Net Asset Value(s)

RNS Number : 5805T

India Capital Growth Fund Limited

09 January 2017

 

9 January 2017

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

Net Asset Value statement at 31 December 2016

Net Asset Value

The Company announces its Net Asset Value per share as at 31 December 2016 was 89.31 pence.

In December the Net Asset Value (NAV) was down 1.9%, whilst the BSE Mid Cap Total Return Index was down 1.3% both in Sterling terms, delivering an underperformance against the notional benchmark of 0.6%. In local currency terms, the NAV was down 4.3% for the month.

Portfolio update

Positive attribution to the portfolio's performance came from Motherson Sumi Systems (up 5.4%), Balkrishna Industries (up 11.1%), Max Financial Services (up 2.8%) and Voltas (up 3.9%). Negative attribution came from Divis Laboratories (down 33.2%), Kajaria Ceramics (down 12.7%) and Emami (down 14.2%).

Market and economic update

Indian equity markets remain on the back foot. The BSE Sensex fell 0.1% whilst the BSE Mid Cap Index was down 3.7%, as investors judge the earnings impact caused by demonetisation to be greater in mid cap companies. Foreign Institutions were net sellers (US$1.2bn for the month), while Domestic Institutions were net buyers (US$1.3bn for the month). The Indian Rupee appreciated 0.7% against the US Dollar and 2.5% against Sterling.

November's consumer price inflation fell to 3.6%, a two year low, led by lower food prices. Demand is depressed across all categories (but mainly "C to C") owing to the ongoing restrictions on cash withdrawals. Despite inflation falling well below the Reserve Bank's target of 5% for FY17, the Monetary Policy Committee (MPC) voted unanimously and unexpectedly to leave the key policy rate unchanged. The MPC cited it needed time to evaluate the long-term impact of currency replacement, plus the shorter term inflationary risk of rising oil prices and a weaker currency. Furthermore, the Bank's estimate of full year FY17 growth was reduced by 0.5% to 7.1%. Following the recent surge in deposits led by market leader State Bank, many Indian Banks announced sharp cuts in lending rates (45bps to 90bps). This has raised hopes that lower borrowing costs will help spark a pick-up in credit growth.

In the Prime Minister's address to the nation, Mr Modi announced "sops" targeting the rural and urban poorest communities, proposing this will help to offset the impact of the current cash crunch, but also perhaps keeping in mind the five States that shortly go to the polls, Uttar Pradesh being the most significant. A win for the BJP here will boost market confidence following a fall in India's equity valuation premium to the broad Emerging Market universe.

Portfolio analysis by sector as at 31 December 2016
Sector	No. of Companies	% of Portfolio
Financials	7	24.1%
Consumer Discretionary	8	18.8%
Materials	8	18.3%
Consumer Staples	5	11.3%
Industrials	5	10.4%
Healthcare	4	7.1%
IT	2	5.4%
Real Estate	2	3.0%
Total Equity Investment	41	98.4%
Net Cash		1.6%
Total Portfolio	41	100.0%
Top 20 holdings as at  31 December 2016
Holding	Sector	% of Portfolio
Yes Bank	Financials	5.1%
Federal Bank	Financials	4.4%
Jyothy Laboratories	Consumer Staples	4.2%
Dewan Housing	Financials	3.9%
Motherson Sumi Systems	Consumer Discretionary	3.8%
PI Industries	Materials	3.4%
Dish TV India	Consumer Discretionary	3.3%
Kajaria Ceramics	Industrials	3.1%
City Union Bank	Financials	2.9%
Indusind Bank	Financials	2.9%
Welspun India	Consumer Discretionary	2.9%
Max Financial Services	Financials	2.8%
Finolex Cables	Industrials	2.7%
Tech Mahindra	IT	2.7%
NIIT Technologies	IT	2.7%
The Ramco Cements	Materials	2.7%
Sobha Developers	Real Estate	2.6%
Essel Propack	Materials	2.6%
Exide Industries	Consumer Discretionary	2.6%
Berger Paints India	Materials	2.5%
Portfolio analysis by market capitalisation size as 31 December 2016
Market capitalisation size	No. of Companies	% of Portfolio
Small Cap (M/Cap < US$2bn)	29	66.3%
Mid Cap (US$2bn < M/Cap < US$7bn)	7	17.5%
Large Cap (M/Cap > US$7bn)	5	14.6%
Total Equity Investment	41	98.4%
Net Cash		1.6%
Total Portfolio	41	100.0%

 

END

 

 

NAVUGUGPGUPMGAQ