SEMI ANNUAL REPORT
JUNE 30, 2000
TEMPLETON DEVELOPING MARKETS TRUST
[FRANKLIN TEMPLETON INVESTMENTS LOGO]
<PAGE>
[FRANKLIN TEMPLETON 50 YEAR SEAL]
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.
[MARK MOBIUS PICTURE]
MARK MOBIUS, PH.D.
President
Templeton Developing
Markets Trust
Mark 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.
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resource for fund literature, prices and performance, investor information and
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<PAGE>
SHAREHOLDER LETTER
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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 MARKET ISSUERS.
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Dear Shareholder:
This semiannual report for Templeton Developing Markets Trust covers the
six-month period ending June 30, 2000. During the reporting period, emerging
market economies generally performed well. In Asia, China was granted permanent
trade status by the U.S. Congress, putting it one step closer to entering the
World Trade Organization. The economies of South Korea and Thailand continued to
recover and the International Monetary Fund, commending Indonesia for its
efforts in bringing about economic reforms, resumed loan disbursements to the
country. Elsewhere in the region, Hong Kong's unemployment rate fell as its
economy expanded by an annualized rate of 14.3% in the first quarter of 2000.
However, trade figures indicated that imports were rising more rapidly than
exports, which could lead to a widening trade deficit.
CONTENTS
<TABLE>
<S> <C>
Shareholder Letter ............................ 1
Performance Summary ........................... 5
Financial Highlights & Statement of Investments 7
Financial Statements .......................... 19
Notes to the Financial Statements ............. 22
Tax Designation ............................... 27
</TABLE>
[FUND CATEGORY PYRAMID]
The dollar value, number of shares or principal value, and complete legal titles
of all portfolio holdings are listed in the Fund's Statement of Investments
(SOI). The SOI begins on page 11.
<PAGE>
GEOGRAPHIC DISTRIBUTION
Based on Total Net Assets
6/30/00
<TABLE>
<S> <C>
Asia 41.8%
Latin America 25.9%
Mid-East/Africa 14.9%
Europe 11.8%
Short-Term Investments & Other Net Assets 5.6%
</TABLE>
Most Latin American economies performed relatively well. Investor confidence in
Mexico increased mainly due to slower inflation and lower interest rates.
Moreover, Moody's(R), an independent credit rating agency, assigned Mexico a
coveted investment-grade rating, potentially lowering the country's financing
costs as well as making it eligible for investment by a broad group of U.S.
institutional investors normally unable to invest in emerging markets. Investor
confidence in Argentina also rose primarily due to support from the
International Monetary Fund's higher than expected US$7.4 billion standby
facility arrangement. In addition, the country's Lower House approved a labor
reform bill, which could lead to increased productivity and employment. And in
Brazil, economic figures released during the period indicated a narrowing trade
deficit, falling unemployment and strong GDP growth -- all signs of a steady
recovery.
During the six months under review, South Africa's economy was marked by falling
interest rates and rising commodity prices. Its government announced plans to
accelerate the privatization of state-owned companies and to raise US$6 billion
by 2004, primarily through foreign direct investment.
In Eastern Europe, Russia's first-quarter gross domestic product (GDP) jumped an
annualized 8.4%, while investment growth, GDP growth and slowing inflation
continued to demonstrate the strength of Hungary's economy.
After recovering strongly in 1999, the first half of 2000 saw equity markets in
most emerging-market countries give back some of those gains. Rising interest
rates, a significant correction in technology stocks and other equities, and an
apparent lack of confidence in developing countries' equity markets contributed
to their negative
2
<PAGE>
performances. For the period, the MSCI Emerging Markets Free Index, one of the
Fund's benchmarks, was down 9.0%.(1)
Within this environment, Templeton Developing Markets Trust - Class A posted a
-15.65% six-month cumulative total return as shown in the Performance Summary on
page 5.
Throughout the period, we selectively sold holdings and increased the Fund's
cash position from 0.8% of total net assets on January 1, 2000, to 5.6% at the
period's end. However, taking advantage of declining equity prices and the
bargains we believed they represented, we did add several European positions to
the Fund's portfolio. In our opinion, aspirations for membership in the European
Union will probably push most Eastern European economies to strive for better
results, which could lead to further reforms and restructuring. This, in turn,
could lead to positive gains for Eastern Europe and its neighbors. On June 30,
our holdings in South Africa comprised the Fund's largest weighting at 13.0% of
total net assets, followed by Brazil (10.9%), South Korea (10.9%), Mexico (9.5%)
and Thailand (6.5%).
Looking forward, we will continue with our bottom-up investment style, choosing
stocks that are selling at prices below our estimate of their true value.
Although we cannot predict what any particular stock will do in the short term,
we believe that over the long term most emerging-market economies should
continue to grow and that, despite volatility, improved corporate governance and
better economic efficiencies could benefit prices of emerging-market stocks for
years to come.
TOP 10 HOLDINGS
6/30/00
<TABLE>
<CAPTION>
COMPANY % OF TOTAL
SECTOR, COUNTRY NET ASSETS
---------------------------------------------------------------
<S> <C>
Cemex SA 3.8%
Construction Materials, Mexico
Centrais Eletricas Brasileiras SA
(Eletrobras) 2.8%
Electric Utilities, Brazil
Samsung Electronics Co. Ltd 2.7%
Semiconductor Equipment &
Products, South Korea
Grupo Financiero Banamex
Accival SA de CV 2.7%
Banks, Mexico
Korea Electric Power Corp. 2.4%
Electric Utilities, South Korea
Cheung Kong Holdings Ltd. 2.0%
Real Estate, Hong Kong
Akbank 1.8%
Banks, Turkey
Telefonos de Mexico SA (Telmex) 1.8%
Diversified Telecommunication
Services, Mexico
South African Breweries PLC 1.6%
Beverages, South Africa
Sasol Ltd. 1.6%
Oil & Gas, South Africa
</TABLE>
1. Source: Morgan Stanley Capital International. MSCI Emerging Markets Free
Index is a market capitalization-weighted equity index comprising 26 of the 48
countries in the MSCI universe. "Free" denotes investment opportunities in the
developing world available to foreign investors.
3
<PAGE>
TOP 10 COUNTRIES
6/30/00
% OF TOTAL
COUNTRY NET ASSETS
--------------------------------
South Africa 13.0%
Brazil 10.9%
South Korea 10.9%
Mexico 9.5%
Thailand 6.5%
Singapore 5.5%
Turkey 5.1%
Hong Kong 4.7%
Indonesia 4.3%
Poland 3.8%
Of course, investing in any emerging market securities 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. The Fund's
definition of "emerging markets" as used by the Fund's manager may differ from
the definition of the same terms as used in managing other Franklin Templeton
funds. Investing in any emerging market means accepting a certain amount of
volatility and, in some cases, severe market corrections. While short-term
volatility can be disconcerting, declines in excess of 50% are not unusual in
emerging markets. In fact, the Hong Kong equity market has increased 924% in the
last 15 years, but has suffered five declines of more than 20% during that
time.(2) 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 confidence and welcome your comments.
Sincerely,
/s/J. MARK MOBIUS
J. Mark Mobius
President
Templeton Developing Markets Trust
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This discussion reflects our views, opinions and portfolio holdings as of June
30, 2000, the end of the reporting period. The information provided is not a
complete analysis of every aspect of any country, sector, security or the Fund.
Our strategies and the Fund's portfolio composition will change depending on
market and economic conditions. Although historical performance is no guarantee
of future results, these insights may help you understand our investment and
management philosophy.
--------------------------------------------------------------------------------
2. Source: Hang Seng Index. Based on quarterly percentage price change over 15
years ended 6/30/00. Market return is measured in U.S.-dollar terms and does not
include reinvested dividends.
