REG - India CapitalGrwthFd - Net Asset Value

India Capital Growth FundAnnouncement

04/10/2019 13:00

RNS Number : 8571O
India Capital Growth Fund Limited
04 October 2019
 


4 October 2019
India Capital Growth Fund Limited (the "Company" or "ICGF")
Net Asset Value statement at 30 September 2019
Net Asset Value
The Company announces its Net Asset Value per share as at 30 September 2019 was 92.51 pence.
In September the Net Asset Value (NAV) was up 4.0% in Sterling terms, whilst the BSE Mid Cap TR Index was up 5.4%, delivering an under performance against the notional benchmark of 1.4%. In local currency terms, the NAV was up 3.4% for the month.
Portfolio update
Positive contribution to the portfolio's performance was driven by Berger Paints (up 17.8%), Jyothy Labs (up 18.7%) and PI Industries (up 14.5%). The negative contribution mainly stemmed from Indian Bank (down 37.3%), Jammu & Kashmir Bank (down 19.5%) and Yes Bank (down 30.9%).
Market and economic update
Indian Equity markets rose in September with the BSE Sensex and BSE Midcap Total Return indices up 3.6% and 4.8% respectively (in Indian Rupees) on the back of the Government announcing a cut in headline corporation tax from 30% to 22% (and 15% for manufacturing companies). Both foreign institutional investors and domestic institutions were net buyers for the month at US$955m and US$1.7bn respectively. The Indian Rupee also reacted positively, appreciating by 1.5% against the US Dollar and 0.6% against Pound Sterling.
The new corporation tax rates come into effect as of this year and have been received well with estimates in the Street predicting an across the board boost to bottom line earnings of around 9%. The cut for the manufacturing sector from 25% to 15% makes India's rate globally competitive at a time when investment into China is under threat. On the fiscal side the cost to the Government's reserves is estimated to be 0.8% of GDP and, putting any revival in growth to one side, it's unclear how this will be funded. We anticipate a renewed push in privatisation to help. Reports suggest that Oil, Gas and Shipping companies will be considered (alongside Air India!).
The market has been increasingly concerned about the Government's commitment to sustainable growth through structural reform. This has been viewed as a big bang response and confirms the Government's belief in the private sector as the core source of wealth creation (something that had come into question more recently). The next challenge is to resolve asset quality issues and confidence in the financial sector specifically.
 
 
 



Portfolio analysis by sector as at 30 September 2019


















Sector


No. of Companies


% of Portfolio




Financials


7


22.8%




Materials


7


21.9%




Consumer Discretionary


5


12.2%




Consumer Staples


4


10.9%




Industrials


5


10.3%




Health Care


3


7.2%




Information Technology


2


6.1%




Real Estate


1


0.1%




Communication Services


0


0.0%




Energy


0


0.0%




Utilities


0


0.0%




Total Equity Investment


34


91.5%




Net Cash






8.5%




Total Portfolio


34


100.0%


















Top 20 holdings as at 30 September 2019


















Holding


Sector


% of Portfolio




Federal Bank


Financials


7.3%




City Union Bank


Financials


5.5%




Tech Mahindra


Information Technology


5.3%




Berger Paints India


Materials


4.7%




PI Industries


Materials


4.6%




Kajaria Ceramics


Industrials


4.5%




Jyothy Laboratories


Consumer Staples


4.3%




Emami


Consumer Staples


3.7%




Divi's Laboratories


Health Care


3.3%




Welspun India


Consumer Discretionary


3.1%




IDFC Bank


Financials


3.1%




Finolex Cables


Industrials


3.1%




Motherson Sumi Systems


Consumer Discretionary


3.0%




Indusind Bank


Financials


2.9%




Radico Khaitan


Consumer Staples


2.9%




Aurobindo Pharma


Health Care


2.7%




JK Lakshmi Cement


Materials


2.7%




The Ramco Cements


Materials


2.7%




Exide Industries


Consumer Discretionary


2.6%




Balkrishna Industries


Consumer Discretionary


2.6%


















Portfolio analysis by market capitalisation size as 30 September 2019


















Market capitalisation size


No. of Companies


% of Portfolio




Small Cap (M/Cap < US$2bn)


20


37.6%




Mid Cap (US$2bn < M/Cap < US$7bn)


12


45.7%




Large Cap (M/Cap > US$7bn)


2


8.2%




Total Equity Investment


34


91.5%




Net Cash






8.5%




Total Portfolio


34


100.0%



 




This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
 
END
 
 
NAVFZLFBKBFEFBL