Letter from the Editor

Yield Matters

There are many ways to screen, and pick, stocks. One such way is through analysing their dividend yield. However, merely picking stocks based on high dividend yield could be risky. This strategy would work only when companies are filtered using other valuation parameters and their management history. This is where Moneylife’s analysis comes in. We have not only considered a company’s dividend yield, but since dividends are paid out of earnings, we have considered sales growth, earnings growth, the size of operations and so on. After factoring in all these, we provide you with a list of 11 stocks that may not only offer good income in the form of dividends but capital appreciation as well.

Mutual funds come in many forms. Many of them are designed only to garner funds from investors. Dynamic equity funds belong to this category. These are pitched at investors as products that can time the markets. However, evidence from the US (from where these strategies are borrowed) shows that such schemes have grossly underperformed. Are their Indian counterparts headed in the same direction? If so, is there a better way? Turn to our Fund Pointer section to find out.

In her Crosshairs section Sucheta writes on Subrata Roy of Sahara who has run his peculiar empire for years without any regulator asking any question—until his defiance of Supreme Court became bizarre. She also writes on Arvind Kejriwal’s strange tactic of targeting only some businessmen, leaving out people like Vijay Mallya.

In her Different Strokes section, she questions SEBI’s corporate governance norms which will not apply to the entire swathe of listed public sector undertakings that have inflicted big losses on investors. The fact that neither SEBI nor the stock exchanges, who administer the corporate governance code, have uttered a word about the goings on at United Bank of India that have mauled its share prices, shows that the norms would be nothing but a sham.
Moneylife Foundation launched yet another helpline for its members; this time for those seeking legal advice. To know more about, or to avail the facilities of, the Legal Resource Centre, please visit—lrc.moneylife.in. We have lined up another helpline; expect to hear about it soon.

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“Ambani ki dukaan Includes Congress-BJP-Media” — Kejriwal

What is Mr Kejriwal’s idea behind these charges?

Aam Aadmi Party (AAP) leader Arvind Kejriwal’s virulent attack on media houses, and their alleged connections with Mukesh Ambani of Reliance Industries, got the Editors’ Guild of India agitated enough to note: “with concern the growing attacks and unsubstantiated charges levelled against the media by political leaders and public figures dissatisfied with the coverage of their activities or with criticism from the media.” Specifically, the editors were ‘distressed’ at General VK Singh’s use of the term ‘presstitutes’ to describe journalists and found it ‘disquieting’ that Arvind Kejriwal attributed corrupt motives to the media that criticised him. While the Guild is correctly agitated about “abuse and vague, unsubstantiated accusations of corrupt motives” attributed to the media, it does not spare a thought for others who are in the crosshairs of these leaders and public figures.

Journalism, as it was taught to us, required charges to be backed by facts, preferably with documents. Not any more. While media houses make vague references to ‘shoot & scoot’ politics, journalism today is about reporting and relaying every allegation without any attempt to check facts even afterwards.

What is Mr Kejriwal’s calculation behind these allegations? As someone doing investigative work for nearly three decades, I know that crony capital, with its lobby groups, wields plenty of clout and has a nice way cutting off access, funding and opportunities for those who dare to be impartial. On the other hand, as one senior editor told me, if one decides on a few high-profile targets and leaves others alone, there is a good chance of building a powerful support base among those who privately dislike the extraordinary influence of one business house across the corporate and political spectrum.

Mukesh Ambani’s enormous clout comes from having several close aides in both houses of parliament, in addition to funding political parties and a section of the media. Reliance’s Foundations and CSR (corporate social responsibility) vehicles also offer a ready berth to powerful politicians and their aides who are out of power. This makes the group appear omnipotent. A top bureaucrat once told me that, in the 1980s, when Dhirubhai Ambani headed Reliance, people used to ask, ‘who is an Ambani person’; these days, under Mukesh Ambani, the question is ‘who isn’t an Ambani person’ because that list may be significantly shorter.

The positive impact of Mr Kejriwal’s attack on Mukesh Ambani is that it has shaken the group and its acolytes from their complacency. But will it force the glitterati and chatterati to choose sides, or will they profess support to AAP, while continuing to enjoy Mr Ambani’s largesse?  

AAP probably calculates that Mr Kejriwal’s ‘courage’ in taking on the Ambanis will ensure him support from all sections including the salaried middle-class working in clean information technology companies and other professionals who desire to end ‘crony capitalism’ without a clear plan or strategy about how to do it.

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COMMENTS

Govindan

3 years ago

How can any country prosper if the PM has no understanding with the Industrialists of Indian origin? Why is Kejri not targeting any foreign multinational companies who have all come here like East India Company to loot this country? All these are proofs that AAP is funded by foreign powers particularly USA to destabilize this country. UPA 2 is surrounded by scams . But in the case of increasing the cost of gas to $ 8 /mmbtu from April they have taken the right decision.. They have followed all standing instructions in this case. European Union is getting gas from Russia almost at the same cost.
Recently, Japan's Toho Gas signed its first long-term contract based on Henry Hub gas prices to buy 300,000 million tonne/year of LNG from the proposed US Cameron LNG export project at $10 per mmbtu as against $15-$17/mmBtu earlier.
GAIL India last year signed a deal with US-based Cheniere Energy Partners to buy 3.5 million tonnes LNG for 20 years, prices of which are linked to Henry Hub benchmark in US.
The landed cost of LNG could be lower than $10/mmBtu (million metric British thermal units).
India at times has to buy spot LNG at prices as high as $18.5-19 per mmBtu.

