<PAGE>
Templeton Developing
Markets Trust
[PHOTO OF J. MARK MOBIUS APPEARS HERE]
J. Mark Mobius, Ph.D.
President
Templeton Developing
Markets Trust
_____________________
Dr. Mobius has been living overseas since earning his Ph.D. in economics and
political science at Massachusetts Institute of Technology in 1964. During his
extensive travels, he has acquired a thorough knowledge of the business
practices and customs that are unique to developing nations. Together with his
team of Templeton analysts, Dr. Mobius currently oversees more than $9 billion
in emerging markets investments for the Templeton Group of Funds.
Your Fund's Objective:
The Templeton Developing Markets Trust seeks long-term capital appreciation by
investing primarily in securities of issuers of countries having developing
markets.
August 15, 1996
Dear Shareholder:
We are pleased to bring you the semi-annual report of the Templeton Developing
Markets Trust, which covers the six months ended June 30, 1996.
Investor activity in emerging markets during the reporting period contrasted
sharply with that of the previous year. In 1995, the shock of the Mexican peso
crisis caused net private capital inflows into emerging markets to fall from
US$50.4 billion to US$37 billion./1/ In response, equities in these markets
declined despite positive developments in their economies and a boom in
developed world equity markets. In 1996, however, out-
1. Source: International Monetary Fund.
1
<PAGE>
side investment in virtually all of the emerging markets increased strongly, and
many of these markets staged strong rallies between January and April before
consolidating in May and June. Within this environment, the Fund's Class I
shares earned a six-month total return of 15.89%, as discussed in the
Performance Summary on page 5, which significantly outperformed the 7.32% return
posted by the Morgan Stanley Capital International World Index (MSCI) over the
same period.
On June 30, 1996, 88.8% of the Fund's total net assets were invested in
equities, with the remaining 11.2% held in cash and other liquid instruments.
These equity investments were diversified across 35 markets, with no single
market accounting for more than 15%.
In Latin America, investors focused on improvement in the area's economies, and
market indices moved sharply higher. For example, when measured in U.S.
dollars, the Brazilian Bovespa Index was up 36.1% during the six-month period,
while the Mexican Bolsa Index increased 17.8%. Participating in this rally, we
substantially increased our Latin American investments, from 24.1% of total net
assets on December 31, 1995 to 29.2% on June 30, 1996. Although we favored the
most highly liquid markets, such as Brazil, Mexico and Argentina, we
- -----------------------------------
Templeton Developing Markets Trust
Geographic Distribution on 6/30/96
Based on Total Net Assets
[3-D PIE GRAPH ON STOCKS APPEARS HERE]
also increased our holdings in several Venezuelan companies, including
Electricidad de Caracas, Venezuela's largest energy company.
Share prices on Asian markets also advanced during the first four months of
1996, as undervalued currencies in several countries attracted foreign capital.
However, during May and June, this capital caused these economies to overheat.
This raised the possibility of an exchange rate crisis and the amount of capital
inflows to the region declined. During the reporting period, we slightly
increased the percentage of the Fund's total net assets in Asia as we made new
investments in India, Indonesia, Malaysia and Turkey.
2
<PAGE>
In western Europe, returns on the Fund's investments in Spain, Portugal, Italy
and Greece have also been good. A new coalition government in Spain has boosted
market confidence and appears committed to taking measures necessary to meet the
conditions specified in the Maastricht Treaty for a single European currency.
During the period under review, we added to our position in Telefonica de
Espana, the recently privatized national telecommunications company, and we
anticipate adding other Spanish stocks to our portfolio in the future.
The Fund's portfolio spans not only many countries, but also many sectors, and
on June 30, 1996, our assets were diversified across 31 different industries.
20.31% of the Fund was invested in the banking sector because we believe that
large holdings in this sector will allow us to benefit from new banking
technology and the wide profit margins available on loans in emerging market
countries. We also like the telecommunications sector because the privatization
of government monopolies has the potential to increase profit margins and
because most people in emerging markets have not yet been able to purchase
telephones or other telecommunication products.
This discussion reflects the strategies we employed for the Fund during the past
six-month period, and includes
- -------------------------------------------------------
Templeton Developing
Markets Trust
Top 10 Countries Represented in the Trust on 6/30/96
As a Percentage of Total Net Assets
<TABLE>
<CAPTION>
% of Total
Country Net Assets
- -------------------------------------------------------
<S> <C>
Hong Kong 14.8%
- -------------------------------------------------------
Brazil 10.2%
- -------------------------------------------------------
Mexico 8.2%
- -------------------------------------------------------
Argentina 7.0%
- -------------------------------------------------------
Turkey 5.0%
- -------------------------------------------------------
Portugal 4.2%
- -------------------------------------------------------
Greece 4.0%
- -------------------------------------------------------
Indonesia 3.4%
- -------------------------------------------------------
Spain 3.3%
- -------------------------------------------------------
Malaysia 3.0%
- -------------------------------------------------------
</TABLE>
our opinions as of the close of the period. Since economic and market conditions
are constantly changing, our strategies, and our evaluations, conclusions and
decisions regarding portfolio holdings, may change as new circumstances arise.
Although past performance of a specific investment or sector cannot guarantee
future performance, such information can be useful in analyzing securities we
purchase or sell for the Fund.
Looking forward, we have confidence in the future of emerging market equities.
We believe that their poor performance in 1995 left many of these markets
undervalued, and that their strong economic fundamentals will continue
3
<PAGE>
- --------------------------------------------------------------------------------
Templeton Developing
Markets Trust
Top 10 Holdings on 6/30/96
As a Percentage of Total Net Assets
<TABLE>
<CAPTION>
% of Total
Company, Industry, Country Net Assets
- --------------------------------------------------------------------------------
<S> <C>
Cheung Kong Holdings Ltd.
Multi-Industry, Hong Kong 2.8%
- --------------------------------------------------------------------------------
Telmex-Telefonos de Mexico SA, ADR, L
Telecommunications, Mexico 2.4%
- --------------------------------------------------------------------------------
Telebras-Telecomunicacoes Brasileiras SA
Telecommunications, Brazil 2.1%
- --------------------------------------------------------------------------------
Electrobras-Centrais Eletricas Brasileiras
SA, B, pfd.; Utilities - Electrical & Gas, Brazil 2.0%
- --------------------------------------------------------------------------------
HSBC Holdings PLC
Banking, Hong Kong 2.0%
- --------------------------------------------------------------------------------
Electricidad de Caracas (Saica Saca)
Utilities - Electrical & Gas, Venezuela 1.9%
- --------------------------------------------------------------------------------
Sun Hung Kai Properties Ltd.
Real Estate, Hong Kong 1.7%
- --------------------------------------------------------------------------------
New World Development Co. Ltd.
Real Estate, Hong Kong 1.6%
- --------------------------------------------------------------------------------
Petroleo Brasileiro SA (Petrobras)
Energy Sources, Brazil 1.5%
- --------------------------------------------------------------------------------
Banco Bilbao Vizcaya SA
Banking, Spain 1.5%
- --------------------------------------------------------------------------------
</TABLE>
For a complete list of portfolio holdings, see page 12 of this report.
to positively influence international investors. Of course, investing in
emerging markets involves special considerations which may include risks related
to market and currency volatility, 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.
While short-term volatility can be disconcerting, declines of as much as 40% to
50% are not unusual in emerging markets. For example, the Hong Kong market has
increased 535% in the last 15 years, but has suffered six declines of more than
20% during that time./2/
We thank you for investing in the Templeton Developing Markets Trust, appreciate
your support and welcome your comments.
2. Source: Bloomberg. Based on quarterly percentage change over 15 years ended
June 30, 1996.
4
<PAGE>
Performance Summary
Class I
The Templeton Developing Markets Trust Class I shares reported a total return of
15.89% for the six-month period ended June 30, 1996. For the one-year period
ended June 30, 1996, total return for Class I shares was 14.13%. Total return
measures the change in value of an investment, assuming reinvestment of
dividends and capital gains distributions, and does not include the initial
sales charge. As the chart to the right illustrates, the Fund's Class I shares
delivered a cumulative total return of more than 68% since inception on October
17, 1991.
During the reporting period, Class I shareholders received distributions of 1.5
cents ($0.015) per share in income dividends and 4.0 cents ($0.04) in long-term
capital gains. As measured by net asset value, the price of the Fund's Class I
shares increased by $2.01, from $13.01 on December 31, 1995 to $15.02 on June
30, 1996. Of course, past performance is not predictive of future results, and
distributions will vary depending on income earned by the Fund, as well as any
profits realized from the sale of securities in the portfolio.
TEMPLETON DEVELOPING
MARKETS TRUST
Class I
Periods ended June 30, 1996
<TABLE>
<CAPTION>
Since
Inception
One-year Three-year (10/17/91)
<S> <C> <C> <C>
Average Annual
Total Return/1/ 7.57% 11.03% 10.26%
Cumulative
Total Return/2/ 14.13% 45.22% 68.04%
Value of $10,000
Investment/3/ $10,757 $13,685 $15,838
</TABLE>
1. Average annual total returns represent the average annual change in value of
an investment over the periods indicated and include the maximum 5.75% initial
sales charge. See Note below.
2. Cumulative total returns measure the change in value of an investment over
the periods indicated and do not include the maximum 5.75% initial sales charge.
See Note below.
3. These figures represent the value of a hypothetical $10,000 investment in the
fund over the specified periods and include the maximum 5.75% initial sales
charge.
Note: 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.
Investment return and principal value will fluctuate with market conditions,
currencies and the economic and political climates of the countries where
investments are made. Developing markets involve heightened risks related to
the same factors, in addition to those associated with the relatively small size
and lesser liquidity of these markets. Thus, your shares, when redeemed, may be
worth more or less than their original cost. Past performance is not predictive
of future results.
5
<PAGE>
PERFORMANCE SUMMARY
CLASS II
The Templeton Developing Markets Trust Class II shares reported a total return
of 15.42% for the six-month period ended June 30, 1996. For the one-year period
ended June 30, 1996, total return for Class II shares was 13.24%. Total return
measures the change in value of an investment, assuming reinvestment of
dividends and capital gains distributions, and does not include the initial
sales charge.
During the reporting period, Class II shareholders received distributions of
1.46 cents ($0.0146) per share in income dividends and 4.0 cents ($0.04) in
long-term capital gains. As measured by net asset value, the price of the
Fund's Class II shares increased by $1.94, from $12.95 on December 31, 1995 to
$14.89 on June 30, 1996. Of course, past performance is not predictive of
future results, and distributions will vary depending on income earned by the
Fund, as well as any profits realized from the sale of securities in the
portfolio.
<TABLE>
<CAPTION>
TEMPLETON DEVELOPING
MARKETS TRUST
Class II
Periods ended June 30, 1996
Since
Inception
One-year (5/1/95)
<S> <C> <C>
Average Annual
Total Return/1/ 11.12% 12.92%
Cumulative
Total Return/2/ 13.24% 17.39%
Value of $10,000
Investment/3/ $11,109 $11,524
</TABLE>
1. Average annual total returns represent the average annual change in value of
an investment over the periods indicated and include the 1.00% initial sales
charge and the 1.00% contingent deferred sales charge (CDSC) applicable to
shares redeemed within 18 months of purchase. See Note below.
