<PAGE> 1
TEMPLETON VIETNAM
OPPORTUNITIES FUND
[PHOTO OF J. MARK MOBIUS]
J. Mark Mobius, Ph.D.
President
Templeton Vietnam Opportunities Fund
Dr. Mobius has been living overseas since earning his Ph.D. in economics and
political science at Massachusetts Institute of Technology in 1964. During his
extensive travels, he has acquired a thorough knowledge of the business
practices and customs that are unique to emerging markets. Together with his
team of Templeton analysts, Dr. Mobius currently oversees more than $10 billion
in emerging markets investments for the Templeton Group of Funds.
YOUR FUND'S OBJECTIVE:
The Templeton Vietnam Opportunities Fund seeks long-term capital appreciation by
investing at least 65% of its total assets in the equity and debt securities of
Vietnam or Vietnam-related companies.
November 15, 1996
Dear Shareholder:
We are pleased to bring you this semi-annual report of the Templeton Vietnam
Opportunities Fund, which covers the six months ended September 30, 1996. During
this time, most Asian equity markets were perceived by investors to be
overvalued, and they declined significantly. The Fund was not immune to this
situation, and produced a six-month total return of -12.16% in market-price
terms, as discussed in the Performance Summary on page 5. Based on the change in
actual net asset value (in contrast to market price), total return was 0.89% for
the same period.
1
<PAGE> 2
TEMPLETON VIETNAM
OPPORTUNITIES FUND
Geographic Distribution on 9/30/96
Based on Total Net Assets
[GRAPHIC]
<TABLE>
<CAPTION>
<S> <C>
Hong Kong 24.2%
Singapore 8.8%
Indonesia 7.0%
Thailand 3.2%
Belgium 1.8%
Short-Term Obligations &
Other Net Assets 55.0%
</TABLE>
On September 30, 1996, 45% of our total net assets were invested in equities,
with the remaining 55% in cash and other liquid assets. When launching the Fund,
we knew it would not be easy to invest in Vietnam because it had no functioning
capital market. We expected that the country would have developed such a market
by now, but this has not happened. Therefore, we invested in companies doing
business in Vietnam (Vietnam-related companies) and listed on exchanges in Hong
Kong, Singapore, Indonesia, and Thailand.
In May 1996, the Fund made its first direct equity investment in Vietnam by
purchasing shares of Sipef South East Asia Holdings (SEA Holdings). This Belgian
firm holds a majority interest in the Phuben Tea Company, a joint venture
tea-processing plant in Vietnam. The company's local partner is Vinatea, the
leading Vietnamese state-owned company involved in tea production. In our
opinion, the Phuben Tea Company could become a significant exporter to many
markets throughout the world.
On September 30, 1996, the Fund's largest sector weightings were real estate
(11.1% of total net assets) and multi-industry (10.6%). Our top holdings
included New World Development Co. Ltd., a Hong Kong-based company which invests
in and develops property, particularly involving hotels in Hong Kong and abroad;
PT Polysindo Eka Perkasa, a large, Indonesian-based producer of polyester
fibers; and Swire Pacific Ltd., the Hong Kong parent company of a diversified
group of several divisions including aviation, property, shipping, dockyard
services, and trading. Each of these firms is active in Vietnam, participating
in new projects in their respective fields of expertise.
2
<PAGE> 3
TEMPLETON VIETNAM
OPPORTUNITIES FUND
Top Ten Holdings as of 9/30/96
Based on Total Net Assets
<TABLE>
<CAPTION>
Company % of Total
Industry, Country Net Assets
<S> <C>
New World Development Co. Ltd.
Real Estate, Hong Kong 7.7%
PT Polysindo Eka Perkasa, fgn.
Textiles & Apparel, Indonesia 5.6%
Swire Pacific Ltd. B.
Multi-Industry, Hong Kong 4.5%
Natsteel Ltd., fgn.
Metals & Mining, Singapore 3.7%
Jardine Matheson Holdings Ltd. (Singapore)
Multi-Industry, Hong Kong 2.6%
Golden Resources Development
International Ltd.
Food & Household Products, Hong Kong 2.3%
Rothmans Industries Ltd., fgn.