REPLY

NSriramamurty

In Reply to Govindan 3 years ago

As Gas is very Costly , due to it's Little Quantity available in the Globe, Our OWN GAS can never be Sold to us itself at International Prices.As Private Colleges have Management Quota to be sold at their prices , RIL also can have some Percentage To be Sold at Prices and Balance at Lower Rates to Indians.GOI better comes out with white Paper on it explaining all Details/Facts.RIL's Confidential Clause in Contract can not be Misused to Blockmail Indians.Let CAG's Performance Audit be Over-Why RIL is Refusing for it? Many Grey Areas are in it.

Govindan

3 years ago

. Except blaming others what have AAP leaders done over the last few months? Kejri, we have had enough of your lectures blaming people like Modi and Mukesh Ambani who have shown their capability in different fields. People of Delhi gave a chance to AAP to show their capability to serve the people . But you people have run away within 49 days. Yours is a sinking party. Your questions to Modiji are silly. Credit should go to Reliance company for offering one of the cheapest mobile tariffs in the world when they entered the business and introduced CDMA technology. Now also Mobile tariff is one of the lowest rates in the world, only due to the competition offered by Reliance.

NSriramamurty

3 years ago

Money Life Article Clearly State that Media is Controlled by Business Magnets and it take Sides on any Issue .Ambani's have grown up by Corrupting Bureucrats and Politicians and killed Ethics in Politics and Buereucrats. Kejrival is Questioning it. It is Pity that all are Ridiculing him and instead of supporting by giving Data with Each Indian to fully Enlight the Issue.(2)Regarding Gas Price Hike , We can Import at Market Price Instead of Paying to Ambani for Indian's Own Gas.It shall definitely be Lower, as Basic GAS is India's Only.

Kathikeyan Esakkimuthu

3 years ago

Across the world it is perhaps true that most of the media companies are controlled by powerful industrial groups. Renowned media critic Noam Chomsky too share the same view. However the allegation against RIL (Reliance Industries) on unfair gas pricing is inappropriate. The price is as per the prevailing rate in international markets. Restricting free market mechanism will have dire consequences as it will hamper future investments in the sector which can mean that our country will continue to be a energy deficient one affecting all other sectors including infrastructure

pushkar kulkarni

3 years ago

AAP is a third class Nautanki party.

let media ignore Keriwal for 4 days , total blackout on TV and newspapers.. see how he reacts.

he seems to be more interested in news than making any constructive work.

what has been his contribution/ decisions when he was IRS officer?? how many of those things have helped aam aadmi? let someone dig into his past.

everybody else is corrupt , who does not agree with AAP.

is AAP geeting money form Middle east , as his opposition to gas price increase would ultimately help those countries. why should reliance give gas at less than production cost, decision arrived by eminent committee? I am not pro-Reliance, but a practical person.

REPLY

NSriramamurty

In Reply to pushkar kulkarni 3 years ago

Cost of Production is to be Audited by Govt. Auditor / CAG. Cost + Return Rule can be Applied.Reliance is Fighting against Performance Audit. CAG Audit Only can bring out Correct Cost, Cosequential Pricing.

Suiketu Shah

In Reply to pushkar kulkarni 3 years ago

agree 100%.I turn the page carrying articles of him.Big turnoff.

MG Warrier

In Reply to pushkar kulkarni 3 years ago

Be practical.'Someone' will not dig for you. If 'someone' agrees to do that the 'exploits' will be priced at international prices. That is what you are justifying here.

govind

3 years ago

dont think he would have made such a virulent attack without a substantial amount of evidence. be patient, they will reveal the truth about all media houses and journalists at the right time.

MG Warrier

3 years ago

Let us not be in a hurry to come to conclusions. For the time being, let us accept "AAP" as a new platform for those having different views on governance. Expecting AAP to conform to the 'discipline' of present mainstream politics or asking Kejriwal to find solutions for all the ills may not lead one anywhere.

REPLY

Abhijit Gosavi

In Reply to MG Warrier 3 years ago

Asking Kejriwal to find solutions? AAP has views on governance? Are you kidding me? Kejriwal has no interest in finding solutions. He loves being in the limelight, and his attacks on various entities ensure that. And that's all there is to it. If he were sincere about his attacks, why did those 370 pages disappear?

Also, a Kejriwal interested in governance would have put his head down and done the good work that a CM can do. But that requires staying away from TV studios and isn't glamorous.

Pantulu

In Reply to Abhijit Gosavi 3 years ago

It is strange that some people think whatever happened in the past 10 years of misrule is good governance. Can they identify a single contribution which helped the common man who has no voice in the present system? Instead of trying to support vested interests who are not bothered about common people they should try to appreciate constructive approach. Otherwise this country will never improve.

Abhijit Gosavi

In Reply to Pantulu 3 years ago

No argument about the past ten years, but what about the forty nine days? When you win an election, don't you think you should do something constructive and not give away the power just like that? Like I said above, he could have put his head down and done the good work a CM can do.

ritesh Manilal Poladia

3 years ago

it seem Mr. Kejriwal jus wants to raise issue and then jump out of it and start a new sensation.
During Delhi election preparation, AAP showed tons of documents that then Delhi CM is corrupt and when coming in power, filed FIR which has terrible technical mistakes. Experts opined that those mistakes are such a gross so as to extent that it remains non-commital.
then comes Lokpal. wanted to break all rules and when it came to follow rules and get support, he simple resigned.

Now Ambani issue. If we take simple poll, majority of ppl (who are not investors or not alligned to current economics), ambani s anti-hero. and just to take advantage of this, Mr. Kejriwalagain doing monkey dance - similar to lungi dance.

i am surprised as some real good names have joined this NOBLE cause. hope sanity returns to them.

Indian market trends

The Sensex and the Nifty advanced 3% each during the fortnight ended 26th February. ML Mega-cap Index and ML Mid-cap Index advanced 3% each. ML Large-cap Index, ML Micro-cap Index and ML Small-cap Index rose 2% each.

 

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