Net Asset Value

RNS Number : 7243T

India Capital Growth Fund Limited

05 July 2018

 

5 July 2018

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

Net Asset Value statement at 30 June 2018

Net Asset Value

The Company announces its Net Asset Value per share as at 30 June 2018 was 108.09 pence.

In June the Net Asset Value (NAV) was down 6.9% in Sterling terms, whilst the BSE Mid Cap TR Index was down 3.6%, delivering an under performance against the notional benchmark of 3.3%. In local currency terms, the NAV was down 6.7% for the month.

Portfolio update

Positive attribution to the portfolio's performance came from Jyothy Labs (up 10.9%), Dewan Housing (up 4.0%) and Emami (up 1.2%). Negative attribution came from Ramkrishna Forgings (down 14.0%), Jain Irrigation (down 25.8%) and Finolex Cables (down 15.1%).

Market and economic update

India's Large cap stocks continue to outperform the Mid and Small cap space in India as the BSE Sensex held its previous month's gain, rising 0.3% whilst the BSE Mid Cap Index  sustained its correction, falling 3.5%. Investors continue to switch into larger cap, more liquid stocks, as a form of protection against weak sentiment for equities, both onshore and across Emerging Markets more generally. Foreign Institutions were net sellers (US$377m for the month), but the market enjoyed ongoing support from Domestic Institutions who were net buyers (US$2bn for the month). India's rupee depreciated 1.6% against the US Dollar and 0.2% against the British Pound.

In a move that surprised markets (positively), the Reserve Bank of India raised the repo rate by 25bps to 6.25%, citing inflation pressure, which was 4.9% in May, up from 4.6% in April, as stronger oil prices fed into the domestic economy. The monetary policy committee upped its own inflation forecasts to 4.8%-4.9% for the full year. Markets took the news positively, believing the Central Bank was aiming to be "ahead of the curve" given US interest rates are set to rise further this year.

Manufacturing continues to strengthen, with the latest PMI manufacturing data for June rising to 53.1, the eleventh successive month of expansion and the strongest pace since December 2017. The auto sector contributed positively, including personal vehicles, 2 wheelers and commercial vehicles, all showing strong double digit growth in June, the latter segment recording 44% growth year over year. Demand is being driven by government expenditure in infrastructure, road building, and affordable housing in particular, which is driving the demand for commercial vehicles, supported by increased economic activity in rural India.

Portfolio analysis by sector as at 30 June 2018
Sector	No. of Companies	% of Portfolio
Financials	8	24.3%
Materials	8	18.9%
Consumer Discretionary	8	17.6%
Consumer Staples	4	10.1%
Industrials	4	8.5%
IT	2	7.9%
Healthcare	2	3.2%
Real Estate	2	2.7%
Total Equity Investment	38	93.2%
Net Cash		6.8%
Total Portfolio	38	100.0%
Top 20 holdings as at 30 June 2018
Holding	Sector	% of Portfolio
Dewan Housing Finance	Financials	5.3%
Jyothy Laboratories	Consumer Staples	4.5%
Ramkrishna Forgings	Materials	4.1%
NIIT Technologies	IT	4.0%
Tech Mahindra	IT	3.9%
Motherson Sumi Systems	Consumer Discretionary	3.9%
Federal Bank	Financials	3.7%
City Union Bank	Financials	3.5%
Indusind Bank	Financials	3.4%
Radico Khaitan	Consumer Staples	2.9%
Balkrishna Industries	Consumer Discretionary	2.9%
Exide Industries	Consumer Discretionary	2.9%
Kajaria Ceramics	Industrials	2.6%
Finolex Cables	Industrials	2.6%
Berger Paints India	Materials	2.5%
Welspun India	Consumer Discretionary	2.5%
Sobha Developers	Real Estate	2.5%
Sagar Cements	Materials	2.4%
Indian Bank	Financials	2.4%
Capital First	Financials	2.4%
Portfolio analysis by market capitalisation size as 30 June 2018
Market capitalisation size	No. of Companies	% of Portfolio
Small Cap (M/Cap < US$2bn)	25	54.0%
Mid Cap (US$2bn < M/Cap < US$7bn)	9	25.9%
Large Cap (M/Cap > US$7bn)	4	13.3%
Total Equity Investment	38	93.2%
Net Cash		6.8%
Total Portfolio	38	100.0%

 

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