<PAGE>
Templeton Developing
Markets Trust
[PHOTO] Dr. Mobius has been living overseas since earning his
Ph.D. in economics and political science at
Massachusetts Institute of Technology in 1964. During
J. Mark Mobius, Ph.D. his extensive travels, he has acquired a thorough
President knowledge of the business practices and customs that are
Templeton Developing unique to developing nations. Together with his team of
Markets Trust Templeton analysts, Dr. Mobius currently oversees more
- --------------------- than $7 billion in emerging markets investments for the
Templeton Group of Funds.
- --------------------------------------------------------------------------------
Mutual Funds, annuities, and other investment products:
. are not FDIC insured;
. are not deposits or obligations of, or guarantee by, any financial
institution;
. are subject to investment risks, including possible loss of the principal
amount invested.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Your Fund's Objective
The Templeton Developing Markets Trust seeks long-term capital appreciation by
investing in securities of issuers of countries having developing markets.
- --------------------------------------------------------------------------------
August 25, 1995
Dear Shareholder:
We are pleased to bring you the fourth semi-annual report of the Templeton
Developing Markets Trust, which covers the period ended June 30, 1995. The first
six months of this year were a turbulent time for emerging markets. According to
Lipper Analytical Services, Inc. the average Emerging Market fund posted a total
return of -11.22% for the first quarter, +8.56% for the second quarter, and
- -3.21% for the period as a whole.* Your Fund, as shown in the Performance
Summary on page 5, earned a total return of +1.91%. While short-term volatility
can be disconcerting, declines of as much as 40% to 50% are not
Source: Lipper Analytical Services is an independent research firm. These
figures are an average of total returns of 48, 56, and 52 Emerging Market funds
for first quarter, second quarter, and six-month periods, respectively, and do
not reflect the effect of sales charges.
1
<PAGE>
unusual in emerging markets. In fact, the Hong Kong market has suffered nine
declines of more than 20% during the last 15 years, but has increased 1000%
during that time. As you can see in the Performance Summary, the Fund's total
return since its inception on 10/17/91 was more than 47%.
By June 30, 1995, 72.6% of the Fund's total net assets were invested in
equities, with the remaining 27.4% in short-term obligations and other net
assets (as compared to 36% on December 31, 1994). The equity investments were
well-diversified across 29 markets, with no market accounting for more than 18%
of the Fund's total net assets. The largest portion was in Asia (36.1%),
followed by Latin America (19.2%), Europe (15.7%), South Africa (1.3%) and the
Middle East (0.3%).
During the six months under review, we substantially increased our investments
in Hong Kong, which as of June 30th, accounted for 17.2% of the Fund's total net
assets. In 1994, rising U.S. interest rates and the slowing Chinese economy
negatively impacted the Hong Kong market. However, during the reporting period,
U.S. long-term interest rates fell significantly and indicators show signs of
more stable economic growth in China. We believe that fears surrounding Hong
Kong's reversion to China in 1997 are already reflected in present market
val-
- --------------------------------------------------------------------------------
Templeton Developing Markets Trust
Asset Allocation on 6/30/95
Based on Total Net Assets
[PIE CHART APPEARS HERE] Equity 72.6%
Short-Term Obligations
Other Net Assets 27.4%
uations and that Hong Kong companies are selling at low prices in comparison
with their counterparts elsewhere. With confidence in China's economic prospects
restored, and political concerns about 1997 receding, we anticipate that the
performance of this market should continue to be a realistic reflection of Hong
Kong's strong economic fundamentals.
The Turkish market, driven by falling interest rates and a strong currency, also
performed well in the first half of 1995. Turkey has reduced customs barriers
with other European nations, and we expect corporate earnings there to improve
in the future. Since it is well-situated to export to the European market and to
take advantage of Central Asia's expected economic growth, we are opti-
2
<PAGE>
mistic about our Turkish holdings, which on June 30th, represented 5.3% of total
net assets.
In Latin America, Argentina's macroeconomic and political fundamentals continued
to strengthen. A combination of external aid and internal government action
overcame the liquidity crisis in its banking system, and strong first-round
election results for the Menem administration have paved the way for accelerated
economic reform. Believing the country's long-term growth prospects have
improved, we have substantially increased our investments there.
During the period, Brazil experienced currency fluctuations, rising inflation,
and a rising trade imbalance. Many are, therefore, proclaiming the demise of the
Real Plan (Brazil's economic program). We believe that this prediction is
premature and that credit restrictions and the quenching of consumer demand can
effectively slow the economy. Encouraged by the progress Brazil's Congress has
made regarding Constitutional reforms and by the government's firming up of its
privatization plans, we maintain a favorable outlook concerning the Real Plan.
Although Mexico's devaluation of its Peso last year took the shine off emerging
markets for many investors, our long-term outlook remains positive, and as a
result of additional investments and capital appreciation during
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Templeton Developing
Markets Trust
Top 10 Countries Represented in the Trust on 6/30/95
Based on Total Net Assets
% of Total
Country Net Assets
- --------------------------------------------------------------------------------
<S> <C>
Hong Kong 17.2%
- --------------------------------------------------------------------------------
Brazil 8.0%
- --------------------------------------------------------------------------------
Mexico 6.2%
- --------------------------------------------------------------------------------
Turkey 5.3%
- --------------------------------------------------------------------------------
Spain 4.5%
- --------------------------------------------------------------------------------
Portugal 4.4%
- --------------------------------------------------------------------------------
Greece 4.2%
- --------------------------------------------------------------------------------
Argentina 3.6%
- --------------------------------------------------------------------------------
Philippines 3.6%
- --------------------------------------------------------------------------------
Malaysia 2.3%
- --------------------------------------------------------------------------------
</TABLE>
the period, our Mexican investments increased from 3.9% to 6.2% of the Fund's
total net assets.
Looking forward, we shall continue to search for the best investment values in
emerging markets throughout the world. Our work in seeking to achieve this
objective has resulted in a well-diversified portfolio. We anticipate that the
Fund's holdings will become even more diversified as we continue our efforts to
take advantage of new opportunities in new markets.
It should be remembered, of course that investing in emerging markets involves
special considerations which may include risks related to market and currency
volatility,
3
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Templeton Developing
Markets Trust
Top 10 Holdings on 6/30/95
Based on Total Net Assets
% of Total
Company, Industry Net Assets
- --------------------------------------------------------------------------------
<S> <C>
Cheung Kong Holdings Ltd., Multi-Industry 2.8%
- --------------------------------------------------------------------------------
Telefonos de Mexico SA
Telecommunications 2.6%
- --------------------------------------------------------------------------------
HSBC Holdings PLC, Banking 2.4%
- --------------------------------------------------------------------------------
Philippine Long Distance Telephone Co.,
Telecommunications 2.0%
- --------------------------------------------------------------------------------
Centrais Eletricas Brasileiras SA,
Utilities-Electrical & Gas 1.8%
- --------------------------------------------------------------------------------
Banco Bilbao Vizcaya SA, Banking 1.8%
- --------------------------------------------------------------------------------
Sun Hung Kai Properties Ltd., Real Estate 1.8%
- --------------------------------------------------------------------------------
Banco Comercial Portugues SA, Banking 1.7%
- --------------------------------------------------------------------------------
New World Development Co. Ltd., Real Estate 1.7%
- --------------------------------------------------------------------------------
Bankinter SA, Banking 1.6%
- --------------------------------------------------------------------------------
</TABLE>
For a detailed listing of portfolio holdings, see page 12 of this report.
adverse social and political developments, and the relatively small size and
lesser liquidity of these markets. These special risks and other considerations
are discussed in the Fund's prospectus.
In closing, we would like to mention that although Sir John Templeton has not
been involved in investment management of the Templeton Funds since October
1992, we were saddened by his recent decision to step down as Chairman and
Director of the U.S.-registered Templeton funds. The Fund's Board of Trustees
have elected John Wm. Galbraith, former vice chairman of Templeton, Galbraith &
Hansberger, Ltd. to succeed him. The investment manager will continue to use the
investment philosophies and principles established by Sir John.
We thank you for investing in the Templeton Developing Markets Trust, appreciate
your support and welcome your comments.
4
<PAGE>
- --------------------------------------------------------------------------------
Performance Summary
As of May 1, 1995, your fund now offers two classes of shares, designated as
"Class I" and "Class II." Class I shares will continue to have the same pricing
structure, which is the standard front-end sales charge (with breakpoints).
Class II shares have a different pricing structure, with a lower initial sales
charge than Class I shares. Also, with certain exceptions, a contingent deferred
sales charge (back-end sales charge) will generally be assessed on Class II
shares redeemed within 18 months of purchase. The different expenses borne by
each class of shares will result in different net asset values, dividends and,
ultimately, different total performance. Class II share total returns are not
shown below, as these shares have not been available for a sufficient period of
time. Please see the prospectus for more details regarding Class I and Class II
shares.
The Fund's total return for Class I shares for the six months ended June 30,
1995 was 1.91%. For the one-year period ended June 30, 1995, total return for
Class I shares was 2.99%. Total return measures the change in value of an
investment, assuming reinvestment of dividends and capital gains distributions,
and does not include the maximum initial sales charge.
The Fund's Class I share price, as measured by net asset value, increased to
$13.60 on June 30, 1995, from $13.42 on December 31, 1994. The fund's Class II
share price, as measured by net asset value, was $13.10 on May 1, 1995 (the
Class II inception date) and ended the reporting period at $13.58. Class I
shareholders received distributions of .5 cents ($.005) per share in income
dividends and 6.5 cents ($.065) in long-term capital gains. Distributions may
vary, however, depending on income earned by the Fund and any profits realized
from the sale of securities in the portfolio. And, of course, past performance
is not predictive of future results.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Templeton Developing
Markets Trust
Periods ended June 30, 1995
Class I Shares
Since
Inception
1-year 3-year (10/17/91)
<S> <C> <C> <C>
Cumulative
Total Return/1/ 2.99% 44.41% 47.23%
Average Annual
Total Return/2/ -2.93% 10.83% 9.23%
</TABLE>
1. Cumulative total return measures the change in value of an investment over
the periods indicated and does not include the maximum 5.75% initial sales
charge for Class I Shares.
