SEMI ANNUAL REPORT
[GLOBE GRAPHIC]
February 28, 1999
TEMPLETON EMERGING
MARKETS FUND, INC.
[FRANKLIN TEMPLETON LOGO]
PAGE
[CELEBRATING 50 YEARS LOGO]
Thank you for investing with Franklin Templeton. We encourage our investors to
maintain a long-term perspective and remember that all securities markets move
both up and down, as do investment company 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 APPEARS HERE]
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 business practices and customs unique to developing nations.
PAGE
SHAREHOLDER LETTER
- -------------------------------------------------------------------------------
Your Fund's Goal: Templeton Emerging Markets Fund seeks long-term capital
appreciation by investing primarily in emerging country equity securities.
- -------------------------------------------------------------------------------
Dear Shareholder:
This semiannual report of Templeton Emerging Markets Fund covers the period
ended February 28, 1999. During the six months under review, the Fund delivered
a six-month cumulative total return of +62.21% in market-price terms,
significantly outperforming the Morgan Stanley Capital International(R) (MSCI)
Emerging Markets Free Index, which posted a return of +24.65% for the same
period.(1) In net asset value terms, the Fund delivered a six-month cumulative
total return of +19.43%, as shown in the Performance Summary on page 10.
After Russia's economic meltdown in August, world financial leaders became
increasingly sensitive to the impact of emerging markets upon the global
economy.
1. Source: Standard & Poor's(R) Micropal. The unmanaged MSCI Emerging Markets
Free Index measures the performance of securities located in 25 emerging
countries, such as Brazil, China, Korea and Poland. It includes reinvested
dividends. One cannot invest directly in an index, nor is an index
representative of the Fund's portfolio.
You will find a complete listing of the Fund's portfolio holdings, including
dollar value and number of shares or principal amount, beginning on page 12 of
this report.
CONTENTS
Shareholder Letter ........................... 1
Important Notice
to Shareholders .............................. 6
Performance Summary .......................... 9
Financial Highlights &
Statement of Investments ..................... 11
Financial Statements ......................... 22
Notes to Financial Statements ................ 25
[FUND CATEGORY PYRAMID]
PAGE
GEOGRAPHIC DISTRIBUTION
Based on Total Net Assets
2/28/99
[PIE CHART]
[THIS CHARTS SHOWS IN PIE FORMAT THE GEOGRAPHIC DISTRIBUTION BREAKDOWN OF
SECURITIES IN TEMPLETON EMERGING MARKETS FUND ON FEBRUARY 28, 1999, BASED ON
TOTAL NET ASSETS.]
Asia 57.4%
Latin America 27.9%
Middle East & Africa 10.3%
Europe 3.1%
Short-Term Investments & Other Net Assets 1.3%
Brazil, the world's eighth-largest economy, had been in a state of
decline since the end of July 1998, when massive amounts of foreign capital
began leaving the country. And when the Malaysian government announced the
imposition of strict currency controls in September, fear that such measures
could be taken elsewhere focused further attention on emerging markets.
In November, the Federal Reserve Board lowered U.S. interest rates for the third
time in 1998, which helped strengthen emerging market currencies against the
U.S. dollar, and speculation involving the Hong Kong dollar and the Chinese
renmimbi eased, spurring a rally in Asian stocks. In Latin America, Brazil
successfully negotiated a standby emergency agreement with the International
Monetary Fund (IMF), temporarily halting the exodus of investment dollars from
that country, but the flight of capital resumed and its government implemented
the IMF standby agreement. Many foreign investors took this as a cue to roll
back their Brazilian positions, and by the end of December, concern about this
situation had spread throughout the world.
During January, Brazil's central bank devalued the real, and then decided to
float the currency, allowing its value to fluctuate with market forces, rather
than pegging it within a daily trading band. Initial worldwide reaction to these
moves was mostly negative, and currency speculation resumed in China and Hong
Kong. However, President Menem of Argentina managed to prevent a run on the
Argentine peso by publicly discussing possible dollarization of Argentina's
economy, where the U.S. dollar is already legal tender.
2
PAGE
While the floating of Brazil's currency did not have the severe impact of the
Thai baht devaluation of 1997 or the 1998 Russian economic meltdown, it did
taint investor sentiment towards emerging markets. Currencies in many Eastern
European markets failed to recover, and the markets of Asia experienced general
weakness. But even though Brazil's Bovespa Index did fall 21.44% during the
reporting period, Mexico's equity market rose +44.39%, Argentina's Merval Index
advanced +7.15%, and Chile's stock market appreciated +17.92%.(2) Another
positive result was that Brazilian state leaders gave up their opposition to
federal pension fund reforms, which Brazil's Congress passed on the fourth
reading shortly after the float of the real.
On February 28, 1999, 98.7% of the Fund's total net assets were in equities, and
1.3% were in short-term investments and other assets. The Fund owned investments
in 30 countries with Mexico being its largest country holding. Our largest
regional holdings were Asia (57.4%), followed by Latin America (27.9%),
Mid-east/Africa (10.3%), and Europe (3.1%). In the period under review, many of
our Asian holdings benefited from gains in recovering markets there. For
example, our shares of Samsung Display Devices Ltd. (South Korea), and Thai
Farmers Bank Public Co. Ltd. (Thailand) appreciated 66.6% and 289.2%,
respectively during the period.(3)
2. Source: Standard & Poor's(R) Micropal. Market returns are measured in U.S.
dollars and, except for Chile's stock market, include reinvested dividends.
Indices are unmanaged. One cannot invest directly in an index, nor is an index
representative of the Fund's portfolio.
3. Source: Bloomberg. Price appreciation is measured in U.S. dollars and does
not include reinvested dividends.
TOP 10 COUNTRIES*
Equity Investments
2/28/99
[THIS TABLE LISTS THE TOP 10 COUNTRIES* REPRESENTED BY EQUITY INVESTMENTS OF
TEMPLETON EMERGING MARKETS FUND AS OF FEBRUARY 28, 1999, BASED ON TOTAL NET
ASSETS.]
% OF TOTAL
COUNTRY NET ASSETS
- ----------------------------
Mexico 10.9%
Singapore 10.8%
Thailand 10.7%
South Africa 9.9%
Brazil 8.0%
Turkey 7.2%
South Korea 7.0%
Malaysia 5.0%
Hong Kong** 4.8%
Indonesia 4.0%
* Does not include investments in fixed-income securities, and short-term
investments and other assets.
** Hong Kong reverted to the sovereignty of China on July 1, 1997.
3
PAGE
TOP 10 HOLDINGS*
2/28/99
[THIS TABLE LISTS THE TOP 10 HOLDINGS*, INCLUDING INDUSTRY AND COUNTRY OF
ORIGIN, OF TEMPLETON EMERGING MARKETS FUND AS OF FEBRUARY 28, 1999, BASED ON
TOTAL NET ASSETS.]
COMPANY % OF TOTAL
INDUSTRY, COUNTRY NET ASSETS
- ----------------------------------------------
Telefonos de Mexico SA
(Telmex), L, ADR
Telecommunications, Mexico 5.0%
Thai Farmers Bank
Public Co. Ltd., fgn.
Banking, Thailand 3.3%
Korea Electric Power Corp.
Utilities Electrical & Gas,
South Korea 3.3%
Akbank
Banking, Turkey 3.2%
Anglo American Corp.
of South Africa Ltd.
Metals & Mining,
South Africa 2.3%
Telecomunicacoes
Brasileiras SA (Telebras), pfd.
Telecommunications, Brazil 2.3%
Finansbank, Br.
Banking, Turkey 2.2%
Philippine Long Distance
Telephone Co., ADR
Telecommunications,
Philippines 2.1%
Siam Cement
Public Co. Ltd., fgn.
Building Materials &
Components, Thailand 2.0%
City Developments Ltd.
Real Estate, Singapore 1.8%
* Does not include investments in fixed-income securities, and short-term
investments and other assets.
Looking forward, we remain optimistic about the potential long-term growth of
emerging markets. Volatility in Latin America has allowed us to acquire
positions in companies we consider key industry leaders there, while divesting
ourselves of holdings that we believed had reached their full value. Because our
Latin American portfolio was structured with possible currency devaluation in
mind, we believe that many companies whose shares we hold could benefit from the
float of the real. In Asia, financial reforms underway there could encourage
further recovery of the region. Likewise, emerging markets in Europe may improve
if governments attempting to meet admittance criteria to the European Monetary
Union reform their economic policies.
