Net Asset Value(s)

RNS Number : 1405W

India Capital Growth Fund Limited

06 February 2017

 

6 February 2017

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

Net Asset Value statement at 31 January 2017

Net Asset Value

The Company announces its Net Asset Value per share as at 31 January 2017 was 94.62 pence.

In January, the Net Asset Value (NAV) was up 6.0% in Sterling terms, whilst the BSE Mid Cap Total Return Index was up 5.4%, delivering an outperformance against the notional benchmark of 0.6%. In local currency terms, the NAV was up 7.8% for the month.

Portfolio update

Positive attribution to the portfolio's performance came from Yes Bank (up 20.7%), Ramkrishna Forgings (up 35.6%), Kajaria Ceramics (up 24.4%) and The Ramco Cements (up 28.2%). Negative attribution came from Divis Laboratories (down 10.7%), Neuland Laboratories (down 12.8%) and Tech Mahindra (down 7.5%).

Market and economic update

India's equity markets recovered sharply following two consecutive months of falling prices. The BSE Sensex rose 3.9%, whilst the BSE Mid Cap Index recovered 6.9%. The first quarterly earnings release since demonetisation indicates a lower impact on corporate profitability than was expected, in the main. Energy, Materials and Financials outperformed, the latter reporting stable asset quality (with some exceptions), while Consumer Staples and Consumer Discretionary companies reported weaker volume growth as expected. Encouragingly though, management commentary was upbeat, pointing to a swift resumption in demand as cash in the economy normalises. IT disappointed on muted guidance. Consumer price inflation softened further to 3.4% in December, a two year low, largely on the back of demonetisation. Foreign Institutions were net equity sellers (US$6.4m for the month) while domestic institutions were net equity buyers (US$696m for the month). The Indian Rupee appreciated 0.1% against the US Dollar and depreciated 1.7% against Sterling.

2017 Budget

The Finance Minister delivered a fiscally prudent budget. Modest tax revenue assumptions combined with a targeted increase in spending towards rural India and infrastructure capital expenditure, in particular roads and railways. The continued path towards fiscal consolidation will be well regarded by investors and should clear the way for looser monetary policy. Additional focus towards further liberalisation of foreign direct investment norms, greater transparency in political funding, clarity over taxation on indirect transfers for foreigners and lower corporate taxes for SME's is encouraging. Emphasis on digital transactions and a low ceiling on cash transactions is also welcome.

Portfolio analysis by sector as at 31 January 2017
Sector	No. of Companies	% of Portfolio
Financials	7	25.8%
Materials	8	18.9%
Consumer Discretionary	7	18.2%
Consumer Staples	5	11.0%
Industrials	4	10.2%
Health Care	3	5.0%
IT	2	4.7%
Real Estate	2	3.0%
Total Equity Investment	38	96.8%
Net Cash		3.2%
Total Portfolio	38	100.0%
Top 20 holdings as at  31 January 2017
Holding	Sector	% of Portfolio
Yes Bank	Financials	5.7%
Federal Bank	Financials	4.6%
Dewan Housing	Financials	4.3%
Jyothy Laboratories	Consumer Staples	4.0%
Motherson Sumi Systems	Consumer Discretionary	3.6%
Kajaria Ceramics	Industrials	3.5%
PI Industries	Materials	3.3%
City Union Bank	Financials	3.2%
The Ramco Cements	Materials	3.2%
Dish TV India	Consumer Discretionary	3.1%
Indusind Bank	Financials	3.1%
Welspun India	Consumer Discretionary	3.1%
Ramkrishna Forgings	Materials	3.0%
Finolex Cables	Industrials	2.7%
Max Financial Services	Financials	2.7%
Exide Industries	Consumer Discretionary	2.7%
Sobha Developers	Real Estate	2.6%
Essel Propack	Materials	2.4%
NIIT Technologies	IT	2.4%
Tech Mahindra	IT	2.3%
Portfolio analysis by market capitalisation size as 31 January 2017
Market capitalisation size	No. of Companies	% of Portfolio
Small Cap (M/Cap < US$2bn)	26	63.5%
Mid Cap (US$2bn < M/Cap < US$7bn)	8	20.9%
Large Cap (M/Cap > US$7bn)	4	12.4%
Total Equity Investment	38	96.8%
Net Cash		3.2%
Total Portfolio	38	100.0%

 

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