2. Cumulative total returns measure the change in value of an investment over
the periods indicated and do not include the 1.00% initial sales charge or the
1.00% CDSC, applicable to shares redeemed within the first 18 months of
investment. See Note below.
3. These figures represent the value of a hypothetical $10,000 investment in the
fund over the specified periods and include the 1.00% initial sales charge and
the 1.00% contingent deferred sales charge (CDSC) applicable to shares redeemed
within 18 months of purchase. See Note below.
Note: 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.
Investment return and principal value will fluctuate with market conditions,
currencies and the economic and political climates of the countries where
investments are made. Developing markets involve heightened risks related to
the same factors, in addition to those associated with the relatively small size
and lesser liquidity of these markets. Thus, your shares, when redeemed, may be
worth more or less than their original cost. Past performance is not predictive
of future results.
6
<PAGE>
THE FOLLOWING LETTER WAS WRITTEN BY DR. MOBIUS AFTER A TRIP TO PORTUGAL IN MAY,
1996.
When I first visited Portugal in 1988, it was still shaking off the cobwebs of
many years of dictatorship and military rule. Today, however, Portuguese cities
and villages are vibrant with activity, modern retail distribution networks are
growing, and there is a wide selection of consumer goods in shops.
Prior to my visit, the country had gone through two political elections, one for
parliament in October 1995, and one for the presidency in January 1996. The
Socialist Party won both elections, but fell short of obtaining an absolute
majority in Parliament by four seats. However, it is clear that the Portuguese
economy is being more affected by other European developments than by its own
domestic, political and economic considerations. Most Portuguese politicians
want the country to participate in the European Monetary Union (EMU) so that the
country can share a common currency with the rest of Europe. They are,
therefore, committed to meeting the Maastricht Agreement criteria concerning
inflation and interest rates, and are determined to override any issues that
might sidetrack Portugal from monetary convergence with members of the EMU.
During the last ten years, Portugal's economy has grown more rapidly than the
economies of many developed countries, which has fueled the rapid expansion of
the the Portuguese stock market. In 1985, there were only 24 listed companies
on the Portuguese stock exchange, and by 1995 that number had increased to 169.
When we began our trip in May, most emerging markets were bullish, and Portugal
was no exception. In fact, the Lisbon BVL General Index had risen about 15%
between January 1996 and May 1996.
In our opinion, two factors favor the continued expansion of Portugal's stock
market. First, the government is planning to step up its privatization program
appreciably. The proposed expansion includes cement, tobacco, petroleum,
shipping, mining, agriculture companies, and banks. Secondly, corporate
restructuring, which has cut costs and improved corporate earnings in recent
7
<PAGE>
[SECTIONIONAL MAP OF PORTUGAL SPAIN APPEARS HERE]
years, is likely to continue. In recent years, consolidation in the banking
sector, probably the largest sector of Portugal's stock market, has resulted in
some significant savings in banks' operating costs. Banco Portugues Sotto Mayor
and Banco Totta & Acores merged with Mundial Confianca, an insurance company,
while Banco Portuguese do Atlantico was purchased by Banco Comercial Portugues.
However, corporate restructuring in Portugal can be expensive due to the high
cost of dismissing workers. Usually if a company fires a worker, it must pay him
one month's wages for every year of employment.
Mergers have also transformed the communications sector of the Portuguese stock
market. Since the combination of three government-owned or controlled
telecommunication companies into one single organization -- Portugal Telecom --
the rate of installations has accelerated and the long waiting list for
telephone lines has declined. The new company has the exclusive right to operate
fixed lines until the year 2003 and expects that traffic will rise as inter-
urban and international call tariffs fall.
An interesting transformation is also taking place in Portuguese retailing.
During the last decade, large retail organizations took over many traditional
retail outlets, and supermarket sales now represent over 30% of the total retail
market. However, supermarket operators are being hampered by government
regulations designed to protect small retailers who were gradually being
squeezed out by large supermarkets. Since 1994, stores larger than 2,000 square
meters were required to have national licenses that, according to one
supermarket operator, were difficult to obtain. His company solved this problem
by dividing its large shopping centers into separate units of less than 2,000
square meters. For example, each complex has separate
8
<PAGE>
stores for hard goods, furniture, and textiles. They are all run as a single
store, but from a legal and tax point of view they are separate.
As you can see in the table on page 3, Portugal was number six of the ten top
countries represented in the Fund. The corporate restructuring it is presently
experiencing bodes well for Portugal's economic development, and as a result of
what I saw during my trip, I believe that investing in Portuguese companies now
should provide the Fund's shareholders with attractive benefits in the future.
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--CLASS I
(For a share outstanding throughout the period)
<TABLE>
<CAPTION>
SIX MONTHS OCTOBER 17, 1991
ENDED YEAR ENDED DECEMBER 31 (COMMENCEMENT
JUNE 30, 1996 -------------------------------------------- OF OPERATIONS) TO
(UNAUDITED) 1995 1994 1993 1992 DECEMBER 31, 1991
------------- ---------- ---------- ---------- -------- -----------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, begin-
ning of period $ 13.01 $ 13.42 $ 15.27 $ 8.86 $ 10.02 $ 10.00
---------- ---------- ---------- ---------- -------- -------
Income from investment
operations:
Net investment income .15 .21 .14 .04 .08 .01
Net realized and
unrealized gain (loss) 1.92 (.18) (1.44) 6.55 (1.06) .03
---------- ---------- ---------- ---------- -------- -------
Total from investment
operations 2.07 .03 (1.30) 6.59 (.98) .04
---------- ---------- ---------- ---------- -------- -------
Distributions:
Dividends from net
investment income (.02) (.20) (.12) (.05) (.07) (.01)
Distributions from net
realized gains (.04) (.24) (.43) (.13) (.11) --
Distributions from
other sources -- -- -- -- -- (.01)
---------- ---------- ---------- ---------- -------- -------
Total distributions (.06) (.44) (.55) (.18) (.18) (.02)
---------- ---------- ---------- ---------- -------- -------
Change in net asset
value 2.01 (.41) (1.85) 6.41 (1.16) .02
---------- ---------- ---------- ---------- -------- -------
Net asset value, end of
period $ 15.02 $ 13.01 $ 13.42 $ 15.27 $ 8.86 $ 10.02
========== ========== ========== ========== ======== =======
TOTAL RETURN* 15.89% .36% (8.64)% 74.50% (9.75)% .40%
RATIOS/SUPPLEMENTAL
DATA
Net assets, end of pe-
riod (000) $2,981,843 $2,147,664 $2,009,154 $1,396,392 $180,189 $23,744
Ratio of expenses to
average net assets 2.04%** 2.10% 2.11% 2.20% 2.52% 3.78%**
Ratio of expenses, net
of reimbursement, to
average net assets 2.04%** 2.10% 2.11% 2.20% 2.25% 2.25%**
Ratio of net investment
income to average net
assets 2.23% 1.66% 1.08% .57% 1.30% .86%**
Portfolio turnover rate 5.36% 9.76% 18.57% 16.01% 21.98% --
Average commission rate
paid (per share) $ .0027
</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
- --------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE--CLASS II
(For a share outstanding throughout the period)
<TABLE>
<CAPTION>
SIX MONTHS FOR THE PERIOD
ENDED MAY 1, 1995+
JUNE 30, 1996 THROUGH
(UNAUDITED) DECEMBER 31, 1995
------------- -----------------
<S> <C> <C>
Net asset value, beginning of period $ 12.95 $ 13.10
-------- -------
Income from investment operations:
Net investment income .21 .02
Net realized and unrealized gain 1.79 .19
-------- -------
Total from investment operations 2.00 .21
-------- -------
Distributions:
Dividends from net investment income (.02) (.18)
Distributions from net realized gains (.04) (.18)
-------- -------
Total distributions (.06) (.36)
-------- -------
Change in net asset value 1.94 (.15)
-------- -------
Net asset value, end of period $ 14.89 $ 12.95
======== =======
TOTAL RETURN* 15.42% 1.70%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000) $151,287 $41,012
Ratio of expenses to average net assets 2.73%** 2.73%**
Ratio of net investment income to average net
assets 1.82%** .19%**
Portfolio turnover rate 5.36% 9.76%
Average commission rate paid (per share) $ .0027
</TABLE>
*TOTAL RETURN DOES NOT REFLECT SALES COMMISSIONS OR THE CONTINGENT DEFERRED
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, 1996 (unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES/PRINCIPAL IN
INDUSTRY LOCAL CURRENCY VALUE
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------
LONG TERM SECURITIES: 88.8%
- ------------------------------------------------------------------------------------------------
Argentina: 7.0%
Aluar Aluminio
Argentino SA, B Miscellaneous Materials & Commodities 294,679 $ 736,970
+Astra Cia Argentina de
Petroleo SA Energy Sources 2,727,380 6,466,283
*Atanor Cia Nacional
Para la Industria
Quimica SA, D Chemicals 2,480,898 6,576,813
Banco Bansud SA, B Banking 450,652 5,252,043
Banco de Galicia y
Buenos Aires SA, B Banking 3,214,099 20,577,850
Banco Frances del Rio
de la Plata SA Banking 1,475,285 13,990,878
Buenos Aires
Embotelladora SA, ADR Beverages & Tobacco 684,200 9,065,650
Capex SA, A Utilities Electrical & Gas 123,774 1,002,940
Central Costanera SA, B Utilities Electrical & Gas 825,769 3,039,955
*Ciadea SA Automobiles 867,998 6,121,648
Industrias
Petroquimicas Koppers
(IPAKO) Chemicals 1,612,631 5,968,943
Juan Minetti SA Building Materials & Components 413,049 1,900,729
Molinos Rio de Plata
SA, B Food & Household Products 2,160,815 22,913,117
Nobleza Piccardo Sdad
Industrial Comercial y
Financial Beverages & Tobacco 190,518 724,236
Perez Companc SA, B Energy Sources 7,009,770 46,001,108
*Quilmes Industrial SA Beverages & Tobacco 810,500 8,307,625
Quilmes Industrial SA,
reg Beverages & Tobacco 105,000 1,076,250
*Sevel Argentina SA, C Automobiles 2,670,129 7,746,239
*Siderar, A Metals & Mining 111,148 286,868
*Sociedad Comercial del
Plata Cadelplata Come Multi-Industry 7,156,070 22,120,441
Transportadora de Gas
del Sur SA, B Energy Sources 1,430,645 3,520,689
YPF Sociedad Anonima,
ADR Energy Sources 1,152,010 25,920,225
*Zanella Hermanos SA Automobiles 931,434 355,940
-------------
219,673,440
- ------------------------------------------------------------------------------------------------
Brazil: 10.2%
Banco Bradesco SA Banking 1,501,078,668 10,748,151
Banco Bradesco SA, pfd. Banking 728,000,795 5,944,935
*Banco do Brasil SA Banking 609,328,792 4,975,846
*Banco do Brazil SA,
pfd. Banking 553,801,120 4,384,523
*Banespa-Banco do
Estado de Sao Paulo
SA, pfd. Banking 1,282,693,850 4,790,223
Brasmotor SA, pfd. Multi-Industry 45,992,231 14,381,876
*Cia Mesbla SA, pfd. Merchandising 75,117,000 411,436
*Confab Industrial SA,
pfd. Industrial Components 1,846,340 680,322
</TABLE>
12
<PAGE>
Templeton Developing Markets Trust
Investment Portfolio, June 30, 1996 (unaudited) (cont.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES/PRINCIPAL IN
INDUSTRY LOCAL CURRENCY VALUE
<S> <C> <C> <C>
- --------------------------------------------------------------------------------------------
LONG TERM SECURITIES: (CONT.)
