TEMPLETON DEVELOPING
MARKETS TRUST
Semi Annual Report
June 30, 1999
[GRAPHIC OF BOOKS]
[FRANKLIN TEMPLETON LOGO]
PAGE
[FRANKLIN TEMPLETON CELEBRATING OVER 50 YEARS LOGO]
Thank you for investing with Franklin Templeton. We encourage our investors to
maintain a long-term perspective and remember that all securities markets move
both up and down, as do mutual fund share prices. We appreciate your past
support and look forward to serving your investment needs in the years ahead.
In 1992, Sir John Templeton retired after a 50-year career of helping investors
manage their money. Currently he devotes all of his time and efforts to the John
Templeton Foundation. A major portion of his assets remain invested in the
Templeton funds which are managed by many of the investment professionals he
selected and trained.
[PHOTO OF J. MARK MOBIUS]
J. Mark Mobius, Ph.D.
President
Templeton Developing
Markets Trust
Dr. Mobius has been living in emerging market countries since earning his Ph.D.
in economics and political science at Massachusetts Institute of Technology in
1964. During his extensive travels, he has acquired a thorough knowledge of
business practices and customs unique to developing nations.
PAGE
SHAREHOLDER LETTER
Your Fund's Goal: Templeton Developing Markets Trust seeks long-term capital
appreciation by investing, under normal market conditions, at least 65% of its
total assets in equity securities of developing or emerging market issuers.
Dear Shareholder:
We are pleased to bring you this semiannual report of Templeton Developing
Markets Trust covering the six months ended June 30, 1999. During this time,
most developing markets performed extremely well, and the Fund's Class A shares
delivered a +36.41% six-month cumulative total return, as shown in the
Performance Summary on page 6.
Initially, 1999 presented concerns for emerging market investors as attention
focused upon pressure on the Brazilian real and the growing flight of capital
from Brazil. In mid-January, Brazil's central bank allowed the real to float,
and within days, its value plummeted 43% against the U.S. dollar. Despite
speculation that such an event could lead to a global economic crisis, the
devaluation spurred many foreign investors to take advantage of bargain-priced
stocks in the region, and Latin American equity
You will find a complete listing of the Fund's portfolio holdings, including
dollar value and number of shares or principal amount, beginning on page 11 of
this report.
CONTENTS
Shareholder Letter ....................................................... 1
Performance Summary ...................................................... 5
Financial Highlights &
Statement of Investments ................................................. 7
Financial Statements ..................................................... 21
Notes to Financial
Statements ............................................................... 24
[FUND CATEGORY PYRAMID GRAPH]
PAGE
GEOGRAPHIC DISTRIBUTION
Based on Total Net Assets
6/30/99
[BAR CHART]
Asia 45.6%
Latin America 33.9%
Mid-East/Africa 11.0%
Europe 6.1%
New Zealand 0.1%
Short-Term Investments
& Other Net Assets 3.3%
markets rallied until mid-May. This positive market reaction encouraged Brazil's
government to implement other economic measures, which contributed to falling
interest rates and more stable currencies throughout Latin America.
At the same time that Latin America's economic situation was improving, the
outlook for developing Asian economies grew brighter. By March, a number of
countries in the region displayed signs of economic growth including lower
unemployment rates, shrinking trade surpluses and increased domestic spending,
which helped equity markets throughout Asia rebound from their 1997 and 1998
lows.
China was an anomaly among Asian markets during the reporting period. Despite
the strong performance of its equity market, the progress of China's economic
and market reform was jeopardized by the poor state of its relations with the
U.S. Accusations that China stole military secrets and hardware were broadcast
widely in the U.S.; the negotiation of China's entry into the World Trade
Organization was put on hold; and China expressed outrage after warplanes
representing the North Atlantic Treaty Organization (NATO) mistakenly bombed the
Chinese embassy in Yugoslavia.
During the period under review, Eastern European economies lagged those of most
other emerging markets. Russia's economy stalled as it suffered a chronic
reshuffling of government officials and attempted to negotiate a monetary rescue
package with the International Monetary Fund. And when NATO began bombing
Yugoslavia,
2
PAGE
concerns about the effects on regional trade dampened investor interest in the
region.
At the end of the reporting period, the Fund was invested in 31 countries, with
Mexico representing the largest country holding, followed by Brazil, South
Africa, Singapore and Thailand. The Fund's position in short-term investments
and other net assets remained small, and during the six months under review we
did not significantly restructure the portfolio. However, we sold all of the
Fund's holdings in several countries, including Sri Lanka, Croatia and Zimbabwe,
because we believed better bargains could be found elsewhere, and we initiated
positions in Austria, which we feel have the potential to benefit from ongoing
development of the European Union and the new euro. Our shares of Anglo American
PLC (South Africa) and Siam Cement Public Co. Ltd. (Thailand) rose in value,
lifting them into the Fund's top ten holdings, as rising commodity prices
generated investor enthusiasm for more cyclical industries.
Looking forward, we are optimistic about emerging market equities, even though
we believe they may be in for a bit of short-term volatility as new governments
form in Indonesia, Mexico and South Africa, and political struggles play out in
Pakistan, India and Korea. Although factors such as currency exchange and
inflation could put pressure on interest rates, we believe their impact may be
short lived, and that the overall long-term recovery and growth of emerging
market countries will be preserved.
Of course, investing in emerging market securities involves special
considerations, which may include risks related to market and currency
volatility, adverse social, economic and political develop-
TOP 10 HOLDINGS
6/30/99
COMPANY % OF TOTAL
INDUSTRY, COUNTRY NET ASSETS
----------------------------------------------------------------------------
Telefonos de Mexico
SA (Telmex), ADR
Telecommunications, Mexico 3.9%
Cemex SA
Building Materials &
Components, Mexico 3.5%
Korea Electric Power Corp.
Utilities Electrical & Gas,
South Korea 2.3%
Thai Farmers Bank
Public Co. Ltd.
Banking, Thailand 2.2%
Electricidad de Caracas
SAICA SAICA, ADR
Utilities Electrical & Gas,
Venezuela 2.1%
Compania de
Telecomunicaciones de
Chile SA, ADR
Telecommunications, Chile 1.9%
Anglo American PLC
Metals & Mining, South Africa 1.9%
Akbank
Banking, Turkey 1.6%
Centrais Eletricas Brasileiras
SA (Electrobras)
Utilities Electrical & Gas, Brazil 1.5%
Siam Cement Public Co. Ltd.
Building Materials &
Components, Thailand 1.5%
3
PAGE
TOP 10 COUNTRIES
6/30/99
% OF TOTAL
Country NET ASSETS
-----------------------------------------------------------------------------
Mexico 11.4%
Brazil 10.3%
South Africa 10.2%
Singapore 8.9%
Thailand 8.1%
South Korea 7.7%
Indonesia 5.2%
Hong Kong* 4.6%
Argentina 4.3%
Malaysia 3.9%
* Hong Kong reverted to the sovereignty of China on July 1, 1997.
ments and the relatively small size and lesser liquidity of these markets.
Investing in any emerging market means accepting a certain amount of volatility
and, in some cases, the consequences of severe market corrections. For example,
Mexico's equity market has increased 3,760% in the last 15 years, but has
suffered 8 quarterly declines of more than 15% during that time.(2) While
short-term volatility can be disconcerting, declines of more than 50% are not
unusual in emerging markets. These special risks and other considerations are
discussed in the Fund's prospectus.
Please remember, this discussion reflects our views, opinions and portfolio
holdings as of June 30, 1999, the end of the reporting period. However, market
and economic conditions are changing constantly, which can be expected to affect
our strategies and the Fund's portfolio composition. Although past performance
is not predictive of future results, these insights may help you understand our
investment and management philosophy.
Thank you for investing in Templeton Developing Markets Trust. We appreciate
your support and welcome your comments.
Sincerely,
/s/J. MARK MOBIUS
- -----------------------------------
J. Mark Mobius, Ph.D.
President
Templeton Developing Markets Trust
(2). Source: Mexico Bolsa Index. Based on quarterly percentage price change over
15 years ended June 30, 1999. Market return is measured in U.S. dollar terms and
does not include reinvested dividends.
4
PAGE
PERFORMANCE SUMMARY AS OF 6/30/99
Distributions will vary based on earnings of the Fund's portfolio and any
profits realized from the sale of the portfolio's securities, as well as the
level of each class' operating expenses. Past distributions are not indicative
of future trends. All total returns include reinvested distributions at net
asset value.
