SEMI ANNUAL REPORT
TEMPLETON DEVELOPING
MARKETS TRUST
[PASSPORT/MAP GRAPHIC]
JUNE 30, 1997
[LOGO]
Franklin Templeton
<PAGE>
[GRAPHIC:FRANKLIN TEMPLETON/50/CELEBRATING OVER 50 YEARS]
CELEBRATING 50 YEARS
This year marks 50 years of business for Franklin Templeton. Over these years,
we have experienced profound changes in technology, regulations and customer
expectations within the mutual fund industry. As one of the largest mutual fund
families, we're proud to be an innovative industry leader, providing people
like you with an opportunity to invest in companies and governments around the
globe.
In addition, we want to stress that all securities markets move both up and
down. Mixed in with the good years can be some bad years. Accordingly, mutual
fund share prices also move up and down. Every investor should expect such
fluctuations, which can be wide. When markets are going down, as well as up,
we encourage investors to maintain a long-term perspective. We thank you for
your past support and look forward to serving your investment needs in the
years ahead.
[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 $15 billion
in emerging markets investments for the Templeton Group of Funds.
<PAGE>
SHAREHOLDER LETTER
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.
Dear Shareholder:
We are pleased to bring you the semi-annual report of the Templeton Developing
Markets Trust for the six months ended June 30, 1997. During this period,
emerging market countries generally experienced strong economic growth
accompanied by moderate inflation, and many investors put large amounts of
capital into emerging market equities. Within this environment, the Fund's Class
I shares provided a six-month total return of 20.14%, as discussed in the
Performance Summary on page 5, significantly outperforming the Morgan Stanley
Capital International(R) World Index(1) (MSCI), which reported a 15.63% total
return for the same period.(2) The Fund's Class I shares also outperformed the
International Finance Corporation's (IFC)
1. A registered trademark of Morgan Stanley & Co. Inc.
2. The MSCI World Index represents the stock markets of 22 countries, including
the U.S., Germany, Canada, Australia, New Zealand, and Japan. The Index is not
managed according to any investment strategy, includes no sales charges or
management expenses, and does not contain cash. (The Fund generally carries a
certain percentage of cash at any given time.) Of course, one cannot invest
directly in an index, and the Index is not representative of the Fund's
portfolio. Total return includes reinvested dividends.
CONTENTS
Shareholder Letter .......................... 1
PERFORMANCE SUMMARIES
Class I .................................... 5
Class II ................................... 7
Advisor Class .............................. 9
FINANCIAL HIGHLIGHTS ........................ 11
STATEMENT OF INVESTMENTS .................... 14
FINANCIAL STATEMENTS ........................ 30
NOTES TO FINANCIAL
STATEMENTS .................................. 33
[FUND CATEGORY PYRAMID GRAPHIC APPEARS HERE]
<PAGE>
GEOGRAPHIC DISTRIBUTION
Based on Total Net Assets
6/30/97
[PIE CHART GRAPHIC APPEARS HERE]
<TABLE>
<S> <C>
Asia 36.2%
Latin America 30.8%
Europe 15.5%
Mid-East/Africa 3.2%
Short-Term
Obligations & Other
Net Assets 14.3%
</TABLE>
Investable Composite Index, composed entirely of emerging market stocks, which
reported a 16.12% six-month total return.(3)
As of June 30, 1997, the Fund owned investments in 35 countries. As shown in the
chart above, our largest regional holding was Asia, followed by Latin America,
Europe, and the Mid-East/Africa. During the reporting period, most Latin
American securities markets delivered strong performances as increased exports
were accompanied by growth in many equity prices in the region. Stock markets in
Brazil, Mexico and Argentina increased substantially, while Ecuador was one of
the few Latin American markets to lose ground during the period.
During the six months under review, most emerging markets in Europe also
performed well. After Boris Yeltsin's re-election and recuperation, increased
government stability in Russia appeared to lure foreign investors, and the
Russian stock market rose significantly. The Greek stock market (home of the
largest amount of our European holdings) also advanced as decreasing inflation
and interest rates helped to attract foreign capital, and many Hungarian
equities appreciated in value as many investors seemed to expect the country's
recent economic recovery to improve corporate earnings.
Asia, however, presented a different picture. For the first time in over a
decade, Asian export growth failed to keep pace with the increase in world
trade. Since exports usually account for a very large portion of gross domestic
product (GDP), several smaller Asian securities markets declined in early 1997.
For example, the share price of many Thai and Malaysian equities fell. But
3. The IFC Investable Composite Index represents the stock markets of 26
countries, including Mexico, South Korea, Brazil, Jordan and Turkey. The Index
is not managed according to any investment strategy, includes no sales charges
or management expenses, and does not contain cash. (The Fund generally carries a
certain percentage of cash at any given time.) Of course, one cannot invest
directly in an index, and the Index is not representative of the Fund's
portfolio. Total return includes reinvested dividends.
2
<PAGE>
Hong Kong's market strengthened as many foreigners anticipated that investments
from the mainland would increase after Hong Kong's takeover by China.
As you know, China regained sovereignty over Hong Kong on July 1, 1997. Some
people believe this could mean an end to economic and personal freedoms there.
We think that is unlikely, although developments following any major transfer of
political power cannot be predicted. In our opinion, China's leaders want to
enhance its people's living standards, and since an economically successful Hong
Kong is necessary to accomplish this, we believe the handover could prove to be
positive, rather than negative. The territory could attract large capital
inflows from the mainland, possibly driving the Hong Kong market to new highs.
Although problems are likely to arise, we are hopeful that they will be
overcome.
Looking forward, we are optimistic about the outlook for developing markets.
Asian exports have the potential to increase, the Hungarian economy could
benefit from foreign investment, and it is possible that Russia may finally
experience GDP growth in 1998. The outlook for Latin American economies is the
best that we have seen in many years, and this could help to boost stock markets
in that region in the long term.
This discussion reflects the strategies we employed for the Fund during the six
months under review, and includes our opinions as of the close of the period.
Since economic and market conditions are constantly changing, our strategies,
and our evaluations, conclusions and decisions may change as new circumstances
arise. All figures shown are as of June 30, 1997, and the level of the Fund's
holdings can be expected to change with market developments and management of
the portfolio.
TOP 10 COUNTRIES
Represented in the Trust
6/30/97
<TABLE>
<CAPTION>
% OF TOTAL
COUNTRY NET ASSETS
- -------------------------------------------
<S> <C>
Brazil 11.8%
Hong Kong 9.8%
Mexico 8.3%
Argentina 5.0%
Thailand 4.9%
Turkey 4.8%
Greece 4.1%
Portugal 3.8%
Indonesia 3.7%
Venezuela 3.6%
</TABLE>
3
<PAGE>
TOP 10 HOLDINGS
6/30/97
<TABLE>
<CAPTION>
COMPANY,
INDUSTRY, % OF TOTAL
COUNTRY NET ASSETS
- -----------------------------------------------------
<S> <C>
Electricidad de Caracas
Utilities - Electrical &
Gas, Venezuela 2.8%
Telebras-Telecomunicacoes
Brasileiras SA
Telecommunications, Brazil 2.7%
Eletrobras-Centrais Eletricas
Brasileiras SA
Utilities - Electrical &
Gas, Brazil 2.7%
HSBC Holdings PLC
Banking, Hong Kong 2.3%
Cheung Kong Holdings Ltd.
Multi-Industry, Hong Kong 2.3%
Telefonos de Mexico SA, L
Telecommunications, Mexico 2.2%
Petrobras-Petroleo
Brasileiro SA, pfd.
Energy Sources, Brazil 2.1%
Cementos Mexicanos
SA de CV (Cemex), B
Building Materials &
Components, Mexico 1.7%
Akbank
Banking, Turkey 1.6%
Alpha Credit Bank
Banking, Greece 1.4%
</TABLE>
For a complete list of portfolio holdings,
see page 14 of this report.
Although past performance of a specific investment or sector cannot guarantee
future performance, such information can be useful in analyzing the securities
we purchase or sell for the Fund. Of course, investing in emerging markets
involves special considerations, which may include risks related to market and
currency volatility, adverse social, economic and political developments and the
relatively small size and lesser liquidity of these markets. While short-term
volatility can be disconcerting, declines of as much as 40% to 50% are not
unusual in emerging markets. In fact, the Hong Kong market has increased 1,089%
in the last 15 years, but has suffered five quarterly declines of more than 20%
during that time.(4) These special risks and other considerations are discussed
in the Fund's prospectus.
Thank you for investing in the Templeton Developing Markets Trust. We appreciate
your support and welcome your comments.
Sincerely,
/s/ J. Mark Mobius, Ph.D.
J. Mark Mobius, Ph.D.
President
Templeton Developing Markets Trust
4. Source: Bloomberg. Based on quarterly percentage price change over 15 years
ended June 30, 1997.
4
<PAGE>
PERFORMANCE SUMMARY
CLASS I
Templeton Developing Markets Trust Class I shares produced a cumulative total
return of 20.14% for the six-month period ended June 30, 1997. Cumulative total
return measures the change in value of an investment, assuming reinvestment of
dividends and capital gains, and does not include the 5.75% maximum initial
sales charge. As the chart on the following page illustrates, the Fund's Class I
shares delivered a cumulative total return of 113.41% since inception on October
17, 1991.
The Fund's share price increased $3.01, from $15.40 on December 31, 1996, to
$18.41 on June 30, 1997. During the reporting period, Class I shareholders
received distributions of 0.5 cents ($0.005) per share in income dividends, 1.0
cent ($0.01) in short-term capital gains, and 7.0 cents ($0.07) in long-term
capital gains. Distributions will vary depending on income earned by the Fund
and any profits realized from the sale of securities in the Fund's portfolio, as
well as the level of the Fund's operating expenses.
Past performance is not predictive of future results.
5
<PAGE>
CLASS I
Periods ended 6/30/97
<TABLE>
<CAPTION>
SINCE
INCEPTION
1-YEAR 5-YEAR (10/17/91)
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cumulative Total Return(1) 27.00% 109.32% 113.41%
Average Annual Total Return(2) 19.69% 14.56% 13.03%
Value of a $10,000 Investment(3) $11,969 $19,730 $20,114
</TABLE>
<TABLE>
<CAPTION>
6/30/93 6/30/94 6/30/95 6/30/96 6/30/97
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
One-Year Total Return(4) 13.50% 23.45% 3.07% 14.13% 27.00%
</TABLE>
1. Cumulative total return represents the change in value of an investment over
the indicated periods, and does not include the initial sales charge.
2. Average annual total return represents the average annual change in value of
an investment over the indicated periods, and includes the current maximum 5.75%
initial sales charge.
3. These figures represent the value of a hypothetical $10,000 investment in the
Fund over the indicated periods, and include the current maximum 5.75% initial
sales charge.
4. One-year total return represents the change in value of an investment over
the one-year periods ended on the dates indicated and does not include the
initial sales charge.
All calculations assume reinvestment of dividends and capital gains at net asset
value. From October 17, 1991 to December 31, 1992, expense waivers by the Fund's
Manager increased the Fund's total returns.
Prior to July 1, 1992, Fund shares were offered at a higher sales charge. Thus,
actual total returns for investors who paid this higher charge would have been
lower than noted. On January 1, 1993, the Fund implemented a plan of
distribution under rule 12b-1, which affects performance for periods after that
date.
Investment return and principal value will fluctuate with market conditions,
currencies, and the economic, social, and political climates of the countries
where investments are made. Emerging markets involve heightened risks related to
the same factors, in addition to those associated with the relatively small size
and lesser liquidity of these markets. You may have a gain or loss when you sell
your shares.
Past performance is not predictive of future results.
6
<PAGE>
CLASS II
Templeton Developing Markets Trust Class II shares produced a cumulative total
return of 19.65% for the six-month period ended June 30, 1997. Cumulative total
return measures the change in value of an investment, assuming reinvestment of
dividends and capital gains, and does not include sales charges. As the chart on
the following page illustrates, the Fund's Class II shares delivered a
cumulative total return of 47.95% since inception on May 1, 1995.
The Fund's share price, as measured by net asset value, increased $2.91, from
$15.27 on December 31, 1996, to $18.18 on June 30, 1997. During the reporting
period, shareholders received distributions of 0.47 cents ($0.0047) per share in
income dividends, 1.0 cent ($0.01) in short-term capital gains and 7.0 cents
($0.07) in long-term capital gains. Distributions will vary depending on income
earned by the Fund and any profits realized from the sale of securities in the
Fund's portfolio, as well as the level of the Fund's operating expenses.
Past performance is not predictive of future results.
7
<PAGE>
CLASS II
Periods ended 6/30/97
<TABLE>
<CAPTION>
SINCE
INCEPTION
1-YEAR (5/1/95)
- ----------------------------------------------------------------------------------
<S> <C> <C>
Cumulative Total Return(1) 26.04% 47.95%
Average Annual Total Return(2) 23.79% 19.26%
Value of a $10,000 Investment(3) $12,379 $14,648
<CAPTION>
6/30/96 6/30/97
- ---------------------------------------------------------------------------------
<S> <C> <C>
One-Year Total Return(4) 13.24% 26.04%
</TABLE>
1. Cumulative total return represents the change in value of an investment over
the indicated periods, and does not include sales charges.
2. Average annual total return represents the average annual change in value of
an investment over the indicated periods, and includes the 1.00% initial sales
charge and the 1.00% contingent deferred sales charge applicable to shares
redeemed within 18 months of purchase.
3. These figures represent the value of a hypothetical $10,000 investment in the
Fund over the indicated periods, and include all sales charges.
4. One-year total return represents the change in value of an investment over
the one-year periods ended on the dates indicated and does not include sales
charges.
All calculations assume reinvestment of dividends and capital gains at net asset
value. Investment return and principal value will fluctuate with market
conditions, currencies, and the economic, social and political climates of
countries where investments are made. Emerging 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. You may have a gain or loss
when you sell your shares.
Past performance is not predictive of future results.
8
<PAGE>
ADVISOR CLASS
Templeton Developing Markets Trust Advisor Class shares produced an aggregate
total return of 20.04% for the six-month period from inception on January 1,
1997 through June 30, 1997. Aggregate total return measures the change in value
of an investment, assuming reinvestment of dividends and capital gains.
The Fund's share price increased $3.00, from $15.43 on January 2, 1997
(commencement of sales), to $18.43 on June 30, 1997. During the reporting
period, shareholders received distributions of 0.5 cents ($0.005) per share in
income dividends, 1.0 cent ($0.01) in short-term capital gains and 7.0 cents
($0.07) in long-term capital gains. Distributions will vary depending on income
earned by the Fund and any profits realized from the sale of securities in the
Fund's portfolio, as well as the level of the Fund's operating expenses.
ADVISOR CLASS
Period ended 6/30/97
<TABLE>
<CAPTION>
SINCE
INCEPTION
(1/1/97)
- -------------------------------------------------------------------
<S> <C>
Aggregate Total Return(1) 20.04%
Value of $10,000 Investment(2) $12,004
</TABLE>
1. Aggregate total return represents the change in value of an investment over
the period indicated. Since Advisor Class shares have existed for less than one
year, average annual total returns are not provided.
2. This figure represents the value of a hypothetical $10,000 investment in the
Fund over the period indicated.
All calculations assume reinvestment of dividends and capital gains at net asset
value. Investment return and principal value will fluctuate with market
conditions, currencies and the economic, social and political climates of
countries where investments are made. Emerging 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. You may have a gain or loss
when you sell your shares.
Past performance is not predictive of future results.
9
<PAGE>
Many investors have asked us about the activities of Sir John Templeton, since
his retirement from the funds. We asked Professor Robert Herrmann to update us
on Sir John's current activities and his comments follow.
THE NEW CAREER OF
SIR JOHN TEMPLETON
[PHOTO]
BY PROFESSOR
ROBERT HERRMANN
In 1992, Sir John Templeton retired after a 50-year career of helping investors
manage their money. Currently, he devotes all of his time and efforts to the
John Templeton Foundation. A major portion of his assets remain invested in
Templeton funds, managed by many of the investment professionals he selected and
trained. For sentimental reasons, he allows his name to be associated with the
funds, although he knows no more about their management and holdings than any
other investor.
Sir John Templeton established the Templeton Foundation in 1987, to foster the
acquisition of spiritual information through scientific research. Working with
scientists, theologians and others, he strives toward a new science that uses
empirical and statistical scientific methods to discover and test spiritual
knowledge. A crucial ingredient in his research is what Sir John calls "humility
theology," an attitude of humility toward the Creator, combined with
receptiveness to the theological significance of current scientific discoveries.
Universal spiritual laws, or "laws of life," are among the areas of
investigation. In his recent book, Worldwide Laws of Life, Sir John compiles 200
laws and proverbs from nearly all religions, and deeply embedded in human
history. For example, the Golden Rule taught by Jesus in the Sermon on the
Mount, states "Do unto others as you would have others do unto you," and is
affirmed by all major religions as an acceptable, universal law of life. Other
books which Sir John has authored or co-authored during the past few years
include: THE HUMBLE APPROACH, IS GOD THE ONLY REALITY, EVIDENCE OF PURPOSE,
WHO'S WHO IN THEOLOGY AND SCIENCE and THE GOD WHO WOULD BE KNOWN.
With an annual budget of more than $30 million, the Templeton Foundation
sponsors 60 programs focusing on spiritual progress and the benefits of freedom.
Sir John's first sizable investment in the programs was the Templeton Prize for
Progress in Religion. A panel of nine judges gives the annual award which now
exceeds $1.2 million to individuals who have shown extraordinary originality in
furthering the world's understanding of God or spirituality.
Recipients of the prize include Professor Paul Davies, author of The Mind of
God; the Right Honorable Lord Jacobovits, former Chief Rabbi of Great Britain
and The Commonwealth; the Reverend Dr. Billy Graham, world-renowned preacher and
presidential inauguration speaker; Mr. Nikkyo Nimano, founder of the World
Conference on Religion and Peace; and Sir Sarepalli Radhakrishnan, former
President of India, and Oxford professor of Eastern Religions and Ethics.
To encourage young people's and their parents' appreciation of spiritual laws of
life, Sir John established an essay contest for teenagers in his home county of
Franklin, Tennessee. Students submit essays about the spiritual life principles
they plan to follow, and prizes are offered semiannually. In 1996, more than 800
youth participated. Twenty-six similar programs have been launched in various
locations, with the support of generous local donors.
The Foundation also sponsors a worldwide program that awards college-level
faculty who teach courses integrating science and religion. During the program's
first two years, more than 200 courses were created. The Foundation maintains an
extensive program of research and education on the health benefits of
spirituality, including prizes for medical schools providing courses on
spirituality in medicine. Lastly, the Foundation publishes a newsletter with
over 2,000 subscribers. Free subscriptions are available to Templeton
shareholders by writing to the Foundation.
To contact Sir John Templeton or receive the free newsletter subscription,
please write to:
The John Templeton Foundation
2 Radnor Corporate Center #320
100 Matsonford Road
Radnor, PA 19087
10
<PAGE>
TEMPLETON DEVELOPING MARKETS TRUST
Financial Highlights
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31
JUNE 30, 1997 -----------------------------------------------------------------
(UNAUDITED) 1996 1995 1994 1993 1992
----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE - CLASS I
(FOR A SHARE OUTSTANDING THROUGHOUT THE
PERIOD)
Net asset value, beginning of period..... $15.40 $13.01 $13.42 $15.27 $8.86 $10.02
----------------------------------------------------------------------------------
Income from investment operations:
Net investment income.................. .14 .16 .21 .14 .04 .08
Net realized and unrealized gain
(loss)............................... 2.96 2.75 (.18) (1.44) 6.55 (1.06)
----------------------------------------------------------------------------------
Total from investment operations......... 3.10 2.91 .03 (1.30) 6.59 (.98)
----------------------------------------------------------------------------------
Distributions:
Dividends from net investment income... (.01) (.17) (.20) (.12) (.05) (.07)
Amount in excess of net investment
income............................... -- (.01) -- -- -- --
Distributions from net realized
gains................................ (.08) (.34) (.24) (.43) (.13) (.11)
----------------------------------------------------------------------------------
Total distributions...................... (.09) (.52) (.44) (.55) (.18) (.18)
----------------------------------------------------------------------------------
Change in net asset value................ 3.01 2.39 (.41) (1.85) 6.41 (1.16)
----------------------------------------------------------------------------------
Net asset value, end of period........... $18.41 $15.40 $13.01 $13.42 $15.27 $8.86
==================================================================================
TOTAL RETURN*............................ 20.14% 22.51% .36% (8.64)% 74.50% (9.75)%
RATIOS /SUPPLEMENTAL DATA
Net assets, end of period (000).......... $4,554,867 $3,308,753 $2,147,664 $2,009,154 $1,396,392 $180,189
Ratio of expenses to average net
assets................................. 2.01%** 2.03% 2.10% 2.11% 2.20% 2.52%
Ratio of expenses, net of reimbursement,
to average net assets.................. 2.01%** 2.03% 2.10% 2.11% 2.20% 2.25%
Ratio of net investment income to average
net assets............................. 1.62%** 1.16% 1.66% 1.08% .57% 1.30%
Portfolio turnover rate.................. 9.51% 12.47% 9.76% 18.57% 16.01% 21.98%
Average commission rate paid (per
share)................................. $0.0031 $0.0024
</TABLE>
*Total return does not reflect sales commissions. Not annualized for periods of
less than one year.
**Annualized.
See Notes to Financial Statements.
11
<PAGE>
TEMPLETON DEVELOPING MARKETS TRUST
Financial Highlights (continued)
<TABLE>
<CAPTION>
FOR THE PERIOD
SIX MONTHS ENDED MAY 1, 1995+
JUNE 30, 1997 YEAR ENDED THROUGH
(UNAUDITED) DECEMBER 31, 1996 DECEMBER 31, 1995
----------------------------------------------------------
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE - CLASS II
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
Net asset value, beginning of period....................... $15.27 $12.95 $13.10
-----------------------------------------------------
Income from investment operations:
Net investment income.................................... .12 .17 .02
Net realized and unrealized gain......................... 2.88 2.60 .19
------------------------------------------------------
Total from investment operations........................... 3.00 2.77 .21
------------------------------------------------------
Distributions:
Dividends from net investment income..................... (.01) (.10) (.18)
Amount in excess of net investment income................ -- (.01) --
Distributions from net realized gains.................... (.08) (.34) (.18)
------------------------------------------------------
Total distributions........................................ (.09) (.45) (.36)
------------------------------------------------------
Change in net asset value.................................. 2.91 2.32 (.15)
------------------------------------------------------
Net asset value, end of period............................. $18.18 $15.27 $12.95
======================================================
TOTAL RETURN*.............................................. 18.65% 21.58% 1.70%
RATIOS /SUPPLEMENTAL DATA
Net assets, end of period (000)............................ $430,083 $226,629 $41,012
Ratio of expenses to average net assets.................... 2.73%** 2.74% 2.73%**
Ratio of net investment income to average net assets....... .98%** .33% .19%**
Portfolio turnover rate.................................... 9.51% 12.47% 9.76%
Average commission rate paid (per share)................... $.0031 $.0024
</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 sales.
See Notes to Financial Statements.
12
<PAGE>
TEMPLETON DEVELOPING MARKETS TRUST
Financial Highlights (continued)
<TABLE>
<CAPTION>
FOR THE PERIOD
JANUARY 2, 1997+
THROUGH
JUNE 30, 1997
(UNAUDITED)
----------------
<S> <C>
PER SHARE OPERATING PERFORMANCE - ADVISOR CLASS
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
Net asset value, beginning of period........................................................... $15.43
------------
Income from investment operations:
Net investment income........................................................................ .12
Net realized and unrealized gain............................................................. 2.97
------------
Total from investment operations............................................................... 3.09
------------
Distributions:
Dividends from net investment income......................................................... (.01)
Distributions from net realized gains........................................................ (.08)
------------
Total distributions............................................................................ (.09)
------------
Change in net asset value...................................................................... 3.00
------------
Net asset value, end of period................................................................. $18.43
============
TOTAL RETURN*.................................................................................. 20.04%
RATIOS /SUPPLEMENTAL DATA
Net assets, end of period (000)................................................................ $35,814
Ratio of expenses to average net assets........................................................ 1.73%**
Ratio of net investment income to average net assets........................................... 2.21%**
Portfolio turnover rate........................................................................ 9.51%
Average commission rate paid (per share)....................................................... $.0031
</TABLE>
*Not annualized for periods of less than one year.
