Net Asset Value

RNS Number : 2666G

India Capital Growth Fund Limited

04 August 2016

 

4 August 2016

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

Net Asset Value statement at 31 July 2016

Net Asset Value

The Company announces its Net Asset Value per share as at 31 July 2016 was 103.02 pence.

In July the Net Asset Value (NAV) was up 9.0% whilst the BSE Mid Cap Index was up 11.0%, delivering an under performance against the notional benchmark of 2.0% in Sterling terms. Against Ocean Dial's Composite Index, ICGF under performed by 0.4%. In local currency terms, the NAV was up 6.4% for the month.

The Company also announces its fully diluted NAV per share as at 31 July 2016 was 89.02 pence. 

The above fully diluted NAV assumes the 37,500,710 Subscription Shares rights will be exercised at their subscription price of 61 pence each within 14 days of the subscription date of 6 August 2016.

Portfolio update

Positive attribution to the portfolio's performance came from Federal Bank (up 12.2%), Berger Paints (up 20.6%), Yes Bank (up 9.9%) and Motherson Sumi (up 14.2%). Negative attribution came from NIIT Technologies (down 12.2%), Jyothy Laboratories (down 4.9%) and Ramkrishna Forgings (down 6.6%).

Market and economic update

Indian equity markets continued to rally in July; the BSE Sensex was up 3.9% whilst the BSE Mid Cap Index was up 8.1% on the back of better monsoon rains and rising expectation of the Good and Services Tax (GST) Bill being passed in the ongoing parliament session, following conciliatory amendments from the ruling party.  Foreign Institutions were net buyers of equities (US$1.7bn for July) whilst Domestic Institutions were net sellers (US$804m). The Indian currency appreciated 0.8% against the US Dollar and 2.5% against Sterling in the month.

June consumer price inflation came in at 5.8%, unchanged compared to the previous month. However the recent strength of monsoon rains has boosted optimism that a better crop output will contain the "food basket's" costs that make up a significant part of India's inflation. This, and mounting ongoing speculation the successor to Central Bank Governor, Raghuram Rajan, will lean toward looser monetary policy, contributed to the 10 year benchmark yield softening a meaningful 28 bps to 7.2%, a three year low.

India's Industrial Production (IIP) increased 1.2% in May, compared to the previous month's fall of 1.4%, driven by manufacturing sector production rebounding 0.7% following two months of decline and mining output and electricity generation rising 1.3% and 4.7% respectively.

Export data was also an improvement in June, expanding for the first time in 18 months, led by growth in pharmaceuticals, chemicals and engineering goods. Imports continue to contract (for the 19th consecutive month), down 7.3% although imports of machinery and transport equipment grew, suggesting a pickup in domestic demand.

1Q FY17 results are underway: Materials, Telecoms, Cement, Auto and Energy companies outperformed expectations while IT Services, Consumer Staples and Healthcare companies have disappointed in the main. Private Sector banks reported inline results though asset quality issues remain at the forefront of investors' minds. 

Portfolio analysis by sector as at 31 July 2016 Sector No. of Companies % of Portfolio Financials 9 30.2% Materials 7 17.4% Consumer Discretionary 7 15.6% Industrials 5 13.0% Consumer Staples 4 8.8% Healthcare 5 8.5% IT 2 4.2% Total Equity Investment 39 97.7% Net Cash 2.3% Total Portfolio 39 100.0% Top 20 holdings as at 31 July 2016 Holding Sector % of Portfolio Yes Bank Financials 5.4% Federal Bank Financials 4.5% Kajaria Ceramics Industrials 4.5% Indusind Bank Financials 3.8% Dewan Housing Financials 3.8% PI Industries Materials 3.8% Dish TV India Consumer Discretionary 3.7% City Union Financials 3.6% Jyothy Laboratories Consumer Staples 3.5% Divis Laboratories Healthcare 3.4% Max Financial Services Financials 3.4% Berger Paints India Materials 3.4% Motherson Sumi Systems Consumer Discretionary 3.3% The Ramco Cements Materials 3.3% Finolex Cables Industrials 3.2% Exide Industries Consumer Discretionary 3.2% Sobha Developers Financials 2.9% Essel Propack Materials 2.5% Emami Consumer Staples 2.4% Tech Mahindra IT 2.2% Portfolio analysis by market capitalisation size as 31 July 2016 Market capitalisation size No. of Companies % of Portfolio Small Cap (M/Cap < INR60bn) 16 30.6% Mid Cap (INR60bn < M/Cap < INR250bn) 16 45.1% Large Cap (M/Cap > INR250bn) 7 22.0% Total Equity Investment 39 97.7% Net Cash 2.3% Total Portfolio 39 100.0%

 

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