Beverages & Tobacco, Singapore 2.1%
Sipef East Asia Holdings
Multi-Industry, Belgium 1.8%
P. T. Unggul Indah Corp., fgn.
Chemicals, Indonesia 1.6%
Lai Sun Development Co. Ltd.
Real Estate, Hong Kong 1.2%
</TABLE>
For a complete list of portfolio holdings, please see page 7 of this report.
In our opinion, the underlying rationale for investing in Vietnamese-related
companies remains viable. Vietnam's economy appears to be strengthening because
of a high level of foreign investment and subdued inflation, but there are
potential negatives.
Imports outnumber exports, and implementation of new foreign investment projects
has slowed noticeably. Although the Ministry of Finance has indicated that a
functioning Vietnamese stock market would be opened by 1999, such timetables
have not been met in the past. Consequently, strong economic growth may not be
sustainable over the long term. We will continue to monitor these developments
closely.
Recent actions have been taken intended to provide the Fund with greater
flexibility in investing in Vietnam. In October 1995, the Fund's Board of
Directors approved an amendment to the Fund's non-fundamental investment
restrictions to increase the amount the Fund may invest in direct equity
investments from 35% to 65% of its total net assets.
On July 30, 1996, the Board also approved a change to its non-fundamental policy
increasing the maximum amount the Fund may invest in any one issuer from 10% to
25%. On October 8, the Fund's shareholders approved amendments deleting its
fundamental restriction on loans and adopting a new fundamental investment
policy allowing the Fund to make loans, including privately placed debt
obligations.
3
<PAGE> 4
TEMPLETON VIETNAM
OPPORTUNITIES FUND
Portfolio Breakdown on 9/30/96
Based on Total Net Assets
[GRAPHIC]
<TABLE>
<CAPTION>
<S> <C>
Real Estate 11.1%
Multi-Industry 10.6%
Textiles & Apparel 5.9%
Metals & Mining 4.1%
Beverages & Tobacco 3.8%
Food & Household Products 3.1%
Chemicals 1.7%
Other Industries 4.7%
Short-Term Obligations &
Other Net Assets 55.0%
</TABLE>
The fundamental investment restriction concerning investments in real estate was
also amended to permit the Fund to make or purchase real estate loans and to
purchase real estate limited partnership interests.
This discussion reflects the strategies we employed for the Fund during the six
months under review, and includes our opinions as of the close of the period.
Since economic and market conditions are constantly changing, our strategies,
evaluations, conclusions and decisions regarding portfolio holdings, may change
as new circumstances arise. Although past performance of a specific investment
or sector cannot guarantee future performance, such information can be useful in
analyzing the securities we purchase or sell for the Fund.
Investing in Vietnam, of course, involves special considerations including risks
relating to direct investments, as well as the risks associated with investing
in an emerging market. These risks include adverse economic, social and
political developments, the absence of an organized stock exchange in Vietnam,
reduced liquidity of emerging markets, and greater market and currency
volatility. Investment in the Fund should be considered speculative.
We thank you for your participation in the Templeton Vietnam Opportunities Fund
and welcome your comments and suggestions.
Sincerely,
/s/ J. Mark Mobius, Ph.D.
- ----------------------------------
J. Mark Mobius, Ph.D.
President
Templeton Vietnam Opportunities Fund, Inc.
4
<PAGE> 5
PERFORMANCE SUMMARY
In market-price terms, the Templeton Vietnam Opportunities Fund produced a total
return of -12.16% for the six-month period ended September 30, 1996. Based on
the change in actual net asset value (in contrast to market price), total return
was 0.89% for the same period. Both total return figures assume reinvestment of
dividends and capital gains in accordance with the dividend reinvestment plan.
During the reporting period, the Fund's closing price on the New York Stock
Exchange decreased $1.625 from $13.00 on March 31, 1996, to $11.375 on September
30, 1996, while the net asset value increased 7 cents ($0.07), from $13.91 to
$13.98 for the same period. Shareholders received distributions of 4.5 cents
($0.045) per share in income dividends.
We have always maintained a long-term investment perspective when managing the
Fund, and encourage our shareholders to view their investments in a similar
manner. Past performance is not predictive of future results, and distributions
will vary depending on income earned by the Fund, as well as any profits
realized from the sale of securities in the portfolio.