**Annualized.
+Commencement of sales.
See Notes to Financial Statements.
13
<PAGE>
TEMPLETON DEVELOPING MARKETS TRUST
INVESTMENT PORTFOLIO, JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
SHARES/PRINCIPAL IN
INDUSTRY LOCAL CURRENCY VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
LONG TERM SECURITIES 85.7%
ARGENTINA 5.0%
Aluar Aluminio ARgentino SA, B Misc Materials & Commodities....... 77,678 $ 279,683
+ Astra Cia Argentina de Petroleo SA Energy Sources..................... 3,710,830 7,868,140
Atanor Cia Nacional Para la Industria
Quimica SA, D Chemicals.......................... 3,507,414 5,647,784
* Banco Bansud SA, B Banking............................ 139,927 2,126,283
Banco de Galicia y Buenos Aires SA, B Banking............................ 3,817,994 25,393,469
Banco Frances del Rio de la Plata SA Banking............................ 1,445,643 15,658,662
* Buenos Aires Embotelladora SA, ADR Beverages & Tobacco................ 746,000 7,460
Capex SA, A Utilities Electrical & Gas......... 123,774 1,163,650
Central Costanera SA, B Utilities Electrical & Gas......... 433,769 1,496,728
Ciadea SA Automobiles........................ 833,497 3,584,576
+* Garovaglio Y Zorraquin SA Chemicals.......................... 1,612,631 5,806,343
Juan Minetti SA Building Materials & Components.... 444,055 2,131,784
Juan Minetti SA, conv. Building Materials & Components.... 113,000 113,017
Molinos Rio de Plata SA, B Food & Household Products.......... 7,054,463 27,587,088
Nobleza Piccardo Sdad Industrial Comercial y
Financial Beverages & Tobacco................ 407,990 2,693,138
Perez Companc SA, B Energy Sources..................... 7,636,463 61,329,998
Quilmes Industrial SA Beverages & Tobacco................ 1,257,500 14,618,438
Quilmes Industrial SA, reg Beverages & Tobacco................ 105,000 1,076,250
* Sevel Argentina SA, C Automobiles........................ 1,423,892 2,905,175
Siderar, A Metals & Mining.................... 367,250 1,509,624
* Sociedad Comercial del Plata Cadelplata Come Multi-Industry..................... 7,156,070 23,332,288
Transportadora de Gas del Sur SA, B Energy Sources..................... 649,645 1,572,377
YPF Sociedad Anonima, ADR Energy Sources..................... 1,312,410 40,356,608
* Zanella Hermanos SA Automobiles........................ 931,434 200,288
--------------
248,458,851
--------------
BRAZIL 11.8%
Aracruz Celulose SA, ADR Forest Products & Paper............ 266,900 5,438,088
Banco Bradesco SA Banking............................ 1,501,078,668 14,361,721
Banco Bradesco SA, pfd. Banking............................ 728,000,794 7,337,150
* Banco do Brasil SA Banking............................ 1,192,085,791 12,512,721
* Banco do Brasil SA, wts., A Banking............................ 216,046,382 702,394
* Banco do Brasil SA, wts., B Banking............................ 324,069,574 906,088
* Banco do Brasil SA, wts., C Banking............................ 540,115,956 1,505,130
* Banco do Brazil SA, pfd. Banking............................ 818,346,120 9,806,015
* Banespa-Banco do Estado de Sao Paulo SA,
pfd. Banking............................ 1,140,033,850 28,073,287
Brasmotor SA, pfd. Multi-Industry..................... 45,992,231 10,253,249
Cia Vale do Rio Doce, pfd. Metals & Mining.................... 785,141 17,364,922
Companhia Siderurgica Nacional Metals & Mining.................... 224,956,000 7,418,084
Confab Industrial SA, pfd. Industrial Components.............. 1,434,340 2,384,904
Copene-Petroquimica do Nordeste SA, A, pfd. Chemicals.......................... 34,105,550 12,640,485
Duratex SA, pfd. Forest Products & Paper............ 478,134,600 25,311,310
Electrolux Do Brasil SA, pfd. Appliances & Household Durables.... 64,682,000 102,741
Eletrobras-Centrais Eletricas Brasileiras SA Utilities Electrical & Gas......... 66,800,000 37,354,141
Eletrobras-Centrais Eletricas Brasileiras
SA, B, pfd. Utilities Electrical & Gas......... 160,885,847 95,944,186
Itausa-Investimentos Itau SA, pfd. Multi-Industry..................... 55,824,179 51,336,155
* Mannesmann SA Machinery & Engineering............ 15,537,010 1,789,596
</TABLE>
14
<PAGE>
TEMPLETON DEVELOPING MARKETS TRUST
INVESTMENT PORTFOLIO, JUNE 30, 1997 (UNAUDITED) (continued)
<TABLE>
<CAPTION>
SHARES/PRINCIPAL IN
INDUSTRY LOCAL CURRENCY VALUE
<S> <C> <C> <C> <C>
LONG TERM SECURITIES (CONT.)
BRAZIL (CONT.)
* Mannesmann SA, pfd. Machinery & Engineering............ 5,137,562 $ 663,342
Marcopolo SA, pfd. Automobiles........................ 12,142,400 2,171,206
Petrobras-Petroleo Brasileiro SA, pfd. Energy Sources..................... 377,096,333 104,737,889
Telebras-Telecomunicacoes Brasileiras SA Telecommunications................. 738,109,194 100,101,196
Telebras-Telecomunicacoes Brasileiras SA,
pfd. Telecommunications................. 218,936,973 33,210,169
Unibanco-Uniao de Bancos Brasileiros SA,
pfd. Banking............................ 238,662,372 8,754,612
--------------
592,180,781
--------------
CHILE 0.1%
Antofagasta Holdings PLC Metals & Mining.................... 901,550 6,883,723
--------------
CHINA 1.6%
Recreation & Other Consumer
China First Pencil Co. Ltd., B Goods.............................. 512,107 204,843
China Southern Glass Co. Ltd., B Building Materials & Components.... 4,929,462 2,576,939
* Chiwan Wharf Holdings Ltd., B Transportation..................... 11,783,100 7,209,208
Guangzhou Shipyard International Co. Ltd., H Machinery & Engineering............ 3,388,000 634,105
* Luoyang Glass Co. Ltd., H Misc Materials & Commodities....... 9,075,000 1,581,357
Shandong Huaneng Power Utilities Electrical & Gas......... 284,000 3,053,000
* Shanghai Chlor-Alkali Chemical Co. Ltd., B Chemicals.......................... 12,105,300 3,462,116
* Shanghai Dazhong Taxi Shareholding Co. Ltd.,
B Transportation..................... 3,304,000 2,933,952
* Shanghai Erfangji Textile Machinery Co.
Ltd., B Machinery & Engineering............ 9,647,887 1,254,225
* Shanghai Industrial Sewing Machine Corp. Machinery & Engineering............ 4,645,810 566,789
* Shanghai Jin Jiang Tower Co. Ltd., B Leisure & Tourism.................. 6,891,378 2,177,675
Shanghai Jinqiao Export Processing Zone
Development, B Real Estate........................ 3,490,500 2,848,248
Shanghai Lujiaxui Finance & Trade Zn Dev
Stock Co Ltd, B Real Estate........................ 17,381,910 24,856,131
* Shanghai Narcissus Electric Appliances Co.
Ltd., B Appliances & Household Durables.... 599,950 85,193
Shanghai New Asia Group Co. Ltd., B Food & Household Products.......... 4,148,500 2,265,081
Shanghai Petrochemical Co. Ltd., H Chemicals.......................... 14,464,000 3,472,570
* Shanghai Refrigerator Compressor Co. Ltd., B Industrial Components.............. 1,905,813 914,790
* Shanghai Rubber Belt Co. Ltd., B Industrial Components.............. 600,480 118,895
* Shanghai Shangling Electric Appliance, B Appliances & Household Durables.... 3,065,060 631,402
* Shanghai Steel Tube Co. Ltd., B Machinery & Engineering............ 1,273,800 168,142
Shanghai Tyre & Rubber Co. Ltd., B Industrial Components.............. 5,509,000 2,699,410
* Shanghai Vacuum Electron Devices Co. Ltd., B Appliances & Household Durables.... 2,324,500 464,900
Recreation & Other Consumer
* Shanghai Wingsung Co. Ltd., B Goods.............................. 558,210 131,738
* Shanghai Yaohua Pilkington Glass, B Building Materials & Components.... 7,795,250 2,821,881
* Shenzhen China Bicycles Co. (Holdings) Ltd., Recreation & Other Consumer
B Goods.............................. 1,526,400 600,922
Shenzhen Konka Electronic Group Co. Ltd., B Appliances & Household Durables.... 1,099,520 1,630,695
Shenzhen Properties & Resources Develop.
(Group) Ltd., B Real Estate........................ 1,367,156 472,936
Shenzhen Vanke Co. Ltd., B Real Estate........................ 8,340,810 8,106,863
* Tsingtao Brewey Co., H Beverages & Tobacco................ 1,802,000 697,791
Zhuhai Sez Lizhu Pharmaceutical Group Inc.,
B Health & Personal Care............. 158,800 105,562
--------------
78,747,359
--------------
</TABLE>
15
<PAGE>
TEMPLETON DEVELOPING MARKETS TRUST
INVESTMENT PORTFOLIO, JUNE 30, 1997 (UNAUDITED) (continued)
<TABLE>
<CAPTION>
SHARES/PRINCIPAL IN
INDUSTRY LOCAL CURRENCY VALUE
<S> <C> <C> <C> <C>
LONG TERM SECURITIES (CONT.)
COLOMBIA 2.0%
Banco Ganadero SA, ADR C Banking............................ 215,000 $ 5,616,875
Banco Industrial Colombiano SA Banking............................ 1,105,000 3,682,658
Bavaria SA Beverages & Tobacco................ 697,960 5,009,190
Cementos Argos SA Building Materials & Components.... 2,663,018 21,357,844
Cia Colombiana de Tabacos SA Coltabaco Beverages & Tobacco................ 2,326,715 8,106,181
Compania Nacional de Chocolates SA Food & Household Products.......... 1,764,924 15,691,808
Compania Suramericana de Seguros Insurance.......................... 1,423,791 36,801,931
Promigas SA Utilities Electrical & Gas......... 242,437 1,033,302
--------------
97,299,789
--------------
CZECH REPUBLIC 1.0%
* CEZ Utilities Electrical & Gas......... 661,300 18,251,619
Chemopetrol Group AS Chemicals.......................... 259,501 9,162,719
Elektrarny Opatovice AS Energy Sources..................... 20,096 2,633,773
Komercni Banka AS Banking............................ 9,822 508,849
* Komercni Banka AS, GDR Banking............................ 37,000 770,525
SPT Telecom AS Telecommunications................. 127,740 13,393,240
* Tabak AS Beverages & Tobacco................ 10,668 2,500,210
--------------
47,220,935
--------------
ECUADOR 0.1%
La Cemento Nacional CA, GDR Multi-Industry..................... 13,400 2,787,200
La Cemento Nacional CA, GDR, 144a Multi-Industry..................... 4,510 938,080
--------------
3,725,280
--------------
EGYPT 0.0%
Commercial International Bank Ltd. Banking............................ 95,650 2,000,946
--------------
GHANA 0.3%
Ashanti Goldfields Co. Ltd., GDR Metals & Mining.................... 1,135,962 13,276,556
--------------
GREECE 4.1%
Alpha Credit Bank Banking............................ 1,069,051 72,733,311
Alpha Leasing SA Financial Services................. 248,690 6,599,505
Delta Dairy SA Food & Household Products.......... 451,840 5,592,283
Delta Dairy SA, pfd. Food & Household Products.......... 151,691 1,319,724
Elais Oleaginous Co. Food & Household Products.......... 203,710 5,924,950
Ergo Bank SA Banking............................ 422,580 25,381,566
Etba Leasing Financial Services................. 151,372 1,537,359
Fourlis Brothers Corp. SA Appliances & Household Durables.... 283,960 2,894,281
Hellas Can - Container Manufacturers Metals & Mining.................... 263,490 4,867,721
Hellenic Bottling Co. SA Food & Household Products.......... 193,385 7,148,719
Hellenic Telecommunications Organizations
OTE Telecommunications................. 287,310 6,745,839
Hellenic Telecommunications Organizations
OTE, 144A Telecommunications................. 815,000 19,135,634
* Hellenic Telecommunications Organizations,
rts. Telecommunications................. 1,102,310 135,427
* Intracom SA, reg. Electrical & Electronics........... 91,000 4,144,043
* National Bank of Greece SA Banking............................ 146,603 17,931,069
Titan Cement Co., reg. Building Materials & Components.... 494,820 24,406,869
</TABLE>
16
<PAGE>
TEMPLETON DEVELOPING MARKETS TRUST
INVESTMENT PORTFOLIO, JUNE 30, 1997 (UNAUDITED) (continued)
<TABLE>
<CAPTION>
SHARES/PRINCIPAL IN
INDUSTRY LOCAL CURRENCY VALUE
<S> <C> <C> <C> <C>
LONG TERM SECURITIES (CONT.)
GREECE (CONT.)
Titan Cement Co., reg. pfd. Building Materials & Components.... 14,200 $ 595,065
X. Benrubi & Son SA Food & Household Products.......... 151,320 418,635
--------------
207,512,000
--------------
HONG KONG 9.8%
Cheung Kong Holdings Ltd. Multi-Industry..................... 11,464,000 113,200,212
China Overseas Land & Investment Ltd. Real Estate........................ 2,533,000 2,043,454
Cross Harbour Tunnel Co. Ltd. Transportation..................... 498,598 1,065,119
Dairy Farm International Holdings Ltd. Merchandising...................... 10,322,036 7,741,527
* East Asiatic Co. (Hong Kong) Ltd. (The) Wholesale & International Trade.... 2,976,000 497,453
Fortei Holdings Ltd. Merchandising...................... 5,366,000 443,282
Great Wall Electronic International Ltd. Electrical & Electronics........... 3,577,924 383,318
Hang Lung Development Co. Ltd. Real Estate........................ 16,755,000 30,710,183
Hong Kong Electric Holdings Ltd. Utilities Electrical & Gas......... 405,000 1,631,020
Hopewell Holdings Ltd. Construction & Housing............. 8,307,002 5,253,999
HSBC Holdings PLC Banking............................ 3,773,173 113,478,155
Jardine International Motor Holdings Ltd. Automobiles........................ 2,423,000 3,064,990
Jardine Matheson Holdings Ltd. (Singapore) Multi-Industry..................... 1,917,872 13,616,891
Jardine Strategic Holdings Ltd. (Singapore) Multi-Industry..................... 4,662,562 17,624,484
JCG Holdings Ltd. Financial Services................. 59,000 47,597
Joyce Boutique Holdings Ltd. Merchandising...................... 1,183,000 184,765
K Wah International Holdings Ltd. Building Materials & Components.... 26,565,251 5,006,295
Lai Sun Development Co. Ltd. Real Estate........................ 3,600,800 4,043,597
Lai Sun Garment International Ltd. Multi-Industry..................... 3,568,000 4,375,202
* Lai Sun Hotels International Ltd., wts. Leisure & Tourism.................. 722,693 63,433
Laws International Holdings Ltd. Textiles & Apparel................. 6,216,000 1,588,641
New World Development Co. Ltd. Real Estate........................ 11,028,883 65,769,287
Electronic Components &
* S. Megga International Holdings Ltd. Instruments........................ 7,476,800 530,797
Semi-Tech (Global) Co. Ltd. Appliances & Household Durables.... 3,335,856 5,446,875
* Sun Hung Kai & Co. Ltd, wts. Financial Services................. 2,023,360 190,654
Sun Hung Kai & Co. Ltd. Financial Services................. 3,671,800 1,101,924
Sun Hung Kai Properties Ltd. Real Estate........................ 4,827,900 58,110,784
Swire Pacific Ltd., B Multi-Industry..................... 1,942,500 2,946,107
Tian An China Investments Co. Ltd. Real Estate........................ 12,881,000 1,745,776
Tungtex (Holdings) Co. Ltd. Textiles & Apparel................. 4,538,000 468,602
Wheelock & Co. Ltd. Multi-Industry..................... 9,609,000 23,627,774
* Wo Kee Hong Holdings Ltd. Merchandising...................... 17,631,200 1,251,683
* Yaohan Hongkong Corp. Ltd. Merchandising...................... 9,530,000 492,042
Recreation & Other Consumer
Yue Yuen Industrial (Holdings) Ltd. Goods.............................. 2,930,800 6,071,708
--------------
493,817,630
--------------
HUNGARY 0.9%
* Danubius Hotel and Spa RT Leisure & Tourism.................. 38,000 1,123,168
Egis RT Multi-Industry..................... 67,100 4,281,873
Fotex First Hungarian-Amer. Photo Co.,
12.00%, 5/11/00 Multi-Industry..................... 32,000 32,000
* Fotex First Hungarian-American Photo-Service Multi-Industry..................... 2,630,400 2,681,127
Gedeon Richter Ltd. Health & Personal Care............. 33,000 3,038,929
</TABLE>
17
<PAGE>
TEMPLETON DEVELOPING MARKETS TRUST
INVESTMENT PORTFOLIO, JUNE 30, 1997 (UNAUDITED) (continued)
<TABLE>
<CAPTION>
SHARES/PRINCIPAL IN
INDUSTRY LOCAL CURRENCY VALUE
<S> <C> <C> <C> <C>
LONG TERM SECURITIES (CONT.)
HUNGARY (CONT.)
* Ibusz RT Leisure & Tourism.................. 125,680 $ 456,371
Inter-Europa Bank RT Banking............................ 1,408 349,622
Mol Magyar Olay -- Es Gazipari RT Energy Sources..................... 12,340 273,468
OTP Bank, GDR Banking............................ 448,000 11,872,000
Pick Szeged RT Food & Household Products.......... 10,403 799,953
Pick Szeged RT, GDR Food & Household Products.......... 30,430 2,339,957
Tiszai Vegyi Kombinat RT Chemicals.......................... 149,558 2,611,565
Tiszai Vegyi Kombinat RT, GDR, 144a Chemicals.......................... 571,000 9,892,575
Tiszai Vegyi Kombinat RT, GDR, S Chemicals.......................... 152,000 2,633,400
--------------
42,386,008
--------------
INDIA 3.4%
Aban Loyd Chiles Offshore Ltd. Energy Sources..................... 245,000 349,022
* Arvind Mills Ltd. Textiles & Apparel................. 1,482,000 5,381,564
ATV Project India Ltd. Machinery & Engineering............ 1,655,300 152,584
* Bank of Baroda Banking............................ 428,700 1,107,675
Bharat Petroleum Corp., Ltd. Energy Sources..................... 1,317,900 16,547,376
* Bombay Dyeing & Manufacturing Co. Ltd. Chemicals.......................... 344,950 929,823
Bses Ltd. Utilities Electrical & Gas......... 348,300 2,317,946
Cochin Refineries Ltd. Energy Sources..................... 215,450 920,778
DCW Ltd. Chemicals.......................... 500,000 259,777
Dr. Reddys Laboratories Ltd. Health & Personal Care............. 94,200 657,821
Essar Shipping Ltd. Transportation..................... 773,500 278,719
Flex Industries Ltd. Food & Household Products.......... 40,000 44,413
Ganesh Benzoplast Ltd. Chemicals.......................... 159,100 59,996
Garden Silk Mills Ltd. Textiles & Apparel................. 229,600 83,374
Grasim Industries Ltd Ord INR10 Multi-Industry..................... 778,050 8,117,365
Great Eastern Shipping Co. Ltd. Transportation..................... 5,853,700 8,012,047
Gujarat Ambuja Cements Ltd. Building Materials & Components.... 366,800 3,550,173
* Gujarat Industries Power Ltd. Energy Equipment & Services........ 378,600 301,399
Gujarat Narmada Valley Fertilizers Co. Ltd. Chemicals.......................... 36,000 22,877
Gujarat Narmanda Valley Fertilizers Co.
Ltd., ADR Chemicals.......................... 72,000 180,000
Hindalco Industries Metals & Mining.................... 148,475 4,043,663
Hindustan Organic Chemicals Ltd. Chemicals.......................... 538,300 375,908
Hindustan Petroleum Corp. Ltd. Energy Sources..................... 1,003,800 12,701,715
* India Cements Ltd. Building Materials & Components.... 302,050 911,212
India Cements Ltd., GDR Building Materials & Components.... 552,910 1,658,730
Indian Aluminium Co. Ltd. Metals & Mining.................... 192,300 715,753
Indian Petrochemicals Corp. Ltd. Chemicals.......................... 3,164,900 12,818,729
Indian Rayon & Industries Ltd., GDR Multi-Industry..................... 122,206 1,530,630
Indian Rayon and Industries Ltd. Multi-Industry..................... 367,800 3,801,285
Indo Gulf Fertilisers & Chemicals Corp. Ltd. Chemicals.......................... 3,927,500 3,784,881
Indo Gulf Fertilisers & Chemicals, GDR Chemicals.......................... 64,150 68,961
Industrial Credit & Inv. Corp. of India
(ICICI) Financial Services................. 6,629,600 14,490,676
* Industrial Development Bank of India Banking............................ 1,943,800 5,551,775
ITC Bhadrachalam Paperboards Ltd. Forest Products & Paper............ 106,850 137,293
Larsen and Toubro Ltd. Multi-Industry..................... 1,424,200 9,706,838
</TABLE>
18
<PAGE>
TEMPLETON DEVELOPING MARKETS TRUST
INVESTMENT PORTFOLIO, JUNE 30, 1997 (UNAUDITED) (continued)
<TABLE>
<CAPTION>
SHARES/PRINCIPAL IN
INDUSTRY LOCAL CURRENCY VALUE
<S> <C> <C> <C> <C>
LONG TERM SECURITIES (CONT.)
INDIA (CONT.)
Madras Cements Building Materials & Components.... 1,325 $ 298,865
Mahanagar Telephone Nigam Ltd. Telecommunications................. 20,000 168,994
* National Aluminium Co. Ltd. Metals & Mining.................... 1,072,200 1,362,712
* Oriental Bank of Commerce Banking............................ 1,630,200 3,173,881
Reliance Industries Ltd. Chemicals.......................... 1,135,600 11,792,159
Shipping Corporation of India Ltd. Transportation..................... 1,869,500 2,545,758
State Bank of India Banking............................ 76,000 722,318
Steel Authority of India Ltd. Metals & Mining.................... 4,904,300 2,808,328
Steel Authority of India Ltd, GDR, reg S Metals & Mining.................... 561,000 5,020,950
Steel Authority of India Ltd., GDR, 144a Metals & Mining.................... 62,000 554,900
Sterlite Industries (India) Ltd. Metals & Mining.................... 236,300 1,765,649
Tamil Nadu Newsprint & Papers Ltd. Forest Products & Paper............ 150,000 251,397
* Tata Chemicals Ltd. Chemicals.......................... 724,900 3,664,997
Tata Engineering & Locomotive Co. Telco Machinery & Engineering............ 617,900 7,801,419
* Tata Iron & Steel Co. Ltd. Metals & Mining.................... 1,062,750 5,677,400
Thermax Ltd. Energy Equipment & Services........ 78,400 766,480
Videocon International Ltd. Appliances & Household Durables.... 404,000 349,832
Wockhardt Health & Personal Care............. 138,800 763,788
--------------
171,062,605
--------------
INDONESIA 3.7%
* Asia Pulp & Paper Co. Ltd., ADR Forest Products & Paper............ 481,100 7,276,638
* PT Bank Dagang Nasional Indonesia, wts. Banking............................ 312,500 128,495
PT Bank Dagang Nasional Indonesia, fgn. Banking............................ 4,375,000 3,103,156
PT Bank Danamon, fgn. Banking............................ 2,846,000 1,492,044
PT Bank PDFCI, fgn. Banking............................ 984,000 920,477
PT Barito Pacific Timber, fgn. Forest Products & Paper............ 28,688,000 24,476,809
PT BBL Dharmala Finance, fgn. Financial Services................. 1,653,000 2,310,938
PT BDNI Capital Corporation, fgn. Financial Services................. 1,186,200 938,912
+ PT Charoen Pokphand Indonesia, fgn. Food & Household Products.......... 19,876,250 8,990,080
PT Ciputra Dev. Real Estate........................ 7,348,000 7,326,850
* PT Dharmala Intiland, fgn. Real Estate........................ 2,912,000 4,190,789
PT Gadjah Tunggal, fgn. Automobiles........................ 23,729,500 11,708,635
PT Indah Kiat Pulp & Paper Corp., fgn. Forest Products & Paper............ 7,349,500 4,306,348
* PT Indah Kiat Pulp & Paper Corp., rts. Forest Products & Paper............ 6,614,550 1,155,914
PT Indocement Tunggal Prakarsa, fgn. Building Materials & Components.... 9,356,000 14,522,574
PT Indosat, fgn Telecommunications................. 2,105,000 6,296,824
* PT Inter-Pacific Bank, fgn. Banking............................ 738,000 675,185
* PT Jakarta International Hotel &
Development, fgn. Real Estate........................ 6,493,750 7,409,604
PT Japfa Comfeed Indonesia Food & Household Products.......... 3,839,500 2,565,455
PT Kalbe Farma, fgn. Health & Personal Care............. 2,725,000 3,641,550
PT Metrodata Electronic, fgn. Electrical & Electronics........... 345,500 525,637
* PT Multibreeder Adirama, fgn. Food & Household Products.......... 858,750 308,966
PT Pabrik Kertas Tjiwi Kimia, fgn. Forest Products & Paper............ 6,214,910 7,219,211
PT Polysindo Eka Perkasa, fgn. Textiles & Apparel................. 11,922,500 6,618,164
PT Semen Cibinong, fgn. Building Materials & Components.... 138,500 363,050
PT Semen Gresik, fgn. Building Materials & Components.... 1,786,000 4,002,344
</TABLE>
19
<PAGE>
TEMPLETON DEVELOPING MARKETS TRUST
INVESTMENT PORTFOLIO, JUNE 30, 1997 (UNAUDITED) (continued)
<TABLE>
<CAPTION>
SHARES/PRINCIPAL IN
INDUSTRY LOCAL CURRENCY VALUE
<S> <C> <C> <C> <C>
LONG TERM SECURITIES (CONT.)
