Net Asset Value(s)

RNS Number : 0474V

India Capital Growth Fund Limited

08 January 2013

 



8 January 2013

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

Net Asset Value statement as at 31 December 2012

Net Asset Value

The Company announces its Net Asset Value per share as at 31 December 2012 was 51.19 pence.

In December the Net Asset Value (NAV) was down 1.7% in Sterling terms, whilst the BSE Midcap Index rose 1.9% in Sterling terms, and hence the fund underperformed the notional benchmark by 3.6%. In local currency terms the NAV was down 0.5%.

Portfolio update

Positive contributors to the portfolio's performance came from Federal Bank (up 11.7%), Motherson Sumi (up 13.7%) and IPCA Labs, which rose 13.4%. Negative attribution came from Jyothy Labs (down 12.5%), KPIT Cummins (down 14.0%) and Kajaria Ceramics (down 10%). This month we added a new stock to the portfolio, Multi Commodity Exchange of India, which is India's largest commodity futures exchange.

Market and economic update

Indian equity markets continued upwards in December led by the BSE Midcap Index which rose 3.1%, whilst the BSE Sensex Index rose 0.4%, in Indian Rupees. Foreign investors ("FIIs") added a further USD4.6bn to the market, offsetting ongoing domestic selling pressure; for the full year FIIs have invested a total of USD24.4bn. Capital market activity also picked up noticeably this month with approximately USD3bn of deal flow being comfortably absorbed into the market. We see this as incrementally good news.

The positive momentum has been created by a combination of improving economic data and encouraging news on the reform agenda. Thus wholesale inflation for November surprised on the downside falling to 7.2%, below expectation for the second month running. Core inflation also beat the market's expectations, reaching 4.5%. In spite of this, the Reserve Bank kept rates on hold, although a cut in early 2013 is universally expected. Elsewhere the Banking Amendment Bill passed successfully, as did the much touted Bill allowing Foreign Direct Investment into the retail sector. We remain cautiously optimistic that this new found energy from the government will continue into the Budget session of Parliament in early 2013.

Benchmarks

The Chairman's statement in the Interim Report 2012 mentioned that the board is considering the introduction of a bespoke benchmark which more appropriately reflects the company's portfolio capitalisation weightings. Having internally monitored this benchmark for a number of months and backtracked the calculations for over a year, the board has determined it is now appropriate to disclose publicly the bespoke benchmark, alongside the BSE Midcap Index, in the Company's monthly NAV announcements beginning with the NAV as at 31 January 2013. The disclosure is initially for information rather than formal benchmarking purposes and the board will provide further comment on this bespoke benchmark in the Annual Report 2012, which will be despatched to shareholders in mid-March 2013.

Portfolio analysis by sector as at 31 December 2012

Sector	No. of Companies	% of Portfolio
Financials	11	34.2%
Industrials	6	16.1%
Consumer Discretionary	4	12.4%
Consumer Staples	3	8.5%
Health Care	3	8.3%
Energy	3	7.3%
Information Technology	2	3.7%
Telecommunication Services	1	2.5%
Materials	1	2.0%
Total Equity Investment	34	95.0%
Net Cash		5.0%
Total Portfolio		100.0%

Top 10 holdings as at 31 December 2012

Holding	Sector	% of Portfolio
Federal Bank	Financials	5.9%
Jyothy Laboratories	Consumer Staples	4.4%
Yes Bank	Financials	4.3%
Dish TV India	Consumer Discretionary	3.8%
KPIT Cummins	IT	3.7%
Max India	Industrials	3.5%
Indian Bank	Financials	3.5%
Kajaria Ceramics	Consumer Discretionary	3.4%
Jammu & Kashmir Bank	Financials	3.3%
Larsen & Toubro	Industrials	3.3%

Portfolio analysis by market capitalisation size as at 31 December 2012

Market capitalisation size	No. of Companies	% of Portfolio
Small Cap (M/Cap <INR 15bn)	2	5.4%
Mid Cap (INR 15bn <M/Cap<INR 100bn)	20	58.4%
Large Cap (M/Cap > INR 100bn)	11	31.2%
Unlisted	1	0.0%
Total Equity Investment	34	95.0%
Net Cash		5.0%
Total Portfolio		100.0%

 

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