TEMPLETON VIETNAM
OPPORTUNITIES FUND
Periods Ended September 30, 1996
<TABLE>
<CAPTION>
Since
Inception
One-Year (9/8/94)
<S> <C> <C>
Cumulative Total Return(1)
Based on change
in net asset value 5.26% 3.22%
Based on change
in market price -7.06% -21.04%
Average Annual Total Return(2)
Based on change
in net asset value 5.26% 1.56%
Based on change
in market price -7.06% -10.92%
</TABLE>
1. Cumulative total return represents the change in value of an investment over
the periods indicated.
2. Average annual total return represents the average annual change in value of
an investment over the periods indicated.
All calculations assume reinvestment of dividends and capital gains
distributions, either at net asset value or at market price on the reinvestment
date, in accordance with the dividend reinvestment plan. Past performance is not
predictive of future results.
From October 1, 1994 through September 30, 1995, the Fund's Investment Manager
waived a portion of its fees, which reduced operating expenses and increased
total return to shareholders. Without these reductions, the Fund's total return
would have been lower during that period.
5
<PAGE> 6
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
Financial Highlights
- --------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE
(For a share outstanding throughout the period)
<TABLE>
<CAPTION>
SIX MONTHS SEPTEMBER 8, 1994
ENDED (COMMENCEMENT
SEPTEMBER 30, 1996 YEAR ENDED OF OPERATIONS) TO
(UNAUDITED) MARCH 31, 1996 MARCH 31, 1995
------------------ -------------- -----------------
<S> <C> <C> <C>
Net asset value, beginning of period $ 13.91 $ 13.09 $ 14.10
-------- -------- --------
Income from investment operations:
Net investment income .19 .36 .13
Net realized and unrealized gain (loss) (.07) .91 (1.00)
-------- -------- --------
Total from investment operations .12 1.27 (.87)
-------- -------- --------
Underwriting expenses deducted from capital -- -- (.09)
-------- -------- --------
Distributions:
Dividends from net investment income (.05) (.38) (.05)
Distributions from net realized gains -- (.07) --
-------- -------- --------
Total distributions (.05) (.45) (.05)
-------- -------- --------
Change in net asset value .07 .82 (1.01)
-------- -------- --------
Net asset value, end of period $ 13.98 $ 13.91 $ 13.09
======== ======== ========
TOTAL RETURN*
Based on market value per share (12.16)% 22.11% (26.33)%
Based on net asset value per share .89 % 9.80% (6.74)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000) $ 112,662 $112,073 $ 105,306
Ratio of expenses, net of fee waiver, to average
net assets 1.76 %** 1.47% 1.72 %**
Ratio of net investment income to average net assets 2.64 %** 2.62% 1.81 %**
Portfolio turnover rate 7.04 % 4.01% 11.77 %
Average commission rate paid (per share) $ .0035 $ .0060
</TABLE>
* NOT ANNUALIZED FOR PERIODS OF LESS THAN ONE YEAR.
** ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS
6
<PAGE> 7
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
Investment Portfolio, September 30, 1996 (unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INDUSTRY ISSUE COUNTRY SHARES VALUE
<S> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS: 45.0%
- --------------------------------------------------------------------------------------------------------------------------
APPLIANCES & HOUSEHOLD
DURABLES 1.1%
*Luks Industrial Co. Ltd. H.K. 11,260,000 $ 1,121,195
*Luks Industrial Co. Ltd., wts. H.K. 2,252,000 75,717
------------
1,196,912
- --------------------------------------------------------------------------------------------------------------------------
BANKING 0.1%
Bangkok Bank Public Co. Ltd. Thai. 11,000 98,620
- --------------------------------------------------------------------------------------------------------------------------
BEVERAGES & TOBACCO 3.8%
Asia Pacific Breweries Ltd. Sing. 30,000 165,104
British American Tobacco Ltd. Sing. 235,000 905,322
Carnaudmetalbox Asia Ltd., fgn. Sing. 371,000 1,001,136
Rothmans Industries Ltd., fgn. Sing. 605,000 2,234,058
------------
4,305,620
- --------------------------------------------------------------------------------------------------------------------------
CHEMICALS 1.7%
PT Unggul Indah Corp., fgn. Indo. 1,724,800 1,856,220
- --------------------------------------------------------------------------------------------------------------------------
CONSTRUCTION & HOUSING 0.8%
Siam Syntech Construction Public
Co. Ltd., fgn. Thai. 421,900 564,060
Sino-Thai Engineering & Construction Public
Co., fgn. Thai. 122,000 381,385
------------
945,445
- --------------------------------------------------------------------------------------------------------------------------
FINANCIAL SERVICES 1.0%
Peregrine Investments Holdings Ltd. H.K. 685,000 1,085,122
*Peregrine Investments Holdings Ltd., wts. H.K. 76,300 14,307
------------
1,099,429
- --------------------------------------------------------------------------------------------------------------------------
FOOD & HOUSEHOLD
PRODUCTS 3.1%
Chareon Pokphand Feedmill Public Co. Ltd., fgn. Thai. 124,500 545,859
Charoen Pokphand Feedmill Public Co. Ltd. Thai. 138,500 498,319
Golden Resources Development International Ltd. H.K. 21,284,000 2,449,600
------------
3,493,778
- --------------------------------------------------------------------------------------------------------------------------
LEISURE & TOURISM 1.3%
*Glynhill International Ltd. H.K. 21,850,000 1,497,543
- --------------------------------------------------------------------------------------------------------------------------
MERCHANDISING 0.3%
Wo Kee Hong Holdings Ltd. H.K. 4,949,000 326,392
*Wo Kee Hong Holdings Ltd., wts. H.K. 989,800 16,640
------------
343,032
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
7
<PAGE> 8
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
Investment Portfolio, September 30, 1996 (unaudited) (cont.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INDUSTRY ISSUE COUNTRY SHARES VALUE
<S> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS (CONT.)
- --------------------------------------------------------------------------------------------------------------------------
METALS & MINING 4.1%
Natsteel Ltd., fgn. Sing. 2,467,000 $ 4,362,186
*Padaeng Industry Public Co. Ltd., fgn. Thai. 459,450 248,415
------------
4,610,601
- --------------------------------------------------------------------------------------------------------------------------
MULTI-INDUSTRY 10.6%
Jardine Matheson Holdings Ltd. (Singapore) H.K. 463,103 2,894,394
Saha Union Public Co. Ltd., fgn. Thai. 339,000 446,561
*Sipef East Asia Holdings Bel. 208,983 2,009,996
Swire Pacific Ltd., B H.K. 3,560,000 5,040,993
Thai Wah Public Co. Ltd., fgn. Thai. 410,850 242,332
Wheelock & Co. Ltd. H.K. 600,000 1,326,781
------------
11,961,057
- --------------------------------------------------------------------------------------------------------------------------
REAL ESTATE 11.1%
Lai Sun Development Co. Ltd. H.K. 1,304,000 1,365,887
*Lai Sun Development Co. Ltd., wts. H.K. 752,000 64,182
Lim Kah Ngam Ltd., fgn. Sing. 1,108,000 1,195,967
New World Development Co. Ltd. H.K. 1,750,837 9,192,291
*South Sea Development Co. Ltd. H.K. 12,239,000 672,646
------------
12,490,973
- --------------------------------------------------------------------------------------------------------------------------
RECREATION & OTHER
CONSUMER GOODS 0.1%
*KTP Holdings Ltd. H.K. 4,050,000 159,738
- --------------------------------------------------------------------------------------------------------------------------
TEXTILES & APPAREL 5.9%
Hua Thai Manufacturing Public Co. Ltd. Thai. 259,400 555,908
PT Polysindo Eka Perkasa, fgn. Indo. 11,795,000 6,092,983
------------
6,648,891
------------
TOTAL COMMON STOCKS (cost $52,138,872) 50,707,859
- --------------------------------------------------------------------------------------------------------------------------
PRINCIPAL IN
LOCAL CURRENCY
- --------------------------------------------------------------------------------------------------------------------------
SHORT TERM OBLIGATIONS:
55.1% (cost $62,080,413)
- --------------------------------------------------------------------------------------------------------------------------
U.S. Treasury Bills, 4.90% to 5.19% with
maturities to 12/12/96 U.S. 62,241,000 62,093,917
- --------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS: 100.1% (cost $114,219,285) 112,801,776
OTHER ASSETS, LESS LIABILITIES: (0.1) (139,840)
------------
TOTAL NET ASSETS: 100.0% $112,661,936
============
</TABLE>
* NON-INCOME PRODUCING.
