An error in calculating the Morgan Stanley Capital International Hongkong Index (MSCI) of top Hongkong stocks may have caused some investors who trade in futures based on the index in Singapore to suffer losses yesterday, according to analysts and traders. ''There has been an extremely grave and horrifying mistake and I think there is going to be a big hoo-ha,'' said Mr John Wang, a Hongkong-based analyst for Barclays de Zoete Wedd (Asia). A new Hongkong index futures contract based on the Morgan Stanley index was launched on Wednesday on the Singapore International Monetary Exchange (SIMEX) as a rival to the Hang Seng index futures traded in Hongkong. Analysts say the error may have damaged, at least in the immediate term, the credibility of the new futures contract. The first official acknowledgement of the mistake came from SIMEX around noon. In a statement to its members SIMEX said: ''Morgan Stanley has informed [us] that the MSCI Hongkong Index currently transmitted needs to be adjusted. It is taking the necessary action to correct the index as soon as possible.'' At 12:26 pm, almost 21/2 hours after trading in Hongkong stocks and the SIMEX contract had opened, the MSCI index was adjusted upwards by 128 points, from 4,347 to 4,475. The SIMEX June Hongkong index contract had reached 4,420 at 12:30 pm, against 4,338 only 21 minutes earlier. Morgan Stanley officials in Tokyo said they could not comment on the incident. However, there was speculation that the mistake could have been prompted by Hang Seng Bank going ex-dividend. Before the mistake was discovered the Morgan Stanley Hongkong Futures Index appeared to have made a spectacular debut. In its first three days of operation 5,226 lots were traded, with an approximate nominal value of HK$2.2 billion. By the end of its first day alone 2,639 lots were traded, representing an underlying value of more than $1.1 billion, according to a report by Barclays de Zoete Wedd (Asia). This compares with the $4.5 billion approximate nominal value traded on the Hongkong Futures Exchange, after five years of slow recovery from the 1987 crash, when the exchange was shut for four days. BZW said many fund managers were still prohibited from using the Hang Seng contracts. In addition, the performance of many European funds was measured against the MSCI Index rather than the Hang Seng. The indexes are fundamentally the same - with the exception of HSBC Holdings, which accounts for 13.2 per cent of the Hang Seng Index but is not included in Morgan Stanley's figures. The report said the MSCI Index had been under-performing the Hang Seng recently, largely as a result of HSBC's strong performance.