2. Average annual total return represents the average annual change in value of
an investment over the specified periods. The figures have been restated to
reflect the maximum 5.75% initial sales charge for Class I Shares.
All total return calculations reflect the deduction of a proportional share of
Fund expenses on an annual basis and assume that all dividends and capital gains
distributions were reinvested when paid. From October 17, 1991 to December 31,
1992 expense limitations increased the Fund's total return.
Class II Shares, which the fund began offering on May 1, 1995, are subject to
different fees and expenses, which will affect their performance. Please see the
prospectus for more details regarding Class I and Class II shares.
Investment return and principal value will fluctuate, so that your shares, when
redeemed, may be worth more or less than their original cost. Past performance
is not predictive of future results.
- --------------------------------------------------------------------------------
5
<PAGE>
A Closer Look at the Philippines by Dr. Mark Mobius.
Almost everything people had to say about the Philippines was negative when our
first emerging markets fund started investing there in 1987. The talk then was
of power outages, natural disasters, poor telephone services, and political
instability. For example, when I told my Philippine friends that I was going to
invest in the Philippine Long Distance Telephone Company (PLDT), that nation's
main provider of telephone services, they expressed horror that we would invest
in what was then an inefficient and bureaucratic organization which kept
applicants for telephone installations waiting for many years. At that time, the
standard joke about PLDT was: "About 10% of the Philippine people have
telephones and of that 10%, 90% are still waiting for a dial tone."
All this and more was keeping the country's economic development well behind its
Southeast Asian neighbors, despite its strong natural resource base and well-
educated, English-speaking business class eager to do business with the outside
world. But there has been a transformation, and this country, which for so long
had been heavily dependent on costly foreign borrowings and foreign aid to cover
chronic balance of payment deficits, now wins praise from many multilateral
financial organizations for its astute monetary policy. The Philippines seems to
be rightly taking its place with the other Asian "tigers."
Since taking office in 1992, President Fidel V. Ramos has given the country
strong democratic leadership, much-needed political stability and a set of pro-
business economic reforms that have turned it into one of the world's most
exciting emerging markets. At last, the Philippines is starting to reach its
vast potential, and with its fully convertible currency and stable exchange
rates, the potential investment outlook for its many strong companies appears
solid for the years ahead.
Although Philippine Gross National Product (GNP) was shrinking in real terms in
1991, in 1995 the economy appears to be on target to exceed 5% growth for the
second consecutive year. Within five
6
<PAGE>
[MAP OF THE PHILIPPINES APPEARS HERE]
years, inflation has fallen from about 18% to below 10%, and local banks'
nominal lending rates have declined from 24% to about 16%. The latter is
especially important for earnings growth, because it means companies can borrow
money for expansion more cheaply and can devote less of their cash flow to
interest payments. This more favorable business climate has brought unemployment
down from 11% to 8% since 1991.
The world has noticed this good news, and has poured private capital into the
Philippines in record amounts. The July 1992 Brady Agreement restructuring the
country's external commercial debt service ratios, which were by far the highest
of the developing Pacific Rim nations, was a key turning point. By early 1993,
the government was able to resume sovereign borrowing in international capital
markets. Key companies like PLDT and the Philippine National Bank then launched
corporate borrowing programs in the Euromarkets in 1994. Since 1993, well over
$1.4 billion of Philippine sovereign and corporate international bonds have been
issued. In the process, the local equity market has also turned into a hotbed of
activity. 1995 could be the second straight year in which Philippine companies
collectively raise about $1 billion via initial public offerings, global
depository receipts, and rights issues. Although a substantial, domestic
shareholder class is emerging, foreign investors have grown confident enough to
let their capital play a major role in fueling the market's growth. In terms of
both market capitalization and daily trading volume, the Philippine Stock
Exchange (PSE) is now comparable to, or even slightly bigger than, its
counterpart in neighboring Indonesia, where the population and overall economy
are much larger.
7
<PAGE>
The establishment of the PSE in March 1994 through the unification of the Manila
and Makati exchanges was a major achievement. These two exchanges had been
fierce rivals, and a great deal of persuasion and gentle arm-twisting was
necessary to bring them together. The merger was many years in the making,
requiring extensive negotiations between brokers determined to defend their
traditional turfs. In the past, the lack of computer links and harmonized
operations were hindrances that added considerably to foreign investors' cost of
doing business. Now there is a computerized "one market, two floors" system that
is far more efficient than its predecessor.
This fall the PSE expects to install a depository system with advanced
technology that should meet "T+3" standards for a three-day settlement period.
It will shorten the time needed for payment and delivery of securities, and is
the kind of thing that I have long recommended to emerging-market securities
regulators world-wide. The challenge, now, for the Philippines is to reach the
next level of capital market development in Asia. I believe it can happen.
Remember that since 1983, market capitalization has risen from $22.7 billion to
$205 billion in Malaysia and from $1.5 billion to $127.9 billion in Thailand.
The current market capitalization of the Philippines market, currently about $50
billion, could grow rapidly.
Privatization is presenting many opportunities in the Philippines, as it is in
other emerging markets. Last summer, the Ramos government raised $373 million by
selling one billion shares in Petron, its giant oil refinery and distribution
company, to investors at home and abroad. It was the largest equity offering in
Philippine history, and put another stock on the market in the same league as
traditional heavyweights like PLDT and San Miguel Corp., the food and beverage
industry leader. Now there are plans to sell sizable pieces of government
holdings in such firms as the Philippine National Bank, the Development Bank of
the Philippines, National Steel Corp., National Power Corp., and Philippine
National Oil Company. Since other private companies will probably be lining up
to do initial public offerings in Manila, there should be many more securities
to choose from soon, just as there are many more now than there were a few years
ago when we began buying there.
8
<PAGE>
There is, however, one big obstacle to this country's economic goals: physical
infrastructure. The roads, airports, electric power and other facilities the
Ramos administration inherited were grossly inadequate, suffering from years of
official neglect and heavy use by a fast-growing population. The government
didn't have enough money to meet reconstruction needs, and has, wisely, I
believe, rewritten its investment and regulatory codes to help attract private
foreign capital for the top priority area of power generation. Its track record
in this regard is impressive, with 35 contracts signed with private power
developers, which should increase the present installed capacity by about 75% by
the end of the decade. Every effort is now being made to attract investors into
the Philippines for private tollroads, ports, railroads, mass transit systems
and telecommunications projects. Given the current lack of a local, long-term
debt market, this won't be easy. But the government, realizing its need to
attract $50 billion in new private infrastructure investment over the next ten
years in an effort to reach development goals, is working closely with the World
Bank and others to accomplish this. In the process, we could see many new
opportunities in the Philippines for our shareholders.
When I look at the Philippines, I see a country with sustained economic growth
led by booming foreign investment and strong international demand for its
increasingly competitive export projects. The potential outlook appears positive
for increased corporate earnings in this exciting new environment. Industries
like manufacturing, electronics and agroprocessing are all coming alive.
However, finding the best investment bargains will be challenging. The market's
aggregate Price/Earnings ratio is high, at 18.7 times, but we will continue to
seek the best values we can find for our shareholders.
Sincerely,
/s/ J. Mark Mobius
J. Mark Mobius, Ph.D.
President
Templeton Developing Markets Trust
9
<PAGE>
Templeton Developing Markets Trust
Financial Highlights
- --------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE
(For a share outstanding throughout the period)
<TABLE>
<CAPTION>
CLASS I
---------------------------------------------------------------
SIX MONTHS OCTOBER 17, 1991
ENDED YEAR ENDED DECEMBER 31 (COMMENCEMENT
JUNE 30, 1995 ------------------------------ OF OPERATIONS) TO
(UNAUDITED) 1994 1993 1992 DECEMBER 31, 1991
------------- ---------- ---------- -------- -----------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $ 13.42 $ 15.27 $ 8.86 $ 10.02 $ 10.00
---------- ---------- ---------- -------- -------
Income from investment
operations:
Net investment income .16 .14 .04 .08 .01
Net realized and
unrealized gain (loss) .09 (1.44) 6.55 (1.06) .03
---------- ---------- ---------- -------- -------
Total from investment
operations .25 (1.30) 6.59 (.98) .04
---------- ---------- ---------- -------- -------
Distributions:
Dividends from net
investment income (.01) (.12) (.05) (.07) (.01)
Distributions from net
realized gains (.06) (.43) (.13) (.11) --
Distributions from
other sources -- -- -- -- (.01)
---------- ---------- ---------- -------- -------
Total distributions (.07) (.55) (.18) (.18) (.02)
---------- ---------- ---------- -------- -------
Change in net asset
value .18 (1.85) 6.41 (1.16) .02
---------- ---------- ---------- -------- -------
Net asset value, end of
period $ 13.60 $ 13.42 $ 15.27 $ 8.86 $ 10.02
========== ========== ========== ======== =======
TOTAL RETURN* 1.91% (8.64)% 74.50% (9.75)% 0.40%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of
period (000) $2,133,488 $2,009,154 $1,396,392 $180,189 $23,744
Ratio of expenses to
average net assets 2.13%** 2.11% 2.20% 2.52% 3.78%**
Ratio of expenses, net
of reimbursement, to
average net assets 2.13%** 2.11% 2.20% 2.25% 2.25%**
Ratio of net investment
income to average
net assets 2.60** 1.08% 0.57% 1.30% 0.86%**
Portfolio turnover rate 5.09% 18.57% 16.01% 21.98% --
</TABLE>
*TOTAL RETURN DOES NOT REFLECT SALES COMMISSIONS. NOT ANNUALIZED FOR PERIODS
OF LESS THAN ONE YEAR.
**ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
10
<PAGE>
Templeton Developing Markets Trust
Financial Highlights (cont.)
