* CSI300 -0.9 pct; SSEC -1.1 pct; HSI -0.3 pct
* RRR cut fails to impact stocks
* Analysts expect further easing
By Sue-Lin Wong
SHANGHAI, Feb 6 (Reuters) - China and Hong Kong stocks fell on Friday morning as investors held back in preparation for a flurry of initial public offerings (IPOs).
The market has drawn limited support from the stimulus delivered to the Chinese economy by a reduction in banks reserve requirement ratios (RRR) earlier this week, though it has rasied expectations of more easing to come.
The CSI300 index fell 0.9 percent, to 3,338.36 points at the end of the morning session, while the Shanghai Composite Index lost 1.1 percent, to 3,100.88 points.
In Hong Kong, the Hang Seng index dropped 0.3 percent, to 24,696.53 points. The Hong Kong China Enterprises Index lost 0.7 percent, to 11,711.93.
“The market is down today not because of this week’s RRR cut but rather because of the expectation of new IPOs. The impact of RRR cuts on the market will be felt over the long term, not the short term,” said Tian Weidong, head of research at Kaiyuan Securities in Xi‘an.
“What Wednesday’s RRR cut did was mark the beginning of what people expect will be six or seven RRR cuts this year.”
But the head of the People’s Bank of China’s research department, Lu Lei, told Xinhua that the RRR decrease is not the start of a strong stimulus for the economy and does not represent a policy shift.
Chinese banks welcomed the easing but bankers who spoke to Reuters said the move was not enough to encourage them to lend more, or lend more cheaply, given the dearth of demand from creditworthy borrowers.
Haitong Securities jumped 3.0 percent, CITIC rose 0.7 percent and Merchants Bank was up 0.4 percent after they, and thirteen other listed brokerages, said in their January earnings report that their net profit soared 211 percent to 6.46 billion yuan, exceeding market expectations, according to the China Securities Journal.
Hong Kong’s stock exchange told investors it expects them to hit the limit of shares they can buy via its trading link with Shanghai by the end of March, a development that will pressure China to lift the quota to prevent the scheme grinding to a near halt.
The index measuring price differences between dual-listed companies in Shanghai and Hong Kong stood at 121.13.
A value above 100 indicates Shanghai shares are pricing at a premium to shares in the same company trading in Hong Kong, and vice versa.
Total volume of A shares traded in Shanghai was 13.03 billion shares, while Shenzhen volume was 8.64 billion shares.
Total trading volume of companies included in the HSI index was 0.6 billion shares.
Reporting by Sue-Lin Wong; Editing by Simon Cameron-Moore