Of course, investing in foreign securities involves special risks, such as
adverse economic, social and political developments in the countries where the
Fund invests, as well as market and currency volatility. Emerging market
securities involve heightened risks related to the same factors, in addition to
those associated with 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. For example, Taiwan's
equity market has increased 951% in the last 15 years, but has suffered 6
declines of more than 20% during that time.(4) While short-term volatility can
be disconcerting, declines in excess of 50% are not unusual in emerging markets.
4. Source: Bloomberg. Based on quarterly percentage price change over 15 years
ended December 31, 1998. Market returns are measured in U.S. dollars and do not
include reinvested dividends.
4
PAGE
Please remember that this discussion reflects our views, opinions and portfolio
holdings as of February 28, 1999, the end of the reporting period. However,
market and economic conditions are changing constantly, which can be expected to
affect our strategies and the Fund's portfolio composition. Although past
performance is not predictive of future results, these insights may help you
better understand our investment and management philosophy.
We thank you for your participation in Templeton Emerging Markets Fund and
welcome your comments and suggestions.
Sincerely,
/s/J. MARK MOBIUS
- ----------------------
J. Mark Mobius, Ph.D.
President
Templeton Emerging Markets Fund, Inc.
5
PAGE
IMPORTANT NOTICE TO SHAREHOLDERS
- -------------------------------------------------------------------------------
EURO RISK. On January 1, 1999, the European Monetary Union (EMU) introduced a
new single currency, the euro, which will replace the national currency for
participating member countries. The transition and the elimination of currency
risk among EMU countries may change the economic environment and behavior of
investors, particularly in European markets.
Because this change to a single currency is new and untested, it is not possible
to predict the impact of the euro on the business or financial condition of
European issuers, which the Fund may hold in its portfolio, and their impact on
Fund performance. To the extent the Fund holds non-U.S. dollar (euro or other)
denominated securities, it will still be exposed to currency risk due to
fluctuations in those currencies versus the U.S. dollar.
YEAR 2000 ISSUE. The Fund's business operations depend on a worldwide network of
computer systems that contain date fields, including securities trading systems,
securities transfer agent operations and stock market links. Many of the systems
currently use a two digit date field to represent the date, and unless these
systems are changed or modified, they may not be able to distinguish the Year
1900 from the Year 2000 (commonly referred to as the Year 2000 problem). In
addition, the fact that the Year 2000 is a leap year may create difficulties for
some systems.
When the Year 2000 arrives, the Fund's operations could be adversely affected if
the computer systems used by the investment manager, its service providers and
other third parties it does business with are not Year 2000 ready. For example,
the Fund's portfolio and operational areas could be impacted, including
securities trade processing, interest and dividend payments, securities pricing,
shareholder account services, reporting, custody functions and others. The Fund
could experience difficulties in effecting
- -------------------------------------------------------------------------------
6
PAGE
- -------------------------------------------------------------------------------
transactions if any of its foreign subcustodians, or if foreign broker-dealers
or foreign markets are not ready for Year 2000.
WHEN EVALUATING CURRENT AND POTENTIAL PORTFOLIO POSITIONS, YEAR 2000 IS ONE OF
THE FACTORS THE FUND'S INVESTMENT MANAGER CONSIDERS.
The investment manager will rely upon public filings and other statements made
by companies about their Year 2000 readiness. Issuers in countries outside the
U.S., particularly in emerging markets, may be more susceptible to Year 2000
risks and may not be required to make the same level of disclosure about Year
2000 readiness as is required in the U.S. The investment manager, of course,
cannot audit each company and its major suppliers to verify their Year 2000
readiness. Of course, the Fund's ability to reduce the effects of the Year 2000
problem is also very much dependent upon the efforts of third parties over which
the Fund and its investment manager may have no control.
If a company in which the Fund is invested is adversely affected by Year 2000
problems, it is likely that the price of its securities will also be adversely
affected. A decrease in the value of one or more of the Fund's portfolio
holdings will have a similar impact on the Fund's performance.
The Information Services & Technology division of Franklin Resources, Inc.
(Resources) established a Year 2000 Project Team in 1996. This team has already
begun making necessary software changes to help the computer systems that
service the Fund and its shareholders to be Year 2000 compliant. After
completing these modifications, comprehensive tests are conducted in one of
Resources' U.S. test labs to verify their effectiveness. Resources continues to
seek reasonable assurances from all major hardware, software or data-services
suppliers that they will be Year 2000 compliant on a timely basis. Resources is
also beginning to develop
- -------------------------------------------------------------------------------
7
PAGE
- -------------------------------------------------------------------------------
a contingency plan, including identification of those mission critical systems
for which it is practical to develop a contingency plan. However, in an
operation as complex and geographically distributed as Resources' business, the
alternatives to use of normal systems, especially mission critical systems, or
supplies of electricity or long distance voice and data lines are limited.
- -------------------------------------------------------------------------------
8
PAGE
PERFORMANCE SUMMARY AS OF 2/28/99
DISTRIBUTIONS WILL VARY BASED ON EARNINGS OF THE FUND'S PORTFOLIO AND ANY
PROFITS REALIZED FROM THE SALE OF THE PORTFOLIO'S SECURITIES AND THE LEVEL OF
THE FUND'S OPERATING EXPENSES. PAST DISTRIBUTIONS ARE NOT INDICATIVE OF FUTURE
TRENDS. ALL TOTAL RETURNS INCLUDE REINVESTED DISTRIBUTIONS ACCORDING TO THE
TERMS SPECIFIED IN THE FUND'S DIVIDEND REINVESTMENT AND CASH PURCHASE PLAN AND
DO NOT REFLECT ANY SALES CHARGES PAID AT INCEPTION OR BROKERAGE COMMISSIONS PAID
ON SECONDARY MARKET PURCHASES.
PRICE AND DISTRIBUTION INFORMATION (9/1/98 - 2/28/99)
<TABLE>
<CAPTION>
CHANGE 2/28/99 8/31/98
- --------------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value - $2.21 $8.64 $10.85
Market Price (NYSE) +$0.75 $9.9375 $9.1875
DISTRIBUTIONS
------------------------------------------
Dividend Income $0.29
Long-Term Capital Gain $4.25
Short-Term Capital Gain $0.01
TOTAL $4.55
</TABLE>
Templeton Emerging Markets Fund paid distributions derived from long-term
capital gains totaling $4.25 cents ($0.0425) per share in November and December
1998. The Fund hereby designates such distributions as capital gain dividends
per Internal Revenue Code Section 852 (b)(3).
Past performance is not predictive of future results.
9
PAGE
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. Six-month return has not been
annualized.
- -------------------------------------------------------------------------------
Since markets can go down as well as up, investment return and principal value
will fluctuate with market conditions, currency volatility, and the economic,
social and political climates of countries where the Fund invests. 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.
- -------------------------------------------------------------------------------
PERFORMANCE
<TABLE>
<CAPTION>
INCEPTION
CLASS A 6-MONTH 1-YEAR 5-YEAR 10-YEAR (2/26/87)
- -------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Cumulative
Total Return(1)
Based on
change in
net asset
value +19.43% -17.78% -4.37% +400.88% +401.98%
Based on
change in
market
price +62.21% -15.11% -5.21% +426.09% +438.36%
Average Annual
Total Return(2)
Based on
change in
net asset
value +19.43% -17.78% -0.89% +17.49% +14.37%
Based on
change in
market
price +62.21% -15.11% -1.06% +18.06% +15.04%
</TABLE>
Past performance is not predictive of future results.
10
PAGE
TEMPLETON EMERGING MARKETS FUND, INC.