- --------------------------------------------------------------------------------------------
Brazil: (cont.)
Copene-Petroquimica do
Nordeste SA, A, pfd. Chemicals 27,073,550 $ 13,049,173
+Duratex SA, pfd. Forest Products & Paper 441,736,600 19,092,136
Eletrobras-Centrais
Eletricas Brasileiras
SA Utilities Electrical & Gas 61,350,000 16,496,041
Eletrobras-Centrais
Eletricas Brasileiras
SA, B, pfd. Utilities Electrical & Gas 160,885,847 45,983,407
Itausa-Investimentos
Itau SA, pfd. Multi-Industry 47,025,179 36,059,740
*Mannesmann SA Machinery & Engineering 15,037,010 1,991,507
*Mannesmann SA, pfd. Machinery & Engineering 5,137,562 690,704
Marcopolo SA, B, pfd. Automobiles 14,371,400 3,091,393
Petrobras-Petroleo Bra-
sileiro SA, pfd. Energy Sources 382,784,333 47,078,489
Refripar-Refrigeracao
Parana Sa, pfd. Appliances & Household Durables 632,250,000 1,574,093
Telebras-
Telecomunicacoes
Brasileiras SA Telecommunications 738,109,194 43,368,463
Telebras-
Telecomunicacoes
Brasileiras SA, pfd. Telecommunications 329,573,973 23,007,654
*Telerj-
Telecomunicacoes do
Rio de Janeiro SA,
pfd. Telecommunications 4,133,888 465,199
Unibanco-Uniao de
Bancos Brasileiros SA,
pfd. Banking 238,662,372 6,462,411
Vale de Rio Doce, pfd. Metals & Mining 785,141 15,207,884
-------------
319,935,606
- --------------------------------------------------------------------------------------------
Chile: 0.1%
Antofagasta Holdings
PLC Metals & Mining 901,550 4,522,311
- --------------------------------------------------------------------------------------------
China: 1.6%
*China First Pencil Co.
Ltd., B Recreation & Other Consumer Goods 366,000 135,420
China Merchants Shekou
Port Service Co. Ltd.,
B Transportation 1,000,000 439,234
China Southern Glass
Co. Ltd., B Building Materials & Components 3,791,894 2,228,869
China Textile Machinery
Co. Ltd., B Machinery & Engineering 2,115,100 287,654
Chiwan Wharf Holdings
Ltd., B Transportation 12,378,500 5,437,057
Foshan Electrical and
Lighting Co. Ltd., B Appliances & Household Durables 790,000 663,372
Guangzhou Shipyard In-
ternational Co. Ltd.,
H Machinery & Engineering 5,972,000 1,450,423
Luoyang Glass Co. Ltd.,
H Misc Materials & Commodities 1,997,000 474,693
Qing Ling Motors Co.
Ltd., H Automobiles 2,606,000 875,316
Shandong Huaneng Power Utilities Electrical & Gas 284,000 2,343,000
Shanghai Chlor-Alkali
Chemical Co. Ltd., B Chemicals 12,105,300 2,953,693
Shanghai Dazhong Taxi
Shareholding Co. Ltd.,
B Transportation 1,300,000 949,000
</TABLE>
13
<PAGE>
Templeton Developing Markets Trust
Investment Portfolio, June 30, 1996 (unaudited) (cont.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES/PRINCIPAL IN
INDUSTRY LOCAL CURRENCY VALUE
<S> <C> <C> <C>
- --------------------------------------------------------------------------------------------
LONG TERM SECURITIES (CONT.)
- --------------------------------------------------------------------------------------------
China: (cont.)
*Shanghai Erfangji Tex-
tile Machinery Co.
Ltd., B Machinery & Engineering 8,770,806 $ 1,105,122
*Shanghai Industrial
Sewing Machine Corp. Machinery & Engineering 3,573,700 493,171
*Shanghai Jin Jiang
Tower Co. Ltd., B Leisure & Tourism 5,649,600 1,604,486
Shanghai Jinqiao Export
Processing Zone Devel-
opment, B Real Estate 5,299,000 2,066,610
*Shanghai Lian Hua Fi-
bre Corp., B Textiles & Apparel 798,360 114,165
*Shanghai Lujiaxui Fi-
nance & Trade Zn Dev
Stock Co Ltd, B Real Estate 12,825,700 9,542,321
*Shanghai Narcissus
Electric Appliances
Co. Ltd., B Appliances & Household Durables 807,950 137,352
Shanghai Pechemical Co.
Ltd., H Chemicals 14,464,000 4,110,816
Shanghai Refrigerator
Compressor Co. Ltd., B Industrial Components 1,466,010 677,296
Shanghai Rubber Belt
Co. Ltd., B Industrial Components 600,480 97,278
*Shanghai Shangling
Electric Appliance, B Appliances & Household Durables 1,348,150 711,823
*Shanghai Steel Tube
Co. Ltd., B Machinery & Engineering 1,273,800 155,404
*Shanghai Tyre & Rubber
Co. Ltd., B Industrial Components 3,576,000 894,000
*Shanghai Vacuum Elec-
tron Devices Co. Ltd.,
B Appliances & Household Durables 2,109,800 379,764
Shanghai Wingsung Co.
Ltd., B Recreation & Other Consumer Goods 485,400 103,876
*Shanghai Yaohua
Pilkington Glass, B Building Materials & Components 6,111,250 3,666,750
Shenzhen China Bicycles
Co. (Holdings) Ltd., B Recreation & Other Consumer Goods 1,526,400 352,970
Shenzhen Gintian Indus-
try Co. Ltd., B Multi-Industry 892,320 293,953
Shenzhen Huafa Elec-
tronics Co. Ltd., B Appliances & Household Durables 212,000 54,501
Shenzhen Konka Elec-
tronic Group Co. Ltd.,
B Appliances & Household Durables 1,000,000 904,305
Shenzhen Petrochemical
(Group) Shareholding
Co. Ltd., B Chemicals 251,600 74,108
Shenzhen Properties &
Resources Develop.
(Group) Ltd., B Real Estate 1,631,960 668,322
Shenzhen Tellus Machin-
ery & Electronics Co.
Ltd., B Multi-Industry 246,400 57,297
Shenzhen Vanke Co.
Ltd., B Real Estate 6,305,926 2,704,605
Tsann Kuen Enterprise
Co. Ltd., B Appliances & Household Durables 648,000 350,757
Zhuhai Sez Lizhu Phar-
maceutical Group Inc.,
B Health & Personal Care 1,196,800 405,079
-------------
49,963,862
- --------------------------------------------------------------------------------------------
</TABLE>
14
<PAGE>
Templeton Developing Markets Trust
Investment Portfolio, June 30, 1996 (unaudited) (cont.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES/PRINCIPAL IN
INDUSTRY LOCAL CURRENCY VALUE
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------
LONG TERM SECURITIES (CONT.)
- ------------------------------------------------------------------------------------------
Colombia: 1.0%
Banco Ganadero SA, ADR
C Banking 79,000 $ 1,540,500
Cementos Argos SA Building Materials & Components 1,879,034 10,475,512
Cia Colombiana de
Tabacos SA Coltabaco Beverages & Tobacco 504,313 1,512,077
Compania Nacional de
Chocolates SA Food & Household Products 829,893 6,889,370
Compania Suramericana
de Seguros Insurance 575,393 10,243,346
Promigas SA Utilities Electrical & Gas 121,311 397,825
-------------
31,058,630
- ------------------------------------------------------------------------------------------
Croatia: 0.1%
*Pliva DD, GDR, 144A Health & Personal Care 18,000 715,500
*Pliva DD, GDR, reg S Health & Personal Care 1,400 55,650
-------------
771,150
- ------------------------------------------------------------------------------------------
Czech Republic: 1.4%
*CEZ Utilities Electrical & Gas 1,720 68,455
CEZ, GDR Utilities Electrical & Gas 412,580 17,276,788
*CEZ, GDS, 144A Utilities Electrical & Gas 30,000 1,256,250
*Chemopetrol Group AS Chemicals 269,000 12,808,127
*Elektrarny Opatovice
AS Energy Sources 20,096 3,374,533
Komercni Banka AS Banking 9,822 801,453
*SPT Telecom AS Telecommunications 80,000 9,769,927
-------------
45,355,533
- ------------------------------------------------------------------------------------------
Ecuador: 0.1%
La Cemento Nacional CA,
GDR Multi-Industry 8,400 1,520,400
- ------------------------------------------------------------------------------------------
Egypt: 0.1%
Commercial Interna-
tional Bank Ltd. Banking 8,609 1,062,996
- ------------------------------------------------------------------------------------------
Greece: 4.0%
Alpha Credit Bank Banking 712,701 37,627,532
Alpha Leasing SA Financial Services 250,690 5,085,709
Delta Dairy SA Food & Household Products 389,500 4,760,466
Delta Dairy SA, pfd. Food & Household Products 189,101 1,525,071
Elais Oleaginous Co. Food & Household Products 169,100 5,483,184
Ergo Bank SA Banking 294,480 16,220,578
Etba Leasing Financial Services 120,040 1,696,678
Fourlis Brothers Corp.
SA Appliances & Household Durables 300,160 4,367,325
Hellas Can--Container
Manufacturers Metals & Mining 245,990 5,266,466
Hellenic Bottling Co.
SA Food & Household Products 193,385 6,423,389
*Hellenic
Telecommunications
Organizations OTE Telecommunications 400,900 6,649,724
</TABLE>
15
<PAGE>
Templeton Developing Markets Trust
Investment Portfolio, June 30, 1996 (unaudited) (cont.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES/PRINCIPAL IN
INDUSTRY LOCAL CURRENCY VALUE
<S> <C> <C> <C>
- --------------------------------------------------------------------------------------------
LONG TERM SECURITIES (CONT.)
- --------------------------------------------------------------------------------------------
Greece: (cont.)
Hellenic
Telecommunications
Organizations OTE,
144A Telecommunications 600,000 $ 9,952,193
Intracom SA, reg. Electrical & Electronics 91,000 1,612,692
National Bank of Greece
SA Banking 133,275 6,554,327
Titan Cement Co., reg. Building Materials & Components 246,410 12,179,650
Titan Cement Co., reg.
pfd. Building Materials & Components 7,100 216,498
X. Benrubi & Son SA Food & Household Products 220,720 1,101,077
-------------
126,722,559
- --------------------------------------------------------------------------------------------
Hong Kong: 14.8%
C.P. Pokphand Co. Ltd. Food & Household Products 215,000 85,408
Cheung Kong Holdings
Ltd. Multi-Industry 12,151,000 87,513,258
China Overseas Land &
Investment Ltd. Real Estate 19,075,000 4,608,113
China Treasure
Telecomunications
Holdings Ltd. Electrical & Electronics 2,066,000 86,742
*China Treasury
Telecomunications
Holdings Ltd., wts. Electrical & Electronics 442,000 5,996
CNT Group Ltd. Multi-Industry 37,771,789 2,293,414
Cross Harbour Tunnel
Co. Ltd. Transportation 1,459,598 2,894,400
Dairy Farm Interna-
tional Holdings Ltd. Merchandising 10,157,972 8,583,486
Dickson Concepts (In-
ternational) Ltd. Merchandising 7,080,000 9,054,937
*East Asiatic Co. (Hong
Kong) Ltd. (The) Wholesale & International Trade 2,976,000 388,303
*Fairwood Holdings Ltd. Food & Household Products 8,792,000 817,781
Fortei Holdings Ltd. Merchandising 5,768,000 327,865
*Fu Hui Jewellery Co.
