Net Asset Value

RNS Number : 1519N
India Capital Growth Fund Limited
04 August 2017
 

4 August 2017

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

Net Asset Value Statement at 31 July 2017

Net Asset Value

The Company announces its Net Asset Value per share as at 31 July 2017 was 114.44 pence.

In July the Net Asset Value (NAV) was up 3.5% in Sterling terms, whilst the BSE Mid Cap TR Index was up 5.5%, delivering an under performance against the notional benchmark of 2.0%. In local currency terms, the NAV was up 3.3% for the month.

Portfolio update

Positive attribution to the portfolio's performance came from Yes Bank (up 23.6%), Skipper (up 14.5%), Indusind Bank (up 11.3%) and City Union Bank (up 9.7%). Negative attribution came from NIIT Technologies (down 10.7%), PI Industries (down 8.6%) and JK Lakshmi Cement (down 5.6%).

Market and economic update

India's equity markets continue to rise on the back of a smoother than expected transition to the Goods and Services Tax (GST) introduced on 1 July, record low CPI inflation, and a good monsoon to date. In the month the BSE Sensex Index was up 5.2%, whilst the BSE Mid Cap TR Index was up 5.3%, both in INR terms. Foreign Institutions were net buyers (US$580m for the month) as were Domestic Institutions (US$500m for the month). INR appreciated 0.6% against USD and 0.1% against GBP in July.

After a nine month pause, the Reserve Bank of India (RBI) announced a 25 basis points cut in the policy rate to 6% following a sharp fall in CPI inflation to 1.5% in June, mainly led by a fall in food prices. Going forward RBI maintains a neutral stance as it expects inflation to move up in the range of 3.5% - 4.5% by the second half of FY18, as the base effect fades and assuming the States implement salary and allowance increases similar to those of the Central Government.

GST implementation has led to a slowdown in the manufacturing sector as businesses migrate to GST; the Manufacturing PMI Index contracted from 50.9 in June to 47.9 in July. However this downturn is expected to be temporary based upon manufacturers' expectations about future production. This is also supported by good progress in GST implementation on the ground. The Government has stated that 1.3 million new tax payers have signed up under the GST system indicating the tax base is set to widen significantly by the end of the year.

Indian companies began reporting June 17 quarter results largely in line with expectations. Revenue for most manufacturing companies, led by Consumer Staples and Consumer Discretionary, have been hit due to destocking by intermediaries ahead of GST. Private sector banks reported healthy loan growth although asset quality pressures continue. IT companies continue to report weak earnings whilst cement companies reported healthy earnings growth.

 

Portfolio analysis by sector as at 31 July 2017




Sector

No. of Companies

% of Portfolio

Financials

8

28.8%

Materials

9

20.6%

Consumer Discretionary

6

15.9%

Consumer Staples

5

10.5%

Industrials

4

9.0%

IT

2

5.2%

Real Estate

2

3.6%

Healthcare

2

3.5%

Total Equity Investment

38

97.1%

Net Cash


2.9%

Total Portfolio

38

100.0%




Top 20 holdings as at 31 July 2017




Holding

Sector

% of Portfolio

Dewan Housing

Financials

5.7%

Federal Bank

Financials

5.3%

Yes Bank

Financials

5.0%

Motherson Sumi Systems

Consumer Discretionary

4.4%

Jyothy Laboratories

Consumer Staples

3.6%

Kajaria Ceramics

Industrials

3.4%

City Union Bank

Financials

3.4%

Ramkrishna Forgings

Materials

3.4%

Indusind Bank

Financials

3.4%

Sobha Developers

Real Estate

3.3%

NIIT Technologies

IT

2.9%

Skipper

Materials

2.8%

Welspun India

Consumer Discretionary

2.8%

Sagar Cements

Materials

2.6%

The Ramco Cements

Materials

2.6%

Exide Industries

Consumer Discretionary

2.4%

Max Financial Services

Financials

2.4%

PI Industries

Materials

2.4%

Finolex Cables

Industrials

2.4%

Tech Mahindra

IT

2.3%




Portfolio analysis by market capitalisation size as 31 July 2017




Market capitalisation size

No. of Companies

% of Portfolio

Small Cap (M/Cap < US$2bn)

23

51.6%

Mid Cap (US$2bn < M/Cap < US$7bn)

11

31.0%

Large Cap (M/Cap > US$7bn)

4

14.5%

Total Equity Investment

38

97.1%

Net Cash


2.9%

Total Portfolio

38

100.0%

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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