SEMI-ANNUAL REPORT
[GRAPHIC]
FEBRUARY 28, 1998
TEMPLETON EMERGING
MARKETS FUND, INC.
[FRANKLIN TEMPLETON LOGO]
PAGE
[GRAPHIC]
Thank you for investing with Franklin Templeton. We encourage our investors to
maintain a long-term perspective, and to expect that mixed in with the good
years can be some bad years. It's important to remember that all securities
markets move both up and down, as do mutual fund share prices. We appreciate
your past support and look forward to serving your investment needs in the years
ahead.
In 1992, Sir John Templeton retired after a 50-year career of helping investors
manage their money. Currently he devotes all of his time and efforts to the John
Templeton Foundation. A major portion of his assets remain invested in the
Templeton funds, which are managed by many of the investment professionals he
selected and trained.
[PHOTO OF J. MARK MOBIUS, PH.D.]
J. Mark Mobius, Ph.D.
President
Templeton Emerging
Markets Fund, Inc.
Dr. Mobius, a German citizen, has been living in emerging market countries since
earning his Ph.D. in economics and political science at Massachusetts Institute
of Technology in 1964. During his extensive travels, he has acquired a thorough
knowledge of the business practices and customs that are unique to developing
nations.
PAGE
SHAREHOLDER LETTER
Your Fund's Objective: Templeton Emerging Markets Fund seeks long-term capital
appreciation by investing primarily in emerging country equity securities.
Dear Shareholder:
This semi-annual report of Templeton Emerging Markets Fund covers the six months
ended February 28, 1998. During this period, stock markets in developing
countries experienced severe volatility due to the Asian currency crisis. At the
epicenter of the crisis, the value of the Thai baht declined 22%, the Indonesian
rupiah plunged 67%, the Malaysian ringgit skidded 21%, and the South Korean won
dropped 45%.(1) These devaluations thrust many companies into bankruptcy, and
adversely affected banking systems in these countries.
Stock markets in the region also suffered, as a rush for cash drove equity
prices down in a wild melee of selling, the likes of which had not been seen for
many years. From August 31, 1997 to their mid-January lows, Thailand's market
dropped 58%,
(1) Source: Bloomberg. Price changes measured in U.S. dollars.
You may find a complete listing of the Fund's portfolio holdings, including the
number of shares and dollar value, beginning on page 11 of this report.
<TABLE>
<CAPTION>
CONTENTS
<S> <C>
Shareholder Letter 1
Performance Summary 5
Financial Highlights &
Statement of Investments 10
Financial Statements 23
Notes to Financial
Statements 26
</TABLE>
[GRAPHIC]
PAGE
GEOGRAPHIC DISTRIBUTION
Based on Total Net Assets
2/28/98
[GRAPH]
Indonesia's 74%, Malaysia's 57%, and South Korea's 71%.(2) Hong Kong's equity
market was hit particularly hard when its government defended their dollar by
raising overnight interbank interest rates substantially. Although this enabled
the currency's peg to the U.S. dollar to be maintained, it precipitated a
dramatic drop in property values. In response, the stock value of banks holding
property as loan collateral fell, and Hong Kong's market dropped by 40% between
October 3 and October 28, 1997.(2)
The European market most affected by the currency crisis was Russia, falling 30%
during the six months, and erasing much of the spectacular gains of 1997.
However, Poland's economy continued to grow, and its stock market rose almost 9%
during the six months under review.(2)
The Asian currency crisis also profoundly affected Latin America. Capital
inflows to the region fell as investors in developed countries perceived a
higher risk of investing in all emerging markets. However, stock markets in many
of these countries began to recover faster than those in Asia, and during the
period, the Brazilian, Mexican and Argentinian markets fell just 4%, 12% and
17%, respectively.(2)
Within this environment, the Fund posted a six-month cumulative total return of
- -12.77% in market-price terms, and -12.39% in net asset value terms, as
discussed in the Performance Summary on page 5.
2. Source: Bloomberg. Market returns are measured in U.S. dollars and include
reinvested dividends.
2
PAGE
At the close of the reporting period, 97.5% of the Fund's total net assets were
invested in long-term securities, with the remaining 2.5% in cash and other
liquid assets. The portfolio was allocated among 32 emerging markets, with the
largest percentages in Brazil (13.2% of total net assets), Portugal (10.6%), and
Turkey (10.2%). Regionally, Asia represented the largest portion (41.7%),
followed by Latin America (29.3%), and Europe (22.1%).
In our opinion, the emerging market crisis represents an excellent opportunity
for long-term investors. It has forced many governments to address much-needed
structural changes, and postpone or cancel over-ambitious infrastructure
projects. Despite the problems of the past several months, many of the
underlying economies are healthy, and equity markets could begin to show growth.
However, for this to occur, government policies around the world will have to
maneuver between the maintenance of a stable currency and the dangers of raising
interest rates. To conclude, we believe that now is not a time for long-term
investors to panic but rather to demonstrate their rational approach to
investing by taking advantage of bargains.
Of course, investing in emerging markets involves special considerations, which
may include risks related to market and currency volatility, adverse social,
economic and political developments and the relatively small size and lesser
liquidity of these markets. Investing in any emerging market means accepting a
certain amount of volatility and, in some cases, severe market corrections.
While short-term
TOP 10 HOLDINGS
2/28/98
<TABLE>
<CAPTION>
COMPANY, % OF TOTAL
INDUSTRY, COUNTRY NET ASSETS
----------------- ----------
<S> <C>
Banco Comercial Portugues SA
Banking, Portugal 6.3%
Telefonos de Mexico SA -
Telmex, L, ADR
Telecommunications, Mexico 3.7%
Antofagasta Holdings Plc
Metals & Mining, Chile 3.6%
BPI Socieda de Gestora de
Participacoes Socias SA
Banking, Portugal 3.5%
Akbank
Banking, Turkey 3.4%
Centrais Eletricas Brasileiras SA -
Eletrobras, B, pfd.
Utilities Electrical & Gas, Brazil 3.4%
Telecomunicacoes
Brasileiras SA - Telebras
Telecommunications, Brazil 3.1%
Ergo Bank SA
Banking, Greece 2.8%
Cheung Kong Holdings Ltd.
Multi-Industry, Hong Kong 2.8%
Titan Cement Co., reg.
Building Materials &
Components, Greece 2.5%
</TABLE>
3
PAGE
TOP 10 COUNTRIES
REPRESENTED IN THE FUND*
Equity Investments
(97.5% of Total Net Assests)
2/28/98
<TABLE>
<CAPTION>
% OF TOTAL
COUNTRY NET ASSETS
------- ----------
<S> <C>
Brazil 13.2%
Portugal 10.6%
Turkey 10.2%
Hong Kong 9.7%
Greece 8.4%
Mexico 7.7%
Thailand 5.7%
Malaysia 4.9%
South Africa 4.0%
Chile 3.7%
</TABLE>
*Does not include investments in fixed-income securities, and short-term
investments and other assets.
volatility can be disconcerting, declines of as much as 40% to 50% are not
unusual in emerging markets. In fact, the Hong Kong market has increased 1,268%
in the last 15 years, but has suffered five declines of more than 20% during
that time.(3)
This discussion reflects the strategies we employed for the Fund during the six
months under review, and includes our opinions as of the close of the period.
Because economic and market conditions are constantly changing, our strategies
and our evaluations, conclusions and decisions regarding portfolio holdings may
change as new circumstances arise. All figures shown are as of February 28,
1998, and the Fund's holdings can be expected to change with market developments
and management of the portfolio. Although past performance of a specific
investment or sector cannot guarantee future performance, such information can
be useful in analyzing the securities we purchase or sell for the Fund.
We welcome your comments and questions and thank you for your continued interest
and support.
(3) Source: Bloomberg. Based on quarterly percentage price change over 15 years
ended December 31, 1997.
4
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PERFORMANCE SUMMARY
In market-price terms, Templeton Emerging Markets Fund produced a -12.77%
cumulative total return for the six-month period ended February 28, 1998. Based
on the change in net asset value (in contrast to market price), the Fund
delivered a -12.39% cumulative total return for the same period. Both total
return figures assume reinvestment of dividends and capital gains in accordance
with the dividend reinvestment plan.
We have always maintained a long-term perspective when managing the Fund, and we
encourage shareholders to view their investments in a similar manner. As you can
see from the table on this page, based on the change in market price, the Fund
delivered a 534.19% cumulative total return for the period from its inception on
February 26, 1987 through February 28, 1998.
During the reporting period, the Fund's closing price on the New York Stock
Exchange decreased $5.5625 per share, from $23.125 on August 31, 1997, to
$17.5625 on February 28, 1998, while the net asset value decreased $4.91 per
share, from $20.67 to $15.76.
Shareholders received combined distributions of $2.44 per share, including
long-term capital gains of $2.115, short-term capital gains of 6.0 cents ($0.06)
and dividend income totaling 26.5 cents ($0.265). Distributions will vary
depending on income earned by the Fund and any profits realized from the sale of
securities in the Fund's portfolio, as well as the level of the Fund's operating
expenses.
Past performance is not predictive of future results.
5
PAGE
<TABLE>
<CAPTION>
TEMPLETON EMERGING MARKETS FUND
Periods ended 2/28/98
SINCE
INCEPTION
1-YEAR 5-YEAR 10-YEAR (2/26/87)
- ----------------------------------------------------------------------------------------
<S> <C>
Cumulative Total Return(1)
Based on change in net asset value - 9.62% 95.00% 720.66% 616.95%
Based on change in market price - 2.16% 76.96% 719.46% 541.01%
Average Annual Total Return(2)
Based on change in net asset value - 9.62% 14.29% 23.43% 19.60%
Based on change in market price - 2.16% 12.09% 23.41% 18.39%
</TABLE>
1. Cumulative total return represents the change in value of an investment over
the periods indicated.
2. Average annual total return represents the average annual change in value of
an investment over the periods indicated.