SEE NOTES TO FINANCIAL STATEMENTS.
8
<PAGE> 9
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
Financial Statements
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
September 30, 1996 (unaudited)
<TABLE>
<S> <C>
Assets:
Investments in securities, at value
(identified cost $114,219,285) $112,801,776
Cash 69
Receivables:
Investment securities sold 8,029
Dividends and interest 115,627
Unamortized organization costs 12,464
------------
Total assets 112,937,965
------------
Liabilities:
Accrued expenses 276,029
------------
Net assets, at value $112,661,936
============
Net assets consist of:
Undistributed net investment income $ 1,496,265
Net unrealized depreciation (1,417,509)
Accumulated net realized loss (320,571)
Net capital paid in on shares of
capital stock 112,903,751
------------
Net assets, at value $112,661,936
============
Shares outstanding 8,058,603
============
Net asset value per share
($112,661,936 / 8,058,603) $ 13.98
============
</TABLE>
STATEMENT OF OPERATIONS
For the six months ended
September 30, 1996 (unaudited)
<TABLE>
<S> <C> <C>
Investment income:
(net of $101,903 foreign
taxes withheld)
Dividends $ 921,779
Interest 1,543,914
----------
Total income $2,465,693
Expenses:
Management fees (Note 3) 837,464
Administrative fees (Note 3) 83,746
Custodian fees 22,000
Reports to shareholders 1,500
Audit fees 22,407
Legal fees (Note 3) 500
Registration and filing fees 11,500
Directors' fees and expenses 5,000
Amortization of
organization costs 2,196
Other 125
----------
Total expenses 986,438
----------
Net investment income 1,479,255
Realized and unrealized gain
(loss):
Net realized gain (loss) on:
Investments 300,178
Foreign currency
transactions (7,486)
----------
292,692
Net unrealized depreciation
on investments (820,732)
----------
Net realized and
unrealized loss (528,040)
----------
Net increase in net assets
resulting from operations $ 951,215
==========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
9
<PAGE> 10
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
Financial Statements (cont.)
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
SEPTEMBER 30, 1996 YEAR ENDED
(UNAUDITED) MARCH 31, 1996
------------------ --------------
<S> <C> <C>
Increase (decrease) in net assets:
Operations:
Net investment income $ 1,479,255 $ 2,877,144
Net realized gain on investment and foreign currency transactions 292,692 169,122
Net unrealized appreciation (depreciation) (820,732) 7,145,378
------------------ --------------
Net increase in net assets resulting from operations 951,215 10,191,644
Distributions to shareholders:
From net investment income (362,637) (3,042,096)
From realized gains -- (538,861)
Capital share transactions (Note 2) -- 156,421
------------------ --------------
Net increase in net assets 588,578 6,767,108
Net assets:
Beginning of period 112,073,358 105,306,250
------------------ --------------
End of period $112,661,936 $112,073,358
=================== ===============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
10
<PAGE> 11
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
Notes to Financial Statements
- --------------------------------------------------------------------------------
1. SUMMARY OF ACCOUNTING POLICIES
Templeton Vietnam Opportunities Fund, Inc. (the Fund) is a Maryland corporation
and a closed-end, non-diversified management investment company registered under
the Investment Company Act of 1940. The Fund seeks long-term capital
appreciation by investing at least 65% of its total assets in the equity and
debt securities of Vietnam or Vietnam-related companies. The following
summarizes the Fund's significant accounting policies.
A. SECURITIES VALUATIONS:
Securities listed or traded on a recognized national or foreign exchange or
NASDAQ are valued at the last reported sales prices on the principal exchange on
which the securities are traded. Over-the-counter securities and listed
securities for which no sale is reported are valued at the mean between the last
current bid and asked prices. Securities for which market quotations are not
readily available are valued at fair value as determined by management and
approved in good faith by the Board of Directors.
