<PAGE> 1
TEMPLETON VIETNAM
OPPORTUNITIES FUND
[PHOTO OF J. MARK MOBIUS]
J. MARK MOBIUS, PH.D.
President
Templeton Vietnam Opportunities Fund, Inc.
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 $12 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 in the equity and debt securities of Vietnam Companies.
MARCH 31, 1997
Dear Shareholder:
We are pleased to bring you the third annual report for the Templeton Vietnam
Opportunities Fund, which covers the one-year period ended March 31, 1997.
During 1996 (the latest period for which statistics are available), the
Vietnamese economy made great strides. Aided by rapid growth in foreign
investments, gross domestic product (GDP) increased approximately 9.5%.
Inflation fell to an estimated 5% per annum, from 17% in 1995, due to government
controls on consumer credit. Even the recent weakness of the Vietnamese dong can
be attributed largely to growing imports of capital equipment, which
1
<PAGE> 2
TEMPLETON VIETNAM
OPPORTUNITIES FUND
Geographic Distribution on 3/31/97
Based on Total Net Assets
[PIE CHART]
<TABLE>
<S> <C>
Hong Kong 21.1%
Vietnam 14.7%
Singapore 10.7%
Indonesia 6.3%
Thailand 2.8%
Short-Term Obligations &
Other Net Assets 44.4%
</TABLE>
*These are direct investments made through companies domiciled in Belgium, Hong
Kong, and Singapore.
should help produce competitive products for export markets.
Despite this economic success, little progress was made in the establishment of
a stock exchange. Although some steps are being taken in this direction, the
timing is unclear. In the absence of a domestic stock market, we have been
pursuing direct investment opportunities in Vietnam. Under Vietnamese law, this
is possible through joint ventures and foreign-owned corporations. When
evaluating a direct investment, there are a variety of criteria which we apply.
Failure to meet even one standard may preclude our participation. Some common
obstacles include insufficient financial resources of the project sponsor,
excessive risk in obtaining raw materials, no means of legally converting the
Vietnamese dong into U.S. dollars or other hard currencies, technical and
logistical risks unique to Vietnam, and no apparent way to sell the holdings in
the future. As of March 31, 1997, 14.7% of the Fund's total net assets were
invested in Vietnam Companies, while 40.9% of total net assets were invested in
Vietnam-related Companies.
Within this environment, the Fund produced a one-year total return of -10.87% in
market-price terms, as shown in the Performance Summary on page 6. Based on the
change in actual net asset value, the one-year total return was 4.03%. Lipper
Analytical Services ranked the Fund #12 out of 27 closed-end
2
<PAGE> 3
TEMPLETON VIETNAM
OPPORTUNITIES FUND
TOP 10 HOLDINGS ON 3/31/97
AS A PERCENTAGE OF TOTAL NET ASSETS
<TABLE>
<CAPTION>
Company, % of Total
Industry, Country Net Assets
----------------- ----------
<S> <C>
New World Development Co. Ltd.
Real Estate, Hong Kong 8.5%
Indotel Ltd.
Leisure & Tourism, Vietnam (direct investment) 8.1%
Natsteel Ltd., fgn.
Metals & Mining, Singapore 5.3%
HEA Holdings Ltd.
Real Estate, Vietnam (direct investment) 4.9%
PT Polysindo Eka Perkasa, fgn.
Textiles & Apparel, Indonesia 4.2%
Swire Pacific Ltd., B
Multi-Industry, Hong Kong 4.0%
Rothman's Industries Ltd., fgn.
Beverages & Tobacco, Singapore 2.5%
Jardine Matheson Holdings Ltd. (Singapore)
Multi-Industry, Hong Kong 2.4%
PT Unggul Indah Corp., fgn.
Chemicals, Indonesia 2.1%
Golden Resources Development International Ltd.
Food & Household Products, Hong Kong 2.1%
</TABLE>
FOR A COMPLETE LIST OF PORTFOLIO HOLDINGS, SEE PAGE 12 OF THIS REPORT.
Pacific Region (excluding Japan) funds in total return based on the change in
net asset value during the one-year period ended March 31, 1997. The Fund was
also ranked #14 out of 27 funds in the same category for the two-year period
ended March 31, 1997.(1)
On March 31, 1997, the Fund's equity investments comprised 55.6% of total net
assets, with 44.4% in cash and other short-term obligations. During the fiscal
year, we made our first direct investment by purchasing US$2 million of shares
in Sipef South East Asia Holdings (SEA Holdings). This Belgian company owns a
majority interest in a Vietnamese tea-processing plantation. The rest of the
Fund's equity holdings consisted of companies that do significant business
inside Vietnam, but are headquartered outside the country.
We remain optimistic about the rationale for investing in Vietnam and
Vietnamese-related companies. Although there is always the possibility that
foreign direct investment may decline, we believe that the Vietnamese economy
has the potential to continue to grow, and the number of economically viable
projects may increase. At the end of the reporting period, we were considering
direct investments involving a variety of businesses such as residential
construction, a hotel chain, a leasing company, and a videocassette
manufacturer. Our analysts in Vietnam, Singapore
1. LIPPER ANALYTICAL SERVICES IS A NATIONALLY RECOGNIZED MUTUAL FUND RESEARCH
ORGANIZATION.
3
<PAGE> 4
TEMPLETON VIETNAM
OPPORTUNITIES FUND
Portfolio Breakdown on 3/31/97
Based on Total Net Assets
[PIE CHART]
<TABLE>
<S> <C>
Real Estate 15.9%
Multi-Industrial 9.8%
Metals & Mining 5.4%
Leisure & Tourism 8.0%
Textiles & Apparel 4.8%
Beverages & Tobacco 4.3%
Food & Household Products 2.8%
Other Industries 4.6%
Short-Term Obligations &
Other Net Assets 44.4%
</TABLE>
and other offices around the world were also evaluating 19 other potential
investments.
