India Capital Growth Fund Limited Net Asset Value(s) (6211G)
November 07 2018 - 3:45AM
UK Regulatory
TIDMIGC
RNS Number : 6211G
India Capital Growth Fund Limited
07 November 2018
7 November 2018
India Capital Growth Fund Limited (the "Company" or "ICGF")
Net Asset Value statement at 31 October 2018
Net Asset Value
The Company announces its Net Asset Value (NAV) per share as at
31 October 2018 was 92.54 pence.
In October the NAV was unchanged in Sterling terms, whilst the
BSE Mid Cap TR Index was down 0.2%, delivering an outperformance
against the notional benchmark of 0.2%. In local currency terms,
the NAV was down 0.9% for the month
Portfolio update
Positive contribution to the portfolio's performance came from
Federal Bank (up 17.0%) and Divi's Laboratories (up 13.2%).
Negative contribution came from Indusind Bank (down 15.7%),
Ramkrishna Forgings (down 11.1%) and Emami (down 20.1%).
Market and economic update
In tandem with a weak month for global equities, October saw
another fall in India driven this time by larger cap names with the
BSE Sensex down 4.9% and BSE Mid Cap TR Index down 1.0% (in local
currency terms). However the domestic macroeconomic environment
showed respite as Brent Crude Oil prices corrected 11% and the
Reserve Bank of India (RBI) announced a liquidity infusion into the
monetary system providing much needed relief to Non-Banking Finance
Corporations and the bond market. Indeed, the yield on 10 year
Government Securities declined from the recent high of 8.4% to
7.9%. The currency remained under pressure however with the Rupee
depreciating by 2.0% against the US Dollar and 0.9% against the
Pound Sterling as Foreign Institutions were again net sellers for
the month (US$3.8bn). Appetite from Domestic Institutions was still
strong with net inflows of US$3.5bn.
The RBI decided to keep interest rates on hold in its policy
meeting against the market expectation of a 25bps increase. It
however elevated its policy stance from "neutral" to "calibrated
tightening", suggesting that the rate hiking cycle is not yet over,
despite marking down its Consumer Price Inflation (CPI) forecast
for H2FY19 to 3.9%-4.5% from 4.8%. Food prices seem to be the chief
reason and this was reflected in the CPI inflation figure for
September which was 3.8% compared to 3.7% in August.
Indian companies began reporting Q2FY19 earnings. The picture so
far shows that whilst revenues have risen fairly well, operating
margins have contracted as few firms have been able to pass on
higher input costs from higher oil prices, leading to lower than
expected earnings. IT, Financials, Industrials and Consumer Staples
sectors have outperformed expectations whilst Energy, Health Care,
Consumer Discretionary and Cement companies have disappointed.
Within the Financials sector, banks are showing a steady recovery
in balance sheets as fewer loans have slipped into non-performing
territory resulting in lower credit costs. Industrials so far have
reported good operating performance on the back of strong order
inflows with the order book of the market leader, Larsen &
Toubro, growing by 42% (YoY). Consumer staples' outperformance was
helped by robust rural consumer demand.
Portfolio analysis by sector as at 31 October 2018
Sector No. of Companies % of Portfolio
Financials 8 20.3%
Materials 8 18.2%
Consumer Discretionary 6 15.1%
Consumer Staples 4 9.6%
IT 2 8.9%
Industrials 4 8.6%
Healthcare 3 8.0%
Real Estate 2 2.9%
Communication Services 1 0.3%
Total Equity Investment 38 92.0%
Net Cash 8.0%
Total Portfolio 38 100.0%
Top 20 holdings as at 31 October 2018
Holding Sector % of Portfolio
Tech Mahindra IT 4.9%
Federal Bank Financials 4.2%
Jyothy Laboratories Consumer Staples 4.0%
NIIT Technologies IT 4.0%
City Union Bank Financials 4.0%
Divi's Laboratories Healthcare 3.7%
Motherson Sumi Systems Consumer Discretionary 3.7%
Ramkrishna Forgings Materials 3.6%
Aurobindo Pharma Healthcare 3.4%
Exide Industries Consumer Discretionary 3.3%
Radico Khaitan Consumer Staples 3.1%
Kajaria Ceramics Industrials 3.1%
PI Industries Materials 3.0%
Welspun India Consumer Discretionary 3.0%
Balkrishna Industries Consumer Discretionary 3.0%
Berger Paints India Materials 2.8%
Sobha Developers Real Estate 2.8%
Indusind Bank Financials 2.8%
Finolex Cables Industrials 2.5%
Capital First Financials 2.4%
Portfolio analysis by market capitalisation size as 31 October
Market capitalisation size No. of Companies % of Portfolio
Small Cap (M/Cap < US$2bn) 27 56.7%
Mid Cap (US$2bn < M/Cap < US$7bn) 9 27.6%
Large Cap (M/Cap > US$7bn) 2 7.7%
Total Equity Investment 38 92.0%
Net Cash 8.0%
Total Portfolio 38 100.0%
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END
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