b.H., the sub-adviser of the Fund (the "Sub-Adviser"), thus terminating the Fund's Sub-Advisory Agreement with the Sub-Adviser as of that date. NEW YORK, April 26 /PRNewswire/ -- The Austria Fund, Inc., a closed-end investment company (NYSE: OST) (the "Fund"), announced the results of its Annual Meeting of Stockholders which was completed earlier today. At the Annual Meeting, the Fund's stockholders (i) elected to the Board of Directors each of the five individuals nominated for election by the Board, (ii) ratified the Board's selection of PricewaterhouseCoopers LLP as the Fund's independent accountants for fiscal 2001, (iii) approved a new Sub-Advisory Agreement between the Fund and its current Sub-Adviser, BAI Fondsberatung Ges. m.b.H. Alliance Capital managed CEFs (but you won't find any info on their web site re these CEFs) Closed-End Funds All-Market Advantage Fund The Austria Fund ACM Government Income Fund ACM Government Opportunity Fund The Korean Investment Fund ACM Managed Dollar Income Fund ACM Managed Income Fund ACM Municipal Securities Income Fund The Southern Africa Fund The Spain Fund World Dollar Government Fund World Dollar Government Fund II Austria's Freedom Party This past Monday, Feb. 28th [00], Joerg Heider unexpectedly resigned from party leadership, which led the other EU governments to boast about the success of their policy. Yet, Heider’s favorability ratings rose further. After his initial apologies for past statements that praised the orderly employment policy of Third Reich and characterized Austria’s immigrants as criminal, Heider now openly menaces EU with veto if their treatment of Austria continues to be "unfair". Aware that Heider will continue to pull the strings, Israel and other states have not halted Austria’s ostracism yet – not until the entire Freedom Party steps down from government.