(H.K.) Ltd. Recreation & Other Consumer Goods 4,808,000 120,499
Gold Peak Industries
(Holdings) Ltd. Electrical & Electronics 944,000 533,540
Goldlion Holdings Ltd. Textiles & Apparel 9,689,000 8,323,722
*Great Wall Electronic
International Ltd. Electrical & Electronics 3,812,000 275,777
Hang Lung Development
Co. Ltd. Real Estate 17,628,000 33,134,696
Hongkong Electric Hold-
ings Ltd. Utilities Electrical & Gas 1,928,000 5,878,087
Hopewell Holdings Ltd. Construction & Housing 13,401,002 7,271,157
HSBC Holdings PLC Banking 4,112,197 62,155,095
Hualing Holdings Ltd. Appliances & Household Durables 1,332,000 137,661
IMC Holdings Ltd. Transportation 793,000 445,635
Jardine International
Motor Holdings Ltd. Automobiles 6,029,000 7,399,218
Jardine Matheson Hold-
ings Ltd. Multi-Industry 1,944,295 14,290,568
Jardine Strategic Hold-
ings Ltd. Multi-Industry 5,349,562 17,118,598
*Jardine Strategic
Holdings Ltd., wts. Multi-Industry 536,062 166,179
JCG Holdings Ltd. Financial Services 2,951,000 2,401,744
Joyce Boutique Holdings
Ltd. Merchandising 3,583,000 1,203,475
K Wah International
Holdings Ltd. Building Materials & Components 30,638,166 5,659,991
</TABLE>
16
<PAGE>
Templeton Developing Markets Trust
Investment Portfolio, June 30, 1996 (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., wts. Building Materials & Components 2,901,142 $ 138,672
KTP Holdings Ltd. Recreation & Other Consumer Goods 8,000,000 299,713
Lai Sun Development Co.
Ltd. Real Estate 42,140,000 8,601,389
*Lai Sun Development
Co. Ltd., wts. Real Estate 4,365,000 287,588
Lai Sun Garment Inter-
national Ltd. Multi-Industry 4,127,000 4,958,318
*Laws International
Holdings Ltd. Textiles & Apparel 7,054,000 801,927
Leefung-Asco Printers
Holdings Ltd. Broadcasting & Publishing 932,000 120,402
*Linkful International
Holdings Ltd. Merchandising 1,600,000 70,277
*Luks Industrial Co.
Ltd. Appliances & Household Durables 3,214,000 357,077
New World Development
Co. Ltd. Real Estate 11,044,051 51,220,028
NG Fund Hong Ltd. Food & Household Products 762,000 351,923
Orient Overseas Inter-
national Ltd. Transportation 314,000 231,218
*Peregrine Investments
Holdings Ltd. Financial Services 2,544,000 3,664,451
*Peregrine Investments
Holdings Ltd., wts. Financial Services 254,400 31,550
*Road King Infrastruc-
ture Construction & Housing 44,256 48,025
*S. Megga International
Holdings Ltd. Electronic Components & Instruments 5,782,000 227,822
Semi-Tech (Global) Co.
Ltd. Appliances & Household Durables 3,145,861 4,856,511
*South Sea Development
Co. Ltd. Real Estate 1,115,000 30,249
Stelux International
Holdings Ltd. Multi-Industry 14,002,570 3,129,470
Sun Hung Kai & Co. Ltd. Financial Services 17,472,000 6,320,008
Sun Hung Kai Properties
Ltd. Real Estate 5,169,900 52,261,690
Swire Pacific Ltd., B Multi-Industry 4,667,500 6,421,713
Tian An China Invest-
ments Co. Ltd. Real Estate 23,396,000 3,173,568
*Top Form International
Ltd. Textiles & Apparel 5,204,000 218,493
Tungtex (Holdings) Co.
Ltd. Textiles & Apparel 6,914,000 616,305
Wai Kee Holdings Ltd. Construction & Housing 4,403,600 1,265,770
Wheelock & Co. Ltd. Multi-Industry 10,613,000 20,977,153
Wing Shan International
Ltd. Utilities Electrical & Gas 6,442,000 882,152
Wo Kee Hong Holdings
Ltd. Merchandising 22,943,000 2,963,925
*Wo Kee Hong Holdings
Ltd., wts. Merchandising 4,588,600 136,341
*Yaohan Hongkong Corp.
Ltd. Merchandising 9,530,000 467,836
Yue Yuen Industrial
(Holdings) Ltd. Recreation & Other Consumer Goods 23,734,000 6,745,445
-------------
465,052,354
- ----------------------------------------------------------------------------------------------
Hungary: 0.8%
Chinoin Pharmaceutical
& Chemical Works Co.
Ltd. Health & Personal Care 13,914 5,560,595
EGIS RT, cert. Multi-Industry 6,100 3,646,551
EGIS RT Multi-Industry 61,000 364,655
*Fotex First Hungarian-
American Photo-Service Multi-Industry 2,630,400 2,383,788
*Gedeon Richter Ltd. Multi-Industry 45,000 2,250,000
</TABLE>
17
<PAGE>
Templeton Developing Markets Trust
Investment Portfolio, June 30, 1996 (unaudited) (cont.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES/PRINCIPAL IN
INDUSTRY LOCAL CURRENCY VALUE
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------
LONG TERM SECURITIES (CONT.)
- -------------------------------------------------------------------------------------
Hungary: (cont.)
+Ibusz Leisure & Tourism 94,260 $ 486,998
*+Ibusz, new Leisure & Tourism 31,420 150,297
Inter-Europa Bank RT Banking 1,408 342,305
+OTP Bank, GDR Banking 448,000 7,072,035
Pannonplast Plastic In-
dustries PLC Industrial Components 52,562 1,417,898
Pick Szeged RT Food & Household Products 35,403 1,532,751
Pick Szeged RT, GDR Food & Household Products 30,430 1,317,448
-------------
26,525,321
- -------------------------------------------------------------------------------------
India: 2.5%
Aban Loyd Chiles Off-
shore Ltd. Energy Sources 245,000 521,573
Arvind Mills Ltd. Textiles & Apparel 469,800 1,866,932
ATV Project India Ltd. Machinery & Engineering 1,732,000 737,440
Bharat Petroleum Corp.,
Ltd. Energy Sources 1,263,000 12,206,968
Bombay Dyeing & Manu-
facturing Co. Ltd. Chemicals 229,550 1,464,416
Bses Ltd. Utilities Electrical & Gas 376,350 2,083,118
*Cochin Refineries Ltd. Energy Sources 5,600 28,612
DCW Ltd. Chemicals 500,000 574,794
Dr. Reddys Laboratories
Ltd. Health & Personal Care 94,200 806,168
Essar Shipping Ltd. Transportation 773,500 424,843
Flex Industries Ltd. Food & Household Products 40,000 165,768
Ganesh Benzoplast Ltd. Chemicals 159,100 198,706
Garden Silk Mills Ltd. Textiles & Apparel 229,600 140,119
Grasim Industries Ltd
Ord. Multi-Industry 449,400 7,299,720
Great Eastern Shipping
Co. Ltd. Transportation 1,568,100 2,247,773
Hindustan Organic Chem-
icals Ltd. Chemicals 393,800 491,831
Hindustan Petroleum
Corp. Ltd. Energy Sources 546,000 6,083,026
Indian Petrochemicals
Corp. Ltd. Chemicals 980,000 4,332,529
Indian Rayon and Indus-
tries Ltd. Multi-Industry 123,800 1,732,427
Indo Gulf Fertilisers &
Chemicals Corp. Ltd. Chemicals 1,498,400 2,115,964
Industrial Credit & In-
vestment Corp. of In-
dia Ltd. Financial Services 3,914,100 9,999,120
Industrial Development
Bank of India Banking 466,000 1,673,261
ITC Bhadrachalam Paper-
boards Ltd. Forest Products & Paper 40,000 120,352
*National Aluminium Co.
Ltd. Metals & Mining 12,600 13,054
Oriental Bank of Com-
merce Banking 9,400 25,815
Reliance Industries
Ltd. Chemicals 1,012,000 6,089,810
Shipping Corporation of
India Ltd. Transportation 575,000 603,889
Steel Authority of In-
dia Ltd. Metals & Mining 681,500 638,362
*Steel Authority of In-
dia Ltd, GDR, reg S Metals & Mining 561,000 8,274,750
*Steel Authority of In-
dia Ltd., GDR, 144A Metals & Mining 62,000 914,500
Sterlite Industries
(India) Ltd. Metals & Mining 154,200 1,348,101
</TABLE>
18
<PAGE>
Templeton Developing Markets Trust
Investment Portfolio, June 30, 1996 (unaudited) (cont.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES/PRINCIPAL IN
INDUSTRY LOCAL CURRENCY VALUE
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------
LONG TERM SECURITIES (CONT.)
- ------------------------------------------------------------------------------------------
India: (cont.)
*Tamil Nadu Newsprint &
Papers Ltd. Forest Products & Paper 150,000 $ 608,856
Tata Chemicals Ltd. Chemicals 256,400 1,877,695
Tata Iron & Steel Co.
Ltd. Metals & Mining 30,000 206,287
Videocon International
Ltd. Appliances & Household Durables 404,000 848,595
Wockhardt Health & Personal Care 121,600 937,973
-------------
79,703,147
- ------------------------------------------------------------------------------------------
Indonesia: 3.4%
*Asia Pulp & Paper Co.
