India Capital Growth Fund Limited Net Asset Value(s) (9508W)
06 August 2018 - 9:59PM
UK Regulatory
TIDMIGC
RNS Number : 9508W
India Capital Growth Fund Limited
06 August 2018
6 August 2018
India Capital Growth Fund Limited (the "Company" or "ICGF")
Net Asset Value statement at 31 July 2018
Net Asset Value
The Company announces its Net Asset Value (NAV) per share as at
31 July 2018 was 111.50 pence.
In the month the NAV was up 3.2% in Sterling terms, whilst the
BSE Mid Cap TR Index was up 3.8%, delivering an under performance
against the notional benchmark of 0.6%. In local currency terms,
the NAV was up 3.3% for the month.
Portfolio update
Positive contribution to the portfolio's performance came from
Motherson Sumi Systems (up 13.1%), NIIT Technologies (up 11.7%) and
Balkrishna Industries (up 16.0%). Negative contribution came from
Dewan Housing Finance (down 5.8%), Jyothy Laboratories (down 6.1%)
and Essel Propack (down 12.0%).
Market and economic update
India's equity markets rallied across the board as global oil
prices slid back below $70 per barrel. "Main Board" stocks rose
6.2% whilst the BSE Mid Cap Index recovered some 4.0%, following a
bleak half year. The downward move in the oil price also supported
the Rupee/Dollar exchange rate after recent weakness; the Rupee
depreciated 0.1% against the US Dollar and 0.2% against Sterling.
Both Foreign and Domestic Institutions were net buyers for the
month; US$208m and US$612m respectively.
The Reserve Bank of India (RBI) raised lending rates by 0.25% to
6.5% on1(st) August for the second time since June, on the back of
rising consumer price inflation and the imported costs of higher
oil. The RBI retained its "neutral" stance however, intending to
contain inflation without choking growth. But clearly the focus is
to contain inflation within the target band, and particularly since
the Government is intent on raising minimum support prices for key
crops well above prior year's prices. This hike will also lend
support to the currency, in some manner. The RBI also maintained
its real GDP growth projection at 7.4% for this financial year
(FY19), but raised its inflation estimates slightly to 4.8%. A
target 5% inflation rate for first quarter of FY20 was also
introduced.
Indian companies began reporting Q1FY19 (30 June ended) results.
To date these results have been mixed. The IT Services, Consumer
Staples and Capital Goods sectors have all outperformed
expectation, with Consumer Staples the standout, reporting double
digit volume growth. These companies are benefitting from a
favourable base effect on volumes, since last year's numbers were
dulled by problems surrounding the implementation of GST.
Management commentary indicates that rural consumption continues to
outpace urban consumption, as the benefits of prior monsoons and
recent Government sops feed through. However passing on input cost
pressures remains a challenge, pressurising margins. Elsewhere,
private sector financials reported healthy retail loan growth, but
earnings suffered from treasury losses (mark to market) and net
interest margin weakness. Corporate loan books also suffered higher
provisioning which continued to dent profits, but there was better
news on the overall decline in the gross and net NPL ratios.
Portfolio analysis by sector as at 31 July 2018
Sector No. of Companies % of Portfolio
Financials 8 24.4%
Materials 8 18.6%
Consumer Discretionary 8 18.1%
Consumer Staples 4 9.7%
Industrials 4 8.2%
IT 2 8.3%
Real Estate 2 2.7%
Healthcare 2 3.4%
Total Equity Investment 38 93.5%
Net Cash 6.5%
Total Portfolio 38 100.0%
Top 20 holdings as at 31 July 2018
Holding Sector % of Portfolio
Dewan Housing Finance Financials 4.8%
NIIT Technologies IT 4.3%
Motherson Sumi Systems Consumer Discretionary 4.2%
Jyothy Laboratories Consumer Staples 4.1%
Federal Bank Financials 3.9%
Tech Mahindra IT 3.9%
Ramkrishna Forgings Materials 3.8%
City Union Bank Financials 3.5%
Indusind Bank Financials 3.4%
Balkrishna Industries Consumer Discretionary 3.3%
Exide Industries Consumer Discretionary 3.0%
Radico Khaitan Consumer Staples 3.0%
Berger Paints India Materials 2.7%
Finolex Cables Industrials 2.7%
Sobha Developers Real Estate 2.6%
Welspun India Consumer Discretionary 2.5%
Divi's Laboratories Healthcare 2.5%
PI Industries Materials 2.4%
Capital First Financials 2.4%
Indian Bank Financials 2.4%
Portfolio analysis by market capitalisation size as 31 July
2018
Market capitalisation size No. of Companies % of Portfolio
Small Cap (M/Cap < US$2bn) 25 53.1%
Mid Cap (US$2bn < M/Cap < US$7bn) 9 26.7%
Large Cap (M/Cap > US$7bn) 4 13.8%
Total Equity Investment 38 93.5%
Net Cash 6.5%
Total Portfolio 38 100.0%
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END
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