This discussion reflects the strategies we employed for the Fund during the
fiscal year, and includes our opinions as of the close of the period. Since
economic and market conditions are constantly changing, our strategies and our
evaluations, conclusions, and decisions 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.
Of course, investing in any emerging market, including Vietnam, 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.
Thank you for investing in the Templeton Vietnam Opportunities Fund. We
appreciate your support and welcome your comments.
4
<PAGE> 5
Your Fund seeks to achieve its investment objective of long-term capital
appreciation by investing in Vietnam Companies. If, by October 1, 1997, however,
at least 65% of the value of the Fund's total assets are not invested in the
securities of Vietnam Companies, management of the Fund will call a
shareholders' meeting to vote on a proposal either to modify the Fund's
investment policies or to liquidate the Fund's assets.
As noted in previous Reports, on October 21, 1995 the Fund's Board of Directors
approved a change to the Fund's non-fundamental investment policy to authorize
an increase in the percentage of the Fund's assets that may be invested in
direct equity investments from 35% to 65%. During the past fiscal year, the
Board and Fund shareholders have made additional changes in the way the Fund may
operate designed to increase investment opportunities available to the Fund:
On July 30, 1996 the Board increased the amount the Fund may invest in a single
issuer from 10% to 25% of its total assets.
On September 10, 1996, at the request of the Fund, the staff of the Securities
and Exchange Commission agreed that the Fund may purchase up to 100% of the
voting securities of holding companies organized for the purpose of investing in
Vietnam companies where direct ownership by the Fund would not be practicable
under Vietnamese law.
On October 8, 1996 the Fund's shareholders approved two amendments to the Fund's
investment policies. First, the Fund's fundamental restriction on making loans
was restated to allow the Fund to purchase and hold debt instruments (including
bonds, debentures or other obligations and certificates of deposit, bankers'
acceptances and fixed deposits) in accordance with its investment objectives and
policies. In addition, the Fund may now make loans, which may take the form of
the purchase of debt obligations that are not publicly distributed. The Fund may
also enter into repurchase agreements with respect to portfolio securities, and
make loans of portfolio securities in accordance with its investment objectives
and policies. Additionally, the fundamental restriction concerning investments
in real estate was amended to permit the Fund to make or purchase real estate
limited partnership interests. Although the Fund may not purchase real estate,
it may now (i) purchase securities secured by real estate or interests therein
or securities issued by companies that invest in real estate or interests
therein, (ii) make or purchase real estate mortgage loans, and (iii) purchase
interests in real estate limited partnerships.
Finally, on April 16, 1996 the Fund's Board of Directors adopted a
non-fundamental policy permitting investment in Russian securities up to 5% of
its total assets. Russian securities involve additional significant risks,
including political and social uncertainty (for example, regional conflicts and
risk of war), currency exchange rate volatility, pervasiveness of corruption and
crime in the Russian economic system, delays in settling portfolio transactions
and risk of loss arising out of Russia's system of share registration and
custody.
* * *
As you can see in the "Investment Portfolio" section of this Report, the Fund
invests in Hong Kong securities. Hong Kong is scheduled to revert to the
sovereignty of China on July 1, 1997. As with any major political transfer of
power, this could result in political, social, economic, market or other
developments in Hong Kong, China or other countries that could affect the value
of Fund investments.
5
<PAGE> 6
PERFORMANCE SUMMARY
In market-price terms, the Templeton Vietnam Opportunities Fund produced a total
return of -10.87% for the year ended March 31, 1997. Based on the change in
actual net asset value (in contrast to market price), the Fund delivered a total
return of 4.03% 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, shareholders received distributions totaling 35.5
cents ($0.355) per share, including 30.5 cents ($0.305) in dividend income and
5.0 cents ($0.05) in long-term capital gains. The Fund's closing price on the
New York Stock Exchange (NYSE) decreased by $1.75, from $13.00 on March 31, 1996
to $11.25 on March 31, 1997, while the Fund's net asset value increased by
$0.14, from $13.91 to $14.05. Past performance is not predictive of future
results, and distributions will vary depending on income earned by the Fund and
any profits realized from the sale of securities in the portfolio, as well as
the level of the Fund's operating expenses.
TEMPLETON VIETNAM
OPPORTUNITIES FUND
Periods Ended March 31, 1997
<TABLE>
<CAPTION>
Since
Inception
One-Year (9/8/94)
<S> <C> <C>
Cumulative Total Return(1)
Based on change
in net asset value 4.03% 6.53%
Based on change
in market price -10.87% -19.82%
Average Annual Total Return(2)
Based on change
in net asset value 4.03% 2.50%
Based on change
in market price -10.87% -8.26%
</TABLE>
1. CUMULATIVE TOTAL RETURNS REPRESENT THE CHANGE IN VALUE OF AN INVESTMENT OVER
THE PERIODS INDICATED.
2. AVERAGE ANNUAL TOTAL RETURNS REPRESENT THE AVERAGE ANNUAL CHANGE IN VALUE OF
AN INVESTMENT OVER THE PERIODS INDICATED.