All calculations assume reinvestment of dividends and capital gains, either at
net asset value or at market price on the reinvestment date, in accordance with
the dividend reinvestment plan and do not reflect sales charges that would have
been paid at inception or brokerage commissions that would have been paid on
secondary market purchases. Investment return and principal value will change
with market conditions, currency volatility and the economic, social, and
political climates of the countries where investments are made. Emerging markets
involve heightened risks related to the same factors, in addition to those
associated with their relatively small size and lesser liquidity. You may have a
gain or loss when you sell your shares.
Past performance is not predictive of future results.
6
PAGE
THE FOLLOWING LETTER WAS WRITTEN BY DR. MOBIUS AFTER A TRIP TO SOUTHEAST ASIA.
I recently visited Thailand, Malaysia, Indonesia and Hong Kong, where the stocks
of many companies were selling at prices far below their actual asset value.
Although I met with some businessmen and investors who were glum about declines
in the value of their nations' currencies, others with more perspective viewed
the recent crisis as an opportunity.
One banker in Thailand admitted that his country and his bank were facing very
difficult times. He said: "It is up to us. If we are willing to work hard and
pull ourselves up, all will be well. At times like these, future fortunes will
be built." A leading Malaysian businessman told me that governments and
businessmen in the region would be forced to make changes for the better -
changes that have been long overdue, and which will make governments and the
business community more efficient.
My trip to Malaysia revealed exciting possibilities for investors looking to
purchase assets at rock-bottom prices. One firm with extensive interests in
construction, manufacturing, property development and
7
PAGE
power generation was the first Malaysian company to sign an agreement with the
country's national power company. It has more than US$400 million in cash assets
which it is planning to use to acquire businesses that complement its existing
operations. I also visited a diversified Malaysian shipping company involved
mainly with the transportation of natural gas, which appeared to be a highly
lucrative operation.
In Indonesia, I visited a cement company, which because of the weak rupiah, is
now able to export competitively to almost any country in the world. Another
Indonesian company I looked at, a vertically integrated pulp and paper producer,
has its own energy supply, access to low-cost hardwood fiber, and labor costs
which are among the world's lowest. This firm also benefits from the
depreciation of the rupiah because about 50% of its products are exported.
"The crisis in Asia's capital markets can be seen as an opportunity to obtain
investment bargains..."
The crisis in Asia's capital markets can be seen as an opportunity to obtain
investment bargains, which probably will not be seen again for years to come. I
remember arriving in Hong Kong in 1967, at the
8
PAGE
time when China's Cultural Revolution was spilling over the Crown Colony. As a
result of threats that Red Guard hordes would sweep over Hong Kong in a
bloodthirsty search for the "peoples' enemies," investors were fleeing and
selling their assets for any price. These prices proved to be bargains for
investors willing to wait and suffer through a number of difficult years. Many
of those investors are today among the richest people in the world. Will history
repeat itself? It generally does. But the rewards come only to the brave and the
patient.*
Sincerely,
/s/ J. Mark Mobius
- -------------------------
J. Mark Mobius, Ph.D.
President
Templeton Emerging Markets Fund, Inc.
*This letter reflects the strategies employed for the Fund during the past six
months and includes our opinions as of the close of the period. However, market
and economic conditions are constantly changing, which may affect our strategies
and portfolio holdings.
9
PAGE
TEMPLETON EMERGING MARKETS FUND, INC.
Financial Highlights
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED AUGUST 31,
FEBRUARY 28, 1998 --------------------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993
-----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
(For a share outstanding throughout the
period)
Net asset value, beginning of period...... $20.67 $17.26 $18.23 $22.77 $17.94 $18.74
-----------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss)............. (.01) .27 .25 .23 .10 .29
Net realized and unrealized gain
(loss)................................. (2.46) 4.27 1.20 (1.62) 5.87 4.93
-----------------------------------------------------------------------------
Total from investment operations.......... (2.47) 4.54 1.45 (1.39) 5.97 5.22
-----------------------------------------------------------------------------
Less distributions from:
Net investment income.................... (.27) (.21) (.26) (.10) (.29) (.39)
Net realized gains....................... (2.17) (.92) (2.16) (3.05) (.85) (5.63)
-----------------------------------------------------------------------------
Total distributions....................... (2.44) (1.13) (2.42) (3.15) (1.14) (6.02)
-----------------------------------------------------------------------------
Net asset value, end of period............ $15.76 $20.67 $17.26 $18.23 $22.77 $17.94
=============================================================================
Total Return*
Based on market value per share.......... (12.77)% 33.81% 7.45% (16.94)% 26.11% 44.30%
Based on net asset value per share....... (12.39)% 27.34% 8.69% (8.53)% 33.39% 34.30%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's)......... $264,743 $342,002 $283,678 $294,962 $363,760 $285,407
Ratios to average net assets:
Expenses................................. 1.70%** 1.67% 1.71% 1.73% 1.78% 1.84%
Net investment income (loss)............. (.13)%** 1.38% 1.51% 1.28% 0.46% 2.07%
Portfolio turnover rate................... 19.98% 12.60% 8.83% 27.58% 6.50% 21.55%
Average commission rate paid***........... $.0022 $.0010 $.0008 -- -- --
</TABLE>
*Total return is not annualized.
**Annualized.
***Relates to purchases and sales of equity securities. Prior to fiscal year
1996 disclosure of average commission rate was not required.
See Notes to Financial Statements.
10
PAGE
TEMPLETON EMERGING MARKETS FUND, INC.
STATEMENT OF INVESTMENTS, FEBRUARY 28, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
INDUSTRY SHARES VALUE
------------------------------------------------
<S> <C> <C> <C>
LONG TERM SECURITIES 97.5%
ARGENTINA 2.2%
Astra Cia Argentina de Petroleo SA.................. Energy Sources 52,900 $ 98,973
Atanor Cia Nacional Para la Industria Quimica SA,
D................................................. Chemicals 57,964 62,633
Banco de Galicia y Buenos Aires SA, B............... Banking 241,751 1,504,458
Capex SA, A......................................... Utilities Electrical & Gas 45,400 263,454
Central Costanera SA, B............................. Utilities Electrical & Gas 40,150 125,332
Garovaglio Y Zorraquin SA........................... Chemicals 176,191 449,516
Molinos Rio de Plata SA, B.......................... Food & Household Products 113,405 246,214
Nobleza Piccardo Sdad Industrial Comercial y
Financial......................................... Beverages & Tobacco 17,760 79,961
Quilmes Industrial SA............................... Beverages & Tobacco 10,000 118,125
Renault Argentina SA................................ Automobiles 21,261 34,673
Sociedad Comercial del Plata Cadelplata Come........ Multi-Industry 1,185,430 1,719,750
Transportadora de Gas del Sur SA, B................. Energy Sources 137,738 325,916
Transportadora de Gas del Sur SA, B, ADR............ Energy Sources 8,500 99,875
YPF Sociedad Anonima, ADR........................... Energy Sources 17,985 568,776
------------
5,697,656
------------
BRAZIL 13.2%
Banco Bradesco SA................................... Banking 211,158,132 1,793,672
Banco Bradesco SA, pfd. ............................ Banking 199,393,504 1,693,738
Banco do Brasil SA.................................. Banking 533,000 3,584
Banco do Brazil SA, pfd. ........................... Banking 16,200,000 140,477
*Banco do Brasil SA, wts., A........................ Banking 3,408,600 5,489
*Banco do Brasil SA, wts., B........................ Banking 5,207,900 8,755
*Banco do Brasil SA, wts., C........................ Banking 7,646,500 15,223
Centrais Eletricas Brasileiras SA (Electrobras), B,
pfd. ............................................. Utilities Electrical & Gas 189,527,770 8,888,176
Copene-Petroquimica do Nordeste SA, A, pfd. ........ Chemicals 5,781,800 1,568,041
Duratex SA, pfd. ................................... Forest Products & Paper 8,887,800 330,299
Itausa-Investimentos Itau SA, pfd. ................. Multi-Industry 7,947,346 5,485,050
*Mannesmann SA...................................... Machinery & Engineering 21,968 2,721
*Mannesmann SA, pfd. ............................... Machinery & Engineering 2,058,844 273,262
Petroleo Brasileiro SA (Petrobras), pfd. ........... Energy Sources 26,390,966 5,978,045
Telecomunicacoes Brasileiras SA (Telebras).......... Telecommunications 83,151,950 8,239,779
Unibanco Uniao de Bancos Brasileiros SA, unit....... Banking 7,223,468 492,153
------------
34,918,464
------------
CHILE 3.7%
Antofagasta Holdings Plc. .......................... Metals & Mining 1,849,181 9,398,536
Empresa Nacional de Electricidad SA, ADR............ Electrical & Electronics 21,600 398,250
------------
9,796,786
------------
CHINA .7%
China Southern Glass Co. Ltd., B.................... Building Materials & Components 942,092 221,454
Chiwan Wharf Holdings Ltd., B....................... Transportation 1,058,000 311,558
Guangshen Railway Co. Ltd., ADR..................... Transportation 6,000 77,625
Guangshen Railway Co. Ltd., H....................... Transportation 508,000 136,145
*Luoyang Glass Co. Ltd., H.......................... Misc Materials & Commodities 406,000 37,231
Shandong Huaneng Power Development Co. Ltd., ADR.... Utilities Electrical & Gas 24,000 202,500
</TABLE>
11
PAGE
TEMPLETON EMERGING MARKETS FUND, INC.
STATEMENT OF INVESTMENTS, FEBRUARY 28, 1998 (UNAUDITED) (CONT.)
<TABLE>
<CAPTION>
INDUSTRY SHARES VALUE
------------------------------------------------
<S> <C> <C> <C>
LONG TERM SECURITIES (CONT.)
CHINA (CONT.)