INDONESIA (CONT.)
PT Sinar Mas Agro Resources & Technology
Corp., fgn. Food & Household Products.......... 6,221,400 $ 5,627,911
PT Sinar Mas Multi Artha, fgn. Financial Services................. 12,855,200 11,761,028
* PT Sinar Mas Multi Artha, wts., fgn. Financial Services................. 964,140 485,638
* PT Sumalindo Lestari Jaya, fgn. Forest Products & Paper............ 4,059,500 3,672,245
PT Summarecon Agung, fgn. Real Estate........................ 833,040 496,673
PT Tambang Timah (Persero), fgn. Metals & Mining.................... 6,279,000 9,746,392
* PT Tempo Scan Pacific, fgn. Health & Personal Care............. 75,000 168,072
PT Ultra Jaya Milk, fgn. Food & Household Products.......... 4,355,000 2,372,687
* PT Unggul Indah Corp., fgn. Chemicals.......................... 1,410,200 2,261,423
PT United Tractors, fgn. Machinery & Engineering............ 4,493,000 16,627,056
--------------
185,693,774
--------------
ISRAEL 0.4%
Agis Industries Ltd. Health & Personal Care............. 69,870 732,639
Bank Hapoalim BM Banking............................ 2,210,909 4,603,267
Clal Industries Ltd. Multi-Industry..................... 1,518,178 7,589,834
Discount Investment Corp. Multi-Industry..................... 20,612 1,643,684
First International Bank of Israel Banking............................ 5,212 4,025,263
Koor Industries Ltd. Multi-Industry..................... 18,334 1,619,033
--------------
20,213,720
--------------
ITALY 2.0%
Banco Ambrosiano Veneto SPA, di Risp Banking............................ 8,653,000 12,709,126
Instituto Finanziaro Industriale SPA, pfd. Automobiles........................ 1,832,500 23,089,026
Istituto Mobiliare Italiano SPA Banking............................ 1,085,000 9,712,263
Italmobiliare SPA Multi-Industry..................... 1,249,210 18,166,251
Italmobiliare SPA, di Risp, conv. Multi-Industry..................... 906,100 7,175,113
Mediobanca/Italmobiliare, 6.00%, conv.,
12/31/99 Multi-Industry..................... 2,922,480,000 ** 1,747,400
Sirti SPA Construction & Housing............. 4,821,200 27,876,375
+ Teleco Cavi SPA, di Risp Telecommunications................. 557,000 1,458,544
--------------
101,934,098
--------------
JORDAN 0.0%
* Jordan Cement Factories Ltd. Building Materials & Components.... 36,000 207,165
--------------
MALAYSIA 2.2%
* Aokam Perdana Bhd. Multi-Industry..................... 1,532,000 1,705,594
Berjaya Singer Bhd. Appliances & Household Durables.... 3,663,000 7,082,187
Berjaya Singer Bhd., fgn. Appliances & Household Durables.... 933,000 1,803,899
Boustead Holdings Bhd., fgn. Food & Household Products.......... 1,357,000 2,957,013
Federal Flour Mills Bhd. Food & Household Products.......... 2,221,250 5,500,322
* Hong Leong Industries Bhd., wts., fgn. Multi-Industry..................... 332,000 273,597
Hong Leong Industries Bhd. Multi-Industry..................... 2,471,800 7,834,548
Island & Peninsula Bhd., fgn. Real Estate........................ 714,000 2,291,363
Leader Universal Holdings Bhd. Industrial Components.............. 6,998,000 12,587,528
Malayawata Steel Bhd. Metals & Mining.................... 1,626,000 2,512,441
Malayawata Steel Bhd., fgn. Metals & Mining.................... 1,418,000 2,191,046
</TABLE>
20
<PAGE>
TEMPLETON DEVELOPING MARKETS TRUST
INVESTMENT PORTFOLIO, JUNE 30, 1997 (UNAUDITED) (continued)
<TABLE>
<CAPTION>
SHARES/PRINCIPAL IN
INDUSTRY LOCAL CURRENCY VALUE
<S> <C> <C> <C> <C>
LONG TERM SECURITIES (CONT.)
MALAYSIA (CONT.)
Malaysian International Shipping Corp. Bhd.,
fgn. Transportation..................... 2,792,000 $ 7,245,483
MBF Capital Bhd. Financial Services................. 5,148,000 9,463,835
Oriental Holdings Bhd. Automobiles........................ 359,000 2,702,456
Oriental Holdings Bhd., fgn. Automobiles........................ 1,292,624 9,730,529
Perlis Plantations Bhd. Multi-Industry..................... 1,535,750 4,502,595
Perlis Plantations Bhd., fgn. Multi-Industry..................... 3,597,500 10,547,345
Renong Bhd. Multi-Industry..................... 13,858,000 18,118,621
* Renong Bhd., wts. Multi-Industry..................... 87,250 45,976
Renong, 4%, conv., 9/09/01 Multi-Industry..................... 139,600 44,247
Shangri La Hotels (Malaysia) Bhd., fgn. Leisure & Tourism.................. 414,000 395,301
Shangri-La Hotels (Malaysia) Bhd. Leisure & Tourism.................. 2,234,202 2,133,291
--------------
111,669,217
--------------
MEXICO 8.3%
Alfa SA de CV, A Multi-Industry..................... 2,840,768 19,386,757
Cementos Mexicanos SA de CV (Cemex), B Building Materials & Components.... 17,947,750 87,456,299
Cifra SA de CV, A Merchandising...................... 2,250,191 4,159,255
Cifra SA, C Merchandising...................... 18,397,824 29,419,839
Coca Cola Femsa SA de CV, ADR Beverages & Tobacco................ 390,600 20,164,725
Cydea SA de CV Chemicals.......................... 1,470,463 3,925,185
DESC SA, A Multi-Industry..................... 500,000 3,525,560
DESC SA, B Multi-Industry..................... 1,024,108 7,479,006
DESC SA, C Multi-Industry..................... 757,255 5,463,447
Fomento Economico Mexicano SA de CV, B Beverages & Tobacco................ 1,723,000 10,250,787
Grupo Carso SA de CV Multi-Industry..................... 163,143 1,135,962
Grupo Financiero Banamex Accival SA, B Banking............................ 7,679,000 19,724,452
* Grupo Financiero Banamex Accival SA, L Banking............................ 15,866,422 37,558,390
* Grupo Financiero Bancomer SA de CV, B Banking............................ 35,846,000 17,241,466
* Grupo Financiero Bancomer SA de CV, L Banking............................ 45,284,592 16,250,452
* Grupo Financiero Serfin SA, B Banking............................ 30,932,187 9,892,691
Telefonos de Mexico SA, L Telecommunications................. 181,000 433,014
Telefonos de Mexico SA, L, ADR Telecommunications................. 2,257,300 107,786,075
Transportacion Maritima Mexicana SA
de CV, L, ADR Transportation..................... 5,000 30,938
* Vitro SA Food & Household Products.......... 4,545,388 16,797,675
--------------
418,081,975
--------------
PAKISTAN 0.7%
* Bank of Punjab Banking............................ 2,883,297 1,612,155
* DG Khan Cement Co. Building Materials & Components.... 2,855,950 862,024
Engro Chemical Chemicals.......................... 1,124,865 3,979,656
* Exide Pakistan Ltd. Energy Equipment & Services........ 18,400 12,246
Fauji Fertilizer Co. Ltd. Chemicals.......................... 1,526,800 3,003,021
Khadim Ali Sham Bukhari & Co. Ltd. Financial Services................. 223,309 91,159
* Kohinoor Industries Ltd. Textiles & Apparel................. 358,720 37,718
National Development Leasing Corp. Financial Services................. 875,353 194,910
* Pakistan Electron Ltd. Appliances & Household Durables.... 371,146 94,578
</TABLE>
21
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TEMPLETON DEVELOPING MARKETS TRUST
INVESTMENT PORTFOLIO, JUNE 30, 1997 (UNAUDITED) (continued)
<TABLE>
<CAPTION>
SHARES/PRINCIPAL IN
INDUSTRY LOCAL CURRENCY VALUE
<S> <C> <C> <C> <C>
LONG TERM SECURITIES (CONT.)
PAKISTAN (CONT.)
* Pakistan International Airlines Corp. Transportation..................... 165,500 $ 31,323
Pakistan Telecom Corp. PTC Telecommunications................. 10,475,300 7,969,309
Pakistan Telecom Corp. PTC Telecommunications................. 21,000 1,585,500
Pakistan Telecommunications Corp., PTC, A Telecommunications................. 21,562,500 16,404,134
Trust Modaraba Financial Services................. 995,580 178,576
* Union Bank Ltd. Banking............................ 1,049,978 259,770
--------------
36,316,079
--------------
PERU 0.0%
Cpt-Telefonica Del Peru SA, ADR B Telecommunications................. 63,000 1,649,813
--------------
PHILIPPINES 1.0%
* A Soriano Corp. Multi-Industry..................... 34,956,324 3,644,597
* Filinvest Development Corp. Real Estate........................ 765,000 182,723
* Keppel Philippine Holdings Inc., B Machinery & Engineering............ 682,650 82,821
* Philex Mining Corp., B Metals & Mining.................... 43,260,143 3,608,292
Philippine Commercial International Bank
Inc. Banking............................ 91,000 879,777
Philippine Long Distance Telephone Co., ADR Telecommunications................. 322,575 20,725,444
* Philippine National Bank Banking............................ 1,554,058 10,546,574
RFM Corp. Food & Household Products.......... 28,117,750 6,822,627
* RFM Corporation, conv., pfd. Food & Household Products.......... 5,112,318 907,099
Sime Darby Pilipinas Inc. Industrial Components.............. 659,658 825,323
--------------
48,225,277
--------------
POLAND 1.0%
* Bank Gdanski SA Banking............................ 412,714 4,771,986
* Bank Gdanski SA, GDR Banking............................ 409,000 4,805,750
* Bank Handlowy W Warszawie Banking............................ 170,000 1,810,437
Bank Inicjatyw Gospodarczch SA, G Banking............................ 5,954,356 7,156,460
Bank Przemyslowo-Handlowy SA Banking............................ 108,970 5,354,832
Bank Rozwoju Eksportu SA Banking............................ 45,000 944,774
Elektrim Towarzystwo Handlowe SA Utilities Electrical & Gas......... 209,316 1,821,524
* Farm Food SA, new Food & Household Products.......... 15,188 206,342
* Farm Food SA Food & Household Products.......... 59,573 815,696
* Huta Olawa SA Metals & Mining.................... 45,442 174,219
* Impexmetal, A Metals & Mining.................... 98,961 1,023,786
* Impexmetal, B Metals & Mining.................... 74,823 774,070
* Mostostal Export SA Construction & Housing............. 1,235,794 3,910,622
* Polifarb Ceiszyu SA Chemicals.......................... 793,964 4,034,444
* Raciborska Fabryka Kotlow SA Energy Equipment & Services........ 204,036 906,413
Rolimpex SA Wholesale & International Trade.... 412,481 1,631,600
Warta SA Insurance.......................... 179,000 2,587,099
Wielkopolski Bank Kredytowy SA Banking............................ 921,624 5,272,031
Zaklady Cementowo Wapiennicze Gorazdze
Chorula Building Materials & Components.... 97,543 3,338,989
--------------
51,341,074
--------------
</TABLE>
22
<PAGE>
TEMPLETON DEVELOPING MARKETS TRUST
INVESTMENT PORTFOLIO, JUNE 30, 1997 (UNAUDITED) (continued)
<TABLE>
<CAPTION>
SHARES/PRINCIPAL IN
INDUSTRY LOCAL CURRENCY VALUE
<S> <C> <C> <C> <C>
LONG TERM SECURITIES (CONT.)
PORTUGAL 3.8%
Banco Comercial Portugues SA Banking............................ 3,540,627 $ 66,873,373
Banco Espirito Santo e Comercial de Lisboa Banking............................ 1,613,545 36,572,709
Banco Totta & Acores SA Banking............................ 991,030 16,561,278
BPI Socieda de Gestora de Participacoes
Socias SA Banking............................ 2,165,625 42,145,949
Cel-Cat Fabrica Nacional de Conductores Electronic Components &
Electricos SA Instruments........................ 12,101 216,249
+* Compta-Equipamentos e Servicos de
Informatica SA Business & Public Services......... 150,000 1,551,225
Espirito Santo Financial Holding SA, ADR Banking............................ 894,200 17,772,225
Portucel Industrial Empresa Product de
Celulose SA Forest Products & Paper............ 729,000 5,405,676
Portugal Telecom SA Telecommunications................. 16,000 645,491
Sociedade Portuguesa de Celulose SA Forest Products & Paper............ 110,940 3,315,782
--------------
191,059,957
--------------
RUSSIA 2.0%
* Aeroflot Transportation..................... 32,900 4,606,000
* Chernogorneft Energy Sources..................... 17,000 179,775
GUM Trade House Merchandising...................... 51,000 2,065,500
Irkutskenergo Utilities Electrical & Gas......... 17,734,000 6,029,560
* Kamaz Automobiles........................ 1,108,792 2,383,903
Krasnoyarsk Aluminum Plant Metals & Mining.................... 64,192 641,920
* Lukoil Holdings., pfd. Energy Sources..................... 399,000 5,027,400
* Lukoil-Holdings Energy Sources..................... 630,000 12,366,900
* Megionneftegaz Multi-Industry..................... 330,000 2,366,100
* Mosenergo Utilities Electrical & Gas......... 4,454,000 6,240,054
* Norilsk Nickel Metals & Mining.................... 519,800 4,912,110
* Norilsk Nickel, pfd. Metals & Mining.................... 20,000 111,000
* Novolipetsk Mettallurgy Multi-Industry..................... 8,000 600,000
* Novorosissk Sea Shipping Transportation..................... 1,630,000 440,100
* Noyabrskneftegaz Multi-Industry..................... 170,930 1,884,503
* Primorsk Shipping Transportation..................... 150,850 618,485
* Purneftegaz Energy Sources..................... 272,000 1,536,800
Rao Gazprom, ADR, 144a Energy Sources..................... 107,000 1,827,025
* Red October Food & Household Products.......... 6,000 141,300
Rostelekom Telecommunications................. 4,231,000 16,416,280
* Rostelekom, pfd. Telecommunications................. 3,414,900 8,468,952
* Saint Petersburg City Telephone Net, pfd. Telecommunications................. 406,000 358,092
* St. Petersburg Intercity International
Telephone Telecommunications................. 137,910 399,939
* St. Petersburg MMT, prf. Telecommunications................. 199,000 362,180
* Unified Energy System Utilities Electrical & Gas......... 50,060,000 18,116,714
* Unified Energy System, prf. Utilities Electrical & Gas......... 1,160,000 258,680
* Uralmash Zavody Machinery & Engineering............ 51,500 423,588
--------------
98,782,860
--------------
SINGAPORE 2.0%
Acer Computer International Ltd. Electrical & Electronics........... 1,563,000 2,875,920
* Acer Computer International Ltd., wts. Electrical & Electronics........... 176,200 101,315
Acma Ltd., fgn. Electrical & Electronics........... 730,400 1,256,756
</TABLE>
23
<PAGE>
TEMPLETON DEVELOPING MARKETS TRUST
INVESTMENT PORTFOLIO, JUNE 30, 1997 (UNAUDITED) (continued)
<TABLE>
<CAPTION>
SHARES/PRINCIPAL IN
INDUSTRY LOCAL CURRENCY VALUE
<S> <C> <C> <C> <C>
LONG TERM SECURITIES (CONT.)
SINGAPORE (CONT.)
* Acma Ltd., fgn., wts. Electrical & Electronics........... 182,600 $ 91,958
British American Tobacco Ltd. Beverages & Tobacco................ 119,000 482,759
* Chemical Industries (Far East) Ltd. Chemicals.......................... 483,000 1,064,174
First Capital Corp. Ltd. Real Estate........................ 1,762,000 4,584,626
First Capital Corp. Ltd., fgn. Real Estate........................ 2,694,000 7,009,638
G P Batteries International Ltd. Electrical & Electronics........... 37,000 110,247
* GP Batteries International Ltd., wts. Electrical & Electronics........... 9,250 14,106
Hai Sun Hup Group Ltd. Transportation..................... 10,791,000 7,774,169
* Hai Sun Hup Group Ltd., wts Transportation..................... 2,436,300 647,544
Hinds Hotels International Ltd. Leisure & Tourism.................. 295,000 528,223
Hinds Hotels International Ltd., fgn. Leisure & Tourism.................. 417,000 746,674
Hour Glass Ltd. Merchandising...................... 1,436,000 1,124,935
Inchcape Bhd., fgn. Wholesale & International Trade.... 2,641,000 9,513,290
Isetan (Singapore) Ltd., fgn. Merchandising...................... 218,500 495,167
Jaya Holdings Ltd. Transportation..................... 2,314,000 1,561,873
Jaya Holdings Ltd., 3.00%, conv., 8/31/98 Transportation..................... 508,800 ** 371,893
* Jaya Holdings Ltd., warrants expire 8/31/98 Transportation..................... 89,071 20,871
* Jaya Holdings Ltd., warrants expire 10/09/99 Transportation..................... 164,760 61,366
Jurong Shipyard, fgn Machinery & Engineering............ 3,432,000 14,883,122
MCL Land Ltd. Real Estate........................ 3,405,000 5,168,112
Natsteel Ltd., fgn. Metals & Mining.................... 2,301,000 5,858,320
Natsteel Ltd., loc. Metals & Mining.................... 1,260,000 3,207,946
Osprey Maritime Ltd. Transportation..................... 851,500 1,113,734
* Osprey Maritime Ltd., rts. Transportation..................... 851,500 250,143
* Osprey Maritime Ltd., rts., pfd. Transportation..................... 459,810 32
Prima Ltd. Food & Household Products.......... 947,000 3,219,151
Resources Development Corp. Ltd. Building Materials & Components.... 232,500 569,175
Robinson & Co. Ltd. Merchandising...................... 120,000 625,306
Sembawang Corp. Ltd. Multi-Industry..................... 3,734,000 16,976,289
Singapore Bus Service (1978) Ltd., fgn. Transportation..................... 271,200 1,299,377
* TIBS Holdings Ltd. Transportation..................... 788,800 1,070,345
* TIBS Holdings Ltd., wts. Transportation..................... 640 224
United Industrial Corp. Real Estate........................ 1,351,000 1,020,550
United Industrial Corporation Ltd., fgn. Real Estate........................ 7,835,000 5,918,584
WBL Corp. Ltd. Multi-Industry..................... 359,000 1,084,759
--------------
102,702,673
--------------
SLOVAK REPUBLIC 0.2%
* Nafta Gbely AS Utilities Electrical & Gas......... 150,454 4,922,501
* Slovakofarma AS Health & Personal Care............. 617 69,736
Slovnaft AS Chemicals.......................... 247,604 6,112,588
Vychodoslovenske Zeleziarne AS Metals & Mining.................... 24,100 451,593
--------------
11,556,418
--------------
SOUTH AFRICA 2.4%
Aeci Ltd. Chemicals.......................... 118,000 702,226
Alpha Ltd. Building Materials & Components.... 145,700 2,512,899
</TABLE>
24
<PAGE>
TEMPLETON DEVELOPING MARKETS TRUST
INVESTMENT PORTFOLIO, JUNE 30, 1997 (UNAUDITED) (continued)
<TABLE>
<CAPTION>
SHARES/PRINCIPAL IN
INDUSTRY LOCAL CURRENCY VALUE
<S> <C> <C> <C> <C>
LONG TERM SECURITIES (CONT.)
SOUTH AFRICA (CONT.)
Anglo American Industrial Corp. Ltd. Multi-Industry..................... 102,372 $ 4,490,198
Anglo American Platinum Corp. Ltd. Metals & Mining.................... 78,197 646,327
Anglovaal Industried Ltd. Multi-Industry..................... 878,266 3,213,404
BTR Dunlop Ltd. Industrial Components.............. 1,880,100 1,864,767
CG Smith Ltd. Multi-Industry..................... 1,865,000 10,399,934
Del Monte Royal Foods Ltd Food & Household Products.......... 7,969,350 4,127,832
Edgars Stores Textiles & Apparel................. 121,700 3,178,631
Engen Ltd. Energy Sources..................... 2,862,652 14,291,177
First National Bank Holdings Ltd. Banking............................ 628,600 5,403,438
Foodcorp Ltd. Food & Household Products.......... 56,333 428,364
Kersaf Investments Ltd. Leisure & Tourism.................. 154,700 1,075,774
Malbak Ltd. Multi-Industry..................... 413,100 655,570
McCarthy Retail Ltd. Appliances & Household Durables.... 1,537,700 4,406,017
McCarthy Retail Ltd., zero, conv., 9/30/03 Appliances & Household Durables.... 223,000 ** 641,426
Nedcor Ltd. Banking............................ 111,260 2,464,543
Palabora Mining Co. Ltd. Metals & Mining.................... 308,000 5,702,447
Polifin Ltd. Chemicals.......................... 293,010 548,950
Potgietersrust Platinums Ltd. Metals & Mining.................... 155,582 1,174,495
* Rainbow Chicken Ltd. Food & Household Products.......... 911,736 182,870
Rainbow Chicken Ltd., conv., pfd. Food & Household Products.......... 2,034,960 403,673
Rembrandt Group Ltd. Multi-Industry..................... 365,770 3,901,977
Reunert Ltd. Electrical & Electronics........... 589,600 2,020,780
Sappi Ltd. Forest Products & Paper............ 1,632,379 14,751,496
Sasol Ltd. Energy Sources..................... 123 1,613
Sentrachem Ltd. Chemicals.......................... 2,837,500 5,003,306
South African Breweries Ltd. Beverages & Tobacco................ 363,000 11,141,228
South African Iron & Steel Industrial Corp.