- --------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE
(For a share outstanding throughout the period)
<TABLE>
<CAPTION>
CLASS II
--------------
FOR THE PERIOD
MAY 1, 1995+
THROUGH
JUNE 30, 1995
(UNAUDITED)
--------------
<S> <C>
Net asset value, beginning of period $13.10
------
Income from investment operations:
Net investment income .04
Net realized and unrealized gain .44
------
Total from investment operations .48
------
Net asset value, end of period $13.58
======
TOTAL RETURN* 3.66%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000) $6,393
Ratio of expenses to average net assets 2.73%**
Ratio of net investment income to average net assets 2.51%**
Portfolio turnover rate 5.09%
</TABLE>
*TOTAL RETURN DOES NOT REFLECT SALES COMMISSIONS OR THE DEFERRED CONTINGENT
SALES CHARGE. NOT ANNUALIZED FOR PERIODS OF LESS THAN ONE YEAR.
**ANNUALIZED.
+COMMENCEMENT OF OFFERING OF SALES.
SEE NOTES TO FINANCIAL STATEMENTS.
11
<PAGE>
Templeton Developing Markets Trust
Investment Portfolio, June 30, 1995 (unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES/PRINCIPAL IN
INDUSTRY LOCAL CURRENCY VALUE
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------------
LONG TERM SECURITIES: 72.6%
- -------------------------------------------------------------------------------------------
Argentina: 3.6%
Banco de Galicia y
Buenos Aires SA, B Banking 2,329,550 $ 9,250,626
Banco del Sud SA, B Banking 202,000 1,252,713
Banco Frances del Rio
de la Plata SA Banking 1,365,000 8,192,048
Ciadea SA Automobiles 726,000 3,521,980
**Comercial de Plata SA Multi-Industry 4,309,800 10,690,977
Compania Naviera Perez
Companc SA, B Energy Sources 4,439,395 18,650,122
**Industrias
Petroquimicas Koppers Chemicals 1,224,104 4,897,640
Molinos Rio de Plata
SA, B Food & Household Products 1,578,931 9,017,950
Nobleza Piccardo Sdad
Industrial Comercial
y Financial Multi-Industry 62,692 257,101
Sevel Argentina SA, C Automobiles 1,523,832 2,819,794
Transportadora de Gas
del Sur SA, B Energy Sources 960,717 1,969,962
YPF Sociedad Anonima,
ADR Energy Sources 341,000 6,436,375
Zanella Hermanos SA Automobiles 931,434 218,942
--------------
77,176,230
- -------------------------------------------------------------------------------------------
Bangladesh: 0.1%
BOC Bangladesh Ltd. Building Materials & Components 33,600 137,852
- -------------------------------------------------------------------------------------------
Bolivia: 0.2%
Compania Boliviana de
Energia Electricas SA Utilities Electrical & Gas 114,200 3,397,450
- -------------------------------------------------------------------------------------------
Brazil: 8.0%
Banco Bradesco SA Banking 781,769,691 5,817,623
**Banco Bradesco SA BBD
Ord Rights Offer
Expires 7/14/95 Banking 14,117,207 767
Banco Bradesco SA, pfd. Banking 465,833,041 3,947,309
**Banco Bradesco SA,
rts. Banking 8,412,019 9,139
Banco do Brasil SA Banking 78,907,800 840,083
Banco do Brazil SA,
pfd. Banking 398,511,120 4,762,219
Banespa-Banco do Estado
de Sao Paulo SA, pfd. Banking 682,036,650 3,778,802
Brasmotor SA, pfd. Multi-Industry 15,142,231 2,796,501
**+Cia Mesbla SA, pfd. Merchandising 75,117,000 4,488,251
Confab Industrial SA,
pfd. Industrial Components 2,302,680 1,701,056
Copene-Petroquimica do
Nordeste SA, A, pfd. Chemicals 8,814,550 6,894,596
Duratex SA, pfd. Forest Products & Paper 21,335,000 1,042,993
Centrais Eletricas
Brasileiras SA,
B, pfd. Utilities Electrical & Gas 143,773,847 38,735,376
Itausa-Investimentos
Itau SA, pfd. Multi-Industry 37,366,579 21,027,581
Light SA Utilities Electrical & Gas 15,770,000 4,968,278
</TABLE>
12
<PAGE>
Templeton Developing Markets Trust
Investment Portfolio, June 30, 1995 (unaudited) (cont.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES/PRINCIPAL IN
INDUSTRY LOCAL CURRENCY VALUE
<S> <C> <C> <C>
- --------------------------------------------------------------------------------------------
LONG TERM SECURITIES (CONT.)
- --------------------------------------------------------------------------------------------
Brazil (cont.)
Mannesmann SA Machinery & Engineering 182,010 $ 47,653
Mannesmann SA, pfd. Machinery & Engineering 2,457,562 643,718
Marcopolo SA, B, pfd. Automobiles 10,371,400 1,746,181
Petrobras-Petroleo
Brasileiro SA, pfd. Energy Sources 280,349,033 23,755,812
Refripar-Refrigeracao
Parana SA, pfd. Appliances & Household Durables 632,250,000 1,229,470
Telebras-
Telecomunicacoes
Brasileiras SA Telecommunications 501,255,294 14,212,670
Telebras-
Telecomunicacoes
Brasileiras SA, pfd. Telecommunications 394,151,973 13,145,536
Telecomunicacoes do Rio
de Janeiro SA, pfd. Telecommunications 13,348,703 667,073
Telecomunicacoes de Sao
Paulo SA Telecommunications 3,330,023 423,262
Telecomunicacoes de Sao
Paulo SA, pfd. Telecommunications 26,157 3,239
Unibanco-Uniao de
Bancos Brasileiros
SA, pfd. Banking 118,744,186 2,840,572
Vale de Rio Doce, pfd. Metals & Mining 82,926,650 12,432,241
--------------
171,958,001
- --------------------------------------------------------------------------------------------
Chile: 0.2%
Antofagasta Holdings
PLC Metals & Mining 898,550 4,614,689
- --------------------------------------------------------------------------------------------
China: 1.1%
China First Pencil Co.
Ltd., B Recreation, Other Consumer Goods 372,000 93,000
China Southern Glass
Co. Ltd., B Multi-Industry 440,000 278,632
**China Textile
Machinery Co. Ltd., B Machinery & Engineering 2,115,100 274,963
+Chiwan Wharf Holdings
Ltd., B Transportation 3,020,000 1,502,623
Guangzhou Shipyard
International Co.
Ltd., H Machinery & Engineering 3,816,000 1,602,781
Luoyang Glass Co. Ltd.,
H Misc Materials & Commodities 2,403,000 1,218,922
Shandong Huaneng Power Utilities Electrical & Gas 281,800 2,148,725
Shanghai Chlor-Alkali
Chemical Co. Ltd., B Chemicals 9,796,800 2,272,858
Shanghai Erfangji
Textile Machinery Co.
Ltd., B Machinery & Engineering 7,248,600 1,072,793
Shanghai Industrial
Sewing Machine Corp. Machinery & Engineering 3,573,700 657,561
Shanghai Jin Jiang
Tower Co. Ltd., B Leisure & Tourism 1,295,000 414,400
Shanghai Jinqiao Export
Processing Zone
Development, B Real Estate 3,699,400 1,775,712
Shanghai Lian Hua Fibre
Corp., B Textiles & Apparel 798,360 191,606
Shanghai Lujiaxui
Finance & Trade Zone
Dev Stock Co. Ltd., B Real Estate 1,194,000 838,188
Shanghai Narcissus
Electric Appliances
Co. Ltd., B Appliances & Household Durables 670,000 174,200
</TABLE>
13
<PAGE>
Templeton Developing Markets Trust
Investment Portfolio, June 30, 1995 (unaudited) (cont.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES/PRINCIPAL IN
INDUSTRY LOCAL CURRENCY VALUE
<S> <C> <C> <C>
- --------------------------------------------------------------------------------------------
LONG TERM SECURITIES (CONT.)
- --------------------------------------------------------------------------------------------
China (cont.)
Shanghai Pechemical Co.
Ltd., H Chemicals 8,108,000 $ 2,541,019
Shanghai Refrigerator
Compressor Co. Ltd., B Industrial Components 320,000 114,560
**Shanghai Rubber Belt
Co. Ltd., B Industrial Components 600,480 86,469
Shanghai Steel Tube Co.
Ltd., B Machinery & Engineering 1,273,800 216,546
Shanghai Tyre & Rubber
Co. Ltd., B Industrial Components 1,554,000 466,200
Shanghai Vacuum
Electron Devices Co.
Ltd., B Appliances & Household Durables 1,086,000 221,544
Shanghai Wingsung
Stationery Co. Ltd., B Recreation, Other Consumer Goods 485,400 94,653
Shanghai Yaohua
Pilkington Glass, B Building Materials & Components 2,980,600 2,980,600
Shenzhen China Bicycles
Co. (Holdings) Ltd., B Recreation, Other Consumer Goods 1,272,000 410,970
Shenzhen Gintian
Industrial Co. Ltd., B Multi-Industry 743,600 307,519
Shenzhen Huafa
Electronics Co. Ltd.,
B Appliances & Household Durables 212,000 42,467
Shenzhen Petrochemical
(Group) Shareholding
Co. Ltd., B Chemicals 208,000 60,482
Shenzhen Properties &
Resources Develop.
(Group) Ltd., B Real Estate 1,055,600 347,874
Shenzhen Tellus
Machinery &
Electronics Co. Ltd.,
B Multi-Industry 224,000 46,608
Shenzhen Vanke Co.
Ltd., B Real Estate 2,186,000 762,775
Tsann Kuen Enterprise
Co. Ltd., B Electrical & Electronics 648,000 163,721
**Zhuhai Sez Lizhu
Pharmaceutical, B Chemicals 1,196,800 527,422
--------------
23,908,393
- --------------------------------------------------------------------------------------------
Colombia: 0.1%
Promigas SA Multi-Industry 61,311 160,713
- --------------------------------------------------------------------------------------------
Czech Republic: 0.3%
**CEZ, GDR Utilities Electrical & Gas 144,000 5,328,000
**CEZ, GDS Utilities Electrical & Gas 30,000 1,110,000
--------------
6,438,000
- --------------------------------------------------------------------------------------------
Greece: 4.2%
Alpha Credit Bank Banking 528,526 29,359,944
Alpha Leasing SA Financial Services 115,690 2,829,990
Delta Dairy SA, pfd. Food & Household Products 189,101 3,637,528
Elais Oleaginous
Products SA Food & Household Products 171,640 5,568,910
Ergo Bank SA Banking 284,220 13,083,424
Etba Leasing Financial Services 120,040 2,204,969
Fourlis Brothers Corp.
