Net Asset Value(s)

RNS Number : 3456E

India Capital Growth Fund Limited

05 May 2017

 

5 May 2017

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

Net Asset Value statement at 30 April 2017

Net Asset Value

The Company announces its Net Asset Value per share as at 30 April 2017 was 113.70 pence.

In April the Net Asset Value (NAV) was up 3.5% in Sterling terms, whilst the BSE Mid Cap Total Return Index was up 2.6%, delivering an out performance against the notional benchmark of 0.9%. In local currency terms, the NAV was up 6.0% for the month.

Portfolio update

Positive attribution to the portfolio's performance came from Dewan Housing Finance (up 16.2%), Federal Bank (up 17.7%), Jyothy Labs (up 13.4%) and Kajaria Ceramics (up 13.8%). Negative attribution came from Dish TV (down 11.5%), Tech Mahindra (down 9.2%) and Neuland Labs (down 6.4%).

Market and economic update

India's equity markets continued to rally, recording new all-time highs. Thus the BSE Sensex rose 1.0%, whilst the BSE Mid Cap Total Return Index rose 5.0%. Foreign Institutions were net sellers (US$171m for the month), whilst Domestic Institutions were net buyers (US$1.2bn). India's currency appreciated 1.0% against US Dollar, but fell 2.4% against Sterling. March's consumer price inflation rose marginally to 3.8%.

In its recent meeting, India's Monetary Policy Committee left benchmark interest rates unchanged, but raised its inflation projection for FY18 to 4.5-5% (vs. 4-5% earlier). The Committee highlighted potential upside risks from the looming monsoon, last year's public employees wage hike, the implementation of the goods and services tax (GST) as well as rising commodity prices and broader "global issues". Hence, further rate reductions in the near term look unlikely. Besides, rate setters remain optimistic on growth, expecting gross value added (or GVA, a proxy for GDP) to improve to 7.4% in FY18 and 8.1% in FY19, with increased consumption demand forecast to be the predominant driver of stronger growth. The Government's 10 year bond yield rose 28bps to 6.9%, as the market anticipates potential interest rate hikes as early as next Financial Year. 

The fourth quarter and full year (FY17) reporting season has begun in earnest. Private sector banks reported healthy loan growth, predominantly in retail credit. However asset quality pressures persist. The IT sector's woes continue; weak earnings on the back of disappointing volume growth combining with currency pressure, and limp guidance for next year. Cement companies surprised positively however on better volumes, despite demonetisation concerns.

The Indian Metrological Department's first seasonal forecast predicted a "normal" monsoon season for June to September.

Portfolio analysis by sector as at 30 April 2017
Sector	No. of Companies	% of Portfolio
Financials	7	27.1%
Materials	9	20.9%
Consumer Discretionary	6	16.5%
Consumer Staples	5	10.4%
Industrials	3	8.5%
IT	2	4.5%
Healthcare	2	3.4%
Real Estate	2	3.5%
Total Equity Investment	36	94.8%
Net Cash		5.2%
Total Portfolio	36	100.0%
Top 20 holdings as at 30 April 2017
Holding	Sector	% of Portfolio
Yes Bank	Financials	5.7%
Dewan Housing	Financials	5.4%
Federal Bank	Financials	5.1%
Jyothy Laboratories	Consumer Staples	3.9%
Motherson Sumi Systems	Consumer Discretionary	3.7%
Kajaria Ceramics	Industrials	3.4%
Ramkrishna Forgings	Materials	3.3%
Welspun India	Consumer Discretionary	3.3%
Sobha Developers	Real Estate	3.2%
Indusind Bank	Financials	3.0%
City Union Bank	Financials	3.0%
PI Industries	Materials	2.8%
Finolex Cables	Industrials	2.8%
Dish TV India	Consumer Discretionary	2.7%
Max Financial Services	Financials	2.7%
NIIT Technologies	IT	2.7%
Sagar Cements	Materials	2.6%
The Ramco Cements	Materials	2.6%
Exide Industries	Consumer Discretionary	2.6%
Berger Paints India	Materials	2.4%
Portfolio analysis by market capitalisation size as 30 April 2017
Market capitalisation size	No. of Companies	% of Portfolio
Small Cap (M/Cap < US$2bn)	21	50.2%
Mid Cap (US$2bn < M/Cap < US$7bn)	11	30.6%
Large Cap (M/Cap > US$7bn)	4	14.0%
Total Equity Investment	36	94.8%
Net Cash		5.2%
Total Portfolio	36	100.0%

 

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