4
<PAGE>
SIX-MONTH PERFORMANCE SUMMARY
AS OF 6/30/00
Six-month total return does not include sales charges. 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 operating expenses for
each class. Past distributions are not indicative of future trends. All total
returns include reinvested distributions at net asset value.
<TABLE>
<CAPTION>
CLASS A
<S> <C> <C>
Six-Month Total Return - 15.65%
Net Asset Value (NAV) $13.12 (6/30/00) $15.61 (12/31/99)
Change in NAV - $2.49
Distributions (1/1/00 - 6/30/00) Dividend Income $0.0531
</TABLE>
<TABLE>
<CAPTION>
CLASS B
<S> <C> <C>
Six-Month Total Return - 15.96%
Net Asset Value (NAV) $12.97 (6/30/00) $15.47 (12/31/99)
Change in NAV - $2.50
Distributions (1/1/00 - 6/30/00) Dividend Income $0.0345
</TABLE>
<TABLE>
<CAPTION>
CLASS C
<S> <C> <C>
Six-Month Total Return - 15.95%
Net Asset Value (NAV) $12.91 (6/30/00) $15.36 (12/31/99)
Change in NAV - $2.45
</TABLE>
<TABLE>
<CAPTION>
ADVISOR CLASS
<S> <C> <C>
Six-Month Total Return - 15.55%
Net Asset Value (NAV) $13.11 (6/30/00) $15.62 (12/31/99)
Change in NAV - $2.51
Distributions (1/1/00 - 6/30/00) Dividend Income $0.0903
</TABLE>
--------------------------------------------------------------------------------
CLASS A: Subject to the 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 return 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: 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 does not guarantee 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.
3. These figures represent the value of a hypothetical $10,000 investment in the
Fund over the periods indicated and include the applicable, maximum sales
charge(s) for that class.
4. Effective 1/2/97, the Fund began offering Advisor Class shares, which do not
have sales charges nor Rule 12b-1 plans. Performance quotations for this class
reflect the following methods of calculation: (a) For periods prior to 1/1/97, a
restated figure is used based upon the Fund's Class A performance, excluding the
effect of Class A's maximum initial sales charge and including the effect of the
Class A Rule 12b-1 fees; and (b) for periods after 1/1/97, an actual Advisor
Class figure is used reflecting a deduction of all charges and fees applicable
to that class. Since 1/2/97(commencement of sales), the cumulative and average
annual total returns of Advisor Class shares were -5.17% and -1.51%,
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 the 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.
--------------------------------------------------------------------------------
ADDITIONAL PERFORMANCE
<TABLE>
<CAPTION>
INCEPTION
CLASS A 1-YEAR 5-YEAR (10/17/91)
<S> <C> <C> <C>
Cumulative Total Return(1) - 6.28% +13.57% +67.21%
Average Annual Total Return(2) - 11.69% +1.37% +5.36%
Value of $10,000 Investment(3) $8,831 $10,703 $15,759
</TABLE>
<TABLE>
<CAPTION>
INCEPTION
CLASS B 1-YEAR (1/1/99)
<S> <C> <C> <C>
Cumulative Total Return(1) - 7.00% +26.22%
Average Annual Total Return(2) - 10.72% +14.36%
Value of $10,000 Investment(3) $8,928 $12,222
</TABLE>
<TABLE>
<CAPTION>
INCEPTION
CLASS C 1-YEAR 5-YEAR (5/1/95)
<S> <C> <C> <C>
Cumulative Total Return(1) - 6.99% +9.56% +13.58%
Average Annual Total Return(2) - 8.84% +1.63% +2.30%
Value of $10,000 Investment(3) $9,116 $10,844 $11,246
</TABLE>
<TABLE>
<CAPTION>
INCEPTION
ADVISOR CLASS(4) 1-YEAR 5-YEAR (10/17/91)
<S> <C> <C> <C>
Cumulative Total Return(1) - 6.05% +14.41% +68.44%
Average Annual Total Return(2) - 6.05% +2.73% +6.17%
Value of $10,000 Investment(3) $9,395 $11,441 $16,844
</TABLE>
For updated performance figures, see "Prices and Performance" at
franklintempleton.com, or call Franklin Templeton at 1-800/342-5236.
Past performance does not guarantee future results.
6
<PAGE>
TEMPLETON DEVELOPING MARKETS TRUST
Financial Highlights
<TABLE>
<CAPTION>
CLASS A
-----------------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 2000 ------------------------------------------------------------------
(UNAUDITED) 1999 1998 1997 1996 1995
-----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE+
(For a share outstanding throughout
the period)
Net asset value, beginning of
period.............................. $15.61 $10.30 $12.94 $15.40 $13.01 $13.42
-----------------------------------------------------------------------------------
Income from investment operations:
Net investment income................ .05 .06 .17 .16 .16 .21
Net realized and unrealized gains
(losses)........................... (2.49) 5.25 (2.57) (1.62) 2.75 (.18)
-----------------------------------------------------------------------------------
Total from investment operations...... (2.44) 5.31 (2.40) (1.46) 2.91 .03
-----------------------------------------------------------------------------------
Less distributions from:
Net investment income................ (.05) -- (.19) (.16) (.17) (.20)
In excess of net investment income... -- -- -- -- (.01) --
Net realized gains................... -- -- (.05) (.53) (.34) (.24)
In excess of net realized gains...... -- -- -- (.31) -- --
-----------------------------------------------------------------------------------
Total distributions................... (.05) -- (.24) (1.00) (.52) (.44)
-----------------------------------------------------------------------------------
Net asset value, end of period........ $13.12 $15.61 $10.30 $12.94 $15.40 $13.01
===================================================================================
Total Return*......................... (15.65)% 51.55% (18.72)% (9.41)% 22.51% .36%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's)..... $2,288,810 $2,958,324 $2,172,954 $3,444,029 $3,308,753 $2,147,664
Ratios to average net assets:
Expenses............................. 2.03%** 2.02% 2.11% 1.96% 2.03% 2.10%
Net investment income................ .78%** .45% 1.40% .99% 1.16% 1.66%
Portfolio turnover rate............... 47.47% 45.82% 37.51% 30.06% 12.47% 9.76%
</TABLE>
*Total return does not reflect sales commissions and is not annualized.
**Annualized.
+Based on average weighted shares outstanding effective year ended December 31,
1999.
7
<PAGE>
TEMPLETON DEVELOPING MARKETS TRUST
Financial Highlights (continued)
<TABLE>
<CAPTION>
CLASS B
--------------------------------------
SIX MONTHS ENDED
JUNE 30, 2000 YEAR ENDED
(UNAUDITED) DECEMBER 31, 1999+
------------------------------------
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE++
(For a share outstanding throughout the period)
Net asset value, beginning of period........................ $15.47 $10.30
--------------------------------------
Income from investment operations:
Net investment income (loss)............................... .01 (.06)
Net realized and unrealized gains (losses)................. (2.48) 5.23
--------------------------------------
Total from investment operations............................ (2.47) 5.17
--------------------------------------
Less distributions from net investment income............... (.03) --
--------------------------------------
Net asset value, end of period.............................. $12.97 $15.47
======================================
Total Return*............................................... (15.96)% 50.19%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's)........................... $14,418 $13,862
Ratios to average net assets:
Expenses................................................... 2.72%** 2.76%**
Net investment income (loss)............................... .14%** (.47)%**
Portfolio turnover rate..................................... 47.47% 45.82%
</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 effective year ended December 31,
1999.
