Net Asset Value(s)

RNS Number : 0137Q

India Capital Growth Fund Limited

06 September 2017

 

6 September 2017

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

Net Asset Value statement at 31 August 2017

Net Asset Value

The Company announces its Net Asset Value per share as at 31 August 2017 was 115.20 pence.

In August the Net Asset Value (NAV) was up 0.7% in Sterling terms, whilst the BSE Mid Cap TR Index was up 2.9%, delivering an under performance against the notional benchmark of 2.2%. In local currency terms, the NAV was down 1.1% for the month.

Portfolio update

Positive attribution to the portfolio's performance came from Dewan Housing Finance (up 10.6%), Finolex Cables (up 15.2%), Tech Mahindra (up 11.0%) and Essel Propack (up 9.9%). Negative attribution came from City Union Bank (down 9.9%), Federal Bank (down 6.0%) and Neuland Laboratories (down 11.7%).

Market and economic update

India's equity markets diverged this month. Large Cap stocks of the BSE Sensex corrected 2.4%, principally on the back of geopolitical tensions over North Korea, whilst stocks of the BSE Mid Cap Index rallied 1.1%, once again supported by ongoing inflows from Domestic Institutions. In August Foreign Institutions were net sellers (US$1.7bn) while Domestic Institutions were net buyers (US$ 2.5bn). The India Rupee appreciated 0.4% against the US Dollar and 1.7% against Sterling.

First quarter FY18 GDP (for the quarter ending June 2017) was reported "softer" than expected, with growth slowing to 5.7% from 6.1%, as companies slashed production due to the wholesale channel destocking ahead of the introduction of the Goods and Services Tax (GST) from July. Consensus estimates for full year GDP growth now range between 6.8% and 7.0%. Looking ahead, manufacturing growth is expected to revive slowly over the next few quarters as the impact of both demonetisation and destocking fades. Plentiful monsoon rainfall and lower interest rates are expected to generate healthy "consumption led" growth, however offsetting this could be a reduction in government spending as the Finance Minister looks to contain the fiscal deficit.  Elsewhere, Consumer Price Inflation rose to 2.4% in July from a low of 1.5% in June, as the transition to GST pushed up prices.

Prime Minister Narendra Modi carried out a third ministerial reshuffle since taking power, in a move designed to raise economic growth and fast track the implementation of social sector projects ahead of the 2019 general election. Nine new cabinet members have been appointed (including India's first female Defence Minster for 35 years), all selected with the Prime

Minister's 'New India' vision and with the '4P' formula in mind; Passion, Proficiency, Professional and Political acumen.

Portfolio analysis by sector as at 31 August 2017
Sector	No. of Companies	% of Portfolio
Financials	8	28.4%
Materials	9	20.7%
Consumer Discretionary	6	15.1%
Consumer Staples	5	10.8%
Industrials	4	9.6%
IT	2	5.4%
Real Estate	2	3.6%
Healthcare	2	3.3%
Total Equity Investment	38	96.9%
Net Cash		3.1%
Total Portfolio	38	100.0%
Top 20 holdings as at 31 August 2017
Holding	Sector	% of Portfolio
Dewan Housing	Financials	6.4%
Federal Bank	Financials	5.1%
Yes Bank	Financials	4.9%
Motherson Sumi Systems	Consumer Discretionary	4.3%
Jyothy Laboratories	Consumer Staples	3.7%
Ramkrishna Forgings	Materials	3.6%
Kajaria Ceramics	Industrials	3.6%
Sobha Developers	Real Estate	3.3%
City Union Bank	Financials	3.1%
Indusind Bank	Financials	2.9%
NIIT Technologies	IT	2.9%
Finolex Cables	Industrials	2.8%
Welspun India	Consumer Discretionary	2.6%
The Ramco Cements	Materials	2.6%
Sagar Cements	Materials	2.6%
Tech Mahindra	IT	2.6%
Skipper	Materials	2.6%
Max Financial Services	Financials	2.4%
PI Industries	Materials	2.3%
Essel Propack	Materials	2.3%
Portfolio analysis by market capitalisation size as 31 August 2017
Market capitalisation size	No. of Companies	% of Portfolio
Small Cap (M/Cap < US$2bn)	23	51.8%
Mid Cap (US$2bn < M/Cap < US$7bn)	11	31.3%
Large Cap (M/Cap > US$7bn)	4	13.8%
Total Equity Investment	38	96.9%
Net Cash		3.1%
Total Portfolio	38	100.0%

 

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