Ltd. Metals & Mining.................... 21,223,105 14,033,351
Sun International Ltd. Leisure & Tourism.................. 4,673,842 2,637,213
Toyota South Africa Limited Automobiles........................ 2,000 12,652
Voltex Holdings Ltd. Electrical & Electronics........... 495,600 279,642
--------------
122,298,220
--------------
SOUTH KOREA 2.0%
Asia Cement Co. Ltd. Building Materials & Components.... 57,380 1,873,896
Boram Bank Co. Ltd. Banking............................ 1,095,857 7,219,328
BYC Co. Ltd. Textiles & Apparel................. 10,550 1,087,078
Central Banking Corp. Financial Services................. 407,993 6,156,651
Cho Hung Bank Co. Ltd., GDR Banking............................ 219,200 1,572,760
Cho Hung Bank, GDR 144a Banking............................ 1,300,000 9,327,500
Choil Aluminium Mfg. Co. Ltd. Metals & Mining.................... 63,326 1,212,322
Dae Duck Electronics Co. Ltd. Electrical & Electronics........... 45,882 2,893,459
Daegu Bank Co. Ltd. Banking............................ 1,211,115 10,381,356
Daehan Synthetic Fiber Co. Ltd. Textiles & Apparel................. 1,000 101,239
Dongkuk Steel Mill Co. Ltd. Metals & Mining.................... 190,000 4,343,468
Hae In Corp. Ltd. Merchandising...................... 25,548 1,409,743
Hana Bank, GDR Banking............................ 604,814 8,739,563
Hankook Cosmetics Co. Ltd. Health & Personal Care............. 52,400 1,410,315
</TABLE>
25
<PAGE>
TEMPLETON DEVELOPING MARKETS TRUST
INVESTMENT PORTFOLIO, JUNE 30, 1997 (UNAUDITED) (continued)
<TABLE>
<CAPTION>
SHARES/PRINCIPAL IN
INDUSTRY LOCAL CURRENCY VALUE
<S> <C> <C> <C> <C>
LONG TERM SECURITIES (CONT.)
SOUTH KOREA (CONT.)
Korea First Bank Banking............................ 1,896,940 $ 7,903,917
Korea Kumho Petrochemical Chemicals.......................... 756,100 5,245,018
Kyong Nam Bank Banking............................ 509,670 5,486,070
Kyung Dong Boiler Co Ltd Energy Equipment & Services........ 36,029 1,192,852
Moon Bae Steel Co. Ltd. Metals & Mining.................... 15,480 495,081
Samsung Display Devices (L) Ltd Electrical & Electronics........... 27,430 1,513,013
Samsung Electronics Co. Ltd. Multi-Industry..................... 406 45,046
* Samsung Heavy Industries Co. Ltd. Machinery & Engineering............ 113,000 1,191,081
* Shinsung Industrial Co. Ltd., rts. Electrical & Electronics........... 8,059 39,024
Shinsung Industries Co. Ltd. Electrical & Electronics........... 40,000 1,103,604
Ssangyong Oil Refining Co Ltd Energy Equipment & Services........ 731,540 14,828,514
Tong Yang Merchant Bank Financial Services................. 430,715 4,462,366
--------------
101,234,264
--------------
SPAIN 0.5%
Bankinter SA Banking............................ 56,900 10,040,041
Telefonica de Espana SA Telecommunications................. 479,424 13,860,511
--------------
23,900,552
--------------
SRI LANKA 0.0%
Aitken Spence & Co. Ltd. Multi-Industry..................... 150,000 474,440
Associated Motorways Ltd. Automobiles........................ 140,178 87,476
* Ceylon Holiday Resorts Ltd. Leisure & Tourism.................. 84,600 63,642
Colombo Dock Yard Ltd. Transportation..................... 40,000 16,071
Lanka Orix Leasing Co. Ltd. Financial Services................. 819 3,501
National Develpoment Bank of Sri Lanka Banking............................ 140,000 622,329
United Motor Lanka Ltd. Automobiles........................ 341,808 309,725
--------------
1,577,184
--------------
THAILAND 4.9%
American Standard Sanitaryware (THB) Public
Co. Ltd., fgn Building Materials & Components.... 362,200 1,943,478
Asia Credit Public Co. Ltd., fgn. Financial Services................. 134,600 342,930
Asia Credit Public Co. Ltd., loc. Financial Services................. 1,001,400 2,106,786
* Asia Fibre Public Co. Ltd., fgn. Textiles & Apparel................. 943,500 225,814
Ayudhya Insurance Public Co. Ltd. Insurance.......................... 4,700 35,379
Ayudhya Insurance Public Co. Ltd., fgn. Insurance.......................... 280,800 2,167,921
Bangkok Bank Public Co. Ltd. Banking............................ 7,529,512 37,494,964
Bangkok Bank Public Co. Ltd., fgn. Banking............................ 160,596 1,103,497
Bangkok Insurance Insurance.......................... 52,100 671,739
Bangkok Insurance, fgn. Insurance.......................... 8,000 139,741
Bangkok Land Public Co. Ltd., fgn. Real Estate........................ 1,057,400 755,140
Bank of Ayudhya Public Co. Ltd. Banking............................ 284,000 438,525
Bank of Ayudhya Public Co. Ltd., fgn. Banking............................ 5,258,800 8,221,633
Charoen Pokphand Feedmill Public Co. Ltd. Food & Household Products.......... 970,400 1,910,457
* Chareon Pokphand Feedmill Public Co. Ltd.,
fgn. Food & Household Products.......... 1,245,500 3,077,089
First Bangkok City Bank Public Co. Ltd.,
fgn. Banking............................ 7,341,000 5,880,168
</TABLE>
26
<PAGE>
TEMPLETON DEVELOPING MARKETS TRUST
INVESTMENT PORTFOLIO, JUNE 30, 1997 (UNAUDITED) (continued)
<TABLE>
<CAPTION>
SHARES/PRINCIPAL IN
INDUSTRY LOCAL CURRENCY VALUE
<S> <C> <C> <C> <C>
LONG TERM SECURITIES (CONT.)
THAILAND (CONT.)
Hana Microelectronics Co. Ltd. Electrical & Electronics........... 319,000 $ 1,490,021
Hana Microelectronics Co. Ltd., fgn. Electrical & Electronics........... 409,500 2,197,279
Hua Thai Manufacturing Public Co. Ltd. Textiles & Apparel................. 175,000 297,240
Industrial Finance Corp. of Thailand, fgn. Banking............................ 6,575,800 8,376,815
Jasmine International Public Co. Ltd. Telecommunications................. 3,610,200 3,344,713
Jasmine International Public Co. Ltd., fgn. Telecommunications................. 1,130,000 1,003,281
* Karat Sanitaryware Public Co. Ltd., fgn. Building Materials & Components.... 370,950 186,155
Kian Gwan (Thailand) Public Co. Ltd., fgn. Real Estate........................ 96,000 244,586
* Land and House Public Co. Ltd. Multi-Industry..................... 2,070,500 3,287,954
* Land and House Public Co. Ltd., fgn. Multi-Industry..................... 2,682,800 5,592,403
Phatra Thanakit Public Co. Ltd. Multi-Industry..................... 4,463,000 4,565,509
Phatra Thanakit Public Co. Ltd., fgn. Multi-Industry..................... 3,343,400 4,130,044
Regional Container Lines Public Co. Ltd.,
fgn. Transportation..................... 379,700 2,257,240
* Royal Ceramic Industry Public Co. Ltd., fgn. Building Materials & Components.... 13,900 2,146
Saha Pathanapibul Public Co Ltd., fgn. Food & Household Products.......... 284,500 505,192
Saha Union Public Co. Ltd. Multi-Industry..................... 7,287,870 4,571,623
Saha Union Public Co. Ltd., fgn. Multi-Industry..................... 2,314,410 1,697,502
Sanyo Universal Electric Public Co. Ltd. Appliances & Household Durables.... 499,500 433,845
Sanyo Universal Electric Public Co Ltd.,
fgn. Appliances & Household Durables.... 949,700 824,870
Serm Suk Public Co. Ltd. Food & Household Products.......... 359,500 4,440,842
Siam Cement Public Co. Ltd. (The) Building Materials & Components.... 102,200 1,522,841
Siam Cement Public Co. Ltd. (The), fgn. Building Materials & Components.... 946,000 16,360,085
Siam City Bank Public Co. Ltd., fgn. Banking............................ 16,413,000 9,662,160
Siam Commercial Bank Ltd., fgn. Banking............................ 783,400 3,205,574
Siam Commercial Bank Ltd., loc. Banking............................ 1,993,300 7,463,814
+* Sino-Thai Engineering & Construction Public
Co. Construction & Housing............. 1,289,700 3,584,574
Textile Prestige Public Co. Ltd., fgn. Textiles & Apparel................. 99,000 118,471
* Thai Airways International Public Co. Ltd. Transportation..................... 5,554,100 8,147,300
Thai Asahi Glass Public Co. Ltd. Building Materials & Components.... 40,700 24,352
Thai Asahi Glass Public Co. Ltd., fgn. Building Materials & Components.... 32,000 19,147
Thai Farmers Bank Public Co. Ltd. Banking............................ 13,866,900 42,556,207
Thai Farmers Bank Public Co. Ltd., fgn. Banking............................ 517,500 2,197,452
Thai Investments and Securities Ltd. Financial Services................. 1,842,500 3,769,639
Thai Military Bank Ltd., fgn. Banking............................ 5,925,900 6,633,897
Thai Petrochemical Industry Public Co. Ltd.,
fgn. Chemicals.......................... 3,942,840 2,473,312
Thai Rayon Public Co. Ltd. Textiles & Apparel................. 43,700 92,781
Thai Rayon Public Co. Ltd., fgn. Textiles & Apparel................. 11,400 24,534
* Thai Telephone & Telecommunication
Public Co. Ltd. Telecommunications................. 2,263,700 939,385
Thai Wacoal Public Co. Ltd. Textiles & Apparel................. 140,700 467,099
Thai Wacoal Public Co. Ltd., fgn. Textiles & Apparel................. 148,800 493,990
Thai Wah Public Co. Ltd., fgn. Multi-Industry..................... 208,900 80,641
Tipco Asphalt Public Co. Ltd. Building Materials & Components.... 421,000 2,193,978
Tipco Asphalt Public Co. Ltd., fgn, (TASCO) Building Materials & Components.... 628,000 3,272,727
Total Access Communication Public Co. Ltd. Telecommunications................. 825,000 3,828,000
</TABLE>
27
<PAGE>
TEMPLETON DEVELOPING MARKETS TRUST
INVESTMENT PORTFOLIO, JUNE 30, 1997 (UNAUDITED) (continued)
<TABLE>
<CAPTION>
SHARES/PRINCIPAL IN
INDUSTRY LOCAL CURRENCY VALUE
<S> <C> <C> <C> <C>
LONG TERM SECURITIES (CONT.)
THAILAND (CONT.)
United Communications Industry Public
Co. Ltd., loc. Multi-Industry..................... 2,547,000 $ 10,520,324 \
United Motor Works (Siam) Public Co. Ltd. Machinery & Engineering............ 30,400 36,086
United Standard Terminal Public Co. Ltd.,
fgn. Wholesale & International Trade.... 155,600 249,272
--------------
245,902,163
--------------
TURKEY 4.8%
Akbank Banking............................ 960,953,434 82,491,836
Akcansa Cimento Building Materials & Components.... 23,707,621 3,272,218
Aksigorta AS Insurance.......................... 32,286,000 2,043,349
* Alarko Gayrimenkul Yatirim Ortakigi AS Real Estate........................ 11,637,000 493,608
Alarko Sanayii ve Ticaret SA Appliances & Household Durables.... 3,840,000 458,913
Alcatel Teletas Endustri Tic AS Telecommunications................. 45,325,000 8,392,055
* Anadolu Anonim Turk Sigorta Sirketi Insurance.......................... 17,453,000 470,035
* Anadolu Anonim Turk Sigorta Sirketi, new Insurance.......................... 17,364,000 467,638
Arcelik AS Appliances & Household Durables.... 256,786,196 34,578,152
Bagfas Chemicals.......................... 4,971,000 1,188,154
Beko Elektronik AS Appliances & Household Durables.... 82,625,484 6,675,683
Borusan AS Industrial Components.............. 15,548,000 942,144
Celik Halat ve Sanayii ve Ticaret AS Building Materials & Components.... 8,584,170 262,972
Cimentas Izmir Cimento Fabrikasi Turk AS Building Materials & Components.... 16,488,253 2,192,513
Cimsa Cimento Sanayi ve Ticaret AS Building Materials & Components.... 39,069,000 5,260,933
Erciyas Biracilik Food & Household Products.......... 106,426,000 12,718,802
Eregli Demir ve Celik Fabrikalari AS Metals & Mining.................... 139,943,750 23,319,981
Finansbank Banking............................ 233,194,154 2,669,113
Goodyear Lastikleri TAS, Industrial Components.............. 37,000 13,452
Izocam Ticaret ve Sanayii AS, br. Building Materials & Components.... 30,908,478 1,061,325
Kartonsan Forest Products & Paper............ 77,621,250 5,618,101
Koc Holding AS Multi-Industry..................... 14,898,332 3,510,800
Koc Yatirim ve Sanayii Mamullesi Pazarlanca
AS Multi-Industry..................... 36,898,143 9,812,961
Marshall Boya ve Vernik Sanayii AS Industrial Components.............. 12,978,392 1,616,565
* Netas Northern Electric Telekomunic Asyon AS Electrical & Electronics........... 6,883,000 1,900,037
Petkim Petrokimya Holding AS Chemicals.......................... 5,454,000 1,872,776
Sasa Suni Ve Sentetik Elyaf Sanayi AS Chemicals.......................... 7,000,000 320,485
Tat Konserve Sanayii AS Food & Household Products.......... 37,479,343 2,775,780
Tekstil Bankasi AS, br. Banking............................ 365,032 5,038
Tofas Turk Otomobil Fabrikasi AS Automobiles........................ 154,616,475 7,495,236
Turk Demir Dokum, br. Appliances & Household Durables.... 44,423,303 2,243,224
Turkiye Garanti Bankasi AS Banking............................ 359,909,663 13,570,039
Vakif Finansal Kiralama AS Financial Services................. 16,152,092 252,844
* Vakif Finansal Kiralama AS, new Financial Services................. 24,228,137 240,609
--------------
240,207,371
--------------
VENEZUELA 3.6%
Banco Provincial SAICA Banking............................ 127,154 258,851
Ceramica Carabobo CA, A Building Materials & Components.... 420,640 457,964
Ceramica Carabobo CA, A, ADR Building Materials & Components.... 416,421 453,371
</TABLE>
28
<PAGE>
TEMPLETON DEVELOPING MARKETS TRUST
INVESTMENT PORTFOLIO, JUNE 30, 1997 (UNAUDITED) (continued)
<TABLE>
<CAPTION>
SHARES/PRINCIPAL IN
INDUSTRY LOCAL CURRENCY VALUE
<S> <C> <C> <C> <C>
LONG TERM SECURITIES (CONT.)
VENEZUELA (CONT.)
Ceramica Carabobo CA, B Building Materials & Components.... 2,822,831 $ 3,015,318
* Consolidada Carabobo, A Building Materials & Components.... 5,131,334 300,414
* Consolidada Carabobo, B Building Materials & Components.... 26,429,743 1,506,610
+ Electricidad de Caracas Utilities Electrical & Gas......... 87,508,315 140,204,211
H.L. Boulton & Co. SA Multi-Industry..................... 7,964,847 625,826
Industrias Ventane Utilities Electrical & Gas......... 3,960,414 2,806,756
Inmuebles Y Valores Caracas SA Building Materials & Components.... 1,015,000 10,696
* Manufacturera de Aparatos Domesticos SA Appliances & Household Durables.... 527,478 563,446
Mavesa SA, ADR Food & Household Products.......... 1,541,899 15,611,727
Siderurgica Venezolana Sivensa Saica Svs. Metals & Mining.................... 300,000 155,298
Siderurgica Venezolana Sivensa Saica Svs.,
ADR Metals & Mining.................... 699,270 3,619,849
Siderurgica Venezolana Sivensa Saica Svs.,
ADR, B, new Metals & Mining.................... 66,298 306,428
Venezolana de Cementos Vencemos, #1 Building Materials & Components.... 2,402,365 8,142,690
Venezolana de Cementos Vencemos, #2 Building Materials & Components.... 277,978 896,510
--------------
178,935,965
--------------
ZIMBABWE 0.1%
Delta Corp. Multi-Industry..................... 42,258 64,841
Meikles Africa Ltd. Multi-Industry..................... 300,000 738,000
Ta Holdings Multi-Industry..................... 50,000 9,426
Zimbabwe Sun Ltd. Multi-Industry..................... 9,676,800 3,605,997
--------------
4,418,264
--------------
TOTAL LONG TERM SECURITIES (COST $3,235,694,104)............................. 4,302,480,546
==============
SHORT TERM OBLIGATIONS (COST $702,462,073) 14.0%
U. S. Treasury Bills, 4.68% to 5.14% with maturities to 9/25/97.................. U.S.707,642,000 702,429,377
--------------
TOTAL INVESTMENTS (COST $3,938,156,177) 99.7%............................... 5,004,909,923
OTHER ASSETS, LESS LIABILITIES 0.3%......................................... 15,854,384
--------------
TOTAL NET ASSETS 100.0%..................................................... $5,020,764,307
==============
</TABLE>
*Non-income producing.
**Principal amount in currency of countries indicated.
+The Investment Company Act of 1940 defines "affiliated companies" as
investments in portfolio companies in which the Fund owns 5% or more of the
outstanding voting securities. Investments in "affiliated companies" at June
30, 1997 were $169,463,117.
See Notes to Financial Statements.
29
<PAGE>
TEMPLETON DEVELOPING MARKETS TRUST
Financial Statements
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1997 (UNAUDITED)
<TABLE>
<S> <C>
Assets:
Investments in securities, at value (identified cost $3,938,156,177)............... $5,004,909,923
Cash............................................................................... 4,040,158
Receivables:
Investment securities sold........................................................ 10,801,712
Fund shares sold.................................................................. 27,115,709
Dividends and interest............................................................ 20,729,879
--------------
Total assets................................................................... 5,067,597,381
--------------
Liabilities:
Payables:
Investment securities purchased................................................... 29,094,405
Fund shares redeemed.............................................................. 4,595,284
Accrued expenses................................................................... 13,143,385
--------------
Total liabilities.............................................................. 46,833,074
--------------
Net assets, at value................................................................ $5,020,764,307
==============
Net assets consist of:
Undistributed net investment income................................................ $ 33,058,043
Net unrealized appreciation........................................................ 1,066,753,746
Accumulated net realized gain...................................................... 94,120,274
Net capital paid in on shares of beneficial interest............................... 3,826,832,244
--------------
Net assets, at value................................................................ $5,020,764,307
==============
CLASS I
Net asset value per share ($4,554,866,783 / 247,456,085 shares outstanding)............... $18.41
======
Maximum offering price ($18.41 / 94.25%).................................................. $19.53
======
CLASS II
Net asset value per share ($430,083,169 / 23,654,823 shares outstanding).................. $18.18
======
Maximum offering price ($18.18 / 99.00%).................................................. $18.36
======
ADVISOR CLASS
Net asset value per share ($35,814,355 / 1,943,566 shares outstanding).................... $18.43
======
</TABLE>
See Notes to Financial Statements.
30
<PAGE>
TEMPLETON DEVELOPING MARKETS TRUST
Financial Statements (continued)
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1997 (UNAUDITED)
<TABLE>
<S> <C> <C>
Investment income:
(net of $3,618,669 foreign taxes withheld)
Dividends........................................................... $ 64,913,814
Interest............................................................ 14,422,487
------------
Total income.................................................... $ 79,336,301
Expenses:
Management fees (Note 3)............................................ 26,462,586
Administrative fees (Note 3)........................................ 1,872,892
Distribution fees (Note 3)
Class I....................................................... 5,374,256
Class II...................................................... 1,605,521
Transfer agent fees (Note 3)........................................ 2,981,000
Custodian fees...................................................... 4,541,079
Reports to shareholders............................................. 448,000
Audit fees.......................................................... 30,000
Legal fees (Note 3)................................................. 82,000
Registration and filing fees........................................ 133,400
Trustees' fees and expenses......................................... 65,000
------------
Total expenses.................................................. 43,595,734
------------
Net investment income........................................... 35,740,567
Realized and unrealized gain (loss):
Net realized gain (loss) on:
Investments........................................................ 96,953,946
Foreign currency transactions...................................... (855,569)
------------
96,098,377
Net unrealized appreciation on investments:......................... 637,437,851
------------
Net realized and unrealized gain..................................... 733,536,228
------------
Net increase in net assets resulting from operations................. $769,276,795
============
</TABLE>
See Notes to Financial Statements.
31
<PAGE>
TEMPLETON DEVELOPING MARKETS TRUST
Financial Statements (continued)
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 1997 YEAR ENDED
(UNAUDITED) DECEMBER 31, 1996
----------------------------------------
<S> <C> <C>
Increase (decrease) in net assets:
Operations:
Net investment income.......................................... $ 35,740,567 $ 33,756,926
Net realized gain on investment and foreign currency
transaction.................................................. 96,098,377 84,667,850
Net unrealized appreciation.................................... 637,437,851 446,213,767
----------------------------------------
Net increase in net assets resulting from operations......... 769,276,795 564,638,543
Distributions to shareholders:
From net investment income
Class I........................................................ (1,077,487) (34,428,429)
Class II....................................................... (81,938) (1,401,202)
Advisor Class.................................................. (6,151) --
Amount in excess of net investment income
Class I........................................................ -- (1,420,492)
Class II....................................................... -- (96,456)
From net realized gain
Class I........................................................ (17,938,462) (69,400,180)
Class II....................................................... (1,400,804) (4,469,289)
Advisor Class.................................................. (98,419) --
Capital share transactions (Note 2)
Class I........................................................ 555,179,384 723,963,075
Class II....................................................... 148,229,301 169,320,035
Advisor Class.................................................. 33,300,426 --
----------------------------------------
Net increase in net assets................................... 1,485,382,645 1,346,705,605
Net assets:
Beginning of period............................................. 3,535,381,662 2,188,676,057
----------------------------------------
End of period................................................... $ 5,020,764,307 $ 3,535,381,662
========================================
</TABLE>
See Notes to Financial Statements.
32
<PAGE>
TEMPLETON DEVELOPING MARKETS TRUST
Notes to Financial Statements (unaudited)
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Templeton Developing Markets Trust (the Fund) is registered under the Investment
Company Act of 1940 as a diversified, open-end investment company. 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 exchange or NASDAQ are
valued at the latest reported sales price. Over-the-counter securities and
listed securities for which no sale is reported are valued within the range of
the latest quoted bid and asked prices. Securities for which market quotations
are not readily available are valued at fair value as determined by management
in accordance with procedures established by the Board of 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 exchange rate of such
currencies against U.S. dollars on the date of valuation. Purchases and sales of
securities and income items denominated in foreign currencies are translated
into U.S. dollars at the exchange rate in effect on the transaction date.
The Fund does not separately report the effect of changes in foreign exchange
rates from changes in market prices on securities held. Such changes are
included with the net realized and unrealized gain or loss from investments.
Realized foreign exchange gains or losses arise from sales of foreign
currencies, currency gains or losses realized between the trade and settlement
dates on securities transactions, the difference between the recorded amounts of
dividends, interest, and foreign withholding taxes, and the U.S. dollar
equivalent of the amounts actually received or paid. Net unrealized foreign
exchange gains and losses arise from changes in foreign exchange rates on
foreign denominated assets and liabilities other than investments in securities
at the end of the reporting period.
The Brazilian government has exercised and may continue to exercise substantial
influence over the exchange of Brazilian currency. Under current Brazilian law,
whenever there occurs a serious imbalance of Brazil's balance of payments or
serious reasons to foresee the imminence of such an imbalance, Brazil's National
Monetary Council may, for a limited period, impose restrictions on foreign
capital remittances abroad. Exchange control regulations may restrict
repatriation of investment income, capital, or the proceeds of securities sales
by foreign investors. The Fund has investments in Brazilian companies with a
value of approximately $592 million as of June 30, 1997.
c. INCOME TAXES:
No provision has been made for income taxes because the Fund's policy is to
qualify as a regulated investment company under the Internal Revenue Code and
distribute substantially all of its taxable income.
d. SECURITY TRANSACTIONS, INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS:
Security transactions are accounted for on trade date. Realized gains and losses
on security transactions are determined on a specific identification basis.
Certain income from foreign securities is recorded as soon as
33
<PAGE>
TEMPLETON DEVELOPING MARKETS TRUST
Notes to Financial Statements (unaudited) (continued)
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONT.)
information is available to the Fund. Interest income and estimated expenses are
accrued daily. Dividend income and distributions to shareholders are recorded on
the ex-dividend date.
