Contract shoemaker Yue Yuen Industrial (Holdings) and mainland container leaser and port operator Cosco Pacific are to replace New World Development and Sino Land in the blue-chip Hang Seng Index. The move reflects the growing importance of China on the city's stock market at the expense of Hong Kong firms, particularly those involved in the depressed property industry. The changes are effective on June 9 and are likely to spark buying in Yue Yuen and Cosco and selling in New World and Sino Land as traders move in ahead of benchmark-tracking fund managers, including the giant Tracker Fund. 'The changes are being made to maintain the representativeness of the Hang Seng Index,' said Vincent Kwan, a director and general manager of HSI Services. Both Yue Yuen, which has most of its production lines in China, and Cosco have been making share-price gains in recent months, taking their market capitalisation above some of the smaller counters in the 33-member index. In contrast, New World and Sino Land, both of which are rooted in the property industry, have seen their share prices and market caps shrivel, making them virtually irrelevant in influencing the movement of the index. HSI Services said Yue Yuen and Cosco ranked 28th and 34th respectively in terms of 12-month average market capitalisation among all eligible stocks on the Hong Kong market. Yue Yuen has a market capitalisation of HK$24.79 billion and Cosco HK$14.92 billion. New World, which had a weighting of 0.21 per cent in the index at yesterday's close, the lowest of the constituents, has a capitalisation of HK$5.91 billion. Sino Land, the second lowest in the index with a weighting of 0.3 per cent, has a market capitalisation of HK$8.1 billion. In response to the company's deletion from the index, a Sino Land spokesman said: 'Sino Land has been privileged as a constituent stock of the Hang Seng Index for eight years. We will work just as hard as before for the best interest of our shareholders.' Some analysts expect more property counters to be removed from the index. The previous change in index constituents was made in November last year when property players Hang Lung Group and Hysan Development were replaced by BOC Hong Kong (Holdings) and Esprit Holdings. Following the changes, the weighting of the commerce and industry sub-index will increase from 37.51 per cent to 38.43 per cent while the property sub-group will decline from 10.66 per cent to 10.24 per cent. The finance and banking sector will fall from 44.55 per cent to 44.11 per cent and utilities sub-index from 7.28 per cent to 7.22 per cent. Graphic: hang09gbz