Net Asset Value(s)

RNS Number : 6213R

India Capital Growth Fund Limited

07 November 2011

 



India Capital Growth Fund Limited

07 November 2011

India Capital Growth Fund Limited (the "Company" or "ICGF")

31 October 2011 NAV Statement

Net Asset Values

The Company announces its net asset value per share as at 31 October 2011 was 49.91 pence

Portfolio Update

During October the Net Asset Value (NAV) of India Capital Growth Fund Limited was up 2.2% in Rupee terms, as against the BSE Midcap Index which was up 2.7%. In Sterling terms the NAV was up 0.1% as, over the period, the Rupee had weakened 2.1% against Sterling. The intense volatility that pervades developed markets continues to affect riskier asset classes across the globe.

Net Foreign investor inflows in October were USD346m, bringing the net inflow for the year to USD398m.  However, Indian domestic pension funds and mutual funds outflow was USD75m during the month. Recently published figures show India's industrial output rose a lower-than-expected 4.1% in August 2011 against 3.8% in July.

Headline inflation remains above the comfort levels of the Reserve Bank of India, rising to 9.7%. The RBI continued its tightening policy with another 25 bps hike in interest rates which was in line with market expectations. The RBI has hinted at a pause in interest rate rises by stating that there is 'low probability' of another hike in December. The RBI has cut its FY12 GDP forecast from 8% to 7.6%: if this proves to be reality it should reduce inflationary pressure.

The portfolio's exposure to the financial sector contributed the majority of the positive attribution for the month. Manappuram Finance (offering loans against gold collateral) rose 13.4%, whilst Federal Bank rose 12.8%. Elsewhere in the sector,  Sobha Developers was up 17.2%, IDFC was up 19.6% and Yes Bank was up 15.3%, while in consumer discretionary, Hathway Cables and Datacom was up 37%.  In the industrial sector the portfolio also benefitted from the strong performance of IVRCL which was up 18.1%.

The negative contribution to the fund's performance was stock specific and spread across various sectors. Jain Irrigation System (a manufacturer of micro-irrigation systems) fell 18.4%, Voltas (engineering solutions) was down 10.2%, and Hindustan Petroleum Corp (oil refiner and oil marketing) fell 9.1%.  The portfolio continues to maintain a high level of cash and we are using the weakness in the market to buy high quality mid cap stocks at attractive prices for the medium term. The liquidity position is closely monitored to ensure that additional cash can be raised to protect capital should global macro conditions deteriorate further from here.

Analysis of holdings at 31 October 2011

Sector Summary	No. of Companies	% of Portfolio
Financials	10	25.4%
Industrials	8	15.1%
Consumer Discretionary	4	9.7%
Materials	7	9.3%
Health Care	3	6.2%
IT	3	4.7%
Energy	2	4.4%
Utilities	1	2.1%
Consumer Staples	2	2.0%
Telecom Services	1	1.7%
Total Equity Investment	41	80.6%
Net Cash		19.4%
Total Portfolio		100.0%

Top 10 equity holdings at 31 October 2011

Holding	Sector	% of Portfolio
Prime Focus	Consumer Discretionary	4.4%
Manappuram Gen Fin & Leasing	Financials	4.1%
Federal Bank	Financials	3.9%
Bilcare	Health Care	3.5%
Sintex Industries	Industrials	3.3%
Jain Irrigation	Industrials	3.2%
Sobha Developers	Financials	2.9%
Cairn India	Energy	2.6%
J&K Bank	Financials	2.6%
Indusind Bank	Financials	2.5%

Portfolio breakdown by size at 31 October 2011

Size	No. of Companies	% of Portfolio
Small Cap (M/Cap <INR 15bn)	12	21.4%
Mid Cap (INR 15bn <M/Cap<INR 100bn)	19	42.4%
Large Cap (M/Cap > INR 100bn)	9	16.8%
Unlisted	1	0.0%
Cash/Cash Equivalent		19.4%
Total	41	100.0%

 

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