Net Asset Value(s)

RNS Number : 2172V

India Capital Growth Fund Limited

09 January 2012

 



09 January 2012

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

Net Asset Value Statement as at 31 December 2011

Net Asset Value

The Company announces its Net Asset Value per share as at 31 December 2011 was 39.59 pence.

Portfolio Update

In December 2011, the Net Asset Value (NAV) of India Capital Growth Fund Limited declined 8.0% in Rupee terms, outperforming the BSE Midcap Index which fell 8.8%. In Sterling terms the NAV fell 9.0% as the Rupee weakened a further 1.0% against Sterling during the month.

In India, net foreign investor inflows were USD31m during December, reducing the total net outflows for the year to USD358m. However, Indian domestic mutual funds inflows were USD109m during the month and USD1,718m for the year.

In November, headline inflation based on the wholesale price index was reported at 9.1%. This was not only in line with expectations but also represented a 0.6% month on month fall and as such was positive news. The effect of the high base of last year's inflation levels should now "kick in" and therefore it is expected inflation will gradually fall towards the end of March 2012. In addition, annual food inflation turned negative to -3.4% for the week ended 24 December, driven by a sharp decline in key vegetable prices. This was the first year on year drop in several years.

The Reserve Bank of India (RBI) left the key repo rate unchanged at 8.5% in its recent policy meeting. The expectation is the RBI will wait for core inflation to ease before initiating lower policy rates, although alternative attempts to ease liquidity may be introduced by cutting the cash reserve ratio (CRR) of the banks. In the recently concluded Winter session of Parliament, the Government's failure to deliver legislative reform continues. Issues relating to the acceptance of foreign participation in multi format retail consumed the early part of this session and despite a three day extension to the session, no agreement was reached on the passage of key new laws on anti-corruption.

The portfolio's exposure to stocks of consumer staples and its relatively large cash position contributed towards the majority of the positive attribution for the month. In respect of specific stock holdings, Jyothy Labs (household products manufacturing and distribution) rose 9.9%, Cairn India (oil exploration) rose 4.2% and Redington India (IT hardware distribution) rose 4.8%.

The majority of the negative contribution to the portfolio's performance during the month was stock and not sector specific, for example Sintex Industries (diversified manufacturing and engineering) fell 33.0%, Jain Irrigation (micro-irrigation systems manufacturing) fell 25.6% and Manappuram Finance (non-banking gold finance) fell 20.3%.

The portfolio has a relatively large cash position which is intended to be selectively invested over time where further downside valuation is expected to be limited.

Portfolio analysis by sector as at 31 December 2011

Sector	No. of Companies	% of Portfolio
Financials	9	21.5%
Industrials	5	11.4%
Consumer Discretionary	4	8.4%
Materials	6	8.0%
Health Care	4	6.9%
Energy	2	4.9%
IT	3	4.9%
Consumer Staples	3	4.1%
Utilities	1	2.0%
Telecom Services	1	1.7%
Total Equity Investment	38	73.8%
Net Cash		26.2%
Total Portfolio		100.0%

Top 10 holdings as at 31 December 2011

Holding	Sector	% of Portfolio
Federal Bank	Financials	3.8%
Prime Focus	Consumer Discretionary	3.8%
Cairn India	Energy	3.3%
Jain Irrigation	Industrials	3.0%
Manappuram Finance	Financials	2.9%
Redington India	IT	2.6%
Eicher Motors	Industrial	2.5%
Indian Bank	Financials	2.5%
J&K Bank	Financials	2.5%
Indusind Bank	Financials	2.4%

Portfolio analysis by market capitalisation size as at 31 December 2011

Market capitalisation size	No. of Companies		% of Portfolio
Small Cap (M/Cap <INR 15bn)		7	13.8%
Mid Cap (INR 15bn <M/Cap<INR 100bn)		23	46.1%
Large Cap (M/Cap > INR 100bn)		7	13.9%
Unlisted		1	0.0%
Total Equity Investment		38	73.8%
Net Cash			26.2%
Total Portfolio			100.0%

 

END

 

 

NAVUGURCGUPPGGB