B. FOREIGN CURRENCY TRANSACTIONS:
Portfolio securities and other assets and liabilities denominated in foreign
currencies are translated into U.S. dollars based on the rate of exchange of
such currencies against U.S. dollars on the date of valuation. Purchases and
sales of portfolio securities and income items denominated in foreign currencies
are translated into U.S. dollar amounts on the respective dates of such
transactions. When the Fund purchases or sells foreign securities it customarily
enters into a foreign exchange contract to minimize foreign exchange risk
between the trade date and the settlement date of such transactions.
The Fund does not isolate that portion of the results of operations resulting
from changes in foreign exchange rates on investments from the fluctuations
arising from changes in market prices of securities held. Such fluctuations are
included with the net realized and unrealized gain or loss from investments.
Reported net realized foreign exchange gains or losses arise from sales of
foreign currencies, currency gains or losses realized between the trade and
settlement dates on securities transactions, the differences between the amounts
of dividends, interest, and foreign withholding taxes recorded on the Fund's
books, and the U.S. dollar equivalent of the amounts actually received or paid.
Net unrealized foreign exchange gains and losses arise from changes in the value
of assets and liabilities other than investments in securities at the end of the
fiscal period, resulting from changes in the exchange rates.
C. INCOME TAXES:
It is the Fund's policy to comply with the requirements of the Internal Revenue
Code applicable to regulated investment companies and to distribute all of its
taxable income to its shareholders. Therefore, no provision has been made for
income taxes.
D. UNAMORTIZED ORGANIZATION COSTS:
Organization costs are being amortized on a straight line basis over five years.
E. SECURITY TRANSACTIONS, INVESTMENT INCOME, DISTRIBUTIONS, AND EXPENSES:
Security transactions are accounted for on a trade date basis. Dividend income
is recorded on the ex-dividend date. Certain dividend income on foreign
securities is recorded as soon as information is available to the Fund. Interest
income and estimated expenses are accrued daily. Distributions to shareholders,
which are determined in accordance with income tax regulations, are recorded on
the ex-dividend date.
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.
11
<PAGE> 12
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
Notes to Financial Statements (cont.)
- --------------------------------------------------------------------------------
2. TRANSACTIONS IN SHARES OF CAPITAL STOCK
At September 30, 1996, there were 100,000,000 shares of capital stock authorized
($0.01 par value).
During the year ended March 31, 1996, 1,510 shares were issued for $156,421 from
reinvested distributions.
3. INVESTMENT MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Certain officers of the Fund are also directors or officers of Templeton Asset
Management Limited (TAML) and Templeton Global Investors, Inc. (TGII), the
Fund's investment manager and administrative manager, respectively.
The Fund pays monthly an investment management fee to TAML equal, on an annual
basis, to 1.5% of the average weekly net assets of the Fund. The Fund pays TGII
monthly a fee of 0.15% per annum on the Fund's average weekly net assets. TAML
pays monthly a shareholder servicing agent fee to Paine Webber (formerly Kidder,
Peabody & Co.) equal, on an annual basis, to 0.10% of the average daily net
assets of the Fund.
An officer of the Fund is a partner of Dechert Price & Rhoads, legal counsel for
the Fund, which firm received fees of $500 for the six months ended September
30, 1996.
4. PURCHASES AND SALES OF SECURITIES
Purchases and sales of securities (excluding short-term securities) for the six
months ended September 30, 1996 aggregated $3,606,467 and $6,206,944,
respectively. The cost of securities for federal income tax purposes is the same
as that shown in the Investment Portfolio. Realized gains and losses are
reported on an identified cost basis.
At September 30, 1996, the aggregate gross unrealized appreciation and
depreciation of portfolio securities, based on cost for federal income tax
purposes, was as follows:
<TABLE>
<S> <C>
Unrealized appreciation $ 8,555,758
Unrealized depreciation (9,973,267)
-----------
Net unrealized depreciation $(1,417,509)
===========
</TABLE>
5. DEFERRED TAX LOSSES
At March 31, 1996, the Fund has deferred capital losses occurring subsequent to
October 31, 1995 of $587,000. Such losses will be recognized in the year ending
March 31, 1997.