SA Appliances & Household Durables 301,060 3,816,140
</TABLE>
14
<PAGE>
Templeton Developing Markets Trust
Investment Portfolio, June 30, 1995 (unaudited) (cont.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES/PRINCIPAL IN
INDUSTRY LOCAL CURRENCY VALUE
<S> <C> <C> <C>
- --------------------------------------------------------------------------------------------
LONG TERM SECURITIES (CONT.)
- --------------------------------------------------------------------------------------------
Greece (cont.)
Hellas Can-Container
Manufacturers Food & Household Products 208,290 $ 3,937,166
Hellenic Bottling Co.
SA Food & Household Products 257,385 7,646,912
Intracom SA Electrical & Electronics 9,000 248,176
National Bank of Greece
SA Banking 129,105 7,051,278
Titan Cement Co. Building Materials & Components 216,410 8,219,807
Titan Cement Co., pfd. Building Materials & Components 7,100 189,468
X. Benrubi & Son SA Food & Household Products 220,900 1,365,642
--------------
89,159,354
- --------------------------------------------------------------------------------------------
Hong Kong: 17.2%
C.P. Pokphand Co. Ltd. Food & Household Products 21,065,000 7,418,404
Cheung Kong Holdings
Ltd. Multi-Industry 12,111,000 59,946,147
China Overseas Land &
Investment Ltd. Real Estate 15,873,000 3,179,605
China Pharmaceutical
Enterprise &
Investment Corp. Ltd. Health & Personal Care 2,101,000 219,935
**China Treasure
Telecomunications
Holdings Ltd. Electrical & Electronics 2,376,000 121,290
CNT Group Ltd. Multi-Industry 36,736,000 2,516,229
Cross Harbour Tunnel
Co. Ltd. Transportation 1,447,598 2,787,512
Dairy Farm
International Holdings
Ltd. Multi-Industry 6,526,893 5,613,128
Dickson Concepts
(International) Ltd. Merchandising 8,571,000 5,123,016
East Asiatic Co. Ltd. Wholesale & International Trade 2,976,000 415,374
Fairwood Holdings Ltd. Food & Household Products 5,402,000 537,561
Fortei Holdings Ltd. Merchandising 5,768,000 327,990
**Fu Hui Jewellery Co.
Ltd. Recreation, Other Consumer Goods 4,808,000 279,614
Gold Peak Industries
(Holdings) Ltd. Electrical & Electronics 3,458,000 1,474,760
Goldlion Holdings Ltd. Textiles & Apparel 14,183,000 4,490,727
Great Wall Electronic
International Ltd. Electrical & Electronics 3,812,000 330,073
Hang Lung Development
Co. Ltd. Real Estate 17,486,000 27,795,730
**Hang Lung Development
Co. Ltd., wts. Real Estate 1,399,100 240,482
Hongkong Electric
Holdings Ltd. Utilities Electrical & Gas 1,686,000 5,730,544
Hopewell Holdings Ltd. Construction & Housing 5,302,539 4,488,567
HSBC Holdings PLC Banking 3,979,021 51,037,483
Hualing Holdings Ltd. Appliances & Household Durables 1,332,000 184,192
IMC Holdings Ltd. Transportation 793,000 522,668
Jardine International
Motor Holdings Ltd. Automobiles 4,413,000 4,334,410
Jardine Matheson
Holdings Ltd. Multi-Industry 1,575,588 11,580,572
Jardine Strategic
Holdings Ltd. Multi-Industry 4,954,562 15,953,690
**Jardine Strategic
Holdings Ltd., wts. Multi-Industry 536,062 235,867
JCG Holdings Ltd. Banking 4,066,000 2,679,909
Joyce Boutique Holdings
Ltd. Merchandising 7,448,000 1,607,454
</TABLE>
15
<PAGE>
Templeton Developing Markets Trust
Investment Portfolio, June 30, 1995 (unaudited) (cont.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES/PRINCIPAL IN
INDUSTRY LOCAL CURRENCY VALUE
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------
LONG TERM SECURITIES (CONT.)
- -----------------------------------------------------------------------------------------------
Hong Kong (cont.)
K Wah International
Holdings Ltd. Building Materials & Components 29,011,427 $ 5,136,558
Lai Sun Development Co.
Ltd. Real Estate 38,046,000 4,671,056
Lai Sun Garment
International Ltd. Multi-Industry 3,418,000 3,555,907
Laws International
Holdings Ltd. Textiles & Apparel 7,054,000 1,230,699
Le Saunda Holdings Ltd. Merchandising 2,598,000 191,380
Leefung-Asco Printers
Holdings Ltd. Broadcasting & Publishing 940,000 151,852
LI & Fung Ltd. Merchandising 1,720,000 1,289,255
Linkful International
Holdings Ltd. Merchandising 1,600,000 103,389
Luks Industrial Co.
Ltd. Appliances & Household Durables 3,214,000 344,752
Ming Pao Enterprise
Corp. Ltd. Broadcasting & Publishing 3,363,000 1,781,941
New World Development
Co. Ltd. Real Estate 10,703,250 35,618,482
Peregrine Investments
Holdings Ltd. Financial Services 2,544,000 3,616,532
S. Megga International
Holdings Ltd. Electronic Components & Instruments 5,782,000 388,565
Semi-Tech Co. Ltd. Appliances & Household Durables 2,397,447 3,857,455
South Sea Development
Co. Ltd. Broadcasting & Publishing 1,115,000 54,757
Stelux International
Holdings Ltd. Multi-Industry 14,002,570 4,116,913
Sun Hung Kai & Co. Ltd. Financial Services 15,472,000 5,798,651
Sun Hung Kai Properties
Ltd. Real Estate 5,169,900 38,250,766
Swire Pacific Ltd., B Multi-Industry 5,117,500 6,216,819
Tian An China
Investments Co. Ltd. Real Estate 23,396,000 3,628,318
Top Form International
Ltd. Textiles & Apparel 5,204,000 484,231
Tungtex (Holdings) Co.
Ltd. Textiles & Apparel 6,914,000 1,295,627
Vitasoy International
Holdings Ltd. Food & Household Products 2,098,000 833,745
Wai Kee Holdings Ltd. Construction & Housing 1,186,000 225,312
Wheelock & Co. Ltd. Multi-Industry 8,831,000 14,665,454
Wing Shan International
Ltd. Utilities Electrical & Gas 6,442,000 865,838
Wo Kee Hong Holdings
Ltd. Merchandising 14,265,000 3,318,385
Yaohan Hongkong Corp.
Ltd. Merchandising 9,530,000 775,918
Yue Yuen Industrial
Ltd. Recreation, Other Consumer Goods 19,856,000 4,824,276
--------------
368,465,766
- -----------------------------------------------------------------------------------------------
Hungary: 0.2%
Chinoin Pharmaceutical
& Chemical Works Co.
Ltd. Health & Personal Care 7,631 2,311,296
Fotex First Hungarian-
American Photo-Service
Co. Multi-Industry 750,400 1,097,864
**+Ibusz Leisure & Tourism 94,260 793,565
--------------
4,202,725
- -----------------------------------------------------------------------------------------------
</TABLE>
16
<PAGE>
Templeton Developing Markets Trust
Investment Portfolio, June 30, 1995 (unaudited) (cont.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES/PRINCIPAL IN
INDUSTRY LOCAL CURRENCY VALUE
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------------
LONG TERM SECURITIES (CONT.)
- -------------------------------------------------------------------------------------------
India: 0.7%
Aban Loyd Chiles
Offshore Ltd. Energy Sources 245,000 $ 1,061,146
ATV Project India Ltd. Machinery & Engineering 1,732,000 1,889,204
Essar Shipping Ltd. Transportation 773,500 991,509
Flex Industries Ltd. Food & Household Products 20,000 113,376
+Ganesh Benzoplast Ltd. Chemicals 159,100 425,618
+Garden Silk Mills Ltd. Textiles & Apparel 229,600 318,076
Grasim Industries Ltd. Multi-Industry 20,000 388,535
Industrial Credit &
Investment Corp. of
India Ltd. Financial Services 2,723,150 8,238,830
Reliance Industries
Ltd. Chemicals 75,750 634,467
**Videocon
International Ltd. Appliances & Household Durables 404,000 1,286,624
--------------
15,347,385
- -------------------------------------------------------------------------------------------
Indonesia: 2.2%
PT Anwar Sierad, fgn. Food & Household Products 932,000 585,900
PT Aqua Golden
Mississippi, fgn. Beverages & Tobacco 393,250 361,995
PT Astra International,
fgn. Multi-Industry 122,100 216,567
PT Bank International
Indonesia, fgn. Financial Services 365,000 1,171,868
PT Bank PDFCI, fgn. Financial Services 623,000 377,661
PT Barito Pacific
Timber, fgn. Forest Products & Paper 8,446,000 12,136,147
PT BBL Dharmala
Finance, fgn. Financial Services 953,000 1,134,014
PT Branta Mulia, fgn. Industrial Components 1,386,000 2,162,708
PT Charoen Pokphand
Indonesia, fgn. Food & Household Products 1,605,000 3,495,397
PT Cipendawa Farm
Enterprises, fgn. Food & Household Products 65,000 80,265
PT Duta Anggada Realty,
fgn. Multi-Industry 835,500 675,303
PT Duta Pertiwi
Nusantura, fgn. Chemicals 687,500 239,251
PT Eratex Djaja, fgn. Textiles & Apparel 567,000 254,603
PT Ficorinvest Bank,
fgn. Financial Services 459,000 267,939
PT Gadjah Tunggal, fgn. Industrial Components 140,000 201,167
PT Gajah Surya Multi
Finance, fgn. Financial Services 1,866,200 1,005,586
PT Ganda Wangsa Utama,
fgn. Textiles & Apparel 1,022,000 355,658
PT Hadtex Indosyntec,
fgn. Textiles & Apparel 2,918,000 1,899,910
PT Hotel Prapatan, fgn. Leisure & Tourism 1,185,000 784,856
PT Intan Wijaya
Chemical Industry,
fgn. Chemicals 1,490,500 501,965
PT Inter-Pacific Bank,
fgn. Financial Services 738,000 492,939
PT Jakarta
International Hotel &
Development, fgn. Real Estate 899,500 1,130,938
PT Japfa Comfeed
Indonesia, fgn. Food & Household Products 3,839,500 2,672,306
PT Metrodata
Electronic, fgn. Electrical & Electronics 345,500 255,983
PT Multibreeder
Adirama, fgn. Food & Household Products 858,750 1,041,143
PT Multipolar Corp.,
fgn. Electrical & Electronics 346,000 209,744
PT Polysindo Eka
Perkasa, fgn. Textiles & Apparel 13,398,000 7,520,207
</TABLE>
17
<PAGE>
Templeton Developing Markets Trust
Investment Portfolio, June 30, 1995 (unaudited) (cont.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES/PRINCIPAL IN
INDUSTRY LOCAL CURRENCY VALUE
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------------
LONG TERM SECURITIES (CONT.)