ALL CALCULATIONS ASSUME REINVESTMENT OF DIVIDENDS AND CAPITAL GAINS AT NET ASSET
VALUE OR AT MARKET PRICE ON THE REINVESTMENT DATE, IN ACCORDANCE WITH THE
DIVIDEND REINVESTMENT PLAN. INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE
WITH MARKET CONDITIONS, CURRENCIES AND THE POLITICAL, SOCIAL AND ECONOMIC
CLIMATES OF COUNTRIES WHERE INVESTMENTS ARE MADE. EMERGING MARKETS INVOLVE
HEIGHTENED RISKS RELATED TO THE SAME FACTORS, IN ADDITION TO THOSE ASSOCIATED
WITH THE RELATIVELY SMALL SIZE AND LESSER LIQUIDITY OF THESE MARKETS. YOU MAY
HAVE A GAIN OR LOSS WHEN YOU SELL YOUR SHARES. PAST PERFORMANCE IS NOT
PREDICTIVE OF FUTURE RESULTS.
FROM OCTOBER 1, 1994 THROUGH SEPTEMBER 30, 1995, FEE REDUCTIONS BY THE FUND'S
INVESTMENT MANAGER INCREASED THE FUND'S TOTAL RETURN. IF THE INVESTMENT MANAGER
HAD NOT TAKEN THIS ACTION, THE FUND'S TOTAL RETURN WOULD HAVE BEEN LOWER.
6
<PAGE> 7
THE FOLLOWING LETTER WAS
WRITTEN BY DR. MOBIUS
AFTER A RECENT VISIT TO
VIETNAM.
Transition to a free market economy has never been easy for communist countries,
and Vietnam is no exception. Responding to a deep recession, its communist
government instituted a series of economic reforms in 1986. After the collapse
of communism in Eastern Europe in 1989, the government tried to improve the
legal framework for business and investment; curb subsidies for state-owned
businesses; and promote foreign investment. However, resistance from within the
government and from some state-owned companies slowed the pace of reform. This
was exacerbated by the fact that the lack of a major economic crisis in recent
years has fostered an environment with no sense of urgency regarding further
reforms.
In spite of the sluggish pace of reform, Vietnam's economy has expanded
appreciably. Since 1990, Vietnam's GDP growth rate has averaged 8.2% per year,
and in 1996, it grew to US$23 billion. This growth is visible on the streets of
the country's major cities where new shops, restaurants and private businesses
of all kinds seem to be flourishing.
Vietnam's short-term economic growth has been sustained by the loosening up of
government restrictions on private businesses, the high level of foreign direct
investment and overseas development assistance (ODA). In addition to the US$2.3
billion pledged in 1996, Vietnam received pledges of $2.4 billion of new
overseas development assistance for 1997. However, the country's long-term
economic growth will depend on the government's ability to implement broad-based
structural changes, and the easy availability of these funds may mitigate
pressure on the government to make necessary reforms in the development of
capital markets.
Certain reforms have not happened as quickly as we expected. For instance, in
1994, the government initiated a program to convert state-owned enterprises
(SOEs) into non-subsidized
7
<PAGE> 8
companies and sell shares to employees and domestic investors. Of 6,000 SOEs,
three were privatized in 1994, one in 1995 and two in 1996. Although
announcements that the process is moving forward are made on a regular basis, we
have yet to see any meaningful results. Unfortunately, the successful
development of a domestic stock exchange depends on the program's
implementation.
Looking forward, we anticipate weakness in Vietnam's banking sector. Apparently
the banks have been under-regulated and improperly managed, and accusations of
fraud pervade all levels of the country's banking system. Recently the former
Director of the country's largest state-owned bank received a jail sentence for
improper lending practices which occurred under his supervision. Others involved
in the case were sentenced to death. Although a banking crisis would be
unfortunate, it could speed up the equitization process and development of a
national stock exchange, since companies would be forced to find new means of
raising capital.
Although we are generally disappointed with the pace of economic reform in
Vietnam, I believe that it is only a matter of time before it becomes a
prosperous and modern nation. Vietnam's growing middle class, as well as the
country's ongoing integration into the Association of Southeast Asian Nations,
and the global economy, should make it increasingly difficult to hold back
reform as the country moves into the 21st century.*
Sincerely,
/s/ J. Mark Mobius
J. Mark Mobius, Ph.D.
President
Templeton Vietnam Opportunities Fund, Inc.
*THIS LETTER REFLECTS THE STRATEGIES EMPLOYED FOR THE FUND DURING THE PAST
FISCAL YEAR AND INCLUDES OUR OPINIONS AS OF THE CLOSE OF THE PERIOD. SINCE
ECONOMIC AND MARKET CONDITIONS ARE CONSTANTLY CHANGING, OUR STRATEGIES, AND OUR
EVALUATIONS, CONCLUSIONS AND DECISIONS REGARDING PORTFOLIO HOLDINGS MAY CHANGE
AS NEW CIRCUMSTANCES ARISE.
8
<PAGE> 9
CELEBRATING 50 YEARS
This year marks 50 years of business for Franklin Templeton. Over these
years, we have experienced profound changes in technology, regulations and
customer expectations within the mutual fund industry. As one of the largest
mutual fund families, we're proud to be an innovative industry leader,
providing people like you with an opportunity to invest in companies and
governments around the globe.
In addition, we want to stress that all securities markets move both up and
down. Mixed in with the good years can be some bad years. Accordingly, mutual
fund share prices also move up and down. Every investor should expect such
fluctuations, which can be wide. When markets are going down, as well as up,
we encourage investors to maintain a long-term perspective. We thank you for
your past support and look forward to serving your investment needs in the
years ahead.
9
<PAGE> 10
Many investors have asked us about the activities of Sir John Templeton, since
his retirement from the funds. We asked Professor Robert Herrmann to update us
on Sir John's current activities and his comments follow.