PRICE AND DISTRIBUTION INFORMATION
CLASS A CHANGE 6/30/99 12/31/98
- ------------------------------------------------------------------------------
Net Asset Value +$3.75 $14.05 $10.30
CLASS B CHANGE 6/30/99 1/1/99
- ------------------------------------------------------------------------------
Net Asset Value +$3.68 $13.98 $10.30
CLASS C CHANGE 6/30/99 12/31/98
- ------------------------------------------------------------------------------
Net Asset Value +$3.66 $13.87 $10.21
ADVISOR CLASS CHANGE 6/30/99 12/31/98
- ------------------------------------------------------------------------------
Net Asset Value +$3.76 $14.04 $10.28
Templeton Developing Markets Trust paid no distributions during the reporting
period.
CLASS A (formerly Class I):
Subject to the current, maximum 5.75% initial sales charge. On January 1, 1993,
the Fund's Class A shares implemented a Rule 12b-1 Plan, which affects
subsequent performance. Past expense reductions by the Fund's Manager increased
the Fund's total returns. Without this reduction, the Fund's total returns would
have been lower.
CLASS B:
Subject to no initial sales charge, but subject to a contingent deferred sales
charge (CDSC) declining from 4% to 0% over six years. These shares have higher
annual fees and expenses than Class A shares.
CLASS C (formerly Class II):
Subject to 1% initial sales charge and 1% CDSC for shares redeemed within 18
months of investment. These shares have higher annual fees and expenses than
Class A shares.
Advisor Class:
No initial sales charge or Rule 12b-1 fees and are available to a limited class
of investors.
Past performance is not predictive of future results.
5
PAGE
(1). Cumulative total return represents the change in value of an investment
over the periods indicated and does not include sales charges.
(2). Average annual total return represents the average annual change in value
of an investment over the periods indicated and includes the current,
applicable, maximum sales charge(s) for that class. Six-month return has not
been annualized. Since Class B shares have existed for less than one year,
aggregate total return for that class represents total return since inception,
including the maximum sales charge.
(3). These figures represent the value of a hypothetical $10,000 investment in
the Fund over the periods indicated and include the current, applicable, maximum
sales charge(s) for that class.
(4). One-year total return represents the change in value of an investment over
the one-year periods ended on the specified dates and does not include sales
charges.
(5). On January 2, 1997, the Fund began selling Advisor Class shares to certain
eligible investors as described in the prospectus. This share class does not
have sales charges or a Rule 12b-1 plan. Performance quotations have been
calculated as follows: (a) For periods prior to January 2, 1997, figures reflect
Class A performance, excluding the effect of the Class A sales charge, but
including the effect of Rule 12b-1 fees and other Class A expenses; and (b) for
periods after January 1, 1997, figures reflect actual Advisor Class performance,
including the deduction of all fees and expenses applicable only to that class.
Since January 2, 1997 (commencement of sales), the cumulative and average annual
total returns of Advisor Class shares were +0.93% and +0.37%, respectively.
Since markets can go down as well as up, investment return and principal value
will fluctuate with market conditions, currency volatility and the social,
economic and political climates of countries where the Fund invests. Emerging
markets involve heightened risks related to the same factors, in addition to
those associated with their relatively small size and lesser liquidity. You may
have a gain or loss when you sell your shares.
PERFORMANCE
INCEPTION
CLASS A 6-MONTH 1-YEAR 5-YEAR (10/17/91)
- -------------------------------------------------------------------------------
Cumulative Total Return(1) +36.41% +34.48% +24.90% +78.41%
Average Annual Total Return(2) +28.55% +26.70% +3.31% +6.98%
Value of $10,000 Investment(3) $12,855 $12,670 $11,769 $16,816
6/30/95 6/30/96 6/30/97 6/30/98 6/30/99
- -------------------------------------------------------------------------------
One-Year
Total Return(4) +3.07% +14.13% +27.00% -37.83% +34.48%
INCEPTION
CLASS B 6-MONTH (1/1/99)
- -------------------------------------------------------------------------------
Cumulative Total Return(1) +35.73% +35.73%
Aggregate Total Return(2) +31.73% +31.73%
Value of $10,000 Investment(3) $13,173 $13,173
INCEPTION
CLASS C 6-MONTH 1-YEAR 3-YEAR (5/1/95)
- -------------------------------------------------------------------------------
Cumulative Total Return(1) +35.85% +33.52% +4.02% +22.11%
Average Annual Total Return(2) +33.64% +31.14% +0.99% +4.66%
Value of $10,000 Investment(3) $13,364 $13,114 $10,299 $12,091
6/30/96 6/30/97 6/30/98 6/30/99
- -------------------------------------------------------------------------------
One-Year
Total Return(4) +13.24% +26.04% -38.19% +33.52%
INCEPTION
ADVISOR CLASS(5) 6-MONTH 1-YEAR 5-YEAR (10/17/91)
- -------------------------------------------------------------------------------
Cumulative Total Return(1) +36.58% +34.95% +25.51% +79.29%
Average Annual Total Return(2) +36.58% +34.95% +4.65% +7.87%
Value of $10,000 Investment(3) $13,658 $13,495 $12,551 $17,929
6/30/95 6/30/96 6/30/97 6/30/98 6/30/99
- -------------------------------------------------------------------------------
One-Year
Total Return(4) +3.07% +14.13% +27.13% -37.69% +34.95%
Past performance is not predictive of future results.
6
PAGE
TEMPLETON DEVELOPING MARKETS TRUST
Financial Highlights
<TABLE>
<CAPTION>
CLASS A
-----------------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 1999 ------------------------------------------------------------------
(UNAUDITED)+ 1998 1997 1996 1995 1994
-----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
(For a share outstanding throughout
the period)
Net asset value, beginning of
period.............................. $10.30 $12.94 $15.40 $13.01 $13.42 $15.27
-----------------------------------------------------------------------------------
Income from investment operations:
Net investment income................ .06 .17 .16 .16 .21 .14
Net realized and unrealized gains
(losses)........................... 3.69 (2.57) (1.62) 2.75 (.18) (1.44)
-----------------------------------------------------------------------------------
Total from investment operations...... 3.75 (2.40) (1.46) 2.91 .03 (1.30)
-----------------------------------------------------------------------------------
Less distributions from:
Net investment income................ -- (.19) (.16) (.17) (.20) (.12)
In excess of net investment income... -- -- -- (.01) -- --
Net realized gains................... -- (.05) (.53) (.34) (.24) (.43)
In excess of net realized gains...... -- -- (.31) -- -- --
-----------------------------------------------------------------------------------
Total distributions................... -- (.24) (1.00) (.52) (.44) (.55)
-----------------------------------------------------------------------------------
Net asset value, end of period........ $14.05 $10.30 $12.94 $15.40 $13.01 $13.42
===================================================================================
Total Return*......................... 36.41% (18.72)% (9.41)% 22.51% .36% (8.64)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's)..... $2,867,695 $2,172,954 $3,444,029 $3,308,753 $2,147,664 $2,009,154
Ratios to average net assets:
Expenses............................. 2.16%** 2.11% 1.96% 2.03% 2.10% 2.11%
Net investment income................ 1.01%** 1.40% .99% 1.16% 1.66% 1.08%
Portfolio turnover rate............... 20.33% 37.51% 30.06% 12.47% 9.76% 18.57%
</TABLE>
*Total return does not reflect sales commissions and is not annualized.
**Annualized.
+Based on average weighted shares outstanding.
7
PAGE
TEMPLETON DEVELOPING MARKETS TRUST
Financial Highlights (continued)
<TABLE>
<CAPTION>
CLASS B
-------------
PERIOD ENDED
JUNE 30, 1999
(unaudited)+
-------------
<S> <C>
PER SHARE OPERATING PERFORMANCE
(For a share outstanding throughout the period)
Net asset value, beginning of period........................ $10.30
------
Income from investment operations:
Net investment income...................................... .02
Net realized and unrealized gains.......................... 3.66
-------------
Total from investment operations............................ 3.68
-------------
Net asset value, end of period.............................. $13.98
=============
Total Return*............................................... 35.73%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's)........................... $5,965
Ratios to average net assets:
Expenses................................................... 2.88%**
Net investment income...................................... .36%**
Portfolio turnover rate..................................... 20.33%
</TABLE>
* Total return does not reflect the contingent deferred sales charge and is not
annualized.
** Annualized.
+ Effective date of Class B shares was January 1, 1999. Based on average
weighted shares outstanding.
