The index compiler adds 60 companies, including 12 listed in Hong Kong, to its series and beefs up the energy sector Morgan Stanley Capital International (MSCI) will add 60 companies, including 12 Hong Kong-listed stocks, to its Asian index series later this month in a reflection of the strong performance of regional markets last year and the shift in focus towards energy and materials. 'The weight of Asian markets globally, or at least outside the United States, will increase slightly after this rebalancing,' MSCI equity research global head Remy Briand said. He noted there would be a 1 per cent shift from Europe towards Asia and Japan in the MSCI index that tracks world stocks outside the US. Far East ex-Japan's weight in the All Country World Index would rise to 3.5 per cent from 3.4 per cent. The companies to be added to the index were pushed higher as investors anticipated that the index inclusion - to take effect after the close of trade on May 28 - would lead to additional capital inflows from funds tracking these indices. In Indonesia, Indocement jumped 18.03 per cent and Bumi Resources gained 12.05 per cent, while in South Korea LG Electronics was up 13.74 per cent. In Hong Kong Kingboard Chemical Holdings finished 8.8 per cent higher, Kerry Properties rose 3.33 per cent and shipping group Orient Overseas added 1.48 per cent. Among the nine mainland-related stocks to be included, battery manufacturer BYD gained 7.28 per cent and Weiqiao Textile rose 5.77 per cent. The key reason for the changes is to ensure the market capitalisation within each sector is as close as possible to the MSCI's 85 per cent target on a country level. 'The review is reflecting a change in the structure of the market, rather than a general increase in the market,' Mr Briand said. Such structural changes were largely triggered by last year's share-price rally in sectors such as raw materials and shipping, pushing up the market capitalisation of many firms. New listings also boosted some sectors. 'Within the Far East ex-Japan index, the biggest sector increases are in energy, technology, insurance and materials,' Mr Briand said. 'The ones decreasing would be telecoms, semiconductors and utilities, but the shifts are not necessarily huge, it's a gradual movement.' MSCI said changes to the MSCI Far East ex-Japan index, which includes nine countries, would result in a 5.1 per cent index turnover - a figure some analysts described as significant. 'The impact is substantial,' Nomura Asian Equity Research analyst Sandy Lee said. She expected more speculative inflows. Around the time of the actual rebalancing, however, the top gainers could fall back slightly because of 'hedge funds playing the game and taking contrarian positions', she added. Others regarded the changes as less significant, noting that the weighting changes for the country indices resulting from the exercise were in the decimal places. The fact that 60 more firms would be on global investors' radar screens - only nine are to be deleted - showed Asian equity markets were now more diversified. Morgan Stanley regional strategist Norman Villamin said the markets were becoming deeper and investors could have more diversified portfolios.