Net Asset Value(s)

RNS Number : 2552X

India Capital Growth Fund Limited

06 February 2013

 



6 February 2013

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

Net Asset Value statement as at 31 January 2013

Net Asset Value

The Company announces its Net Asset Value per share as at 31 January 2013 was 54.21 pence.

In January the Net Asset Value (NAV) was up 5.9% in Sterling terms, whilst the BSE Midcap Index rose 3.0% in Sterling terms, delivering an outperformance against the notional benchmark of 2.9%. In local currency terms the NAV was up 0.8%.

As announced in the NAV statement as at 31 December 2012, the board has determined it will disclose publicly, for information rather than formal benchmarking purposes, a bespoke benchmark which more appropriately reflects the company's portfolio capitalisation weightings, beginning with disclosure in the NAV statement this month. Therefore the board announces that in January 2013, the Bespoke Benchmark (BB) rose 4.0% in Sterling terms and hence the fund outperformed this benchmark by 1.9%. The board will provide further comment on this BB in the Annual Report 2012 which will be despatched to shareholders in mid-march 2013.

Portfolio update

Positive contributors to the portfolio's performance came from Manappuram Finance (up 28.8%), Yes Bank (up 12.5%) and Dewan Housing (up 14.6%). Negative attribution came from Federal Bank (down 6.1%), Jyothy Labs (down 7.2%) and Kajaria Ceramics (down 8.0%).

Market and economic update

The BSE Sensex was up 7.6% in Sterling terms helped again by the strong net inflow of USD4.06bn from FII's. The strong inflows into Indian equities were encouraged by the news of deferred implementation of the General Anti-Avoidance Rules (GAAR) by two years to April 2016, the fuel price reform by the Government and easing of interest rates by the Reserve Bank of India (RBI).

The Government has allowed oil marketing companies to raise retail diesel prices by INR0.5 per litre every month and entirely deregulated diesel sold to bulk buyers (like the Indian Railways, Indian Army etc.) which accounts for ~18% of the total volumes. Together these measures should help reduce the Government's fuel subsidy bill by ~0.5% of GDP.

For the first time in nine months the RBI cut rates by 25bps, creating scope for banks to lower the cost of borrowing. The RBI also cut the cash reserve ratio (CRR) rate by 25bps, to infuse further liquidity into the banking system. At the same time, the RBI cut its FY13 (ending March 2013) GDP growth forecast to 5.5% from 5.8%. In addition, the WPI inflation forecast for the same period was revised to 6.8% from 7.5%.

The Q3 FY13 corporate results season has been satisfactory so far. In the information technology, private sector banks and healthcare sectors, companies have delivered good results, whereas in the consumer space, lower than expected volume growth disappointed the market.

India's Finance Minister Mr. P Chidambaram travelled across Asia and Europe to showcase India's economic potential to foreign investors. He appeared determined to return the country to a sustainable level of higher GDP growth.

Portfolio analysis by sector as at 31 January 2013

Sector	No. of Companies	% of Portfolio
Financials	11	36.0%
Industrials	6	16.4%
Consumer Discretionary	4	12.0%
Consumer Staples	3	8.7%
Health Care	3	8.0%
Energy	3	7.4%
Information Technology	2	3.7%
Telecommunication Services	1	2.7%
Materials	1	1.7%
Total Equity Investment	34	96.6%
Net Cash		3.4%
Total Portfolio		100.0%

Top 10 holdings as at 31 January 2013

Holding	Sector	% of Portfolio
Federal Bank	Financials	5.5%
Yes Bank	Financials	4.8%
Jyothy Laboratories	Consumer Staples	4.6%
Manappuram Finance	Financials	3.9%
KPIT Cummins	IT	3.7%
Max India	Industrials	3.6%
Dish TV India	Consumer Discretionary	3.6%
Jammu & Kashmir Bank	Financials	3.5%
Indian Bank	Financials	3.5%
Dewan Housing	Financials	3.5%

Portfolio analysis by market capitalisation size as at 31 January 2013

Market capitalisation size	No. of Companies	% of Portfolio
Small Cap (M/Cap <INR15bn)	2	5.4%
Mid Cap (INR15bn <M/Cap<INR100bn)	19	57.0%
Large Cap (M/Cap > INR100bn)	12	34.2%
Unlisted	1	0.0%
Total Equity Investment	34	96.6%
Net Cash		3.4%
Total Portfolio		100.0%

 

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