8
PAGE
TEMPLETON DEVELOPING MARKETS TRUST
Financial Highlights (continued)
<TABLE>
<CAPTION>
CLASS C
--------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 1999 -------------------------------------------------
(UNAUDITED)+ 1998 1997 1996 1995++
-------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
(For a share outstanding throughout the period)
Net asset value, beginning of period............... $10.21 $12.81 $15.27 $12.95 $13.10
--------------------------------------------------------------------
Income from investment operations:
Net investment income............................. .01 .07 .09 .17 .02
Net realized and unrealized gains (losses)........ 3.65 (2.51) (1.64) 2.60 .19
--------------------------------------------------------------------
Total from investment operations................... 3.66 (2.44) (1.55) 2.77 .21
--------------------------------------------------------------------
Less distributions from:
Net investment income............................. -- (.11) (.07) (.10) (.18)
In excess of net investment income................ -- -- -- (.01) --
Net realized gains................................ -- (.05) (.53) (.34) (.18)
In excess of net realized gains................... -- -- (.31) -- --
--------------------------------------------------------------------
Total distributions................................ -- (.16) (.91) (.45) (.36)
--------------------------------------------------------------------
Net asset value, end of period..................... $13.87 $10.21 $12.81 $15.27 $12.95
====================================================================
Total Return*...................................... 35.85% (19.20)% (10.10)% 21.58% 1.70%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's).................. $368,179 $294,588 $404,542 $226,629 $41,012
Ratios to average net assets:
Expenses.......................................... 2.83%** 2.78% 2.69% 2.74% 2.73%**
Net investment income............................. .24%** .76% .21% .33% .19%**
Portfolio turnover rate............................ 20.33% 37.51% 30.06% 12.47% 9.76%
</TABLE>
* Total return does not reflect sales commissions or the contingent deferred
sales charge and is not annualized.
** Annualized.
+ Based on average weighted shares outstanding.
++ For the period May 1, 1995 (effective date) to December 31, 1995.
9
PAGE
TEMPLETON DEVELOPING MARKETS TRUST
Financial Highlights (continued)
<TABLE>
<CAPTION>
ADVISOR CLASS
---------------------------------------
SIX MONTHS YEAR ENDED
ENDED DECEMBER 31,
JUNE 30, 1999 ----------------------
(UNAUDITED)++ 1998 1997+
---------------------------------------
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
(For a share outstanding throughout the period)
Net asset value, beginning of period........................ $10.28 $12.93 $15.43
---------------------------------------
Income from investment operations:
Net investment income...................................... .07 .23 .17
Net realized and unrealized gains (losses)................. 3.69 (2.60) (1.63)
---------------------------------------
Total from investment operations............................ 3.76 (2.37) (1.46)
---------------------------------------
Less distributions from:
Net investment income...................................... -- (.23) (.20)
Net realized gains......................................... -- (.05) (.53)
In excess of net realized gains............................ -- -- (.31)
---------------------------------------
Total distributions......................................... -- (.28) (1.04)
---------------------------------------
Net asset value, end of period.............................. $14.04 $10.28 $12.93
=======================================
Total Return*............................................... 36.58% (18.47)% (9.36)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's)........................... $161,412 $115,494 $98,101
Ratios to average net assets:
Expenses................................................... 1.84%** 1.78% 1.69%**
Net investment income...................................... 1.32%** 1.82% 1.04%**
Portfolio turnover rate..................................... 20.33% 37.51% 30.06%
</TABLE>
* Total return is not annualized.
** Annualized.
+ Effective date of Advisor Class shares was January 1, 1997. Based on average
weighted shares outstanding.
++ Based on average weighted shares outstanding.
See Notes to Financial Statements.
10
PAGE
TEMPLETON DEVELOPING MARKETS TRUST
STATEMENT OF INVESTMENTS, JUNE 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
INDUSTRY SHARES VALUE
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
LONG TERM SECURITIES 96.7%
ARGENTINA 4.3%
*Atanor Cia Nacional Para la Industria Quimica SA,
D............................................... Chemicals 1,903,372 $ 932,746
Banco de Galicia y Buenos Aires SA de CV, B....... Banking 989,358 5,075,914
Banco Frances SA.................................. Banking 1,385,000 9,003,400
*Banco Frances SA, new............................ Banking 170,684 1,092,487
*Buenos Aires Embotelladora SA, B, ADR............ Beverages & Tobacco 746,000 46,998
*Capex SA, A...................................... Utilities Electrical & Gas 217,604 1,268,758
*Molinos Rio de la Plata SA, B.................... Food & Household Products 6,622,464 11,126,852
Nobleza Piccardo Sdad Industrial Comercial y
Financial....................................... Beverages & Tobacco 452,079 1,492,010
Perez Companc SA, B............................... Energy Sources 7,289,779 41,920,421
Quilmes Industrial SA, ADR........................ Beverages & Tobacco 1,326,200 16,411,725
*Sociedad Comercial del Plata Cadelplata Come..... Multi-Industry 5,526,210 2,122,277
Telecom Argentina Stet-France SA, ADR............. Telecommunications 872,100 23,328,675
Telefonica de Argentina SA, ADR................... Telecommunications 903,560 28,349,195
Transportadora de Gas del Sur SA, ADR............. Utilities Electrical & Gas 600,700 5,631,563
--------------
147,803,021
--------------
AUSTRIA 1.1%
Austria Tabak AG.................................. Beverages & Tobacco 147,608 8,600,445
Bank Austria AG................................... Banking 343,050 18,042,230
OMV AG............................................ Energy Sources 106,800 9,525,763
--------------
36,168,438
--------------
BRAZIL 10.3%
Aracruz Celulose SA, ADR.......................... Forest Products & Paper 1,585,900 34,889,800
Banco Bradesco SA................................. Banking 741,198,851 2,960,563
Banco Bradesco SA, pfd. .......................... Banking 1,206,333,077 6,195,148
Banco do Brasil SA................................ Banking 947,469,792 3,784,469
Brasmotor SA, pfd. ............................... Multi-Industry 35,826,231 2,859,966
Centrais Eletricas Brasileiras SA (Electrobras)... Utilities Electrical & Gas 284,553,000 5,423,150
Centrais Eletricas Brasileiras SA (Electrobras),
B, pfd. ........................................ Utilities Electrical & Gas 2,277,402,470 46,392,735
Centrais Geradoras Do Sul Do Brasil SA, B,
pfd. ........................................... Utilities Electrical & Gas 2,380,068,470 1,928,500
Cia Cervejaria Brahma............................. Beverages & Tobacco 1,750,000 693,000
Cia Cervejaria Brahma, pfd. ...................... Beverages & Tobacco 12,576,000 7,168,858
Cia Energetica de Minas Gerais Cemig, Br.,
pfd. ........................................... Utilities Electrical & Gas 887,907,000 18,751,177
*Cia Mesbla SA, pfd. ............................. Merchandising 73,017,000 314,150
Cia Vale do Rio Doce, A, pfd. .................... Metals & Mining 1,143,777 22,712,376
Copene-Petroquimica do Nordeste SA, A, pfd. ...... Chemicals 33,816,844 5,306,495
+Duratex SA, pfd. ................................ Forest Products & Paper 445,097,800 11,937,002
Embratel Participacoes SA, pfd. .................. Telecommunications 403,723,973 5,667,110
Investimentos Itau SA............................. Multi-Industry 2,810,432 1,502,912
*Investimentos Itau SA, pfd. ..................... Multi-Industry 69,075,179 37,050,310
*Mannesmann SA.................................... Machinery & Engineering 21,720,874 1,607,531
*Mannesmann SA, pfd. ............................. Machinery & Engineering 4,701,562 355,468
Petroleo Brasileiro SA, pfd. ..................... Energy Sources 107,193,333 16,820,637
Tele Celular Sul Participacoes SA, pfd. .......... Telecommunications 403,723,973 863,889
Tele Centro Oeste Celular Participacoes SA,
pfd. ........................................... Telecommunications 153,023,973 194,718
</TABLE>
11
PAGE
TEMPLETON DEVELOPING MARKETS TRUST
STATEMENT OF INVESTMENTS, JUNE 30, 1999 (UNAUDITED) (CONT.)
<TABLE>
<CAPTION>
INDUSTRY SHARES VALUE
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
LONG TERM SECURITIES (CONT.)
BRAZIL (CONT.)
