First Pacific and Henderson Investment are to be made Hang Seng Index stocks after the exclusive club for Hong Kong blue chips was shaken up for the first time in 18 months. Miramar Hotel and Investment and Hong Kong Aircraft Engineering are to be relegated as constituent index stock when the change is imposed on August 30. The timing of the reshuffle, after a steady 18 months, came as a surprise for dealers. However, both new inclusions have been widely tipped as future HSI stocks and already form core holdings for many institutional fund managers. Buying action can be expected in both stocks this morning, but any share price re-rating is expected to be gradual since index tracking funds do not tend to make immediate trading decisions. Few analysts were surprised by the demotion of Miramar or Haeco from the index, since both have experienced stagnant turnover and under-performed the market. 'That Haeco and Miramar are still there is purely an historical anomaly,' said Deutsche Morgan Grenfell research manager Alan Hutcheson. He expected the First Pacific share price to consolidate on the news and Henderson Investment to rise, possibly as high as 5 per cent. First Pacific, a diversified conglomerate and the international investment arm of the Indonesian Salim Group, had been widely tipped for HSI inclusion at the time of the last reshuffle. Manuel Pangilanan, managing director of First Pacific said he was delighted at the decision following the disappointment of being passed over last time around. HSI inclusion meant that attention from international investors would increase, adding: 'We welcome the higher profile and vow not to become lazy because of the benefit inclusion gives us.' Henderson Investment owns about 35 per cent stake in Miramar, meaning that index investors retain exposure to the dormant hotel company's assets despite it being dropped from the index. The effect of the change is to increase the dominance of property companies in the index. Similarly, businessman Lee Shau-kee extends his control of HSI stocks, already having major shareholdings in Henderson Land and The Hong Kong China Gas Co. 'Shareholdings among index stocks looks more incestuous than ever,'said one analyst. HSI services reviews the constituent stocks of the HSI quarterly, making changes according to the criteria of market capitalisation and turnover during the previous two years, HSI spokesman Tony Chiu said. The HSI will capture about 75 per cent of total market capitalisation following the change, representing an increase of about 1.8 per cent. Haeco is dropped from the index after a 26-year uninterrupted run. Over the past three months, daily turnover in the company's shares has averaged a mere $3 million. A dismal profit record and stagnant share price over recent years account for the lack of dealing interest in the heavy maintenance company owned by Cathay Pacific and Swire Pacific. Mixed reaction to changes.