Realized and unrealized gains and losses on security transactions and net
investment income, other than class specific expenses, are allocated daily to
each class of shares based upon the relative proportion of net assets of each
class.
e. ACCOUNTING ESTIMATES:
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities at the date of the
financial statements and the amounts of income and expense during the reporting
period. Actual results could differ from those estimates.
2. BENEFICIAL SHARES
Effective January 2, 1997, the Fund offers three classes of shares: Class I,
Class II and Advisor Class shares. Prior to this date, only Class I and Class II
shares were offered. The shares have the same rights except for their initial
sales load, distribution fees, voting rights on matters affecting a single class
of shares, and the exchange privilege of each class.
At June 30, 1997, there were an unlimited number of shares authorized ($0.01 par
value). Transactions in the Fund's shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1997 DECEMBER 31, 1996
------------------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT
------------------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS I
Shares sold........................................... 54,065,413 $ 917,990,942 81,183,040 $1,183,527,423
Shares issued on reinvestment of distributions........ 949,077 16,286,912 6,016,317 88,975,415
Shares redeemed....................................... (22,422,928) (379,098,470) (37,415,543) (548,539,761)
------------------------------------------------------------------
Net increase.......................................... 32,591,562 $ 555,179,384 49,783,814 $723,963,075
==================================================================
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1997 DECEMBER 31, 1996
------------------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT
------------------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS II
Shares sold........................................... 9,708,103 $ 163,196,624 12,543,242 $181,957,609
Shares issued on reinvestment of distributions........ 71,557 1,214,119 328,438 4,824,061
Shares redeemed....................................... (970,047) (16,181,442) (1,194,443) (17,461,635)
-----------------------------------------------------------------
Net increase.......................................... 8,809,613 $ 148,229,301 11,677,237 $169,320,035
=================================================================
</TABLE>
34
<PAGE>
TEMPLETON DEVELOPING MARKETS TRUST
Notes to Financial Statements (unaudited) (continued)
2. BENEFICIAL SHARES (CONT.)
<TABLE>
<CAPTION>
FOR THE PERIOD
JANUARY 2, 1997
THROUGH
JUNE 30, 1997
----------------------------
SHARES AMOUNT
----------------------------
<S> <C> <C>
ADVISOR CLASS
Shares sold........................................................................... 2,029,769 $34,771,508
Shares issued on reinvestment of distributions........................................ 6,101 104,577
Shares redeemed....................................................................... (92,304) (1,575,659)
----------------------------
Net increase.......................................................................... 1,943,566 $33,300,426
============================
</TABLE>
3. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES
Certain Officers of the Fund are also officers or directors of Templeton Asset
Management Ltd. (TAML), Franklin Templeton Services, Inc. (FTSI), Franklin
Templeton Distributors, Inc. (FTD) and Franklin Templeton Investor Services,
Inc. (FTIS), the Fund's investment manager, administrative manager, principal
underwriter, and transfer agent, respectively.
The Fund pays an investment management fee to TAML of 1.25% per year of the
average daily net assets of the fund. The Fund pays an administrative fee to
FTSI based on the Fund's aggregate average net assets as follows: 0.15% per
annum on the first $200 million, 0.135% of the next $500 million, 0.10% of the
next $500 million, and 0.075% in excess of $1.2 billion.
The Fund reimburses FTD up to 0.35% and 1.00% per year of the average daily net
assets of Class I and Class II, respectively, for costs incurred in marketing
the Fund's shares. Under the Class I distribution plan, costs exceeding the
maximum may be reimbursed in subsequent periods. At June 30, 1997 there were no
unreimbursed expenses.
FTD received net commissions from sales of the Fund's shares, and received
contingent deferred sales charges for the period of $1,157,409 and $67,543,
respectively.
During the period ended June 30, 1997, legal fees of $82,000 were paid to a law
firm in which an officer of the Fund is a partner.
4. INVESTMENT TRANSACTIONS
Purchases and sales of securities (excluding short-term securities) for the
period ended June 30, 1997 aggregated $701,559,136 and $351,852,244,
respectively.
35
<PAGE>
TEMPLETON DEVELOPING MARKETS TRUST
Notes to Financial Statements (unaudited) (continued)
5. INCOME TAXES
At June 30, 1997, the net unrealized appreciation based on the cost of
investments for income tax purposes of $3,939,070,622 was as follows:
<TABLE>
<S> <C>
Unrealized appreciation........................................... $1,391,797,139
Unrealized depreciation........................................... (325,957,838)
--------------
Net unrealized appreciation....................................... $1,065,839,301
==============
</TABLE>
36
<PAGE>
LITERATURE REQUEST
For a free brochure and prospectus, which contain more complete information,
including charges and expenses, call Franklin Fund Information, toll free, at
1-800/DIAL BEN (1-800/342-5236). Please read the prospectus carefully before you
invest or send money. To ensure the highest quality of service, telephone calls
to or from our service departments may be monitored, recorded and accessed.
These calls can be determined by the presence of a regular beeping tone.
FRANKLIN TEMPLETON GROUP
<TABLE>
<S> <C> <C> <C>
GLOBAL GROWTH Franklin Templeton High Income Fund Allocator Series FRANKLIN STATE-SPECIFIC
Franklin Global Health Care Fund Currency Fund Franklin Templeton Conservative FUNDS SEEKING
Franklin Templeton Japan Fund Templeton Americas Government Target Fund TAX-FREE INCOME
Templeton Developing Securities Fund Franklin Templeton Moderate Alabama
Markets Trust Target Fund Arizona*
Templeton Foreign Fund GROWTH Franklin Templeton Growth Arkansas**
Templeton Foreign Smaller Franklin Blue Chip Fund Target Fund California*
Companies Fund Franklin California Growth Fund Colorado
Templeton Global Franklin DynaTech Fund INCOME Connecticut
Infrastructure Fund Franklin Equity Fund Franklin Adjustable Rate Florida*
Templeton Global Franklin Gold Fund Securities Fund Georgia
Opportunities Trust Franklin Growth Fund Franklin Adjustable U.S. Hawaii**
Templeton Global Franklin MidCap Growth Fund Government Securities Fund Indiana
Real Estate Fund Franklin Small Cap Franklin's AGE High Income Fund Kentucky
Templeton Global Growth Fund Franklin Investment Grade Louisiana
Smaller Companies Fund Mutual Discovery Fund Income Fund Maryland
Templeton Greater European Fund Franklin Short-Intermediate Massachusetts***
Templeton Growth Fund GROWTH AND INCOME U.S. Government Securities Fund Michigan*
Templeton Latin America Fund Franklin Asset Allocation Fund Franklin U.S. Government Minnesota***
Templeton Pacific Growth Fund Franklin Balance Sheet Securities Fund Missouri
Templeton World Fund Investment Fund Franklin Money Fund New Jersey
Franklin Convertible Franklin Federal Money Fund New York*
GLOBAL GROWTH AND INCOME Securities Fund North Carolina
Franklin Global Utilities Fund Franklin Equity Income Fund Ohio***
Franklin Templeton German Franklin Income Fund For Corporations Oregon
Government Bond Fund Franklin MicroCap Value Fund Franklin Corporate Qualified Pennsylvania
Franklin Templeton Global Franklin Natural Resources Fund Dividend Fund Tennessee**
Currency Fund Franklin Real Estate Texas
Mutual European Fund Securities Fund FRANKLIN FUNDS SEEKING Virginia
Templeton Global Bond Fund Franklin Rising Dividends Fund TAX-FREE INCOME Washington**
Templeton Growth and Franklin Strategic Income Fund Federal Intermediate-Term
Income Fund Franklin Utilities Fund Tax-Free Income Fund VARIABLE ANNUITIES+
Franklin Value Fund Federal Tax-Free Income Fund Franklin Valuemark(R)
GLOBAL INCOME Mutual Beacon Fund High Yield Tax-Free Income Fund Franklin Templeton
Franklin Global Government Mutual Qualified Fund Insured Tax-Free Income Fund Valuemark Income Plus
Income Fund Mutual Shares Fund Puerto Rico Tax-Free (an immediate annuity)
Franklin Templeton Hard Templeton American Trust, Inc. Income Fund
Currency Fund Tax-Exempt Money Fund
</TABLE>
*Two or more fund options available: long-term portfolio, intermediate-term
portfolio, a portfolio of insured municipal securities, and/or a high yield
portfolio (CA) and a money market portfolio (CA and NY).
**The fund may invest up to 100% of its assets in bonds that pay interest
subject to the federal alternative minimum tax.
***Portfolio of insured municipal securities.
+ Franklin Valuemark and Franklin Templeton Valuemark Income Plus are issued by
Allianz Life Insurance Company of North America or by its wholly owned
subsidiary, Preferred Life Insurance Company of New York, and distributed by
NALAC Financial Plans, LLC.
02/97.1
<PAGE>
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 risk factors, charges and expenses. Like any investment in securities,
the Fund's portfolio will be subject to the risk of loss from market, currency,
economic, political and other factors, as well as investment decisions by the
Investment Manager, which will not always be profitable or wise. The Fund and
Fund investors are not protected from such losses by the Investment Manager.
Therefore, investors who cannot accept the risk of such losses should not invest
in shares of the Fund.
To ensure the highest quality of service, telephone calls to or from our service
departments may be monitored, recorded and accessed. These calls can be
determined by the presence of a regular beeping tone.
711 S97 08/97
TL711 S97 [RECYCLING LOGO] Printed on recycled paper
<PAGE>
TEMPLETON DEVELOPING MARKETS TRUST
Financial Highlights
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31
JUNE 30, 1997 -----------------------------------------------------------------
(UNAUDITED) 1996 1995 1994 1993 1992
----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE - CLASS I
(FOR A SHARE OUTSTANDING THROUGHOUT THE
PERIOD)
Net asset value, beginning of period..... $15.40 $13.01 $13.42 $15.27 $8.86 $10.02
----------------------------------------------------------------------------------
Income from investment operations:
Net investment income.................. .14 .16 .21 .14 .04 .08
Net realized and unrealized gain
(loss)............................... 2.96 2.75 (.18) (1.44) 6.55 (1.06)
----------------------------------------------------------------------------------
Total from investment operations......... 3.10 2.91 .03 (1.30) 6.59 (.98)
----------------------------------------------------------------------------------
Distributions:
Dividends from net investment income... (.01) (.17) (.20) (.12) (.05) (.07)
Amount in excess of net investment
income............................... -- (.01) -- -- -- --
Distributions from net realized
gains................................ (.08) (.34) (.24) (.43) (.13) (.11)
----------------------------------------------------------------------------------
Total distributions...................... (.09) (.52) (.44) (.55) (.18) (.18)
----------------------------------------------------------------------------------
Change in net asset value................ 3.01 2.39 (.41) (1.85) 6.41 (1.16)
----------------------------------------------------------------------------------
Net asset value, end of period........... $18.41 $15.40 $13.01 $13.42 $15.27 $8.86
==================================================================================
TOTAL RETURN*............................ 20.14% 22.51% .36% (8.64)% 74.50% (9.75)%
RATIOS /SUPPLEMENTAL DATA
Net assets, end of period (000).......... $4,554,867 $3,308,753 $2,147,664 $2,009,154 $1,396,392 $180,189
Ratio of expenses to average net
assets................................. 2.01%** 2.03% 2.10% 2.11% 2.20% 2.52%
Ratio of expenses, net of reimbursement,
to average net assets.................. 2.01%** 2.03% 2.10% 2.11% 2.20% 2.25%
Ratio of net investment income to average
net assets............................. 1.62%** 1.16% 1.66% 1.08% .57% 1.30%
Portfolio turnover rate.................. 9.51% 12.47% 9.76% 18.57% 16.01% 21.98%
Average commission rate paid (per
share)................................. $0.0031 $0.0024
</TABLE>
*Total return does not reflect sales commissions. Not annualized for periods of
less than one year.
**Annualized.
See Notes to Financial Statements.
11
<PAGE>
TEMPLETON DEVELOPING MARKETS TRUST
Financial Highlights (continued)
<TABLE>
<CAPTION>
FOR THE PERIOD
SIX MONTHS ENDED MAY 1, 1995+
JUNE 30, 1997 YEAR ENDED THROUGH
(UNAUDITED) DECEMBER 31, 1996 DECEMBER 31, 1995
----------------------------------------------------------
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE - CLASS II
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
Net asset value, beginning of period....................... $15.27 $12.95 $13.10
-----------------------------------------------------
Income from investment operations:
Net investment income.................................... .12 .17 .02
Net realized and unrealized gain......................... 2.88 2.60 .19
------------------------------------------------------
Total from investment operations........................... 3.00 2.77 .21
------------------------------------------------------
Distributions:
Dividends from net investment income..................... (.01) (.10) (.18)
Amount in excess of net investment income................ -- (.01) --
Distributions from net realized gains.................... (.08) (.34) (.18)
------------------------------------------------------
Total distributions........................................ (.09) (.45) (.36)
------------------------------------------------------
Change in net asset value.................................. 2.91 2.32 (.15)
------------------------------------------------------
Net asset value, end of period............................. $18.18 $15.27 $12.95
======================================================
TOTAL RETURN*.............................................. 18.65% 21.58% 1.70%
RATIOS /SUPPLEMENTAL DATA
Net assets, end of period (000)............................ $430,083 $226,629 $41,012
Ratio of expenses to average net assets.................... 2.73%** 2.74% 2.73%**
Ratio of net investment income to average net assets....... .98%** .33% .19%**
Portfolio turnover rate.................................... 9.51% 12.47% 9.76%
Average commission rate paid (per share)................... $.0031 $.0024
</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 sales.
See Notes to Financial Statements.
12
<PAGE>
TEMPLETON DEVELOPING MARKETS TRUST
Financial Highlights (continued)
<TABLE>
<CAPTION>
FOR THE PERIOD
JANUARY 2, 1997+
THROUGH
JUNE 30, 1997
(UNAUDITED)
----------------
<S> <C>
PER SHARE OPERATING PERFORMANCE - ADVISOR CLASS
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
Net asset value, beginning of period........................................................... $15.43
------------
Income from investment operations:
Net investment income........................................................................ .12
Net realized and unrealized gain............................................................. 2.97
------------
Total from investment operations............................................................... 3.09
------------
Distributions:
Dividends from net investment income......................................................... (.01)
Distributions from net realized gains........................................................ (.08)
------------
Total distributions............................................................................ (.09)
------------
Change in net asset value...................................................................... 3.00
------------
Net asset value, end of period................................................................. $18.43
============
TOTAL RETURN*.................................................................................. 20.04%
RATIOS /SUPPLEMENTAL DATA
Net assets, end of period (000)................................................................ $35,814
Ratio of expenses to average net assets........................................................ 1.73%**
Ratio of net investment income to average net assets........................................... 2.21%**
Portfolio turnover rate........................................................................ 9.51%
Average commission rate paid (per share)....................................................... $.0031
</TABLE>
*Not annualized for periods of less than one year.
**Annualized.
+Commencement of sales.
See Notes to Financial Statements.
13
<PAGE>
TEMPLETON DEVELOPING MARKETS TRUST
INVESTMENT PORTFOLIO, JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
SHARES/PRINCIPAL IN
INDUSTRY LOCAL CURRENCY VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
LONG TERM SECURITIES 85.7%
ARGENTINA 5.0%
Aluar Aluminio ARgentino SA, B Misc Materials & Commodities....... 77,678 $ 279,683
+ Astra Cia Argentina de Petroleo SA Energy Sources..................... 3,710,830 7,868,140
Atanor Cia Nacional Para la Industria
Quimica SA, D Chemicals.......................... 3,507,414 5,647,784
* Banco Bansud SA, B Banking............................ 139,927 2,126,283
Banco de Galicia y Buenos Aires SA, B Banking............................ 3,817,994 25,393,469
Banco Frances del Rio de la Plata SA Banking............................ 1,445,643 15,658,662
* Buenos Aires Embotelladora SA, ADR Beverages & Tobacco................ 746,000 7,460
Capex SA, A Utilities Electrical & Gas......... 123,774 1,163,650
Central Costanera SA, B Utilities Electrical & Gas......... 433,769 1,496,728
Ciadea SA Automobiles........................ 833,497 3,584,576
+* Garovaglio Y Zorraquin SA Chemicals.......................... 1,612,631 5,806,343
Juan Minetti SA Building Materials & Components.... 444,055 2,131,784
Juan Minetti SA, conv. Building Materials & Components.... 113,000 113,017
Molinos Rio de Plata SA, B Food & Household Products.......... 7,054,463 27,587,088
Nobleza Piccardo Sdad Industrial Comercial y
Financial Beverages & Tobacco................ 407,990 2,693,138
Perez Companc SA, B Energy Sources..................... 7,636,463 61,329,998
Quilmes Industrial SA Beverages & Tobacco................ 1,257,500 14,618,438
Quilmes Industrial SA, reg Beverages & Tobacco................ 105,000 1,076,250
* Sevel Argentina SA, C Automobiles........................ 1,423,892 2,905,175
Siderar, A Metals & Mining.................... 367,250 1,509,624
* Sociedad Comercial del Plata Cadelplata Come Multi-Industry..................... 7,156,070 23,332,288
Transportadora de Gas del Sur SA, B Energy Sources..................... 649,645 1,572,377
YPF Sociedad Anonima, ADR Energy Sources..................... 1,312,410 40,356,608
* Zanella Hermanos SA Automobiles........................ 931,434 200,288
--------------
248,458,851
--------------
BRAZIL 11.8%
Aracruz Celulose SA, ADR Forest Products & Paper............ 266,900 5,438,088
Banco Bradesco SA Banking............................ 1,501,078,668 14,361,721
Banco Bradesco SA, pfd. Banking............................ 728,000,794 7,337,150
* Banco do Brasil SA Banking............................ 1,192,085,791 12,512,721
* Banco do Brasil SA, wts., A Banking............................ 216,046,382 702,394
* Banco do Brasil SA, wts., B Banking............................ 324,069,574 906,088
* Banco do Brasil SA, wts., C Banking............................ 540,115,956 1,505,130
* Banco do Brazil SA, pfd. Banking............................ 818,346,120 9,806,015
* Banespa-Banco do Estado de Sao Paulo SA,
pfd. Banking............................ 1,140,033,850 28,073,287
Brasmotor SA, pfd. Multi-Industry..................... 45,992,231 10,253,249
Cia Vale do Rio Doce, pfd. Metals & Mining.................... 785,141 17,364,922
Companhia Siderurgica Nacional Metals & Mining.................... 224,956,000 7,418,084
Confab Industrial SA, pfd. Industrial Components.............. 1,434,340 2,384,904
Copene-Petroquimica do Nordeste SA, A, pfd. Chemicals.......................... 34,105,550 12,640,485
Duratex SA, pfd. Forest Products & Paper............ 478,134,600 25,311,310
Electrolux Do Brasil SA, pfd. Appliances & Household Durables.... 64,682,000 102,741
Eletrobras-Centrais Eletricas Brasileiras SA Utilities Electrical & Gas......... 66,800,000 37,354,141
Eletrobras-Centrais Eletricas Brasileiras
SA, B, pfd. Utilities Electrical & Gas......... 160,885,847 95,944,186
Itausa-Investimentos Itau SA, pfd. Multi-Industry..................... 55,824,179 51,336,155
* Mannesmann SA Machinery & Engineering............ 15,537,010 1,789,596
</TABLE>
14
<PAGE>
TEMPLETON DEVELOPING MARKETS TRUST
INVESTMENT PORTFOLIO, JUNE 30, 1997 (UNAUDITED) (continued)
<TABLE>
<CAPTION>
SHARES/PRINCIPAL IN
INDUSTRY LOCAL CURRENCY VALUE
<S> <C> <C> <C> <C>
LONG TERM SECURITIES (CONT.)
BRAZIL (CONT.)
* Mannesmann SA, pfd. Machinery & Engineering............ 5,137,562 $ 663,342
Marcopolo SA, pfd. Automobiles........................ 12,142,400 2,171,206
Petrobras-Petroleo Brasileiro SA, pfd. Energy Sources..................... 377,096,333 104,737,889
Telebras-Telecomunicacoes Brasileiras SA Telecommunications................. 738,109,194 100,101,196
Telebras-Telecomunicacoes Brasileiras SA,
pfd. Telecommunications................. 218,936,973 33,210,169
Unibanco-Uniao de Bancos Brasileiros SA,
pfd. Banking............................ 238,662,372 8,754,612
--------------
592,180,781
--------------
CHILE 0.1%
Antofagasta Holdings PLC Metals & Mining.................... 901,550 6,883,723
--------------
CHINA 1.6%
Recreation & Other Consumer
China First Pencil Co. Ltd., B Goods.............................. 512,107 204,843
China Southern Glass Co. Ltd., B Building Materials & Components.... 4,929,462 2,576,939
* Chiwan Wharf Holdings Ltd., B Transportation..................... 11,783,100 7,209,208
Guangzhou Shipyard International Co. Ltd., H Machinery & Engineering............ 3,388,000 634,105
* Luoyang Glass Co. Ltd., H Misc Materials & Commodities....... 9,075,000 1,581,357
Shandong Huaneng Power Utilities Electrical & Gas......... 284,000 3,053,000
* Shanghai Chlor-Alkali Chemical Co. Ltd., B Chemicals.......................... 12,105,300 3,462,116
* Shanghai Dazhong Taxi Shareholding Co. Ltd.,
B Transportation..................... 3,304,000 2,933,952
* Shanghai Erfangji Textile Machinery Co.
Ltd., B Machinery & Engineering............ 9,647,887 1,254,225
* Shanghai Industrial Sewing Machine Corp. Machinery & Engineering............ 4,645,810 566,789
* Shanghai Jin Jiang Tower Co. Ltd., B Leisure & Tourism.................. 6,891,378 2,177,675
Shanghai Jinqiao Export Processing Zone
Development, B Real Estate........................ 3,490,500 2,848,248
Shanghai Lujiaxui Finance & Trade Zn Dev
Stock Co Ltd, B Real Estate........................ 17,381,910 24,856,131
* Shanghai Narcissus Electric Appliances Co.
Ltd., B Appliances & Household Durables.... 599,950 85,193
Shanghai New Asia Group Co. Ltd., B Food & Household Products.......... 4,148,500 2,265,081
Shanghai Petrochemical Co. Ltd., H Chemicals.......................... 14,464,000 3,472,570
* Shanghai Refrigerator Compressor Co. Ltd., B Industrial Components.............. 1,905,813 914,790
* Shanghai Rubber Belt Co. Ltd., B Industrial Components.............. 600,480 118,895
* Shanghai Shangling Electric Appliance, B Appliances & Household Durables.... 3,065,060 631,402
* Shanghai Steel Tube Co. Ltd., B Machinery & Engineering............ 1,273,800 168,142
Shanghai Tyre & Rubber Co. Ltd., B Industrial Components.............. 5,509,000 2,699,410
* Shanghai Vacuum Electron Devices Co. Ltd., B Appliances & Household Durables.... 2,324,500 464,900
Recreation & Other Consumer
* Shanghai Wingsung Co. Ltd., B Goods.............................. 558,210 131,738
* Shanghai Yaohua Pilkington Glass, B Building Materials & Components.... 7,795,250 2,821,881
* Shenzhen China Bicycles Co. (Holdings) Ltd., Recreation & Other Consumer
B Goods.............................. 1,526,400 600,922
Shenzhen Konka Electronic Group Co. Ltd., B Appliances & Household Durables.... 1,099,520 1,630,695
Shenzhen Properties & Resources Develop.
(Group) Ltd., B Real Estate........................ 1,367,156 472,936
Shenzhen Vanke Co. Ltd., B Real Estate........................ 8,340,810 8,106,863
* Tsingtao Brewey Co., H Beverages & Tobacco................ 1,802,000 697,791
Zhuhai Sez Lizhu Pharmaceutical Group Inc.,
B Health & Personal Care............. 158,800 105,562
--------------
78,747,359
--------------
</TABLE>
15
<PAGE>
TEMPLETON DEVELOPING MARKETS TRUST
INVESTMENT PORTFOLIO, JUNE 30, 1997 (UNAUDITED) (continued)
<TABLE>
<CAPTION>
SHARES/PRINCIPAL IN
INDUSTRY LOCAL CURRENCY VALUE
<S> <C> <C> <C> <C>
LONG TERM SECURITIES (CONT.)