Tele Centro Sul Participacoes SA, pfd. ........... Telecommunications 1,381,900,973 $ 15,368,474
Tele Leste Celular Participacoes SA, pfd. ........ Telecommunications 403,723,973 241,889
Tele Nordeste Celular Participacoes SA, pfd. ..... Telecommunications 403,723,973 557,496
Tele Norte Celular Participacoes SA, pfd. ........ Telecommunications 403,723,973 230,370
Tele Norte Leste Participacoes SA, pfd. .......... Telecommunications 1,075,308,973 19,757,458
Tele Sudeste Celular Participacoes SA, pfd. ...... Telecommunications 3,355,697,973 19,243,803
Telemig Celular Participacoes SA, pfd. ........... Telecommunications 403,723,973 513,726
Telesp Celular Participacoes SA, pfd. ............ Telecommunications 403,723,973 4,284,888
Telesp Participacoes SA, ADR, pfd. ............... Telecommunications 1,781,100 40,742,663
Telesp Participacoes SA, pfd. .................... Telecommunications 403,723,973 9,560,368
Unibanco Uniao de Bancos Brasileiros SA........... Banking 119,331,186 5,447,358
--------------
351,328,457
--------------
CHILE 3.3%
Antofagasta Holdings PLC.......................... Metals & Mining 811,668 3,774,188
Cia Cervecerias Unidas SA, ADR.................... Beverages & Tobacco 106,450 3,047,131
Compania de Telecomunicaciones de Chile SA, ADR... Telecommunications 2,543,909 62,961,748
Empresa Nacional de Electricidad SA, ADR.......... Electrical & Electronics 1,727,138 20,941,548
Enersis SA, ADR................................... Utilities Electrical & Gas 585,162 13,385,581
Madeco Manufacturera de Cobre SA, ADR............. Industrial Components 81,500 825,188
Quinenco SA, ADR.................................. Multi-Industry 755,400 7,081,875
--------------
112,017,259
--------------
CHINA .8%
China Resources Enterprises Ltd. ................. Multi-Industry 1,100,000 1,942,298
*China Telecommunications Ltd. ................... Telecommunications 1,894,000 5,260,535
China Vanke Co. Ltd., B........................... Real Estate 10,732,503 7,206,782
Guangshen Railway Co. Ltd., H..................... Transportation 7,812,000 1,198,152
Guangshen Railway Co. Ltd., H, ADR................ Transportation 399,300 3,044,663
Shandong Huaneng Power Development Co. Ltd.,
ADR............................................. Utilities Electrical & Gas 641,500 3,327,781
*Shanghai Lujiaxui Finance & Trade Zn Dev Stock Co
Ltd, B.......................................... Real Estate 3,936,189 2,558,523
*Shanghai New Asia Group Co. Ltd., B.............. Food & Household Products 6,329,154 1,708,872
Shanghai Petrochemical Co. Ltd., H................ Chemicals 7,777,100 1,834,304
--------------
28,081,910
--------------
COLOMBIA .9%
Banco Ganadero SA, C, ADR, pfd. .................. Banking 92,300 709,556
Bavaria SA........................................ Beverages & Tobacco 360,712 1,339,743
Cementos Argos SA................................. Building Materials & Components 3,457,564 8,977,535
Cia Colombiana de Tabacos SA...................... Beverages & Tobacco 2,354,027 3,357,619
Compania Nacional de Chocolates SA................ Food & Household Products 1,971,120 5,634,181
Compania Suramericana de Inversiones SA........... Insurance 6,216,351 8,866,568
Promigas SA....................................... Utilities Electrical & Gas 40,156 148,000
--------------
29,033,202
--------------
</TABLE>
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INDUSTRY SHARES VALUE
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<S> <C> <C> <C>
LONG TERM SECURITIES (CONT.)
CZECH REPUBLIC 1.5%
*CEZ AS........................................... Utilities Electrical & Gas 11,288,628 $ 23,233,564
*SPT Telecom AS................................... Telecommunications 1,348,428 21,891,954
Tabak AS.......................................... Beverages & Tobacco 13,786 3,283,499
Unipetrol......................................... Chemicals 1,349,173 2,562,303
--------------
50,971,320
--------------
ECUADOR
La Cemento Nacional CA, GDR, 144A................. Multi-Industry 4,510 324,720
La Cemento Nacional SA, GDR, Reg S................ Multi-Industry 14,400 1,036,800
--------------
1,361,520
--------------
EGYPT .2%
Commercial International Bank Ltd. ............... Banking 124,332 1,116,580
Eastern Tobacco Co. .............................. Beverages & Tobacco 180,861 4,405,337
--------------
5,521,917
--------------
GHANA
Ashanti Goldfields Co. Ltd., GDR.................. Metals & Mining 178,335 1,237,199
--------------
HONG KONG 4.6%
CDL Hotel International Ltd. ..................... Leisure & Tourism 19,160 8,026
Cheung Kong Holdings Ltd. ........................ Multi-Industry 4,666,000 41,495,067
Citic Pacific Ltd. ............................... Multi-Industry 2,085,000 6,650,953
Dairy Farm International Holdings Ltd. ........... Merchandising 11,703,116 14,043,739
Hang Lung Development Co. Ltd. ................... Real Estate 10,519,000 13,015,125
Hong Kong Land Holdings Ltd. ..................... Real Estate 51,000 82,620
HSBC Holdings PLC................................. Banking 1,084,591 39,559,890
Jardine Matheson Holdings Ltd. ................... Multi-Industry 1,908,926 9,544,630
Jardine Strategic Holdings Ltd. .................. Multi-Industry 1,921,687 4,996,386
New World Development Co. Ltd. ................... Real Estate 8,647,589 25,913,176
Wheelock and Company Ltd. ........................ Multi-Industry 1,129,231 1,550,012
--------------
156,859,624
--------------
HUNGARY 1.5%
Borsodchem RT..................................... Chemicals 340,681 8,265,556
Egis RT........................................... Multi-Industry 91,638 2,193,584
*Fotex First Hungarian American Photo Service
Co. ............................................ Multi-Industry 2,872,088 1,092,410
**Fotex First Hungarian American Photo Service
Co., cvt., 12.00%, 5/11/00...................... Multi-Industry 32,000 32,000
Gedeon Richter Ltd. .............................. Health & Personal Care 202,757 8,822,629
Matav RT.......................................... Telecommunications 456,396 2,468,025
Mol Magyar Olay-Es Gazipari RT.................... Energy Sources 566,000 13,642,219
+Tiszai Vegyi Kombinat RT......................... Chemicals 1,250,308 13,077,887
--------------
49,594,310
--------------
</TABLE>
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STATEMENT OF INVESTMENTS, JUNE 30, 1999 (UNAUDITED) (CONT.)
<TABLE>
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INDUSTRY SHARES VALUE
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
LONG TERM SECURITIES (CONT.)
INDIA .9%
Arvind Mills Ltd. ................................ Textiles & Apparel 50 $ 42
Bharat Petroleum Corp. Ltd. ...................... Energy Sources 635,927 3,857,103
Bombay Dyeing & Manufacturing Co. Ltd. ........... Chemicals 30 32
Cochin Refineries Ltd............................. Energy Sources 50 167
*Grasim Industries Ltd. .......................... Multi-Industry 1,904 9,726
*Great Eastern Shipping Co. Ltd. ................. Transportation 2,180 1,222
Gujarat Ambuja Cements Ltd. ...................... Building Materials & Components 447,525 3,302,672
Hindustan Petroleum Corp. Ltd. ................... Energy Sources 696,000 3,748,597
ICICI Ltd. ....................................... Financial Services 50 85
Indian Aluminium Co. Ltd. ........................ Metals & Mining 246,300 347,911
Indian Petrochemicals Corp. Ltd. ................. Chemicals 200 473
INDO Gulf Corp. Ltd. ............................. Chemicals 100 122
Larsen & Toubro Ltd. ............................. Multi-Industry 1,681,493 11,110,098
Mahanagar Telephone Nigam Ltd. ................... Telecommunications 378,920 1,625,394
*National Aluminum Co. Ltd. ...................... Metals & Mining 100 100
**National Aluminum Co Ltd., 14.50%, 3/08/05...... Metals & Mining 17,183,000 INR 418,602
Reliance Industries Ltd. ......................... Chemicals 1,161,000 4,731,153
*Sterlite Industries Ltd. ........................ Metals & Mining 210 1,167
*Tata Chemicals Ltd. ............................. Chemicals 150 268
Tata Engineering & Locomotive Co. ................ Machinery & Engineering 330 1,562
Tata Iron & Steel Co., Ltd. ...................... Metals & Mining 500 1,614
--------------
29,158,110
--------------
INDONESIA 5.2%
*Asia Pulp & Paper Co. Ltd., ADR.................. Forest Products & Paper 1,938,500 18,658,063
*Asia Pulp & Paper Co. Ltd., wts. ................ Forest Products & Paper 455,480 1,195,635
*PT Barito Pacific Timber TBK..................... Forest Products & Paper 47,707,500 5,196,895
PT Gudang Garamm.................................. Beverages & Tobacco 2,254,500 6,123,333
*PT Indah Kiat Pulp & Paper Corp. ................ Forest Products & Paper 66,951,550 31,117,641
*PT Indocement Tunggal Prakarsa................... Building Materials & Components 17,097,500 8,753,622
*PT Indofoods Sukses Makmurr...................... Food & Household Products 10,080,480 13,762,747
PT Indosat........................................ Telecommunications 3,076,000 5,897,342
PT Semen Gresik (Persero)......................... Building Materials & Components 7,121,263 15,514,734
*PT Sinar Mas Agro Resources & Technology
Corp. .......................................... Food & Household Products 7,221,400 6,450,488
PT Tambang Timah.................................. Metals & Mining 12,430,500 10,832,680
PT Telekomunikasi Indonesia (Persero), B.......... Telecommunications 78,802,360 45,782,054
PT Tempo Scan Pacific............................. Health & Personal Care 535,000 223,402
*PT Tjiwi Kimia................................... Forest Products & Paper 16,142,330 6,213,097
--------------
175,721,733
--------------
ISRAEL .6%
*Bank Hapoalim BM................................. Banking 900,500 2,310,190
*Formula Systems Ltd. ............................ Data Processing & Reproduction 167,060 5,071,037
Koor Industries Ltd. ............................. Multi-Industry 100,827 11,625,198
--------------
19,006,425
--------------
</TABLE>
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- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
LONG TERM SECURITIES (CONT.)