8
<PAGE>
TEMPLETON DEVELOPING MARKETS TRUST
Financial Highlights (continued)
<TABLE>
<CAPTION>
CLASS C
------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 2000 -------------------------------------------------------
(UNAUDITED) 1999 1998 1997 1996 1995+
------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE++
(For a share outstanding throughout the period)
Net asset value, beginning of period........... $15.36 $10.21 $12.81 $15.27 $12.95 $13.10
------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss).................. .01 (.03) .07 .09 .17 .02
Net realized and unrealized gains (losses).... (2.46) 5.18 (2.51) (1.64) 2.60 .19
------------------------------------------------------------------------
Total from investment operations............... (2.45) 5.15 (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................. $12.91 $15.36 $10.21 $12.81 $15.27 $12.95
========================================================================
Total Return*.................................. (15.95)% 50.44% (19.20)% (10.10)% 21.58% 1.70%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's).............. $290,161 $385,584 $294,588 $402,542 $226,629 $41,012
Ratios to average net assets:
Expenses...................................... 2.71%** 2.73% 2.78% 2.69% 2.74% 2.73%**
Net investment income (loss).................. .10%** (.26)% .76% .21% .33% .19%**
Portfolio turnover rate........................ 47.47% 45.82% 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.
+For the period May 1, 1995 (effective date) to December 31, 1995.
++Based on average weighted shares outstanding effective year ended December 31,
1999.
9
<PAGE>
TEMPLETON DEVELOPING MARKETS TRUST
Financial Highlights (continued)
<TABLE>
<CAPTION>
ADVISOR CLASS
---------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 2000 ----------------------------------
(UNAUDITED) 1999 1998 1997+
---------------------------------------------------
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE++
(For a share outstanding throughout the period)
Net asset value, beginning of period........................ $15.62 $10.28 $12.93 $15.43
---------------------------------------------------
Income from investment operations:
Net investment income...................................... .08 .09 .23 .17
Net realized and unrealized gains (losses)................. (2.50) 5.25 (2.60) (1.63)
---------------------------------------------------
Total from investment operations............................ (2.42) 5.34 (2.37) (1.46)
---------------------------------------------------
Less distributions from:
Net investment income...................................... (.09) -- (.23) (.20)
Net realized gains......................................... -- -- (.05) (.53)
In excess of net realized gains............................ -- -- -- (.31)
---------------------------------------------------
Total distributions......................................... (.09) -- (.28) (1.04)
---------------------------------------------------
Net asset value, end of period.............................. $13.11 $15.62 $10.28 $12.93
===================================================
Total Return*............................................... (15.55)% 51.95% (18.47)% (9.36)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's)........................... $179,805 $190,341 $115,494 $98,101
Ratios to average net assets:
Expenses................................................... 1.71%** 1.74% 1.78% 1.69%**
Net investment income...................................... 1.14%** .72% 1.82% 1.04%**
Portfolio turnover rate..................................... 47.47% 45.82% 37.51% 30.06%
</TABLE>
*Total return is not annualized.
**Annualized.
+For the period January 1, 1997 (effective date) to December 31, 1997.
++Based on average weighted shares outstanding effective year ended December 31,
1999.
See Notes to Financial Statements.
10
<PAGE>
TEMPLETON DEVELOPING MARKETS TRUST
STATEMENT OF INVESTMENTS, JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
INDUSTRY SHARES VALUE
----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
LONG TERM SECURITIES 94.4%
ARGENTINA 3.1%
*Molinos Rio de la Plata SA, B................... Food Products 6,164,435 $ 11,714,769
PC Holdings SA, B................................ Oil & Gas 12,171,417 22,278,149
*Quilmes Industrial SA, ADR...................... Beverages 1,097,610 12,210,911
Telecom Argentina Stet-France SA, B, ADR......... Diversified Telecommunication Services 1,258,286 34,602,863
Transportadora de Gas del Sur SA, B, ADR......... Gas Utilities 556,710 5,010,390
--------------
85,817,082
--------------
AUSTRIA 2.2%
Austria Tabak AG................................. Tobacco 28,320 1,053,273
Bank Austria AG.................................. Banks 788,945 38,583,616
Bbag Oesterreichische Brau-Beteiligungs AG....... Beverages 9,900 450,664
Mayr-Melnhof Karton AG........................... Containers & Packaging 57,962 2,752,978
OMV AG........................................... Oil & Gas 195,120 17,019,976
--------------
59,860,507
--------------
BRAZIL 10.9%
Banco Bradesco SA, pfd. ......................... Banks 4,424,569,697 38,506,497
Brasil Telecom Participacoes SA, pfd. ........... Diversified Telecommunication Services 536,137,000 7,756,750
Centrais Eletricas Brasileiras SA
(Electrobras).................................. Electric Utilities 121,024,000 2,482,200
Centrais Eletricas Brasileiras SA (Electrobras),
B, pfd. ....................................... Electric Utilities 3,425,490,470 75,763,340
Cia Cervejaria Brahma, pfd. ..................... Beverages 2,416,000 2,049,047
Cia Energetica de Minas Gerais Cemig, Br.,
pfd. .......................................... Electric Utilities 700,679,000 12,234,694
*Cia Vale do Rio Doce, A, pfd. .................. Metals & Mining 972,377 27,435,693
Companhia Paranaense de Energia-Copel, B,
pfd. .......................................... Electric Utilities 1,103,715,000 10,400,858
*Companhia Riograndense de Telecom, A, pfd. ..... Diversified Telecommunication Services 25,960,000 8,778,049
Copene-Petroquimica do Nordeste SA, A, pfd. ..... Chemicals 26,261,844 9,783,410
+Duratex SA, pfd. ............................... Building Products 359,522,800 11,459,291
Eletropaulo Metropolitana SA, pfd. .............. Electric Utilities 71,969,000 5,066,554
Empresa Brasileira de Aeronautica SA............. Aerospace & Defense 2,222,000 13,536,463
Investimentos Itau SA, pfd. ..................... Industrial Conglomerates 31,435,732 30,494,751
Tele Celular Sul Participacoes SA, pfd. ......... Wireless Telecommunication Services 152,381,000 734,875
Tele Norte Leste Participacoes SA, pfd. ......... Diversified Telecommunication Services 1,252,631,130 29,336,843
Unibanco Uniao de Bancos Brasileiros SA, GDR..... Banks 616,582 17,726,733
--------------
303,546,048
--------------
CHILE .8%
*Cia de Telecomunicaciones de Chile SA, ADR...... Diversified Telecommunication Services 811,199 14,702,982
*Enersis SA, ADR................................. Electric Utilities 256,432 5,112,613
*Madeco Manufacturera de Cobre SA, ADR........... Metals & Mining 275,470 2,100,459
--------------
21,916,054
--------------
CHINA .1%
Shandong Huaneng Power Development Co. Ltd.,
ADR............................................ Electric Utilities 511,300 2,141,069
Shanghai Petrochemical Co. Ltd., H............... Chemicals 1,734,000 235,788
--------------
2,376,857
--------------
</TABLE>
11
<PAGE>
TEMPLETON DEVELOPING MARKETS TRUST
STATEMENT OF INVESTMENTS, JUNE 30, 2000 (UNAUDITED) (CONT.)
<TABLE>
<CAPTION>
INDUSTRY SHARES VALUE
----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
LONG TERM SECURITIES (CONT.)