12
<PAGE> 13
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
- --------------------------------------------------------------------------------
DIVIDEND REINVESTMENT PLAN
The Fund offers a Dividend Reinvestment Plan (the "Plan") with the following
features: --If shares of the Fund are held in the shareholder's name, the
shareholder will automatically be a participant in the Plan unless he elects to
withdraw. If the shares are registered in the name of a broker-dealer or other
nominee (i.e., in "street name"), the broker-dealer or nominee will elect to
participate in the Plan on the shareholder's behalf unless the shareholder
instructs them otherwise, or unless the reinvestment service is not provided by
the broker-dealer or nominee. --Participants should contact Chemical Mellon
Securities Trust Company, Dividend Reinvestment Services, P.O. Box 750,
Pittsburgh, PA 15230, to receive the plan brochure. --To receive dividends or
distributions in cash, the shareholder must notify Chemical Mellon Securities
Trust Company ("Mellon") or the institution in whose name the shares are held.
Mellon must receive written notice within 10 business days before the record
date for the distribution. --Whenever the Fund declares dividends in either cash
or common stock of the Fund, if the market price is equal to or exceeds net
asset value at the valuation date, participants will receive the dividends
entirely in stock at a price equal to but not less than 95% of the then current
market price of the Fund's shares. If the market price is lower than the net
asset value and if dividends and/or capital gains distributions are payable only
in cash, the participant will receive shares purchased on the New York Stock
Exchange. --The automatic reinvestment of dividends and/or capital gains does
not relieve the participant of any income tax which may be payable on dividends
or distributions. --The participant may withdraw from the Plan without penalty
at any time by written notice to Mellon. Upon withdrawal, the participant will
receive, without charge, stock certificates issued and in the participant's name
for all full shares; or if the participant wishes, Mellon will sell the
participant's shares and send the proceeds, net of any brokerage commissions. A
$5.00 fee is charged by Mellon upon any cash withdrawal or termination.
- --Whenever shares are purchased on the New York Stock Exchange, each participant
will pay a pro rata portion of brokerage commissions. Brokerage commissions will
be deducted from amounts to be invested.
13
<PAGE> 14
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
- --------------------------------------------------------------------------------
TRANSFER AGENT
Chemical Mellon Shareholder Services
Securities Transfer Services
450 West 33rd Street, 15th Floor
New York, NY 10001
800-526-0801
SHAREHOLDER INFORMATION
Shares of Templeton Vietnam Opportunities, Inc. are traded daily on the New York
Stock Exchange under the symbol "TVF." Information about the net asset value and
the market price is published weekly in Barron's and in the Monday edition of
the Wall Street Journal in a table called "Publicly Traded Funds."
For current information about the net asset value, call 1-800-292-9293.
If any shareholder is not receiving copies of the Reports to Shareholders
because shares are registered in a broker's name or in a custodian's name, he or
she can write and request that his or her name be added to the Fund's mailing
list by writing Templeton Vietnam Opportunities, Inc. 700 Central Avenue, St.
Petersburg, FL 33701.
For information about dividends and shareholder accounts, call 1-800-526-0801.
14
<PAGE> 15
LITERATURE REQUEST
- --------------------------------------------------------------------------------
For a free brochure and prospectus, which contain more complete information,
including charges and expenses, call Franklin Fund Information, toll free, at
1-800/DIAL BEN (1-800/342-5236). Please read the prospectus carefully before you
invest or send money. To ensure the highest quality of service, telephone calls
to or from our service departments may be monitored, recorded and accessed.
These calls can be determined by the presence of a regular beeping tone.
FRANKLIN TEMPLETON GROUP
GLOBAL GROWTH INCOME
Franklin Global Health Franklin Adjustable Rate
Care Fund Securities Fund
Franklin Templeton Franklin Adjustable U.S.
Japan Fund Government Securities Fund
Templeton Developing Franklin's AGE High
Markets Trust Income Fund
Templeton Foreign Fund Franklin Investment Grade
Income Fund
Templeton Foreign Smaller
Companies Fund Franklin Short-Intermediate U.S.
