First Pacific and Henderson Investment lost ground on their first day in the Hang Seng Index yesterday but brokers say the stocks have a bright future. The counters were admitted to the 33-stock benchmark index when trading began but suffered from the broad decline in the market on interest rate fears. First Pacific, a conglomerate controlled by the Indonesian Salim Group, fell 2.33 per cent to $12.55. Turnover was $44.77 million. Henderson Investment, whose interests cover hotels, retailing, property and utilities, dropped 2.35 per cent to $8.30 with $49.24 million worth of shares traded. Both stocks were buoyed to year highs last week as retail and institutional investors sought out the counters. Vickers Ballas Securities research director Andrew Fernow said: 'Their inclusion in the index has prompted many investors to put these stocks in their portfolios.' Both counters have outperformed the index since HSI Services, the unit of Hang Seng Bank which oversees the Hang Seng Index, announced the reshuffle of the index on July 18. First Pacific set a new record high last Wednesday of $13.10, up 11 per cent since the announcement. Henderson Investment also set a year-high the same day, rising to $8.70. Brokers said they saw both counters with the potential to go higher, as long as they maintained their earnings growth. Mr Fernow said: 'The stocks will benefit from being in the index and it will help their share price but they will need to provide pretty good results to maintain their valuation.' First Pacific reports its interim results on Monday.