COLOMBIA 2.0%
Banco Ganadero SA, ADR C Banking............................ 215,000 $ 5,616,875
Banco Industrial Colombiano SA Banking............................ 1,105,000 3,682,658
Bavaria SA Beverages & Tobacco................ 697,960 5,009,190
Cementos Argos SA Building Materials & Components.... 2,663,018 21,357,844
Cia Colombiana de Tabacos SA Coltabaco Beverages & Tobacco................ 2,326,715 8,106,181
Compania Nacional de Chocolates SA Food & Household Products.......... 1,764,924 15,691,808
Compania Suramericana de Seguros Insurance.......................... 1,423,791 36,801,931
Promigas SA Utilities Electrical & Gas......... 242,437 1,033,302
--------------
97,299,789
--------------
CZECH REPUBLIC 1.0%
* CEZ Utilities Electrical & Gas......... 661,300 18,251,619
Chemopetrol Group AS Chemicals.......................... 259,501 9,162,719
Elektrarny Opatovice AS Energy Sources..................... 20,096 2,633,773
Komercni Banka AS Banking............................ 9,822 508,849
* Komercni Banka AS, GDR Banking............................ 37,000 770,525
SPT Telecom AS Telecommunications................. 127,740 13,393,240
* Tabak AS Beverages & Tobacco................ 10,668 2,500,210
--------------
47,220,935
--------------
ECUADOR 0.1%
La Cemento Nacional CA, GDR Multi-Industry..................... 13,400 2,787,200
La Cemento Nacional CA, GDR, 144a Multi-Industry..................... 4,510 938,080
--------------
3,725,280
--------------
EGYPT 0.0%
Commercial International Bank Ltd. Banking............................ 95,650 2,000,946
--------------
GHANA 0.3%
Ashanti Goldfields Co. Ltd., GDR Metals & Mining.................... 1,135,962 13,276,556
--------------
GREECE 4.1%
Alpha Credit Bank Banking............................ 1,069,051 72,733,311
Alpha Leasing SA Financial Services................. 248,690 6,599,505
Delta Dairy SA Food & Household Products.......... 451,840 5,592,283
Delta Dairy SA, pfd. Food & Household Products.......... 151,691 1,319,724
Elais Oleaginous Co. Food & Household Products.......... 203,710 5,924,950
Ergo Bank SA Banking............................ 422,580 25,381,566
Etba Leasing Financial Services................. 151,372 1,537,359
Fourlis Brothers Corp. SA Appliances & Household Durables.... 283,960 2,894,281
Hellas Can - Container Manufacturers Metals & Mining.................... 263,490 4,867,721
Hellenic Bottling Co. SA Food & Household Products.......... 193,385 7,148,719
Hellenic Telecommunications Organizations
OTE Telecommunications................. 287,310 6,745,839
Hellenic Telecommunications Organizations
OTE, 144A Telecommunications................. 815,000 19,135,634
* Hellenic Telecommunications Organizations,
rts. Telecommunications................. 1,102,310 135,427
* Intracom SA, reg. Electrical & Electronics........... 91,000 4,144,043
* National Bank of Greece SA Banking............................ 146,603 17,931,069
Titan Cement Co., reg. Building Materials & Components.... 494,820 24,406,869
</TABLE>
16
<PAGE>
TEMPLETON DEVELOPING MARKETS TRUST
INVESTMENT PORTFOLIO, JUNE 30, 1997 (UNAUDITED) (continued)
<TABLE>
<CAPTION>
SHARES/PRINCIPAL IN
INDUSTRY LOCAL CURRENCY VALUE
<S> <C> <C> <C> <C>
LONG TERM SECURITIES (CONT.)
GREECE (CONT.)
Titan Cement Co., reg. pfd. Building Materials & Components.... 14,200 $ 595,065
X. Benrubi & Son SA Food & Household Products.......... 151,320 418,635
--------------
207,512,000
--------------
HONG KONG 9.8%
Cheung Kong Holdings Ltd. Multi-Industry..................... 11,464,000 113,200,212
China Overseas Land & Investment Ltd. Real Estate........................ 2,533,000 2,043,454
Cross Harbour Tunnel Co. Ltd. Transportation..................... 498,598 1,065,119
Dairy Farm International Holdings Ltd. Merchandising...................... 10,322,036 7,741,527
* East Asiatic Co. (Hong Kong) Ltd. (The) Wholesale & International Trade.... 2,976,000 497,453
Fortei Holdings Ltd. Merchandising...................... 5,366,000 443,282
Great Wall Electronic International Ltd. Electrical & Electronics........... 3,577,924 383,318
Hang Lung Development Co. Ltd. Real Estate........................ 16,755,000 30,710,183
Hong Kong Electric Holdings Ltd. Utilities Electrical & Gas......... 405,000 1,631,020
Hopewell Holdings Ltd. Construction & Housing............. 8,307,002 5,253,999
HSBC Holdings PLC Banking............................ 3,773,173 113,478,155
Jardine International Motor Holdings Ltd. Automobiles........................ 2,423,000 3,064,990
Jardine Matheson Holdings Ltd. (Singapore) Multi-Industry..................... 1,917,872 13,616,891
Jardine Strategic Holdings Ltd. (Singapore) Multi-Industry..................... 4,662,562 17,624,484
JCG Holdings Ltd. Financial Services................. 59,000 47,597
Joyce Boutique Holdings Ltd. Merchandising...................... 1,183,000 184,765
K Wah International Holdings Ltd. Building Materials & Components.... 26,565,251 5,006,295
Lai Sun Development Co. Ltd. Real Estate........................ 3,600,800 4,043,597
Lai Sun Garment International Ltd. Multi-Industry..................... 3,568,000 4,375,202
* Lai Sun Hotels International Ltd., wts. Leisure & Tourism.................. 722,693 63,433
Laws International Holdings Ltd. Textiles & Apparel................. 6,216,000 1,588,641
New World Development Co. Ltd. Real Estate........................ 11,028,883 65,769,287
Electronic Components &
* S. Megga International Holdings Ltd. Instruments........................ 7,476,800 530,797
Semi-Tech (Global) Co. Ltd. Appliances & Household Durables.... 3,335,856 5,446,875
* Sun Hung Kai & Co. Ltd, wts. Financial Services................. 2,023,360 190,654
Sun Hung Kai & Co. Ltd. Financial Services................. 3,671,800 1,101,924
Sun Hung Kai Properties Ltd. Real Estate........................ 4,827,900 58,110,784
Swire Pacific Ltd., B Multi-Industry..................... 1,942,500 2,946,107
Tian An China Investments Co. Ltd. Real Estate........................ 12,881,000 1,745,776
Tungtex (Holdings) Co. Ltd. Textiles & Apparel................. 4,538,000 468,602
Wheelock & Co. Ltd. Multi-Industry..................... 9,609,000 23,627,774
* Wo Kee Hong Holdings Ltd. Merchandising...................... 17,631,200 1,251,683
* Yaohan Hongkong Corp. Ltd. Merchandising...................... 9,530,000 492,042
Recreation & Other Consumer
Yue Yuen Industrial (Holdings) Ltd. Goods.............................. 2,930,800 6,071,708
--------------
493,817,630
--------------
HUNGARY 0.9%
* Danubius Hotel and Spa RT Leisure & Tourism.................. 38,000 1,123,168
Egis RT Multi-Industry..................... 67,100 4,281,873
Fotex First Hungarian-Amer. Photo Co.,
12.00%, 5/11/00 Multi-Industry..................... 32,000 32,000
* Fotex First Hungarian-American Photo-Service Multi-Industry..................... 2,630,400 2,681,127
Gedeon Richter Ltd. Health & Personal Care............. 33,000 3,038,929
</TABLE>
17
<PAGE>
TEMPLETON DEVELOPING MARKETS TRUST
INVESTMENT PORTFOLIO, JUNE 30, 1997 (UNAUDITED) (continued)
<TABLE>
<CAPTION>
SHARES/PRINCIPAL IN
INDUSTRY LOCAL CURRENCY VALUE
<S> <C> <C> <C> <C>
LONG TERM SECURITIES (CONT.)
HUNGARY (CONT.)
* Ibusz RT Leisure & Tourism.................. 125,680 $ 456,371
Inter-Europa Bank RT Banking............................ 1,408 349,622
Mol Magyar Olay -- Es Gazipari RT Energy Sources..................... 12,340 273,468
OTP Bank, GDR Banking............................ 448,000 11,872,000
Pick Szeged RT Food & Household Products.......... 10,403 799,953
Pick Szeged RT, GDR Food & Household Products.......... 30,430 2,339,957
Tiszai Vegyi Kombinat RT Chemicals.......................... 149,558 2,611,565
Tiszai Vegyi Kombinat RT, GDR, 144a Chemicals.......................... 571,000 9,892,575
Tiszai Vegyi Kombinat RT, GDR, S Chemicals.......................... 152,000 2,633,400
--------------
42,386,008
--------------
INDIA 3.4%
Aban Loyd Chiles Offshore Ltd. Energy Sources..................... 245,000 349,022
* Arvind Mills Ltd. Textiles & Apparel................. 1,482,000 5,381,564
ATV Project India Ltd. Machinery & Engineering............ 1,655,300 152,584
* Bank of Baroda Banking............................ 428,700 1,107,675
Bharat Petroleum Corp., Ltd. Energy Sources..................... 1,317,900 16,547,376
* Bombay Dyeing & Manufacturing Co. Ltd. Chemicals.......................... 344,950 929,823
Bses Ltd. Utilities Electrical & Gas......... 348,300 2,317,946
Cochin Refineries Ltd. Energy Sources..................... 215,450 920,778
DCW Ltd. Chemicals.......................... 500,000 259,777
Dr. Reddys Laboratories Ltd. Health & Personal Care............. 94,200 657,821
Essar Shipping Ltd. Transportation..................... 773,500 278,719
Flex Industries Ltd. Food & Household Products.......... 40,000 44,413
Ganesh Benzoplast Ltd. Chemicals.......................... 159,100 59,996
Garden Silk Mills Ltd. Textiles & Apparel................. 229,600 83,374
Grasim Industries Ltd Ord INR10 Multi-Industry..................... 778,050 8,117,365
Great Eastern Shipping Co. Ltd. Transportation..................... 5,853,700 8,012,047
Gujarat Ambuja Cements Ltd. Building Materials & Components.... 366,800 3,550,173
* Gujarat Industries Power Ltd. Energy Equipment & Services........ 378,600 301,399
Gujarat Narmada Valley Fertilizers Co. Ltd. Chemicals.......................... 36,000 22,877
Gujarat Narmanda Valley Fertilizers Co.
Ltd., ADR Chemicals.......................... 72,000 180,000
Hindalco Industries Metals & Mining.................... 148,475 4,043,663
Hindustan Organic Chemicals Ltd. Chemicals.......................... 538,300 375,908
Hindustan Petroleum Corp. Ltd. Energy Sources..................... 1,003,800 12,701,715
* India Cements Ltd. Building Materials & Components.... 302,050 911,212
India Cements Ltd., GDR Building Materials & Components.... 552,910 1,658,730
Indian Aluminium Co. Ltd. Metals & Mining.................... 192,300 715,753
Indian Petrochemicals Corp. Ltd. Chemicals.......................... 3,164,900 12,818,729
Indian Rayon & Industries Ltd., GDR Multi-Industry..................... 122,206 1,530,630
Indian Rayon and Industries Ltd. Multi-Industry..................... 367,800 3,801,285
Indo Gulf Fertilisers & Chemicals Corp. Ltd. Chemicals.......................... 3,927,500 3,784,881
Indo Gulf Fertilisers & Chemicals, GDR Chemicals.......................... 64,150 68,961
Industrial Credit & Inv. Corp. of India
(ICICI) Financial Services................. 6,629,600 14,490,676
* Industrial Development Bank of India Banking............................ 1,943,800 5,551,775
ITC Bhadrachalam Paperboards Ltd. Forest Products & Paper............ 106,850 137,293
Larsen and Toubro Ltd. Multi-Industry..................... 1,424,200 9,706,838
</TABLE>
18
<PAGE>
TEMPLETON DEVELOPING MARKETS TRUST
INVESTMENT PORTFOLIO, JUNE 30, 1997 (UNAUDITED) (continued)
<TABLE>
<CAPTION>
SHARES/PRINCIPAL IN
INDUSTRY LOCAL CURRENCY VALUE
<S> <C> <C> <C> <C>
LONG TERM SECURITIES (CONT.)
INDIA (CONT.)
Madras Cements Building Materials & Components.... 1,325 $ 298,865
Mahanagar Telephone Nigam Ltd. Telecommunications................. 20,000 168,994
* National Aluminium Co. Ltd. Metals & Mining.................... 1,072,200 1,362,712
* Oriental Bank of Commerce Banking............................ 1,630,200 3,173,881
Reliance Industries Ltd. Chemicals.......................... 1,135,600 11,792,159
Shipping Corporation of India Ltd. Transportation..................... 1,869,500 2,545,758
State Bank of India Banking............................ 76,000 722,318
Steel Authority of India Ltd. Metals & Mining.................... 4,904,300 2,808,328
Steel Authority of India Ltd, GDR, reg S Metals & Mining.................... 561,000 5,020,950
Steel Authority of India Ltd., GDR, 144a Metals & Mining.................... 62,000 554,900
Sterlite Industries (India) Ltd. Metals & Mining.................... 236,300 1,765,649
Tamil Nadu Newsprint & Papers Ltd. Forest Products & Paper............ 150,000 251,397
* Tata Chemicals Ltd. Chemicals.......................... 724,900 3,664,997
Tata Engineering & Locomotive Co. Telco Machinery & Engineering............ 617,900 7,801,419
* Tata Iron & Steel Co. Ltd. Metals & Mining.................... 1,062,750 5,677,400
Thermax Ltd. Energy Equipment & Services........ 78,400 766,480
Videocon International Ltd. Appliances & Household Durables.... 404,000 349,832
Wockhardt Health & Personal Care............. 138,800 763,788
--------------
171,062,605
--------------
INDONESIA 3.7%
* Asia Pulp & Paper Co. Ltd., ADR Forest Products & Paper............ 481,100 7,276,638
* PT Bank Dagang Nasional Indonesia, wts. Banking............................ 312,500 128,495
PT Bank Dagang Nasional Indonesia, fgn. Banking............................ 4,375,000 3,103,156
PT Bank Danamon, fgn. Banking............................ 2,846,000 1,492,044
PT Bank PDFCI, fgn. Banking............................ 984,000 920,477
PT Barito Pacific Timber, fgn. Forest Products & Paper............ 28,688,000 24,476,809
PT BBL Dharmala Finance, fgn. Financial Services................. 1,653,000 2,310,938
PT BDNI Capital Corporation, fgn. Financial Services................. 1,186,200 938,912
+ PT Charoen Pokphand Indonesia, fgn. Food & Household Products.......... 19,876,250 8,990,080
PT Ciputra Dev. Real Estate........................ 7,348,000 7,326,850
* PT Dharmala Intiland, fgn. Real Estate........................ 2,912,000 4,190,789
PT Gadjah Tunggal, fgn. Automobiles........................ 23,729,500 11,708,635
PT Indah Kiat Pulp & Paper Corp., fgn. Forest Products & Paper............ 7,349,500 4,306,348
* PT Indah Kiat Pulp & Paper Corp., rts. Forest Products & Paper............ 6,614,550 1,155,914
PT Indocement Tunggal Prakarsa, fgn. Building Materials & Components.... 9,356,000 14,522,574
PT Indosat, fgn Telecommunications................. 2,105,000 6,296,824
* PT Inter-Pacific Bank, fgn. Banking............................ 738,000 675,185
* PT Jakarta International Hotel &
Development, fgn. Real Estate........................ 6,493,750 7,409,604
PT Japfa Comfeed Indonesia Food & Household Products.......... 3,839,500 2,565,455
PT Kalbe Farma, fgn. Health & Personal Care............. 2,725,000 3,641,550
PT Metrodata Electronic, fgn. Electrical & Electronics........... 345,500 525,637
* PT Multibreeder Adirama, fgn. Food & Household Products.......... 858,750 308,966
PT Pabrik Kertas Tjiwi Kimia, fgn. Forest Products & Paper............ 6,214,910 7,219,211
PT Polysindo Eka Perkasa, fgn. Textiles & Apparel................. 11,922,500 6,618,164
PT Semen Cibinong, fgn. Building Materials & Components.... 138,500 363,050
PT Semen Gresik, fgn. Building Materials & Components.... 1,786,000 4,002,344
</TABLE>
19
<PAGE>
TEMPLETON DEVELOPING MARKETS TRUST
INVESTMENT PORTFOLIO, JUNE 30, 1997 (UNAUDITED) (continued)
<TABLE>
<CAPTION>
SHARES/PRINCIPAL IN
INDUSTRY LOCAL CURRENCY VALUE
<S> <C> <C> <C> <C>
LONG TERM SECURITIES (CONT.)
INDONESIA (CONT.)
PT Sinar Mas Agro Resources & Technology
Corp., fgn. Food & Household Products.......... 6,221,400 $ 5,627,911
PT Sinar Mas Multi Artha, fgn. Financial Services................. 12,855,200 11,761,028
* PT Sinar Mas Multi Artha, wts., fgn. Financial Services................. 964,140 485,638
* PT Sumalindo Lestari Jaya, fgn. Forest Products & Paper............ 4,059,500 3,672,245
PT Summarecon Agung, fgn. Real Estate........................ 833,040 496,673
PT Tambang Timah (Persero), fgn. Metals & Mining.................... 6,279,000 9,746,392
* PT Tempo Scan Pacific, fgn. Health & Personal Care............. 75,000 168,072
PT Ultra Jaya Milk, fgn. Food & Household Products.......... 4,355,000 2,372,687
* PT Unggul Indah Corp., fgn. Chemicals.......................... 1,410,200 2,261,423
PT United Tractors, fgn. Machinery & Engineering............ 4,493,000 16,627,056
--------------
185,693,774
--------------
ISRAEL 0.4%
Agis Industries Ltd. Health & Personal Care............. 69,870 732,639
Bank Hapoalim BM Banking............................ 2,210,909 4,603,267
Clal Industries Ltd. Multi-Industry..................... 1,518,178 7,589,834
Discount Investment Corp. Multi-Industry..................... 20,612 1,643,684
First International Bank of Israel Banking............................ 5,212 4,025,263
Koor Industries Ltd. Multi-Industry..................... 18,334 1,619,033
--------------
20,213,720
--------------
ITALY 2.0%
Banco Ambrosiano Veneto SPA, di Risp Banking............................ 8,653,000 12,709,126
Instituto Finanziaro Industriale SPA, pfd. Automobiles........................ 1,832,500 23,089,026
Istituto Mobiliare Italiano SPA Banking............................ 1,085,000 9,712,263
Italmobiliare SPA Multi-Industry..................... 1,249,210 18,166,251
Italmobiliare SPA, di Risp, conv. Multi-Industry..................... 906,100 7,175,113
Mediobanca/Italmobiliare, 6.00%, conv.,
12/31/99 Multi-Industry..................... 2,922,480,000 ** 1,747,400
Sirti SPA Construction & Housing............. 4,821,200 27,876,375
+ Teleco Cavi SPA, di Risp Telecommunications................. 557,000 1,458,544
--------------
101,934,098
--------------
JORDAN 0.0%
* Jordan Cement Factories Ltd. Building Materials & Components.... 36,000 207,165
--------------
MALAYSIA 2.2%
* Aokam Perdana Bhd. Multi-Industry..................... 1,532,000 1,705,594
Berjaya Singer Bhd. Appliances & Household Durables.... 3,663,000 7,082,187
Berjaya Singer Bhd., fgn. Appliances & Household Durables.... 933,000 1,803,899
Boustead Holdings Bhd., fgn. Food & Household Products.......... 1,357,000 2,957,013
Federal Flour Mills Bhd. Food & Household Products.......... 2,221,250 5,500,322
* Hong Leong Industries Bhd., wts., fgn. Multi-Industry..................... 332,000 273,597
Hong Leong Industries Bhd. Multi-Industry..................... 2,471,800 7,834,548
Island & Peninsula Bhd., fgn. Real Estate........................ 714,000 2,291,363
Leader Universal Holdings Bhd. Industrial Components.............. 6,998,000 12,587,528
Malayawata Steel Bhd. Metals & Mining.................... 1,626,000 2,512,441
Malayawata Steel Bhd., fgn. Metals & Mining.................... 1,418,000 2,191,046
</TABLE>
20
<PAGE>
TEMPLETON DEVELOPING MARKETS TRUST
INVESTMENT PORTFOLIO, JUNE 30, 1997 (UNAUDITED) (continued)
<TABLE>
<CAPTION>
SHARES/PRINCIPAL IN
INDUSTRY LOCAL CURRENCY VALUE
<S> <C> <C> <C> <C>
LONG TERM SECURITIES (CONT.)
MALAYSIA (CONT.)
Malaysian International Shipping Corp. Bhd.,
fgn. Transportation..................... 2,792,000 $ 7,245,483
MBF Capital Bhd. Financial Services................. 5,148,000 9,463,835
Oriental Holdings Bhd. Automobiles........................ 359,000 2,702,456
Oriental Holdings Bhd., fgn. Automobiles........................ 1,292,624 9,730,529
Perlis Plantations Bhd. Multi-Industry..................... 1,535,750 4,502,595
Perlis Plantations Bhd., fgn. Multi-Industry..................... 3,597,500 10,547,345
Renong Bhd. Multi-Industry..................... 13,858,000 18,118,621
* Renong Bhd., wts. Multi-Industry..................... 87,250 45,976
Renong, 4%, conv., 9/09/01 Multi-Industry..................... 139,600 44,247
Shangri La Hotels (Malaysia) Bhd., fgn. Leisure & Tourism.................. 414,000 395,301
Shangri-La Hotels (Malaysia) Bhd. Leisure & Tourism.................. 2,234,202 2,133,291
--------------
111,669,217
--------------
MEXICO 8.3%
Alfa SA de CV, A Multi-Industry..................... 2,840,768 19,386,757
Cementos Mexicanos SA de CV (Cemex), B Building Materials & Components.... 17,947,750 87,456,299
Cifra SA de CV, A Merchandising...................... 2,250,191 4,159,255
Cifra SA, C Merchandising...................... 18,397,824 29,419,839
Coca Cola Femsa SA de CV, ADR Beverages & Tobacco................ 390,600 20,164,725
Cydea SA de CV Chemicals.......................... 1,470,463 3,925,185
DESC SA, A Multi-Industry..................... 500,000 3,525,560
DESC SA, B Multi-Industry..................... 1,024,108 7,479,006
DESC SA, C Multi-Industry..................... 757,255 5,463,447
Fomento Economico Mexicano SA de CV, B Beverages & Tobacco................ 1,723,000 10,250,787
Grupo Carso SA de CV Multi-Industry..................... 163,143 1,135,962
Grupo Financiero Banamex Accival SA, B Banking............................ 7,679,000 19,724,452
* Grupo Financiero Banamex Accival SA, L Banking............................ 15,866,422 37,558,390
* Grupo Financiero Bancomer SA de CV, B Banking............................ 35,846,000 17,241,466
* Grupo Financiero Bancomer SA de CV, L Banking............................ 45,284,592 16,250,452
* Grupo Financiero Serfin SA, B Banking............................ 30,932,187 9,892,691
Telefonos de Mexico SA, L Telecommunications................. 181,000 433,014
Telefonos de Mexico SA, L, ADR Telecommunications................. 2,257,300 107,786,075
Transportacion Maritima Mexicana SA
de CV, L, ADR Transportation..................... 5,000 30,938
* Vitro SA Food & Household Products.......... 4,545,388 16,797,675
--------------
418,081,975
--------------
PAKISTAN 0.7%
* Bank of Punjab Banking............................ 2,883,297 1,612,155
* DG Khan Cement Co. Building Materials & Components.... 2,855,950 862,024
Engro Chemical Chemicals.......................... 1,124,865 3,979,656
* Exide Pakistan Ltd. Energy Equipment & Services........ 18,400 12,246
Fauji Fertilizer Co. Ltd. Chemicals.......................... 1,526,800 3,003,021
Khadim Ali Sham Bukhari & Co. Ltd. Financial Services................. 223,309 91,159
* Kohinoor Industries Ltd. Textiles & Apparel................. 358,720 37,718
National Development Leasing Corp. Financial Services................. 875,353 194,910
* Pakistan Electron Ltd. Appliances & Household Durables.... 371,146 94,578
</TABLE>
21
<PAGE>
TEMPLETON DEVELOPING MARKETS TRUST
INVESTMENT PORTFOLIO, JUNE 30, 1997 (UNAUDITED) (continued)
<TABLE>
<CAPTION>
SHARES/PRINCIPAL IN
INDUSTRY LOCAL CURRENCY VALUE
<S> <C> <C> <C> <C>
LONG TERM SECURITIES (CONT.)