Government Securities Fund
Templeton Global
Infrastructure Fund Franklin U.S. Government
Securities Fund
Templeton Global
Opportunities Trust Franklin Money Fund
Templeton Global Franklin Federal Money Fund
Real Estate Fund
FOR NON-U.S. INVESTORS:
Templeton Global Smaller
Companies Fund Franklin Tax-Advantaged
High Yield Securities Fund
Templeton Greater
European Fund Franklin Tax-Advantaged
International Bond Fund
Templeton Growth Fund
Franklin Tax-Advantaged U.S.
Templeton Latin America Government Securities Fund
Fund
FOR CORPORATIONS:
Templeton Pacific
Growth Fund Franklin Corporate Qualified
Dividend Fund
Templeton World Fund
FRANKLIN FUNDS SEEKING
GLOBAL GROWTH AND INCOME TAX-FREE INCOME
Franklin Global Utilities Fund Federal Intermediate-Term
Tax-Free Income Fund
Franklin Templeton German
Government Bond Fund Federal Tax-Free Income Fund
Franklin Templeton High Yield Tax-Free
Global Currency Fund Income Fund
Mutual European Fund Insured Tax-Free Income Fund
Templeton Global Bond Fund Puerto Rico Tax-Free
Income Fund
Templeton Growth and
Income Fund Tax-Exempt Money Fund
GLOBAL INCOME FRANKLIN STATE-SPECIFIC
FUNDS SEEKING
Franklin Global Government TAX-FREE INCOME
Income Fund
Franklin Templeton Hard Alabama
Currency Fund
Arizona*
Franklin Templeton High
Income Currency Fund Arkansas**
Templeton Americas California*
Government Securities Fund
Colorado
GROWTH
Connecticut
Franklin Blue Chip Fund
Florida*
Franklin California Growth Fund
Georgia
Franklin DynaTech Fund
Hawaii**
Franklin Equity Fund
Indiana
Franklin Gold Fund
Kentucky
Franklin Growth Fund
Louisiana
Franklin MidCap Growth Fund
Maryland
Franklin Small Cap Growth Fund
Massachusetts***
Mutual Discovery Fund
Michigan*
GROWTH AND INCOME
Minnesota***
Franklin Asset Allocation Fund
Missouri
Franklin Balance Sheet
Investment Fund New Jersey
Franklin Convertible New York*
Securities Fund
North Carolina
Franklin Equity Income Fund
Ohio***
Franklin Income Fund
Oregon
Franklin MicroCap Value Fund
Pennsylvania
Franklin Natural Resources Fund
Tennessee**
Franklin Real Estate
Securities Fund Texas
Franklin Rising Dividends Fund Virginia
Franklin Strategic Income Fund Washington**
Franklin Utilities Fund VARIABLE ANNUITIES
Franklin Value Fund Franklin Valuemark(R)
Mutual Beacon Fund Franklin Templeton
Valuemark Income Plus
Mutual Qualified Fund (an immediate annuity)
Mutual Shares Fund
Templeton American Trust, Inc.
*Two or more fund options available: long-term portfolio, intermediate-term
portfolio, a portfolio of insured municipal securities, and/or a high yield
portfolio (CA) and a money market portfolio (CA and NY).
**The fund may invest up to 100% of its assets in bonds that pay interest
subject to the federal alternative minimum tax.
***Portfolio of insured municipal securities. 11/96.1
<PAGE> 16
TEMPLETON
VIETNAM
OPPORTUNITIES
FUND, INC.
SEMI-ANNUAL REPORT
SEPTEMBER 30, 1996
TEMPLETON VIETNAM
OPPORTUNITIES FUND, INC.
700 Central Avenue
St. Petersburg,
Florida 33701-3628
Auditors
McGladrey & Pullen, LLP
555 Fifth Avenue
New York, New York 10017-2416
Investors should be aware that the value of investments made for the Fund may go
up as well as down and that the Investment Manager may make errors in selecting
securities for the Fund's portfolio. 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 Fund investors are not
protected from such losses by the Investment Manager. Therefore, investors who
cannot accept the risk of such losses should not invest in shares of the Fund.
To ensure the highest quality of service, telephone calls to or from our service
departments may be monitored, recorded and accessed. These calls can be
determined by the presence of a regular beeping tone.
[RECYCLE LOGO]
[FRANKLIN TEMPLETON LOGO]