MALAYSIA 3.9%
Boustead Holdings Bhd. ........................... Food & Household Products 4,683,000 $ 4,263,995
Federal Flour Mills Bhd. ......................... Food & Household Products 2,447,250 2,318,447
Genting Bhd. ..................................... Leisure & Tourism 5,422,000 20,689,211
Golden Hope Plantations Bhd. ..................... Misc Materials & Commodities 955,000 819,289
Hong Leong Industries Bhd. ....................... Multi-Industry 5,454,800 6,430,922
Island & Peninsula Bhd. .......................... Real Estate 3,963,000 3,879,568
Kian Joo Can Factory Bhd. ........................ Industrial Components 1,245,000 2,260,658
*Leader Universal Holdings Bhd. .................. Industrial Components 18,134,000 7,587,647
Malayawata Steel Bhd. ............................ Metals & Mining 4,539,000 1,815,600
Malaysian Airlines System Bhd. ................... Transportation 6,783,000 9,282,000
Malaysian International Shipping Corp., fgn. ..... Transportation 2,311,000 4,226,697
Oriental Holdings Bhd. ........................... Automobiles 3,345,598 9,156,373
Perlis Plantations Bhd. .......................... Multi-Industry 6,470,250 7,559,976
Perusahaan Otomobil Nasional Bhd. ................ Automobiles 1,335,000 3,091,579
Public Bank Bhd. ................................. Banking 1,207,000 917,955
Public Bank Bhd., fgn. ........................... Banking 3,400,600 3,561,681
Resorts World Bhd. ............................... Leisure & Tourism 13,064,000 30,769,158
Shangri La Hotels (Malaysia) Bhd. ................ Leisure & Tourism 4,237,202 1,549,924
Tanjong PLC....................................... Recreation & Other Consumer Goods 3,316,000 8,246,368
Technology Resources Industries Bhd. ............. Multi-Industry 1,811,000 1,477,395
YTL Corp. Bhd. ................................... Construction & Housing 654,000 1,376,842
--------------
131,281,285
--------------
MEXICO 11.4%
Cemex SA.......................................... Building Materials & Components 999,802 4,958,975
Cemex SA, B....................................... Building Materials & Components 22,774,750 113,569,762
*Cifra SA de CV, V................................ Merchandising 13,559,336 27,220,023
*Coca Cola Femsa SA de CV, L, ADR................. Beverages & Tobacco 790,100 15,308,188
DESC SA de CV DESC, A............................. Multi-Industry 1,848,000 1,943,705
DESC SA de CV DESC, B............................. Multi-Industry 8,993,370 9,891,267
DESC SA de CV DESC, C............................. Multi-Industry 910,675 1,021,045
Fomento Economico Mexicano SA De Cv Femsa......... Beverages & Tobacco 134,500 5,363,188
Grupo Financiero Banamex Accival Sa De CV......... Banking 16,128,571 41,333,231
*Grupo Financiero Bancomer SA De CV............... Banking 29,830,687 10,862,001
Panamerican Beverages Inc., A..................... Food & Household Products 625,200 14,887,575
Telefonos de Mexico SA (Telmex), ADR.............. Telecommunications 1,641,500 132,653,707
Vitro SA De CV, A................................. Food & Household Products 6,039,888 10,422,273
--------------
389,434,940
--------------
NEW ZEALAND .1%
Brierley Investments Ltd. ........................ Multi-Industry 9,167,000 2,574,522
--------------
</TABLE>
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STATEMENT OF INVESTMENTS, JUNE 30, 1999 (UNAUDITED) (CONT.)
<TABLE>
<CAPTION>
INDUSTRY SHARES VALUE
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
LONG TERM SECURITIES (CONT.)
PAKISTAN .4%
*Bank of Punjab................................... Banking 753,675 $ 193,531
Engro Chemical Pakistan Ltd. ..................... Chemicals 2,344,832 3,294,580
Pakistan Telecommunications Corp., A.............. Telecommunications 25,384,300 9,765,084
--------------
13,253,195
--------------
PERU .9%
Telefonica Del Peru SA, ADR....................... Telecommunications 2,031,100 30,720,388
--------------
PHILIPPINES 2.1%
*A Soriano Corp. ................................. Multi-Industry 99,757,903 2,883,934
Ayala Corp. ...................................... Multi-Industry 8,204,784 2,695,396
*Belle Corp. ..................................... Real Estate 52,363,000 5,573,460
Petron Corp. ..................................... Energy Sources 13,670,000 1,455,020
Philippine Commercial International Bank Inc. .... Banking 558,210 3,814,313
Philippine Long Distance Telephone Co., ADR....... Telecommunications 1,303,150 39,257,394
*Philippine National Bank......................... Banking 1,473,128 3,987,705
RFM Corp. ........................................ Food & Household Products 32,895,068 4,192,932
San Miguel Corp., B............................... Food & Household Products 3,881,400 8,466,654
*Southeast Asia Cement Holdings Inc. ............. Building Materials & Components 3,132,228 45,275
--------------
72,372,083
--------------
POLAND .8%
Bank Rozwoju Eksportu SA.......................... Banking 19,600 616,949
Bank Slaski SA W Katowicach....................... Banking 76,538 3,745,456
Elektrim SA....................................... Multi-Industry 124,200 1,756,875
*Impexmetal SA.................................... Metals & Mining 290,016 1,330,518
Mostostal Export SA............................... Construction & Housing 1,069,900 1,349,816
*Prokom Software SA............................... Data Processing & Reproduction 52,400 1,742,883
Telekomunikacja Polska SA......................... Telecommunications 1,230,074 8,621,648
Warta SA.......................................... Insurance 234,936 4,610,698
Wielkopolski Bank Kredytowy SA.................... Banking 300,655 1,762,474
--------------
25,537,317
--------------
RUSSIA 1.2%
*Aeroflot - Russia International Airlines......... Transportation 9,090,900 1,218,181
GAZ Auto Works.................................... Automobiles 19,960 703,390
*GUM Trade House.................................. Merchandising 500,000 390,000
Irkutskenergo..................................... Utilities Electrical & Gas 6,179,100 629,032
Irkutskenergo, ADR................................ Utilities Electrical & Gas 96,950 493,476
Krasnoyarsk Aluminum Plant........................ Metals & Mining 63,192 388,903
Lukoil Holdings................................... Energy Sources 141,000 1,395,900
Lukoil Holdings, ADR.............................. Energy Sources 106,580 4,220,568
Mosenergo......................................... Utilities Electrical & Gas 77,103,400 3,454,232
Mosenergo, ADR.................................... Utilities Electrical & Gas 45,700 205,650
*Norilsk Nickel................................... Metals & Mining 352,000 1,154,560
*Novorosissk Sea Shipping......................... Transportation 1,528,000 257,315
</TABLE>
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STATEMENT OF INVESTMENTS, JUNE 30, 1999 (UNAUDITED) (CONT.)
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INDUSTRY SHARES VALUE
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
LONG TERM SECURITIES (CONT.)
RUSSIA (CONT.)