COLOMBIA .5%
Cementos Argos SA................................ Construction Materials 3,026,174 $ 5,370,037
Compania Nacional de Chocolates SA............... Food Products 1,796,520 4,792,387
Compania Suramericana de Inversiones SA.......... Diversified Financials 6,049,851 4,350,392
--------------
14,512,816
--------------
CROATIA
Pliva D D, GDR................................... Pharmaceuticals 75,200 776,440
--------------
CZECH REPUBLIC 1.2%
*Cesky Telecom AS................................ Diversified Telecommunication Services 139,828 2,369,532
*CEZ AS.......................................... Electric Utilities 10,861,060 28,785,533
Tabak AS......................................... Tobacco 10,574 1,650,187
--------------
32,805,252
--------------
EGYPT .8%
*Al Ahram Beverages Co., GDR..................... Beverages 357,819 6,145,541
Commercial International Bank Ltd. .............. Banks 916,529 9,769,234
*Suez Cement Co. ................................ Construction Materials 262,482 2,743,353
*Suez Cement Co., GDR............................ Construction Materials 357,720 3,577,200
--------------
22,235,328
--------------
ESTONIA .2%
Eesti Telekom AS, GDR............................ Diversified Telecommunication Services 30,850 620,085
Hansabank Ltd. .................................. Banks 659,800 4,958,487
--------------
5,578,572
--------------
FINLAND
Hartwall OYJ, A.................................. Beverages 38,020 765,327
--------------
GREECE .4%
Hellenic Telecommunications Organization SA...... Diversified Telecommunication Services 450,510 11,364,343
--------------
HONG KONG 4.7%
Cheung Kong Holdings Ltd. ....................... Real Estate 4,992,000 55,233,282
*China Aerospace International Holdings Ltd. .... Industrial Conglomerates 14,918,200 2,315,629
Dairy Farm International Holdings Ltd. .......... Food & Drug Retailing 12,525,804 7,515,482
Hang Lung Development Co. Ltd. .................. Real Estate 8,513,000 6,607,013
Henderson China Holdings Ltd. ................... Real Estate 10,000 5,003
Hong Kong & Shanghai Hotels Ltd. ................ Hotels Restaurants & Leisure 1,100,000 638,526
Hong Kong Land Holdings Ltd. .................... Real Estate 3,662,000 5,859,200
HSBC Holdings PLC................................ Banks 1,624,973 18,552,538
Hutchison Whampoa Ltd. .......................... Diversified Financials 1,462,200 18,382,307
Jardine Matheson Holdings Ltd. .................. Food & Drug Retailing 2,503,680 10,966,118
Jardine Strategic Holdings Ltd. ................. Diversified Financials 659,687 1,972,464
</TABLE>
12
<PAGE>
TEMPLETON DEVELOPING MARKETS TRUST
STATEMENT OF INVESTMENTS, JUNE 30, 2000 (UNAUDITED) (CONT.)
<TABLE>
<CAPTION>
INDUSTRY SHARES VALUE
----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
LONG TERM SECURITIES (CONT.)
HONG KONG (CONT.)
Shangri-La Asia Ltd. ............................ Hotels Restaurants & Leisure 738,000 $ 870,986
Swire Pacific Ltd., A............................ Diversified Financials 450,000 2,632,355
--------------
131,550,903
--------------
HUNGARY 2.3%
*Borsodchem RT................................... Chemicals 371,481 11,522,984
Egis RT.......................................... Pharmaceuticals 68,328 2,871,295
*Fotex First Hungarian American Photo Service
Co. ........................................... Specialty Retail 170,061 198,718
*Fotex First Hung-Amer Photo Co., cvt., 12.00%,
5/11/00........................................ Specialty Retail 32,000 32,000
Gedeon Richter Ltd. ............................. Pharmaceuticals 333,067 18,035,476
*Graphisoft NV................................... Electronic Equipment & Instruments 7,393 139,606
Matav RT......................................... Diversified Telecommunication Services 338,300 2,363,118
Mol Magyar Olay-Es Gazipari RT................... Oil & Gas 502,903 6,960,948
OTP Bank......................................... Banks 100,950 5,284,074
+Tiszai Vegyi Kombinat RT........................ Chemicals 1,224,807 16,953,205
--------------
64,361,424
--------------
INDIA .9%
Associated Cement Cos. Ltd. ..................... Construction Materials 326,617 862,376
BSES Ltd. ....................................... Electric Utilities 368,700 2,026,210
*Colgate-Palmolive Ltd. ......................... Household Products 27,904 112,497
Grasim Industries Ltd. .......................... Industrial Conglomerates 423,333 2,712,136
Hindalco Industries Inc. ........................ Metals & Mining 187,993 3,323,044
Hindustan Petroleum Corporation Ltd. ............ Oil & Gas 895,240 2,459,919
Mahanagar Telephone Nigam Ltd. .................. Diversified Telecommunication Services 1,788,700 8,590,645
Tata Engineering & Locomotive Co. ............... Automobiles 623,944 1,722,140
*Wipro Ltd. ..................................... Software 34,500 2,239,633
--------------
24,048,600
--------------
INDONESIA 4.3%
*Asia Pulp & Paper Co. Ltd., ADR................. Paper & Forest Products 2,472,670 12,517,892
*PT Barito Pacific Timber TBK.................... Paper & Forest Products 44,667,000 1,913,753
*PT Gudang Garamm................................ Tobacco 2,595,500 4,196,095
*PT Indah Kiat Pulp & Paper Corp. ............... Paper & Forest Products 79,227,550 16,067,284
*PT Indocement Tunggal Prakarsa.................. Construction Materials 12,520,500 4,613,380
*PT Indofoods Sukses Makmurr..................... Food Products 22,797,480 12,437,357
PT Indosat....................................... Diversified Telecommunication Services 10,998,000 12,942,519
*PT Semen Gresik (Persero)....................... Construction Materials 7,382,763 6,705,852
*PT Sinar Mas Agro Resources & Technology
Corp. ......................................... Food Products 1,291,400 564,365
PT Telekomunikasi Indonesia (Persero), B......... Diversified Telecommunication Services 121,259,360 42,601,832
PT Timah TBK..................................... Metals & Mining 8,242,500 2,448,500
*PT Tjiwi Kimia.................................. Paper & Forest Products 13,725,330 2,273,834
--------------
119,282,663
--------------
</TABLE>
13
<PAGE>
TEMPLETON DEVELOPING MARKETS TRUST
STATEMENT OF INVESTMENTS, JUNE 30, 2000 (UNAUDITED) (CONT.)
<TABLE>
<CAPTION>
INDUSTRY SHARES VALUE
----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
LONG TERM SECURITIES (CONT.)
ISRAEL 1.1%
*Ampal-American Israel Corp. .................... Diversified Financials 19,780 $ 296,700
*Crystal Systems Solutions Ltd. ................. Software 15,720 148,358
Elron Electronic Industries Ltd. ................ Electronic Equipment & Instruments 116,964 4,368,604
*Formula Systems Ltd. ........................... Software 95,560 5,163,002
*Fundtech Ltd. .................................. Software 221,120 5,749,120
Koor Industries Ltd. ............................ Industrial Conglomerates 20,755 2,233,081
*Nice Systems Ltd. .............................. Communications Equipment 56,680 4,408,907
*Sapiens International Corp. .................... Software 2,000 12,625
*Tecnomatix Technologies Ltd. ................... Software 169,235 2,305,827
*TTI Team Telecom International Ltd. ............ Commercial Services & Supplies 77,000 2,772,000
*Vocaltec Communications Ltd. ................... Software 109,600 2,520,800
--------------
29,979,024
--------------
MALAYSIA .7%
*Genting Bhd. ................................... Hotels Restaurants & Leisure 3,556,000 13,101,053
Golden Hope Plantations Bhd. .................... Food Products 1,440,000 1,599,158
IOI Corp. Bhd. .................................. Food Products 4,978,000 3,916,900
*Resorts World Bhd. ............................. Hotels Restaurants & Leisure 677,000 1,852,842
--------------
20,469,953
--------------
MEXICO 9.5%
Alfa SA de CV, A................................. Industrial Conglomerates 2,183,600 4,991,212
Cemex SA......................................... Construction Materials 22,657,887 106,228,627
DESC SA de CV DESC, B............................ Industrial Conglomerates 4,355,270 2,787,444
*Fomento Economico Mexicano SA de CV Femsa....... Beverages 232,571 10,015,089
Grupo Bimbo SA de CV, A.......................... Food Products 2,305,500 3,630,340
*Grupo Financiero Banamex Accival SA de CV....... Banks 17,458,271 73,426,365
*Grupo Financiero Bancomer SA de CV.............. Banks 24,215,187 12,300,090
Telefonos de Mexico SA (Telmex), ADR............. Diversified Telecommunication Services 848,701 48,482,045
Vitro SA de CV, A................................ Containers & Packaging 357,388 399,377
--------------
262,260,589
--------------
PAKISTAN .9%
*Hub Power Co. Ltd. ............................. Electric Utilities 27,416,000 7,637,427
*Pakistan Telecommunications Corp., A............ Diversified Telecommunication Services 34,300,300 17,731,344
--------------
25,368,771
--------------
PERU
Credicorp Ltd. .................................. Banks 120,700 1,086,300
--------------
</TABLE>
14
<PAGE>
TEMPLETON DEVELOPING MARKETS TRUST
STATEMENT OF INVESTMENTS, JUNE 30, 2000 (UNAUDITED) (CONT.)
