11:59: Net Asset Value
India Capital Growth Fund Limited (the “Company” or “ICGF”)
Net Asset Value statement at 28 February 2020
Net Asset Value
The Company announces its Net Asset Value per share as at 28 February 2020 was 83.06 pence.
In February the Net Asset Value (NAV) was down 7.4% in Sterling terms, whilst the BSE MidCap TR Index was down 4.7%, delivering an under performance against the notional benchmark of 2.7%. In local currency terms, the NAV was down 8.0% for the month.
Positive contribution to the portfolio’s performance was driven by Divi’s Laboratories (up 8.7%), Balkrishna Industries (up 3.8%) and Radico Khaitan (up 3.5%). The negative contribution mainly stemmed from Jyothy Laboratories (down 20.3%), Motherson Sumi Systems (down 22.5%) and Bajaj Consumer Care (down 14.2%).
Market and economic update
Indian Equity markets corrected in February with the S&P BSE Sensex down 5.9% while the BSE Midcap Total Return was down 5.3% (in Indian Rupees). Both foreign and domestic institutional investors were net buyers to the tune of US$1.4bn and US$313m respectively. The Indian Rupee depreciated 1.1% against the US Dollar and appreciated 0.7% against the Pound Sterling.
Real GDP growth moderated to 4.7% in 3QFY20 as against an upward revised print of 5.1% in 2QFY20 led by a contraction in manufacturing. On a positive note, private consumption saw a small uptick while government consumption growth contributed positively (albeit at a lower rate). Gross fixed capital formation was down 5.2%, and both export and import growth contracted (the latter at a sharper pace). The government of India now expects FY2020 GDP growth at 5%.
At the time of writing, India has 28 confirmed cases of Covid-19. On the supply side, India’s key imports from China suggest that pharmaceuticals, chemicals and electronic companies could see supply chains being impacted if there is a prolonged disruption in production activity in China beyond March. On the other hand, any long term shift in global supply away from China could see some beneficiaries in India, like garment and textile exporters, speciality chemicals and Active Pharmaceutical Ingredient manufacturing.