Financial Highlights
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED AUGUST 31,
FEBRUARY 28, 1999 ----------------------------------------------------------------
(UNAUDITED) 1998 1997 1996 1995 1994
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
(For a share outstanding throughout
the period)
Net asset value, beginning of
period.............................. $10.85 $20.67 $17.26 $18.23 $22.77 $17.94
---------------------------------------------------------------------------------------
Income from investment operations:
Net investment income.............. .07 .26 .27 .25 .23 .10
Net realized and unrealized gains
(losses)......................... 2.27 (7.64) 4.27 1.20 (1.62) 5.87
---------------------------------------------------------------------------------------
Total from investment operations.... 2.34 (7.38) 4.54 1.45 (1.39) 5.97
---------------------------------------------------------------------------------------
Less distributions from:
Net investment income.............. (.29) (.26) (.21) (.26) (.10) (.29)
Net realized gains................. (4.26) (2.18) (.92) (2.16) (3.05) (.85)
---------------------------------------------------------------------------------------
Total distributions................. (4.55) (2.44) (1.13) (2.42) (3.15) (1.14)
---------------------------------------------------------------------------------------
Net asset value, end of period...... $8.64 $10.85 $20.67 $17.26 $18.23 $22.77
=======================================================================================
Total Return*
Based on market value per share.... 62.21% (54.35)% 33.81% 7.45% (16.94)% 26.11%
Based on net asset value per
share............................ 19.43% (39.69)% 27.34% 8.69% (8.53)% 33.39%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's)... $152,576 $182,352 $342,002 $283,678 $294,962 $363,760
Ratios to average net assets:
Expenses........................... 1.71%** 1.70% 1.67% 1.71% 1.73% 1.78%
Net investment income.............. 1.36%** 1.58% 1.38% 1.51% 1.28% .46%
Portfolio turnover rate............. 12.05% 40.51% 12.60% 8.83% 27.58% 6.50%
</TABLE>
*Total return is not annualized.
**Annualized.
See Notes to Financial Statements.
11
PAGE
TEMPLETON EMERGING MARKETS FUND, INC.
STATEMENT OF INVESTMENTS, FEBRUARY 28, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
INDUSTRY SHARES VALUE
------------------------------------------------
<S> <C> <C> <C>
LONG TERM SECURITIES 98.7%
ARGENTINA 2.6%
*Atanor Cia Nacional Para la Industria Quimica SA,
D................................................. Chemicals 57,964 $ 31,313
*Capex SA, A........................................ Utilities Electrical & Gas 45,400 199,840
Central Costanera SA, B............................. Utilities Electrical & Gas 11,601 26,403
*Garovaglio Y Zorraquin SA.......................... Chemicals 163,791 145,832
Molinos Rio de la Plata SA, B....................... Food & Household Products 112,257 205,513
Nobleza Piccardo Sdad Industrial Comercial y
Financial......................................... Beverages & Tobacco 20,760 76,843
Quilmes Industrial SA, ADR.......................... Beverages & Tobacco 7,900 68,139
*Siderar, A......................................... Metals & Mining 1,400 2,059
Siderca SA, A....................................... Metals & Mining 35,000 30,812
*Sociedad Comercial del Plata Cadelplata Come....... Multi-Industry 1,176,430 600,219
Transportadora de Gas del Sur SA, B................. Utilities Electrical & Gas 167,738 334,771
Transportadora de Gas del Sur SA, B, Reg S, ADR..... Utilities Electrical & Gas 200,500 1,979,938
YPF Soc Anonima Yacimientos Petroliferos, ADR....... Energy Sources 8,575 248,675
------------
3,950,357
------------
AUSTRIA .5%
*Austria Tabak AG................................... Beverages & Tobacco 6,300 465,368
OMV AG.............................................. Energy Sources 3,000 276,634
------------
742,002
------------
BRAZIL 8.0%
Banco Bradesco SA................................... Banking 185,780,741 619,878
Banco Bradesco SA, pfd. ............................ Banking 168,113,328 675,758
Banco do Brasil SA.................................. Banking 221,000 694
Banco do Brazil SA, pfd. ........................... Banking 8,190,000 34,088
*Centrais Eletricas Brasileiras SA (Electrobras),
pfd. ............................................. Utilities Electrical & Gas 161,936,770 2,220,165
Centrais Geradoras Do Sul Do Brasil SA, B, pfd. .... Utilities Electrical & Gas 189,527,770 114,555
Cia Energetica de Minas Gerais Cemig, pfd., Br. .... Utilities Electrical & Gas 54,200,000 713,789
*Cia Mesbla SA, pfd. ............................... Merchandising 6,825,690 335
Cia Vale do Rio Doce, A, pfd. ...................... Metals & Mining 24,500 313,624
Companhia Energetica do Ceara, pfd. ................ Utilities Electrical & Gas 12,700,000 18,722
Companhia Paranaense de Energia-Copel, ADR.......... Utilities Electrical & Gas 17,500 78,750
Copene-Petroquimica do Nordeste SA, A, pfd. ........ Chemicals 5,742,800 467,043
Duratex SA, pfd. ................................... Forest Products & Paper 8,687,800 138,749
Itausa-Investimentos SA, pfd. ...................... Multi-Industry 3,947,346 1,629,371
*Mannesmann SA, pfd. ............................... Machinery & Engineering 1,951,344 114,875
Petroleo Brasileiro SA (Petrobras), pfd. ........... Energy Sources 11,504,966 910,843
*Tele Norte Leste Participacoes SA, pfd. ........... Telecommunications 53,400,000 530,326
Telecomunicacoes Brasileiras SA (Telebras).......... Telecommunications 83,151,950 2,880,694
Telecomunicacoes Brasileiras SA (Telebras), pfd. ... Telecommunications 9,284,000 601,293
Unibanco Uniao de Bancos Brasileiros SA............. Banking 7,223,468 193,454
------------
12,257,006
------------
</TABLE>
12
PAGE
TEMPLETON EMERGING MARKETS FUND, INC.
STATEMENT OF INVESTMENTS, FEBRUARY 28, 1999 (UNAUDITED) (CONT.)
<TABLE>
<CAPTION>
INDUSTRY SHARES VALUE
------------------------------------------------
<S> <C> <C> <C>
LONG TERM SECURITIES (CONT.)
CHILE 1.8%
Antofagasta Holdings Plc. .......................... Metals & Mining 677,181 $ 1,898,476
Compania de Telecomunicaciones de Chile SA, ADR..... Telecommunications 26,200 579,675
Empresa Nacional de Electricidad SA, ADR............ Electrical & Electronics 21,600 272,700
------------
2,750,851
------------
CHINA .6%
China Resources Enterprises Ltd. ................... Multi-Industry 157,000 205,679
*China Southern Glass Co. Ltd., B................... Building Materials & Components 314,092 23,513
China Vanke Co. Ltd., B............................. Real Estate 130,328 29,437
Chiwan Wharf Holdings Ltd., B....................... Transportation 1,058,000 92,858
Guangshen Railway Co. Ltd., H....................... Transportation 834,000 95,803
Guangshen Railway Co. Ltd., H, ADR.................. Transportation 12,700 71,438
*Luoyang Glass Co. Ltd., H.......................... Misc Materials & Commodities 61,000 1,260
Shandong Huaneng Power Development Co. Ltd., ADR.... Utilities Electrical & Gas 29,000 103,313
*Shanghai Chlor-Alkali Chemical Co. Ltd., B......... Chemicals 603,800 33,813
*Shanghai Jin Jiang Tower Co. Ltd., B............... Leisure & Tourism 597,360 48,984
*Shanghai New Asia Group Co. Ltd., B................ Food & Household Products 102,362 11,669
Shanghai Petrochemical Co. Ltd., H.................. Chemicals 524,000 42,609
*Shanghai Tyre & Rubber Co. Ltd., B................. Industrial Components 675,730 60,816
*Shanghai Vacuum Electron Devices Co. Ltd., B....... Appliances & Household Durables 262,432 25,718
------------
846,910
------------
COLOMBIA 1.4%
Bavaria SA.......................................... Beverages & Tobacco 92,400 383,464
Cementos Argos SA................................... Building Materials & Components 556,528 1,208,105
Cia Colombiana de Tabacos SA........................ Beverages & Tobacco 70,000 125,140
Compania Nacional de Chocolates SA.................. Food & Household Products 79,955 234,824
Compania Suramericana de Inversiones SA............. Insurance 155,540 218,476
------------
2,170,009
------------
CZECH REPUBLIC .3%
*CEZ AS............................................. Utilities Electrical & Gas 185,900 242,239
*SPT Telecom AS..................................... Telecommunications 19,000 214,758
Tabak AS............................................ Beverages & Tobacco 100 21,056
------------
478,053
------------
EGYPT .2%
Commercial International Bank Ltd. ................. Banking 27,700 301,489
Eastern Tobacco Co. ................................ Beverages & Tobacco 2,501 73,521
------------
375,010
------------
GHANA .1%
Ashanti Goldfields Co. Ltd., GDR, Reg S............. Metals & Mining 22,138 196,475
------------
GREECE
National Bank of Greece SA.......................... Banking 6 410
------------
</TABLE>
13
PAGE
TEMPLETON EMERGING MARKETS FUND, INC.