THE NEW CAREER OF
SIR JOHN TEMPLETON
[PHOTO OF SIR JOHN TEMPLETON]
BY PROFESSOR
ROBERT HERRMANN
In 1992, Sir John Templeton retired after a 50-year career of helping investors
manage their money. Currently, he devotes all of his time and efforts to the
John Templeton Foundation. A major portion of his assets remain invested in
Templeton funds, managed by many of the investment professionals he selected and
trained. For sentimental reasons, he allows his name to be associated with the
funds, although he knows no more about their management and holdings than any
other investor.
Sir John Templeton established the Templeton Foundation in 1987, to foster the
acquisition of spiritual information through scientific research. Working with
scientists, theologians and others, he strives toward a new science that uses
empirical and statistical scientific methods to discover and test spiritual
knowledge. A crucial ingredient in his research is what Sir John calls "humility
theology," an attitude of humility toward the Creator, combined with
receptiveness to the theological significance of current scientific discoveries.
Universal spiritual laws, or "laws of life," are among the areas of
investigation. In his recent book, Worldwide Laws of Life, Sir John compiles 200
laws and proverbs from nearly all religions, and deeply embedded in human
history. For example, the Golden Rule taught by Jesus in the Sermon on the
Mount, states "Do unto others as you would have others do unto you," and is
affirmed by all major religions as an acceptable, universal law of life. Other
books which Sir John has authored or co-authored during the past few years
include: The Humble Approach, Is God the Only Reality, Evidence of Purpose,
Who's Who in Theology and Science and The God Who Would Be Known.
With an annual budget of more than $30 million, the Templeton Foundation
sponsors 60 programs focusing on spiritual progress and the benefits of freedom.
Sir John's first sizable investment in the programs was the Templeton Prize for
Progress in Religion. A panel of nine judges gives the annual award which now
exceeds $1.2 million to individuals who have shown extraordinary originality in
furthering the world's understanding of God or spirituality.
Recipients of the prize include Professor Paul Davies, author of The Mind of
God; the Right Honorable Lord Jacobovits, former Chief Rabbi of Great Britain
and The Commonwealth; the Reverend Dr. Billy Graham, world-renowned preacher and
presidential inauguration speaker; Mr. Nikkyo Nimano, founder of the World
Conference on Religion and Peace; and Sir Sarepalli Radhakrishnan, former
President of India, and Oxford professor of Eastern Religions and Ethics.
To encourage young people's and their parents' appreciation of spiritual laws of
life, Sir John established an essay contest for teenagers in his home county of
Franklin, Tennessee. Students submit essays about the spiritual life principles
they plan to follow, and prizes are offered semiannually. In 1996, more than 800
youth participated. Twenty-six similar programs have been launched in various
locations, with the support of generous local donors.
The Foundation also sponsors a worldwide program that awards college-level
faculty who teach courses integrating science and religion. During the program's
first two years, more than 200 courses were created. The Foundation maintains an
extensive program of research and education on the health benefits of
spirituality, including prizes for medical schools providing courses on
spirituality in medicine. Lastly, the Foundation publishes a newsletter with
over 2,000 subscribers. Free subscriptions are available to Templeton
shareholders by writing to the Foundation.
To contact Sir John Templeton or receive the free newsletter subscription,
please write to:
The John Templeton Foundation
2 Radnor Corporate Center #320
100 Matsonford Road
Radnor, PA 19087
10
<PAGE> 11
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
Financial Highlights
- --------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE
(For a share outstanding throughout the period)
<TABLE>
<CAPTION>
SEPTEMBER 8, 1994
YEAR ENDED MARCH 31 (COMMENCEMENT
---------------------- OF OPERATIONS) TO
1997 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 .29 .36 .13
Net realized and unrealized gain (loss) .21 .91 (1.00)
-------- -------- --------
Total from investment operations .50 1.27 (.87)
-------- -------- --------
Underwriting expenses deducted from capital -- -- (.09)
-------- -------- --------
Distributions:
Dividends from net investment income (.31) (.38) (.05)
Distributions from net realized gains (.05) (.07) --
-------- -------- --------
Total distributions (.36) (.45) (.05)
-------- -------- --------
Change in net asset value .14 .82 (1.01)
-------- -------- --------
Net asset value, end of period $ 14.05 $ 13.91 $ 13.09
======== ======== ========
TOTAL RETURN*
Based on market value per share (10.87)% 22.11% (26.33)%
Based on net asset value per share 4.03% 9.80% (6.74)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000) $113,214 $112,073 $ 105,306
Ratio of expenses, net of fee waiver, to average net assets 1.82% 1.47% 1.72%**
Ratio of net investment income to average net assets 2.04% 2.62% 1.81%**
Portfolio turnover rate 20.16% 4.01% 11.77%
Average commission rate paid (per share) $ 0.0009 $ .0060
</TABLE>
* NOT ANNUALIZED FOR PERIODS OF LESS THAN ONE YEAR.
** ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS
11
<PAGE> 12
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
Investment Portfolio, March 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INDUSTRY ISSUE COUNTRY SHARES VALUE
- ---------------------------------------------------------------------------------------------------------------------
COMMON STOCKS: 40.9%
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
BANKING 0.4%
Bangkok Bank Public Co. Ltd. Thai. 76,000 $ 521,210
- ---------------------------------------------------------------------------------------------------------------------
BEVERAGES & TOBACCO 4.3%
Asia Pacific Breweries Ltd. Sing. 30,000 150,571
British American Tobacco Ltd. Sing. 235,000 976,116
Carnaudmetalbox Asia Ltd., fgn. Sing. 371,000 898,927
Rothmans Industries Ltd., fgn. Sing. 605,000 2,806,161
------------
4,831,775
- ---------------------------------------------------------------------------------------------------------------------
CHEMICALS 2.1%
PT Unggul Indah Corp., fgn. Indo. 1,724,800 2,370,612
- ---------------------------------------------------------------------------------------------------------------------
CONSTRUCTION &
HOUSING 0.5%
Siam Syntech Construction Public Co. Ltd., fgn. Thai. 421,900 390,121
*Sino-Thai Engineering & Construction Public Co.,
fgn. Thai. 122,000 130,437
------------
520,558
- ---------------------------------------------------------------------------------------------------------------------
FINANCIAL SERVICES 1.0%
Peregrine Investments Holdings Ltd. H.K. 685,000 1,091,764
*Peregrine Investments Holdings Ltd., wts. H.K. 76,300 18,512
------------
1,110,276
- ---------------------------------------------------------------------------------------------------------------------
FOOD & HOUSEHOLD
PRODUCTS 2.8%
*Charoen Pokphand Feedmill Public Co. Ltd. Thai. 138,500 389,540
*Chareon Pokphand Feedmill Public Co. Ltd., fgn. Thai. 124,500 371,749
Golden Resources Development International Ltd. H.K. 21,284,000 2,362,234
------------
3,123,523
- ---------------------------------------------------------------------------------------------------------------------
MERCHANDISING 0.4%
Wo Kee Hong Holdings Ltd. H.K. 4,949,000 498,177
*Wo Kee Hong Holdings Ltd., wts. H.K. 989,800 11,880
------------
510,057
- ---------------------------------------------------------------------------------------------------------------------
METALS & MINING 5.4%
Natsteel Ltd., fgn. Sing. 2,467,000 5,943,344
*Padaeng Industry Public Co. Ltd., fgn. Thai. 459,450 181,443
------------
6,124,787
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
12
<PAGE> 13
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
Investment Portfolio, March 31, 1997 (cont.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INDUSTRY ISSUE COUNTRY SHARES VALUE
- ---------------------------------------------------------------------------------------------------------------------
COMMON STOCKS (CONT.)
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
MULTI-INDUSTRY: 8.0%
Jardine Matheson Holdings Ltd. (Singapore) H.K. 463,103 2,685,997
Saha Union Public Co. Ltd., fgn. Thai. 339,000 284,078
Swire Pacific Ltd., B H.K. 3,560,000 4,525,404
Thai Wah Public Co. Ltd., fgn. Thai. 410,850 280,971
Wheelock & Co. Ltd. H.K. 600,000 1,312,478
------------
9,088,928
- ---------------------------------------------------------------------------------------------------------------------
REAL ESTATE: 11.0%
Lai Sun Development Co. Ltd. H.K. 1,304,000 1,514,577
*Lai Sun Development Co. Ltd., wts. H.K. 752,000 70,846
Lim Kah Ngam Ltd., fgn. Sing. 1,108,000 1,242,617
New World Development Co. Ltd. H.K. 1,779,758 9,600,821
------------
12,428,861
- ---------------------------------------------------------------------------------------------------------------------
RECREATION & OTHER
CONSUMER GOODS: 0.2%
*KTP Holdings Ltd. H.K. 5,062,500 231,934
- ---------------------------------------------------------------------------------------------------------------------
TEXTILES & APPAREL: 4.8%
Hua Thai Manufacturing Public Co. Ltd. Thai. 259,400 679,607
PT Polysindo Eka Perkasa, fgn. Indo. 8,729,500 4,726,510
------------
5,406,117
------------
TOTAL COMMON STOCKS
(cost $46,406,841) 46,268,638
- ---------------------------------------------------------------------------------------------------------------------
DIRECT EQUITY
INVESTMENTS: 14.7%
- ---------------------------------------------------------------------------------------------------------------------
REAL ESTATE: 4.9%
(R)+*Mayfair Hanoi, Ltd., 30% equity interest owned
through HEA Holdings Ltd., a wholly owned
investment acquired 10/31/96 Viet. 5,519,699
- ---------------------------------------------------------------------------------------------------------------------
LEISURE & TOURISM: 8.0%
(R)+*Indotel Ltd. acquired 11/22/96 Viet. 900,000 9,135,540
- ---------------------------------------------------------------------------------------------------------------------
MULTI-INDUSTRY: 1.8%
(R)+*Phuben Tea Joint Venture, 30% equity interest
owned through Sipef East Asia Holdings, a 50%
owned investment acquired 5/29/96 Viet. 2,031,357
------------
TOTAL DIRECT EQUITY
INVESTMENTS (cost $16,686,596) 16,686,596
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
13
<PAGE> 14
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
Investment Portfolio, March 31, 1997 (cont.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INDUSTRY ISSUE CURRENCY SHARES VALUE
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
PRINCIPAL IN
LOCAL CURRENCY**
- --------------------------------------------------------------------------------------------------------------------------
SHORT TERM OBLIGATIONS:
44.6% (cost $50,538,069)
- --------------------------------------------------------------------------------------------------------------------------
U.S. Treasury Bills, 4.94% to 5.20% with
maturities to 6/19/97 U.S. 50,930,000 50,533,185
- --------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS:
100.2% (cost $113,631,506) 113,488,419
OTHER ASSETS, LESS
LIABILITIES: (0.2%) (274,271)
------------
TOTAL NET ASSETS: 100.0% $113,214,148
============
</TABLE>
* NON-INCOME PRODUCING.
**CURRENCY OF COUNTRY INDICATED
+ SEE NOTE 5
(R) RESTRICTED SECURITIES, SEE NOTE 6
SEE NOTES TO FINANCIAL STATEMENTS.
14
<PAGE> 15
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
Financial Statements
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
March 31, 1997
<TABLE>
<S> <C>
Assets:
Investments in securities, at value
(identified cost $113,631,506) $113,488,419
Receivables:
Investment securities sold 131,054
Dividends and interest 44,693
Unamortized organization costs 10,280
------------
Total assets 113,674,446
------------
Liabilities:
Funds advanced by custodian 13,923
Accrued expenses 446,375
------------
Total liabilities 460,298
------------
Net assets, at value $113,214,148
============
Net assets consist of:
Undistributed net investment income $ 217,520
Net unrealized depreciation (143,087)
Accumulated net realized gain 235,964
Net capital paid in on shares of
capital stock 112,903,751
------------
Net assets, at value $113,214,148
============
Shares outstanding 8,058,603
============
Net asset value per share
($113,214,148 / 8,058,603
shares outstanding) $ 14.05
============
</TABLE>
STATEMENT OF OPERATIONS
for the year ended March 31, 1997
<TABLE>
<S> <C> <C>
Investment income:
(net of $134,368 foreign
taxes withheld)
Dividends $1,505,395
Interest 2,868,748
Other 11,861
----------
Total income $4,386,004
Management fees (Note 3) 1,702,398
Administrative fees (Note 3) 170,246
Custodian fees 50,000
Reports to shareholders 38,825
Audit fees 37,647
Legal fees 30,000
Registration and filing fees 18,460
Directors' fees and expenses 12,100
Amortization of
organization costs 4,380
Other 125
----------
Total expenses 2,064,181
----------
Net investment income 2,321,823
Realized and unrealized gain
(loss):
Net realized gain (loss) on:
Investments 1,237,398
Foreign currency
transactions (11,317)
----------
1,226,081
Net unrealized appreciation
on investments 453,690
----------
Net realized and
unrealized gain 1,679,771
----------
Net increase in net assets
resulting from operations $4,001,594
==========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
15
<PAGE> 16
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
Financial Statements (cont.)
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
For the years ended March 31, 1997 and 1996
<TABLE>
<CAPTION>
1997 1996
------------------ --------------
<S> <C> <C>
Increase in net assets:
Operations:
Net investment income $ 2,321,823 $ 2,877,144
Net realized gain on investment and foreign currency transactions 1,226,081 169,122
Net unrealized appreciation 453,690 7,145,378
------------------ --------------
Net increase in net assets resulting from operations 4,001,594 10,191,644
Distributions to shareholders:
From net investment income (2,457,874) (3,042,096)
From net realized gain (402,930) --
In excess of net realized gain -- (538,861)
Fund share transactions (Note 2) -- 156,421
------------------ --------------
Net increase in net assets 1,140,790 6,767,108
Net assets:
Beginning of year 112,073,358 105,306,250
------------------ --------------
End of year $113,214,148 $112,073,358
=================== ===============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
16
<PAGE> 17
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
Notes to Financial Statements
- --------------------------------------------------------------------------------
1. SUMMARY OF ACCOUNTING POLICIES
Templeton Vietnam Opportunities Fund, Inc. (the Fund) is 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
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 in good faith by
management and approved 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.
17
<PAGE> 18
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
Notes to Financial Statements (cont.)
- --------------------------------------------------------------------------------
2. TRANSACTIONS IN SHARES OF CAPITAL STOCK
At March 31, 1997, there were 100,000,000 shares of capital stock authorized
($0.01 par value). During the year ended March 31, 1997, there were no share
transactions. During the year ended March 31, 1996, 11,510 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 Franklin Templeton Services, Inc. (FTSI), 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 FTSI
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 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 legal fees for the year ended March 31, 1997.
4. PURCHASES AND SALES OF SECURITIES
Purchases and sales of securities (excluding short-term securities) for the year
ended March 31, 1997 aggregated $18,969,754 and $11,546,987, 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 March 31, 1997, 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 $ 8,283,087
Unrealized depreciation (8,426,174)
-----------
Net unrealized depreciation $ (143,087)
===========
</TABLE>
5. HOLDING OF 5% VOTING SECURITIES OF PORTFOLIO COMPANIES
The Investment Company Act of 1940 defines "affiliated companies" as investments
in portfolio companies in which the Fund owns 5% or more of the outstanding
voting securities. Investments in "affiliated companies" at March 31, 1997
amounted to $14,508,147.
6. DIRECT INVESTMENTS IN VIETNAM VENTURES
The Fund may invest up to 65% of its total assets in direct equity investments.
These investments typically take the form of a business cooperation contract,
joint venture company established in Vietnam or a wholly owned foreign company
established in Vietnam. Since these securities are not publicly traded, and may
be restricted as to resale, they may be less liquid than securities traded in
active markets. Direct investments in Vietnam ventures include certain risks not
typically associated with investing in countries with developed securities
markets, such as political, economic and legal uncertainties. Readily available
market quotations cannot be obtained for these securities. The fair value of
these securities is estimated using methods approved by the Board. However,
because of the inherent uncertainty of valuation, those estimated values may
differ significantly from the values that would have been used had a ready
market for the securities existed, and the differences could be material. The
total value of direct equity investments was $16,686,596 (14.7% of net assets)
at March 31, 1997.
18
<PAGE> 19
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
Independent Auditor's Report
- --------------------------------------------------------------------------------
The Board of Directors and Shareholders
Templeton Vietnam Opportunities Fund, Inc.