<TABLE>
<CAPTION>
INDUSTRY SHARES VALUE
----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
LONG TERM SECURITIES (CONT.)
PHILIPPINES 1.9%
Philippine Long Distance Telephone Co., ADR...... Diversified Telecommunication Services 1,258,120 $ 22,331,630
*Philippine National Bank........................ Banks 3,116,256 4,072,831
*RFM Corp. ...................................... Food Products 23,805,166 1,266,525
San Miguel Corp., B.............................. Beverages 19,577,400 24,228,334
--------------
51,899,320
--------------
POLAND 3.8%
Bank Rozwoju Eksportu SA......................... Banks 130,350 4,040,700
*Bank Slaski SA W Katowicach..................... Banks 148,941 8,019,900
*Elektrim SA..................................... Electrical Equipment 1,334,250 15,318,599
*Impexmetal SA................................... Metals & Mining 282,667 1,888,774
*Optimus SA, D................................... Computers & Peripherals 50,000 2,319,173
*Orbis SA........................................ Hotels Restaurants & Leisure 712,700 5,564,133
Polski Koncern Naftowy Orlen SA.................. Oil & Gas 2,903,700 14,001,768
*Prokom Software SA.............................. IT Consulting & Services 448,047 23,456,881
*Telekomunikacja Polska SA....................... Diversified Telecommunication Services 3,134,974 22,459,515
Warta SA......................................... Insurance 234,936 7,876,155
--------------
104,945,598
--------------
RUSSIA 1.6%
GAZ Auto Works................................... Automobiles 17,970 468,119
GUM Trade House.................................. Multiline Retail 1,435,000 2,374,925
Lukoil Holdings.................................. Oil & Gas 113,500 1,450,530
Lukoil Holdings, ADR............................. Oil & Gas 386,410 19,127,295
Mosenergo, ADR................................... Electric Utilities 213,250 746,375
Mosenergo, GDR................................... Electric Utilities 224,027 856,819
Rostelecom, ADR.................................. Diversified Telecommunication Services 1,234,820 16,824,423
Rostelecom, pfd. ................................ Diversified Telecommunication Services 2,610,200 1,868,903
*Unified Energy Systems.......................... Electric Utilities 10,007,200 1,150,828
*Unified Energy Systems, pfd. ................... Electric Utilities 1,365,000 62,108
--------------
44,930,325
--------------
SINGAPORE 5.5%
Cycle & Carriage Ltd. ........................... Specialty Retail 169,000 396,842
DBS Group Holdings Ltd. ......................... Banks 1,034,234 13,279,349
*First Capital Corp. Ltd. ....................... Real Estate 2,020,000 1,927,704
Fraser and Neave Ltd. ........................... Beverages 7,634,650 27,156,216
*Golden Agri-Resources Ltd. ..................... Food Products 19,133,000 3,817,747
Keppel Corp. Ltd. ............................... Diversified Financials 12,619,000 27,296,160
MCL Land Ltd. ................................... Real Estate 83,000 63,846
Natsteel Ltd. ................................... Industrial Conglomerates 9,971,000 13,725,263
Oversea Chinese Banking Corp. Ltd. .............. Banks 3,168,500 21,807,490
Overseas Union Enterprise Ltd. .................. Hotels Restaurants & Leisure 2,521,950 6,126,194
Sembcorp Industries Ltd. ........................ Industrial Conglomerates 9,598,986 10,437,301
Sembcorp Marine Ltd. ............................ Machinery 24,126,000 9,069,925
</TABLE>
15
<PAGE>
TEMPLETON DEVELOPING MARKETS TRUST
STATEMENT OF INVESTMENTS, JUNE 30, 2000 (UNAUDITED) (CONT.)
<TABLE>
<CAPTION>
INDUSTRY SHARES VALUE
----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
LONG TERM SECURITIES (CONT.)
SINGAPORE (CONT.)
United Industrial Corporation Ltd. .............. Real Estate 19,224,000 $ 9,061,631
United Overseas Bank Ltd. ....................... Banks 1,177,604 7,696,313
--------------
151,861,981
--------------
SLOVAK REPUBLIC .1%
*Slovnaft AS..................................... Oil & Gas 247,604 2,951,512
*Vychodoslovenske Zeleziarne AS.................. Metals & Mining 134,435 335,619
--------------
3,287,131
--------------
SOUTH AFRICA 13.0%
*African Bank Investments Ltd. .................. Diversified Financials 6,555,200 8,566,235
Anglo American PLC............................... Metals & Mining 792,911 37,680,815
Barlow Ltd. ..................................... Industrial Conglomerates 4,801,500 28,893,982
CG Smith Ltd. ................................... Food Products 12,907,200 190,372
*Comparex Holdings Ltd. ......................... IT Consulting & Services 568,500 1,002,002
De Beers Centenary AG............................ Metals & Mining 488,800 11,895,575
*Dimension Data Holdings Ltd. ................... IT Consulting & Services 97,450 806,334
Fedsure Holdings Ltd. ........................... Insurance 2,554,470 12,433,261
Firstrand Ltd. .................................. Banks 2,276,000 2,349,853
Illovo Sugar Ltd. ............................... Food Products 152,000 110,973
*Imperial Holdings Ltd. ......................... Specialty Retail 713,500 5,809,027
*Iscor Ltd. ..................................... Metals & Mining 6,073,420 10,346,313
Kersaf Investments Ltd. ......................... Hotels Restaurants & Leisure 966,800 3,793,050
Liberty Group Ltd. .............................. Insurance 1,955,230 18,600,639
Nampak Ltd. ..................................... Containers & Packaging 6,265,371 13,538,007
Nedcor Ltd. ..................................... Banks 264,150 5,547,929
Old Mutual PLC................................... Insurance 10,793,430 23,733,226
Palabora Mining Co. Ltd. ........................ Metals & Mining 194,500 1,058,562
Rembrandt Group Ltd. ............................ Diversified Financials 2,695,570 26,001,516
Reunert Ltd. .................................... Electronic Equipment & Instruments 1,154,300 1,702,507
Sanlam Ltd. ..................................... Insurance 9,825,700 11,608,239
*Sappi Ltd. ..................................... Paper & Forest Products 1,659,179 12,480,550
Sasol Ltd. ...................................... Oil & Gas 6,480,223 43,488,222
*South African Breweries PLC..................... Beverages 5,940,798 44,336,929
*Super Group Ltd. ............................... Specialty Retail 1,351,400 1,600,552
Tiger Brands Ltd. ............................... Food Products 2,854,481 25,597,706
Tongaat-Hulett Group Ltd. ....................... Food Products 1,482,090 6,503,271
--------------
359,675,647
--------------
SOUTH KOREA 10.9%
Cheil Jedang Corp. .............................. Food Products 167,490 7,675,827
Hana Bank........................................ Banks 2,030,471 12,656,015
*Hyundai Electronics Industries Co. ............. Semiconductor Equipment & Products 913,830 18,030,322
*Hyundai Heavy Industries........................ Machinery 215,550 4,059,595
Hyundai Motor Co. Ltd. .......................... Automobiles 293,000 3,757,674
*Korea Data Systems.............................. Computers & Peripherals 1,118,940 5,559,452
</TABLE>
16
<PAGE>
TEMPLETON DEVELOPING MARKETS TRUST
STATEMENT OF INVESTMENTS, JUNE 30, 2000 (UNAUDITED) (CONT.)