STATEMENT OF INVESTMENTS, FEBRUARY 28, 1999 (UNAUDITED) (CONT.)
<TABLE>
<CAPTION>
INDUSTRY SHARES VALUE
------------------------------------------------
<S> <C> <C> <C>
LONG TERM SECURITIES (CONT.)
HONG KONG 4.8%
CDL Hotel International Ltd. ....................... Leisure & Tourism 62,531 $ 16,061
Cheung Kong Holdings Ltd. .......................... Multi-Industry 266,000 1,811,042
Citic Pacific Ltd. ................................. Multi-Industry 451,000 788,752
Dairy Farm International Holdings Ltd. ............. Merchandising 227,116 243,014
Hang Lung Development Co. Ltd. ..................... Real Estate 981,000 943,300
HSBC Holdings PLC................................... Banking 47,658 1,340,963
Jardine Matheson Holdings Ltd. ..................... Multi-Industry 219,918 576,185
Jardine Strategic Holdings Ltd. .................... Multi-Industry 124,500 180,525
Lai Sun Garment International Ltd. ................. Multi-Industry 76,000 4,414
New World Development Co. Ltd. ..................... Real Estate 510,466 938,871
Sun Hung Kai Properties Ltd. ....................... Real Estate 69,599 473,860
------------
7,316,987
------------
HUNGARY .8%
Borsodchem RT....................................... Chemicals 16,972 309,453
Borsodchem RT, GDR, Reg S........................... Chemicals 19,500 354,413
Fotex First Hungarian-American Photo Service Co. ... Multi-Industry 973,000 426,625
Tiszai Vegyi Kombinat RT............................ Chemicals 19,250 202,654
------------
1,293,145
------------
INDIA 3.0%
Arvind Mills Ltd. .................................. Textiles & Apparel 42,100 37,784
*ATV Projects India Ltd. ........................... Machinery & Engineering 200,000 11,716
Bharat Petroleum Corp. Ltd. ........................ Energy Sources 89,600 440,074
Bombay Dyeing & Manufacturing Co. Ltd. ............. Chemicals 13,050 16,513
Grasim Industries Ltd. ............................. Multi-Industry 6,550 23,483
Grasim Industries Ltd., GDR......................... Multi-Industry 21,000 92,925
Great Eastern Shipping Co. Ltd. .................... Transportation 63,500 32,289
Gujarat Narmada Valley Fertilizers Co. Ltd. ........ Chemicals 23,600 7,632
Hindalco Industries Inc. ........................... Metals & Mining 5,500 57,352
Hindalco Industries Inc., GDR, Reg S................ Metals & Mining 10,000 102,500
Hindustan Organic Chemicals Ltd. ................... Chemicals 900 128
Hindustan Petroleum Corporation Ltd. ............... Energy Sources 28,000 135,817
India Cements Ltd., GDR............................. Building Materials & Components 61,890 43,323
Indian Petrochemicals Corp. Ltd. ................... Chemicals 63,500 182,576
*Indian Rayon & Industries Ltd. .................... Multi-Industry 27,750 53,062
Indian Rayon & Industries Ltd., GDR................. Multi-Industry 8,700 16,965
Indo Gulf Corp. Ltd. ............................... Chemicals 48,200 24,340
Industrial Credit & Inv. Corp. of India............. Financial Services 439,600 416,680
Industrial Credit & Inv. Corp. of India, GDR........ Financial Services 10,400 66,300
*Larsen & Toubro Ltd. .............................. Multi-Industry 189,150 810,675
Larsen & Toubro Ltd., GDR, Reg S.................... Multi-Industry 49,900 424,150
*Madras Cements Ltd. ............................... Building Materials & Components 905 69,935
Mahanagar Telephone Nigam Ltd. ..................... Telecommunications 62,000 230,856
*National Aluminum Co. Ltd. ........................ Metals & Mining 211,100 81,620
Reliance Industries Ltd. ........................... Chemicals 77,400 252,831
</TABLE>
14
PAGE
TEMPLETON EMERGING MARKETS FUND, INC.
STATEMENT OF INVESTMENTS, FEBRUARY 28, 1999 (UNAUDITED) (CONT.)
<TABLE>
<CAPTION>
INDUSTRY SHARES VALUE
------------------------------------------------
<S> <C> <C> <C>
LONG TERM SECURITIES (CONT.)
INDIA (CONT.)
Reliance Industries Ltd., GDR....................... Chemicals 81,900 $ 481,163
Tata Chemicals Ltd. ................................ Chemicals 23,300 38,192
Tata Engineering & Locomotive Co. (Telco)........... Machinery & Engineering 45,100 192,342
Wockhardt........................................... Health & Personal Care 31,700 226,561
------------
4,569,784
------------
INDONESIA 4.0%
*Asia Pulp & Paper Co. Ltd., ADR.................... Forest Products & Paper 137,700 946,688
*PT Barito Pacific Timber TBK....................... Forest Products & Paper 6,233,500 193,970
*PT BBL Dharmala Finance TBK, fgn. ................. Financial Services 163,000 18,444
*PT Charoen Pokphand Indonesia...................... Food & Household Products 1,330,000 22,574
*PT Ciputra Development............................. Real Estate 732,000 10,354
*PT Indah Kiat Pulp & Paper Corp. .................. Forest Products & Paper 343,300 81,576
*PT Indocement Tunggal Prakarsa..................... Building Materials & Components 1,016,000 347,768
*PT Indofoods Sukses Makmurr........................ Food & Household Products 2,522,250 1,348,530
PT Indosat.......................................... Telecommunications 80,000 110,438
*PT Jakarta International Hotel & Development....... Real Estate 294,500 7,498
*PT Kalbe Farma..................................... Health & Personal Care 141,500 5,204
PT Lippo Life Insurance............................. Insurance 872,500 37,023
*PT Metrodata Electronic............................ Electrical & Electronics 733,327 62,234
*PT Pakuwon Jati.................................... Real Estate 232,000 1,313
*PT Semen Cibinong.................................. Building Materials & Components 4,587,500 116,796
PT Semen Gresik (Persero)........................... Building Materials & Components 308,111 324,236
*PT Sinar Mas Agro Resources & Technology Corp. .... Food & Household Products 92,400 16,729
*PT Sinar Mas Multi Artha, fgn. .................... Financial Services 13,050 2,289
*PT Sumalindo Lestari Jaya.......................... Forest Products & Paper 123,000 4,697
PT Telekomunikasi Indonesia (Persero), B............ Telecommunications 4,426,500 1,377,412
*PT Tempo Scan Pacific.............................. Health & Personal Care 207,000 9,955
PT Timah............................................ Metals & Mining 1,413,000 791,440
*PT Tjiwi Kimia..................................... Forest Products & Paper 1,205,000 238,614
*PT United Tractors................................. Machinery & Engineering 85,000 3,847
------------
6,079,629
------------
MALAYSIA 5.0%
AMMB Holdings Bhd. ................................. Financial Services 71,000 51,905
Boustead Holdings Bhd. ............................. Food & Household Products 254,000 154,206
Cosway Corporation Bhd. ............................ Appliances & Household Durables 57,000 16,285
Edaran Otomobil Nasional Bhd. ...................... Automobiles 2,000 2,458
Federal Flour Mills Bhd. ........................... Food & Household Products 994,998 729,488
Genting Bhd. ....................................... Leisure & Tourism 308,000 559,676
Golden Hope Plantations Bhd. ....................... Misc Materials & Commodities 66,000 52,686
Hong Leong Industries Bhd. ......................... Multi-Industry 51,800 29,054
*Hong Leong Industries Bhd., wts.................... Multi-Industry 4,500 428
Hong Leong Properties Bhd., fgn. ................... Real Estate 248,000 35,948
Island & Peninsula Bhd. ............................ Real Estate 45,000 24,579
Kian Joo Can Factory Bhd. .......................... Industrial Components 140,000 154,404
</TABLE>
15
PAGE
TEMPLETON EMERGING MARKETS FUND, INC.
STATEMENT OF INVESTMENTS, FEBRUARY 28, 1999 (UNAUDITED) (CONT.)
