Net Asset Value

RNS Number : 3436K

India Capital Growth Fund Limited

06 July 2017

 

6 July 2017

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

Net Asset Value statement at 30 June 2017

Net Asset Value

The Company announces its Net Asset Value per share as at 30 June 2017 was 110.61       pence.

In June the Net Asset Value (NAV) was down 1.0% in Sterling terms, whilst the BSE Mid Cap TR Index was down 1.7%, delivering out performance against the notional benchmark of       0.7%. In local currency terms, the NAV was up 0.9% for the month.

Portfolio update

A summary of the Top 20 holdings is provided below.

Market and Economic Update

Following the Reserve Bank of India's decision to stand pat on rates, consumer price inflation fell to 2.2% for May, the lowest level reported in this series; food and fuel prices drove the number lower.

The imminent onset of the Goods & Services Tax (GST), combined with the current outlook for favourable monsoon rainfall and the ongoing positive base effect, augurs well for some loosening of monetary policy. Implementation of GST took place on July 1^st with the Government confident of a smooth transition period and no widespread tension reported as yet. Some leeway on filing of returns and a "penalty amnesty" for two months has been granted. 

Elsewhere the "core sector" (making up 40% of the index of industrial production (IIP)), grew 2.8% in April versus 5.2% growth in May last year; both coal and fertiliser volumes contracted. The ongoing slowdown in private sector investment plus uncertainty surrounding GST suggests a turnaround here is not imminent. The reported trade deficit for May rose to a 30 month high as imports of gold and oil contributed to the incremental uptick, as export growth softened. This spike in gold imports maybe a temporary factor connected to GST, but must be watched. A weaker trade balance may halt further strength in India's currency.

Several States announced a "farm loan waiver" whereby farmers' debts are transferred to State budgets for political gain, but fiscal cost. In other news, the Cabinet approved the privatisation of loss making Air India by March 2018 and reportedly, CIDB Holdings, a state-owned company in Malaysia, will bid to manage six Indian railway stations. This bidding is among the first of the 23 stations to be privatised, as confirmed by the Government last month. Successful bidders will be given land redevelopment rights for 45 years and will be required to modernise the stations, build elevators and other passenger facilities. These six have an estimated value of US$780m.

Prime Minister Modi met with President Trump and discussed America's wish to sell more natural gas to India on long term contracts, as well as removing current barriers of US exports to India.

Portfolio analysis by sector as at 30 June 2017
Sector	No. of Companies	% of Portfolio
Financials	8	27.4%
Materials	9	21.1%
Consumer Discretionary	6	16.3%
Consumer Staples	5	10.3%
Industrials	4	9.0%
IT	2	5.7%
Healthcare	2	3.5%
Real Estate	2	3.5%
Total Equity Investment	38	97.0%
Net Cash		3.0%
Total Portfolio	38	100.0%
Top 20 holdings as at 30 June 2017
Holding	Sector	% of Portfolio
Dewan Housing	Financials	5.6%
Federal Bank	Financials	5.4%
Motherson Sumi Systems	Consumer Discretionary	4.3%
Yes Bank	Financials	4.2%
Jyothy Laboratories	Consumer Staples	3.5%
Kajaria Ceramics	Industrials	3.5%
Ramkrishna Forgings	Materials	3.5%
NIIT Technologies	IT	3.4%
City Union Bank	Financials	3.2%
Sobha Developers	Real Estate	3.2%
Indusind Bank	Financials	3.1%
Welspun India	Consumer Discretionary	2.9%
PI Industries	Materials	2.7%
The Ramco Cements	Materials	2.7%
Max Financial Services	Financials	2.6%
Sagar Cements	Materials	2.6%
Exide Industries	Consumer Discretionary	2.6%
Skipper	Materials	2.5%
Finolex Cables	Industrials	2.4%
Balkrishna Industries	Consumer Discretionary	2.4%
Portfolio analysis by market capitalisation size as 30 June 2017
Market capitalisation size	No. of Companies	% of Portfolio
Small Cap (M/Cap < US$2bn)	23	52.4%
Mid Cap (US$2bn < M/Cap < US$7bn)	11	34.4%
Large Cap (M/Cap > US$7bn)	4	10.1%
Total Equity Investment	38	97.0%
Net Cash		3.0%
Total Portfolio	38	100.0%

 

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