BofAML advises buyers to avoid risk

Sentiment has shifted toward companies with the reliable record of profits and sales growth

Want to buy shares in Asia’s most-expensive stock market? Stay with high-quality companies that better weather downturns and perform respectably on the way up.
 

That’s the advice from Bank of America Merrill Lynch after Indian equities posted multiple records this year, fueled by a tide of liquidity and optimism about the government policy. The euphoria has had the usual side effect: stocks have become expensive. The S&P BSE Sensex’s estimated price-earnings ratio has reached 22, the steepest among equity benchmarks in the region. A measure of smaller companies is even costlier.

“It is better to stick with companies that are