Red October....................................... Food & Household Products 195,000 $ 1,345,500
*Rostelecom....................................... Telecommunications 4,236,000 6,692,880
*Rostelecom, ADR.................................. Telecommunications 217,760 2,136,770
*Rostelecom, pfd. ................................ Telecommunications 3,459,900 1,781,849
*Saint Petersburg City Telephone Network, A,
pfd. ........................................... Telecommunications 1,063,000 148,820
*Tyumen Aviatrans................................. Transportation 3,330,000 46,620
Unified Energy Systems............................ Utilities Electrical & Gas 69,337,400 6,067,023
Unified Energy Systems, ADR....................... Utilities Electrical & Gas 208,500 1,840,013
Unified Energy Systems, pfd. ..................... Utilities Electrical & Gas 13,160,000 536,928
*Vimpel Communications, ADR....................... Telecommunications 249,950 5,795,716
--------------
40,903,326
--------------
SINGAPORE 8.9%
Acma Ltd. ........................................ Electrical & Electronics 994,800 1,005,026
City Developments Ltd. ........................... Real Estate 3,402,000 21,780,793
Cycle & Carriage Ltd. ............................ Automobiles 1,497,000 8,617,093
Delgro Corp. ..................................... Transportation 926,900 2,232,182
Development Bank of Singapore Ltd., fgn. ......... Banking 4,000 48,869
First Capital Corp. Ltd. ......................... Real Estate 3,699,000 5,757,621
Fraser and Neave Ltd. ............................ Beverages & Tobacco 7,049,650 31,262,765
Hai Sun Hup Group Ltd. ........................... Transportation 12,048,000 7,147,419
Hong Leong Finance Ltd., fgn. .................... Financial Services 677,000 1,550,837
Inchcape Motors Ltd. ............................. Wholesale & International Trade 2,509,000 4,037,979
Jurong Shipyard Ltd. ............................. Machinery & Engineering 2,874,000 14,095,683
Keppel Corp., Ltd. ............................... Transportation 12,530,000 42,686,637
MCL Land Ltd. .................................... Real Estate 5,677,000 7,169,192
Metro Holdings Ltd. .............................. Wholesale & International Trade 1,884,000 2,965,709
Natsteel Ltd. .................................... Metals & Mining 10,677,000 18,688,670
*Neptune Orient Lines Ltd. ....................... Transportation 9,897,000 12,091,489
Overseas Chinese Banking Corp. Ltd., fgn. ........ Banking 3,350,000 27,941,263
Overseas Union Enterprise Ltd. ................... Leisure & Tourism 2,696,350 8,552,300
Sembcorp Industries Ltd. ......................... Multi-Industry 17,335,986 27,493,194
United Industrial Corporation Ltd. ............... Real Estate 36,848,000 24,889,985
United Overseas Bank Ltd., fgn. .................. Banking 4,129,000 28,860,558
United Overseas Land Ltd. ........................ Real Estate 4,528,000 5,106,467
--------------
303,981,731
--------------
SLOVAK REPUBLIC .2%
Nafta Gbely AS.................................... Utilities Electrical & Gas 118,216 1,560,891
*Slovnaft AS...................................... Chemicals 247,604 3,269,295
*Vychodoslovenske Zeleziarne AS................... Metals & Mining 134,435 550,875
--------------
5,381,061
--------------
SOUTH AFRICA 10.2%
Anglo American PLC................................ Metals & Mining 1,345,091 62,857,844
Barlow Ltd. ...................................... Multi-Industry 2,832,900 16,336,883
</TABLE>
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STATEMENT OF INVESTMENTS, JUNE 30, 1999 (UNAUDITED) (CONT.)
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<CAPTION>
INDUSTRY SHARES VALUE
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
LONG TERM SECURITIES (CONT.)
SOUTH AFRICA (CONT.)
CG Smith Ltd. .................................... Multi-Industry 11,335,700 $ 32,591,664
Comparex Holdings Ltd. ........................... Data Processing & Reproduction 47,000 295,965
De Beers/Centenary Linked Units................... Misc Materials & Commodities 1,313,900 31,483,957
Edgars Consolidated Stores Ltd. .................. Textiles & Apparel 567,363 4,409,533
Firstrand Ltd. ................................... Insurance 4,162,500 4,759,508
Iscor Ltd. ....................................... Metals & Mining 50,619,987 15,854,135
Kersaf Investments Ltd. .......................... Leisure & Tourism 15,000 67,114
*Liberty International PLC........................ Insurance 703,570 4,657,822
Liberty Life Association of Africa Ltd. .......... Insurance 1,673,830 21,441,223
Palabora Mining Co. Ltd. ......................... Metals & Mining 482,700 3,439,572
Rembrandt Group Ltd. ............................. Multi-Industry 2,504,870 20,879,105
Sappi Ltd. ....................................... Forest Products & Paper 4,114,279 30,135,244
Sasol Ltd. ....................................... Energy Sources 6,654,023 47,469,664
South African Breweries PLC....................... Beverages & Tobacco 5,065,698 43,987,501
Tongaat-Hulett Group Ltd. ........................ Multi-Industry 1,077,790 6,590,513
--------------
347,257,247
--------------
SOUTH KOREA 7.7%
*Cho Hung Bank Co. Ltd. .......................... Banking 288,600 1,618,155
*Cho Hung Bank Co. Ltd., GDR, Reg S............... Banking 108,000 605,340
*Daegu Bank Co. Ltd. ............................. Banking 904,291 4,031,224
*Daewoo Electronics Co. .......................... Electrical & Electronics 1,450,640 7,143,540
Hana Bank......................................... Banking 677,138 9,945,007
Hana Bank, GDR, Reg S............................. Banking 2,114,733 30,452,155
*Hotel Shilla Co. ................................ Leisure & Tourism 206,865 2,305,450
Korea Electric Power Corp. ....................... Utilities Electrical & Gas 1,859,510 77,272,079
LG Electronics Inc. .............................. Electrical & Electronics 1,015,752 28,081,265
Samsung Display Devices Ltd. ..................... Electrical & Electronics 635,646 34,596,715
Samsung Electronics Co. Ltd. ..................... Electrical & Electronics 332,612 36,493,930
*Samsung Heavy Industries Co. Ltd. ............... Machinery & Engineering 4,433,212 24,128,929
Shin Poong Paper Manufacturing Co. Ltd. .......... Forest Products & Paper 94,443 938,311
SK Corp........................................... Energy Sources 72,292 2,079,761
Ssangyong Oil Refining Co. Ltd. .................. Chemicals 145,910 3,781,685
--------------
263,473,546
--------------
THAILAND 8.1%
Advanced Info Service Public Co. Ltd., fgn. ...... Telecommunications 1,524,000 20,664,407
American Standard Sanitaryware Public Co. Ltd.,
fgn. ........................................... Building Materials & Components 361,200 1,812,122
Ayudhya Insurance Public Co. Ltd., fgn. .......... Insurance 217,100 700,607
*Bangkok Bank Public Co. Ltd. .................... Banking 17,134,112 37,404,638
*Bangkok Bank Public Co. Ltd., fgn. .............. Banking 2,616,996 9,793,775
*Bangkok Insurance Public Co. Ltd. ............... Insurance 119,120 449,022
BEC World Public Co Ltd., fgn. ................... Telecommunications 353,100 2,202,386
*Charoen Pokphand Feedmill Public Co. Ltd.,
fgn. ........................................... Food & Household Products 2,372,480 3,860,306
*Hana Microelectronics Co. Ltd., fgn. ............ Electrical & Electronics 1,524,700 4,589,605
Hua Thai Manufacturing Public Co. Ltd., fgn. ..... Textiles & Apparel 172,800 243,209
</TABLE>
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STATEMENT OF INVESTMENTS, JUNE 30, 1999 (UNAUDITED) (CONT.)
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INDUSTRY SHARES VALUE
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
LONG TERM SECURITIES (CONT.)
THAILAND (CONT.)
