Stocks: Should You Raise Cash for a Dip?
The numbers presented in the Union Budget are worrying because they point to an economy that is in the grip of a severe slowdown. The ‘trend’ is still down and, hence, it is difficult to digest or believe that the fiscal 2020-21 will be better than this year has been.
I would have expected that the government would, at least, make an attempt to create some demand. On the contrary....
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  • Zee Entertainment Falls 10% on Reports of Books Inspection by MCA
    Shares of Zee Entertainment Enterprises Ltd tumbled about 10% amidst reports about inspection of its books by the ministry of corporate affairs (MCA). Both, Bombay Stock Exchange (BSE) and National Stock Exchange (NSE), have sought clarification from Zee Entertainment Enterprises Ltd ((ZEEL)) on a news published by quoting "MCA orders inspection of Zee Entertainment's books."
    Quoting a source, a report from says, "MCA has ordered an inspection of the financials of Zee Entertainment following allegations of corporate governance lapses and after some its independent directors quit recently."
    "The inspection has been ordered under Section 206 (5) of The Companies Act. The MCA’s western regional director will carry out the probe into the company’s books and will record the statements of the company management," the report added.
    In its clarification, Zee Entertainment accepted that it has received a letter on 21 January 2020 from the MCA seeking certain information and inspection under Section 206(5) of the Companies Act, 2013. 
    In a regulatory filing, the company says, "the information sought by MCA is already available in the public domain. However, we are collating all the desired information and will be providing the same to MCA with an intent to fully cooperate with their inspection. You may note that no conclusion or adverse inference has been drawn by any authority against the company."
    Last year in November, two independent directors Niharika Vohra and Sunil Sharma had resigned from ZEEL. While Ms Vohra had alleged poor corporate governance, Mr Sharma had resigned to make way for new institutional investors. 
    In her letter, Ms Vohra had mentioned, "In the 17 October 2019 meeting it was clear that commensurate action by the operating team of ZEEL has not been taken against a bank for squaring off loans of related companies of the group against a matured fixed deposit (FD) of ZEEL. Subsequent action suggested to further protect deposits of ZEEL in other banks has not been taken (as per my knowledge). At the same meeting it was brought to light via a letter received by the board from the concerned bank that guarantees have been given to a subsidiary without approval from the board. The operating team treated the issue very casually."
    "Laxity in spending approved CSR funds reflects poor governance. Advances given for film acquisition and aggregation in the financial year 2018-2019 were highly unusual and presented another instance of poor controls," Ms Vohra had stated in her resignation letter of 22 November 2019.
    Commenting on the resignation of its independent directors and price movement, Zee Entertainment says, "The press reports seem to speculate that this inquiry was triggered by the resignation of independent directors few months ago, and we cannot fathom any reason for this dated fact (and subsequent full disclosures on all material issues arising out of such resignations made by the company) to have caused such price movement in the company's share price."
    "On the contrary, we have been writing letters to SEBI that some persons have been trying to manipulate our stocks and have been spreading false rumours which have adversely impacted the share price of the company," it added.
    During the trading, Zee Entertainment reached an intra-day low of Rs220.25.

    Zee Entertainment closed Wednesday 7.49% down at Rs226.70 on the BSE, while the 30-share Sensex ended the day marginally up at 41,142.
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    Nifty, Sensex shoot up on mutual fund buying – Tuesday closing report
    We had mentioned in Monday’s closing report that Nifty, Sensex were indecisive.
    The major indices rallied today. On the NSE, there were 1,249 advances, 533 declines and 358 unchanged. The trends of the major indices in the course of Tuesday’s trading are given in the table below:
    Slide in global crude oil prices and positive global cues aided the benchmark Sensex to gain over 900 points. 
    Around 3,000 employees of Life Insurance Corporation of India (LIC) observed a one-hour strike across the north-eastern region to protest against the union government's budget proposal to sell a part of stake in the state-run financial institution.
    IFCI has completed the stake sale of NSE and further received an amount of approximately 1178.65 crore. 
    Tata Communications will launch a 100G media backbone to meet the growing bandwidth demands of the industry. The backbone - delivered in collaboration with Net Insight - will enable broadcasters, sports organisations, OTT companies and eSports businesses to offer their audiences worldwide more immersive viewing and gaming experiences and transform how they operate through full remote production.
    Adani Ports and Special Economic Zone reported 20.88% YoY rise in revenues for the quarter ended December 2019, at Rs3,830.43 crore. Net profits declined 4% to Rs1,352 crore.
    Jindal Saw reported a nearly flat 0.61% YoY rise in revenues for the quarter ended December 2019, at Rs3,009.89 crore. Net profits declined 35.53% to Rs89.55 crore.
    Punjab National Bank reported a standalone net loss of ₹492.28 crore for December quarter 2019-20 due to substantial increase in bad loan provisioning. The bank had posted a net profit of ₹246.51 crore for the same period a year ago. Net interest income rose to ₹ 15,967.49 crore as against ₹14,854.24 crore in the previous year.
    Bajaj Auto reported 3.1% decline in total sales at 3,94,473 units in January. The firm had sold a total of 4,07,150 units in January 2019.
    Shares of Shriram Transport Finance Company surged 13% as net profits grew 38.1% year on year (y-o-y) to Rs882 crore in the quarter ended December 2019.
    Profit before taxes rose 20.6% to Rs.1,186 crore on rise in other income and fall in loan losses and provisions.
    Shares of Tata Consultancy Services gained over 1.5% after the company bagged a $1.5 billion (about Rs.10,650 crore) contract from pharma company Walgreens Boots Alliance, spread over a period of 10 years. Under the contract, TCS will provide managed services including application maintenance and support, required infrastructure and security operations.
    GlaxoSmithKline Pharmaceuticals reported a consolidated net loss of Rs .661 crore for the December 2019 quarter, mainly on account of financial impact related to the voluntary recall of Zinetac. The drug firm had posted a net profit of Rs.114 crore in the year-ago quarter and Rs553 crore in the September quarter.
    The top gainers and top losers of the major indices are given in the table below:
    The closing values of the major Asian indices are given in the table below:
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