<TABLE>
<CAPTION>
INDUSTRY SHARES VALUE
------------------------------------------------
<S> <C> <C> <C>
LONG TERM SECURITIES (CONT.)
MALAYSIA (CONT.)
*Leader Universal Holdings Bhd. .................... Industrial Components 195,000 $ 40,759
Malayawata Steel Bhd. .............................. Metals & Mining 1,095,000 209,327
Malaysian Airlines System Bhd. ..................... Transportation 220,000 79,029
Malaysian International Shipping Corp., fgn. ....... Transportation 1,430,666 1,490,700
*MBF Capital Bhd. .................................. Financial Services 8,000 1,000
Oriental Holdings Bhd. ............................. Automobiles 1,520,408 1,996,229
Perlis Plantations Bhd. ............................ Multi-Industry 975,348 794,990
Perusahaan Otomobil Nasional Bhd. .................. Automobiles 1,000 1,113
Public Finance Bhd., fgn. .......................... Financial Services 140,000 52,938
Renong Bhd. ........................................ Multi-Industry 223,000 40,522
Resorts World Bhd. ................................. Leisure & Tourism 652,000 682,099
Shangri La Hotels (Malaysia) Bhd. .................. Leisure & Tourism 145,000 36,248
Tanjong Plc. ....................................... Recreation & Other Consumer Goods 230,000 314,059
Technology Resources Industries Bhd. ............... Multi-Industry 117,000 43,012
------------
7,593,142
------------
MEXICO 10.9%
Alfa SA de CV, A.................................... Multi-Industry 642,000 1,580,010
*Altos Hornos de Mexico SA.......................... Metals & Mining 3,000 2,471
Cemex SA............................................ Building Materials & Components 15,427 44,243
Cemex SA, B......................................... Building Materials & Components 554,250 1,706,455
*Cifra SA de CV, C.................................. Merchandising 686,543 875,851
Coca Cola Femsa SA de CV, L, ADR.................... Beverages & Tobacco 80,000 1,105,000
DESC SA de CV DESC, A............................... Multi-Industry 540,000 482,772
Grupo Financiero Banamex Accival SA de CV, B........ Banking 461,000 703,887
*Grupo Financiero Banamex Accival SA de CV, L....... Banking 719,459 1,011,796
Grupo Financiero Bancomer SA de CV, B............... Banking 1,185,000 279,734
Grupo Financiero Bancomer SA de CV, L............... Banking 2,669,370 493,384
*Grupo Financiero Serfin SA de CV, B................ Banking 1,007,411 65,778
Telefonos de Mexico SA (Telmex), L, ADR............. Telecommunications 132,700 7,588,781
Vitro SA De CV, A................................... Food & Household Products 501,355 757,446
------------
16,697,608
------------
PAKISTAN .8%
*DG Khan Cement Co. ................................ Building Materials & Components 26,000 1,573
Engro Chemical Pakistan Ltd. ....................... Chemicals 155,135 258,483
Fauji Fertilizer Co. Ltd............................ Chemicals 67,000 57,877
National Development Leasing Corp. ................. Financial Services 75,927 5,558
Pakistan Telecommunications Corp., PTC, A........... Telecommunications 2,477,000 858,306
------------
1,181,797
------------
PERU 1.1%
Telefonica Del Peru SA, B, ADR...................... Telecommunications 136,400 1,611,225
------------
PHILIPPINES 3.5%
*A Soriano Corp. ................................... Multi-Industry 1,054,000 19,483
Ayala Corp. ........................................ Multi-Industry 171,400 56,107
</TABLE>
16
PAGE
TEMPLETON EMERGING MARKETS FUND, INC.
STATEMENT OF INVESTMENTS, FEBRUARY 28, 1999 (UNAUDITED) (CONT.)
<TABLE>
<CAPTION>
INDUSTRY SHARES VALUE
------------------------------------------------
<S> <C> <C> <C>
LONG TERM SECURITIES (CONT.)
PHILIPPINES (CONT.)
*Digital Telecommunications Philippines Inc. ....... Telecommunications 360,000 $ 9,797
*Filinvest Development Corp. ....................... Real Estate 1,066,000 50,358
*Keppel Philippine Holdings Inc., B................. Machinery & Engineering 723,975 14,870
*Metro Pacific Corp. MDI............................ Multi-Industry 502,740 24,782
Petron Corp. ....................................... Energy Sources 949,000 116,950
*Philex Mining Corp., B............................. Metals & Mining 8,231,008 50,717
Philippine Long Distance Telephone Co., ADR......... Telecommunications 133,106 3,161,268
*Philippine National Bank........................... Banking 550,430 883,232
RFM Corp. .......................................... Food & Household Products 6,762,209 902,785
------------
5,290,349
------------
POLAND .6%
*Agora SA, 144A..................................... Broadcasting & Publishing 4,000 44,300
Bank Slaski SA W Katowicach......................... Banking 10,300 449,075
Elektrim SA......................................... Multi-Industry 27,500 283,016
*Impexmetal SA...................................... Metals & Mining 1,603 4,754
Mostostal Export SA................................. Construction & Housing 109,463 130,412
*Orbis SA........................................... Leisure & Tourism 3,696 27,170
*Rolimpex SA........................................ Wholesale & International Trade 823 1,419
Warta SA............................................ Insurance 2,566 40,978
------------
981,124
------------
RUSSIA .8%
Aeroflot............................................ Transportation 105,300 6,318
GUM Trade House..................................... Merchandising 30,000 12,750
*Irkutskenergo...................................... Utilities Electrical & Gas 439,500 21,316
Lukoil Holdings, ADR................................ Energy Sources 8,000 168,000
Mosenergo........................................... Utilities Electrical & Gas 3,443,000 67,139
Mosenergo, ADR...................................... Utilities Electrical & Gas 24,670 49,340
Norilsk Nickel...................................... Metals & Mining 36,100 41,515
Red October......................................... Food & Household Products 22,000 148,500
Rostelecom.......................................... Telecommunications 201,000 158,790
Rostelecom, pfd. ................................... Telecommunications 138,400 34,600
Rostelecom, ADR..................................... Telecommunications 15,300 74,588
Saint Petersburg City Telephone Network, pfd., A.... Telecommunications 46,000 6,245
*Tyumen Aviatrans................................... Transportation 530,000 4,505
Unified Energy Systems.............................. Utilities Electrical & Gas 7,183,900 312,500
Unified Energy Systems, pfd. ....................... Utilities Electrical & Gas 1,260,000 18,900
*Vimpel Communications, ADR......................... Telecommunications 5,700 85,500
------------
1,210,506
------------
SINGAPORE 10.8%
Acer Computer International Ltd. ................... Electrical & Electronics 13,000 4,940
Acma Ltd. .......................................... Electrical & Electronics 416,000 169,106
Asia Pacific Breweries Ltd. ........................ Beverages & Tobacco 24,000 50,174
City Developments Ltd. ............................. Real Estate 658,000 2,751,220
</TABLE>
17
PAGE
TEMPLETON EMERGING MARKETS FUND, INC.
STATEMENT OF INVESTMENTS, FEBRUARY 28, 1999 (UNAUDITED) (CONT.)
<TABLE>
<CAPTION>
INDUSTRY SHARES VALUE
------------------------------------------------
<S> <C> <C> <C>
LONG TERM SECURITIES (CONT.)
SINGAPORE (CONT.)
