THERE has probably never been such a fuss made about a change to a private indicator in Hong Kong as there was in September when HSI Services announced the seven new names it was adding to its main stock market index. The changes were made necessary by the departure of the Jardine Group which quit Hong Kong as its primary listing location after it failed in its bid to become exempt from Hong Kong takeover laws. When the new entrants were announced, there were murmurs of 'unfair' from several companies which thought they should have been included in the index. Some analysts remarked that HSI Services had missed a golden chance to dramatically rejig the main market indicator. But the decision was final, according to HSI Services. To be part of the Hang Seng Index (HSI), companies need to have their main base in Hong Kong and they need to have a substantial earnings and stock turnover history. Out of the index are five Jardine companies plus Lai Sun Garment and Winsor Industrial. The seven new entrants are Amoy Properties, Guangdong Investment, Johnson Electric, Oriental Press Group, Shangri-La Asia, Sino Land and South China Morning Post (Holdings.) The first four companies join the index from Wednesday and the last three from February 28 next year. So why the fuss? Companies which join the index can usually look forward to a greater level of institutional interest as big investors often favour index constituent stocks in their portfolios. There is the added benefit of a generally higher public awareness of HSI companies' names as they appear repeatedly in the press under HSI constituent lists. For whatever reason, the HSI has become known as the main indicator of market sentiment, although it really only represents the movements of its 33 constituents. There is a need for a common indicator and investors have, over the years, agreed to use the Hang Seng Index in much the same way as people end up using particular scales of weights and measures - if most other people one deals with are using a particular system, it makes little sense to use a different one. The seven companies which are about to join the index for the first time have little reason to object to their inclusion. There is no downside to being part of the index and all the blue chip prestige membership carries with it. There are no extra reporting requirements and companies welcome the opportunity to spend more time talking to analysts and potential investors, if membership leads to that. Being part of the HSI is the closest thing to a listed company free lunch and that is probably why companies which missed out were so bitter. HSI Services has been collating the index since 1969 and has back-dated its database to 1964. Being oldest has its advantages, not least of which involves the futures market, where the Hang Seng Index contract consistently attracts high interest from investors and speculators. HSI Services runs the calculation of the index with a remarkably small team. The basic tools are a feed from the stock exchange and a computer. