-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Cm+sxdoKYbx0R2iS/B7sMkigdzJy3iXt2jRVVcyHOkYPesu3R3xrLrXVYA0DrwXw 6BYOi3KORyHWIHbTt+Uk8A== 0000919893-09-000011.txt : 20090528 0000919893-09-000011.hdr.sgml : 20090528 20090528154829 ACCESSION NUMBER: 0000919893-09-000011 CONFORMED SUBMISSION TYPE: N-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20090331 FILED AS OF DATE: 20090528 DATE AS OF CHANGE: 20090528 EFFECTIVENESS DATE: 20090528 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TEMPLETON DRAGON FUND INC CENTRAL INDEX KEY: 0000919893 IRS NUMBER: 650473580 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-Q SEC ACT: 1940 Act SEC FILE NUMBER: 811-08394 FILM NUMBER: 09857498 BUSINESS ADDRESS: STREET 1: 500 EAST BROWARD BLVD. STREET 2: SUITE 2100 CITY: FORT LAUDERDALE STATE: FL ZIP: 33394-3091 BUSINESS PHONE: 9545277500 MAIL ADDRESS: STREET 1: 500 EAST BROWARD BLVD. STREET 2: SUITE 2100 CITY: FORT LAUDERDALE STATE: FL ZIP: 33394-3091 N-Q 1 tdf-nq309.txt TDF NQ 03-09 FORM N-Q QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED MANAGEMENT INVESTMENT COMPANY Investment Company Act file number 811-08394 --------- TEMPLETON DRAGON FUND, INC. -------------------------------- (Exact name of registrant as specified in charter) 500 EAST BROWARD BLVD., SUITE 2100, FORT LAUDERDALE, FL 33394-3091 ---------------------------------------------------------------------- (Address of principal executive offices) (Zip code) CRAIG S. TYLE, ONE FRANKLIN PARKWAY, SAN MATEO, CA 94403-1906 ---------------------------------------------------------------- (Name and address of agent for service) Registrant's telephone number, including area code: (954) 527-7500 ---------------- Date of fiscal year end: 12/31 ---------- Date of reporting period: 3/31/09 ----------- ITEM 1. SCHEDULE OF INVESTMENTS. Templeton Dragon Fund, Inc. QUARTERLY STATEMENT OF INVESTMENTS MARCH 31, 2009 CONTENTS Statement of Investments.................................................... 3 Notes to Statement of Investments........................................... 7
(FRANKLIN TEMPLETON INVESTMENS(R) LOGO) Franklin - TEMPLETON - Mutual Series Quarterly Statement of Investments | 1 This page intentionally left blank. Templeton Dragon Fund, Inc. STATEMENT OF INVESTMENTS, MARCH 31, 2009 (UNAUDITED)
COUNTRY SHARES/UNITS VALUE ------------- ------------ ------------ COMMON STOCKS AND OTHER EQUITY INTERESTS 98.8% AIR FREIGHT & LOGISTICS 0.1% Sinotrans Ltd., H ........................................... China 4,063,000 $ 629,073 ------------ AUTO COMPONENTS 1.7% Cheng Shin Rubber Industry Co. Ltd. ......................... Taiwan 12,778,099 12,369,546 (a) Norstar Founders Group Ltd. ................................. Hong Kong 13,376,000 -- (b) Zhejiang Glass Co. Ltd., H .................................. China 2,154,000 352,958 ------------ 12,722,504 ------------ AUTOMOBILES 2.9% (b) Chongqing Changan Automobile Co. Ltd., B .................... China 4,395,302 1,678,624 Denway Motors Ltd. .......................................... China 2,008,000 777,245 Dongfeng Motor Corp., H ..................................... China 27,354,000 14,152,667 Great Wall Motor Co. Ltd., H ................................ China 2,496,000 1,014,444 Jiangling Motors Corp. Ltd., B .............................. China 3,818,520 3,241,859 ------------ 20,864,839 ------------ BEVERAGES 0.3% Yantai Changyu Pioneer Wine Co. Ltd., B ..................... China 529,490 1,926,549 ------------ COMMERCIAL BANKS 8.0% Bank of China Ltd., H ....................................... China 35,777,000 11,863,426 (c) Bank of China Ltd., H, 144A ................................. China 9,420,000 3,123,612 China Construction Bank Corp., H ............................ China 50,251,000 28,527,943 Industrial and Commercial Bank of China Ltd., H ............. China 27,510,000 14,304,370 ------------ 57,819,351 ------------ COMMUNICATIONS EQUIPMENT 0.4% ZTE Corp., H ................................................ China 788,737 3,210,737 ------------ COMPUTERS & PERIPHERALS 3.5% Acer Inc. ................................................... Taiwan 3,245,905 4,878,183 Advantech Co. Ltd. .......................................... Taiwan 1,813,561 2,517,128 Asustek Computer Inc. ....................................... Taiwan 14,656,504 15,397,211 Lite-On IT Corp. ............................................ Taiwan 6,206,598 2,807,464 ------------ 25,599,986 ------------ CONSTRUCTION MATERIALS 0.0%(d) (b) Asia Cement China Holdings Corp. ............................ China 389,500 211,072 ------------ DISTRIBUTORS 1.7% China Resources Enterprise Ltd. ............................. Hong Kong 5,818,000 9,007,993 Dah Chong Hong Holdings Ltd. ................................ Hong Kong 18,751,520 2,975,875 (c) Dah Chong Hong Holdings Ltd., 144A .......................... Hong Kong 550,000 87,285 ------------ 12,071,153 ------------
Quarterly Statement of Investments | 3 Templeton Dragon Fund, Inc. STATEMENT OF INVESTMENTS, MARCH 31, 2009 (UNAUDITED) (CONTINUED)
COUNTRY SHARES/UNITS VALUE ------------- ------------ ------------ COMMON STOCKS AND OTHER EQUITY INTERESTS (CONTINUED) DIVERSIFIED TELECOMMUNICATION SERVICES 1.7% China Telecom Corp. Ltd., H ................................. China 18,476,000 $ 7,628,357 China Unicom (Hong Kong) Ltd. ............................... China 4,430,752 4,733,483 ------------ 12,361,840 ------------ ELECTRIC UTILITIES 4.4% Cheung Kong Infrastructure Holdings Ltd. .................... Hong Kong 7,952,000 31,806,153 ------------ ELECTRICAL EQUIPMENT 0.1% Dongfang Electric Co. Ltd., H ............................... China 354,000 791,087 ------------ ENERGY EQUIPMENT & SERVICES 0.0%(d) Honghua Group Ltd. .......................................... China 2,026,000 300,615 ------------ FOOD & STAPLES RETAILING 19.0% Beijing Jingkelong Supermarket Chain Group Co. Ltd., H ...... China 2,070,000 745,157 Dairy Farm International Holdings Ltd. ...................... Hong Kong 31,063,578 136,990,379 ------------ 137,735,536 ------------ FOOD PRODUCTS 1.4% China Foods Ltd. ............................................ China 16,322,000 6,317,827 People's Food Holdings Ltd. ................................. China 3,574,000 1,151,425 (b) Uni-President China Holdings Ltd. ........................... Taiwan 2,340,000 712,526 Uni-President Enterprises Corp. ............................. Taiwan 1,290,692 1,045,942 Xiwang Sugar Holdings Co. Ltd. .............................. Hong Kong 6,972,000 1,043,490 ------------ 10,271,210 ------------ HOTELS, RESTAURANTS & LEISURE 0.2% NagaCorp Ltd. ............................................... Cambodia 17,265,000 1,559,329 ------------ INDEPENDENT POWER PRODUCERS & ENERGY TRADERS 2.8% Datang International Power Generation Co. Ltd., H ........... China 34,592,000 15,219,596 Guangdong Electric Power Development Co. Ltd., B ............ China 10,224,960 3,891,856 Huaneng Power International Inc., H ......................... China 1,454,000 964,274 ------------ 20,075,726 ------------ INDUSTRIAL CONGLOMERATES 2.6% Shanghai Industrial Holdings Ltd. ........................... China 6,850,000 18,957,932 ------------ INSURANCE 1.9% China Life Insurance Co. Ltd., H ............................ China 4,134,000 13,708,082 ------------ IT SERVICES 0.3% Travelsky Technology Ltd., H ................................ China 5,574,000 2,560,295 ------------ LEISURE EQUIPMENT & PRODUCTS 0.2% Yorkey Optical International Cayman Ltd. .................... China 11,491,000 1,527,102 ------------
4 | Quarterly Statement of Investments Templeton Dragon Fund, Inc. STATEMENT OF INVESTMENTS, MARCH 31, 2009 (UNAUDITED) (CONTINUED)
COUNTRY SHARES/UNITS VALUE ------------- ------------ ------------ COMMON STOCKS AND OTHER EQUITY INTERESTS (CONTINUED) MACHINERY 1.6% China International Marine Containers (Group) Co. Ltd., B ... China 10,565,295 $ 6,679,605 Lonking Holdings Ltd. ....................................... China 3,020,000 1,835,274 Shin Zu Shing Co. Ltd. ...................................... Taiwan 985,637 3,427,293 ------------ 11,942,172 ------------ MARINE 0.1% Sinotrans Shipping Ltd. ..................................... Hong Kong 3,090,500 769,590 ------------ MEDIA 0.1% Next Media Ltd. ............................................. Hong Kong 5,588,000 584,002 ------------ METALS & MINING 0.3% Angang Steel Co. Ltd., H .................................... China 840,000 850,789 (e) China Steel Corp. ........................................... Taiwan 1,292,000 845,216 Zijin Mining Group Co. Ltd., H .............................. China 498,000 354,684 ------------ 2,050,689 ------------ OIL, GAS & CONSUMABLE FUELS 22.6% China Coal Energy Co., H .................................... China 891,000 657,577 China Petroleum and Chemical Corp., H ....................... China 97,904,000 62,654,922 China Shenhua Energy Co. Ltd., H ............................ China 7,079,500 15,948,503 CNOOC Ltd. .................................................. China 35,637,000 35,313,067 PetroChina Co. Ltd., H ...................................... China 52,788,000 42,091,729 Yanzhou Coal Mining Co. Ltd., H ............................. China 9,996,000 7,196,702 ------------ 163,862,500 ------------ PHARMACEUTICALS 0.1% Tong Ren Tang Technologies Co. Ltd., H ...................... China 679,000 796,355 ------------ REAL ESTATE MANAGEMENT & DEVELOPMENT 4.4% Cheung Kong (Holdings) Ltd. ................................. Hong Kong 954,000 8,216,233 Hopewell Holdings Ltd. ...................................... Hong Kong 7,088,000 18,610,635 Soho China Ltd. ............................................. China 11,126,500 4,479,053 (c) Soho China Ltd., 144A ....................................... China 764,000 307,554 ------------ 31,613,475 ------------ SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT 4.5% MediaTek Inc. ............................................... Taiwan 383,800 3,607,844 Novatek Microelectronics Corp. Ltd. ......................... Taiwan 2,875,766 4,355,809 Taiwan Semiconductor Manufacturing Co. Ltd. ................. Taiwan 16,295,661 24,682,392 ------------ 32,646,045 ------------ SOFTWARE 0.5% Kingdee International Software Group Co. Ltd., fgn. ......... Hong Kong 12,774,000 1,648,162 (b) Shanda Interactive Entertainment Ltd., ADR .................. China 52,600 2,079,278 ------------ 3,727,440 ------------
Quarterly Statement of Investments | 5 Templeton Dragon Fund, Inc. STATEMENT OF INVESTMENTS, MARCH 31, 2009 (UNAUDITED) (CONTINUED)
COUNTRY SHARES/UNITS VALUE ------------- ------------ ------------ COMMON STOCKS AND OTHER EQUITY INTERESTS (CONTINUED) TEXTILES, APPAREL & LUXURY GOODS 0.4% Anta Sports Products Ltd. ................................... China 1,944,000 $ 1,279,203 Tainan Enterprises Co. Ltd. ................................. Taiwan 1,657,443 884,035 Weiqiao Textile Co. Ltd., H ................................. China 1,556,000 461,754 ------------ 2,624,992 ------------ TRANSPORTATION INFRASTRUCTURE 1.1% Cosco Pacific Ltd. .......................................... China 6,710,000 6,623,035 Hopewell Highway Infrastructure Ltd. ........................ Hong Kong 708,800 399,648 (c) Rickmers Maritime, 144A (Trust Units) ....................... Singapore 2,904,000 658,720 ------------ 7,681,403 ------------ WIRELESS TELECOMMUNICATION SERVICES 9.9% China Mobile Ltd. ........................................... China 7,731,500 67,334,961 Taiwan Mobile Co. Ltd. ...................................... Taiwan 2,972,831 4,305,721 ------------ 71,640,682 ------------ TOTAL COMMON STOCKS AND OTHER EQUITY INTERESTS (COST $478,112,585) ...................................... 716,649,516 ------------ SHORT TERM INVESTMENTS (COST $6,986,168) 0.9% MONEY MARKET FUNDS 0.9% (f) Franklin Institutional Fiduciary Trust Money Market Portfolio, 0.13% ......................................... United States 6,986,168 6,986,168 ------------ TOTAL INVESTMENTS (COST $485,098,753) 99.7% ................. 723,635,684 OTHER ASSETS, LESS LIABILITIES 0.3% ......................... 1,865,850 ------------ NET ASSETS 100.0% ........................................... $725,501,534 ============
See Abbreviations on page 9. (a) Security has been deemed illiquid because it may not be able to be sold within seven days. (b) Non-income producing. (c) Security was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. These securities have been deemed liquid under guidelines approved by the Fund's Board of Trustees. At March 31, 2009, the aggregate value of these securities was $4,177,171, representing 0.58% of net assets. (d) Rounds to less than 0.1% of net assets. (e) A portion or all of the security purchased on a delayed delivery basis. (f) The Franklin Institutional Fiduciary Trust Money Market Portfolio is managed by an affiliate of the Fund's investment manager. The rate shown is the annualized seven-day yield at period end. See Notes to Statement of Investments. 6 | Quarterly Statement of Investments Templeton Dragon Fund, Inc. NOTES TO STATEMENT OF INVESTMENTS (UNAUDITED) 1. ORGANIZATION Templeton Dragon Fund (Fund) is registered under the Investment Company Act of 1940, as amended, as a closed-end investment company. 2. SECURITY VALUATION Securities listed on a securities exchange or on the NASDAQ National Market System are valued at the last quoted sale price or the official closing price of the day, respectively. Over-the-counter securities and listed securities for which there is no reported sale are valued within the range of the most recent quoted bid and ask prices. Securities that trade in multiple markets or on multiple exchanges are valued according to the broadest and most representative market. Investments in open-end mutual funds are valued at the closing net asset value. Foreign securities are valued as of the close of trading on the foreign stock exchange on which the security is primarily traded, or the NYSE, whichever is earlier. If no sale is reported at that time, the foreign security will be valued within the range of the most recent quoted bid and ask prices. The value is then converted into its U.S. dollar equivalent at the foreign exchange rate in effect at the close of the NYSE on the day that the value of the foreign security is determined. Occasionally, events may impact the availability or reliability of foreign exchange rates used to convert to the U.S. dollar equivalent value. If such an event occurs, the foreign exchange rate will be valued at fair value using procedures established and approved by the Fund's Board of Directors. The Fund has procedures to determine the fair value of individual securities and other assets for which market prices are not readily available or which may not be reliably priced. Methods for valuing these securities may include: fundamental analysis, matrix pricing, discounts from market prices of similar securities, or discounts applied due to the nature and duration of restrictions on the disposition of the securities. Due to the inherent uncertainty of valuations of such securities, the fair values may differ significantly from the values that would have been used had a ready market for such investments existed. Occasionally, events occur between the time at which trading in a security is completed and the close of the NYSE that might call into question the availability (including the reliability) of the value of a portfolio security held by the Fund. The investment manager monitors price movements following the close of trading in foreign stock markets through a series of country specific market proxies (such as baskets of American Depository Receipts, futures contracts and exchange traded funds). These price movements are measured against established trigger thresholds for each specific market proxy to assist in determining if an event has occurred. If such an event occurs, the securities may be valued using fair value procedures, which may include the use of independent pricing services. All security valuation procedures are approved by the Fund's Board of Directors. Quarterly Statement of Investments | 7 Templeton Dragon Fund, Inc. NOTES TO STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED) 3. INCOME TAXES At March 31, 2009, the cost of investments and net unrealized appreciation (depreciation) for income tax purposes were as follows: Cost of investments .............................. $485,907,375 ------------ Unrealized appreciation .......................... $312,929,323 Unrealized depreciation .......................... (75,201,014) ------------ Net unrealized appreciation (depreciation) ....... $237,728,309 ============
4. FAIR VALUE MEASUREMENTS Financial Accounting Standards Board (FASB) Statement No. 157 "Fair Value Measurement" establishes a fair value hierarchy that distinguishes between market data obtained from independent sources (observable inputs) and the Fund's own market assumptions (unobservable inputs). These inputs are used in determining the value of the Fund's investments and are summarized in the following fair value hierarchy: - Level 1 - quoted prices in active markets for identical securities - Level 2 - other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speed, credit risk, etc.) - Level 3 - significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments) The inputs or methodology used for valuing securities are not an indication of the risk associated with investing in those securities. The following is a summary of the inputs used as of March 31, 2009, in valuing the Fund's assets carried at fair value:
LEVEL 1 LEVEL 2 LEVEL 3 TOTAL ------------ -------- ------- ------------ ASSETS: Investments in Securities......... $723,328,130 $307,554 $-- $723,635,684
8 | Quarterly Statement of Investments Templeton Dragon Fund, Inc. NOTES TO STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED) 4. FAIR VALUE MEASUREMENTS (CONTINUED) At March 31, 2009, the reconciliation of assets in which significant unobservable inputs (Level 3) were used in determining fair value, is as follows:
INVESTMENTS IN SECURITIES ------------- Beginning Balance - January 1, 2009 ............................... $ 952,764 Net realized gain (loss) ....................................... -- Net change in unrealized appreciation (depreciation) ........... (1,259,860) Net purchases (sales) .......................................... -- Transfers in and/or out of Level 3 ............................. 307,096 ----------- Ending Balance .................................................... $ -- =========== Net change in unrealized appreciation (depreciation) attributable to assets still held at end of period ............. $(1,259,860) ===========
5. NEW ACCOUNTING PRONOUNCEMENTS In April 2009, FASB issued FASB Staff Position FSP FAS 157-4, "Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly" (FSP FAS 157-4), which provides additional guidance when the volume and level of activity for the asset or liability measured at fair value have significantly decreased. Additionally, FSP FAS 157-4 amends FSAS 157 expanding disclosure requirements by reporting entities surrounding the major categories of assets and liabilities carried at fair value. FSP FAS 157-4 is effective for interim and annual periods ending after June 15, 2009. The Fund is currently evaluating the impact, if any, of applying FSP FAS 157-4. ABBREVIATIONS SELECTED PORTFOLIO ADR - American Depository Receipt For information on the Fund's policy regarding other significant accounting policies, please refer to the Fund's most recent semiannual or annual shareholder report. Quarterly Statement of Investments | 9 ITEM 2. CONTROLS AND PROCEDURES. (a) EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES. The Registrant maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Registrant's filings under the Securities Exchange Act of 1934 and the Investment Company Act of 1940 is recorded, processed, summarized and reported within the periods specified in the rules and forms of the Securities and Exchange Commission. Such information is accumulated and communicated to the Registrant's management, including its principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. The Registrant's management, including the principal executive officer and the principal financial officer, recognizes that any set of controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. Within 90 days prior to the filing date of this Quarterly Schedule of Portfolio Holdings on Form N-Q, the Registrant had carried out an evaluation, under the supervision and with the participation of the Registrant's management, including the Registrant's principal executive officer and the Registrant's principal financial officer, of the effectiveness of the design and operation of the Registrant's disclosure controls and procedures. Based on such evaluation, the Registrant's principal executive officer and principal financial officer concluded that the Registrant's disclosure controls and procedures are effective. (b) CHANGES IN INTERNAL CONTROLS. There have been no significant changes in the Registrant's internal controls or in other factors that could significantly affect the internal controls subsequent to the date of their evaluation in connection with the preparation of this Quarterly Schedule of Portfolio Holdings on Form N-Q. ITEM 3. EXHIBITS. (a) Certification pursuant to Section 30a-2 under the Investment Company Act of 1940 of Laura F. Fergerson, Chief Executive Officer - Finance and Administration, and Mark H. Otani, Chief Financial Officer and Chief Accounting Officer SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. TEMPLETON DRAGON FUND, INC. By /s/LAURA F. FERGERSON --------------------------------- Laura F. Fergerson Chief Executive Officer - Finance and Administration Date May 27, 2009 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By /s/LAURA F. FERGERSON --------------------------------- Laura F. Fergerson Chief Executive Officer - Finance and Administration Date May 27, 2009 By /s/MARK H. OTANI -------------------------------- Mark H. Otani Chief Financial Officer and Chief Accounting Officer Date May 27, 2009 EX-99.CERT 2 tdf302_0309.txt 302 CERTS TDF Exhibit 3 I, Laura F. Fergerson, certify that: 1. I have reviewed this report on Form N-Q of TEMPLETON DRAGON FUND, INC. 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the schedules of investments included in this report fairly present in all material respects the investments of the registrant as of the end of the fiscal quarter for which the report is filed; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report, based on such evaluation; and (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. 5/27/2009 S\LAURA F. FERGERSON Laura F. Fergerson Chief Executive Officer - Finance and Administration I, Mark H. Otani, certify that: 1. I have reviewed this report on Form N-Q of TEMPLETON DRAGON FUND, INC.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the schedules of investments included in this report fairly present in all material respects the investments of the registrant as of the end of the fiscal quarter for which the report is filed; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report, based on such evaluation; and (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. 5/27/2009 S\MARK H. OTANI Mark H. Otani Chief Financial Officer and Chief Accounting Officer -----END PRIVACY-ENHANCED MESSAGE-----