Shanghai Chlor-Alkali Chemical Co. Ltd., B.......... Chemicals 1,142,800 $ 196,562
Shanghai Erfangji Textile Machinery Co. Ltd., B..... Machinery & Engineering 269,356 23,165
Shanghai Jin Jiang Tower Co. Ltd., B................ Leisure & Tourism 756,360 143,708
Shanghai New Asia Group Co. Ltd., B................. Food & Household Products 126,740 33,459
*Shanghai Steel Tube Co. Ltd., B.................... Machinery & Engineering 499,400 53,935
Shanghai Tyre & Rubber Co. Ltd., B.................. Industrial Components 614,300 158,489
*Shanghai Vacuum Electron Devices Co. Ltd., B....... Appliances & Household Durables 892,360 151,701
Shanghai Yaohua Pilkington Glass, B................. Building Materials & Components 251,250 47,737
*Shenzhen Properties & Resources Development Ltd.,
B................................................. Real Estate 252,200 50,163
Shenzhen Vanke Co. Ltd., B.......................... Real Estate 136,480 77,208
------------
1,922,640
------------
COLOMBIA .9%
Bavaria SA.......................................... Beverages & Tobacco 12,000 74,132
Cementos Argos SA................................... Building Materials & Components 341,728 1,271,735
Cia Colombiana de Tabacos SA Coltabaco.............. Beverages & Tobacco 70,000 130,252
Compania Nacional de Chocolates SA.................. Food & Household Products 79,955 449,302
Compania Suramericana de Inversiones SA............. Insurance 38,885 523,850
*Valores Bavaria SA................................. Financial Services 20,000 65,498
------------
2,514,769
------------
CZECH REPUBLIC .2%
*CEZ................................................ Utilities Electrical & Gas 15,600 447,122
Elektrarny Opatovice AS............................. Energy Sources 420 49,081
*Leciva AS.......................................... Health & Personal Care 800 54,312
*SPT Telecom AS..................................... Telecommunications 500 59,345
------------
609,860
------------
GHANA .1%
Ashanti Goldfields Co. Ltd., GDR.................... Metals & Mining 23,469 224,422
------------
GREECE 8.4%
Alpha Credit Bank................................... Banking 117,820 6,311,712
Ergo Bank SA........................................ Banking 148,793 7,427,486
Fourlis Brothers Corp. SA........................... Appliances & Household Durables 116,430 712,828
Hellas Can Sa Packaging Manufacturers............... Metals & Mining 12,000 160,921
Hellenic Telecommunications Organizations........... Telecommunications 13,022 258,202
*National Bank of Greece SA......................... Banking 8,732 622,695
Titan Cement Co., reg. ............................. Building Materials & Components 142,322 6,733,152
------------
22,226,996
------------
HONG KONG 9.7%
CDL Hotel International Ltd. ....................... Leisure & Tourism 60,000 21,892
Cheung Kong Holdings Ltd. .......................... Multi-Industry 1,054,000 7,385,147
Dairy Farm International Holdings Ltd. ............. Merchandising 269,697 323,636
Hang Lung Development Co. Ltd. ..................... Real Estate 2,841,000 4,164,721
Hopewell Holdings Ltd. ............................. Construction & Housing 962,553 212,588
HSBC Holdings Plc. ................................. Banking 189,446 5,480,905
</TABLE>
12
PAGE
TEMPLETON EMERGING MARKETS FUND, INC.
STATEMENT OF INVESTMENTS, FEBRUARY 28, 1998 (UNAUDITED) (CONT.)
<TABLE>
<CAPTION>
INDUSTRY SHARES VALUE
------------------------------------------------
<S> <C> <C> <C>
LONG TERM SECURITIES (CONT.)
HONG KONG (CONT.)
Jardine Matheson Holdings Ltd. ..................... Multi-Industry 28,150 $ 131,742
Jardine Strategic Holdings Ltd. .................... Multi-Industry 154,500 440,325
Lai Sun Garment International Ltd. ................. Multi-Industry 45,000 24,411
New World Development Co. Ltd. ..................... Real Estate 1,118,443 4,124,191
Sun Hung Kai Properties Ltd. ....................... Real Estate 431,000 3,228,673
Tian An China Investments Co. Ltd. ................. Real Estate 1,670,000 95,983
------------
25,634,214
------------
HUNGARY .9%
Borsodchem RT....................................... Chemicals 8,472 284,275
Borsodchem RT, GDR.................................. Chemicals 8,000 266,200
Egis RT............................................. Multi-Industry 4,550 277,102
*Fotex First Hungarian-American Photo-Service....... Multi-Industry 973,000 941,650
*Graboplast Textil Es Muborgyarto RT................ Textiles & Apparel 7,250 344,055
Tiszai Vegyi Kombinat RT............................ Chemicals 19,250 341,418
------------
2,454,700
------------
INDIA 2.3%
Arvind Mills Ltd. .................................. Textiles & Apparel 42,300 59,123
*ATV Projects India Ltd. ........................... Machinery & Engineering 200,000 13,723
Bharat Petroleum Corp. Ltd. ........................ Energy Sources 82,400 795,207
Bombay Dyeing & Manufacturing Co. Ltd. ............. Chemicals 42,650 92,291
Bses Ltd. .......................................... Utilities Electrical & Gas 11,300 57,577
Cochin Refineries Ltd. ............................. Energy Sources 47,200 231,622
Essar Shipping Ltd. ................................ Transportation 56,250 15,581
Garden Silk Mills Ltd. ............................. Textiles & Apparel 85,700 31,144
Grasim Industries Ltd. ............................. Multi-Industry 27,550 200,376
Great Eastern Shipping Co. Ltd. .................... Transportation 63,500 67,050
Gujarat Industries Power Ltd. ...................... Energy Equipment & Services 2,800 1,519
Gujarat Narmada Valley Fertilizers Co. Ltd. ........ Chemicals 43,600 23,711
Hindustan Organic Chemicals Ltd. ................... Chemicals 2,000 668
Hindustan Petroleum Corp. Ltd. ..................... Energy Sources 21,000 247,090
India Cements Ltd. ................................. Building Materials & Components 37,300 58,201
India Cements Ltd., GDR............................. Building Materials & Components 61,890 92,835
Indian Aluminium Co. Ltd. .......................... Metals & Mining 2,000 5,110
Indian Petrochemicals Corp. Ltd. ................... Chemicals 63,500 93,596
Indian Rayon & Industries Ltd. ..................... Multi-Industry 27,750 102,890
Indian Rayon & Industries Ltd., GDR................. Multi-Industry 8,700 31,972
Indo Gulf Fertilisers & Chemicals Corp. Ltd. ....... Chemicals 55,000 46,614
Industrial Credit & Inv. Corp. of India............. Financial Services 439,600 1,004,321
Larsen and Toubro Ltd. ............................. Multi-Industry 179,150 1,032,559
Madras Cements Ltd. ................................ Building Materials & Components 905 88,626
Mahanagar Telephone Nigam Ltd. ..................... Telecommunications 46,000 304,874
National Aluminium Co. Ltd. ........................ Metals & Mining 211,100 150,211
Reliance Industries Ltd. ........................... Chemicals 102,000 414,739
Steel Authority of India Ltd. ...................... Metals & Mining 99,500 18,459
Tamil Nadu Newsprint & Papers Ltd. ................. Forest Products & Paper 5,500 2,998
</TABLE>
13
PAGE
TEMPLETON EMERGING MARKETS FUND, INC.
STATEMENT OF INVESTMENTS, FEBRUARY 28, 1998 (UNAUDITED) (CONT.)
<TABLE>
<CAPTION>
INDUSTRY SHARES VALUE
------------------------------------------------
<S> <C> <C> <C>
LONG TERM SECURITIES (CONT.)
INDIA (CONT.)
Tata Chemicals Ltd. ................................ Chemicals 52,800 $ 178,460
Tata Engineering & Locomotive Co. (Telco)........... Machinery & Engineering 33,100 209,031
Tata Iron & Steel Co. Ltd. ......................... Metals & Mining 35,000 117,675
Wockhardt........................................... Health & Personal Care 34,700 191,622
------------
5,981,475
------------
INDONESIA 1.4%
Asia Pulp & Paper Co. Ltd., ADR..................... Forest Products & Paper 24,400 291,275
PT Barito Pacific Timber TBK........................ Forest Products & Paper 6,233,500 1,392,961
PT BBL Dharmala Finance, fgn. ...................... Financial Services 163,000 27,318
PT Charoen Pokphand Indonesia....................... Food & Household Products 1,828,000 86,804
PT Ciputra Dev. .................................... Real Estate 732,000 26,581
PT Gadjah Tunggal TBK............................... Automobiles 446,000 18,687
PT Hanjaya Mandala Sampoerna........................ Beverages & Tobacco 241,000 137,330
PT Indah Kiat Pulp & Paper Corp. TBK................ Forest Products & Paper 343,300 74,797
*PT Indah Kiat Pulp & Paper Corp. TBK, wts. ........ Forest Products & Paper 25,920 2,592
PT Indocement Tunggal Prakarsa...................... Building Materials & Components 1,031,500 345,754
PT Indofoods Sukses Makmur.......................... Food & Household Products 417,250 125,874
PT Indosat.......................................... Telecommunications 15,500 22,038
PT Jakarta International Hotel & Development........ Real Estate 294,500 31,260
PT Japfa Comfeed Indonesia.......................... Food & Household Products 539,000 21,078
PT Kalbe Farma...................................... Health & Personal Care 141,500 16,600
PT Lippo Life Insurance TBK......................... Insurance 872,500 31,683
PT Metrodata Electronic............................. Electrical & Electronics 347,000 59,126
PT Modern Photo Film Co. ........................... Multi-Industry 17,500 2,933
PT Pakuwon Jati..................................... Real Estate 232,000 13,609
PT Semen Cibinong, loc. ............................ Building Materials & Components 4,700,500 249,468
PT Semen Gresik..................................... Building Materials & Components 383,000 234,293
PT Sinar Mas Agro Resources & Technology Corp. ..... Food & Household Products 92,400 9,033
PT Sinar Mas Multi Artha, fgn. ..................... Financial Services 708,050 118,667
*PT Sinar Mas Multi Artha, wts., fgn. .............. Financial Services 53,100 593
PT Sumalindo Lestari Jaya TBK....................... Forest Products & Paper 123,000 11,681
PT Tambang Timah (Persero).......................... Metals & Mining 191,000 161,123
PT Tempo Scan Pacific............................... Health & Personal Care 69,000 5,011
*PT Tempo Scan Pacific, rts. ....................... Health & Personal Care 138,000 1,542
PT Tjiwi Kimia TBK.................................. Forest Products & Paper 1,205,000 225,517
PT United Tractors.................................. Machinery & Engineering 85,000 13,771
------------
3,758,999
------------
ISRAEL .2%
Clal Industries Ltd. ............................... Multi-Industry 65,781 321,245
Discount Investment Corp. .......................... Multi-Industry 7,806 191,747
------------
512,992
------------
JORDAN
Jordan Cement Factories Ltd. ....................... Building Materials & Components 7,000 26,582
------------
</TABLE>
14
PAGE
TEMPLETON EMERGING MARKETS FUND, INC.