We have audited the accompanying statement of assets and liabilities, including
the investment portfolio, of Templeton Vietnam Opportunities Fund, Inc. as of
March 31, 1997, and the related statement of operations for the year then ended,
the statement of changes in net assets for each of the two years in the period
then ended and the financial highlights for the periods indicated in the
accompanying financial statements. These financial statements and financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of March
31, 1997, by correspondence with the custodian. An audit also includes assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Templeton Vietnam Opportunities Fund, Inc. as of March 31, 1997, the results of
its operations, the changes in its net assets and the financial highlights for
the periods indicated, in conformity with generally accepted accounting
principles.
/s/ McGladrey & Pullen, LLP
New York, New York
April 25, 1997
19
<PAGE> 20
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
- --------------------------------------------------------------------------------
An Annual Meeting of Shareholders of the Fund was held at the Fund's offices,
700 Central Avenue, St. Petersburg, Florida, on October 8, 1996. The purpose of
the meeting was to elect three Directors of the Fund(1); to approve the deletion
of the Fund's current fundamental investment restriction on loans and the
adoption of a new fundamental investment policy regarding lending; to approve an
amendment to the Fund's current fundamental investment restriction concerning
investments in real estate; to ratify the selection of McGladrey & Pullen, LLP,
as the Fund's independent auditors for the fiscal year ending March 31, 1997;
and, in their discretion, to authorize the proxyholders to vote upon such other
matters which may legally come before the meeting or any other adjournment
thereof. At the meeting, the following persons were elected by the shareholders
to serve as Directors of the Fund: Martin L. Flanagan, Andrew H. Hines, Jr. and
Charles B. Johnson. Shareholders approved the deletion of the Fund's fundamental
investment restriction on loans and the adoption of a new fundamental investment
policy regarding lending. In addition, shareholders approved the amendment to
the Fund's fundamental restriction concerning investments in real estate. The
selection of McGladrey & Pullen, LLP, to serve as the Fund's independent
auditors for the fiscal year ending March 31, 1997, was ratified by
shareholders. No other business was transacted at the meeting.
The results of the voting at the Annual Meeting are as follows:
1. ELECTION OF THREE (3) DIRECTORS:
<TABLE>
<CAPTION>
% OF % OF % OF % OF
OUTSTANDING VOTING OUTSTANDING VOTING
TERMS EXPIRING 1999: FOR SHARES SHARES WITHHELD SHARES SHARES
--------------------- -------- ----------- ------ -------- ----------- ------
<S> <C> <C> <C> <C> <C> <C>
Martin L. Flanagan 4,006,556 49.72% 95.22% 201,049 2.49% 4.78%
Andrew H. Hines, Jr. 3,998,751 49.62% 95.04% 208,854 2.59% 4.96%
Charles B. Johnson 4,030,477 50.01% 95.79% 177,128 2.20% 4.21%
</TABLE>
2. APPROVAL OF THE DELETION OF THE FUND'S CURRENT FUNDAMENTAL INVESTMENT
RESTRICTION ON LOANS AND THE ADOPTION OF A NEW FUNDAMENTAL INVESTMENT POLICY
REGARDING LENDING:
<TABLE>
<CAPTION>
% OF % OF % OF % OF % OF
OUTSTANDING VOTING OUTSTANDING VOTING OUTSTANDING BROKER
FOR SHARES SHARES AGAINST SHARES SHARES ABSTAIN SHARES NON-VOTES
-------- ----------- ------ ------- ----------- ------ ------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
3,075,069 38.16% 93.53% 212,798 2.64% 6.47% 64,042 0.79% 855,696
<CAPTION>
% OF
OUTSTANDING
SHARES
-----------
<S> <C>
10.62%
</TABLE>
3. APPROVAL OF THE AMENDMENT TO THE FUND'S CURRENT FUNDAMENTAL INVESTMENT
RESTRICTION CONCERNING INVESTMENTS IN REAL ESTATE:
<TABLE>
<CAPTION>
% OF % OF % OF % OF % OF
OUTSTANDING VOTING OUTSTANDING VOTING OUTSTANDING BROKER
FOR SHARES SHARES AGAINST SHARES SHARES ABSTAIN SHARES NON-VOTES
-------- ----------- ------ ------- ----------- ------ ------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
3,079,942 38.21% 93.36% 219,089 2.72% 6.64% 52,879 0.66% 855,695
<CAPTION>
% OF
OUTSTANDING
SHARES
-----------
<S> <C>
10.62%
</TABLE>
4. RATIFICATION OF THE SELECTION OF MCGLADREY & PULLEN, LLP, AS INDEPENDENT
AUDITORS OF THE FUND FOR THE FISCAL YEAR ENDING MARCH 31, 1997:
<TABLE>
<CAPTION>
% OF % OF % OF % OF % OF
OUTSTANDING VOTING OUTSTANDING VOTING OUTSTANDING
FOR SHARES SHARES AGAINST SHARES SHARES ABSTAIN SHARES
-------- ----------- ------ ------- ----------- ------- ------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
4,126,938 51.21% 99.24% 31,643 0.39% 0.76% 49,024 0.61%
</TABLE>
- ---------------
(1) After the meeting, the terms of office continued for the following
directors: Harris J. Ashton, Nicholas F. Brady, Harmon E. Burns, S. Joseph
Fortunato, John Wm. Galbraith, Hasso-G von Diergardt-Naglo, Betty P.
