Hong Kong stock index adds 2 Chinese companies

Hang Seng Indexes Co. said late Friday it will remove billionaire Li Ka-shing's Cheung Kong Infrastructure Holdings Ltd. and fixed-line operator PCCW Ltd. from the list of stocks from which the index is calculated, starting June 10.

It said it will replace them with Tencent Holdings Ltd., operator of the Chinese instant-messaging service QQ, and Aluminum Corp. of China.

The moves raise the index's number of H-share companies, or China-registered companies traded in Hong Kong, to 10 from nine before the review.

Aluminum Corp. of China is an H-share company, while Tencent is a red chip -a company listed and registered in Hong Kong but with most of its assets in mainland China.

Traders said the addition of H-share companies reflects rising investor interest in China. The market expects the companies to report high earnings growth and investment returns, given the rapid economic growth in the communist country.

Analysts had not expected the index compiler to make changes after its latest review, and no reasons were given for the delisting. However, market participants have long anticipated that PCCW would be removed from the Hang Seng Index because the telephone company has reported low turnover since 2004.

The other nine H-share companies in the benchmark index are PetroChina, China Shenhua Energy, China Life Insurance Co., China Construction Bank Corp., Industrial & Commercial Bank of China Ltd., Bank of Communications Co., Bank of China Ltd., Ping An Insurance (Group) Co. of China Ltd. and China Petroleum & Chemical Corp.