STATEMENT OF INVESTMENTS, FEBRUARY 28, 1998 (UNAUDITED) (CONT.)
<TABLE>
<CAPTION>
INDUSTRY SHARES VALUE
------------------------------------------------
<S> <C> <C> <C>
LONG TERM SECURITIES (CONT.)
MALAYSIA 4.9%
AMMB Holdings Bhd. ................................. Banking 166,000 $ 203,962
Berjaya Singer Bhd. ................................ Appliances & Household Durables 68,000 50,977
Boustead Holdings Bhd., fgn. ....................... Food & Household Products 250,000 240,866
*Edaran Otomobil Nasional Bhd. ..................... Automobiles 3,000 6,495
Federal Flour Mills Bhd. ........................... Food & Household Products 994,998 1,050,201
Genting Berhad...................................... Leisure & Tourism 132,000 435,832
Hong Leong Industries Bhd. ......................... Multi-Industry 51,800 58,038
*Hong Leong Industries Bhd., fgn., wts. ............ Multi-Industry 4,500 974
Hong Leong Properties Bhd., fgn. ................... Real Estate 248,000 86,582
Island & Peninsula Bhd., fgn. ...................... Real Estate 45,000 30,446
Kian Joo Can Factory Bhd. .......................... Industrial Components 140,000 242,490
Leader Universal Holdings Bhd. ..................... Industrial Components 198,000 123,783
Malayawata Steel Bhd. .............................. Metals & Mining 1,104,000 478,051
Malaysian Airline System Bhd. ...................... Transportation 220,000 252,449
Malaysian International Shipping Corp., fgn. ....... Transportation 1,930,666 3,553,052
MBF Capital Bhd. ................................... Financial Services 98,000 46,414
MBF Capital Bhd., fgn. ............................. Financial Services 282,000 133,559
Oriental Holdings Bhd. ............................. Automobiles 1,566,408 3,179,448
Oriental Holdings Bhd., fgn. ....................... Automobiles 42,000 85,250
Perlis Plantations Bhd. ............................ Multi-Industry 783,598 1,293,626
Perlis Plantations Bhd., fgn. ...................... Multi-Industry 127,750 210,900
Perusahaan Otomobil Nasional Bhd., fgn. ............ Automobiles 1,000 1,881
Public Finance Bhd., fgn. .......................... Financial Services 157,000 73,932
*Renong Bhd. ....................................... Multi-Industry 254,000 119,610
*Renong Bhd., wts. ................................. Multi-Industry 8,375 1,315
+Renong, 4.00%, conv., 5/22/01...................... Multi-Industry 13,400MYR 1,360
Resorts World Bhd. ................................. Leisure & Tourism 383,000 829,229
Shangri-La Hotels (Malaysia) Bhd. .................. Leisure & Tourism 98,000 40,844
Shangri La Hotels (Malaysia) Bhd., fgn. ............ Leisure & Tourism 47,000 19,589
Tanjong Plc. ....................................... Recreation & Other Consumer Goods 59,000 134,925
YTL Corp. Bhd. ..................................... Construction & Housing 2,000 3,437
------------
12,989,517
------------
MEXICO 7.7%
*Altos Hornos de Mexico SA.......................... Metals & Mining 4,000 6,546
*Cemex SA, B........................................ Building Materials & Components 514,250 2,461,306
*Cifra SA de CV..................................... Merchandising 148,296 286,694
Cifra SA de CV, C................................... Merchandising 980,043 1,747,510
DESC SA de CV DESC, A............................... Multi-Industry 108,000 752,560
DESC SA de CV DESC, C............................... Multi-Industry 3,314 24,219
*Grupo Financiero Banamex Accival SA, B............. Banking 568,000 1,429,245
*Grupo Financiero Banamex Accival SA, L............. Banking 40,959 91,292
*Grupo Financiero Bancomer SA de CV, B.............. Banking 1,185,000 686,715
*Grupo Financiero Bancomer SA de CV, L.............. Banking 2,669,370 926,897
</TABLE>
15
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TEMPLETON EMERGING MARKETS FUND, INC.
STATEMENT OF INVESTMENTS, FEBRUARY 28, 1998 (UNAUDITED) (CONT.)
<TABLE>
<CAPTION>
INDUSTRY SHARES VALUE
------------------------------------------------
<S> <C> <C> <C>
LONG TERM SECURITIES (CONT.)
MEXICO (CONT.)
*Grupo Financiero Serfin SA de CV, B................ Banking 1,007,411 $ 159,541
Telefonos de Mexico SA (Telmex), L, ADR............. Telecommunications 193,500 9,808,031
Vitro SA............................................ Food & Household Products 501,355 1,893,792
------------
20,274,348
------------
PAKISTAN .5%
*DG Khan Cement Co. ................................ Building Materials & Components 110,000 16,248
Engro Chemical Pakistan Ltd. ....................... Chemicals 134,900 328,927
Fauji Fertilizer Co. Ltd. .......................... Chemicals 67,000 124,770
National Development Leasing Corp. ................. Financial Services 155,925 21,614
Pakistan Telecommunications Corp., PTC, A........... Telecommunications 1,293,000 962,272
------------
1,453,831
------------
PERU .4%
Telefonica Del Peru SA, ADR B....................... Telecommunications 54,000 1,022,625
------------
PHILIPPINES 2.5%
*A Soriano Corp. ................................... Multi-Industry 1,058,000 39,367
Ayala Corp., B...................................... Multi-Industry 182,000 85,795
*Digital Telecommunications Philippines Inc. ....... Telecommunications 360,000 20,817
Filinvest Development Corp. ........................ Real Estate 1,066,000 112,563
Keppel Philippine Holdings Inc., B.................. Machinery & Engineering 658,160 23,993
Metro Pacific Corp. MDI............................. Multi-Industry 502,740 20,982
Petron Corporation.................................. Energy Sources 670,000 99,384
Philex Mining Corp., B.............................. Metals & Mining 8,231,008 202,800
Philippine Long Distance Telephone Co., ADR......... Telecommunications 134,706 3,552,871
*Philippine National Bank........................... Banking 550,430 1,127,845
RFM Corporation..................................... Food & Household Products 5,700,100 902,844
RFM Corporation, conv., pfd. ....................... Food & Household Products 1,049,109 123,440
Sime Darby Pilipinas Inc. .......................... Industrial Components 573,286 381,950
------------
6,694,651
------------
POLAND .4%
Elektrim SA......................................... Multi-Industry 13,750 179,751
*Impexmetal SA, A................................... Metals & Mining 1,603 14,784
Mostostal Export SA................................. Construction & Housing 109,463 320,794
Orbis SA............................................ Leisure & Tourism 3,696 27,610
*Polifarb Cieszyn Wroclaw SA........................ Chemicals 21,360 108,626
*Polifarb Cieszyu Wroclaw SA, D..................... Chemicals 8,333 33,758
*Rolimpex SA........................................ Wholesale & International Trade 823 1,702
Warta SA............................................ Insurance 5,000 67,519
Zaklady Cementowo Wapiennicze Gorazdze Chorula...... Building Materials & Components 2,625 87,110
*Zaklady Plyt Wiorowych Grajewo AS.................. Forest Products & Paper 1,800 87,918
------------
929,572
------------
</TABLE>
16
PAGE
TEMPLETON EMERGING MARKETS FUND, INC.
STATEMENT OF INVESTMENTS, FEBRUARY 28, 1998 (UNAUDITED) (CONT.)
<TABLE>
<CAPTION>
INDUSTRY SHARES VALUE
------------------------------------------------
<S> <C> <C> <C>
LONG TERM SECURITIES (CONT.)