- -------------------------------------------------------------------------------------------
Indonesia (cont.)
PT Pudjiadi Prestige Ltd.,
fgn. Real Estate 762,500 $ 505,024
+PT Sarasa Nugraha, fgn. Textiles & Apparel 2,567,000 2,881,679
PT Sari Husada, zero,
6/21/96 Food & Household Products 124,560,000* 44,186
PT Sinar Mas Multi Artha,
fgn. Multi-Industry 980,000 1,034,127
PT Summarecon Agung, fgn. Real Estate 400,500 287,741
PT Unggul Indah Corp., fgn. Chemicals 220,000 197,575
--------------
46,182,352
- -------------------------------------------------------------------------------------------
Israel: 0.3%
Bank Hapoalim BM Banking 673,348 1,058,307
Clal Industries Ltd. Multi-Industry 295,378 1,752,938
Discount Investment Corp. Multi-Industry 46,932 2,991,394
The First International
Bank of Israel Banking 9,955 1,229,622
--------------
7,032,261
- -------------------------------------------------------------------------------------------
Italy: 2.1%
Banco Ambrosiano Veneto
SPA, di Risp Banking 2,138,000 2,899,448
Istituto Mobiliare Italiano
SPA Banking 1,069,000 6,537,151
Italmobiliare SPA Multi-Industry 520,260 9,856,721
+Italmobiliare SPA, di Risp Multi-Industry 848,350 8,446,948
**Italmobiliare SPA, wts. Multi-Industry 162,360 173,647
**Mediobanca/Italmobiliare,
6.00%, conv., 12/31/99 Multi-Industry 2,922,480,000* 1,678,919
Sirti SPA Construction & Housing 2,018,500 14,974,834
Teleco Cavi SPA Telecommunications 1,000 4,263
+Teleco Cavi SPA, di Risp Telecommunications 557,000 1,361,650
--------------
45,933,581
- -------------------------------------------------------------------------------------------
Korea (South): 1.0%
Central Investment &
Finance Corp. Financial Services 287,994 6,570,783
Choil Aluminium Mfg. Co.
Ltd. Metals & Mining 54,592 1,835,933
Dae Yu Co. Textiles & Apparel 2,000 43,785
Dae Yu Co. Ltd., new Textiles & Apparel 11,642 245,660
Daegu Bank Co. Ltd. Banking 280,430 3,361,831
**Daegu Bank Co. Ltd., new Banking 59,068 669,165
Daehan Synthetic Fiber Co.
Ltd. Textiles & Apparel 16,920 2,789,318
Hae In Corp. Ltd. Merchandising 21,788 1,422,362
Hankook Cosmetics Co. Ltd. Health & Personal Care 52,400 2,004,088
Samseong Publishing Co.
Ltd. Business & Public Services 10,300 218,701
Ssangyong Oil Refining Co.
Ltd. Energy Equipment & Services 10,000 287,504
Yuhwa Corp. Textiles & Apparel 23,310 1,260,415
--------------
20,709,545
- -------------------------------------------------------------------------------------------
</TABLE>
18
<PAGE>
Templeton Developing Markets Trust
Investment Portfolio, June 30, 1995 (unaudited) (cont.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES/PRINCIPAL IN
INDUSTRY LOCAL CURRENCY VALUE
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------------
LONG TERM SECURITIES (CONT.)
- -------------------------------------------------------------------------------------------
Malaysia: 2.3%
Federal Flour Mills
Bhd. Food & Household Products 1,777,000 $ 5,885,675
Malayawata Steel Bhd. Metals & Mining 1,626,000 3,254,668
Malayawata Steel Bhd.,
fgn. Metals & Mining 1,418,000 2,838,326
Malaysian International
Shipping Corp.
Bhd., fgn. Transportation 5,291,000 15,517,084
Oriental Holdings Bhd. Automobiles 300,000 1,599,672
Oriental Holdings Bhd.,
fgn. Automobiles 1,753,160 9,348,269
Perlis Plantations Bhd. Multi-Industry 1,228,600 4,081,895
Perlis Plantations
Bhd., fgn. Multi-Industry 1,430,000 4,751,025
Shangri-La Hotels Bhd. Leisure & Tourism 2,092,202 2,402,857
--------------
49,679,471
- -------------------------------------------------------------------------------------------
Mexico: 6.2%
Cemex SA, B Building Materials & Components 1,962,750 7,081,602
Cifra SA, C Merchandising 4,505,000 5,939,392
DESC Sociedad de
Fomento Industrial,
SA, A Multi-Industry 500,000 1,664,000
DESC Sociedad de
Fomento Industrial,
SA, B Multi-Industry 1,024,108 3,400,039
DESC Sociedad de
Fomento Industrial,
SA, C Multi-Industry 188,000 616,640
Grupo Financiero
Banamex Accival SA, B Banking 7,679,000 11,672,080
Grupo Financiero
Banamex Accival SA, L Banking 3,760,750 5,716,340
Grupo Financiero
Bancomer SA de CV, B Banking 35,846,000 10,381,002
Grupo Financiero
Bancomer SA de CV, L Banking 4,004,518 1,057,193
**Grupo Financiero
Serfin SA de CV, rts. Banking 2,981,500 6,328
Grupo Financiero Serfin
SA, B Banking 2,981,500 2,079,894
Grupo Industrial Alfa
SA, A Multi-Industry 1,593,982 19,357,317
Telefonos de Mexico SA,
L Telecommunications 181,000 267,011
Telefonos de Mexico SA,
L, ADR Telecommunications 1,844,100 54,631,463
Transportacion Maritima
Mexicana SA de
CV, ADR, A Transportation 15,200 76,000
**Tubos de Acero de
Mexico SA Metals & Mining 432,192 2,109,097
Vitro SA Food & Household Products 2,396,400 6,817,279
--------------
132,872,677
- -------------------------------------------------------------------------------------------
Pakistan: 0.2%
**Bank of Punjab Banking 2,126,620 1,630,370
+Exide Pakistan Ltd. Energy Equipment & Services 198,400 301,004
Khadim Ali Sham Bukhari
& Co. Ltd. Financial Services 203,009 234,274
Kohinoor Industries
Ltd. Textiles & Apparel 358,720 107,110
National Development
Leasing Corp., rts. Financial Services 68,063 37,350
National Development
Leasing Corp. Financial Services 850,790 741,513
**Pakistan Electron
Ltd. Appliances & Household Durables 237,406 383,172
</TABLE>
19
<PAGE>
Templeton Developing Markets Trust
Investment Portfolio, June 30, 1995 (unaudited) (cont.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES/PRINCIPAL IN
INDUSTRY LOCAL CURRENCY VALUE
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------
LONG TERM SECURITIES (CONT.)
- -----------------------------------------------------------------------------------------------
Pakistan (cont.)
**Pakistan Telecom
Corp. PTC Telecommunications 180,000 $ 191,743
**+Trust Modaraba Financial Services 2,427,000 783,434
Union Bank Ltd. Banking 830,025 602,846
--------------
5,012,816
- -----------------------------------------------------------------------------------------------
Philippines: 3.6%
A. Soriano Corp., B Multi-Industry 16,537,254 2,687,142
Dizon Copper Silver
Mines Inc. Metals & Mining 141,371,500 415,147
Keppel Philippine
Holdings Inc., B Machinery & Engineering 195,820 93,923
Philex Minning Corp., B Metals & Mining 15,467,095 2,210,450
Philippine Commercial
International Bank
Inc. Banking 224,032 1,657,872
Philippine Long
Distance Telephone
Co., ADR Telecommunications 610,975 43,837,456
Philippine National
Bank Banking 1,541,336 17,954,090
RFM Corp. Food & Household Products 27,070,250 7,101,436
Sime Darby Pilipinas
Inc. Industrial Components 662,758 700,645
--------------
76,658,161
- -----------------------------------------------------------------------------------------------
Poland: 0.1%
Bank Przemyslowo-
Handlowy SA Banking 20,000 692,012
Bank Slaski SA W
Katowicach Banking 8,000 478,428
Elektrim Towarzystwo
Handlowe SA Utilities Electrical & Gas 310,000 1,092,482
--------------
2,262,922
- -----------------------------------------------------------------------------------------------
Portugal: 4.4%
Banco Chemical Portugal
SA Banking 211,315 2,124,705
Banco Comercial
Portugues SA Banking 1,822,552 24,117,981
Banco Comercial
Portugues, 8.75%,
conv., 5/21/02 Banking 8,780,000* 12,256,775
**Banco Espirito Santo
e Comercial de Lisboa Banking 980,600 16,381,315
Banco Portugues de
Investimento SA Banking 1,093,480 19,096,660
Banco Totta & Acores SA Banking 355,990 7,543,192
Cel-Cat Fabrica
Nacional de
Conductores Electricos
SA Electronic Components & Instruments 64,581 1,507,479
+Compta-Equipamentos e
Servicos de
Informatica SA Business & Public Services 125,000 1,427,717
Espirito Santo
Financial Holding SA,
ADR Banking 781,200 9,081,450
--------------
93,537,274
- -----------------------------------------------------------------------------------------------
</TABLE>
20
<PAGE>
Templeton Developing Markets Trust
Investment Portfolio, June 30, 1995 (unaudited) (cont.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES/PRINCIPAL IN
INDUSTRY LOCAL CURRENCY VALUE
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------------
LONG TERM SECURITIES (CONT.)