PAKISTAN (CONT.)
* Pakistan International Airlines Corp. Transportation..................... 165,500 $ 31,323
Pakistan Telecom Corp. PTC Telecommunications................. 10,475,300 7,969,309
Pakistan Telecom Corp. PTC Telecommunications................. 21,000 1,585,500
Pakistan Telecommunications Corp., PTC, A Telecommunications................. 21,562,500 16,404,134
Trust Modaraba Financial Services................. 995,580 178,576
* Union Bank Ltd. Banking............................ 1,049,978 259,770
--------------
36,316,079
--------------
PERU 0.0%
Cpt-Telefonica Del Peru SA, ADR B Telecommunications................. 63,000 1,649,813
--------------
PHILIPPINES 1.0%
* A Soriano Corp. Multi-Industry..................... 34,956,324 3,644,597
* Filinvest Development Corp. Real Estate........................ 765,000 182,723
* Keppel Philippine Holdings Inc., B Machinery & Engineering............ 682,650 82,821
* Philex Mining Corp., B Metals & Mining.................... 43,260,143 3,608,292
Philippine Commercial International Bank
Inc. Banking............................ 91,000 879,777
Philippine Long Distance Telephone Co., ADR Telecommunications................. 322,575 20,725,444
* Philippine National Bank Banking............................ 1,554,058 10,546,574
RFM Corp. Food & Household Products.......... 28,117,750 6,822,627
* RFM Corporation, conv., pfd. Food & Household Products.......... 5,112,318 907,099
Sime Darby Pilipinas Inc. Industrial Components.............. 659,658 825,323
--------------
48,225,277
--------------
POLAND 1.0%
* Bank Gdanski SA Banking............................ 412,714 4,771,986
* Bank Gdanski SA, GDR Banking............................ 409,000 4,805,750
* Bank Handlowy W Warszawie Banking............................ 170,000 1,810,437
Bank Inicjatyw Gospodarczch SA, G Banking............................ 5,954,356 7,156,460
Bank Przemyslowo-Handlowy SA Banking............................ 108,970 5,354,832
Bank Rozwoju Eksportu SA Banking............................ 45,000 944,774
Elektrim Towarzystwo Handlowe SA Utilities Electrical & Gas......... 209,316 1,821,524
* Farm Food SA, new Food & Household Products.......... 15,188 206,342
* Farm Food SA Food & Household Products.......... 59,573 815,696
* Huta Olawa SA Metals & Mining.................... 45,442 174,219
* Impexmetal, A Metals & Mining.................... 98,961 1,023,786
* Impexmetal, B Metals & Mining.................... 74,823 774,070
* Mostostal Export SA Construction & Housing............. 1,235,794 3,910,622
* Polifarb Ceiszyu SA Chemicals.......................... 793,964 4,034,444
* Raciborska Fabryka Kotlow SA Energy Equipment & Services........ 204,036 906,413
Rolimpex SA Wholesale & International Trade.... 412,481 1,631,600
Warta SA Insurance.......................... 179,000 2,587,099
Wielkopolski Bank Kredytowy SA Banking............................ 921,624 5,272,031
Zaklady Cementowo Wapiennicze Gorazdze
Chorula Building Materials & Components.... 97,543 3,338,989
--------------
51,341,074
--------------
</TABLE>
22
<PAGE>
TEMPLETON DEVELOPING MARKETS TRUST
INVESTMENT PORTFOLIO, JUNE 30, 1997 (UNAUDITED) (continued)
<TABLE>
<CAPTION>
SHARES/PRINCIPAL IN
INDUSTRY LOCAL CURRENCY VALUE
<S> <C> <C> <C> <C>
LONG TERM SECURITIES (CONT.)
PORTUGAL 3.8%
Banco Comercial Portugues SA Banking............................ 3,540,627 $ 66,873,373
Banco Espirito Santo e Comercial de Lisboa Banking............................ 1,613,545 36,572,709
Banco Totta & Acores SA Banking............................ 991,030 16,561,278
BPI Socieda de Gestora de Participacoes
Socias SA Banking............................ 2,165,625 42,145,949
Cel-Cat Fabrica Nacional de Conductores Electronic Components &
Electricos SA Instruments........................ 12,101 216,249
+* Compta-Equipamentos e Servicos de
Informatica SA Business & Public Services......... 150,000 1,551,225
Espirito Santo Financial Holding SA, ADR Banking............................ 894,200 17,772,225
Portucel Industrial Empresa Product de
Celulose SA Forest Products & Paper............ 729,000 5,405,676
Portugal Telecom SA Telecommunications................. 16,000 645,491
Sociedade Portuguesa de Celulose SA Forest Products & Paper............ 110,940 3,315,782
--------------
191,059,957
--------------
RUSSIA 2.0%
* Aeroflot Transportation..................... 32,900 4,606,000
* Chernogorneft Energy Sources..................... 17,000 179,775
GUM Trade House Merchandising...................... 51,000 2,065,500
Irkutskenergo Utilities Electrical & Gas......... 17,734,000 6,029,560
* Kamaz Automobiles........................ 1,108,792 2,383,903
Krasnoyarsk Aluminum Plant Metals & Mining.................... 64,192 641,920
* Lukoil Holdings., pfd. Energy Sources..................... 399,000 5,027,400
* Lukoil-Holdings Energy Sources..................... 630,000 12,366,900
* Megionneftegaz Multi-Industry..................... 330,000 2,366,100
* Mosenergo Utilities Electrical & Gas......... 4,454,000 6,240,054
* Norilsk Nickel Metals & Mining.................... 519,800 4,912,110
* Norilsk Nickel, pfd. Metals & Mining.................... 20,000 111,000
* Novolipetsk Mettallurgy Multi-Industry..................... 8,000 600,000
* Novorosissk Sea Shipping Transportation..................... 1,630,000 440,100
* Noyabrskneftegaz Multi-Industry..................... 170,930 1,884,503
* Primorsk Shipping Transportation..................... 150,850 618,485
* Purneftegaz Energy Sources..................... 272,000 1,536,800
Rao Gazprom, ADR, 144a Energy Sources..................... 107,000 1,827,025
* Red October Food & Household Products.......... 6,000 141,300
Rostelekom Telecommunications................. 4,231,000 16,416,280
* Rostelekom, pfd. Telecommunications................. 3,414,900 8,468,952
* Saint Petersburg City Telephone Net, pfd. Telecommunications................. 406,000 358,092
* St. Petersburg Intercity International
Telephone Telecommunications................. 137,910 399,939
* St. Petersburg MMT, prf. Telecommunications................. 199,000 362,180
* Unified Energy System Utilities Electrical & Gas......... 50,060,000 18,116,714
* Unified Energy System, prf. Utilities Electrical & Gas......... 1,160,000 258,680
* Uralmash Zavody Machinery & Engineering............ 51,500 423,588
--------------
98,782,860
--------------
SINGAPORE 2.0%
Acer Computer International Ltd. Electrical & Electronics........... 1,563,000 2,875,920
* Acer Computer International Ltd., wts. Electrical & Electronics........... 176,200 101,315
Acma Ltd., fgn. Electrical & Electronics........... 730,400 1,256,756
</TABLE>
23
<PAGE>
TEMPLETON DEVELOPING MARKETS TRUST
INVESTMENT PORTFOLIO, JUNE 30, 1997 (UNAUDITED) (continued)
<TABLE>
<CAPTION>
SHARES/PRINCIPAL IN
INDUSTRY LOCAL CURRENCY VALUE
<S> <C> <C> <C> <C>
LONG TERM SECURITIES (CONT.)
SINGAPORE (CONT.)
* Acma Ltd., fgn., wts. Electrical & Electronics........... 182,600 $ 91,958
British American Tobacco Ltd. Beverages & Tobacco................ 119,000 482,759
* Chemical Industries (Far East) Ltd. Chemicals.......................... 483,000 1,064,174
First Capital Corp. Ltd. Real Estate........................ 1,762,000 4,584,626
First Capital Corp. Ltd., fgn. Real Estate........................ 2,694,000 7,009,638
G P Batteries International Ltd. Electrical & Electronics........... 37,000 110,247
* GP Batteries International Ltd., wts. Electrical & Electronics........... 9,250 14,106
Hai Sun Hup Group Ltd. Transportation..................... 10,791,000 7,774,169
* Hai Sun Hup Group Ltd., wts Transportation..................... 2,436,300 647,544
Hinds Hotels International Ltd. Leisure & Tourism.................. 295,000 528,223
Hinds Hotels International Ltd., fgn. Leisure & Tourism.................. 417,000 746,674
Hour Glass Ltd. Merchandising...................... 1,436,000 1,124,935
Inchcape Bhd., fgn. Wholesale & International Trade.... 2,641,000 9,513,290
Isetan (Singapore) Ltd., fgn. Merchandising...................... 218,500 495,167
Jaya Holdings Ltd. Transportation..................... 2,314,000 1,561,873
Jaya Holdings Ltd., 3.00%, conv., 8/31/98 Transportation..................... 508,800 ** 371,893
* Jaya Holdings Ltd., warrants expire 8/31/98 Transportation..................... 89,071 20,871
* Jaya Holdings Ltd., warrants expire 10/09/99 Transportation..................... 164,760 61,366
Jurong Shipyard, fgn Machinery & Engineering............ 3,432,000 14,883,122
MCL Land Ltd. Real Estate........................ 3,405,000 5,168,112
Natsteel Ltd., fgn. Metals & Mining.................... 2,301,000 5,858,320
Natsteel Ltd., loc. Metals & Mining.................... 1,260,000 3,207,946
Osprey Maritime Ltd. Transportation..................... 851,500 1,113,734
* Osprey Maritime Ltd., rts. Transportation..................... 851,500 250,143
* Osprey Maritime Ltd., rts., pfd. Transportation..................... 459,810 32
Prima Ltd. Food & Household Products.......... 947,000 3,219,151
Resources Development Corp. Ltd. Building Materials & Components.... 232,500 569,175
Robinson & Co. Ltd. Merchandising...................... 120,000 625,306
Sembawang Corp. Ltd. Multi-Industry..................... 3,734,000 16,976,289
Singapore Bus Service (1978) Ltd., fgn. Transportation..................... 271,200 1,299,377
* TIBS Holdings Ltd. Transportation..................... 788,800 1,070,345
* TIBS Holdings Ltd., wts. Transportation..................... 640 224
United Industrial Corp. Real Estate........................ 1,351,000 1,020,550
United Industrial Corporation Ltd., fgn. Real Estate........................ 7,835,000 5,918,584
WBL Corp. Ltd. Multi-Industry..................... 359,000 1,084,759
--------------
102,702,673
--------------
SLOVAK REPUBLIC 0.2%
* Nafta Gbely AS Utilities Electrical & Gas......... 150,454 4,922,501
* Slovakofarma AS Health & Personal Care............. 617 69,736
Slovnaft AS Chemicals.......................... 247,604 6,112,588
Vychodoslovenske Zeleziarne AS Metals & Mining.................... 24,100 451,593
--------------
11,556,418
--------------
SOUTH AFRICA 2.4%
Aeci Ltd. Chemicals.......................... 118,000 702,226
Alpha Ltd. Building Materials & Components.... 145,700 2,512,899
</TABLE>
24
<PAGE>
TEMPLETON DEVELOPING MARKETS TRUST
INVESTMENT PORTFOLIO, JUNE 30, 1997 (UNAUDITED) (continued)
<TABLE>
<CAPTION>
SHARES/PRINCIPAL IN
INDUSTRY LOCAL CURRENCY VALUE
<S> <C> <C> <C> <C>
LONG TERM SECURITIES (CONT.)
SOUTH AFRICA (CONT.)
Anglo American Industrial Corp. Ltd. Multi-Industry..................... 102,372 $ 4,490,198
Anglo American Platinum Corp. Ltd. Metals & Mining.................... 78,197 646,327
Anglovaal Industried Ltd. Multi-Industry..................... 878,266 3,213,404
BTR Dunlop Ltd. Industrial Components.............. 1,880,100 1,864,767
CG Smith Ltd. Multi-Industry..................... 1,865,000 10,399,934
Del Monte Royal Foods Ltd Food & Household Products.......... 7,969,350 4,127,832
Edgars Stores Textiles & Apparel................. 121,700 3,178,631
Engen Ltd. Energy Sources..................... 2,862,652 14,291,177
First National Bank Holdings Ltd. Banking............................ 628,600 5,403,438
Foodcorp Ltd. Food & Household Products.......... 56,333 428,364
Kersaf Investments Ltd. Leisure & Tourism.................. 154,700 1,075,774
Malbak Ltd. Multi-Industry..................... 413,100 655,570
McCarthy Retail Ltd. Appliances & Household Durables.... 1,537,700 4,406,017
McCarthy Retail Ltd., zero, conv., 9/30/03 Appliances & Household Durables.... 223,000 ** 641,426
Nedcor Ltd. Banking............................ 111,260 2,464,543
Palabora Mining Co. Ltd. Metals & Mining.................... 308,000 5,702,447
Polifin Ltd. Chemicals.......................... 293,010 548,950
Potgietersrust Platinums Ltd. Metals & Mining.................... 155,582 1,174,495
* Rainbow Chicken Ltd. Food & Household Products.......... 911,736 182,870
Rainbow Chicken Ltd., conv., pfd. Food & Household Products.......... 2,034,960 403,673
Rembrandt Group Ltd. Multi-Industry..................... 365,770 3,901,977
Reunert Ltd. Electrical & Electronics........... 589,600 2,020,780
Sappi Ltd. Forest Products & Paper............ 1,632,379 14,751,496
Sasol Ltd. Energy Sources..................... 123 1,613
Sentrachem Ltd. Chemicals.......................... 2,837,500 5,003,306
South African Breweries Ltd. Beverages & Tobacco................ 363,000 11,141,228
South African Iron & Steel Industrial Corp.
Ltd. Metals & Mining.................... 21,223,105 14,033,351
Sun International Ltd. Leisure & Tourism.................. 4,673,842 2,637,213
Toyota South Africa Limited Automobiles........................ 2,000 12,652
Voltex Holdings Ltd. Electrical & Electronics........... 495,600 279,642
--------------
122,298,220
--------------
SOUTH KOREA 2.0%
Asia Cement Co. Ltd. Building Materials & Components.... 57,380 1,873,896
Boram Bank Co. Ltd. Banking............................ 1,095,857 7,219,328
BYC Co. Ltd. Textiles & Apparel................. 10,550 1,087,078
Central Banking Corp. Financial Services................. 407,993 6,156,651
Cho Hung Bank Co. Ltd., GDR Banking............................ 219,200 1,572,760
Cho Hung Bank, GDR 144a Banking............................ 1,300,000 9,327,500
Choil Aluminium Mfg. Co. Ltd. Metals & Mining.................... 63,326 1,212,322
Dae Duck Electronics Co. Ltd. Electrical & Electronics........... 45,882 2,893,459
Daegu Bank Co. Ltd. Banking............................ 1,211,115 10,381,356
Daehan Synthetic Fiber Co. Ltd. Textiles & Apparel................. 1,000 101,239
Dongkuk Steel Mill Co. Ltd. Metals & Mining.................... 190,000 4,343,468
Hae In Corp. Ltd. Merchandising...................... 25,548 1,409,743
Hana Bank, GDR Banking............................ 604,814 8,739,563
Hankook Cosmetics Co. Ltd. Health & Personal Care............. 52,400 1,410,315
</TABLE>
25
<PAGE>
TEMPLETON DEVELOPING MARKETS TRUST
INVESTMENT PORTFOLIO, JUNE 30, 1997 (UNAUDITED) (continued)
<TABLE>
<CAPTION>
SHARES/PRINCIPAL IN
INDUSTRY LOCAL CURRENCY VALUE
<S> <C> <C> <C> <C>
LONG TERM SECURITIES (CONT.)
SOUTH KOREA (CONT.)
Korea First Bank Banking............................ 1,896,940 $ 7,903,917
Korea Kumho Petrochemical Chemicals.......................... 756,100 5,245,018
Kyong Nam Bank Banking............................ 509,670 5,486,070
Kyung Dong Boiler Co Ltd Energy Equipment & Services........ 36,029 1,192,852
Moon Bae Steel Co. Ltd. Metals & Mining.................... 15,480 495,081
Samsung Display Devices (L) Ltd Electrical & Electronics........... 27,430 1,513,013
Samsung Electronics Co. Ltd. Multi-Industry..................... 406 45,046
* Samsung Heavy Industries Co. Ltd. Machinery & Engineering............ 113,000 1,191,081
* Shinsung Industrial Co. Ltd., rts. Electrical & Electronics........... 8,059 39,024
Shinsung Industries Co. Ltd. Electrical & Electronics........... 40,000 1,103,604
Ssangyong Oil Refining Co Ltd Energy Equipment & Services........ 731,540 14,828,514
Tong Yang Merchant Bank Financial Services................. 430,715 4,462,366
--------------
101,234,264
--------------
SPAIN 0.5%
Bankinter SA Banking............................ 56,900 10,040,041
Telefonica de Espana SA Telecommunications................. 479,424 13,860,511
--------------
23,900,552
--------------
SRI LANKA 0.0%
Aitken Spence & Co. Ltd. Multi-Industry..................... 150,000 474,440
Associated Motorways Ltd. Automobiles........................ 140,178 87,476
* Ceylon Holiday Resorts Ltd. Leisure & Tourism.................. 84,600 63,642
Colombo Dock Yard Ltd. Transportation..................... 40,000 16,071
Lanka Orix Leasing Co. Ltd. Financial Services................. 819 3,501
National Develpoment Bank of Sri Lanka Banking............................ 140,000 622,329
United Motor Lanka Ltd. Automobiles........................ 341,808 309,725
--------------
1,577,184
--------------
THAILAND 4.9%
American Standard Sanitaryware (THB) Public
Co. Ltd., fgn Building Materials & Components.... 362,200 1,943,478
Asia Credit Public Co. Ltd., fgn. Financial Services................. 134,600 342,930
Asia Credit Public Co. Ltd., loc. Financial Services................. 1,001,400 2,106,786
* Asia Fibre Public Co. Ltd., fgn. Textiles & Apparel................. 943,500 225,814
Ayudhya Insurance Public Co. Ltd. Insurance.......................... 4,700 35,379
Ayudhya Insurance Public Co. Ltd., fgn. Insurance.......................... 280,800 2,167,921
Bangkok Bank Public Co. Ltd. Banking............................ 7,529,512 37,494,964
Bangkok Bank Public Co. Ltd., fgn. Banking............................ 160,596 1,103,497
Bangkok Insurance Insurance.......................... 52,100 671,739
Bangkok Insurance, fgn. Insurance.......................... 8,000 139,741
Bangkok Land Public Co. Ltd., fgn. Real Estate........................ 1,057,400 755,140
Bank of Ayudhya Public Co. Ltd. Banking............................ 284,000 438,525
Bank of Ayudhya Public Co. Ltd., fgn. Banking............................ 5,258,800 8,221,633
Charoen Pokphand Feedmill Public Co. Ltd. Food & Household Products.......... 970,400 1,910,457
* Chareon Pokphand Feedmill Public Co. Ltd.,
fgn. Food & Household Products.......... 1,245,500 3,077,089
First Bangkok City Bank Public Co. Ltd.,
fgn. Banking............................ 7,341,000 5,880,168
</TABLE>
26
<PAGE>
TEMPLETON DEVELOPING MARKETS TRUST
INVESTMENT PORTFOLIO, JUNE 30, 1997 (UNAUDITED) (continued)
<TABLE>
<CAPTION>
SHARES/PRINCIPAL IN
INDUSTRY LOCAL CURRENCY VALUE
<S> <C> <C> <C> <C>
LONG TERM SECURITIES (CONT.)
THAILAND (CONT.)
Hana Microelectronics Co. Ltd. Electrical & Electronics........... 319,000 $ 1,490,021
Hana Microelectronics Co. Ltd., fgn. Electrical & Electronics........... 409,500 2,197,279
Hua Thai Manufacturing Public Co. Ltd. Textiles & Apparel................. 175,000 297,240
Industrial Finance Corp. of Thailand, fgn. Banking............................ 6,575,800 8,376,815
Jasmine International Public Co. Ltd. Telecommunications................. 3,610,200 3,344,713
Jasmine International Public Co. Ltd., fgn. Telecommunications................. 1,130,000 1,003,281
* Karat Sanitaryware Public Co. Ltd., fgn. Building Materials & Components.... 370,950 186,155
Kian Gwan (Thailand) Public Co. Ltd., fgn. Real Estate........................ 96,000 244,586
* Land and House Public Co. Ltd. Multi-Industry..................... 2,070,500 3,287,954
* Land and House Public Co. Ltd., fgn. Multi-Industry..................... 2,682,800 5,592,403
Phatra Thanakit Public Co. Ltd. Multi-Industry..................... 4,463,000 4,565,509
Phatra Thanakit Public Co. Ltd., fgn. Multi-Industry..................... 3,343,400 4,130,044
Regional Container Lines Public Co. Ltd.,
fgn. Transportation..................... 379,700 2,257,240
* Royal Ceramic Industry Public Co. Ltd., fgn. Building Materials & Components.... 13,900 2,146
Saha Pathanapibul Public Co Ltd., fgn. Food & Household Products.......... 284,500 505,192
Saha Union Public Co. Ltd. Multi-Industry..................... 7,287,870 4,571,623
Saha Union Public Co. Ltd., fgn. Multi-Industry..................... 2,314,410 1,697,502
Sanyo Universal Electric Public Co. Ltd. Appliances & Household Durables.... 499,500 433,845
Sanyo Universal Electric Public Co Ltd.,
fgn. Appliances & Household Durables.... 949,700 824,870
Serm Suk Public Co. Ltd. Food & Household Products.......... 359,500 4,440,842
Siam Cement Public Co. Ltd. (The) Building Materials & Components.... 102,200 1,522,841
Siam Cement Public Co. Ltd. (The), fgn. Building Materials & Components.... 946,000 16,360,085
Siam City Bank Public Co. Ltd., fgn. Banking............................ 16,413,000 9,662,160
Siam Commercial Bank Ltd., fgn. Banking............................ 783,400 3,205,574
Siam Commercial Bank Ltd., loc. Banking............................ 1,993,300 7,463,814
+* Sino-Thai Engineering & Construction Public
Co. Construction & Housing............. 1,289,700 3,584,574
Textile Prestige Public Co. Ltd., fgn. Textiles & Apparel................. 99,000 118,471
* Thai Airways International Public Co. Ltd. Transportation..................... 5,554,100 8,147,300
Thai Asahi Glass Public Co. Ltd. Building Materials & Components.... 40,700 24,352
Thai Asahi Glass Public Co. Ltd., fgn. Building Materials & Components.... 32,000 19,147
Thai Farmers Bank Public Co. Ltd. Banking............................ 13,866,900 42,556,207
Thai Farmers Bank Public Co. Ltd., fgn. Banking............................ 517,500 2,197,452
Thai Investments and Securities Ltd. Financial Services................. 1,842,500 3,769,639
Thai Military Bank Ltd., fgn. Banking............................ 5,925,900 6,633,897
Thai Petrochemical Industry Public Co. Ltd.,
fgn. Chemicals.......................... 3,942,840 2,473,312
Thai Rayon Public Co. Ltd. Textiles & Apparel................. 43,700 92,781
Thai Rayon Public Co. Ltd., fgn. Textiles & Apparel................. 11,400 24,534
* Thai Telephone & Telecommunication
Public Co. Ltd. Telecommunications................. 2,263,700 939,385
Thai Wacoal Public Co. Ltd. Textiles & Apparel................. 140,700 467,099
Thai Wacoal Public Co. Ltd., fgn. Textiles & Apparel................. 148,800 493,990
Thai Wah Public Co. Ltd., fgn. Multi-Industry..................... 208,900 80,641
Tipco Asphalt Public Co. Ltd. Building Materials & Components.... 421,000 2,193,978
Tipco Asphalt Public Co. Ltd., fgn, (TASCO) Building Materials & Components.... 628,000 3,272,727
Total Access Communication Public Co. Ltd. Telecommunications................. 825,000 3,828,000
</TABLE>
27
<PAGE>
TEMPLETON DEVELOPING MARKETS TRUST
INVESTMENT PORTFOLIO, JUNE 30, 1997 (UNAUDITED) (continued)
<TABLE>
<CAPTION>
SHARES/PRINCIPAL IN
INDUSTRY LOCAL CURRENCY VALUE
<S> <C> <C> <C> <C>
LONG TERM SECURITIES (CONT.)