PORTUGAL 10.6%
Banco Comercial Portugues SA........................ Banking 500,232 $ 16,590,041
Banco Espirito Santo e Comercial de Lisboa.......... Banking 6,200 251,904
Banco Totta & Acores SA............................. Banking 2,901 80,488
BPI Socieda de Gestora de Participacoes Socias SA... Banking 258,679 9,286,270
Espirito Santo Financial Group SA, ADR.............. Banking 64,680 1,592,745
*Portucel Industrial Empresa Product de Celulose
SA................................................ Forest Products & Paper 32,000 242,842
Sociedade Portuguesa de Celulose SA................. Forest Products & Paper 2,510 97,252
------------
28,141,542
------------
RUSSIA 1.4%
*Aeroflot........................................... Transportation 300 34,950
GUM Trade House..................................... Merchandising 30,000 77,325
Irkutskenergo....................................... Utilities Electrical & Gas 394,000 60,282
Mosenergo........................................... Utilities Electrical & Gas 283,000 370,164
Norilsk Nickel...................................... Metals & Mining 44,000 233,200
Rao Gazprom, ADR, 144A.............................. Energy Sources 2,000 41,200
Red October......................................... Food & Household Products 22,000 308,000
*Rostelekom......................................... Telecommunications 10,000 35,000
Rostelekom, pfd. ................................... Telecommunications 138,400 276,246
*Saint Petersburg City Telephone Network, pfd., A... Telecommunications 46,000 26,680
*Tyumen Aviatrans................................... Telecommunications 530,000 31,270
Unified Energy System............................... Utilities Electrical & Gas 6,940,000 1,916,828
*Unified Energy System, pfd. ....................... Utilities Electrical & Gas 1,260,000 216,090
------------
3,627,235
------------
SINGAPORE 3.1%
Acer Computer International Ltd. ................... Electrical & Electronics 13,000 9,490
Acma Ltd. .......................................... Electrical & Electronics 416,000 323,456
Cycle & Carriage Ltd. .............................. Automobiles 65,000 288,800
Delgro Corp. ....................................... Transportation 1,869,200 2,306,942
First Capital Corp. Ltd. ........................... Real Estate 73,000 73,878
First Capital Corp. Ltd., fgn. ..................... Real Estate 107,000 108,287
Fraser and Neave Ltd., fgn. ........................ Beverages & Tobacco 58,000 254,119
G P Batteries International Ltd. ................... Electrical & Electronics 32,000 103,672
*G P Batteries International Ltd., wts. ............ Electrical & Electronics 8,750 9,719
Hai Sun Hup Group Ltd. ............................. Transportation 43,000 17,513
Hai Sun Hup Group Ltd., fgn. ....................... Transportation 340,000 138,476
*Hai Sun Hup Group Ltd., wts........................ Transportation 33,600 3,836
Hong Leong Finance Ltd. ............................ Financial Services 270,000 333,230
*Inchcape Marketing Services Ltd., fgn. ............ Broadcasting & Publishing 40,000 10,120
Inchcape Motores Ltd., fgn. ........................ Wholesale & International Trade 40,000 60,475
Jaya Holdings Ltd. ................................. Transportation 356,500 97,897
*Jaya Holdings Ltd., wts., expire 8/31/98........... Transportation 30,051 556
*Jaya Holdings Ltd., wts., expire 10/09/99.......... Transportation 36,780 1,135
+Jaya Holdings Ltd., 3.00%, 8/31/98, conv. ......... Transportation 15,900SGD 4,121
Jurong Shipyard Ltd., fgn. ......................... Machinery & Engineering 19,000 89,108
Keppel Corp. Ltd. .................................. Transportation 150,000 431,348
</TABLE>
17
PAGE
TEMPLETON EMERGING MARKETS FUND, INC.
STATEMENT OF INVESTMENTS, FEBRUARY 28, 1998 (UNAUDITED) (CONT.)
<TABLE>
<CAPTION>
INDUSTRY SHARES VALUE
------------------------------------------------
<S> <C> <C> <C>
LONG TERM SECURITIES (CONT.)
SINGAPORE (CONT.)
MCL Land Ltd. ...................................... Real Estate 161,000 $ 126,177
Metro Holdings Ltd., fgn. .......................... Wholesale & International Trade 40,000 54,798
Natsteel Ltd. ...................................... Metals & Mining 100,000 138,229
Natsteel Ltd., fgn. ................................ Metals & Mining 1,000 1,382
Neptune Orient Lines Ltd. .......................... Transportation 8,000 3,752
Osprey Maritime Ltd. ............................... Transportation 322,000 155,983
Osprey Maritime Ltd., conv., pfd. .................. Transportation 66,960 26,858
Overseas Union Enterprise Ltd. ..................... Leisure & Tourism 41,000 100,191
Prima Ltd. ......................................... Food & Household Products 511,000 971,231
Republic Hotels & Resorts Ltd. ..................... Leisure & Tourism 98,000 39,914
Robinson & Co. Ltd. ................................ Merchandising 23,000 83,030
Rothmans Industries Ltd. ........................... Beverages & Tobacco 1,000 5,060
*SBS Bus Service Ltd., fgn. ........................ Transportation 1,032,100 401,248
Sembawang Corp. Ltd. ............................... Multi-Industry 290,000 608,454
Singapore Petroleum Company, fgn. .................. Chemicals 44,000 23,894
TIBS Holdings Ltd. ................................. Transportation 175,700 104,086
*TIBS Holdings Ltd., wts. .......................... Transportation 547 44
Times Publishing Ltd. .............................. Broadcasting & Publishing 26,000 51,342
United Industrial Corporation....................... Real Estate 164,000 66,288
United Industrial Corporation Ltd., fgn. ........... Real Estate 311,000 125,705
United Overseas Land Ltd. .......................... Real Estate 404,000 359,000
WBL Corp. Ltd. ..................................... Multi-Industry 114,000 139,994
------------
8,252,838
------------
SLOVAK REPUBLIC .2%
Nafta Gbely AS...................................... Utilities Electrical & Gas 8,462 250,462
Slovnaft AS......................................... Chemicals 8,000 197,113
Vychodoslovenske Zeleziarne AS...................... Metals & Mining 5,000 91,468
------------
539,043
------------
SOUTH AFRICA 4.0%
Aeci Ltd. .......................................... Chemicals 83,000 277,143
Alpha Ltd. ......................................... Building Materials & Components 7,000 69,412
Anglo American Industrial Corp. Ltd. ............... Multi-Industry 40,063 942,086
Anglovaal Industried Ltd. .......................... Multi-Industry 231,825 425,978
Barlow Ltd. ........................................ Multi-Industry 196,900 1,840,894
Bonnita Holdings Ltd. .............................. Food & Household Products 80,000 16,999
BTR Dunlop Ltd. .................................... Industrial Components 61,000 27,158
CG Smith Ltd. ...................................... Multi-Industry 206,000 981,746
De Beers Centenary Linked Units, Reg. .............. Misc Materials & Commodities 55,100 1,092,745
Del Monte Royal Foods Ltd. ......................... Food & Household Products 517,825 314,373
Edgars Stores Ltd. ................................. Textiles & Apparel 19,078 305,001
Engen Ltd. ......................................... Energy Sources 156,324 556,775
Foodcorp Ltd. ...................................... Food & Household Products 49,000 277,648
Ingwe Coal Corp. Ltd. .............................. Metals & Mining 68,000 231,185
Kersaf Investments Ltd. ............................ Leisure & Tourism 15,000 123,697
Malbak Ltd. ........................................ Multi-Industry 106,500 89,441
</TABLE>
18
PAGE
TEMPLETON EMERGING MARKETS FUND, INC.
STATEMENT OF INVESTMENTS, FEBRUARY 28, 1998 (UNAUDITED) (CONT.)
<TABLE>
<CAPTION>
INDUSTRY SHARES VALUE
------------------------------------------------
<S> <C> <C> <C>
LONG TERM SECURITIES (CONT.)
SOUTH AFRICA (CONT.)
+McCarthy Retail Ltd., conv., zero coupon,
9/30/03........................................... Multi-Industry 44,000ZAR $ 79,247
Palabora Mining Co. Ltd. ........................... Metals & Mining 39,500 279,773
Plate Glass & Shatterprufe Industries Ltd. ......... Building Materials & Components 14,000 230,901
Polifin Ltd. ....................................... Chemicals 154,400 259,338
*Rainbow Chicken Ltd. .............................. Food & Household Products 2,305,000 79,298
Rembrandt Group Ltd. ............................... Multi-Industry 30,000 205,201
Reunert Ltd. ....................................... Electrical & Electronics 106,000 169,463
*Sappi Ltd. ........................................ Forest Products & Paper 78,000 346,474
Sasol Ltd. ......................................... Energy Sources 27,000 230,578
South African Breweries Ltd. ....................... Beverages & Tobacco 16,306 457,353
South African Iron & Steel Industrial Corp. Ltd. ... Metals & Mining 1,290,738 430,986
Sun International (South Africa) Ltd. .............. Leisure & Tourism 79,200 54,493
Tongaat-Hulett Group Ltd. .......................... Multi-Industry 19,500 205,201
Toyota South Africa Limited......................... Automobiles 12,000 59,010
------------
10,659,597
------------
SOUTH KOREA .7%
*Daegu Bank Co. Ltd. ............................... Banking 74,484 155,992
*Dongkuk Steel Mill Co. Ltd. ....................... Metals & Mining 15,700 102,872
*Hae In Corp. Ltd. ................................. Merchandising 1,531 82,410
*Hankook Cosmetics Co. Ltd. ........................ Health & Personal Care 8,700 90,569
Korea Electric Power Corp. ......................... Utilities Electrical & Gas 14,100 188,230
*Kyung Dong Boiler Co. Ltd. ........................ Energy Equipment & Services 8,154 70,405
*Saehan Precision Co. Ltd. ......................... Electrical & Electronics 16,785 266,214
*Samsung Display Devices Ltd., L.................... Electrical & Electronics 5,930 344,978
*Samsung Heavy Industries Co. Ltd. ................. Machinery & Engineering 11,000 73,423
*Shin Poong Paper Manufacturing Co. Ltd. ........... Forest Products & Paper 2,000 25,964
Shin Young Wocoal Inc. ............................. Textiles & Apparel 1,610 72,859
*Ssangyong Oil Refining Co. Ltd. ................... Energy Equipment & Services 29,710 234,696
Tong Yang Merchant Bank............................. Financial Services 8,666 21,652
------------
1,730,264
------------
SRI LANKA
Aitken Spence & Co. Ltd. ........................... Multi-Industry 34,900 91,954
United Motor Lanka Ltd. ............................ Automobiles 108,320 75,521
------------
167,475
------------
THAILAND 5.7%
Advanced Info Service Ltd., fgn. ................... Telecommunications 118,600 903,619
American Standard Sanitaryware Public Co. Ltd.,
fgn............................................... Building Materials & Components 17,000 75,424
*Asia Credit Public Co. Ltd. ....................... Financial Services 86,000 36,957
*Asia Fibre Public Co. Ltd., fgn. .................. Textiles & Apparel 182,500 25,012
Ayudhya Insurance Public Co. Ltd., fgn. ............ Insurance 15,000 71,080
Bangkok Insurance Public Co. Ltd. BKI............... Insurance 19,800 137,059
Bangkok Insurance Public Co. Ltd. BKI, fgn. ........ Insurance 4,900 40,065
Banpu Public Company Ltd. .......................... Energy Sources 84,800 516,088
Charoen Pokphand Feedmill Public Co. Ltd. .......... Food & Household Products 65,100 105,854
</TABLE>
19
PAGE
TEMPLETON EMERGING MARKETS FUND, INC.
