Net Asset Value(s)

RNS Number : 9765E

India Capital Growth Fund Limited

08 June 2012

 



8 June 2012

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

Net Asset Value statement as at 31 May 2012

Net Asset Value

The Company announces its Net Asset Value per share as at 31 May 2012 was 41.89        pence.

Portfolio update

In May 2012 the Indian stock markets continued to give back the strong gains made at the start of the year. This was the third consecutive month of falling markets and, coupled with the plunging Indian Rupee ("INR"), this extended the negative returns for investors in sterling terms. Against this backdrop the Net Asset Value of the Company fell 4.8% in sterling terms and the INR depreciated 2.2% against sterling in the month. In INR terms the portfolio fell 2.7%, an out performance of 3.7% versus the BSE Midcap index which fell 6.5% and the BSE Sensex which fell 6.4%.

The majority of the positive attribution comes from stock selection as opposed to sector allocation. In the IT sector, KPIT Cummins Infosystems (technology solution provider) was up 38.4% this month after comfortably beating market expectations. In the consumer sector, Berger Paints was up 15.7% as it continues to improve its product mix and its domestic reach. Elsewhere Jyothy Laboratories (a manufacturer of household products) rose 25.8% as the markets gain confidence in its ability to deliver on its growth strategy.

The downside in performance in the portfolio came from the financial sector.  Indian Bank (a public sector bank) fell 23.5% having disappointed the market with poorer asset quality and the consequential impact on profitability. Manappuram Finance, a financier of loans against gold, fell 32.1% as once gain the sector is subject to further regulatory upheaval.

Market and economic update

Appetite for Indian equities continues to suffer on the back of weak global sentiment and disappointing domestic macro-economic data. In India, the recently announced GDP figures for the quarter to March 2012 showed 5.3% year over year growth, which is the lowest quarterly performance in the last nine years, and surprisingly weaker than any quarter during the global financial crisis of 2008/09. The Reserve Bank of India now has a difficult job of judging the extent to which base rates can be cut, given that wholesale inflation is still above targeted levels, but they have been helped by the price of oil which has fallen in May. One positive event was a 10% rise in petrol prices which has been long awaited and which will reduce the cost of government subsidies. Next step is a diesel hike, which if implemented, would have a far more positive impact on reducing the fiscal deficit.

Portfolio analysis by sector as at 31 May 2012

Sector	No. of Companies	% of Portfolio
Financials	10	25.2%
Industrials	6	14.3%
Health Care	6	11.9%
Consumer Discretionary	4	8.9%
Materials	3	7.4%
IT	3	7.1%
Consumer Staples	2	6.7%
Utilities	2	5.4%
Energy	2	5.3%
Telecom	1	1.9%
Total Equity Investment	39	94.1%
Net Cash		5.9%
Total Portfolio		100.0%

Top 10 holdings as at 31 May 2012

Holding	Sector	% of Portfolio
KPIT Cummins Infosystems	IT	4.8%
Federal Bank	Financials	4.2%
Jyothy Labs	Consumer Staples	4.1%
Dish TV India	Consumer Discretionary	3.6%
CESC	Utilities	3.5%
Lupin	Health Care	3.4%
Eicher Motors	Industrials	3.1%
Cairn India	Energy	3.1%
Max India	Industrials	3.0%
Jammu & Kashmir Bank	Financials	3.0%

Portfolio analysis by market capitalisation size as at 31 May 2012

Market capitalisation size	No. of Companies	% of Portfolio
Small Cap (M/Cap <INR 15bn)	5	6.6%
Mid Cap (INR 15bn <M/Cap<INR 100bn)	24	64.0%
Large Cap (M/Cap > INR 100bn)	9	23.5%
Unlisted	1	0.0%
Total Equity Investment	39	94.1%
Net Cash		5.9%
Total Portfolio		100.0%

 

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