<TABLE>
<CAPTION>
INDUSTRY SHARES VALUE
----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
LONG TERM SECURITIES (CONT.)
SOUTH KOREA (CONT.)
Korea Electric Power Corp. ...................... Electric Utilities 2,118,380 $ 65,734,802
Korea Telecom Corp. ............................. Diversified Telecommunication Services 12,880 1,134,339
*Korea Telecom Corp., ADR........................ Diversified Telecommunication Services 83,993 4,063,161
LG Chemical Ltd. ................................ Chemicals 348,510 6,970,044
LG Electronics Inc. ............................. Household Durables 714,930 20,004,768
Samsung Corp. ................................... Trading Companies & Distributors 466,160 4,017,666
Samsung Electronics Co. Ltd. .................... Semiconductor Equipment & Products 228,322 75,559,578
*Samsung Heavy Industries Co. Ltd. .............. Machinery 5,382,332 25,149,167
Samsung SDI Co. Ltd. ............................ Electronic Equipment & Instruments 464,296 22,277,380
SK Corp. ........................................ Oil & Gas 1,158,610 21,249,366
*SK Global....................................... Trading Companies & Distributors 252,970 3,028,766
--------------
300,927,922
--------------
TAIWAN .3%
*Accton Technology Corp. ........................ Computers & Peripherals 7,000 15,568
*Hon Hai Precision Industry Co. Ltd. ............ Electronic Equipment & Instruments 494,000 4,458,831
*UNI-President Enterprises Corp. ................ Food Products 1,514,000 1,150,247
*Via Technologies Inc. .......................... Electronic Equipment & Instruments 255,000 3,932,630
--------------
9,557,276
--------------
THAILAND 6.5%
*Advanced Info Service Public Co. Ltd., fgn. .... Wireless Telecommunication Services 79,000 982,843
*American Standard Sanitaryware Public Co. Ltd.,
fgn. .......................................... Building Products 284,200 1,304,168
*Bangkok Bank Public Co. Ltd. ................... Banks 239,771 186,438
*Bangkok Bank Public Co. Ltd., fgn. ............. Banks 7,037,400 8,611,732
BEC World Public Co Ltd., fgn. .................. Media 678,470 3,978,282
Chareon Pokphand Foods Public Co. Ltd., fgn. .... Food Products 4,517,856 6,795,500
*Charoen Pokphand Foods Public Co. Ltd., wts.,
4/28/02........................................ Food Products 2,392,728 6
Electricity Generating Public Co. Ltd., fgn. .... Electric Utilities 1,325,600 1,419,381
Hana Microelectronics Co. Ltd., fgn. ............ Electronic Equipment & Instruments 819,600 6,266,362
*Jasmine International Public Co. Ltd., fgn. .... Communications Equipment 8,478,300 2,269,526
*Land and House Public Co. Ltd., fgn. ........... Household Durables 745,345 389,537
PTT Exploration & Production Public Co. Ltd.,
fgn. .......................................... Oil & Gas 1,813,000 8,781,899
*Serm Suk Public Co. Ltd. ....................... Beverages 365,000 911,918
*Shin Corporations Public Company Ltd., fgn. .... Communications Equipment 1,274,700 6,694,409
*Siam Cement Public Co. Ltd. .................... Construction Materials 784,150 8,676,127
*Siam Cement Public Co. Ltd., fgn. .............. Construction Materials 1,149,280 21,564,565
*Siam Commercial Bank, cvt., 144A, 5.25%, cvt.
pfd., fgn. .................................... Banks 43,313,100 22,084,436
Siam Makro Public Company Ltd., fgn. ............ Specialty Retail 2,791,400 3,608,005
*Telecomasia Corp. Public Co. Ltd., fgn. ........ Diversified Telecommunication Services 7,303,900 8,099,927
*Thai Airways International Public Co. Ltd.,
fgn. .......................................... Airlines 4,251,000 4,074,891
*Thai Farmers Bank Public Co. Ltd. .............. Banks 21,444,042 15,034,064
*Thai Farmers Bank Public Co. Ltd., fgn. ........ Banks 28,505,758 23,981,900
</TABLE>
17
<PAGE>
TEMPLETON DEVELOPING MARKETS TRUST
STATEMENT OF INVESTMENTS, JUNE 30, 2000 (UNAUDITED) (CONT.)
<TABLE>
<CAPTION>
INDUSTRY SHARES VALUE
----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
LONG TERM SECURITIES (CONT.)
THAILAND (CONT.)
*Total Access Communication Public Co. Ltd. ..... Diversified Telecommunication Services 5,677,900 $ 22,825,158
*United Communications Industries, fgn. ......... Communications Equipment 2,939,300 2,529,034
--------------
181,070,108
--------------
TURKEY 5.1%
Akbank........................................... Banks 6,266,761,360 48,556,020
Akcansa Cimento Sanayi Ve Ticaret AS............. Construction Materials 30,319,000 474,728
Arcelik AS, Br. ................................. Household Durables 820,189,836 40,380,613
*Dogan Sirketler Grubu Holding AS................ Diversified Financials 474,561,000 11,490,581
Haci Omer Sabanci Holding AS..................... Diversified Financials 80,228,600 945,389
*Tupras-Turkiye Petrol Rafineleri AS............. Oil & Gas 748,384,100 39,261,474
--------------
141,108,805
--------------
UNITED STATES
*Seminis Inc., A................................. Food Products 19,800 51,975
--------------
VENEZUELA 1.1%
Compania Anonima Nacional Telefonos de Venezuela,
ADR............................................ Diversified Telecommunication Services 1,092,640 29,706,150
--------------
TOTAL LONG TERM SECURITIES (COST
$2,460,765,854)................................ 2,618,985,091
--------------
<CAPTION>
PRINCIPAL
AMOUNT**
-------------
<S> <C> <C> <C>
SHORT TERM INVESTMENTS (COST $177,452,026) 6.4%
U.S. Treasury Bills, 5.54% to 5.97%, with
maturities to 10/12/00......................... $ 179,139,000 177,548,630
--------------
TOTAL INVESTMENTS (COST $2,638,217,880) 100.8%... 2,796,533,721
OTHER ASSETS, LESS LIABILITIES (.8%)............. (23,340,002)
--------------
TOTAL NET ASSETS 100.0%.......................... $2,773,193,719
==============
</TABLE>
*Non-income producing.
**Securities denominated in U.S. dollars.
+The Investment Company Act of 1940 defines "affiliated persons" 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, 2000, were
$28,412,496.
See Notes to Financial Statements.