STATEMENT OF INVESTMENTS, FEBRUARY 28, 1998 (UNAUDITED) (CONT.)
<TABLE>
<CAPTION>
INDUSTRY SHARES VALUE
------------------------------------------------
<S> <C> <C> <C>
LONG TERM SECURITIES (CONT.)
THAILAND (CONT.)
Chareon Pokphand Feedmill Public Co. Ltd., fgn. .... Food & Household Products 22,700 $ 41,129
Dusit Thani Public Company Ltd., fgn. .............. Leisure & Tourism 74,500 84,797
Hana Microelectronics Co. Ltd. ..................... Electrical & Electronics 160,000 613,240
Hana Microelectronics Co. Ltd., fgn. ............... Electrical & Electronics 89,700 354,216
Industrial Finance Corp. of Thailand................ Financial Services 160,200 95,822
Industrial Finance Corp. of Thailand, fgn. ......... Financial Services 561,500 378,246
Italian-Thai Development Public Company Ltd. ....... Construction & Housing 38,100 39,826
Italian-Thai Development Public Company Ltd.,
fgn. ............................................. Construction & Housing 185,600 194,007
Jasmine International Public Co. Ltd. .............. Telecommunications 195,000 137,021
Jasmine International Public Co. Ltd., fgn. ........ Telecommunications 719,000 501,045
Kian Gwan (Thailand) Public Co. Ltd., fgn. ......... Real Estate 26,000 44,692
Land and House Public Co. Ltd. ..................... Real Estate 494,336 275,588
Land and House Public Co. Ltd., fgn. ............... Real Estate 154,300 95,877
National Petrochemical Public Company Ltd., fgn. ... Chemicals 723,300 743,462
*Phatra Thanakit Public Co. Ltd. ................... Financial Services 739,332 695,539
*Phatra Thanakit Public Co. Ltd., fgn. ............. Financial Services 393,000 502,090
Regional Container Lines Public Co. Ltd. ........... Transportation 400 372
Regional Container Lines Public Co. Ltd., fgn. ..... Transportation 139,000 193,728
Saha Union Public Co. Ltd. ......................... Multi-Industry 400,000 301,974
Sanyo Universal Electric Public Co Ltd., fgn. ...... Appliances & Household Durables 6,000 3,519
Serm Suk Public Co. Ltd. ........................... Food & Household Products 85,700 772,395
Serm Suk Public Co. Ltd., fgn. ..................... Food & Household Products 1,000 9,187
Shinawatra Computer & Communications Public Co.
Ltd. ............................................. Electrical & Electronics 18,500 92,822
Siam Cement Public Co. Ltd. ........................ Building Materials & Components 125,000 1,242,741
Siam Cement Public Co. Ltd., fgn. .................. Building Materials & Components 37,900 538,787
*Siam Makro Public Company Ltd., fgn. .............. Merchandising 437,100 817,341
*Sino-Thai Engineering & Construction Public Co.,
fgn. ............................................. Construction & Housing 10,900 3,038
Thai Airways International Public Co. Ltd., fgn. ... Transportation 405,800 556,149
*Thai Engine Manufacturing Public Company Ltd. ..... Machinery & Engineering 162,000 413,937
*Thai Engine Manufacturing Public Company Ltd.,
fgn. ............................................. Machinery & Engineering 31,000 79,210
Thai Investments and Securities Ltd. ............... Financial Services 532,400 531,782
Thai Petrochemical Industry Public Co. Ltd. ........ Chemicals 92,000 24,576
Thai Petrochemical Industry Public Co. Ltd.,
fgn. ............................................. Chemicals 1,166,100 311,502
Thai Plastic and Chemical Co. Ltd., fgn. ........... Chemicals 2,800 7,805
Thai Rayon Public Co. Ltd. ......................... Textiles & Apparel 17,300 24,513
*Thai Telephone & Telecommunication Public Co.
Ltd. ............................................. Telecommunications 431,400 125,261
Thai Telephone & Telecommunication Public Co. Ltd.,
fgn. ............................................. Telecommunications 12,000 3,415
Thai Wah Public Co. Ltd., fgn. ..................... Multi-Industry 8,450 1,119
Tipco Asphalt Public Co. Ltd., fgn. ................ Building Materials & Components 169,000 367,050
Total Access Communication Public Co. Ltd. ......... Telecommunications 276,000 400,200
United Communications Industry Public Co. Ltd.,
fgn. ............................................. Telecommunications 578,000 738,444
United Communications Industry Public Co. Ltd.,
loc. ............................................. Telecommunications 589,000 656,725
United Standard Terminal Public Co. Ltd., fgn. ..... Wholesale & International Trade 88,000 37,816
------------
14,963,163
------------
</TABLE>
20
PAGE
TEMPLETON EMERGING MARKETS FUND, INC.
STATEMENT OF INVESTMENTS, FEBRUARY 28, 1998 (UNAUDITED) (CONT.)
<TABLE>
<CAPTION>
INDUSTRY SHARES VALUE
------------------------------------------------
<S> <C> <C> <C>
LONG TERM SECURITIES (CONT.)
TURKEY 10.2%
Akbank.............................................. Banking 115,164,373 $ 9,098,484
Arcelik AS.......................................... Appliances & Household Durables 44,195,541 3,443,808
Beko Elektronik AS.................................. Appliances & Household Durables 16,415,386 653,773
Cimentas Izmir Cimento Fabrikasi Turk AS............ Building Materials & Components 11,979,407 596,377
Cimsa Cimento Sanayi ve Ticaret AS.................. Building Materials & Components 4,481,000 203,682
Erciyas Biracilik................................... Food & Household Products 543,000 70,519
Eregli Demir ve Celik Fabrikalari AS................ Metals & Mining 25,961,250 3,203,011
Finansbank.......................................... Banking 252,438,231 3,934,102
Izocam Ticaret ve Sanayii AS, br. .................. Building Materials & Components 8,359,587 238,845
Koc Holding AS...................................... Multi-Industry 18,250,450 2,962,735
Marshall Boya ve Vernik Sanayii AS.................. Industrial Components 5,753,256 747,176
*Netas Northern Electric Telekomunic Asyon AS....... Electrical & Electronics 351,000 133,714
Petkim Petrokimya Holding AS........................ Chemicals 170,000 104,870
Tekstil Bankasi AS, br. ............................ Banking 578,534 7,639
Turk Demir Dokum, br. .............................. Appliances & Household Durables 10,669,402 401,835
Turkiye Garanti Bankasi AS.......................... Banking 25,719,060 990,908
Vakif Finansal Kiralama AS.......................... Financial Services 10,613,069 90,739
------------
26,882,217
------------
VENEZUELA 1.2%
Ceramica Carabobo CA, A, ADR........................ Building Materials & Components 20,973 111,607
*Corporacion Industrial Carbabobo Saca SIC, B....... Building Materials & Components 359,630 10,124
Electricidad de Caracas............................. Utilities Electrical & Gas 1,477,072 1,354,548
*International Briquettes Holdings.................. Metals & Mining 588 5,788
*Manufacturera de Aparatos Domesticos SA............ Appliances & Household Durables 36,000 20,198
Mavesa SA, ADR...................................... Food & Household Products 222,900 1,184,156
Siderurgica Venezolana Sivensa Saica Svs., A........ Metals & Mining 2,045,930 552,376
------------
3,238,797
------------
ZIMBABWE .1%
Delta Corp. ........................................ Multi-Industry 119,000 82,639
Meikles Africa Ltd. ................................ Multi-Industry 37,000 41,625
Transarchipel Shipping Ltd. ........................ Multi-Industry 587,000 137,691
Zimbabwe Sun Ltd. .................................. Multi-Industry 102,671 23,449
------------
285,404
------------
TOTAL LONG TERM INVESTMENTS (COST $206,384,344)..... 258,132,674
------------
</TABLE>
21
PAGE
TEMPLETON EMERGING MARKETS FUND, INC.
STATEMENT OF INVESTMENTS, FEBRUARY 28, 1998 (UNAUDITED) (CONT.)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
------
<S> <C> <C> <C>
SHORT TERM INVESTMENTS (COST $7,555,451) 2.9%
+U.S. Treasury Bills, 4.98% to 5.10% with maturities
to 6/25/98........................................ $7,663,000 $ 7,590,857
------------
TOTAL INVESTMENTS (COST $213,939,795) 100.4%........ 265,723,531
OTHER ASSETS, LESS LIABILITIES (.4%)................ (980,663)
------------
TOTAL NET ASSETS 100.0%............................. $264,742,868
============
</TABLE>
CURRENCY ABBREVIATIONS:
<TABLE>
<S> <C>
MYR -- Maylaysian Ringgit
SGD -- Singapore Dollars
ZAR -- South Africian Rand
</TABLE>
*Non-income producing.
+Designates debt securities that are traded in U.S. dollars unless otherwise
indicated.
See Notes to Financial Statements.
22
PAGE
TEMPLETON EMERGING MARKETS FUND, INC.