- -------------------------------------------------------------------------------------------
Singapore: 1.2%
Acma Ltd. Electrical & Electronics 60,000 $ 190,626
Acma Ltd., fgn. Electrical & Electronics 738,000 2,344,701
Chemical Industries
(Far East) Ltd. Chemicals 440,000 1,621,467
First Capital Corp.
Ltd., fgn. Real Estate 112,000 346,218
G.P. Batteries
International Ltd. Electrical & Electronics 37,000 90,650
Hai Sun Hup Group Ltd. Transportation 1,006,000 604,680
Hai Sun Hup Group Ltd.,
new Transportation 528,000 309,810
Hinds Hotels
International Ltd. Leisure & Tourism 335,000 383,542
Hinds Hotels
International Ltd.,
fgn. Leisure & Tourism 449,000 514,061
Hotel Properties Ltd.,
fgn. Leisure & Tourism 309,000 546,140
Hour Glass Ltd. Merchandising 908,000 773,181
Inchcape Bhd., fgn. Wholesale & International Trade 530,000 1,729,374
Inter-Roller
Engineering Ltd., fgn. Industrial Components 262,000 84,365
**Inter-Roller
Engineering Ltd.,
fgn., rts. Industrial Components 65,500 4,687
Isetan (Singapore)
Ltd., fgn. Merchandising 325,000 665,116
Jaya Holdings Ltd. Transportation 4,119,000 3,654,784
Jaya Holdings Ltd.,
3.50%, conv., 9/07/97 Transportation 823,800* 499,585
Jaya Holdings Ltd.,
3.00%, conv., 8/31/98 Transportation 508,800* 600,730
**Jaya Holdings Ltd.,
wts., expires 8/31/98 Transportation 318,071 134,284
**Jaya Holdings Ltd.,
wts., expires 10/19/99 Transportation 164,760 106,107
**Osprey Maritime Ltd. Transportation 399,000 786,030
Prima Ltd. Food & Household Products 983,000 3,657,674
Singapore Bus Service
(1978) Ltd., fgn. Transportation 328,200 2,295,639
TIBS Holdings Ltd. Transportation 788,800 2,144,859
**Tibs Holdings Ltd.,
wts. Transportation 236,640 160,864
Wing Tai Holdings Ltd.,
fgn. Real Estate 355,000 683,327
--------------
24,932,501
- -------------------------------------------------------------------------------------------
South Africa: 1.3%
Amalgamated Banks of
South Africa Ltd. Banking 2,072,260 7,921,461
BTR Dunlop Ltd. Industrial Components 190,000 310,897
Del Monte Royal Foods
Ltd. Food & Household Products 728,800 982,089
Engen Ltd. Energy Sources 1,420,602 8,594,911
First National Bank
Holdings Ltd. Banking 797,200 5,097,257
Nedcor Ltd. Banking 243,196 2,942,764
Rembrandt Group Ltd. Multi-Industry 312,200 2,146,442
--------------
27,995,821
- -------------------------------------------------------------------------------------------
</TABLE>
21
<PAGE>
Templeton Developing Markets Trust
Investment Portfolio, June 30, 1995 (unaudited) (cont.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES/PRINCIPAL IN
INDUSTRY LOCAL CURRENCY VALUE
<S> <C> <C> <C>
- --------------------------------------------------------------------------------------------
LONG TERM SECURITIES (CONT.)
- --------------------------------------------------------------------------------------------
Spain: 4.4%
Banco Bilbao Vizcaya SA Banking 1,341,200 $ 38,699,641
Bankinter SA Banking 382,750 34,443,550
Endesa-Empresa Nacional
de Electricidad SA Utilities Electrical & Gas 319,500 15,773,870
Union Electrica-Fenosa,
SA Utilities Electrical & Gas 1,380,267 6,472,583
--------------
95,389,644
- --------------------------------------------------------------------------------------------
Sri Lanka: 0.1%
Associated Motorways
Ltd. Automobiles 281,088 284,745
**Ceylon Holiday
Resorts Ltd. Recreation, Other Consumer Goods 144,600 163,355
**Colombo Dock Yard
Ltd. Transportation 40,000 11,918
**Kelani Tyres Ltd. Industrial Components 700 233
Lanka Ceramic Ltd. Building Materials & Components 309,100 330,005
Lanka Orix Leasing Co.
Ltd. Financial Services 819 3,481
+United Motor Lanka
Ltd. Automobiles 884,840 430,600
--------------
1,224,337
- --------------------------------------------------------------------------------------------
Thailand: 1.1%
American Standard
Sanitaryware Public
Co. Ltd., fgn. Health & Personal Care 99,800 1,657,606
Asia Fibre Public Co.
Ltd., fgn. Textiles & Apparel 943,500 831,320
Ayudhya Insurance
Public Co. Ltd., fgn. Insurance 239,000 1,786,328
Bangkok Bank Public Co.
Ltd. Banking 500,000 4,375,127
Bangkok Land Co. Ltd.,
fgn. Real Estate 802,000 1,356,431
Bank of Ayudhya Ltd.,
fgn. Banking 474,400 2,325,396
Charoen Pokphand
Feedmill Public Co.
Ltd. Food & Household Products 152,000 905,165
Chareon Pokphand
Feedmill Public Co.
Ltd., fgn. Food & Household Products 338,500 2,056,917
Hua Thai Manufacturing
Public Co. Ltd. Textiles & Apparel 35,000 93,579
Karat Sanitaryware
Public Co. Ltd., fgn. Building Materials & Components 199,600 780,288
Kian Gwan (Thailand)
Public Co. Ltd., fgn. Real Estate 96,000 295,564
Padaeng Industry Public
Co. Ltd., fgn. Metals & Mining 357,110 473,784
**Royal Ceramic
Industry Public Co.
Ltd., fgn. Building Materials & Components 53,200 128,232
Saha Pathanapibul Co
Ltd., fgn. Health & Personal Care 284,400 544,375
Saha Union Public Co.
Ltd. Textiles & Apparel 456,000 665,019
Saha Union Public Co.
Ltd., fgn. Textiles & Apparel 1,912,080 3,079,003
Sanyo Universal
Electric Public Co
Ltd., fgn. Electrical & Electronics 27,200 139,939
Textile Prestige Corp.
Ltd., fgn. Textiles & Apparel 66,000 127,669
Thai Asahi Glass Public
Co. Ltd. Building Materials & Components 40,700 89,034
</TABLE>
22
<PAGE>
Templeton Developing Markets Trust
Investment Portfolio, June 30, 1995 (unaudited) (cont.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES/PRINCIPAL IN
INDUSTRY LOCAL CURRENCY VALUE
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------------
LONG TERM SECURITIES (CONT.)
- -------------------------------------------------------------------------------------------
Thailand (cont.)
Thai Asahi Glass Public
Co. Ltd., fgn. Building Materials & Components 32,000 $ 70,002
Thai Farmers Bank
Public Co. Ltd. Banking 74,500 540,227
Thai Rayon Public Co.
Ltd. Textiles & Apparel 43,700 382,386
Thai Rayon Public Co.
Ltd., fgn. Textiles & Apparel 11,000 97,924
Thai Wacoal Public Co.
Ltd. Textiles & Apparel 14,000 81,953
Thai Wacoal Public Co.
Ltd., fgn. Textiles & Apparel 99,000 806,117
Thai Wah Public Co.
Ltd., fgn. Food & Household Products 191,000 305,631
United Motor Works
(Siam) Public Co. Ltd. Machinery & Engineering 30,400 140,393
United Standard
Terminal Public Co.
Ltd., fgn. Transportation 212,100 317,914
--------------
24,453,323
- -------------------------------------------------------------------------------------------
Turkey: 5.3%
Akbank Banking 44,655,444 11,362,066
**Akbank, new Banking 20,852,222 5,069,804
Akcimento Ticaret AS Building Materials & Components 5,518,000 2,339,986
**Akcimento Ticaret AS,
rts. Building Materials & Components 2,759,000 1,107,594
Aksigorta AS Insurance 18,780,000 3,652,788
Alcatel Teletas
Endustri Tic AS Telecommunications 4,152,000 1,455,524
Anadolu Anonim Turk
Sigorta Sirketi Insurance 67,000 14,850
Arcelik AS Appliances & Household Durables 49,300,736 15,052,809
Bagfas Bandirma Gubre
Fabrikalari AS Chemicals 9,437,000 4,375,404
Bekoteknik AS Appliances & Household Durables 31,364,375 4,114,291
Borusan AS Industrial Components 1,782,000 695,228
Celik Halat ve Sanayii
ve Ticaret AS Building Materials & Components 5,243,200 924,957
Cimentas Izmir Cimento
Fabrikasi TAS Building Materials & Components 4,925,250 3,174,706
Cimsa Cimento Sanayi ve
Ticaret AS Building Materials & Components 6,340,000 4,516,793
Compagnie Financiere
Ottomane SA Banking 52,500 2,462,516
Cukurova Elektrik AS Utilities Electrical & Gas 16,762,500 7,866,604
**Dardanel Onentas Food & Household Products 737,000 1,833,541
Eregli Demir ve Celik
Fabrikalari AS Metals & Mining 72,081,750 9,292,457
Finans Bank AS, br. Banking 34,979,998 4,588,578
Izocam Ticaret ve
Sanayii AS, br. Building Materials & Components 4,789,827 1,126,636
Kartonsan Forest Products & Paper 17,678,750 6,897,171
**Kartonsan Karton San
Ve Tic AS, rts. Forest Products & Paper 10,808,500 1,986,183
Koc Holding AS Multi-Industry 1,221,000 1,201,255
Koc Yatirim ve Sanayii
Mamullesi
Pazarlanca AS Multi-Industry 13,934,354 4,333,311
Marshall Boya ve Vernik
Sanayii AS Industrial Components 4,480,140 658,621
**Marshall Boya ve
Vernik Sanayii AS, new Industrial Components 8,064,252 1,085,204
**Marshall Boya ve
Vernik Sanayii AS,
rts. Industrial Components 4,480,140 --
</TABLE>
23
<PAGE>
Templeton Developing Markets Trust
Investment Portfolio, June 30, 1995 (unaudited) (cont.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES/PRINCIPAL IN
INDUSTRY LOCAL CURRENCY VALUE
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------------
LONG TERM SECURITIES (CONT.)
