Net Asset Value(s)

RNS Number : 9961G

India Capital Growth Fund Limited

05 July 2012

 



5 July 2012

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

Net Asset Value statement as at 30 June 2012

Net Asset Value

The Company announces its Net Asset Value per share as at 30 June 2012 was 44.17 pence.

Portfolio update

In June 2012 the Net Asset Value (NAV) of the Company rose 5.5% in sterling terms. In Indian Rupee (INR) terms, the NAV was up 6.3%, registering a 2.2% outperformance compared to the BSE Midcap Index, the portfolio's notional benchmark. The INR continued to slide against Sterling, falling 0.8% during the month.

Positive contributions to the NAV came from Manappuram Finance (a financier of loans against gold) which recovered 53.9% from heavily oversold levels. The catalyst appears to have been the credit rating agency CRISIL reaffirming its A1+ rating. Larsen and Toubro (a large cap engineering company) was up 19.2%, whilst Prime Focus (a 2D to 3D conversion service provider) rallied 21.9%. Elsewhere Jain Irrigation (a micro irrigation equipment manufacturer) rose 16.4%, and Sobha Developers (a South India based real estate company) finished the month 13.6% higher.

Negative contributions in the portfolio came from Eicher Motors (a manufacturer of light commercial vehicles) which fell 12.8%, Cairn India (an oil exploration and production company) down 7.9% and KPIT Cummins (a technology solution provider) was down 2.2%.

Market and economic update

In June the INR continued to weaken touching its all-time high of 57.22 to the USD as the government reported a weaker balance of payments and a worsening current account deficit. The currency recovered somewhat however following some insipid measures from the Reserve Bank of India (RBI) to stem the demand for foreign currency combined with the overall month end recovery in global markets.

The markets were disappointed by the decision of the RBI not to cut interest rates, despite slower growth and collapsing confidence. In our opinion this was an excellent decision. Inflation is still well above comfort levels, the monsoon is late (low levels of rain hamper crop production and thus add to inflationary pressure), and the message from the RBI to the government is clear. Credible fiscal reform is required to tackle inflation, before further monetary easing can occur. This puts the ball firmly back into the government's court.

Despite the ongoing weak economic outlook, foreign selling of equities remained muted with just USD86.2m of outflows this month. Year to date foreigners have invested USD8.5bn in equities, whilst domestic mutual funds continue to be net sellers to the tune of USD1.1bn in 2012.

Portfolio analysis by sector as at 30 June 2012

Sector	No. of Companies	% of Portfolio
Financials	10	26.9%
Industrials	6	15.0%
Health Care	5	11.0%
Consumer Discretionary	4	9.3%
Materials	3	7.4%
Consumer Staples	2	6.7%
Information Technology	3	5.6%
Utilities	2	5.5%
Energy	2	4.2%
Telecommunication Services	1	1.8%
Total Equity Investment	38	93.4%
Net Cash		6.6%
Total Portfolio		100.0%

Top 10 holdings as at 30 June 2012

Holding	Sector	% of Portfolio
Federal Bank	Financials	4.2%
Jyothy Laboratories	Consumer Staples	4.1%
Dish TV India	Consumer Discretionary	3.7%
CESC	Utilities	3.6%
KPIT Cummins Infosystems	Information Technology	3.6%
Jain Irrigation Systems	Industrials	3.3%
Lupin	Health Care	3.2%
Divi's Laboratories	Health Care	3.1%
Indian Bank	Financials	3.1%
Sobha Developers Ltd	Financials	3.1%

Portfolio analysis by market capitalisation size as at 30 June 2012

Market capitalisation size	No. of Companies	% of Portfolio
Small Cap (M/Cap <INR 15bn)	4	6.3%
Mid Cap (INR 15bn <M/Cap<INR 100bn)	23	61.8%
Large Cap (M/Cap > INR 100bn)	10	25.3%
Unlisted	1	0.0%
Total Equity Investment	38	93.4%
Net Cash		6.6%
Total Portfolio		100.0%

 

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