Financial Statements
STATEMENT OF ASSETS AND LIABILITIES
FEBRUARY 28, 1998 (UNAUDITED)
<TABLE>
<S> <C>
Assets:
Investments in securities, at value (cost $213,939,795).... $265,723,531
Cash....................................................... 124,847
Receivables:
Investment securities sold................................ 497,723
Dividends and interest.................................... 184,606
------------
Total assets.......................................... 266,530,707
------------
Liabilities:
Payables:
Investment securities purchased........................... 832,566
To affiliates............................................. 272,509
Other liabilities.......................................... 682,764
------------
Total liabilities..................................... 1,787,839
------------
Net assets, at value........................................ $264,742,868
============
Net assets consist of:
Distributions in excess of net investment income........... $ (222,680)
Net unrealized appreciation................................ 51,783,736
Accumulated net realized gain.............................. 16,191,388
Capital shares............................................. 196,990,424
------------
Net assets, at value........................................ $264,742,868
============
Net asset value per share ($264,742,868 [divided by]
16,800,338 shares outstanding)........................... $15.76
============
</TABLE>
See Notes to Financial Statements.
23
PAGE
TEMPLETON EMERGING MARKETS FUND, INC.
Financial Statements (continued)
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED FEBRUARY 28, 1998 (UNAUDITED)
<TABLE>
<S> <C> <C>
Investment Income:
(net of foreign taxes of $150,469)
Dividends.................................................. $ 1,682,178
Interest................................................... 579,821
-----------
Total investment income............................... $ 2,261,999
Expenses:
Management fees (Note 3)................................... 1,800,980
Administrative fees (Note 3)............................... 216,117
Transfer agent fees........................................ 12,000
Custodian fees............................................. 274,006
Reports to shareholders.................................... 81,000
Registration and filing fees............................... 25,000
Professional fees (Note 3)................................. 24,606
Directors' fees and expenses............................... 15,000
Other...................................................... 2,706
-----------
Total expenses........................................ 2,451,415
------------
Net investment loss............................. (189,416)
------------
Realized and unrealized gains (losses):
Net realized gain (loss) from:
Investments............................................... 25,291,930
Foreign currency transactions............................. (343,710)
-----------
Net realized gain...................................... 24,948,220
Net unrealized depreciation on investments............. (65,777,074)
------------
Net realized and unrealized loss............................ (40,828,854)
------------
Net decrease in net assets resulting from operations........ $(41,018,270)
============
</TABLE>
See Notes to Financial Statements.
24
PAGE
TEMPLETON EMERGING MARKETS FUND, INC.
Financial Statements (continued)
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
FEBRUARY 28, 1998 YEAR ENDED
(UNAUDITED) AUGUST 31, 1997
---------------------------------------
<S> <C> <C>
Increase (decrease) in net assets:
Operations:
Net investment income (loss).............................. $ (189,416) $ 4,470,808
Net realized gain from investments and foreign currency
transactions............................................ 24,948,220 34,714,170
Net unrealized appreciation (depreciation) on
investments.............................................. (65,777,074) 35,709,116
---------------------------------------
Net increase (decrease) in net assets resulting from
operations............................................ (41,018,270) 74,894,094
Distributions to shareholders from:
Net investment income..................................... (4,385,151) (3,534,016)
Net realized gains........................................ (36,081,159) (15,067,265)
Capital share transactions (Note 2):....................... 4,225,187 2,031,444
---------------------------------------
Net increase (decrease) in net assets................... (77,259,393) 58,324,257
Net assets:
Beginning of period........................................ 342,002,261 283,678,004
---------------------------------------
End of period.............................................. $264,742,868 $342,002,261
=======================================
Undistributed net investment income/(Distributions in excess
of net investment income) included in net assets:
End of period.............................................. $ (222,680) $ 4,351,887
=======================================
</TABLE>
See Notes to Financial Statements.
25
PAGE
TEMPLETON EMERGING MARKETS FUND, INC.
Notes to Financial Statements (unaudited)
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Templeton Emerging Markets Fund, Inc. (the Fund) is registered under the
Investment Company Act of 1940 as a closed-end, non-diversified investment
company. The Fund seeks long term capital appreciation by primarily investing in
emerging country equity securities. The following summarizes the Fund's
significant accounting policies.
a. SECURITY VALUATION:
Securities listed or traded on a recognized national exchange or NASDAQ are
valued at the latest reported sales price. Over-the-counter securities and
listed securities for which no sale is reported are valued within the range of
the latest quoted bid and asked prices. Securities for which market quotations
are not readily available are valued at fair value as determined by management
in accordance with procedures established by the Board of Directors.
b. FOREIGN CURRENCY TRANSLATION:
Portfolio securities and other assets and liabilities denominated in foreign
currencies are translated into U.S. dollars based on the exchange rate of such
currencies against U.S. dollars on the date of valuation. Purchases and sales of
securities and income items denominated in foreign currencies are translated
into U.S. dollars at the exchange rate in effect on the transaction date. When
the Fund purchases or sells foreign securities it will customarily enter into a
foreign exchange contract to minimize foreign exchange risk from the trade date
to the settlement date of such transactions.
The Fund does not separately report the effect of changes in foreign exchange
rates from changes in market prices on securities held. Such changes are
included in net realized and unrealized gain or loss from investments.
Realized foreign exchange gains or losses arise from sales of foreign
currencies, currency gains or losses realized between the trade and settlement
dates on securities transactions and the difference between the recorded amounts
of dividends, interest, and foreign withholding taxes, and the U.S. dollar
equivalent of the amounts actually received or paid. Net unrealized foreign
exchange gains and losses arise from changes in foreign exchange rates on
foreign currency denominated assets and liabilities other than investments in
securities held at the end of the reporting period.
The Brazilian government has exercised and may continue to exercise substantial
influence over the exchange of Brazilian currency. Under current Brazilian law,
whenever there occurs a serious imbalance of Brazil's balance of payments or
serious reasons to foresee the imminence of such an imbalance, Brazil's National
Monetary Council may, for a limited period, impose restrictions on foreign
capital remittances abroad. Exchange control regulations may restrict
repatriation of investment income, capital, or the proceeds of securities sales
by foreign investors. The Fund has investments in Brazilian companies with a
value of approximately 35 million as of February 28, 1998.
c. INCOME TAXES:
No provision has been made for income taxes because the Fund's policy is to
qualify as a regulated investment company under the Internal Revenue Code and to
distribute all of its taxable income.
26
PAGE
TEMPLETON EMERGING MARKETS FUND, INC.
Notes to Financial Statements (unaudited) (continued)
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONT.)
d. SECURITY TRANSACTIONS, INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS:
Security transactions are accounted for on trade date. Realized gains and losses
on security transactions are determined on a specific identification basis.
Certain income from foreign securities is recorded as soon as information is
available to the Fund. Interest income and estimated expenses are accrued daily.
Dividend income and distributions to shareholders are recorded on the
ex-dividend date.
e. ACCOUNTING ESTIMATES:
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities at the date of the
financial statements and the amounts of income and expense during the reporting
period. Actual results could differ from those estimates.
2. CAPITAL SHARES
At February 28, 1998, there were 30 million shares authorized ($0.01 par value).
During the six months ended February 28, 1998 and the year ended August 31,
1997, 252,599 shares were issued for $4,225,187 and 112,244 shares were issued
for $2,031,444 from reinvested distributions, respectively.
3. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES
Certain officers of the Fund are also officers or directors of Templeton Assets
Management Ltd. (TAML), and Franklin Templeton Services, Inc. (FT Services), the
Fund's investment manager, and administrative manager, respectively.
The Fund pays an investment management fee to TAML of 1.25% per year of the
average daily net assets of the Fund. The Fund pays an administrative fee
monthly to FT Services based on the rate of 0.15% per year of the Fund's average
daily net assets
Included in professional fees are legal fees of $15,366 that were paid to a law
firm in which a partner is an officer of the Fund.
4. INCOME TAXES
At February 28, 1998, the net unrealized appreciation based on cost of
investments for income tax purposes of $215,089,047 was as follows:
<TABLE>
<S> <C>
Unrealized appreciation..................................... $ 94,634,268
Unrealized depreciation..................................... (43,999,784)
------------
Net unrealized appreciation................................. $ 50,634,484
============
</TABLE>
5. INVESTMENT TRANSACTIONS
Purchases and sales of securities (excluding short-term securities) for the
period ended February 28, 1998 aggregated $45,431,519 and $54,261,743,
respectively.
27
PAGE
TEMPLETON EMERGING MARKETS FUND, INC.
Annual Meeting of Shareholders, February 17, 1998
An Annual Meeting of Shareholders of the Fund was held at the Fund's offices,
500 East Broward Boulevard, Ft. Lauderdale, Florida, on February 17, 1998. The
purpose of the meeting was to elect three Directors of the Fund, to ratify the
selection of McGladrey & Pullen, LLP, as the Fund's independent auditors for the
fiscal year ending August 31, 1998, and in their discretion, to authorize the
proxyholders to vote upon other such matters that may legally come before the
meeting or any adjournment of the meeting. At the meeting, the following persons
were elected by the shareholders to serve as Directors of the Fund: Harmon E.
Burns, Andrew H. Hines, Jr. and Charles B. Johnson.* The shareholders ratified
the selection of McGladrey & Pullen, LLP, to serve as the Fund's independent
auditors for the fiscal year ending August 31, 1998. No other business was
transacted at the meeting.