Ltd., ADR Forest Products & Paper 162,500 1,990,625
PT Anwar Sierad,fgn. Food & Household Products 1,384,500 1,308,657
*PT Aqua Golden Missis-
sippi, fgn. Beverages & Tobacco 511,225 494,202
PT Astra International,
fgn. Multi-Industry 1,926,100 2,792,948
PT Bank Dagang Nasional
Indonesia, fgn. Banking 1,250,000 1,047,261
PT Bank PDFCI, fgn. Banking 623,000 582,180
PT Barito Pacific Tim-
ber, fgn. Forest Products & Paper 23,452,500 15,366,300
PT BBL Dharmala Fi-
nance, fgn. Financial Services 1,653,000 2,308,163
PT Bimantara Citra,
fgn. Multi-Industry 2,564,000 3,222,213
PT Branta Mulia, fgn. Automobiles 1,386,000 818,797
+PT Charoen Pokphand
Indonesia, fgn. Food & Household Products 6,830,500 13,206,122
PT Cipendawa Farm En-
terprises, fgn. Food & Household Products 65,000 50,967
PT Dharmala Intiland,
fgn. Real Estate 5,641,500 4,362,922
PT Duta Anggada Realty,
fgn. Real Estate 1,284,500 883,008
PT Duta Pertiwi
Nusantura, fgn. Chemicals 687,500 221,536
PT Eratex Djaja, fgn. Textiles & Apparel 567,000 170,526
PT Ficorinvest Bank,
fgn. Banking 363,000 304,125
PT Gadjah Tunggal, fgn. Automobiles 13,864,500 6,850,344
PT Gajah Surya Multi
Finance, fgn. Financial Services 1,866,200 821,850
*PT Ganda Wangsa Utama,
fgn. Textiles & Apparel 1,022,000 307,368
PT Hotel Prapatan, fgn. Leisure & Tourism 1,185,000 840,064
PT Intan Wijaya Chemi-
cal Industry, fgn. Chemicals 1,490,500 576,348
PT Inter-Pacific Bank,
fgn. Banking 738,000 491,472
PT Jakarta
International Hotel &
Development, fgn. Real Estate 4,693,750 4,033,298
PT Japfa Comfeed Indo-
nesia, fgn. Food & Household Products 3,839,500 2,226,992
PT Metrodata Electron-
ic, fgn. Electrical & Electronics 345,500 400,795
PT Multibreeder
Adirama, fgn. Food & Household Products 858,750 318,226
PT Pabrik Kertas Tjiwi
Kimia, fgn. Forest Products & Paper 1,955,500 1,995,408
PT Panasia Indosyntec,
fgn. Textiles & Apparel 8,170,400 2,193,985
PT Polysindo Eka
Perkasa, fgn. Textiles & Apparel 23,187,000 10,958,410
*PT Pudjiadi Prestige
Ltd., fgn. Real Estate 762,500 655,209
+PT Sarasa Nugraha,
fgn. Textiles & Apparel 2,567,000 634,168
</TABLE>
19
<PAGE>
Templeton Developing Markets Trust
Investment Portfolio, June 30, 1996 (unaudited) (cont.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES/PRINCIPAL IN
INDUSTRY LOCAL CURRENCY VALUE
<S> <C> <C> <C>
- --------------------------------------------------------------------------------------------
LONG TERM SECURITIES (CONT.)
- --------------------------------------------------------------------------------------------
Indonesia: (cont.)
PT Sari Husada, fgn. Food & Household Products 785 $ 4,618
PT Sinar Mas Agro
Resources &
Technology Corp., fgn. Food & Household Products 3,902,000 2,850,011
*PT Sinar Mas Multi
Artha, fgn. Financial Services 5,017,000 6,143,265
PT Sumalindo Lestari
Jaya, fgn. Forest Products & Paper 2,050,000 2,466,165
PT Summarecon Agung, fgn. Real Estate 400,500 223,695
PT Tambang Timah
(Persero), fgn. Metals & Mining 627,000 1,158,367
PT Ultra Jaya Milk, fgn. Food & Household Products 3,395,500 1,932,991
PT Unggul Indah Corp.,
fgn. Chemicals 1,410,200 1,454,127
PT United Tractors, fgn. Machinery & Engineering 4,823,000 7,615,263
-------------
106,282,991
- --------------------------------------------------------------------------------------------
Israel: 0.7%
Agis Industries Ltd. Health & Personal Care 46,906 326,580
Bank Hapoalim BM Banking 1,629,948 2,390,206
Clal Industries Ltd. Multi-Industry 1,409,405 7,260,054
Discount Investment Corp. Multi-Industry 133,732 9,022,662
The First International
Bank of Israel Banking 17,504 1,941,336
-------------
20,940,838
- --------------------------------------------------------------------------------------------
Italy: 2.3%
Banco Ambrosiano Veneto
SPA, di Risp Banking 7,639,000 10,522,794
Instituto Finanziaro
Industriale SPA, pfd. Automobiles 632,000 5,637,766
*Istituto Mobiliare
Italiano SPA Banking 1,085,000 9,120,588
Italmobiliare SPA Multi-Industry 859,210 14,366,631
+Italmobiliare SPA, di
Risp, conv. Multi-Industry 906,100 8,222,484
*Italmobiliare SPA, wts. Multi-Industry 162,360 76,529
Mediobanca/Italmobiliare,
6.00%, conv., 12/31/99 Corporate Bond 2,922,480,000** 1,869,777
Sirti SPA Construction & Housing 3,484,500 22,580,151
+Teleco Cavi SPA, di Risp Telecommunications 557,000 1,154,545
-------------
73,551,265
- --------------------------------------------------------------------------------------------
Korea (South): 2.1%
Asia Cement Co. Ltd. Building Materials & Components 47,900 1,765,545
*Boram Bank Co. Ltd. Banking 466,820 5,524,497
*Boram Bank Co. Ltd.,
rts. Banking 82,357 177,669
BYC Co. Ltd. Textiles & Apparel 3,400 419,132
*Central Investment & Fi-
nance Corp. Financial Services 383,994 6,816,462
Choil Aluminium Mfg. Co.
Ltd. Metals & Mining 63,326 1,561,292
Dae Duck Electronics Co.
Ltd. Electrical & Electronics 43,698 1,594,508
</TABLE>
20
<PAGE>
Templeton Developing Markets Trust
Investment Portfolio, June 30, 1996 (unaudited) (cont.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES/PRINCIPAL IN
INDUSTRY LOCAL CURRENCY VALUE
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------
LONG TERM SECURITIES (CONT.)
- ------------------------------------------------------------------------------------------
Korea (South): (cont.)
Daegu Bank Co. Ltd. Banking 406,798 $ 6,006,689
Daehan Synthetic Fiber
Co. Ltd. Textiles & Apparel 29,010 2,789,423
Dongkuk Steel Mill Co.
Ltd. Metals & Mining 145,000 3,092,332
Hae In Corp. Ltd. Merchandising 25,548 1,335,349
Hankook Cosmetics Co.
Ltd. Health & Personal Care 52,400 1,421,105
Korea First Bank Banking 39,000 344,663
Korea Iron & Steel
Works Co. Ltd. Metals & Mining 9,000 1,453,402
Korea Kumho Petrochemi-
cal Chemicals 475,470 4,149,812
Kyong Nam Bank Banking 202,000 2,614,645
Kyung Dong Boiler Co
Ltd Energy Equipment & Services 36,029 1,150,334
Moon Bae Steel Co. Ltd. Metals & Mining 15,480 501,879
Shinsung Industries Co.
Ltd. Electrical & Electronics 40,000 1,252,465
Ssangyong Oil Refining
Co Ltd Energy Equipment & Services 664,420 15,398,294
*Tong Yang Investment
and Finance Co. Ltd. Financial Services 238,790 4,121,129
Yuhwa Textiles & Apparel 23,310 1,491,357
-------------
64,981,983
- ------------------------------------------------------------------------------------------
Malaysia: 3.0%
Aokam Perdana Bhd. Multi-Industry 3,422,000 5,734,199
Berjaya Singer Bhd. Appliances & Household Durables 3,663,000 3,788,551
Berjaya Singer Bhd.,
fgn. Appliances & Household Durables 351,000 363,031
Boustead Holdings Bhd.,
fgn. Food & Household Products 968,000 2,114,893
Federal Flour Mills
Bhd. Food & Household Products 2,221,250 5,921,552
Hong Leong Industries
Bhd. Multi-Industry 723,000 3,507,035
IOI Corp. Bhd. Misc Materials & Commodities 859,000 1,191,477
Island & Peninsula BHD,
fgn. Real Estate 386,000 1,090,920
Leader Universal Hold-
ings Bhd. Industrial Components 854,000 2,413,590
Malayawata Steel Bhd. Metals & Mining 1,626,000 2,789,850
Malayawata Steel Bhd.,
fgn. Metals & Mining 1,418,000 2,432,969
Malaysian International
Shipping Corp.
Bhd., fgn. Transportation 5,552,000 17,249,148
MBF Capital Bhd. Financial Services 3,729,000 5,142,417
Oriental Holdings Bhd. Automobiles 300,000 1,960,313
Oriental Holdings Bhd.,
fgn. Automobiles 1,766,160 11,540,753
Perlis Plantations Bhd. Multi-Industry 1,228,600 4,728,226
Perlis Plantations
Bhd., fgn. Multi-Industry 2,878,000 11,075,887
*Renong Bhd. Multi-Industry 4,525,000 7,219,683
*Renong Bhd., wts. Multi-Industry 87,250 13,991
Renong, 4.00%, conv.,
9/09/01 Corporate Bond 139,600** 52,605
Shangri La Hotels (Ma-
laysia) Bhd. Leisure & Tourism 2,252,202 2,338,426
Shangri La Hotels (Ma-
laysia) Bhd., fgn. Leisure & Tourism 414,000 429,850
-------------
93,099,366
- ------------------------------------------------------------------------------------------
</TABLE>
21
<PAGE>
Templeton Developing Markets Trust
Investment Portfolio, June 30, 1996 (unaudited) (cont.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES/PRINCIPAL IN
INDUSTRY LOCAL CURRENCY VALUE
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------
LONG TERM SECURITIES (CONT.)
- ------------------------------------------------------------------------------------------
Mexico: 8.2%
Cemex SA, B Building Materials & Components 7,317,750 $ 28,894,741
*Cifra SA, C Merchandising 17,507,824 24,974,905
Coca Cola Femsa SA de
CV, ADR Beverages & Tobacco 240,600 6,887,175
*Controladora Comercial
Mexicana SA, B Merchandising 524,000 490,494
Cydea SA de CV Chemicals 1,778,463 4,426,814
*DESC SA, A Multi-Industry 500,000 2,659,855
*DESC SA, B Multi-Industry 1,024,108 5,522,217
*DESC SA, C Multi-Industry 223,663 1,164,758
Fomento Economico
Mexicano SA de CV, B Beverages & Tobacco 1,723,000 4,952,063
*Grupo Carso SA de CV Multi-Industry 163,143 1,157,165
*Grupo Financiero
Banamex Accival SA, B Banking 7,679,000 15,955,312
*Grupo Financiero
Banamex Accival SA, L Banking 8,335,423 15,824,665
*Grupo Financiero
Bancomer SA de CV, B Banking 35,846,000 15,595,491
*Grupo Financiero
Bancomer SA de CV, L Banking 12,716,518 4,241,634
*+Grupo Financiero
Serfin SA, B Banking 18,232,187 11,153,243
Grupo Industrial Alfa
SA, A Multi-Industry 4,613,682 20,833,039
Grupo Industrial Maseca
SA de CV, ADR B Food & Household Products 27,500 433,125
Grupo Industrial Maseca
SA de CV, B Food & Household Products 1,968,093 2,055,016
Telmex-Telefonos de
Mexico SA, L Telecommunications 181,000 306,399
Telmex-Telefonos de
Mexico SA, L, ADR Telecommunications 2,257,300 75,619,550
Vitro SA Food & Household Products 5,687,387 13,196,837
-------------
256,344,498
- ------------------------------------------------------------------------------------------
Morocco: 0.1%
*Banque Marocaine de
Commerce Exterieur,
GDR, 144A Banking 116,850 1,665,113
- ------------------------------------------------------------------------------------------
Pakistan: 0.8%
*Bank of Punjab Banking 2,764,606 1,559,805
*DG Khan Cement Co. Building Materials & Components 3,014,450 1,196,996
Engro Chemical Chemicals 894,900 4,141,517
Exide Pakistan Ltd. Energy Equipment & Services 18,400 18,660
Fauji Fertilizer Co.