Cycle & Carriage Ltd. .............................. Automobiles 194,000 $ 709,756
Delgro Corp. ....................................... Transportation 1,819,200 2,097,045
First Capital Corp. Ltd. ........................... Real Estate 180,000 131,707
*First Capital Corp. Ltd., cvt., pfd. .............. Real Estate 54,000 38,571
Fraser and Neave Ltd. .............................. Beverages & Tobacco 372,000 1,263,763
G P Batteries International Ltd. ................... Electrical & Electronics 26,000 45,296
Hai Sun Hup Group Ltd. ............................. Transportation 375,000 100,174
Hong Leong Finance Ltd., fgn. ...................... Financial Services 270,000 366,899
*Inchcape Marketing Services Ltd. .................. Broadcasting & Publishing 3,000 1,664
Inchcape Motors Ltd. ............................... Wholesale & International Trade 40,000 43,902
Jaya Holdings Ltd. ................................. Transportation 331,500 102,992
Jurong Shipyard Ltd. ............................... Machinery & Engineering 17,000 64,170
Keppel Corp., Ltd. ................................. Transportation 662,000 1,537,747
MCL Land Ltd. ...................................... Real Estate 161,000 105,650
Metro Holdings Ltd. ................................ Wholesale & International Trade 40,000 34,379
Natsteel Ltd. ...................................... Metals & Mining 162,000 153,345
*Neptune Orient Lines Ltd. ......................... Transportation 8,000 2,718
*Osprey Maritime Ltd. .............................. Transportation 320,000 112,427
Osprey Maritime Ltd., cvt., pfd. ................... Transportation 47,960 13,926
Overseas Chinese Banking Corp. Ltd., fgn. .......... Banking 298,000 1,990,128
Overseas Union Enterprise Ltd. ..................... Leisure & Tourism 57,400 101,333
Prima Ltd. ......................................... Food & Household Products 511,000 854,634
Republic Hotels & Resorts Ltd. ..................... Leisure & Tourism 98,000 42,256
Robinson & Co., Ltd. ............................... Merchandising 5,000 12,718
Rothmans Industries Ltd. ........................... Beverages & Tobacco 1,000 5,865
*Sembcorp Industries Ltd. .......................... Multi-Industry 979,096 1,063,246
Singapore Petroleum Company, fgn. .................. Chemicals 44,000 18,014
Times Publishing Ltd. .............................. Broadcasting & Publishing 26,000 38,653
United Industrial Corporation Ltd. ................. Real Estate 693,000 285,732
United Overseas Bank Ltd., fgn. .................... Banking 305,000 1,788,908
United Overseas Land Ltd. .......................... Real Estate 421,000 266,487
WBL Corp. Ltd. ..................................... Multi-Industry 114,000 84,739
------------
16,454,284
------------
SLOVAK REPUBLIC .1%
Nafta Gbely AS...................................... Utilities Electrical & Gas 5,662 54,125
Slovnaft AS......................................... Chemicals 8,000 130,458
Vychodoslovenske Zeleziarne AS...................... Metals & Mining 5,000 23,680
------------
208,263
------------
SOUTH AFRICA 9.9%
Aeci Ltd. .......................................... Chemicals 84,000 120,678
Anglo American Corp. of South Africa Ltd. .......... Metals & Mining 113,945 3,553,528
Anglovaal Industried Ltd. .......................... Multi-Industry 231,825 288,144
Barlow Ltd. ........................................ Multi-Industry 331,144 1,526,095
CG Smith Ltd. ...................................... Multi-Industry 709,500 1,689,286
</TABLE>
18
PAGE
TEMPLETON EMERGING MARKETS FUND, INC.
STATEMENT OF INVESTMENTS, FEBRUARY 28, 1999 (UNAUDITED) (CONT.)
<TABLE>
<CAPTION>
INDUSTRY SHARES VALUE
------------------------------------------------
<S> <C> <C> <C>
LONG TERM SECURITIES (CONT.)
SOUTH AFRICA (CONT.)
De Beers/Centenary Linked Units, Reg. .............. Misc Materials & Commodities 119,900 $ 2,067,041
*Del Monte Royal Foods Ltd. ........................ Food & Household Products 517,825 174,698
Dunlop Africa Ltd. ................................. Industrial Components 61,000 23,632
Edgars Stores Ltd. ................................. Textiles & Apparel 25,295 107,796
Iscor Ltd. ......................................... Metals & Mining 1,290,738 220,853
Kersaf Investments Ltd. ............................ Leisure & Tourism 47,575 165,111
Liberty Life Association of Africa Ltd. ............ Insurance 11,000 151,461
Malbak Ltd. ........................................ Multi-Industry 105,500 51,090
+McCarthy Retail Ltd., cvt., zero cpn., 9/30/03..... Multi-Industry 26,733ZAR 13,809
Palabora Mining Co. Ltd. ........................... Metals & Mining 39,500 200,847
Plate Glass & Shatterprufe Industries Ltd. ......... Building Materials & Components 14,480 66,849
Rembrandt Group Ltd. ............................... Multi-Industry 205,700 1,344,770
Reunert Ltd. ....................................... Electrical & Electronics 38,000 46,618
Sappi Ltd. ......................................... Forest Products & Paper 178,000 634,996
Sasol Ltd. ......................................... Energy Sources 202,500 789,407
South African Breweries Ltd. ....................... Beverages & Tobacco 84,952 1,234,169
Sun International (South Africa) Ltd. .............. Leisure & Tourism 90,890 11,004
Tongaat-Hulett Group Ltd. .......................... Multi-Industry 92,081 526,177
Toyota South Africa Limited......................... Automobiles 12,000 30,993
------------
15,039,052
------------
SOUTH KOREA 7.0%
*Daegu Bank Co. Ltd. ............................... Banking 86,314 201,058
*Daewoo Electronics Co. ............................ Electrical & Electronics 20,200 89,154
*Dongkuk Steel Mill Co. Ltd. ....................... Metals & Mining 20,410 90,915
*Hankook Cosmetics Co. Ltd. ........................ Health & Personal Care 8,700 97,417
*Korea Electric Power Corp. ........................ Utilities Electrical & Gas 214,400 5,064,291
*Kyung Dong Boiler Co. Ltd. ........................ Energy Equipment & Services 8,154 67,978
LG Electronics Inc. ................................ Electrical & Electronics 162,871 1,644,019
*Saehan Precision Co. Ltd. ......................... Electrical & Electronics 17,288 259,998
*Samsung Display Devices Ltd. ...................... Electrical & Electronics 60,336 2,441,056
*Samsung Electronics Co. Ltd. ...................... Electrical & Electronics 1,878 132,312
Samsung Heavy Industries Co. Ltd. .................. Machinery & Engineering 23,746 104,416
*Shin Poong Paper Manufacturing Co. Ltd. ........... Forest Products & Paper 2,000 17,981
Shin Young Wocoal Inc. ............................. Textiles & Apparel 1,610 63,821
*Ssangyong Oil Refining Co. Ltd. ................... Chemicals 21,510 309,421
*Tong Yang Merchant Bank............................ Financial Services 7,149 31,436
------------
10,615,273
------------
SRI LANKA
Aitken Spence & Co. Ltd. ........................... Multi-Industry 46,533 66,256
------------
THAILAND 10.7%
Advanced Info Service Public Co. Ltd., fgn. ........ Telecommunications 134,000 933,548
*American Standard Sanitaryware Public Co. Ltd.
fgn. ............................................. Building Materials & Components 17,000 114,108
Ayudhya Insurance Public Co. Ltd., fgn. ............ Insurance 15,000 48,232
*Bangkok Bank Public Co. Ltd. ...................... Banking 84,500 105,851
</TABLE>
19
PAGE
TEMPLETON EMERGING MARKETS FUND, INC.
STATEMENT OF INVESTMENTS, FEBRUARY 28, 1999 (UNAUDITED) (CONT.)
<TABLE>
<CAPTION>
INDUSTRY SHARES VALUE
------------------------------------------------
<S> <C> <C> <C>
LONG TERM SECURITIES (CONT.)
THAILAND (CONT.)