Industrial Finance Corp. of Thailand, fgn. ....... Financial Services 12,987,700 $ 8,276,907
Italian-Thai Development Public Co. Ltd., fgn. ... Construction & Housing 891,300 2,151,205
*Jasmine International Public Co. Ltd., fgn. ..... Telecommunications 7,847,500 5,479,949
*Land and House Public Co. Ltd., fgn. ............ Real Estate 65,600 119,192
Saha Pathanapibul Public Co. Ltd., fgn. .......... Food & Household Products 86,100 128,420
*Saha Union Public Co. Ltd. ...................... Multi-Industry 3,148,764 1,387,591
Saha Union Public Co. Ltd., fgn. ................. Multi-Industry 5,116,716 2,289,514
*Serm Suk Public Co. Ltd. ........................ Food & Household Products 622,900 2,888,567
*Siam Cement Public Co. Ltd. ..................... Building Materials & Components 1,432,750 26,887,132
Siam Cement Public Co. Ltd., fgn. ................ Building Materials & Components 776,750 23,592,136
*Siam Commercial Bank, 5.25%, cvt. pfd., 144A,
fgn. ........................................... Banking 468,000 666,305
Siam Makro Public Company Ltd., fgn. ............. Merchandising 4,356,200 8,293,023
*Telecomasia Corp. Public Co. Ltd., fgn. ......... Telecommunications 584,000 589,939
*Thai Airways International Public Co. Ltd.,
fgn. ........................................... Transportation 4,211,700 8,269,209
*Thai Farmers Bank Public Co. Ltd. ............... Banking 24,487,941 49,141,902
*Thai Farmers Bank Public Co. Ltd., fgn. ......... Banking 8,580,059 26,525,471
*Tipco Asphalt Public Co. Ltd., fgn. ............. Building Materials & Components 1,990,300 2,752,686
*Total Access Communication Public Co. Ltd. ...... Telecommunications 6,359,400 20,350,080
*United Communications Industries, fgn. .......... Telecommunications 4,981,200 5,659,994
--------------
277,169,299
--------------
TURKEY 2.9%
Akbank............................................ Banking 3,658,759,680 53,751,753
Anadolu Anonim Turk Sigorta Sirketi, Br. ......... Insurance 40,384,000 177,030
*Arcelik AS, Br. ................................. Appliances & Household Durables 439,771,390 15,630,944
*Erciyas Biracilik................................ Food & Household Products 268,879,000 6,180,101
*Eregli Demir ve Celik Fabrikalari AS............. Metals & Mining 461,050,250 6,445,658
*Finansbank, Br. ................................. Banking 1,018,432,573 3,499,192
Haci Omer Sabanci Holding AS, ADR, 144A........... Multi-Industry 748,850 4,081,233
Hurriyet Gazete................................... Broadcasting & Publishing 172,432,000 1,225,762
Koc Holding AS.................................... Multi-Industry 24,122,662 1,514,740
*Tofas Turk Otomobil Fabrikasi AS................. Automobiles 76,109,865 302,081
*Tofas Turk Otomobil Fabrikasi AS, new............ Automobiles 114,164,148 453,118
*Tofas Turk Otomobil Fabrikasi AS, rts. .......... Automobiles 152,218,865 422,009
*Turkiye Garanti Bankasi AS....................... Banking 698,090,039 5,210,614
Turkiye Is Bankasi AS, C.......................... Banking 4,426,400 78,665
--------------
98,972,900
--------------
</TABLE>
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TEMPLETON DEVELOPING MARKETS TRUST
STATEMENT OF INVESTMENTS, JUNE 30, 1999 (UNAUDITED) (CONT.)
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INDUSTRY SHARES VALUE
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
LONG TERM SECURITIES (CONT.)
VENEZUELA 2.7%
Compania Anonima Nacional Telefonos de Venezuela,
ADR............................................. Telecommunications 603,900 $ 16,456,275
Electricidad de Caracas SAICA SAICA, ADR.......... Utilities Electrical & Gas 3,663,458 71,699,324
Mavesa SA, ADR.................................... Food & Household Products 1,311,925 4,263,756
--------------
92,419,355
--------------
TOTAL LONG TERM SECURITIES (COST
$3,119,954,922)................................. 3,288,596,640
--------------
<CAPTION>
PRINCIPAL
AMOUNT**
--------
<S> <C> <C> <C>
SHORT TERM INVESTMENTS (COST $48,669,455) 1.4%
U.S. Treasury Bills, 4.31% to 4.85%, with
maturities to 12/09/1999........................ $ 49,599,000 48,674,111
--------------
TOTAL INVESTMENTS (COST $3,168,624,377) 98.1%..... 3,337,270,751
OTHER ASSETS, LESS LIABILITIES 1.9%............... 65,980,197
--------------
TOTAL NET ASSETS 100.0%........................... $3,403,250,948
==============
</TABLE>
CURRENCY ABBREVIATIONS:
INR -- Indian Rupee
*Non-income producing.
**Securities denominated in U.S. dollars unless otherwise indicated.
+The Investment Company Act of 1940 defines "affiliated persons" to include any
person, such as the Fund, that owns 5% or more of the outstanding voting
securities of another person. As of June 30, 1999, the Fund had investments in
"affiliated persons" valued at $25,014,889.
See Notes to Financial Statements.
20
PAGE
TEMPLETON DEVELOPING MARKETS TRUST
Financial Statements
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1999 (UNAUDITED)
<TABLE>
<S> <C>
Assets:
Investments in securities, at value (cost
$3,168,624,377)........................................... $3,337,270,751
Cash....................................................... 16,712,361
Receivables:
Investment securities sold................................ 39,834,610
Fund shares sold.......................................... 42,988,926
Dividends and interest.................................... 13,363,587
--------------
Total assets.......................................... 3,450,170,235
--------------
Liabilities:
Payables:
Investment securities purchased........................... 21,550,304
Fund shares redeemed...................................... 10,176,633
To affiliates............................................. 7,783,022
Deferred tax liability (Note 1e)........................... 5,881,378
Accrued expenses........................................... 1,527,950
--------------
Total liabilities..................................... 46,919,287
--------------
Net assets, at value........................................ $3,403,250,948
==============
Net assets consist of:
Undistributed net investment income........................ $ 11,964,458
Net unrealized appreciation................................ 162,764,996
Accumulated net realized loss.............................. (532,061,172)
Beneficial shares.......................................... 3,760,582,666
--------------
Net assets, at value........................................ $3,403,250,948
==============
CLASS A:
Net asset value per share ($2,867,694,932 / 204,110,208
shares outstanding)....................................... $14.05
==============
Maximum offering price per share ($14.05 / 94.25%)......... $14.91
==============
CLASS B:
Net asset value and maximum offering price per share
($5,965,606 / 426,797 shares outstanding)*................ $13.98
==============
CLASS C:
Net asset value per share ($368,178,770 / 26,537,665 shares
outstanding)*............................................. $13.87
==============
Maximum offering price per share ($13.87 / 99.00%)......... $14.01
==============
ADVISOR CLASS:
Net asset value and maximum offering price per share
($161,411,640 / 11,496,145 shares outstanding)............ $14.04
==============
</TABLE>
*Redemption price per share is equal to net asset value less any applicable
sales charge.
See Notes to Financial Statements.
21
PAGE
TEMPLETON DEVELOPING MARKETS TRUST
Financial Statements (continued)
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1999 (UNAUDITED)
<TABLE>
<S> <C> <C>
Investment Income:
(net of foreign taxes of $4,847,071)
Dividends.................................................. $ 42,937,332
Interest................................................... 468,506
--------------
Total investment income............................... $ 43,405,838
Expenses:
Management fees (Note 3)................................... 17,217,801
Administrative fees (Note 3)............................... 1,318,205
Distribution fees (Note 3)
Class A................................................... 3,653,450
Class B................................................... 10,328
Class C................................................... 1,495,352
Transfer agent fees (Note 3)............................... 4,062,000
Custodian fees............................................. 1,714,000
Reports to shareholders.................................... 750,300
Registration and filing fees............................... 27,300
Professional fees.......................................... 47,000
Trustees' fees and expenses................................ 67,000
Other...................................................... 153,573
--------------
Total expenses........................................ 30,516,309
--------------
Net investment income........................... 12,889,529
--------------
Realized and unrealized gains (losses):
Net realized loss from:
Investments............................................... (310,377,925)
Foreign currency transactions............................. (3,450,357)
--------------
Net realized loss..................................... (313,828,282)
Net unrealized appreciation (depreciation) on:
Investments............................................... 1,189,639,372
Deferred taxes (Note 1e).................................. (5,881,378)
--------------
Net unrealized appreciation........................... 1,183,757,994
--------------
Net realized and unrealized gain............................ 869,929,712
--------------
Net increase in net assets resulting from operations........ $ 882,819,241
==============
</TABLE>
See Notes to Financial Statements.
22
PAGE
TEMPLETON DEVELOPING MARKETS TRUST
Financial Statements (continued)
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 1999 YEAR ENDED
(UNAUDITED) DECEMBER 31, 1998
---------------------------------------
<S> <C> <C>
Increase (decrease) in net assets:
Operations:
Net investment income..................................... $ 12,889,529 $ 43,691,812
Net realized loss from investments and foreign currency
transactions............................................. (313,828,282) (109,871,525)
Net unrealized appreciation (depreciation) on investments
and deferred taxes....................................... 1,183,757,994 (707,091,116)
---------------------------------------
Net increase (decrease) in net assets resulting from
operations............................................ 882,819,241 (773,270,829)
Distributions to shareholders from:
Net investment income:
Class A.................................................. -- (43,371,538)
Class C.................................................. -- (3,527,590)
Advisor Class............................................ -- (2,350,466)
In excess of net investment income:
Class A.................................................. -- (814,661)
Class C.................................................. -- (66,260)
Advisor Class............................................ -- (44,150)
Net realized gains:
Class A.................................................. -- (13,098,049)
Class C.................................................. -- (1,659,062)
Advisor Class............................................ -- (534,895)
Beneficial share transactions (Note 2):
Class A.................................................. (51,767,411) (555,757,624)
Class B.................................................. 5,298,435 --
Class C.................................................. (22,173,629) (16,513,221)
Advisor Class............................................ 6,037,880 49,372,708
---------------------------------------
Net increase (decrease) in net assets................... 820,214,516 (1,361,635,637)
Net assets:
Beginning of period........................................ 2,583,036,432 3,944,672,069
---------------------------------------
End of period.............................................. $3,403,250,948 $ 2,583,036,432
=======================================
Undistributed net investment income/(Distributions in excess
of net investment income) included in net assets:
End of period.............................................. $ 11,964,458 $ (925,071)
=======================================
</TABLE>
See Notes to Financial Statements.
