India fund’s five favourites
The Indian market was weak in December, but Carnegie Indienfond fared well and closed the month unchanged from November. For full-year 2015, the fund rose in value by 5.0 percent, expressed in SEK.
December was a relatively uneventful month, at least for India-specific news. Three factors dominated the global macro economy. The Fed raised interest rates for the first time in ten years, making it more difficult for India to lower its own rates. China ushered in a new period during which it will allow its currency to weaken.
This also affects other Asian currencies, which is why India’s currency fell in value. Oil prices fell below 40 dollars per barrel for the first time in ten years. OPEC’s ambition to regain hegemony over oil also means that it will increase production, resulting in falling prices. India is the single biggest Asian winner from falling oil prices.
Nonetheless, it is still possible to make money on Indian stocks in this unpredictable climate, as demonstrated by some of our favourite companies in the portfolio, including:
Bajaj Finance, 4.8 percent of the fund, a finance company offering consumer loans for the purchase of motorcycles and white goods. Rose in value by 73 percent during the year.
Apollo Hospital, 5.5 percent of the fund, a private healthcare operator with its own hospitals. Rose in value by 30 percent during the year.
Bharti Infratel, 4.6 percent of the fund, leases out phone masts and is benefitting from the expansion of India’s telecom network with 4G. Rose in value by 29 percent during the year.
Cummins Diesel, 7 percent of the fund, manufactures diesel engines and generators for backup power. Rose in value by 19 percent during the year.
Asian Paint, 6.1 percent of the fund, a paint manufacturer with a dominant market share that benefits from lower oil prices. Rose in value by 18 percent during the year.
In December, the fund made new investments in Voltas, a manufacturer of industrial refrigeration, and Havells, which sells electrical equipment. The holding in Axis Bank was reduced.