*Bangkok Bank Public Co. Ltd., fgn. ................ Banking 161,000 $ 271,785
Bangkok Insurance Public Co. Ltd. .................. Insurance 19,800 66,318
Bangkok Insurance Public Co. Ltd., fgn. ............ Insurance 4,900 22,320
*Charoen Pokphand Feedmill Public Co. Ltd., fgn. ... Food & Household Products 143,800 183,025
*Dusit Thani Public Company Ltd., fgn. ............. Leisure & Tourism 74,500 55,895
*Hana Microelectronics Co. Ltd., fgn. .............. Electrical & Electronics 203,700 458,489
Industrial Finance Corp. of Thailand, fgn. ......... Financial Services 964,400 264,874
*Industrial Finance Corp. of Thailand, rts. ........ Financial Services 360,850 2,417
*Italian-Thai Development Public Co. Ltd., fgn. .... Construction & Housing 269,900 549,636
*Jasmine International Public Co. Ltd., fgn. ....... Telecommunications 876,000 194,823
*Land and House Public Co. Ltd. .................... Real Estate 462,536 235,482
*Land and House Public Co. Ltd., fgn. .............. Real Estate 186,100 104,719
National Petrochemical Public Company Ltd., fgn. ... Chemicals 702,100 333,930
*Regional Container Lines Public Co. Ltd. .......... Transportation 400 228
Regional Container Lines Public Co. Ltd., fgn. ..... Transportation 139,000 88,458
*Saha Union Public Co. Ltd. ........................ Multi-Industry 313,614 123,950
Saha Union Public Co. Ltd., fgn. ................... Multi-Industry 86,386 34,142
*Sanyo Universal Electric Public Co Ltd., fgn. ..... Appliances & Household Durables 6,000 1,479
*Serm Suk Public Co. Ltd. .......................... Food & Household Products 85,700 293,934
*Serm Suk Public Co. Ltd., fgn. .................... Food & Household Products 4,900 16,806
*SG Asia Credit Public Co. Ltd., fgn. .............. Financial Services 7,000 2,016
*Shinawatra Computer & Comm. Public Co. Ltd.,
fgn. ............................................. Electrical & Electronics 18,500 51,058
*Shinawatra Computer & Comm. Public Co. Ltd.,
rts. ............................................. Electrical & Electronics 18,500 43,623
*Siam Cement Public Co. Ltd. ....................... Building Materials & Components 128,065 1,873,620
Siam Cement Public Co. Ltd., fgn. .................. Building Materials & Components 59,135 1,223,264
Siam Makro Public Company Ltd., fgn. ............... Merchandising 438,100 815,861
*Thai Airways International Public Co. Ltd.,
fgn. ............................................. Transportation 406,800 534,116
*Thai Engine Manufacturing Public Company Ltd.,
fgn. ............................................. Machinery & Engineering 193,000 38,786
*Thai Farmers Bank Public Co. Ltd. ................. Banking 481,100 657,452
*Thai Farmers Bank Public Co. Ltd., fgn. ........... Banking 2,636,500 4,415,360
*Thai Petrochemical Industry Public Co. Ltd.,
fgn. ............................................. Chemicals 1,327,100 209,804
*Thai Rayon Public Co. Ltd. ........................ Textiles & Apparel 6,300 5,233
*Thai Telephone & Telecommunication Public Co. Ltd.,
fgn. ............................................. Telecommunications 713,400 95,579
*Tipco Asphalt Public Co. Ltd., fgn. ............... Building Materials & Components 169,000 296,610
*Total Access Communication Public Co. Ltd. ........ Telecommunications 374,000 774,180
*United Communications Industries, fgn. ............ Telecommunications 1,161,000 746,624
*United Standard Terminal Public Co. Ltd., fgn. .... Wholesale & International Trade 88,000 36,254
------------
16,323,889
------------
TURKEY 7.2%
Akbank.............................................. Banking 180,509,932 4,886,695
Arcelik AS, Br. .................................... Appliances & Household Durables 42,560,541 1,056,167
Erciyas Biracilik................................... Food & Household Products 354,000 25,955
*Eregli Demir ve Celik Fabrikalari AS............... Metals & Mining 83,886,250 842,138
*Eregli Demir ve Celik Fabrikalari AS, rts. ........ Metals & Mining 16,777,250 42,580
Finansbank, Br. .................................... Banking 392,190,215 3,317,882
</TABLE>
20
PAGE
TEMPLETON EMERGING MARKETS FUND, INC.
STATEMENT OF INVESTMENTS, FEBRUARY 28, 1999 (UNAUDITED) (CONT.)
<TABLE>
<CAPTION>
INDUSTRY SHARES VALUE
------------------------------------------------
<S> <C> <C> <C>
LONG TERM SECURITIES (CONT.)
TURKEY (CONT.)
Haci Omer Sabanci Holding AS........................ Multi-Industry 7,670,000 $ 179,521
*Turkiye Garanti Bankasi AS......................... Banking 17,171,325 629,492
------------
10,980,430
------------
VENEZUELA 2.1%
*Ceramica Carabobo CA, A, ADR....................... Building Materials & Components 20,973 14,600
Compania Anonima Nacional Telefonos de Venezuela,
ADR............................................... Telecommunications 69,000 1,073,813
Electricidad De Caracas Saica Saca, ADR............. Utilities Electrical & Gas 80,020 1,229,064
Mavesa SA, ADR...................................... Food & Household Products 222,900 766,219
Siderurgica Venezolana Sivensa Saica Services, A.... Metals & Mining 2,386,918 78,924
Siderurgica Venezolana Sivensa Saica Services, A,
ADR............................................... Metals & Mining 2,000 4,629
------------
3,167,249
------------
ZIMBABWE .1%
Delta Corp. ........................................ Multi-Industry 227,341 48,970
Meikles Africa Ltd. ................................ Multi-Industry 37,000 21,275
Zimbabwe Sun Ltd. .................................. Multi-Industry 106,688 6,268
------------
76,513
------------
TOTAL LONG TERM SECURITIES (COST $201,153,485)...... 150,523,588
------------
<CAPTION>
PRINCIPAL
AMOUNT
-----------
<S> <C> <C> <C>
SHORT TERM INVESTMENTS (COST $2,522,628) 1.6%
+U.S. Treasury Bills, 4.29% to 4.48%, with
maturities to 5/27/99............................. $2,535,000 2,522,456
------------
TOTAL INVESTMENTS (COST $203,676,113) 100.3%........ 153,046,044
OTHER ASSETS, LESS LIABILITIES (.3%)................ (469,747)
------------
TOTAL NET ASSETS 100.0%............................. $152,576,297
============
</TABLE>
CURRENCY ABBREVIATION:
ZAR -- South African Rand
*Non-income producing.
+Designates debt securities denominated in U.S. dollars unless otherwise
indicated.
See Notes to Financial Statements.
21
PAGE
TEMPLETON EMERGING MARKETS FUND, INC.
Financial Statements
STATEMENT OF ASSETS AND LIABILITIES
FEBRUARY 28, 1999 (UNAUDITED)
<TABLE>
<S> <C>
Assets:
Investments in securities, at value (cost $203,676,113).... $153,046,044
Cash....................................................... 40,556
Receivables:
Investment securities sold................................ 236,973
Dividends and interest.................................... 583,480
------------
Total assets.......................................... 153,907,053
------------
Liabilities:
Payables:
Investment securities purchased........................... 856,479
To affiliates............................................. 162,864
Distributions to shareholders.............................. 46,959
Accrued Expenses........................................... 264,454
------------
Total liabilities..................................... 1,330,756
------------
Net assets, at value........................................ $152,576,297
============
Net assets consist of:
Undistributed net investment income........................ $ 1,104,484
Net unrealized depreciation................................ (50,850,910)
Accumulated net realized loss.............................. (2,426,914)
Capital shares............................................. 204,749,637
------------
Net assets, at value........................................ $152,576,297
============
Net asset value per share ($152,576,297 / 17,651,129 shares
outstanding).............................................. $8.64
============
</TABLE>
See Notes to Financial Statements.
22
PAGE
TEMPLETON EMERGING MARKETS FUND, INC.
Financial Statements (continued)
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED FEBRUARY 28, 1999 (UNAUDITED)
<TABLE>
<S> <C> <C>
Investment Income:
(net of foreign taxes of $277,865)
Dividends.................................................. $ 1,972,697
Interest................................................... 696,044
-----------
Total investment income............................... $ 2,668,741
Expenses:
Management fees (Note 3)................................... 1,084,795
Administrative fees (Note 3)............................... 130,175
Transfer agent fees........................................ 12,800
Custodian fees............................................. 89,600
Reports to shareholders.................................... 74,600
Registration and filing fees............................... 28,600
Professional fees.......................................... 54,400
Directors' fees and expenses............................... 9,900
Other...................................................... 2,519
-----------
Total expenses........................................ 1,487,389
-----------
Net investment income........................... 1,181,352
-----------
Realized and unrealized gains (losses):
Net realized gain (loss) from:
Investments............................................... 360,127
Foreign currency transactions............................. (113,485)
-----------
Net realized gain..................................... 246,642
Net unrealized appreciation (depreciation) on:
Investments............................................... 37,716,745
Translation of assets and liabilities denominated in
foreign currencies...................................... (220,841)
-----------
Net unrealized appreciation........................... 37,495,904
-----------
Net realized and unrealized gain............................ 37,742,546
-----------
Net increase in net assets resulting from operations........ $38,923,898
============
</TABLE>
See Notes to Financial Statements.
23
PAGE
TEMPLETON EMERGING MARKETS FUND, INC.
