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India Capital Growth reports on difficult start to 2019

India Capital Growth reports on difficult start to 2019 – Following a difficult year in 2018, the Indian stock market struggled to move forward in the first half of 2019. While the large company index showed a positive return, the small and mid-cap index, the BSE MidCap Total Return Index declined 2.4% in sterling terms. India Capital Growth Fund’s NAV fell by 4.6% and the share price by 2.8%.

Extract from the manager’s report

We continued to hold most existing investments in the first half with only one stock exited. We did however use the volatility in the market to trim or add exposure in several stocks to take advantage of price movements.

During the period the stock exited was Dewan Housing Finance, a housing finance company, headquartered in Mumbai with branches spread across India. The Company offers housing finance to the lower and middle income groups in semi-urban and rural parts of India.

Many stocks in the portfolio contributed positive returns, including PI Industries (3.9% weight) up 36.0%, Federal Bank (5.7% weight) up 16.3%, NIIT Technologies (4.5% weight) up 17.0%, Kajaria Ceramics (4.0% weight) up 18.0% and PSP Projects (2.2% weight) up 39.9%.

Among the negative contributors were Jyothy Laboratories (3.5% weight) down 25.7%, Yes Bank (2.1% weight) down 39.4%, Jain Irrigation (0.6% weight) down 63.0% and Manpasand Beverages (0.6% weight) down 60.1%.

Outperformance stemmed mainly from stock selection in Materials, HealthCare and Information Technology, holding Cash (7.3% weight) in a falling market and being underweight in Utilities and Energy, while we were negatively impacted due to stock selection in Consumer Staples, Consumer Discretionary, Industrials and Financials.”

[There should be a note out from us on this in coming weeks and we’ll delve into what has been happening with this trust in that. The adviser remains focused on stock selection and has not been making wholesale changes to the portfolio. India’s economy has been sluggish, however. In marked contrast to its potential.]

IGC : India Capital Growth cuts management fee

 

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