- -------------------------------------------------------------------------------------------
Turkey (cont.)
Netas Northern Electric
Telekomunic Asyon AS Electrical & Electronics 426,000 $ 146,930
Otosan Otomobil Sanayii
AS Automobiles 7,016,000 2,578,537
Tekstil Bankasi
Tekstilbank AS, br. Banking 107,363 7,406
Tofas Turk Otomobil
Fabrikasi AS Automobiles 1,663,700 1,467,473
Trakya Cam Sanayii AS Misc Materials & Commodities 804,596 101,905
Trakya Cam Sanayii AS,
new Misc Materials & Commodities 6,474,596 981,110
**Trakya Cam Sanayii
AS, rts. Misc Materials & Commodities 7,279,192 151,461
Turk Demir Dokum, br. Appliances & Household Durables 7,914,463 1,324,596
**Turkey Garanti
Bankasi AS, new Banking -- --
**Turkiye Demir Dokum,
rts. Appliances & Household Durables 5,935,996 286,406
Turkiye Garanti Bankasi
AS Banking 36,458,175 4,947,395
Vakif Finansal Kiralama
AS Financial Services 6,057,000 650,701
--------------
113,832,797
- -------------------------------------------------------------------------------------------
Venezuela: 0.9%
**Banco Provincial BVP,
rts. Banking 2,447 2,907
Banco Provincial SAICA Banking 47,260 57,802
Banco Venezolano de
Credito Banking 15,540 465,421
Ceramica Carabobo CA, A Building Materials & Components 286,800 201,263
Ceramica Carabobo CA,
A, ADR Building Materials & Components 130,000 91,228
Ceramica Carabobo CA, B Building Materials & Components 1,924,658 1,273,458
Consolidada Carabobo, A Building Materials & Components 5,684,664 534,273
Consolidada Carabobo, B Building Materials & Components 9,797,772 908,565
Electricidad de Caracas Utilities Electrical & Gas 8,161,887 7,255,692
Fabrica Nacional de
Cementos CA Building Materials & Components 1,221,000 100,985
H.L. Boulton & Co. SA Multi-Industry 12,912,748 372,172
Industrias Ventane Utilities Electrical & Gas 3,960,414 1,232,791
Inmuebles y Valores
Caracas CA Building Materials & Components 1,015,000 1,017,544
Manufacturera de
Aparatos Domesticos SA Appliances & Household Durables 545,225 956,535
Mavesa SA, ADR Food & Household Products 786,250 2,325,251
Siderurgica Venezolana
Sivensa Saica Svs Metals & Mining 150,000 42,481
Siderurgica Venezolana
Sivensa Saica Svs, ADR Metals & Mining 319,350 452,212
Vencemos de Cementos Building Materials & Components 1,821,144 2,190,850
+Venezolana de Cementos
Vencemos, #2 Building Materials & Components 832,000 913,323
--------------
20,394,753
--------------
TOTAL LONG TERM SECURITIES (cost $1,506,187,246) 1,553,070,794
- -------------------------------------------------------------------------------------------
</TABLE>
24
<PAGE>
Templeton Developing Markets Trust
Investment Portfolio, June 30, 1995 (unaudited) (cont.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES/PRINCIPAL IN
INDUSTRY LOCAL CURRENCY VALUE
<S> <C> <C> <C>
- --------------------------------------------------------------------------
SHORT TERM OBLIGATIONS: 28.0% (cost $598,158,600)
- --------------------------------------------------------------------------
U.S. Treasury Bills, 5.29% to
5.65% with maturities to
8/24/95 600,682,000* $ 598,521,239
- --------------------------------------------------------------------------
TOTAL INVESTMENTS: 100.6%
(cost $2,104,345,846) 2,151,592,033
OTHER ASSETS, LESS
LIABILITIES: (0.6)% (11,711,236)
--------------
TOTAL NET ASSETS: 100.0% $2,139,880,797
==============
</TABLE>
*PRINCIPAL AMOUNT IN CURRENCY OF COUNTRY INDICATED.
**NON-INCOME PRODUCING.
+SEE NOTE 5.
SEE NOTES TO FINANCIAL STATEMENTS.
25
<PAGE>
Templeton Developing Markets Trust
Financial Statements
- -----------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1995 (unaudited)
<TABLE>
<S> <C>
Assets:
Investment in securities, at value (identified cost
$2,104,345,846) $2,151,592,033
Cash 1,103,784
Receivables:
Investment securities sold 1,502,871
Fund shares sold 4,921,123
Dividends and interest 7,290,812
--------------
Total assets 2,166,410,623
--------------
Liabilities:
Payables:
Investment securities purchased 16,776,020
Fund shares redeemed 3,235,831
Accrued expenses 6,517,975
--------------
Total liabilities 26,529,826
--------------
Net assets, at value $2,139,880,797
==============
Net assets consist of:
Undistributed net investment income $ 27,870,400
Net unrealized appreciation 47,246,187
Accumulated net realized gain 15,099,505
Net capital paid in on shares of beneficial interest 2,049,664,705
--------------
Net assets, at value $2,139,880,797
==============
Class I:
Net asset value per share ($2,133,487,773 / 156,871,523
shares outstanding) $ 13.60
==============
Maximum offering price
($13.60 / 94.25%) $ 14.43
==============
Class II:
Net asset value per share
($6,393,024 / 470,715 shares outstanding) $ 13.58
==============
Maximum offering price
($13.58 / 99.00%) $ 13.72
==============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF OPERATIONS
for the six months endedJune 30, 1995 (unaudited)
<TABLE>
<S> <C> <C>
Investment Income:
(net of $187,816 foreign taxes withheld)
Dividends $28,325,972
Interest 18,516,892
-----------
Total income $46,842,864
Expenses:
Management fees (Note 3) 12,363,756
Administrative fees (Note 3) 1,026,964
Distribution fees (Note 3)
Class I 3,460,831
Class II 6,471
Transfer agent fees (Note 3) 1,720,000
Custodian fees 1,450,000
Reports to shareholders 730,000
Audit fees 24,000
Legal fees 5,000
Registration and filing fees 190,000
Trustees' fees and expenses 68,000
Other 21,906
-----------
Total expenses 21,066,928
-----------
Net investment income 25,775,936
Realized and unrealized
gain (loss):
Net realized gain (loss) on:
Investments 20,806,258
Foreign currency transactions (2,059,498)
-----------
18,746,760
Net unrealized depreciation on investments (3,299,550)
-----------
Net realized and unrealized gain 15,447,210
-----------
Net increase in net assets resulting from operations $41,223,146
===========
</TABLE>
26
<PAGE>
Templeton Developing Markets Trust
Financial Statements (cont.)
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JUNE 30, 1995 YEAR ENDED
(UNAUDITED) DECEMBER 31, 1994
-------------- -----------------
<S> <C> <C>
Increase (decrease) in net assets:
Operations:
Net investment income $ 25,775,936 $ 20,199,930
Net realized gain from security and for-
eign currency transactions 18,746,760 56,154,084
Net unrealized depreciation (3,299,550) (253,449,533)
-------------- --------------
Net increase (decrease) in net assets re-
sulting from operations 41,223,146 (177,095,519)
Distributions to shareholders:
From net investment income
Class I (754,003) (17,351,463)
From net realized gain
Class I (9,802,047) (59,144,627)
Fund share transactions (Note 2)
Class I 93,672,170 866,353,985
Class II 6,387,343 --
-------------- --------------
Net increase in net assets 130,726,609 612,762,376
Net assets:
Beginning of period 2,009,154,188 1,396,391,812
-------------- --------------
End of period $2,139,880,797 $2,009,154,188
============== ==============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
27
<PAGE>
Templeton Developing Markets Trust
Notes to Financial Statements (unaudited)
- --------------------------------------------------------------------------------
1. SUMMARY OF ACCOUNTING POLICIES
Templeton Developing Markets Trust (the Fund) is a Massachusetts business trust
and an open-end, diversified management investment company registered under the
Investment Company Act of 1940. The following summarizes the Fund's significant
accounting policies.
a. Securities Valuations:
Securities listed or traded on a recognized national or foreign stock exchange
or NASDAQ are valued at the last reported sales prices on the principal ex-
change on which the securities are traded. Over-the-counter securities and
listed securities for which no sale is reported are valued at the mean between
the last current bid and asked prices. Securities for which market quotations
are not readily available are valued at fair value as determined by management
and approved in good faith by the Board of Trustees.
b. Foreign Currency Translations:
Portfolio securities and other assets and liabilities denominated in foreign
currencies are translated into U.S. dollars based on the rate of exchange of
such currencies against U.S. dollars on the date of valuation. Purchases and
sales of portfolio securities and income items denominated in foreign curren-
cies are translated into U.S. dollar amounts on the respective dates of such
transactions. When the Fund purchases or sells foreign securities it customar-
ily enters into foreign exchange contracts to minimize foreign exchange risk
between the trade date and the settlement date of such transactions.
The Fund does not isolate that portion of the results of operations resulting
from changes in foreign exchange rates on investments from the fluctuations
arising from changes in market prices of securities held. Such fluctuations are
included with the net realized and unrealized gain or loss from investments.
Reported net realized foreign exchange gains or losses arise from sales of for-
eign currencies, currency gains or losses realized between the trade and set-
tlement dates on securities transactions, the differences between the amounts
of dividends, interest, and foreign withholding taxes recorded on the Fund's
books, and the U.S. dollar equivalent of the amounts actually received or paid.
Net unrealized foreign exchange gains and losses arise from changes in the
value of assets and liabilities other than investments in securities at the end
of the fiscal period, resulting from changes in the exchange rates.
