Net Asset Value(s)

RNS Number : 6859P

India Capital Growth Fund Limited

03 October 2013

 



3 October 2013

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

Net Asset Value statement as at 30 September 2013

Net Asset Value

The Company announces its Net Asset Value per share as at 30 September 2013 was 38.95 pence.

In September the Net Asset Value (NAV) was up 8.9% in Sterling terms, whilst the BSE Mid Cap Index was up 7.8%, delivering an outperformance against the notional benchmark of 1.1% in Sterling terms. Against Ocean Dial's Composite Index, the portfolio delivered an outperformance of 1.7%.

 Portfolio update

Positive contributors to the portfolio's performance came from Yes Bank (up 18.1%), Motherson Sumi (up 18.4%) and Emami (up 18.2%). Negative attribution came from Manappuram Finance (down 22%), Dewan Housing (down 12.3%) and Divi's Labs (down 2.4%).

Market and economic update

In September, Indian equity markets recovered some recent losses. The Sensex closed up 4.1%, whilst the BSE Midcap Index finished 5.8% higher as foreign institutional investors were net buyers of approximately USD2bn of equities. This inflow follows three consecutive months of selling. The market sentiment was further supported by fresh policy measures announced by the new Governor of the Reserve Bank of India (RBI), Mr. Raghuram Rajan. The intention is to underpin the exchange rate by attracting higher foreign currency inflows through a limited offer of Sovereign credit to corporates and non-resident Indians, specifically absorbing part of the currency risk through a swap arrangement with the RBI. This helped INR appreciate 1.9% against Sterling and 5.7% against USD this month.

Progress is being made on improving India's macro-economic data, notably the second quarter (FY14) current account deficit, which was reported in June at USD21bn. This is still high in absolute terms but lower than consensus estimates. The monthly trade deficit has halved from USD20.1bn in May to USD10.9bn in September as higher duties on gold and other articles have reduced the import cost and exports are gradually recovering. The government forecasts a reduction in the current account deficit from a record USD88bn in FY13 to USD70bn by end of FY14 and achieving a fiscal deficit target of 4.8% of GDP; currently both look achievable.

Later in September, the RBI surprised the market by increasing headline interest rates by 25 basis points to 7.5%, citing inflationary concerns driven by food prices and the depreciated currency. Both wholesale and consumer price inflation remain uncomfortably high, with the former rising to 6.1%, whilst the latter fell to 9.5% although it still remains elevated. There was some relief for banks however as standby borrowing facility costs were reduced by 0.75%, and the minimum daily maintenance of the cash reserve ratio (CRR) was reduced. Credit growth is showing signs of nascent recovery but it is too early to cause a rethink.

Portfolio analysis by sector as at 30 September 2013

Sector	No. of Companies	% of Portfolio
Financials	10	21.8%
Industrials	6	14.0%
Consumer Discretionary	4	13.4%
Consumer Staples	3	11.4%
Healthcare	3	11.0%
IT	3	8.6%
Energy	2	5.6%
Materials	2	2.6%
Telecommunications	1	4.2%
Total Equity Investment	34	92.6%
Net Cash		7.4%
Total Portfolio		100.0%

Top 20 holdings as at 30 September 2013

Holding	Sector	% of Portfolio
Jyothy Laboratories	Consumer Staples	5.8%
KPIT Cummins Infosystems	IT	5.4%
Lupin	Healthcare	4.5%
Idea Cellular	Telecommunications	4.2%
Kajaria Ceramics	Consumer Discretionary	4.1%
Jammu & Kashmir Bank	Financials	3.5%
Federal Bank	Financials	3.5%
Motherson Sumi Systems	Consumer Discretionary	3.5%
IPCA Laboratories	Healthcare	3.4%
Emami	Consumer Staples	3.3%
Eicher Motors	Industrials	3.3%
NIIT Technologies	IT	3.2%
Berger Paints India	Consumer Discretionary	3.2%
Divi's Laboratories	Healthcare	3.2%
Cairn India	Energy	3.0%
Max India	Industrials	2.9%
Indusind Bank	Financials	2.9%
Yes Bank	Financials	2.8%
Dish TV India	Consumer Discretionary	2.7%
Larsen & Toubro	Industrials	2.7%

Portfolio analysis by market capitalisation size as at 30 September 2013

Market capitalisation size	No. of Companies	% of Portfolio
Small Cap (M/Cap <INR15bn)	2	2.3%
Mid Cap (INR15bn <M/Cap<INR100bn)	23	64.1%
Large Cap (M/Cap > INR100bn)	8	26.2%
Unlisted	1	0.0%
Total Equity Investment	34	92.6%
Net Cash		7.4%
Total Portfolio		100.0%

 

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