India Capital Growth Fund Limited Net Asset Value(s) (5805T)

TIDMIGC

RNS Number : 5805T

India Capital Growth Fund Limited

09 January 2017

9 January 2017

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

Net Asset Value statement at 31 December 2016

Net Asset Value

The Company announces its Net Asset Value per share as at 31 December 2016 was 89.31 pence.

In December the Net Asset Value (NAV) was down 1.9%, whilst the BSE Mid Cap Total Return Index was down 1.3% both in Sterling terms, delivering an underperformance against the notional benchmark of 0.6%. In local currency terms, the NAV was down 4.3% for the month.

Portfolio update

Positive attribution to the portfolio's performance came from Motherson Sumi Systems (up 5.4%), Balkrishna Industries (up 11.1%), Max Financial Services (up 2.8%) and Voltas (up 3.9%). Negative attribution came from Divis Laboratories (down 33.2%), Kajaria Ceramics (down 12.7%) and Emami (down 14.2%).

Market and economic update

Indian equity markets remain on the back foot. The BSE Sensex fell 0.1% whilst the BSE Mid Cap Index was down 3.7%, as investors judge the earnings impact caused by demonetisation to be greater in mid cap companies. Foreign Institutions were net sellers (US$1.2bn for the month), while Domestic Institutions were net buyers (US$1.3bn for the month). The Indian Rupee appreciated 0.7% against the US Dollar and 2.5% against Sterling.

November's consumer price inflation fell to 3.6%, a two year low, led by lower food prices. Demand is depressed across all categories (but mainly "C to C") owing to the ongoing restrictions on cash withdrawals. Despite inflation falling well below the Reserve Bank's target of 5% for FY17, the Monetary Policy Committee (MPC) voted unanimously and unexpectedly to leave the key policy rate unchanged. The MPC cited it needed time to evaluate the long-term impact of currency replacement, plus the shorter term inflationary risk of rising oil prices and a weaker currency. Furthermore, the Bank's estimate of full year FY17 growth was reduced by 0.5% to 7.1%. Following the recent surge in deposits led by market leader State Bank, many Indian Banks announced sharp cuts in lending rates (45bps to 90bps). This has raised hopes that lower borrowing costs will help spark a pick-up in credit growth.

In the Prime Minister's address to the nation, Mr Modi announced "sops" targeting the rural and urban poorest communities, proposing this will help to offset the impact of the current cash crunch, but also perhaps keeping in mind the five States that shortly go to the polls, Uttar Pradesh being the most significant. A win for the BJP here will boost market confidence following a fall in India's equity valuation premium to the broad Emerging Market universe.

 
Portfolio analysis by sector as at 31 
 December 2016 
 
Sector                       No. of Companies        % of Portfolio 
Financials                   7                                24.1% 
Consumer Discretionary       8                                18.8% 
Materials                    8                                18.3% 
Consumer Staples             5                                11.3% 
Industrials                  5                                10.4% 
Healthcare                   4                                 7.1% 
IT                           2                                 5.4% 
Real Estate                  2                                 3.0% 
Total Equity Investment      41                               98.4% 
Net Cash                                                       1.6% 
Total Portfolio              41                              100.0% 
 
Top 20 holdings as at 31 
 December 2016 
 
Holding                      Sector                  % of Portfolio 
Yes Bank                     Financials                        5.1% 
Federal Bank                 Financials                        4.4% 
Jyothy Laboratories          Consumer Staples                  4.2% 
Dewan Housing                Financials                        3.9% 
Motherson Sumi Systems       Consumer Discretionary            3.8% 
PI Industries                Materials                         3.4% 
Dish TV India                Consumer Discretionary            3.3% 
Kajaria Ceramics             Industrials                       3.1% 
City Union Bank              Financials                        2.9% 
Indusind Bank                Financials                        2.9% 
Welspun India                Consumer Discretionary            2.9% 
Max Financial Services       Financials                        2.8% 
Finolex Cables               Industrials                       2.7% 
Tech Mahindra                IT                                2.7% 
NIIT Technologies            IT                                2.7% 
The Ramco Cements            Materials                         2.7% 
Sobha Developers             Real Estate                       2.6% 
Essel Propack                Materials                         2.6% 
Exide Industries             Consumer Discretionary            2.6% 
Berger Paints India          Materials                         2.5% 
 
Portfolio analysis by market capitalisation size 
 as 31 December 2016 
 
Market capitalisation size   No. of Companies        % of Portfolio 
Small Cap (M/Cap < US$2bn)   29                               66.3% 
Mid Cap (US$2bn < M/Cap 
 < US$7bn)                   7                                17.5% 
Large Cap (M/Cap > US$7bn)   5                                14.6% 
Total Equity Investment      41                               98.4% 
Net Cash                                                       1.6% 
Total Portfolio              41                              100.0% 
 

This information is provided by RNS

The company news service from the London Stock Exchange

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January 09, 2017 04:00 ET (09:00 GMT)