Salient to Investors:

Wang Weijun at Zheshang Securities said the producer-price index is indicating the economic recovery is weaker than expected as demand for industrial products looks sluggish – the market needs to digest profit taking after the recent rebound.

The Shanghai Composite is at 9.6 times estimated earnings for 2013 versus the 7-yr average of 17.5.

Yao Wei at Societe Generale said the drop in producer prices reflects falling commodity prices and excess manufacturing capacity, as companies have a difficult time raising prices, affecting profit margins.

The China Securities Journal said the China’s tolerance for slowing growth will be higher than the market expects, and as long as growth averages 7 percent, China will reach its goal of a well-off society in 2020.

Fan Xiaoyang at Sealand Securities said the resumption of bill sales has killed off hopes of an interest-rate cut.

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