THAILAND (CONT.)
United Communications Industry Public
Co. Ltd., loc. Multi-Industry..................... 2,547,000 $ 10,520,324 \
United Motor Works (Siam) Public Co. Ltd. Machinery & Engineering............ 30,400 36,086
United Standard Terminal Public Co. Ltd.,
fgn. Wholesale & International Trade.... 155,600 249,272
--------------
245,902,163
--------------
TURKEY 4.8%
Akbank Banking............................ 960,953,434 82,491,836
Akcansa Cimento Building Materials & Components.... 23,707,621 3,272,218
Aksigorta AS Insurance.......................... 32,286,000 2,043,349
* Alarko Gayrimenkul Yatirim Ortakigi AS Real Estate........................ 11,637,000 493,608
Alarko Sanayii ve Ticaret SA Appliances & Household Durables.... 3,840,000 458,913
Alcatel Teletas Endustri Tic AS Telecommunications................. 45,325,000 8,392,055
* Anadolu Anonim Turk Sigorta Sirketi Insurance.......................... 17,453,000 470,035
* Anadolu Anonim Turk Sigorta Sirketi, new Insurance.......................... 17,364,000 467,638
Arcelik AS Appliances & Household Durables.... 256,786,196 34,578,152
Bagfas Chemicals.......................... 4,971,000 1,188,154
Beko Elektronik AS Appliances & Household Durables.... 82,625,484 6,675,683
Borusan AS Industrial Components.............. 15,548,000 942,144
Celik Halat ve Sanayii ve Ticaret AS Building Materials & Components.... 8,584,170 262,972
Cimentas Izmir Cimento Fabrikasi Turk AS Building Materials & Components.... 16,488,253 2,192,513
Cimsa Cimento Sanayi ve Ticaret AS Building Materials & Components.... 39,069,000 5,260,933
Erciyas Biracilik Food & Household Products.......... 106,426,000 12,718,802
Eregli Demir ve Celik Fabrikalari AS Metals & Mining.................... 139,943,750 23,319,981
Finansbank Banking............................ 233,194,154 2,669,113
Goodyear Lastikleri TAS, Industrial Components.............. 37,000 13,452
Izocam Ticaret ve Sanayii AS, br. Building Materials & Components.... 30,908,478 1,061,325
Kartonsan Forest Products & Paper............ 77,621,250 5,618,101
Koc Holding AS Multi-Industry..................... 14,898,332 3,510,800
Koc Yatirim ve Sanayii Mamullesi Pazarlanca
AS Multi-Industry..................... 36,898,143 9,812,961
Marshall Boya ve Vernik Sanayii AS Industrial Components.............. 12,978,392 1,616,565
* Netas Northern Electric Telekomunic Asyon AS Electrical & Electronics........... 6,883,000 1,900,037
Petkim Petrokimya Holding AS Chemicals.......................... 5,454,000 1,872,776
Sasa Suni Ve Sentetik Elyaf Sanayi AS Chemicals.......................... 7,000,000 320,485
Tat Konserve Sanayii AS Food & Household Products.......... 37,479,343 2,775,780
Tekstil Bankasi AS, br. Banking............................ 365,032 5,038
Tofas Turk Otomobil Fabrikasi AS Automobiles........................ 154,616,475 7,495,236
Turk Demir Dokum, br. Appliances & Household Durables.... 44,423,303 2,243,224
Turkiye Garanti Bankasi AS Banking............................ 359,909,663 13,570,039
Vakif Finansal Kiralama AS Financial Services................. 16,152,092 252,844
* Vakif Finansal Kiralama AS, new Financial Services................. 24,228,137 240,609
--------------
240,207,371
--------------
VENEZUELA 3.6%
Banco Provincial SAICA Banking............................ 127,154 258,851
Ceramica Carabobo CA, A Building Materials & Components.... 420,640 457,964
Ceramica Carabobo CA, A, ADR Building Materials & Components.... 416,421 453,371
</TABLE>
28
<PAGE>
TEMPLETON DEVELOPING MARKETS TRUST
INVESTMENT PORTFOLIO, JUNE 30, 1997 (UNAUDITED) (continued)
<TABLE>
<CAPTION>
SHARES/PRINCIPAL IN
INDUSTRY LOCAL CURRENCY VALUE
<S> <C> <C> <C> <C>
LONG TERM SECURITIES (CONT.)
VENEZUELA (CONT.)
Ceramica Carabobo CA, B Building Materials & Components.... 2,822,831 $ 3,015,318
* Consolidada Carabobo, A Building Materials & Components.... 5,131,334 300,414
* Consolidada Carabobo, B Building Materials & Components.... 26,429,743 1,506,610
+ Electricidad de Caracas Utilities Electrical & Gas......... 87,508,315 140,204,211
H.L. Boulton & Co. SA Multi-Industry..................... 7,964,847 625,826
Industrias Ventane Utilities Electrical & Gas......... 3,960,414 2,806,756
Inmuebles Y Valores Caracas SA Building Materials & Components.... 1,015,000 10,696
* Manufacturera de Aparatos Domesticos SA Appliances & Household Durables.... 527,478 563,446
Mavesa SA, ADR Food & Household Products.......... 1,541,899 15,611,727
Siderurgica Venezolana Sivensa Saica Svs. Metals & Mining.................... 300,000 155,298
Siderurgica Venezolana Sivensa Saica Svs.,
ADR Metals & Mining.................... 699,270 3,619,849
Siderurgica Venezolana Sivensa Saica Svs.,
ADR, B, new Metals & Mining.................... 66,298 306,428
Venezolana de Cementos Vencemos, #1 Building Materials & Components.... 2,402,365 8,142,690
Venezolana de Cementos Vencemos, #2 Building Materials & Components.... 277,978 896,510
--------------
178,935,965
--------------
ZIMBABWE 0.1%
Delta Corp. Multi-Industry..................... 42,258 64,841
Meikles Africa Ltd. Multi-Industry..................... 300,000 738,000
Ta Holdings Multi-Industry..................... 50,000 9,426
Zimbabwe Sun Ltd. Multi-Industry..................... 9,676,800 3,605,997
--------------
4,418,264
--------------
TOTAL LONG TERM SECURITIES (COST $3,235,694,104)............................. 4,302,480,546
==============
SHORT TERM OBLIGATIONS (COST $702,462,073) 14.0%
U. S. Treasury Bills, 4.68% to 5.14% with maturities to 9/25/97.................. U.S.707,642,000 702,429,377
--------------
TOTAL INVESTMENTS (COST $3,938,156,177) 99.7%............................... 5,004,909,923
OTHER ASSETS, LESS LIABILITIES 0.3%......................................... 15,854,384
--------------
TOTAL NET ASSETS 100.0%..................................................... $5,020,764,307
==============
</TABLE>
*Non-income producing.
**Principal amount in currency of countries indicated.
+The Investment Company Act of 1940 defines "affiliated companies" as
investments in portfolio companies in which the Fund owns 5% or more of the
outstanding voting securities. Investments in "affiliated companies" at June
30, 1997 were $169,463,117.
See Notes to Financial Statements.
29
<PAGE>
TEMPLETON DEVELOPING MARKETS TRUST
Financial Statements
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1997 (UNAUDITED)
<TABLE>
<S> <C>
Assets:
Investments in securities, at value (identified cost $3,938,156,177)............... $5,004,909,923
Cash............................................................................... 4,040,158
Receivables:
Investment securities sold........................................................ 10,801,712
Fund shares sold.................................................................. 27,115,709
Dividends and interest............................................................ 20,729,879
--------------
Total assets................................................................... 5,067,597,381
--------------
Liabilities:
Payables:
Investment securities purchased................................................... 29,094,405
Fund shares redeemed.............................................................. 4,595,284
Accrued expenses................................................................... 13,143,385
--------------
Total liabilities.............................................................. 46,833,074
--------------
Net assets, at value................................................................ $5,020,764,307
==============
Net assets consist of:
Undistributed net investment income................................................ $ 33,058,043
Net unrealized appreciation........................................................ 1,066,753,746
Accumulated net realized gain...................................................... 94,120,274
Net capital paid in on shares of beneficial interest............................... 3,826,832,244
--------------
Net assets, at value................................................................ $5,020,764,307
==============
CLASS I
Net asset value per share ($4,554,866,783 / 247,456,085 shares outstanding)............... $18.41
======
Maximum offering price ($18.41 / 94.25%).................................................. $19.53
======
CLASS II
Net asset value per share ($430,083,169 / 23,654,823 shares outstanding).................. $18.18
======
Maximum offering price ($18.18 / 99.00%).................................................. $18.36
======
ADVISOR CLASS
Net asset value per share ($35,814,355 / 1,943,566 shares outstanding).................... $18.43
======
</TABLE>
See Notes to Financial Statements.
30
<PAGE>
TEMPLETON DEVELOPING MARKETS TRUST
Financial Statements (continued)
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1997 (UNAUDITED)
<TABLE>
<S> <C> <C>
Investment income:
(net of $3,618,669 foreign taxes withheld)
Dividends........................................................... $ 64,913,814
Interest............................................................ 14,422,487
------------
Total income.................................................... $ 79,336,301
Expenses:
Management fees (Note 3)............................................ 26,462,586
Administrative fees (Note 3)........................................ 1,872,892
Distribution fees (Note 3)
Class I....................................................... 5,374,256
Class II...................................................... 1,605,521
Transfer agent fees (Note 3)........................................ 2,981,000
Custodian fees...................................................... 4,541,079
Reports to shareholders............................................. 448,000
Audit fees.......................................................... 30,000
Legal fees (Note 3)................................................. 82,000
Registration and filing fees........................................ 133,400
Trustees' fees and expenses......................................... 65,000
------------
Total expenses.................................................. 43,595,734
------------
Net investment income........................................... 35,740,567
Realized and unrealized gain (loss):
Net realized gain (loss) on:
Investments........................................................ 96,953,946
Foreign currency transactions...................................... (855,569)
------------
96,098,377
Net unrealized appreciation on investments:......................... 637,437,851
------------
Net realized and unrealized gain..................................... 733,536,228
------------
Net increase in net assets resulting from operations................. $769,276,795
============
</TABLE>
See Notes to Financial Statements.
31
<PAGE>
TEMPLETON DEVELOPING MARKETS TRUST
Financial Statements (continued)
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 1997 YEAR ENDED
(UNAUDITED) DECEMBER 31, 1996
----------------------------------------
<S> <C> <C>
Increase (decrease) in net assets:
Operations:
Net investment income.......................................... $ 35,740,567 $ 33,756,926
Net realized gain on investment and foreign currency
transaction.................................................. 96,098,377 84,667,850
Net unrealized appreciation.................................... 637,437,851 446,213,767
----------------------------------------
Net increase in net assets resulting from operations......... 769,276,795 564,638,543
Distributions to shareholders:
From net investment income
Class I........................................................ (1,077,487) (34,428,429)
Class II....................................................... (81,938) (1,401,202)
Advisor Class.................................................. (6,151) --
Amount in excess of net investment income
Class I........................................................ -- (1,420,492)
Class II....................................................... -- (96,456)
From net realized gain
Class I........................................................ (17,938,462) (69,400,180)
Class II....................................................... (1,400,804) (4,469,289)
Advisor Class.................................................. (98,419) --
Capital share transactions (Note 2)
Class I........................................................ 555,179,384 723,963,075
Class II....................................................... 148,229,301 169,320,035
Advisor Class.................................................. 33,300,426 --
----------------------------------------
Net increase in net assets................................... 1,485,382,645 1,346,705,605
Net assets:
Beginning of period............................................. 3,535,381,662 2,188,676,057
----------------------------------------
End of period................................................... $ 5,020,764,307 $ 3,535,381,662
========================================
</TABLE>
See Notes to Financial Statements.
32
<PAGE>
TEMPLETON DEVELOPING MARKETS TRUST
Notes to Financial Statements (unaudited)
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Templeton Developing Markets Trust (the Fund) is registered under the Investment
Company Act of 1940 as a diversified, open-end investment company. 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 exchange or NASDAQ are
valued at the latest reported sales price. Over-the-counter securities and
listed securities for which no sale is reported are valued within the range of
the latest quoted bid and asked prices. Securities for which market quotations
are not readily available are valued at fair value as determined by management
in accordance with procedures established by the Board of 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 exchange rate of such
currencies against U.S. dollars on the date of valuation. Purchases and sales of
securities and income items denominated in foreign currencies are translated
into U.S. dollars at the exchange rate in effect on the transaction date.
The Fund does not separately report the effect of changes in foreign exchange
rates from changes in market prices on securities held. Such changes are
included with the net realized and unrealized gain or loss from investments.
Realized foreign exchange gains or losses arise from sales of foreign
currencies, currency gains or losses realized between the trade and settlement
dates on securities transactions, the difference between the recorded amounts of
dividends, interest, and foreign withholding taxes, and the U.S. dollar
equivalent of the amounts actually received or paid. Net unrealized foreign
exchange gains and losses arise from changes in foreign exchange rates on
foreign denominated assets and liabilities other than investments in securities
at the end of the reporting period.
The Brazilian government has exercised and may continue to exercise substantial
influence over the exchange of Brazilian currency. Under current Brazilian law,
whenever there occurs a serious imbalance of Brazil's balance of payments or
serious reasons to foresee the imminence of such an imbalance, Brazil's National
Monetary Council may, for a limited period, impose restrictions on foreign
capital remittances abroad. Exchange control regulations may restrict
repatriation of investment income, capital, or the proceeds of securities sales
by foreign investors. The Fund has investments in Brazilian companies with a
value of approximately $592 million as of June 30, 1997.
c. INCOME TAXES:
No provision has been made for income taxes because the Fund's policy is to
qualify as a regulated investment company under the Internal Revenue Code and
distribute substantially all of its taxable income.
d. SECURITY TRANSACTIONS, INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS:
Security transactions are accounted for on trade date. Realized gains and losses
on security transactions are determined on a specific identification basis.
Certain income from foreign securities is recorded as soon as
33
<PAGE>
TEMPLETON DEVELOPING MARKETS TRUST
Notes to Financial Statements (unaudited) (continued)
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONT.)
information is available to the Fund. Interest income and estimated expenses are
accrued daily. Dividend income and distributions to shareholders are recorded on
the ex-dividend date.
Realized and unrealized gains and losses on security transactions and net
investment income, other than class specific expenses, are allocated daily to
each class of shares based upon the relative proportion of net assets of each
class.
e. ACCOUNTING ESTIMATES:
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities at the date of the
financial statements and the amounts of income and expense during the reporting
period. Actual results could differ from those estimates.
2. BENEFICIAL SHARES
Effective January 2, 1997, the Fund offers three classes of shares: Class I,
Class II and Advisor Class shares. Prior to this date, only Class I and Class II
shares were offered. The shares have the same rights except for their initial
sales load, distribution fees, voting rights on matters affecting a single class
of shares, and the exchange privilege of each class.
At June 30, 1997, there were an unlimited number of shares authorized ($0.01 par
value). Transactions in the Fund's shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1997 DECEMBER 31, 1996
------------------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT
------------------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS I
Shares sold........................................... 54,065,413 $ 917,990,942 81,183,040 $1,183,527,423
Shares issued on reinvestment of distributions........ 949,077 16,286,912 6,016,317 88,975,415
Shares redeemed....................................... (22,422,928) (379,098,470) (37,415,543) (548,539,761)
------------------------------------------------------------------
Net increase.......................................... 32,591,562 $ 555,179,384 49,783,814 $723,963,075
==================================================================
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1997 DECEMBER 31, 1996
------------------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT
------------------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS II
Shares sold........................................... 9,708,103 $ 163,196,624 12,543,242 $181,957,609
Shares issued on reinvestment of distributions........ 71,557 1,214,119 328,438 4,824,061
Shares redeemed....................................... (970,047) (16,181,442) (1,194,443) (17,461,635)
-----------------------------------------------------------------
Net increase.......................................... 8,809,613 $ 148,229,301 11,677,237 $169,320,035
=================================================================
</TABLE>
34
<PAGE>
TEMPLETON DEVELOPING MARKETS TRUST
Notes to Financial Statements (unaudited) (continued)
2. BENEFICIAL SHARES (CONT.)
<TABLE>
<CAPTION>
FOR THE PERIOD
JANUARY 2, 1997
THROUGH
JUNE 30, 1997
----------------------------
SHARES AMOUNT
----------------------------
<S> <C> <C>
ADVISOR CLASS
Shares sold........................................................................... 2,029,769 $34,771,508
Shares issued on reinvestment of distributions........................................ 6,101 104,577
Shares redeemed....................................................................... (92,304) (1,575,659)
----------------------------
Net increase.......................................................................... 1,943,566 $33,300,426
============================
</TABLE>
3. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES
Certain Officers of the Fund are also officers or directors of Templeton Asset
Management Ltd. (TAML), Franklin Templeton Services, Inc. (FTSI), Franklin
Templeton Distributors, Inc. (FTD) and Franklin Templeton Investor Services,
Inc. (FTIS), the Fund's investment manager, administrative manager, principal
underwriter, and transfer agent, respectively.
The Fund pays an investment management fee to TAML of 1.25% per year of the
average daily net assets of the fund. The Fund pays an administrative fee to
FTSI based on the Fund's aggregate average net assets as follows: 0.15% per
annum on the first $200 million, 0.135% of the next $500 million, 0.10% of the
next $500 million, and 0.075% in excess of $1.2 billion.
The Fund reimburses FTD up to 0.35% and 1.00% per year of the average daily net
assets of Class I and Class II, respectively, for costs incurred in marketing
the Fund's shares. Under the Class I distribution plan, costs exceeding the
maximum may be reimbursed in subsequent periods. At June 30, 1997 there were no
unreimbursed expenses.
FTD received net commissions from sales of the Fund's shares, and received
contingent deferred sales charges for the period of $1,157,409 and $67,543,
respectively.
During the period ended June 30, 1997, legal fees of $82,000 were paid to a law
firm in which an officer of the Fund is a partner.
4. INVESTMENT TRANSACTIONS
Purchases and sales of securities (excluding short-term securities) for the
period ended June 30, 1997 aggregated $701,559,136 and $351,852,244,
respectively.
35
<PAGE>
TEMPLETON DEVELOPING MARKETS TRUST
Notes to Financial Statements (unaudited) (continued)
5. INCOME TAXES
At June 30, 1997, the net unrealized appreciation based on the cost of
investments for income tax purposes of $3,939,070,622 was as follows:
<TABLE>
<S> <C>
Unrealized appreciation........................................... $1,391,797,139
Unrealized depreciation........................................... (325,957,838)
--------------
Net unrealized appreciation....................................... $1,065,839,301
==============
</TABLE>
36
<PAGE>
LITERATURE REQUEST
For a free brochure and prospectus, which contain more complete information,
including charges and expenses, call Franklin Fund Information, toll free, at
1-800/DIAL BEN (1-800/342-5236). Please read the prospectus carefully before you
invest or send money. To ensure the highest quality of service, telephone calls
to or from our service departments may be monitored, recorded and accessed.
These calls can be determined by the presence of a regular beeping tone.
FRANKLIN TEMPLETON GROUP
<TABLE>
<S> <C> <C> <C>
GLOBAL GROWTH Franklin Templeton High Income Fund Allocator Series FRANKLIN STATE-SPECIFIC
Franklin Global Health Care Fund Currency Fund Franklin Templeton Conservative FUNDS SEEKING
Franklin Templeton Japan Fund Templeton Americas Government Target Fund TAX-FREE INCOME
Templeton Developing Securities Fund Franklin Templeton Moderate Alabama
Markets Trust Target Fund Arizona*
Templeton Foreign Fund GROWTH Franklin Templeton Growth Arkansas**
Templeton Foreign Smaller Franklin Blue Chip Fund Target Fund California*
Companies Fund Franklin California Growth Fund Colorado
Templeton Global Franklin DynaTech Fund INCOME Connecticut
Infrastructure Fund Franklin Equity Fund Franklin Adjustable Rate Florida*
Templeton Global Franklin Gold Fund Securities Fund Georgia
Opportunities Trust Franklin Growth Fund Franklin Adjustable U.S. Hawaii**
Templeton Global Franklin MidCap Growth Fund Government Securities Fund Indiana
Real Estate Fund Franklin Small Cap Franklin's AGE High Income Fund Kentucky
Templeton Global Growth Fund Franklin Investment Grade Louisiana
Smaller Companies Fund Mutual Discovery Fund Income Fund Maryland
Templeton Greater European Fund Franklin Short-Intermediate Massachusetts***
Templeton Growth Fund GROWTH AND INCOME U.S. Government Securities Fund Michigan*
Templeton Latin America Fund Franklin Asset Allocation Fund Franklin U.S. Government Minnesota***
Templeton Pacific Growth Fund Franklin Balance Sheet Securities Fund Missouri
Templeton World Fund Investment Fund Franklin Money Fund New Jersey
Franklin Convertible Franklin Federal Money Fund New York*
GLOBAL GROWTH AND INCOME Securities Fund North Carolina
Franklin Global Utilities Fund Franklin Equity Income Fund Ohio***
Franklin Templeton German Franklin Income Fund For Corporations Oregon
Government Bond Fund Franklin MicroCap Value Fund Franklin Corporate Qualified Pennsylvania
Franklin Templeton Global Franklin Natural Resources Fund Dividend Fund Tennessee**
Currency Fund Franklin Real Estate Texas
Mutual European Fund Securities Fund FRANKLIN FUNDS SEEKING Virginia
Templeton Global Bond Fund Franklin Rising Dividends Fund TAX-FREE INCOME Washington**
Templeton Growth and Franklin Strategic Income Fund Federal Intermediate-Term
Income Fund Franklin Utilities Fund Tax-Free Income Fund VARIABLE ANNUITIES+
Franklin Value Fund Federal Tax-Free Income Fund Franklin Valuemark(R)
GLOBAL INCOME Mutual Beacon Fund High Yield Tax-Free Income Fund Franklin Templeton
Franklin Global Government Mutual Qualified Fund Insured Tax-Free Income Fund Valuemark Income Plus
Income Fund Mutual Shares Fund Puerto Rico Tax-Free (an immediate annuity)
Franklin Templeton Hard Templeton American Trust, Inc. Income Fund
Currency Fund Tax-Exempt Money Fund
</TABLE>
*Two or more fund options available: long-term portfolio, intermediate-term
portfolio, a portfolio of insured municipal securities, and/or a high yield
portfolio (CA) and a money market portfolio (CA and NY).
**The fund may invest up to 100% of its assets in bonds that pay interest
subject to the federal alternative minimum tax.
***Portfolio of insured municipal securities.
+ Franklin Valuemark and Franklin Templeton Valuemark Income Plus are issued by
Allianz Life Insurance Company of North America or by its wholly owned
subsidiary, Preferred Life Insurance Company of New York, and distributed by
NALAC Financial Plans, LLC.
02/97.1
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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 risk factors, charges and expenses. Like any investment in securities,
the Fund's portfolio will be subject to the risk of loss from market, currency,
economic, political and other factors, as well as investment decisions by the
Investment Manager, which will not always be profitable or wise. The Fund and
Fund investors are not protected from such losses by the Investment Manager.
Therefore, investors who cannot accept the risk of such losses should not invest
in shares of the Fund.
To ensure the highest quality of service, telephone calls to or from our service
departments may be monitored, recorded and accessed. These calls can be
determined by the presence of a regular beeping tone.
711 S97 08/97
TL711 S97 [RECYCLING LOGO] Printed on recycled paper
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