18
<PAGE>
TEMPLETON DEVELOPING MARKETS TRUST
Financial Statements
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2000 (UNAUDITED)
<TABLE>
<S> <C>
Assets:
Investments in securities, at value (cost
$2,638,217,880)........................................... $2,796,533,721
Cash....................................................... 2,421,576
Receivables:
Fund shares sold.......................................... 48,634,673
Dividends and interest.................................... 8,097,850
--------------
Total assets.......................................... 2,855,687,820
--------------
Liabilities:
Payables:
Investment securities purchased........................... 60,933,420
Fund shares redeemed...................................... 14,582,630
To affiliates............................................. 5,435,567
Accrued expenses........................................... 1,542,484
--------------
Total liabilities..................................... 82,494,101
--------------
Net assets, at value........................................ $2,773,193,719
==============
Net assets consist of:
Undistributed net investment income........................ $ 6,057,940
Net unrealized appreciation................................ 158,315,841
Accumulated net realized loss.............................. (709,760,884)
Beneficial shares.......................................... 3,318,580,822
--------------
Net assets, at value........................................ $2,773,193,719
==============
CLASS A:
Net asset value per share ($2,288,809,649 / 174,482,970
shares outstanding)....................................... $13.12
==============
Maximum offering price per share ($13.12 / 94.25%)......... $13.92
==============
CLASS B:
Net asset value and maximum offering price per share
($14,418,246 / 1,111,798 shares outstanding)*............. $12.97
==============
CLASS C:
Net asset value per share ($290,161,090 / 22,472,800 shares
outstanding)*............................................. $12.91
==============
Maximum offering price per share ($12.91 / 99.00%)......... $13.04
==============
ADVISOR CLASS:
Net asset value and maximum offering price per share
($179,804,734 / 13,711,956 shares outstanding)............ $13.11
==============
</TABLE>
*Redemption price per share is equal to net asset value less any applicable
sales charge.
See Notes to Financial Statements.
19
<PAGE>
TEMPLETON DEVELOPING MARKETS TRUST
Financial Statements (continued)
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2000 (UNAUDITED)
<TABLE>
<S> <C> <C>
Investment Income:
(net of foreign taxes of $5,519,150)
Dividends.................................................. $38,497,278
Interest................................................... 4,998,460
-----------
Total investment income............................... $ 43,495,738
Expenses:
Management fees (Note 3)................................... 19,309,724
Administrative fees (Note 3)............................... 1,444,511
Distribution fees (Note 3)
Class A................................................... 4,083,185
Class B................................................... 71,624
Class C................................................... 1,638,771
Transfer agent fees (Note 3)............................... 3,380,000
Custodian fees............................................. 1,850,000
Reports to shareholders.................................... 254,200
Registration and filing fees............................... 75,400
Professional fees.......................................... 40,300
Trustees' fees and expenses................................ 79,500
Other...................................................... 42,208
-----------
Total expenses........................................ 32,269,423
-------------
Net investment income........................... 11,226,315
-------------
Realized and unrealized gains (losses):
Net realized gain (loss) from:
Investments............................................... 17,180,126
Foreign currency transactions............................. (4,404,531)
-----------
Net realized gain..................................... 12,775,595
Net unrealized depreciation on investments............ (552,564,443)
-------------
Net realized and unrealized loss............................ (539,788,848)
-------------
Net decrease in net assets resulting from operations........ $(528,562,533)
=============
</TABLE>
See Notes to Financial Statements.
20
<PAGE>
TEMPLETON DEVELOPING MARKETS TRUST
Financial Statements (continued)
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 2000 YEAR ENDED
(UNAUDITED) DECEMBER 31, 1999
---------------------------------------
<S> <C> <C>
Increase (decrease) in net assets:
Operations:
Net investment income..................................... $ 11,226,315 $ 11,263,054
Net realized gain (loss) from investments and foreign
currency transactions.................................... 12,775,595 (508,711,215)
Net unrealized appreciation (depreciation) on
investments.............................................. (552,564,443) 1,731,873,282
---------------------------------------
Net increase (decrease) in net assets resulting from
operations............................................ (528,562,533) 1,234,425,121
Distributions to shareholders from:
Net investment income:
Class A.................................................. (9,924,994) --
Class B.................................................. (35,509) --
Class C.................................................. -- --
Advisor Class............................................ (1,138,229) --
Beneficial share transactions (Note 2):
Class A.................................................. (223,594,913) (254,980,071)
Class B.................................................. 3,147,815 11,547,988
Class C.................................................. (36,477,915) (41,139,850)
Advisor Class............................................ 21,668,801 15,221,576
---------------------------------------
Net increase (decrease) in net assets................... (774,917,477) 965,074,764
Net assets:
Beginning of period........................................ 3,548,111,196 2,583,036,432
---------------------------------------
End of period.............................................. $2,773,193,719 $3,548,111,196
=======================================
Undistributed net investment income included in net assets:
End of period.............................................. $ 6,057,940 $ 5,930,357
=======================================
</TABLE>
See Notes to Financial Statements.
21
<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, 2000, the Fund has investments with a value of approximately $46.7
million in countries with restrictions on the repatriation of their currencies
or formal exchange controls currently in place.
22
<PAGE>
TEMPLETON DEVELOPING MARKETS TRUST
Notes to Financial Statements (unaudited) (continued)
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONT.)
c. 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.
d. 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.
At June 30, 2000, 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, 2000 DECEMBER 31, 1999
-----------------------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT
---------------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS A SHARES:
Shares sold....................................... 143,268,088 $ 2,005,383,724 197,849,068 $ 2,524,193,132
Shares issued on reinvestment of distributions.... 581,038 8,535,213 -- --
Shares redeemed................................... (158,847,211) (2,237,513,850) (219,369,270) (2,779,173,203)
-----------------------------------------------------------------------
Net decrease...................................... (14,998,085) $ (223,594,913) (21,520,202) $ (254,980,071)
=======================================================================
</TABLE>
23
<PAGE>
TEMPLETON DEVELOPING MARKETS TRUST
Notes to Financial Statements (unaudited) (continued)
2. BENEFICIAL SHARES (CONT.)
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 2000 DECEMBER 31, 1999+
-----------------------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT
---------------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS B SHARES:
Shares sold....................................... 301,791 $ 4,286,301 928,527 $ 11,967,245
Shares issued on reinvestment of distributions.... 2,225 32,389 -- --
Shares redeemed................................... (88,090) (1,170,875) (32,655) (419,257)
-----------------------------------------------------------------------
Net increase...................................... 215,926 $ 3,147,815 895,872 $ 11,547,988
=======================================================================
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 2000 DECEMBER 31, 1999
-----------------------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT
---------------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS C SHARES:
Shares sold....................................... 5,173,865 $ 71,174,824 8,925,949 $ 112,803,533
Shares redeemed................................... (7,799,762) (107,652,739) (12,679,609) (153,943,383)
-----------------------------------------------------------------------
Net decrease...................................... (2,625,897) $ (36,477,915) (3,753,660) $ (41,139,850)
=======================================================================
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 2000 DECEMBER 31, 1999
-----------------------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT
---------------------------------------------------------------
<S> <C> <C> <C> <C>
ADVISOR CLASS SHARES:
Shares sold....................................... 3,863,410 $ 54,330,314 7,552,205 $ 96,653,070
Shares issued on reinvestment of distributions.... 72,871 1,069,014 -- --
Shares redeemed................................... (2,412,133) (33,730,527) (6,601,479) (81,431,494)
-----------------------------------------------------------------------
Net increase...................................... 1,524,148 $ 21,668,801 950,726 $ 15,221,576
=======================================================================
+Effective date of Class B shares was January 1, 1999.