Financial Statements (continued)
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS ENDED
FEBRUARY 28, 1999 YEAR ENDED
(UNAUDITED) AUGUST 31, 1998
---------------------------------------
<S> <C> <C>
Increase (decrease) in net assets:
Operations:
Net investment income..................................... $ 1,181,352 $ 4,311,591
Net realized gain from investments and foreign currency
transactions............................................ 246,642 78,186,635
Net unrealized appreciation (depreciation) on
investments.............................................. 37,495,904 (205,907,624)
---------------------------------------
Net increase (decrease) in net assets resulting from
operations............................................ 38,923,898 (123,409,398)
Distributions to shareholders from:
Net investment income..................................... (4,872,098) (4,385,151)
Net realized gains........................................ (71,586,456) (36,081,159)
Capital share transactions (Note 2)........................ 7,759,213 4,225,187
---------------------------------------
Net decrease in net assets.............................. (29,775,443) (159,650,521)
Net assets:
Beginning of period........................................ 182,351,740 342,002,261
---------------------------------------
End of period.............................................. $152,576,297 $ 182,351,740
=======================================
Undistributed net investment income included in net assets:
End of period.............................................. $ 1,104,484 $ 4,795,230
======================================
</TABLE>
See Notes to Financial Statements.
24
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, diversified investment company.
The Fund seeks long-term capital appreciation by investing primarily 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.
Certain countries in which the Fund invests have imposed restrictions on the
repatriation of their currencies. Other countries have previously instituted
currency exchange controls in the past during periods of serious imbalance in
their balance of payments or upon the occurrence of other destabilizing events.
Exchange control regulations may restrict the Fund's ability to convert
investment income, capital, or the proceeds of securities into U.S. dollars. As
of February 28, 1999, the Fund has investments with a value of approximately
$7.6 million in countries with restrictions on the repatriation of their
currencies or formal exchange controls currently in place.
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.
25
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, 1999, there were 30 million shares authorized ($0.01 par value).
During the period ended February 28, 1999 and the year ended August 31, 1998,
850,791 and 252,599 shares were issued for $7,759,213 and $4,225,187 from
reinvested distributions, respectively.
3. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES
Certain officers of the Fund are also officers or directors of Templeton Asset
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.
Legal fees of $24,817 were paid to a law firm in which a partner is an officer
of the Fund.
4. INCOME TAXES
At February 28, 1999, the net unrealized appreciation based on the cost of
investments for income tax purposes of $204,961,353 was as follows:
<TABLE>
<S> <C>
Unrealized appreciation..................................... $ 24,650,441
Unrealized depreciation..................................... (76,565,750)
------------
Net unrealized depreciation................................. $(51,915,309)
============
</TABLE>
26
PAGE
TEMPLETON EMERGING MARKETS FUND, INC.
Notes to Financial Statements (unaudited) (continued)
5. INVESTMENT TRANSACTIONS
Purchases and sales of securities (excluding short-term securities) for the
period ended February 28, 1999 aggregated $17,472,204 and $29,806,404,
respectively.
27
PAGE
TEMPLETON EMERGING MARKETS FUND, INC.
Annual Meeting of Shareholders, February 16, 1999
An Annual Meeting of Shareholders of the Fund was held at the Fund's offices,
500 E. Broward Blvd., Ft. Lauderdale, Florida, on February 16, 1999. The purpose
of the meeting was to elect six 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, 1999; and in their discretion, to authorize the
proxyholders to vote upon such other 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: Harris J.
Ashton, Nicholas F. Brady, Frank J. Crothers, S. Joseph Fortunato, Edith E.
Holiday and Constantine D. Tseretopoulos.* Shareholders ratified the selection
of McGladrey & Pullen, LLP, to serve as the Fund's independent auditors for the
fiscal year ending August 31, 1999. No other business was transacted at the
meeting.
The results of the voting at the Annual Meeting are as follows:
1. The election of six (6) Directors:
<TABLE>
<CAPTION>
% OF % OF
OUTSTANDING OUTSTANDING
TERM EXPIRING 2001: FOR SHARES WITHHELD SHARES
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Constantine D. Tseretopoulos................................ 11,988,699 67.92% 305,757 1.73%
TERM EXPIRING 2002:
- --------------
Harris J. Ashton............................................ 12,025,886 68.13% 268,570 1.52%
Nicholas F. Brady........................................... 12,024,038 68.12% 270,418 1.53%
Frank J. Crothers........................................... 11,996,724 67.96% 297,732 1.69%
S. Joseph Fortunato......................................... 12,008,398 68.03% 286,058 1.62%
Edith E. Holiday............................................ 12,017,189 68.08% 277,267 1.57%
</TABLE>
2. The ratification of the selection of McGladrey & Pullen, LLP, as independent
auditors of the Fund for the fiscal year ending August 31, 1999:
<TABLE>
<CAPTION>
% OF % OF % OF % OF
OUTSTANDING OUTSTANDING OUTSTANDING BROKER OUTSTANDING
FOR SHARES AGAINST SHARES ABSTAIN SHARES NON-VOTES SHARES
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
12,077,730.. 68.42% 89,237 0.51% 127,489 0.72% -- --
</TABLE>
*Harmon E. Burns, John Wm. Galbraith, Andrew H. Hines, Jr., Charles B. Johnson,
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 that 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 charge 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.
29
PAGE
TEMPLETON EMERGING MARKETS FUND, INC.
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
1-800/416-5585.
The daily closing net asset value as of the previous business day may be
obtained when available by calling Franklin Templeton Fund Information after 7
a.m. pacific time any business day at 1-800/DIAL BEN(R) (1-800/342-5236). The
Fund's net asset value and dividends are also listed on the NASDAQ Stock Market,
Inc.'s Mutual Fund Quotation Service ("NASDAQ MFQS").
Shareholders not receiving copies of the Reports to Shareholders because their
shares are registered in the name of a broker or a custodian can request that
they 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.
30
PAGE
This page intentionally left blank.
PAGE
This page intentionally left blank.
PAGE
LITERATURE REQUEST
For a free brochure and prospectus, which contain more complete information,
including charges and expenses, call Franklin Templeton Fund Information at
1-800/DIAL BEN(R) (1-800/342-5236). Please read the prospectus carefully before
investing or sending 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
Mutual Discovery 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
Mutual European Fund
Templeton Global Bond Fund
Templeton Growth and Income Fund
GLOBAL INCOME
Franklin Global Government Income Fund
Franklin Templeton Global Currency Fund
Franklin Templeton Hard 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
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 Utilities Fund
Franklin Value Fund
Mutual Beacon Fund
Mutual Financial Services Fund
Mutual Qualified Fund
Mutual Shares Fund
Fund Allocator Series
Franklin Templeton Conservative Target Fund
Franklin Templeton Moderate Target Fund
Franklin Templeton Growth Target Fund
INCOME
Franklin Adjustable U.S. Government Securities Fund
Franklin's AGE High Income Fund
Franklin Bond Fund
Franklin Floating Rate Trust
Franklin Investment Grade Income Fund
Franklin Short-Intermediate U.S. Government Securities Fund
Franklin Strategic Income Fund
Franklin U.S. Government Securities Fund
Franklin Federal Money Fund
Franklin Money 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**
California**
Colorado
Connecticut
Florida**
Georgia
Kentucky
Louisiana
Maryland
Massachusetts+
Michigan+
Minnesota+
Missouri
New Jersey
New York**
North Carolina
Ohio+
Oregon
Pennsylvania
Tennessee***
Texas
Virginia
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
plan 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. The Franklin Valuemark Funds are managed by Franklin
Advisers, Inc. and its Templeton and Franklin affiliates.
PAGE
SEMIANNUAL REPORT
TEMPLETON EMERGING MARKETS FUNDS, INC.
100 Fountain Parkway
P.O. Box 33030
St. Petersburg, Florida 33733-8030
TRANSFER AGENT
ChaseMellon Shareholder Services, L.L.C.
85 Challenger Road
Overpeck Centre
Ridgefield Park, NJ 07660
1-800/416-5585
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
value of the Fund's portfolio will be subject to the risk of loss from market,
currency, economic, political and other factors. The Fund and its investors are
not protected from such losses by the Investment Manager. Therefore, investors
who cannot accept this 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 S99 04/99 [RECYCLE LOGO] Printed on recycled paper
