Net Asset Value(s)

RNS Number : 3501E

India Capital Growth Fund Limited

03 July 2019

 

3 July 2019

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

Net Asset Value statement at 30 June 2019

Net Asset Value

The Company announces its Net Asset Value per share as at 30 June 2019 was 97.02 pence.

In June the Net Asset Value (NAV) was down 5.1% in Sterling terms, whilst the BSE MidCap TR Index was down 1.0%, delivering an under performance against the notional benchmark of 4.1%. In local currency terms, the NAV was down 5.8% for the month.

Portfolio update

Positive contribution to the portfolio's performance came from Motherson Sumi Systems (up 5.7%), PI Industries (up 3.1%) and City Union Bank (up 2.9%). Negative contribution came from Jammu & Kashmir Bank (down 32.2%), Yes Bank (down 26.4%) and Jain Irrigation (down 48.3%).

Market and economic update

Indian equity markets corrected in June. The BSE Sensex and BSE MidCap Total Return indices fell 0.5% and 1.8% respectively (in Indian Rupees). This was on the back of concerns owing to the late onset of the monsoon, which has since arrived, and challenges concerning the ongoing "liquidity squeeze" in the shadow banking sector, as further downgrades from the rating agencies (on specific companies' credit) undermines confidence. Foreign institutional investors and domestic institutions were net buyers to the tune of US$149m and US$523m respectively over the month. The Indian Rupee appreciated by 1.0% against US Dollar and 0.8% against Pound Sterling.

In the June meeting, the Monetary Policy Committee of the Reserve Bank of India (RBI) cut headline interest rates by 25 basis points to 5.75% for third time in just four months, and changed its stance from "neutral" to "accommodative". Furthermore the RBI revised down FY20 growth forecast to 7.0% from 7.2%. Since consumer price inflation is well under 4% the market expects further rate cuts. However the extent of further monetary loosening is likely to be affected by the outcome of the monsoon rains. Nonetheless, 10 year Government bond yields reached a 19-month low of 6.8%.

India's current account deficit (CAD) for March quarter stood at US$4.60bn or 0.7% of gross domestic product against US$17.7bn, or 2.7% of GDP in the previous quarter. The lower trade deficit came about on the back of higher exports combining with lower oil and non-oil imports. Overall, the balance of payments clocked a US$14.2bn surplus in the fourth quarter after 12 months of deficit, as oil prices stabilised combined with an overall improvement in the capital account.

Portfolio analysis by sector as at 30 June 2019
Sector	No. of Companies	% of Portfolio
Financials	7	23.1%
Materials	8	20.5%
Consumer Discretionary	5	11.8%
Information Technology	3	10.3%
Consumer Staples	4	9.2%
Industrials	4	9.0%
Health Care	3	7.1%
Real Estate	2	1.6%
Communication Services	0	0.0%
Energy	0	0.0%
Utilities	0	0.0%
Total Equity Investment	36	92.7%
Net Cash		7.3%
Total Portfolio	36	100.0%
Top 20 holdings as at 30 June 2019
Holding	Sector	% of Portfolio
Federal Bank	Financials	5.7%
City Union Bank	Financials	5.2%
Tech Mahindra	Information Technology	4.7%
NIIT Technologies	Information Technology	4.5%
Kajaria Ceramics	Industrials	4.0%
PI Industries	Materials	3.9%
Divi's Laboratories	Health Care	3.6%
Jyothy Laboratories	Consumer Staples	3.5%
Berger Paints India	Materials	3.3%
IDFC Bank	Financials	3.2%
Ramkrishna Forgings	Materials	3.1%
Welspun India	Consumer Discretionary	3.0%
Motherson Sumi Systems	Consumer Discretionary	2.8%
Indusind Bank	Financials	2.8%
Aurobindo Pharma	Health Care	2.7%
The Ramco Cements	Materials	2.6%
Exide Industries	Consumer Discretionary	2.6%
Radico Khaitan	Consumer Staples	2.6%
Emami	Consumer Staples	2.5%
Essel Propack	Materials	2.5%
Portfolio analysis by market capitalisation size as 30 June 2019
Market capitalisation size	No. of Companies	% of Portfolio
Small Cap (M/Cap < US$2bn)	22	45.2%
Mid Cap (US$2bn < M/Cap < US$7bn)	12	39.9%
Large Cap (M/Cap > US$7bn)	2	7.5%
Total Equity Investment	36	92.7%
Net Cash		7.3%
Total Portfolio	36	100.0%

 

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