</TABLE>
24
<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 0.35%, 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, 2000, 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 $341,302 and $71,559, respectively.
4. 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.
At June 30, 2000, the net unrealized appreciation based on cost of investments
for income tax purposes of $2,675,812,624 was as follows:
<TABLE>
<S> <C>
Unrealized appreciation..................................... $ 468,682,111
Unrealized depreciation..................................... (347,961,014)
-------------
Net unrealized appreciation................................. $ 120,721,097
=============
</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.
25
<PAGE>
TEMPLETON DEVELOPING MARKETS TRUST
Notes to Financial Statements (unaudited) (continued)
4. INCOME TAXES (CONT.)
At December 31, 1999, the Fund had tax basis capital losses which may be carried
over to offset future capital gains. Such losses expire as follows:
<TABLE>
<S> <C>
Capital loss carryover expiring in:
2006................................. $ 44,971,158
2007................................. 548,121,432
------------
$593,092,590
============
</TABLE>
At December 31, 1999, the Fund had deferred capital losses occurring subsequent
to October 31, 1999 of $46,586,222. For tax purposes, such losses will be
reflected in the year end December 31, 2000.
5. INVESTMENT TRANSACTIONS
Purchases and sales of securities (excluding short-term securities) for the six
months ended June 30, 2000 aggregated $1,381,552,048 and $1,748,644,168,
respectively.
26
<PAGE>
TEMPLETON DEVELOPING MARKETS TRUST
Tax Designation
At December 31, 1999, more than 50% of the Templeton Developing Markets Trust's
total assets were invested in securities of foreign issuers. In most instances,
foreign taxes were withheld from dividends paid to the fund on these
investments. The Fund intends to make an election under Section 853 of the
Internal Revenue Code. This election will allow shareholders to treat their
proportionate share of foreign taxes paid by the Fund as having been paid
directly by them.
27
<PAGE>
TEMPLETON DEVELOPING MARKETS TRUST
Tax Designation (continued)
The following table provides a breakdown by country of foreign source income and
foreign taxes paid, as designated by the Fund, to Class A, Class B, Class C, and
Advisor Class shareholders of record on March 2, 2000.
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
------------------------------------------------------------------------------------------------
FOREIGN TAXES FOREIGN SOURCE FOREIGN TAXES FOREIGN SOURCE FOREIGN TAXES FOREIGN SOURCE
PAID INCOME PAID INCOME PAID INCOME
COUNTRY PER SHARE PER SHARE PER SHARE PER SHARE PER SHARE PER SHARE
-----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Argentina............ $ 0.0000 $ 0.0049 $ 0.0000 $ 0.0037 $ 0.0000 $ 0.0000
Austria.............. 0.0004 0.0006 0.0004 0.0005 0.0004 0.0000
Brazil............... 0.0092 0.0134 0.0092 0.0102 0.0092 0.0000
Chile................ 0.0018 0.0010 0.0018 0.0008 0.0018 0.0000
China................ 0.0000 0.0011 0.0000 0.0008 0.0000 0.0000
Colombia............. 0.0001 0.0019 0.0001 0.0014 0.0001 0.0000
Czech Republic....... 0.0003 0.0003 0.0003 0.0002 0.0003 0.0000
Ecuador.............. 0.0000 0.0001 0.0000 0.0000 0.0000 0.0000
Egypt................ 0.0000 0.0001 0.0000 0.0001 0.0000 0.0000
Ghana................ 0.0000 0.0001 0.0000 0.0001 0.0000 0.0000
Hong Kong............ 0.0000 0.0036 0.0000 0.0026 0.0000 0.0000
Hungary.............. 0.0012 0.0016 0.0012 0.0012 0.0012 0.0000
India................ 0.0000 0.0013 0.0000 0.0010 0.0000 0.0000
Indonesia............ 0.0009 0.0012 0.0009 0.0009 0.0009 0.0000
Israel............... 0.0008 0.0007 0.0008 0.0005 0.0008 0.0000
Malaysia............. 0.0016 0.0012 0.0016 0.0009 0.0016 0.0000
Mexico............... 0.0007 0.0059 0.0007 0.0044 0.0007 0.0000
Pakistan............. 0.0007 0.0009 0.0007 0.0007 0.0007 0.0000
Peru................. 0.0000 0.0007 0.0000 0.0005 0.0000 0.0000
Philippines.......... 0.0005 0.0004 0.0005 0.0003 0.0005 0.0000
Poland............... 0.0005 0.0007 0.0005 0.0005 0.0005 0.0000
Russia............... 0.0001 0.0001 0.0001 0.0000 0.0001 0.0000
Singapore............ 0.0066 0.0081 0.0066 0.0060 0.0066 0.0000
South Africa......... 0.0000 0.0089 0.0000 0.0066 0.0000 0.0000
South Korea.......... 0.0023 0.0028 0.0023 0.0021 0.0023 0.0000
Sri Lanka............ 0.0001 0.0001 0.0001 0.0000 0.0001 0.0000
Thailand............. 0.0002 0.0004 0.0002 0.0003 0.0002 0.0000
Turkey............... 0.0000 0.0039 0.0000 0.0029 0.0000 0.0000
United Kingdom....... 0.0000 0.0006 0.0000 0.0004 0.0000 0.0000
Venezuela............ 0.0000 0.0045 0.0000 0.0033 0.0000 0.0000
------------------------------------------------------------------------------------------------
TOTAL................ $ 0.0280 $ 0.0711 $ 0.0280 $ 0.0529 $ 0.0280 $ 0.0000
================================================================================================
<CAPTION>
ADVISOR CLASS
------------------------------
FOREIGN TAXES FOREIGN SOURCE
PAID INCOME
COUNTRY PER SHARE PER SHARE
---------------------
<S> <C> <C>
Argentina............ $ 0.0000 $ 0.0074
Austria.............. 0.0004 0.0009
Brazil............... 0.0092 0.0203
Chile................ 0.0018 0.0016
China................ 0.0000 0.0016
Colombia............. 0.0001 0.0028
Czech Republic....... 0.0003 0.0005
Ecuador.............. 0.0000 0.0001
Egypt................ 0.0000 0.0001
Ghana................ 0.0000 0.0001
Hong Kong............ 0.0000 0.0054
Hungary.............. 0.0012 0.0025
India................ 0.0000 0.0020
Indonesia............ 0.0009 0.0018
Israel............... 0.0008 0.0010
Malaysia............. 0.0016 0.0019
Mexico............... 0.0007 0.0090
Pakistan............. 0.0007 0.0014
Peru................. 0.0000 0.0011
Philippines.......... 0.0005 0.0006
Poland............... 0.0005 0.0010
Russia............... 0.0001 0.0001
Singapore............ 0.0066 0.0122
South Africa......... 0.0000 0.0134
South Korea.......... 0.0023 0.0043
Sri Lanka............ 0.0001 0.0001
Thailand............. 0.0002 0.0007
Turkey............... 0.0000 0.0059
United Kingdom....... 0.0000 0.0009
Venezuela............ 0.0000 0.0068
------------------------------
TOTAL................ $ 0.0280 $ 0.1075
==============================
</TABLE>
In January 2001, shareholders will receive Form 1099-DIV which will include
their share of taxes withheld and foreign source income distributed during the
calendar year 2000. Shareholders are advised to check with their tax advisors
for information on the treatment of these amounts on their individual income tax
returns.
28
<PAGE>
[FRANKLIN TEMPLETON
INVESTMENTS LOGO]
SEMIANNUAL REPORT
PRINCIPAL UNDERWRITER
Franklin/Templeton Distributors, Inc.
1-800/DIAL BEN(R)
franklintempleton.com
SHAREHOLDER SERVICES
1-800/632-2301
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. 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.
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