Ltd. Chemicals 1,337,800 3,439,566
Khadim Ali Sham Bukhari
& Co. Ltd. Financial Services 223,310 121,208
*Kohinoor Industries
Ltd. Textiles & Apparel 358,720 51,238
*National Development
Leasing Corp. Financial Services 918,853 387,176
*Pakistan Electron Ltd. Appliances & Household Durables 371,147 349,888
*Pakistan International
Airlines Corp. Transportation 165,500 42,315
*Pakistan Telecom Corp.
PTC Telecommunications 8,985,300 10,267,448
*Pakistan Telecom Corp.
PTC, GDR Telecommunications 21,000 2,478,000
+Trust Modaraba Financial Services 2,427,000 457,598
*Union Bank Ltd. Banking 1,049,978 400,434
-------------
24,911,849
- ------------------------------------------------------------------------------------------
</TABLE>
22
<PAGE>
Templeton Developing Markets Trust
Investment Portfolio, June 30, 1996 (unaudited) (cont.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES/PRINCIPAL IN
INDUSTRY LOCAL CURRENCY VALUE
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------------
LONG TERM SECURITIES (CONT.)
- -------------------------------------------------------------------------------------------
Peru: 0.1%
Telefonica de Peru, B Telecommunications 107,000 $ 217,241
- -------------------------------------------------------------------------------------------
Philippines: 2.6%
*A Soriano Corp. Multi-Industry 16,716,567 2,041,718
*Belle Corp. Real Estate 70,152,000 16,868,611
*Keppel Philippine
Holdings Inc., B Machinery & Engineering 568,875 141,133
*Philex Minning Corp.,
B Metals & Mining 17,263,095 2,207,304
Philippine Long Dis-
tance Telephone Co.,
ADR Telecommunications 568,575 33,048,422
*Philippine National
Bank Banking 1,312,336 21,914,008
RFM Corp. Food & Household Products 26,083,750 5,276,484
Sime Darby Pilipinas
Inc. Industrial Components 659,658 541,322
--------------
82,039,002
- -------------------------------------------------------------------------------------------
Poland: 1.5%
*Agros Holding SA, C Food & Household Products 49,000 1,262,236
Bank Gdanski SA Banking 234,000 2,910,576
*Bank Inicjatyw
Gospodarczch SA, G Banking 4,141,052 5,181,268
*Bank Przemyslowo-
Handlowy SA Banking 97,970 7,066,358
Bank Rozwoju Eksportu
SA Banking 45,000 1,175,756
Bank Slaski SA W
Katowicach Banking 21,700 1,836,682
*Debica SA, A Automobiles 23,000 558,622
Elektrim Towarzystwo
Handlowe SA Utilities Electrical & Gas 1,150,316 9,439,923
Farm Food SA Food & Household Products 66,476 782,819
Huta Olawa SA Metals & Mining 45,442 284,284
Mostostal Export SA Construction & Housing 681,915 2,333,778
Polifarb Ceiszyu SA Chemicals 831,815 4,224,276
*Raciborska Fabryka
Kotlow SA Energy Equipment & Services 204,036 1,208,869
*Rolimpex SA Wholesale & International Trade 1,929 98,317
Warta SA Insurance 114,000 2,349,304
Wielkopolski Bank
Kredytowy SA Banking 865,296 4,680,890
*Zaklady Cementowo
Wapiennicze
Gorazdze Chorula Building Materials & Components 94,522 2,469,663
--------------
47,863,621
- -------------------------------------------------------------------------------------------
Portugal: 4.2%
Banco Chemical (Portu-
gal) Banking 218,015 2,257,441
Banco Comercial
Portugues SA Banking 2,208,552 26,099,145
Banco Comercial
Portugues SA, new Banking 516,468 5,888,824
Banco Comercial
Portugues, 8.75%,
conv., 5/21/02 Corporate Bond 8,780,000** 11,404,373
Banco Espirito Santo e
Comercial de Lisboa Banking 1,693,545 27,196,245
Banco Totta & Acores SA Banking 905,080 17,708,464
</TABLE>
23
<PAGE>
Templeton Developing Markets Trust
Investment Portfolio, June 30, 1996 (unaudited) (cont.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES/PRINCIPAL IN
INDUSTRY LOCAL CURRENCY VALUE
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------
LONG TERM SECURITIES (CONT.)
- -----------------------------------------------------------------------------------------------
Portugal: (cont.)
BPI Socieda de Gestora
de Participacoes
Socias SA Banking 1,569,294 $ 19,898,107
Cel-Cat Fabrica
Nacional de
Conductores Electricos
SA Electronic Components & Instruments 64,581 1,134,447
+Compta-Equipamentos e
Servicos de
Informatica SA Business & Public Services 150,000 1,331,843
Espirito Santo Finan-
cial Holding SA, ADR Banking 953,200 12,153,300
Portucel Industrial
Empresa Product de
Celulose SA Forest Products & Paper 729,000 4,670,629
*Sociedade Portuguesa
de Celulose SA Forest Products & Paper 110,940 2,446,987
--------------
132,189,805
- -----------------------------------------------------------------------------------------------
Russia: 0.1%
*Chernogorneft Energy Sources 135,000 1,323,000
*GUM Trade House Merchandising 36,000 738,000
*Lukoil-Holdings Multi-Industry 217,000 2,300,200
*Purneftegaz Energy Sources 156,000 444,600
--------------
4,805,800
- -----------------------------------------------------------------------------------------------
Singapore: 1.7%
*Acer Computer Interna-
tional Ltd. Electrical & Electronics 881,000 1,709,140
Acma Ltd. Electrical & Electronics 730,400 2,132,706
British American To-
bacco Ltd. Beverages & Tobacco 119,000 468,072
Chemical Industries
(Far East) Ltd. Chemicals 618,000 1,567,994
First Capital Corp.
Ltd. Real Estate 1,021,000 2,532,601
First Capital Corp.
Ltd., fgn. Real Estate 911,000 2,259,745
GP Batteries Interna-
tional Ltd. Electrical & Electronics 37,000 108,780
*GP Batteries Interna-
tional Ltd., wts. Electrical & Electronics 9,250 7,863
Hai Sun Hup Group Ltd. Transportation 4,415,000 3,348,016
Hinds Hotels Interna-
tional Ltd. Leisure & Tourism 335,000 391,743
Hinds Hotels Interna-
tional Ltd., fgn. Leisure & Tourism 449,000 525,053
Hour Glass Ltd. Merchandising 1,436,000 1,261,970
Inchcape Bhd., fgn. Wholesale & International Trade 1,645,000 5,246,279
Isetan (Singapore)
Ltd., fgn. Merchandising 426,500 949,121
Jaya Holdings Ltd. Transportation 2,314,000 2,148,363
Jaya Holdings Ltd.,
3.00%, conv. ln. stk.,
8/31/98 Transportation 508,800 656,283
*Jaya Holdings Ltd.,
wts. Transportation 253,831 139,016
Jurong Shipyard, fgn Machinery & Engineering 859,000 4,352,835
Natsteel Ltd., fgn. Metals & Mining 3,561,000 7,066,477
Osprey Maritime Ltd. Transportation 499,500 881,618
</TABLE>
24
<PAGE>
Templeton Developing Markets Trust
Investment Portfolio, June 30, 1996 (unaudited) (cont.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES/PRINCIPAL IN
INDUSTRY LOCAL CURRENCY VALUE
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------------
LONG TERM SECURITIES (CONT.)
- -------------------------------------------------------------------------------------------
Singapore: (cont.)
Prima Ltd. Food & Household Products 947,000 $ 3,355,776
Resources Development
Corp. Ltd. Building Materials & Components 232,500 779,394
Sembawang Corp. Ltd. Multi-Industry 1,051,000 5,214,033
Singapore Bus Service
Ltd., fgn. Transportation 328,200 2,326,010
TIBS Holdings Ltd. Transportation 788,800 1,856,000
*TIBS Holdings Ltd.,
wts. Transportation 640 458
WBL Corp. Ltd. Multi-Industry 873,000 2,066,492
--------------
53,351,838
- -------------------------------------------------------------------------------------------
Slovak Republic: 0.1%
*Nafta Gbely AS Utilities Electrical & Gas 8,904 662,752
*Slovakofarma AS Health & Personal Care 617 55,812
*Slovnaft AS Chemicals 133,604 3,884,590
--------------
4,603,154
- -------------------------------------------------------------------------------------------
South Africa: 1.9%
Anglo American Indus-
trial Corp. Ltd. Multi-Industry 74,540 2,993,298
Anglo American Platinum
Corp. Ltd. Metals & Mining 95,003 591,987
Anglovaal Industried
Ltd. Metals & Mining 132,200 640,711
BTR Dunlop Ltd. Industrial Components 1,371,700 1,851,937
Del Monte Royal Foods
Ltd Food & Household Products 4,553,550 5,464,680
Engen Ltd. Energy Sources 2,966,902 20,199,310
First National Bank
Holdings Ltd. Banking 690,200 4,977,787
Kersaf Investments Ltd. Leisure & Tourism 34,082 349,236
Malbak Ltd. Multi-Industry 413,100 2,049,769
Nedcor Ltd. Banking 108,059 1,633,479
Palabora Mining Co.
Ltd. Metals & Mining 271,700 4,263,928
Polifin Ltd. Chemicals 293,010 532,868
Potgietersrust Plati-
nums Ltd. Metals & Mining 150,373 754,815
*Rainbow Chicken Ltd. Food & Household Products 847,900 281,785
Rembrandt Group Ltd. Multi-Industry 381,470 3,583,159
Sappi Ltd. Forest Products & Paper 70,000 773,829
Sasol Ltd. Energy Sources 70,473 764,420
South African Iron &
Steel Industrial
Corp. Ltd. Metals & Mining 5,736,400 4,487,975
Sun International
(South Africa) Ltd. Leisure & Tourism 1,688,842 1,812,397
--------------
58,007,370
- -------------------------------------------------------------------------------------------
Spain: 3.3%
Banco Bilbao Vizcaya Banking 1,154,200 46,797,375
Bankinter SA Banking 319,750 35,795,613
</TABLE>
25
<PAGE>
Templeton Developing Markets Trust
Investment Portfolio, June 30, 1996 (unaudited) (cont.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES/PRINCIPAL IN
INDUSTRY LOCAL CURRENCY VALUE
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------------
LONG TERM SECURITIES (CONT.)
- -------------------------------------------------------------------------------------------
Spain: (cont.)
Endesa-Empresa Nacional
de Electricidad SA Utilities Electrical & Gas 214,500 $ 13,388,969
Telefonica de Espana SA Telecommunications 93,000 1,714,621
Union Electrica-Fenosa,
SA Utilities Electrical & Gas 921,871 5,934,313
--------------
103,630,891
- -------------------------------------------------------------------------------------------
Sri Lanka: 0.1%
Aitken Spence & Co.
