Net Asset Value(s)

RNS Number : 3171H

India Capital Growth Fund Limited

06 June 2017

 

6 June 2017

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

Net Asset Value statement at 31 May 2017

Net Asset Value

The Company announces its Net Asset Value per share as at 31 May 2017 was 111.75 pence.

In the month the Net Asset Value (NAV) was down 1.7% in Sterling terms, whilst the BSE Mid Cap TR Index was down 0.9%, delivering an under performance against the notional benchmark of 0.8%. In local currency terms, the NAV was down 1.9% for the month.

Portfolio update

Positive attribution to the portfolio's performance came from Motherson Sumi (up 12.3%), NIIT Technologies (up 13.9%), Manpasand Beverages (up 13.9%) and Kajaria Ceramics (up 5.6%). Negative attribution came from Yes Bank (down 12.2%), Kitex Garments (down 25.7%) and Welspun India (down 14.4%).

Market and economic update

India's equity markets exhibited mixed performance in May; large caps meaningfully outperformed their mid and small cap peers as the BSE Sensex rallied 4.3%, whilst the BSE Mid Cap TR Index fell 1.1%. Foreign and Domestic Institutions were net buyers alike (US$1.5bn for FII's) and US$0.8bn for DII's. INR depreciated 0.4% against USD, though appreciated a further 0.2% against GBP.

India's 4^th quarter (Jan-Mar) GDP expanded 6.1% year over year compared to 7.0% in the previous quarter, the slowest pace of quarterly growth for three years. This was partly a result of upward revision to earlier data, but more a consequence of demonetisation, which dragged the industrial and services sectors lower; the agriculture sector fared well. On the expenditure side, government spending continued to contribute positively whilst on going disappointment in gross fixed capital formation spending, a proxy for private sector investment continued, falling 2.0% year over year adjusting for inflation, though remaining flat in nominal terms. In efforts to meaningfully address the issue of non-performing assets in the public banking sector, the Government passed an ordinance (circumventing the legislative process) giving additional powers to the Reserve Bank. This should facilitate broader recognition by the banks of the extent of the problem, but falls short of addressing any far reaching solution.

Ahead of the implementation of India's new tax system on July 1^st, the GST council finalised the rate structure for all goods and services. The overall impact is broadly tax neutral, as majority of goods and services fall in the 18% tax bracket or below. However confusion on the quantum of input credit on the goods within the supply chain, during the period of transition, could lead to significant de-stocking which could impact sales initially. Monsoon forecasts remain healthy.

Consumer price inflation dropped to 3% in April, its lowest since the inception of the CPI series in January 2012 on the back of stable food prices and weak pricing power. The 10 year Government yield fell 30bps to 6.7% on hope that central bank might revisit its hawkish stance, particularly given recent sluggish GDP growth.

Portfolio analysis by sector as at 31 May 2017
Sector	No. of Companies	% of Portfolio
Financials	8	27.8%
Materials	9	21.2%
Consumer Discretionary	6	15.9%
Consumer Staples	5	10.5%
Industrials	4	9.4%
IT	2	4.8%
Healthcare	2	3.3%
Real Estate	2	3.6%
Total Equity Investment	38	96.6%
Net Cash		3.4%
Total Portfolio	38	100.0%
Top 20 holdings as at 31 May 2017
Holding	Sector	% of Portfolio
Dewan Housing	Financials	5.4%
Federal Bank	Financials	5.4%
Yes Bank	Financials	5.1%
Motherson Sumi Systems	Consumer Discretionary	4.3%
Kajaria Ceramics	Industrials	3.7%
Jyothy Laboratories	Consumer Staples	3.7%
Sobha Developers	Real Estate	3.2%
Indusind Bank	Financials	3.2%
City Union Bank	Financials	3.2%
Ramkrishna Forgings	Materials	3.2%
NIIT Technologies	IT	3.1%
Welspun India	Consumer Discretionary	2.9%
The Ramco Cements	Materials	2.8%
Finolex Cables	Industrials	2.7%
Sagar Cements	Materials	2.7%
Exide Industries	Consumer Discretionary	2.7%
PI Industries	Materials	2.7%
Skipper	Materials	2.5%
Dish TV India	Consumer Discretionary	2.4%
Max Financial Services	Financials	2.4%
Portfolio analysis by market capitalisation size as 31 May 2017
Market capitalisation size	No. of Companies	% of Portfolio
Small Cap (M/Cap < US$2bn)	23	51.1%
Mid Cap (US$2bn < M/Cap < US$7bn)	11	34.4%
Large Cap (M/Cap > US$7bn)	4	11.0%
Total Equity Investment	38	96.6%
Net Cash		3.4%
Total Portfolio	38	100.0%

 

END

 

 

NAVUGUMPQUPMGWQ