23
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, under normal market
conditions, at least 65% of its total assets in equity securities of developing
or emerging market issuers. The following summarizes the Fund's significant
accounting policies.
a. SECURITY VALUATION:
Securities listed or traded on a recognized national exchange or NASDAQ are
valued at the latest reported sales price. Over-the-counter securities and
listed securities for which no sale is reported are valued within the range of
the latest quoted bid and asked prices. Securities for which market quotations
are not readily available are valued at fair value as determined by management
in accordance with procedures established by the Board of Trustees.
b. FOREIGN CURRENCY TRANSLATION:
Portfolio securities and other assets and liabilities denominated in foreign
currencies are translated into U.S. dollars based on the exchange rate of such
currencies against U.S. dollars on the date of valuation. Purchases and sales of
securities and income items denominated in foreign currencies are translated
into U.S. dollars at the exchange rate in effect on the transaction date. When
the Fund purchases or sells foreign securities it will customarily enter into a
foreign exchange contract to minimize foreign exchange risk from the trade date
to the settlement date of such transactions.
The Fund does not separately report the effect of changes in foreign exchange
rates from changes in market prices on securities held. Such changes are
included in net realized and unrealized gain or loss from investments.
Realized foreign exchange gains or losses arise from sales of foreign
currencies, currency gains or losses realized between the trade and settlement
dates on securities transactions, 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
held at the end of the reporting period.
Certain countries in which the Fund invests have imposed restrictions on the
repatriation of their currencies. Other countries have previously instituted
currency exchange controls in the past during periods of serious imbalance in
their balance of payments or upon the occurrence of other destabilizing events.
Exchange control regulations may restrict the Fund's ability to convert
investment income, capital, or the proceeds of securities into U.S. dollars. As
of June 30, 1999, the Fund has investments with a value of approximately $131
million in countries with restrictions on the repatriation of their currencies
or formal exchange controls currently in place.
24
PAGE
TEMPLETON DEVELOPING MARKETS TRUST
Notes to Financial Statements (unaudited) (continued)
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONT.)
c. INCOME TAXES:
No provision has been made for income taxes because the Fund's policy is to
qualify as a regulated investment company under the Internal Revenue Code and to
distribute all of its taxable income.
d. SECURITY TRANSACTIONS, INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS:
Security transactions are accounted for on trade date. Realized gains and losses
on security transactions are determined on a specific identification basis.
Certain income from foreign securities is recorded as soon as information is
available to the Fund. Interest income and estimated expenses are accrued daily.
Dividend income and distributions to shareholders are recorded on the
ex-dividend date.
Realized and unrealized gains and losses 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. DEFERRED TAXES:
Deferred taxes are recorded for estimated tax liabilities inherent in the Fund's
portfolio securities which may arise from subsequent sales of those securities
and asset repatriations from countries that impose such taxes.
f. 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
The Fund offers four classes of shares; Class A, Class B, Class C and Advisor
Class. Effective January 1, 1999, Class I and Class II were renamed Class A and
Class C, respectively, and a fourth class of shares, Class B, was established.
The shares differ by their initial sales load, distribution fees, voting rights
on matters affecting a single class and the exchange privilege of each class.
25
PAGE
TEMPLETON DEVELOPING MARKETS TRUST
Notes to Financial Statements (unaudited) (continued)
2. BENEFICIAL SHARES (CONT.)
At June 30, 1999, 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, 1999 DECEMBER 31, 1998
--------------------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS A SHARES:
Shares sold........................................ 87,324,165 $ 1,064,425,486 89,591,968 $ 996,558,996
Shares issued on reinvestment of distributions..... -- -- 4,360,232 50,316,889
Shares redeemed.................................... (94,215,214) (1,116,192,897) (149,082,542) (1,602,633,509)
----------------------------------------------------------------------
Net decrease....................................... (6,891,049) $ (51,767,411) (55,130,342) $ (555,757,624)
======================================================================
SIX MONTHS ENDED
JUNE 30, 1999+
------------------------------
SHARES AMOUNT
------------------------------
CLASS B SHARES:
Shares sold........................................ 432,000 $ 5,368,334
Shares redeemed.................................... (5,203) (69,899)
------------------------------
Net increase....................................... 426,797 $ 5,298,435
==============================
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1999 DECEMBER 31, 1998
----------------------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT
----------------------------------------------------------------------
CLASS C SHARES:
Shares sold........................................ 3,108,051 $ 37,226,150 10,915,747 $ 124,293,106
Shares issued on reinvestment of distributions..... -- -- 365,154 4,366,838
Shares redeemed.................................... (5,422,743) (59,399,779) (13,849,038) (145,173,165)
----------------------------------------------------------------------
Net decrease....................................... (2,314,692) $ (22,173,629) (2,568,137) $ (16,513,221)
======================================================================
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1999 DECEMBER 31, 1998
----------------------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT
----------------------------------------------------------------------
ADVISOR CLASS SHARES:
Shares sold........................................ 3,908,172 $ 48,005,532 12,540,225 $ 138,875,712
Shares issued on reinvestment of distributions..... -- -- 238,176 2,645,549
Shares redeemed.................................... (3,649,109) (41,967,652) (9,129,829) (92,148,553)
----------------------------------------------------------------------
Net increase....................................... 259,063 $ 6,037,880 3,648,572 $ 49,372,708
======================================================================
+Effective date of Class B shares was January 1, 1999.
</TABLE>
26
PAGE
TEMPLETON DEVELOPING MARKETS TRUST
Notes to Financial Statements (unaudited) (continued)
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. (FT Services),
Franklin/Templeton Distributors, Inc. (Distributors) and Franklin/Templeton
Investor Services, Inc. (Investor Services), 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 FT
Services based on the Fund's average daily net assets as follows:
<TABLE>
<CAPTION>
ANNUALIZED
FEE RATE AVERAGE DAILY NET ASSETS
- -----------------------------------------------------------------
<S> <C>
0.15% First $200 million
0.135% Over $200 million, up to and including $700 million
0.10% Over $700 million, up to and including $1.2 billion
0.075% Over $1.2 billion
</TABLE>
The Fund reimburses Distributors for costs incurred in marketing the Fund's
shares up to .35%, 1.00% and 1.00% per year of the average daily net assets of
Class A, Class B and Class C shares, respectively. Under the Class A
distribution plan, costs exceeding the maximum may be reimbursed in subsequent
periods. At June 30, 1999, there were no unreimbursed costs. Distributors
received net commissions from sales of the Fund's shares, and received
contingent deferred sales charges for the period of $341,351 and $174,499,
respectively.
4. INCOME TAXES
At June 30, 1999, the net unrealized depreciation based on cost of investments
for income tax purposes of $3,255,993,525 was as follows:
<TABLE>
<S> <C>
Unrealized appreciation..................................... $ 632,896,033
Unrealized depreciation..................................... (551,618,807)
-------------
Net unrealized appreciation................................. $ 81,277,226
=============
</TABLE>
Net investment income and net realized gains differ for financial statement and
tax purposes primarily due to differing treatments of passive foreign investment
companies and wash sales, and losses realized subsequent to October 31 on the
sales of securities and foreign currencies.
At December 31, 1998, the Fund had tax basis capital losses of $45,000,000 which
may be carried over to offset future capital gains. Such losses expire December
31, 2006.
At December 31, 1998, the Fund had deferred capital losses occurring subsequent
to October 31, 1998 of $78,523,423. For tax purposes, such losses will be
reflected in the year end December 31, 1999.
27
PAGE
TEMPLETON DEVELOPING MARKETS TRUST
Notes to Financial Statements (unaudited) (continued)
5. INVESTMENT TRANSACTIONS
Purchases and sales of securities (excluding short-term securities) for the six
months ended June 30, 1999 aggregated $564,310,241 and $764,607,992,
respectively.
28
PAGE
SEMIANNUAL REPORT
PRINCIPAL UNDERWRITER
Franklin/Templeton Distributors, Inc.
1-800/DIAL-BEN(R)
www.franklin-templeton.com
SHAREHOLDER SERVICES
1-800/632-2301
FUND INFORMATION
1-800/342-5236
This report must be preceded or accompanied by the current Templeton Developing
Markets Trust prospectus, 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
its 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 S99 08/99 [RECYCLING ARROWS LOGO] Printed on recycled paper