Ltd. Multi-Industry 150,000 408,071
Associated Motorways
Ltd. Automobiles 281,088 207,632
Ceylon Holiday Resorts
Ltd. Leisure & Tourism 144,600 75,550
*Colombo Dock Yard Ltd. Transportation 40,000 6,126
*Lanka Ceramic Ltd. Building Materials & Components 309,100 236,677
Lanka Orix Leasing Co.
Ltd. Financial Services 819 2,287
National Develpoment
Bank of Sri Lanka Banking 140,000 491,848
United Motor Lanka Ltd. Automobiles 341,808 163,191
--------------
1,591,382
- -------------------------------------------------------------------------------------------
Thailand: 1.3%
American Standard
Sanitaryware (THB)
Public Co. Ltd., fgn Building Materials & Components 362,200 5,735,166
Asia Fibre Public Co.
Ltd., fgn. Textiles & Apparel 943,500 371,632
Ayudhya Insurance Pub-
lic Co. Ltd., fgn. Insurance 276,000 2,065,543
Bangkok Bank Public Co.
Ltd. Banking 127,408 1,204,424
Bangkok Bank Public Co.
Ltd., fgn. Banking 2,592 35,121
Bangkok Land Public Co.
Ltd. Real Estate 269,000 294,027
Bangkok Land Public Co.
Ltd., fgn. Real Estate 1,257,500 1,585,001
Charoen Pokphand
Feedmill Public Co.
Ltd. Food & Household Products 653,600 2,677,422
Chareon Pokphand
Feedmill Public Co.
Ltd., fgn. Food & Household Products 338,500 1,799,965
Hua Thai Manufacturing
Public Co. Ltd. Textiles & Apparel 175,000 373,946
Karat Sanitaryware Pub-
lic Co. Ltd. Building Materials & Components 400 1,150
Karat Sanitaryware Pub-
lic Co. Ltd., fgn. Building Materials & Components 246,900 712,361
Kian Gwan (Thailand)
Public Co. Ltd., fgn. Real Estate 96,000 254,293
*Padaeng Industry Pub-
lic Co. Ltd., fgn. Metals & Mining 535,665 279,564
Regional Container
Lines Public Co. Ltd.,
fgn. Transportation 136,700 2,003,009
*Royal Ceramic Industry
Public Co. Ltd., fgn. Building Materials & Components 53,200 59,721
Saha Pathanapibul Pub-
lic Co Ltd., fgn. Food & Household Products 284,400 736,541
</TABLE>
26
<PAGE>
Templeton Developing Markets Trust
Investment Portfolio, June 30, 1996 (unaudited) (cont.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES/PRINCIPAL IN
INDUSTRY LOCAL CURRENCY VALUE
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------------
LONG TERM SECURITIES (CONT.)
- -------------------------------------------------------------------------------------------
Thailand: (cont.)
Saha Pathanapibul Pub-
lic Co. Ltd. Food & Household Products 100 $ 244
Saha Union Public Co.
Ltd. Multi-Industry 1,972,800 2,719,710
Saha Union Public Co.
Ltd., fgn. Multi-Industry 2,283,080 3,574,619
Sanyo Universal Elec-
tric Public Co. Ltd. Appliances & Household Durables 376,900 1,306,412
Sanyo Universal Elec-
tric Public Co Ltd.,
fgn. Appliances & Household Durables 587,800 1,944,824
Siam Cement Co.
Ltd.(The), fgn. Building Materials & Components 46,800 2,296,865
Sino-Thai Engineering &
Construction Public
Co. Construction & Housing 1,162,900 5,313,392
Textile Prestige Public
Co. Ltd., fgn. Textiles & Apparel 99,000 169,627
Thai Asahi Glass Public
Co. Ltd. Building Materials & Components 40,700 94,584
Thai Asahi Glass Public
Co. Ltd., fgn. Building Materials & Components 32,000 74,366
Thai Rayon Public Co.
Ltd. Textiles & Apparel 43,700 225,488
Thai Rayon Public Co.
Ltd., fgn. Textiles & Apparel 11,000 61,525
Thai Wacoal Public Co.
Ltd., fgn. Textiles & Apparel 148,800 986,119
Thai Wah Public Co.
Ltd., fgn. Multi-Industry 208,900 199,536
United Motor Works (Si-
am) Public Co. Ltd. Machinery & Engineering 30,400 128,124
United Standard Termi-
nal Public Co. Ltd.,
fgn. Wholesale & International Trade 155,600 257,413
--------------
39,541,734
- -------------------------------------------------------------------------------------------
Turkey: 5.0%
Akbank Banking 114,807,666 13,840,671
*Akbank, new Banking 231,337,332 27,888,938
Akcimento Building Materials & Components 49,310,000 4,443,424
Aksigorta AS Insurance 10,238,000 2,244,082
Alarko Sanayii ve
Ticaret SA Appliances & Household Durables 3,840,000 596,201
*Alcatel Teletas
Endustri Tic AS Telecommunications 45,325,000 2,980,455
Anadolu Anonim Turk
Sigorta Sirketi Insurance 17,364,000 581,478
Arcelik AS Appliances & Household Durables 171,190,797 15,843,279
Bagfas Chemicals 9,786,000 2,651,467
Bekoteknik AS Appliances & Household Durables 47,214,563 2,989,719
Borusan AS Industrial Components 15,548,000 1,287,462
*Celik Halat ve Sanayii
ve Ticaret AS Building Materials & Components 16,153,093 767,134
Cimentas Izmir Cimento
Fabrikasi Turk AS Building Materials & Components 16,014,253 3,510,187
Cimsa Cimento Sanayi ve
Ticaret AS Building Materials & Components 7,954,000 4,552,338
Compagnie Financiere
Ottomane SA Banking 52,500 3,628,168
Erciyas Biracilik Food & Household Products 20,100,000 11,381,515
Eregli Demir ve Celik
Fabrikalari AS Metals & Mining 133,652,750 14,810,521
Finans Bank AS, br. Banking 116,597,077 2,378,228
Goodyear Lastikleri
TAS, Industrial Components 37,000 15,094
Izocam Ticaret ve
Sanayii AS, br. Building Materials & Components 15,397,239 1,312,478
Kartonsan Forest Products & Paper 62,097,000 5,444,452
</TABLE>
27
<PAGE>
Templeton Developing Markets Trust
Investment Portfolio, June 30, 1996 (unaudited) (cont.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES/PRINCIPAL IN
INDUSTRY LOCAL CURRENCY VALUE
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------------
LONG TERM SECURITIES (CONT.)
- -------------------------------------------------------------------------------------------
Turkey: (cont.)
Koc Holding AS Multi-Industry 8,939,000 $ 2,177,058
+Koc Yatirim ve Sanayii
Mamullesi Pazarlanca
AS Multi-Industry 36,898,144 5,953,488
Marshall Boya ve Vernik
Sanayii AS Industrial Components 12,978,392 1,122,097
Netas Northern Electric
Telekomunic Asyon AS Electrical & Electronics 6,895,000 1,637,269
Otosan Otomobil Sanayii
AS Automobiles 9,732,000 3,318,266
Tat Konserve Sanayii AS Food & Household Products 6,063,642 1,421,397
*Tat Konserve Sanayii
AS, rts. Food & Household Products 4,548,869 674,285
Tekstil Bankasi AS, br. Banking 182,517 3,000
Tofas Turk Otomobil
Fabrikasi AS Automobiles 92,910,650 4,469,034
Trakya Cam Sanayii AS Building Materials & Components 22,492,037 1,232,515
Turk Demir Dokum, br. Appliances & Household Durables 26,577,983 1,618,241
Turkiye Garanti Bankasi
AS Banking 146,837,894 10,013,300
Vakif Finansal Kiralama
AS Financial Services 13,460,077 639,239
--------------
157,426,480
- -------------------------------------------------------------------------------------------
Venezuela: 2.6%
Banco Provincial SAICA Banking 79,023 131,892
Banco Venezolano de
Credito Banking 13,835 498,382
Ceramica Carabobo CA, A Building Materials & Components 315,480 326,152
Ceramica Carabobo CA,
A, ADR Building Materials & Components 143,000 147,837
Ceramica Carabobo CA, B Building Materials & Components 2,117,124 2,166,179
Consolidada Carabobo, A Building Materials & Components 5,684,664 202,362
Consolidada Carabobo, B Building Materials & Components 25,280,208 889,143
+Electricidad de Ca-
racas Utilities Electrical & Gas 72,122,238 59,957,097
Fabrica Nacional de
Cementos CA Building Materials & Components 1,221,000 234,242
H.L. Boulton & Co. SA Multi-Industry 12,912,748 619,310
Industrias Ventane Utilities Electrical & Gas 3,960,414 1,730,618
Inmuebles y Valores Ca-
racas CA Building Materials & Components 1,015,000 703,163
*Manufacturera de
Aparatos Domesticos SA Appliances & Household Durables 545,225 384,690
Mavesa SA, ADR Food & Household Products 1,541,900 6,113,301
Siderurgica Venezolana
Sivensa Saica Svs Metals & Mining 150,000 99,120
Siderurgica Venezolana
Sivensa Saica Svs, ADR Metals & Mining 699,270 2,310,380
Venezolana de Cementos-
Vencemos, #1 Building Materials & Components 2,021,064 3,855,759
+Venezolana de
Cementos-Vencemos, #2 Building Materials & Components 832,000 1,420,570
--------------
81,790,197
- -------------------------------------------------------------------------------------------
</TABLE>
28
<PAGE>
Templeton Developing Markets Trust
Investment Portfolio, June 30, 1996 (unaudited) (cont.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES/PRINCIPAL IN
INDUSTRY LOCAL CURRENCY VALUE
<S> <C> <C> <C>
- ------------------------------------------------------------------------------
LONG TERM SECURITIES (CONT.)
- ------------------------------------------------------------------------------
Zimbabwe: 0.0%
Ta Holdings Multi-Industry 50,000 $ 7,338
--------------
TOTAL LONG TERM SECURITIES
(Cost $2,477,563,217) 2,780,711,065
- ------------------------------------------------------------------------------
SHORT TERM OBLIGATIONS:
11.0% (cost $346,599,428)
- ------------------------------------------------------------------------------
U.S. Treasury Bills, 4.83%
to 5.10% with
maturities to 9/12/96 340,666,000** 346,686,123
- ------------------------------------------------------------------------------
TOTAL INVESTMENTS: 99.8%
(cost $2,824,162,645) 3,127,397,188
OTHER ASSETS, LESS LIABILI-
TIES: 0.2% 5,732,522
--------------
TOTAL NET ASSETS: 100.0% $3,133,129,710
==============
</TABLE>
* Non-income producing.
** Principal amount in currency of countries indicated.
+ See Note 5.
SEE NOTES TO FINANCIAL STATEMENTS.
