MGB Morgan Stanley Global Opportunity Bond Fund, Inc.

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES

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 Fund’s semi-annual report transmitted to shareholders pursuant to Rule 30e-1 under the Investment Company Act of 1940 is as follows:

Morgan Stanley

Global Opportunity Bond Fund, Inc. (MGB)

Morgan Stanley

Investment Management Inc.

Investment Adviser

Letter to Stockholders

Performance

For the six months ended June 30, 2008, the Morgan Stanley Global Opportunity Bond Fund, Inc. (the “Fund”) had total returns based on net asset value and market value per share (including reinvestment of distributions), of -1.78%, net of fees, and -3.86%, respectively, compared to its benchmark, the Emerging Markets Bond/U.S. Corporate High Yield Blended Composite (the “Index”) which returned -0.61%. The Index is comprised of 50% of the J.P. Morgan Emerging Markets Bond Global Index and 50% of the Lehman Brothers U.S. Corporate High Yield - 2% Issuer Cap Index. At June 30, 2008, the Fund’s investments in debt instruments were comprised of 61.0% emerging markets debt securities and 39.0% U.S. high yield securities. However, the Fund’s weightings in these asset classes are not restricted and under normal circumstances will fluctuate depending on market conditions. On June 30, 2008, the closing price of the Fund’s shares on the New York Stock Exchange was $6.48, representing an 14.5% discount to the Fund’s net asset value per share. Past performance is no guarantee of future results.

Factors Affecting Performance

·                  Market volatility in the remained elevated throughout the reporting period as credit remained constrained and fears of an economic recession were joined by concerns about escalating inflation. The financial crisis that began with subprime mortgage-related securities continued to spread to other segments of the bond market, forcing investors to write down assets for huge paper losses and stoking concerns about counterparty risk throughout the financial system. Although several investment banks have been affected to varying degrees, Bear Stearns was a notable casualty, as it was forced to sell itself to JP Morgan Chase in a fire-sale brokered by the U.S. Federal Reserve.

·                  The emerging market debt (EMD) asset class trended mostly sideways over the course of the period, ending the period slightly negative on a year-to-date basis. During the first quarter of the year, Emerging Markets (EM) bond prices rose modestly but failed to keep pace with the dramatic rally in the U.S. Treasury market, where yields fell precipitously on the back of interest rates cuts by the Federal Open Market Committee and expectations of a sharp slowdown of the economy.

·                  The U.S. high yield market struggled during the first quarter of the year, rebounded in April and May, then reversed course again in June as the weaker economic picture, declining equity prices and higher volatility pushed prices lower.

·                  Within the U.S. high-yield portion of the portfolio, a higher-than-average credit quality was additive to performance for the overall period. In the risk-averse environment that persisted throughout much of the period, investors generally favored higher-quality issues, causing the higher-rated segment of the market to outperform the lower-rated segment. As such, our greater relative emphasis on higher-quality securities enhanced returns.

·                  Other positive contributors to the Fund’s high yield performance included an overweight relative to the benchmark in the health care sector, which performed well during the period. Additionally, the portfolio held no investments in the airline sector, which was beneficial as the sector struggled amid rising fuel prices.

·                  Holdings in mortgage-backed securities (MBS) and select commercial mortgage-backed securities (CMBS) hindered returns as these sectors declined for the overall period.

·                  With regard to the EMD portion of the portfolio, an emphasis on local currency-denominated securities over external debt aided relative performance as a number of EM currencies rallied versus the U.S. dollar.

·                  Overweighted positions in Brazilian, Mexican and Russian local market securities bolstered relative returns, as did an underweight and security selection in Brazil and Turkey. Conversely, an underweight in Lebanese debt and selection in Russia detracted from relative performance.

Management Strategies

·                  Within EMD, the Fund maintained a neutral spread and below-benchmark interest rate duration (a measure of interest-rate sensitivity) during the period.

·                  We favored retaining local currency-denominated securities over external debt during the period, retaining a substantial overweight exposure to local currencies.

2

Letter to Stockholders (cont’d)

Management Strategies (cont’d)

·    Within the U.S. high yield portion of the Fund, we maintained a defensive stance in terms of the Fund’s credit quality profile. We believed this was a prudent strategy given that, in a declining market such as we experienced for much of the reporting period, higher-rated issues typically outperform lower-rated issues.

·    Given that credit spreads in the U.S. high yield market still remain much wider than long-term averages, we are seeking opportunities to increase the portfolio’s risk profile to a more neutral, rather than defensive, stance.

Sincerely,

Ronald E. Robison

3

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 also reviewed and considered the nature and extent of the non-advisory, administrative services provided by the Fund’s 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 Adviser’s expense. (The Investment Adviser and the Administrator together are referred to as the “Adviser” and the 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 Adviser’s 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 Fund’s 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 “performance peer group”). The Board also discussed with the Adviser the performance goals and the actual results achieved in managing the Fund. The Board concluded that the Fund’s 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 Fund’s 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 Fund’s management fee schedule under the Management Agreement and noted that it does not include any breakpoints. The Board considered that the Fund is a closed-end fund and, therefore, that the Fund’s assets are not likely to grow with new sales or grow significantly as a result of capital appreciation. The Board concluded that economies of scale for the Fund were not a factor that needed to be considered at the present time.

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.

4

Investment Advisory Agreement Approval (cont’d)

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. 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 Adviser’s affiliates have ownership interests and/or board seats. The Board concluded that the commissions were competitive with those of other broker-dealers and the fall-out benefits were relatively small.

Soft Dollar Benefits

The Board considered whether the Adviser realizes any benefits from commissions paid to brokers who execute securities transactions for the Fund (“soft dollars”). The Board noted that the Fund invests only in fixed income securities, which do not generate soft dollars.

Adviser Financially Sound and Financially Capable of Meeting the Fund’s 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 Fund’s operations and the Board’s 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 Fund’s 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 Fund’s 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.

5

Portfolio of Investments

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Portfolio of Investments (cont’d)

(Showing percentage of Total Value of Investments)

Portfolio of Investments (cont’d)

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Portfolio of Investments (cont’d)

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