Net Asset Value(s)

RNS Number : 7891Q

India Capital Growth Fund Limited

04 September 2014

 



4 September 2014

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

Net Asset Value statement at 31 August 2014

Net Asset Value

The Company announces its Net Asset Value per share as at 31 August 2014 was 64.09 pence.

In August the Net Asset Value (NAV) was up 5.5% in Sterling terms, whilst the BSE Mid Cap Index was up 2.8%, delivering an out performance against the notional benchmark of 2.7%. Against Ocean Dial's Composite Index, ICGF out performed by 2.1%. In local currency terms, the NAV increased 3.8% for the month.

Portfolio update

Positive attribution to the portfolio's performance came from Jyothy Labs (up 22.9%), Voltas (up 27.3%), Emami (up 20.5%) and Eicher Motors (up 14.8%). Negative attribution came from Jain Irrigation (down 13.0%), Aban Offshore (down 8.0%), Dish TV (down 8.4%) and Jammu & Kashmir Bank (down 6.9%).

Market and economic update

Indian equity markets continued to rise in August; the BSE Sensex rose 2.9% whilst the BSE Mid Cap Index rose 1.2%. Foreign Institutional Inflows remained strong (US$1.1bn for the month), reinforced by further positive flows from domestic institutions.

In its recent monetary policy statement, the Reserve Bank of India (RBI) kept interest rates on hold but cut the statutory liquidity reserve (SLR) to 22.0% from 22.5% in an on-going attempt to improve the effectiveness of monetary transmission. The RBI continues to monitor inflation closely; it has a January 2016 consumer price inflation (CPI) target of 6.0% compared to the current level of 8.0%, suggesting that interest rates may have to stay higher for longer, compounded perhaps by a poor monsoon negatively impacting food prices. However, the recent fall in international crude prices and the benign outlook on global non-oil commodity prices should help to offset this

India's GDP growth for the quarter April to June rose 5.7% versus 4.7% in the year ago quarter. This is the strongest quarterly GDP report of the last eight, and was driven by industrial output which grew by 4.2% (after contracting for the last two quarters), agriculture which grew by 3.8%, and services which were 6.8% stronger. Gross fixed capital formation growth was recorded at 7% year on year (as compared to a contraction of 0.9% in the previous quarter). The data clearly indicates the economy is through the worst and investment is recovering. We believe that this positive momentum is set to continue. Corporate results for first quarter FY15, ending in June were mixed. The consumer, IT Services (Large Cap) and Telecom sectors fared better than expectations, whilst there was disappointment in Industrials, Utilities and Materials sectors. This would suggest that whilst the policy environment has improved, and industrial activity is recovering, this has yet to flow through to corporate earnings.

Portfolio analysis by sector as at 31 August 2014
Sector	No. of Companies	% of Portfolio
Industrials	10	24.3%
Financials	8	22.6%
Consumer Staples	4	10.3%
Healthcare	4	9.9%
IT	4	9.5%
Materials	3	8.7%
Consumer Discretionary	2	6.8%
Energy	1	2.6%
Total Equity Investment	36	94.7%
Net Cash		5.3%
Total Portfolio	36	100.0%
Top 20 holdings as at 31 August 2014
Holding	Sector	% of Portfolio
Federal Bank	Financials	4.7%
Motherson Sumi Systems	Consumer Discretionary	4.3%
Jyothy Laboratories	Consumer Staples	4.3%
Kajaria Ceramics	Industrials	3.9%
Dewan Housing	Financials	3.9%
Tech Mahindra	IT	3.6%
PI Industries	Materials	3.6%
Emami	Consumer Staples	3.5%
Yes Bank	Financials	3.2%
Divi's Laboratories	Healthcare	3.1%
Max India	Industrials	3.0%
KPIT Cummins Infosystems	IT	3.0%
Lupin	Healthcare	2.8%
Berger Paints India	Materials	2.8%
Eicher Motors	Industrials	2.8%
Jammu & Kashmir Bank	Financials	2.8%
Indusind Bank	Financials	2.8%
Aban Offshore	Energy	2.8%
Sobha Developers	Financials	2.7%
Gujarat Pipavav	Industrials	2.6%
Portfolio analysis by market capitalisation size as 31 August 2014
Market capitalisation size	No. of Companies	% of Portfolio
Small Cap (M/Cap <INR60bn)	13	34.1%
Mid Cap (INR60bn <M/Cap<INR250bn)	16	42.3%
Large Cap (M/Cap > INR250bn)	6	18.3%
Unlisted	1	0.0%
Total Equity Investment	36	94.7%
Net Cash		5.3%
Total Portfolio	36	100.0%

 

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