The share price of Shanghai Electric Group jumped 5.49 per cent to a record high of $2.40 yesterday on news it would be included in Morgan Stanley Capital International's standard index series from September 1. The firm, which listed in Hong Kong in late April and makes power equipment and other industrial machinery, was one of only four stocks added to the index series globally after the latest quarterly review. None of the other additions was Asian, which meant speculation earlier this week that Hong Kong-listed China Netcom would claim a spot was incorrect. Based on market capitalisation on July 27, Shanghai Electric will have a 0.64 per cent weighting in the MSCI China index, according to index provider MSCI Barra. The stock, which will also be included in the H-share index from September 5, has had a strong run recently with gains in 14 of the past 17 sessions. It is trading at 41 per cent above its initial public offering price of $1.70 at a forward price-earnings ratio of 21.1 times. 'The upside is likely to continue as more fund managers will now be forced to add the stock to their portfolios,' said Sandy Lee, quantitative analyst at Nomura International (Hong Kong). 'But investors should obviously be careful about any possible reversal in the share price after the inclusion.' MSCI estimates US$3 billion worth of investments are benchmarked against its indices globally. Macquarie Securities' Gary Chui began coverage of the stock with an outperform rating and a target price of $2.50 in a report on August 9 when it was trading at $2.