29
<PAGE>
Templeton Developing Markets Trust
Financial Statements
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1996 (unaudited)
<TABLE>
<S> <C>
Assets:
Investments in securities, at value
(identified cost $2,824,162,645) $3,127,397,188
Cash 1,928,644
Receivables:
Investment securities sold 10,297,542
Fund shares sold 11,510,522
Dividends and interest 14,704,372
--------------
Total assets 3,165,838,268
--------------
Liabilities:
Payables:
Investment securities purchased 22,928,955
Fund shares redeemed 2,454,842
Accrued expenses 7,324,761
--------------
Total liabilities 32,708,558
--------------
Net assets, at value $3,133,129,710
==============
Net assets consist of:
Undistributed net investment income $ 29,979,993
Net unrealized appreciation 303,234,543
Accumulated net realized gain 23,258,628
Net capital paid in on shares of beneficial interest 2,776,656,546
--------------
Net assets, at value $3,133,129,710
==============
Class I
Net asset value per share
($2,981,842,578 / 198,555,307
shares outstanding) $ 15.02
==============
Maximum offering price
($15.02 / 94.25%) $ 15.94
==============
Class II
Net asset value per share
($151,287,132 / 10,162,502
shares outstanding) $ 14.89
==============
Maximum offering price
($14.89 / 99.0%) $ 15.04
==============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF OPERATIONS
for the six months ended June 30, 1996 (unaudited)
<TABLE>
<S> <C> <C>
Investment income:
(net of $3,743,158
foreign taxes withheld)
Dividends $ 47,619,235
Interest 11,510,715
------------
Total income $ 59,129,950
Expenses:
Management fees (Note 3) 17,240,080
Administrative fees
(Note 3) 1,320,554
Distribution fees (Note 3)
Class I 4,159,565
Class II 511,181
Transfer agent fees
(Note 3) 2,153,000
Custodian fees 2,225,000
Reports to shareholders 593,000
Audit fees 22,000
Legal fees (Note 3) 6,000
Registration and filing fees 236,500
Trustees' fees and
expenses 50,000
Other 41,750
------------
Total expenses 28,558,630
------------
Net investment income 30,571,320
Realized and unrealized gain (loss):
Net realized gain (loss) on:
Investments 27,857,567
Foreign currency transactions (3,652,869)
------------
24,204,698
Net unrealized appreciation on:
Investments 319,514,239
Foreign currency translation of other assets and
liabilities 618,176
------------
320,132,415
------------
Net realized and unrealized gain 344,337,113
------------
Net increase in net assets resulting from
operations $374,908,433
============
</TABLE>
30
<PAGE>
Templeton Developing Markets Trust
Financial Statements (cont.)
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JUNE 30, 1996 YEAR ENDED
(UNAUDITED) DECEMBER 31, 1995
-------------- -----------------
<S> <C> <C>
Increase (decrease) in net assets:
Operations:
Net investment income $ 30,571,320 $ 34,733,235
Net realized gain on investment and for-
eign currency transactions 24,204,698 36,819,502
Net unrealized appreciation (deprecia-
tion) 320,132,415 (67,443,609)
-------------- --------------
Net increase in net assets resulting
from operations 374,908,433 4,109,128
Distributions to shareholders:
From net investment income
Class I (2,696,810) (32,067,523)
Class II (91,003) (535,755)
From net realized gain
Class I (7,234,166) (38,696,973)
Class II (249,324) (521,839)
Capital share transactions (Note 2)
Class I 480,037,577 204,236,626
Class II 99,778,946 42,998,205
-------------- --------------
Net increase in net assets 944,453,653 179,521,869
Net assets:
Beginning of period 2,188,676,057 2,009,154,188
-------------- --------------
End of period $3,133,129,710 $2,188,676,057
============== ==============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
31
<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 Fund seeks long-term capital appreciation
by investing in securities of issuers of countries having developing markets.
The following summarizes the Fund's significant accounting policies.
a. Securities Valuations:
Securities listed or traded on a recognized national or foreign exchange or
NASDAQ are valued at the last reported sales prices on the principal exchange
on which the securities are traded. Over-the-counter 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 Transactions:
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 a foreign exchange contract 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 the exchange of Brazilian currency. Under current Brazilian law,
whenever 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 of its
taxable income to its shareholders. Therefore, no provision has been made for
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.
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.
32
<PAGE>
Templeton Developing Markets Trust
Notes to Financial Statements (unaudited) (cont.)
- --------------------------------------------------------------------------------
2. TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST
The Fund offers two classes of shares: Class I shares and Class II shares.
Shares of each class are identical except for their initial sales load, a con-
tingent deferred sales charge on Class II shares, distribution fees, and voting
rights on matters affecting a single class. At June 30, 1996, there were an un-
limited 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, 1996 DECEMBER 31, 1995
-------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Shares sold 50,842,217 $ 728,893,258 48,470,874 $ 646,712,609
Shares issued on
reinvestment of
distributions 588,412 8,425,296 4,711,716 59,816,280
Shares redeemed (17,956,031) (257,280,977) (37,809,132) (502,292,263)
----------- ------------- ----------- -------------
Net increase 33,474,598 $ 480,037,577 15,373,458 $ 204,236,626
=========== ============= =========== =============
<CAPTION>
CLASS II
------------------------------------------------------
FOR THE PERIOD
SIX MONTHS ENDED MAY 1, 1995 THROUGH
JUNE 30, 1996 DECEMBER 31, 1995
-------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Shares sold 7,402,350 $ 105,594,321 3,421,478 $ 46,480,813
Shares issued on
reinvestment of
distributions 19,667 278,974 66,344 839,919
Shares redeemed (427,488) (6,094,349) (319,849) (4,322,527)
----------- ------------- ----------- -------------
Net increase 6,994,529 $ 99,778,946 3,167,973 $ 42,998,205
=========== ============= =========== =============
</TABLE>
3. INVESTMENT MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Certain officers of the Fund are also directors or officers of Templeton Asset
Management Ltd. (TAML), Templeton Global Investors, Inc. (TGII), Franklin Tem-
pleton Distributors, Inc. (FTD) and Franklin Templeton Investor Services, Inc.
(FTIS), the Fund's investment manager, administrative manager, principal under-
writer, and transfer agent, respectively.
The Fund pays monthly an investment management fee to TAML equal, on an annual
basis, to 1.25% of the average daily net assets of the Fund. The Fund pays TGII
monthly an administrative fee of 0.15% per annum of 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 such average net assets
in excess of $1.2 billion. For the six months ended June 30, 1996, FTD received
net commissions of $1,293,836 from the sale of the Fund's shares and FTIS re-
ceived fees of $2,153,000.
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 activities
that are 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, 1996 there were no unreimbursed expenses. Class II shares redeemed
within 18 months are subject to a contingent deferred sales charge. Contingent
deferred sales charges of $19,354 were paid to FTD for the six months ended
June 30, 1996.
33
<PAGE>
Templeton Developing Markets Trust
Notes to Financial Statements (unaudited) (cont.)
- --------------------------------------------------------------------------------
An officer of the Fund is a partner of Dechert Price & Rhoads, legal counsel
for the Fund, which firm received fees of $6,000 for the six months ended June
30, 1996.
4. PURCHASES AND SALES OF SECURITIES
Purchases and sales of securities (excluding short-term securities) for the six
months ended June 30, 1996 aggregated $730,718,750 and $124,653,441, respec-
tively. The cost of securities for federal income tax purposes aggregated
$2,824,206,986. Realized gains and losses are reported on an identified cost
basis.
At June 30, 1996, 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 $ 552,246,494
Unrealized depreciation (249,056,292)
-------------
Net unrealized appreciation $ 303,190,202
=============
</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, 1996
amounted to $136,758,907. For the six months ended June 30, 1996, dividends and
interest income from "affiliated companies" was $1,189,762 and net realized
gains from disposition of "affiliated companies" were $187,713.
34
<PAGE>
The Franklin Templeton Group
Literature Request - Call today for a free descriptive brochure and prospectus
on any of the funds listed below. The prospectus contains more complete
information, including fees, charges and expenses, and should be read carefully
before investing or sending money.
<TABLE>
<S> <C> <C> <C>
Templeton Funds Florida* Franklin Funds Seeking Franklin Templeton Global
American Trust Georgia Growth and Income Currency Funds
Americas Government Hawaii** Balance Sheet German Government
Securities Indiana Investment Fund Bond
Developing Markets Trust Kentucky Convertible Securities Fund Global Currency
Foreign Fund Louisiana Equity Income Fund High Income Currency
Global Infrastructure Fund Maryland Global Utilities Fund Hard Currency
Global Opportunities Trust Massachusetts*** Income Fund Franklin Money
Greater European Fund Michigan*** MicroCap Value Market Funds
Growth Fund Minnesota*** Natural Resources Fund Money Fund
Growth and Income Fund Missouri Premier Return Fund Federal Money Fund
Global Bond Fund New Jersey Real Estate Securities Fund Tax-Exempt Money
Latin America Fund New York* Rising Dividends Fund Fund
Pacific Growth North Carolina Strategic Income Fund California Tax-Exempt
Global Real Estate Fund Ohio*** Utilities Fund Money Fund
Global Smaller Oregon Value New York Tax-Exempt
Company Fund Pennsylvania Money Fund
World Fund Tennessee Franklin Funds Seeking IFT U.S. Treasury Money
Texas High Current Income Market Portfolio
Franklin Funds Seeking Virginia AGE High Income Fund
Tax-Free Income Washington** Global Government Franklin Fund for Corporations
Federal Tax-Free Income Fund Corporate Qualified
Income Fund Franklin Funds Investment Grade Dividend Fund
Federal Intermediate-Term Seeking Capital Growth Income Fund
Tax-Free Income Fund California Growth Fund U.S. Government Franklin Tax-Deferred
High Yield DynaTech Fund Securities Fund Annuity
Insured Tax-Free Equity Fund Franklin Valuemark
Income Fund*** Global Health Care Franklin Funds Seeking Franklin Templeton
Puerto Rico Tax-Free Gold Fund High Current Income and Valuemark Income Plus
Income Fund Growth Fund Stability of Principal (an immediate annuity)
International Adjustable Rate
Franklin State-Specific Equity Fund Securities Fund
Funds Seeking Tax-Free Income Japan Fund Adjustable U.S. Government
Alabama Small Cap Growth Fund Securities Fund
Arizona* Short-Intermediate U.S.
Arkansas** Government
California* Securities Fund
Colorado
Connecticut Franklin Funds for
Non-U.S. Investors
Tax-Advantaged High Yield
Securities Fund
Tax-Advantaged International
Bond Fund
Tax-Advantaged U.S.
Government Securities Fund
</TABLE>
Fund Information: 1-800/342-5236
Shareholder Services: 1-800/632-2301
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.
*Two or more fund options available: long-term portfolio, intermediate-term
portfolio, a portfolio of insured municipal securities, and a high yield
portfolio (CA).
**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.
<PAGE>
TEMPLETON
DEVELOPING
MARKETS TRUST
PRINCIPAL UNDERWRITER:
Franklin Templeton
Distributors, Inc.
700 Central Avenue
St. Petersburg,
Florida 33701-3628
Shareholder Services
1-800-632-2301
Fund Information
1-800-342-5236
This report must be
preceded or accompanied
by the current
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.
TL711 S96 08/96
[LOGO OF RECYCLE SYMBOL APPEARS HERE]
TEMPLETON
DEVELOPING
MARKETS
TRUST
Semi-Annual Report
June 30, 1996
[LOGO OF FRANKLIN TEMPLETON APPEARS HERE]