The results of the voting at the Annual Meeting are as follows:
1. The election of three (3) Directors for the term set forth below:
<TABLE>
<CAPTION>
% OF % OF
OUTSTANDING OUTSTANDING
TERM EXPIRING 2001: FOR SHARES WITHHELD SHARES
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Harmon E. Burns............................................. 12,399,904 74.03% 215,824 1.29%
Andrew H. Hines, Jr. ....................................... 12,417,807 74.14% 197,921 1.18%
Charles B. Johnson.......................................... 12,444,967 74.30% 170,761 1.02%
</TABLE>
2. The ratification or rejection of the selection of McGladrey & Pullen, LLP, as
independent auditors for the Fund for the fiscal year ending August 31, 1998:
<TABLE>
<CAPTION>
% OF % OF % OF
OUTSTANDING OUTSTANDING OUTSTANDING
FOR SHARES AGAINST SHARES ABSTAIN SHARES
- -----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
12,245,304 73.10% 76,465 0.46% 293,959 1.76%
</TABLE>
*Harris J. Ashton, Nicholas F. Brady, S. Joseph Fortunato, John Wm. Galbraith,
Edith E. Holiday, Betty P. Krahmer, Gordon S. Macklin and Fred R. Millsaps are
Directors of the Fund who are currently serving and whose terms of office
continued after the Annual Meeting of Shareholders.
28
PAGE
TEMPLETON EMERGING MARKETS FUND, INC.
DIVIDEND REINVESTMENT AND CASH PURCHASE PLAN
The Fund offers a Dividend Reinvestment and Cash Purchase Plan (the "Plan") with
the following features: -- Shareholders must affirmatively elect to participate
in the Plan; Stock dividends and capital gains distributions will be reinvested
automatically; ChaseMellon Shareholder Services, Investor Services, P.O. Box
3338, South Hackensack, NJ 07606-1938, will provide additional Plan information
upon request. -- Whenever the Fund declares dividends in either cash or common
stock of the Fund, if the market price is equal to or exceeds net asset value at
the valuation date, the participant will receive the dividends entirely in stock
at a price equal to the net asset value, but not less than 95% of the then
current market price of the Fund's shares. If the market price is lower than net
asset value or if dividends and/or capital gains distributions are payable only
in cash, the participant will receive shares purchased on the New York Stock
Exchange or otherwise on the open market. -- A participant has the option of
submitting additional payments to Mellon Securities Trust Company (the "Plan
Agent"), in any amounts of at least $100, up to a maximum of $5,000 per month,
for the purchase of Fund shares for his or her account. These payments shall be
made by check or money order payable to "Mellon Securities Trust Co." and sent
to ChaseMellon Shareholder Services, Investor Services, P.O. Box 382009,
Pittsburgh, PA 15250-8009, Attn: Templeton Emerging Markets Fund, Inc. The Plan
Agent shall apply such payments (less a $5.00 service charge and less a pro rata
share of trading fees) to purchases of Fund shares in the open market. -- The
automatic reinvestment of dividends and/or capital gains does not relieve the
participant of any income tax which may be payable on dividends or
distributions. -- The participant may withdraw from the Plan without penalty at
any time by written notice to the Plan Agent sent to ChaseMellon Shareholder
Services, Investor Services, P.O. Box 3338, South Hackensack, NJ 07606-1938.
Upon withdrawal, the participant will receive, without charge, stock
certificates issued in the participant's name for all full shares held by the
Plan Agent; or, if the participant wishes, the Plan Agent will sell the
participant's shares and send the proceeds, less a service fee of $5.00 and less
trading fees. -- Whenever shares are purchased on the New York Stock Exchange or
otherwise on the open market, each participant will pay a pro rata portion of
trading fees. Trading fees will be deducted from amounts to be invested.
SHAREHOLDER INFORMATION
Shares of Templeton Emerging Markets Fund, Inc. are traded daily on the New York
Stock Exchange under the symbol "EMF". The Fund's shares are also listed and
traded on the Pacific Exchange. Information about the net asset value and the
market price is published each Monday in the Wall Street Journal, weekly in
Barron's and each Saturday in The New York Times and other newspapers. Daily
market prices for the Fund's shares are published in the New York Stock Exchange
Composite Transactions section of newspapers.
For current information about dividends and shareholder accounts, call
1-800-292-9293.
The daily closing net asset value as of the previous business day may be
obtained when available by calling Franklin Templeton Fund Information after 10
a.m. Eastern Time any business day at 1-800-DIAL BEN (1-800-342-5236).
If any shareholder is not receiving copies of the Reports to Shareholders
because shares are registered in a broker's name or in a custodian's name, he or
she can write and request that his or her name be added to the Fund's mailing
list, by writing Templeton Emerging Markets Fund, Inc., 100 Fountain Parkway,
P.O. Box 33030, St. Petersburg, FL 33733-8030.
29
PAGE
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LITERATURE REQUEST
For a free brochure and prospectus, which contain more complete information,
including charges and expenses, call Franklin Fund Information, toll free, at
1-800/DIAL BEN (1-800/342-5236). Please read the prospectus carefully before you
invest or send money. To ensure the highest quality of service, telephone calls
to or from our service departments may be monitored, recorded and accessed.
These calls can be determined by the presence of a regular beeping tone.
FRANKLIN TEMPLETON GROUP
GLOBAL GROWTH
Franklin Global Health Care Fund
Templeton Developing
Markets Trust
Templeton Foreign Fund
Templeton Foreign Smaller
Companies Fund
Templeton Global
Infrastructure Fund
Templeton Global
Opportunities Trust
Templeton Global
Real Estate Fund
Templeton Global
Smaller Companies Fund
Templeton Greater European Fund
Templeton Growth Fund
Templeton Latin America Fund
Templeton Pacific Growth Fund
Templeton World Fund
GLOBAL GROWTH AND INCOME
Franklin Global Utilities Fund
Franklin Templeton German
Government Bond Fund
Franklin Templeton Global
Currency Fund
Mutual European Fund
Templeton Global Bond Fund
Templeton Growth and
Income Fund
GLOBAL INCOME
Franklin Global Government
Income Fund
Franklin Templeton Hard
Currency Fund
Franklin Templeton High Income
Currency Fund
Templeton Americas Government
Securities Fund
GROWTH
Franklin Biotechnology
Discovery Fund
Franklin Blue Chip Fund
Franklin California Growth Fund
Franklin DynaTech Fund
Franklin Equity Fund
Franklin Gold Fund
Franklin Growth Fund
Franklin MidCap Growth Fund
Franklin Small Cap
Growth Fund
Mutual Discovery Fund
GROWTH AND INCOME
Franklin Asset Allocation Fund
Franklin Balance Sheet
Investment Fund*
Franklin Convertible
Securities Fund
Franklin Equity Income Fund
Franklin Income Fund
Franklin MicroCap Value Fund*
Franklin Natural Resources Fund
Franklin Real Estate
Securities Fund
Franklin Rising Dividends Fund
Franklin Strategic Income Fund
Franklin Utilities Fund
Franklin Value Fund
Mutual Beacon Fund
Mutual Financial Services Fund
Mutual Qualified Fund
Mutual Shares Fund
Templeton American Trust, Inc.
Fund Allocator Series
Franklin Templeton Conservative
Target Fund
Franklin Templeton Moderate
Target Fund
Franklin Templeton Growth
Target Fund
INCOME
Franklin Adjustable Rate
Securities Fund
Franklin Adjustable U.S.
Government Securities Fund
Franklin's AGE High Income Fund
Franklin Investment Grade
Income Fund
Franklin Short-Intermediate
U.S. Government Securities Fund
Franklin U.S. Government
Securities Fund
Franklin Money Fund
Franklin Federal Money Fund
FOR CORPORATIONS
Franklin Corporate Qualified
Dividend Fund
FRANKLIN FUNDS SEEKING TAX-FREE INCOME
Federal Intermediate-Term
Tax-Free Income Fund
Federal Tax-Free Income Fund
High Yield Tax-Free Income Fund
Insured Tax-Free Income Fund
Puerto Rico Tax-Free
Income Fund
Tax-Exempt Money Fund
FRANKLIN STATE-SPECIFIC FUNDS SEEKING TAX-FREE INCOME
Alabama
Arizona**
Arkansas***
California**
Colorado
Connecticut
Florida**
Georgia
Hawaii***
Indiana
Kentucky
Louisiana
Maryland
Massachusetts+
Michigan**
Minnesota+
Missouri
New Jersey
New York**
North Carolina
Ohio+
Oregon
Pennsylvania
Tennessee***
Texas
Virginia
Washington***
VARIABLE ANNUITIES++
Franklin Valuemark(R)
Franklin Templeton
Valuemark Income Plus
(an immediate annuity)
*These funds are now closed to new accounts, with the exception of retirement
accounts.
**Two or more fund options available: long-term portfolio, intermediate-term
portfolio, a portfolio of insured municipal securities, and/or a high yield
portfolio (CA) and a money market portfolio (CA and NY).
***The fund may invest up to 100% of its assets in bonds that pay interest
subject to the federal alternative minimum tax.
+Portfolio of insured municipal securities.
++Franklin Valuemark and Franklin Templeton Valuemark Income Plus are issued by
Allianz Life Insurance Company of North America or by its wholly owned
subsidiary, Preferred Life Insurance Company of New York, and distributed by
NALAC Financial Plans, LLC.
10/97.1
PAGE
TEMPLETON EMERGING
MARKETS FUND, INC.
100 Fountain Parkway
P.O. Box 33030
St. Petersburg, Florida 33733-8030
TRANSFER AGENT
Chase Mellon Shareholder Services
450 West 33rd Street
New York, New York 10001
1-800/416-5585
SHAREHOLDER SERVICES
1-800/632-2301
FUND INFORMATION
1-800/342-5236
Investors should be aware that the value of investments made for the Fund may go
down as well as up, and that the Investment Manager may make errors in selecting
securities for the Fund's portfolio. Like any investment in securities, the
Fund's portfolio will be subject to the risk of loss from market, currency,
economic, political and other factors. The Fund and Fund investors are not
protected from such losses by the Investment Manager. Therefore, investors who
cannot accept the risk of such losses should not invest in shares of the Fund.
To ensure the highest quality of service, telephone calls to or from our service
departments may be monitored, recorded and accessed. These calls can be
determined by the presence of a regular beeping tone.
TLEMF S98 04/98 [LOGO] Printed on recycled paper
