HSI Services, which compiles the Hang Seng Index, says it will consider adjusting the criteria for membership of the benchmark indicator if its recent reshuffle of constituents continues to draw criticism from brokers and investors. HSI Services manager Tony Chiu Man-chong said: 'If there is such a [negative] comment, we will have to review the selection criteria at the next review.' Mr Chiu's remarks come as two companies - Cheung Kong Infrastructure (CKI) and China Resources Enterprise - are added to the index tomorrow. CKI's inclusion, which was part of a regular overhaul, has sparked criticism because a relatively small proportion of its shares are available to investors. An estimate compiled by ING Baring Securities shows that CKI has a free float of just 14 per cent - by far the lowest proportion of the 33 index members. The average percentage of shares freely available to investors across the whole group is about 50 per cent. Brokers say that a low volume of available shares helps to push up a counter's price as fund managers chase index stocks to try and make their portfolios representative. Since CKI's inclusion was announced on July 16 its shares have risen 9.11 per cent to $25.15. China Resources stock has climbed 3.09 per cent to $36.60. Asia Financial Securities research manager Kinson Au Kin-kee said: 'I don't think it's a good idea to have such a small amount of shares available . . . [CKI] should make more available, maybe through a share placement.' HSI Services' choice of CKI has also elicited concern because of cross shareholdings. CKI is about 85 per cent held by another index member, conglomerate Hutchison Whampoa, which is itself almost 50 per cent by Li Ka-shing's flagship, Cheung Kong (Holdings). In addition, CKI also holds about 35 per cent of fellow index member Hongkong Electric. As all Hang Seng Index members are weighted at their full market capitalisation, such cross holdings effectively lead to some shares being counted more than once - and their importance effectively overstated. Nikko Securities senior investment adviser Kent Rossiter said: 'It doesn't seem like the wisest decision. They could have chosen a more representative company without the overlap.' A Hutchison spokesman would not comment on plans for its CKI stake. Mr Chiu said that at present, constituents were selected principally on the basis of their market capitalisations and levels of liquidity. Free-float figures and cross-holdings were not taken into account, he said. 'If one day we decide to take into account these factors, there may be some replacements,' Mr Chiu said. Such changes would bring HSI Services' approach more into line with that used by other index-compiling firms. Geneva-based Capital International Perspective, which compiles the Morgan Stanley family of indices, says it seeks to avoid or minimise the inclusion of companies with significant cross-holdings or low free floats. Hong Kong commentators acknowledged, however, that the new switches did bring some benefits. They said the adjustments boosted the index's coverage to about 71 per cent of total market capitalisation, up from about 66 per cent. The increased emphasis on China plays was also well received. China Resources is a red chip and CKI has considerable mainland exposure. The two new members replace publishing group Oriental Press Group and micro-motor manufacturer Johnson Electric.