Heng Seng Index Services Co. Ltd, the HSI compliance registry, announced an adjustment of the bench index constituents stocks for the second quarter of 2008. PCCW (HK: 0008) will be taken out of the HSI and replaced by Tencent Holdings Limited (HK: 0700) and Cheung Kong Infrastructure Holdings (HK: 1038) will be replaced by Aluminum Corporation of China Limited (SH: 601600; HK: 2600). The adjustment will become effective on 6 Jun 2008, Tecent will account for 0.92% of the HSI and Chalco will account for 0.87%. Following the adjustment, mainland constituents stocks will account for 52% of the benchmark index, leaving 48% for Hong Kong-based blue chips.

PCCW and Cheung Kong Infrastructure Holdings are controlled by Li Ka-shing and his sons who are local tycoons in Hong Kong. PCCW, formerly known as Hong Kong Phone Company, had been a constituent of HSI since the index was first complied in 1964. The company had experienced operational difficulties, and it made lay-offs in recent years. The company's share price plummeted from HKD 100 per share in 2000 to HKD 5 per share, its current price. PCCW was the last remaining Hong Kong telecom stock on the benchmark index.
Aluminum Corporation of China Limited, or Chalco, is the largest aluminum manufacturer in China. Tecent is the most popular internet media service provider in the country.

Source: China Business News

Date: 12 May 2008

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