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SCMP Reporter

KOWLOON Motor Bus has been removed from the Hang Seng Index and is being replaced by Macau casino tycoon Stanley Ho's conglomerate Shun Tak.

  The change was announced yesterday by Hang Seng Index Services.

   The body also said it was re-defining Jardine Strategic Holdings, formerly a financial constituent, as a commerce and industry stock, along with Shun Tak.

  The changes become effective on June 30. The number of index constituents will remain at 33.

  HSI Services said: ''These changes are aimed at strengthening the representatives of the index as an indicator of the stock market.

  ''The sectoral distribution of the Hang Seng Index after the changes would be more closely in line with that of the whole market.''   Shun Tak's core business is the operation of the Hongkong-Macau passenger service with the world's largest fleet of jetfoils.

  The group was due to join the index at the time of the privatisation of Cavendish International by Hutchison Whampoa last spring, which was the last time an index constituent change was made.

  However, a rapid increase in the market capitalisation of CITIC Pacific following the successful acquisition of Hang Chong meant the HSI Services constituents selection panel opted for the Hongkong-listed mainland investment holding vehicle.

  Standard Chartered head of equities research Edward Chan said: ''It is a sensible move, considering Shun Tak is a broadly based investment holding company and more active in managing underlying businesses.

  ''Shun Tak has improved its liquidity and, of course, when you compare it with KMB you see much more interest in an investment holding company than a simple utility.'' Monitor, Page 16 



Shun Tak replaces KMB on index