Krahmer, Gordon S. Macklin and Fred R. Millsaps. On December 3, 1996, Edith
E. Holiday was elected a Director of the Fund by the Board of Directors.
Hasso-G von Diergardt-Naglo resigned effective December 31, 1996.
20
<PAGE> 21
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 Chase 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 Chase 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.
21
<PAGE> 22
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
- --------------------------------------------------------------------------------
TRANSFER AGENT
Chase 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.
22
<PAGE> 23
FRANKLIN TEMPLETON GROUP OF FUNDS
LITERATURE REQUEST - Call 1-800/DIAL BEN (1-800/342-5236) today for a free
descriptive brochure and prospectus on any of the funds listed below. The
prospectus contains more complete information, including fees, charges and
expenses, and should be read carefully before investing or sending money.
GLOBAL GROWTH INCOME
Franklin Global Health Care Fund Franklin Adjustable Rate
Securities Fund
Franklin Templeton Japan Fund
Franklin Adjustable U.S.
Templeton Developing Markets Trust Government Securities Fund
Templeton Foreign Fund Franklin's AGE High Income Fund
Templeton Foreign Smaller Franklin Investment
Companies Fund Grade Income Fund
Templeton Global Infrastructure Fund Franklin Short-Intermediate U.S.
Government Securities Fund
Templeton Global
Opportunities Trust Franklin U.S. Government
Securities Fund
Templeton Global Real Estate Fund
Franklin Money Fund
Templeton Global Smaller
Companies Fund Franklin Federal Money Fund
Templeton Greater European Fund
Templeton Growth Fund FOR NON-U.S. INVESTORS:
Templeton Latin America Fund Franklin Tax-Advantaged
High Yield Securities Fund
Templeton Pacific Growth Fund
Franklin Tax-Advantaged
Templeton World Fund International Bond Fund
GLOBAL GROWTH AND INCOME Franklin Tax-Advantaged U.S.
Government Securities Fund
Franklin Global Utilities Fund
Franklin Templeton German
Government Bond Fund FOR CORPORATIONS:
Franklin Templeton Franklin Corporate Qualified
Global Currency Fund Dividend Fund
Mutual European Fund
Templeton Global Bond Fund FRANKLIN FUNDS SEEKING
TAX-FREE INCOME
Templeton Growth and Income Fund
Federal Intermediate-Term
Tax-Free Income Fund
GLOBAL INCOME
Federal Tax-Free Income Fund
Franklin Global Government
Income Fund High Yield Tax-Free Income Fund
Franklin Templeton Hard Insured Tax-Free Income Fund
Currency Fund
Puerto Rico Tax-Free Income Fund
Franklin Templeton High
Income Currency Fund Tax-Exempt Money Fund
Templeton Americas
Government Securities Fund
FRANKLIN STATE-SPECIFIC
GROWTH FUNDS SEEKING
TAX-FREE INCOME
Franklin Blue Chip Fund
Alabama
Franklin California Growth Fund
Arizona*
Franklin DynaTech Fund
Arkansas**
Franklin Equity Fund
California*
Franklin Gold Fund
Colorado
Franklin Growth Fund
Connecticut
Franklin MidCap Growth Fund
Florida*
Franklin Small Cap Growth Fund
Georgia
Mutual Discovery Fund
Hawaii**
GROWTH AND INCOME Indiana
Franklin Asset Allocation Fund Kentucky
Franklin Balance Sheet Louisiana
Investment Fund
Maryland
Franklin Convertible Securities Fund
Massachusetts***
Franklin Equity Income Fund
Michigan*
Franklin Income Fund
Minnesota***
Franklin MicroCap Value Fund
Missouri
Franklin Natural Resources Fund
New Jersey
Franklin Real Estate Securities Fun
New York*
Franklin Rising Dividends Fund
North Carolina
Franklin Strategic Income Fund
Ohio***
Franklin Utilities Fund
Oregon
Franklin Value Fund
Pennsylvania
Mutual Beacon Fund
Tennessee**
Mutual Qualified Fund
Texas
Mutual Shares Fund
Virginia
Templeton American Trust, Inc.
Washington**
FUND ALLOCATOR SERIES:
VARIABLE ANNUITIES+
Franklin Templeton
Conservative Target Fund Franklin Valuemark(R)
Franklin Templeton Franklin Templeton
Moderate Target Fund Valuemark Income Plus
(an immediate annuity)
Franklin Templeton
Growth Target Fund
*TWO OR MORE FUND OPTIONS AVAILABLE: LONG-TERM PORTFOLIO, INTERMEDIATE-TERM
PORTFOLIO, A PORTFOLIO OF INSURED MUNICIPAL SECURITIES, AND/OR A HIGH YIELD
PORTFOLIO (CA) AND A MONEY MARKET PORTFOLIO (CA AND NY).
**THE FUND MAY INVEST UP TO 100% OF ITS ASSETS IN BONDS THAT PAY INTEREST
SUBJECT TO THE FEDERAL ALTERNATIVE MINIMUM TAX.
***PORTFOLIO OF INSURED MUNICIPAL SECURITIES.
+FRANKLIN VALUEMARK AND FRANKLIN TEMPLETON VALUEMARK INCOME PLUS ARE ISSUED BY
ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA OR BY ITS WHOLLY OWNED
SUBSIDIARY, PREFERRED LIFE INSURANCE COMPANY OF NEW YORK, AND DISTRIBUTED BY
NALAC FINANCIAL PLANS, LLC.
FGF 02/97
<PAGE> 24
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.
TEMPLETON
VIETNAM
OPPORTUNITIES
FUND, INC.
ANNUAL REPORT
MARCH 31, 1997
[TEMPLETON LOGO]