The Brazilian government has exercised and may continue to exercise substantial
influence over exchange of their currency. Under current Brazilian law, when-
ever there occurs a serious 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.
c. Income Taxes:
It is the Fund's policy to comply with the requirements of the Internal Revenue
Code applicable to regulated investment companies and to distribute all its
taxable income to its shareholders. Therefore, no provision has been made for
federal income taxes.
d. Security Transactions, Investment Income, Distributions, and expenses:
Security transactions are accounted for on a trade date basis. Dividend income
is recorded on the ex-dividend date. Certain dividend income on foreign securi-
ties is recorded as soon as information is available to the Fund. Interest in-
come and estimated expenses are accrued daily. Distributions to shareholders,
which are determined in accordance with income tax regulations, are recorded on
the ex-dividend date.
28
<PAGE>
Templeton Developing Markets Trust
Notes to Financial Statements (unaudited) (cont.)
- --------------------------------------------------------------------------------
2. TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST
Effective May 1, 1995, the Fund offered two classes of shares: Class I shares
and Class II shares. Shares of each class are identical except for their ini-
tial sales load, a contingent deferred sales charge on Class II shares, distri-
bution fees, and voting rights on matters affecting a single class. All Fund
shares outstanding before May 1, 1995 were designated as Class I shares. At
June 30, 1995, there were an unlimited number of shares of beneficial interest
authorized for each class of shares ($0.01 par value). Transactions in the
Fund's shares were as follows:
<TABLE>
<CAPTION>
CLASS I
------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1995 DECEMBER 31, 1994
------------------------- ---------------------------
SHARES AMOUNT SHARES AMOUNT
----------- ------------ ----------- --------------
<S> <C> <C> <C> <C>
Shares sold 14,348,276 $188,597,229 84,733,238 $1,257,587,619
Shares issued on
reinvestment of
distributions 8,684,037 110,388,065 4,603,992 63,556,714
Shares redeemed (15,868,041) (205,313,124) (31,092,171) (454,790,348)
----------- ------------ ----------- --------------
Net increase 7,164,272 $ 93,672,170 58,245,059 $ 866,353,985
=========== ============ =========== ==============
</TABLE>
<TABLE>
<CAPTION>
CLASS II
----------------------
FOR THE PERIOD MAY 1,
1995 THROUGH
JUNE 30, 1995
----------------------
SHARES AMOUNT
----------------------
<S> <C> <C> <C> <C>
Shares sold 560,522 $ 7,613,137
Shares redeemed (89,807) (1,225,794)
-------- ------------
Net increase 470,715 $ 6,387,343
======== ============
</TABLE>
3. INVESTMENT MANAGEMENT FEES AND OTHER TRANSACTION WITH AFFILIATES
Certain officers of the Fund are also directors or officers of Templeton In-
vestment Management (Hong Kong) Limited (TIML), Templeton Global Investors,
Inc. (TGII), Franklin Templeton Distributors, Inc. (FTD), and Franklin Temple-
ton Investor Services, Inc. (FTIS), the Fund's investment manager, administra-
tive manager, principal underwriter, and transfer agent, respectively. The Fund
pays monthly an investment management fee to TIML equal, on an annual basis, to
1.25% of the average daily net assets of the Fund. The fee is subject to reduc-
tion in any year to the extent that expenses (exclusive of certain expenses) of
the Fund exceed 2 1/2% of the first $30 million of net assets, 2% of the next
$70 million of net assets and 1 1/2% of the remainder. During the six months
ended June 30, 1995, no reduction in fee was required as a result of this limi-
tation. The Fund pays TGII an administrative fee of 0.15% per annum on the
first $200 million of the Fund's aggregate average daily net assets, 0.135% of
the next $500 million, 0.10% of the next $500 million, and 0.075% per annum of
average net assets in excess of $1.2 billion. For the six months ended June 30,
1995, FTD received net commissions of $1,720,000 from the sale of the Fund's
shares, and FTIS received fees of $1,188,757.
Under the distribution plans for Class I and Class II shares, the Fund reim-
burses FTD quarterly for FTD's costs and expenses in connection with any activ-
ity that is primarily intended to result in a sale of Fund shares, subject to a
maximum of 0.35% and 1.00% per annum of the average daily net assets of Class I
and Class II shares, respectively. Under the Class I distribution plan, costs
and expenses exceeding the maximum may be reimbursed in subsequent periods. At
June 30, 1995, unreimbursed expenses amounted to $746,513. Class II shares re-
deemed within 18 months are subject to a contingent deferred sales charge. Con-
tingent deferred sales charges of $13,340 were paid to FTD for the six months
ended June 30, 1995.
29
<PAGE>
Templeton Developing Markets Trust
Notes to Financial Statements (unaudited) (cont.)
- --------------------------------------------------------------------------------
4. PURCHASES AND SALES OF SECURITIES
Purchases and sales of securities (excluding short-term securities) for the six
months ended June 30, 1995 aggregated $317,427,959 and $68,991,866, respective-
ly. The cost of securities for federal income tax purposes is $2,104,211,125.
Realized gains and losses are reported on an identified cost basis.
At June 30, 1995, the aggregate gross unrealized appreciation and depreciation
of portfolio securities, based on cost for federal income tax purposes, was as
follows:
<TABLE>
<S> <C>
Unrealized appreciation $ 215,534,079
Unrealized depreciation (168,153,171)
-------------
Net unrealized appreciation $ 47,380,908
=============
</TABLE>
5. HOLDING OF 5% VOTING SECURITIES OF PORTFOLIO COMPANIES
The Investment Company Act of 1940 defines "affiliated companies" as invest-
ments in portfolio companies in which the Fund owns 5% or more of the outstand-
ing voting securities. Investments in "affiliated companies" at June 30, 1995
amounted to $24,074,488. For the six months ended June 30, 1995, dividend and
interest income from "affiliated companies" was $220,635 and net realized gains
from disposition of "affiliated companies" were $526,550.
30
<PAGE>
Templeton Developing Markets Trust
Special Meeting of Shareholders, May 4, 1995
- --------------------------------------------------------------------------------
A Special Meeting of Shareholders of the Fund was held at the Fund's offices,
700 Central Avenue, St. Petersburg, Florida, on May 4, 1995. The purpose of the
meeting was to elect twelve trustees of the Fund. At the meeting, the following
persons were elected by the shareholders to serve as trustees of the Fund: John
Wm. Galbraith, Charles E. Johnson, Nicholas F. Brady, Betty P. Krahmer, Con-
stantine D. Tseretopoulos, Frank J. Crothers, Fred R. Millsaps, S. Joseph
Fortunato, Harris J. Ashton, Andrew H. Hines, Jr., John G. Bennett, Jr., and
Gordon S. Macklin.
The results of the voting at the Special Meeting are as follows:
1. Election of twelve (12) Trustees:
<TABLE>
<CAPTION>
% OF % OF % OF
OUTSTANDING SHARES OUTSTANDING
FOR SHARES VOTED AGAINST % ABSTAIN SHARES
---------- ----------- ------ ------- --- --------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
John Wm. Galbraith* 94,389,266 62.43% 98.16% 0 0 1,766,545 1.17%
Charles E. Johnson 94,371,144 62.43 98.14 0 0 1,784,667 1.18
Nicholas F. Brady 94,388,163 62.43 98.16 0 0 1,767,648 1.17
Betty P. Krahmer 94,338,603 62.40 98.11 0 0 1,817,208 1.20
Constantine D.
Tseretopoulos 94,342,756 62.40 98.11 0 0 1,676,086 1.20
Frank J. Crothers 94,426,230 62.45 98.20 0 0 1,729,581 1.14
Fred R. Millsaps 94,416,015 62.45 98.19 0 0 1,739,796 1.15
S. Joseph Fortunato 94,327,094 62.39 98.10 0 0 1,828,717 1.21
Harris J. Ashton 94,346,725 62.40 98.12 0 0 1,809,086 1.20
Andrew H. Hines, Jr. 94,356,616 62.41 98.13 0 0 1,799,195 1.19
John G. Bennett, Jr.** 94,412,875 62.44 98.19 0 0 1,742,936 1.15
Gordon S. Macklin 94,320,364 62.38 98.09 0 0 1,835,447 1.21
</TABLE>
* AFTER HIS NOMINATION AND THE MAILING OF THE PROXY FOR THE SPECIAL MEETING,
SIR JOHN TEMPLETON STEPPED DOWN AS CHAIRMAN AND DIRECTOR OF THE U.S.
REGISTERED TEMPLETON FUNDS, EFFECTIVE APRIL 16, 1995, AND DECLINED TO STAND
FOR RE-ELECTION. CONSEQUENTLY, PURSUANT TO DISCRETIONARY AUTHORITY GRANTED
IN THE PROXIES, THE PROXY HOLDERS CAST THE PROXIES FOR JOHN WM. GALBRAITH,
FORMER VICE CHAIRMAN OF TEMPLETON, GALBRAITH & HANSBERGER LTD.
** SUBSEQUENT TO THE SPECIAL MEETING, MR. JOHN G. BENNETT, JR., RESIGNED FROM
ALL OF THE TEMPLETON FUNDS, EFFECTIVE MAY 19, 1995.
31
<PAGE>
- --------------------------
TEMPLETON
DEVELOPING
MARKETS TRUST
PRINCIPAL UNDERWRITER:
Franklin Templeton
Distributors, Inc.
700 Central Avenue
St. Petersburg,
Florida 33701-3628
Account Services
1-800-354-9191
Sales Information
1-800-292-9293
This report must be
preceded or accompanied
by the prospectus of
the Templeton
Developing Markets
Trust which contains
more complete
information including
charges and expenses.
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, as
well as investment
decisions by the
investment manager
which will not always
be profitable or wise.
The Fund and its
investors are not
protected from such
losses by the
investment manager.
Therefore, investors
who cannot accept this
risk 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.
- --------------------------
[RECYCLING LOGO
APPEARS HERE]
TL711 S95 06/95
TEMPLETON
DEVELOPING
MARKETS
TRUST
Semi-Annual Report
June 30, 1995
[LOGO OF FRANKLIN TEMPLETON APPEARS HERE]
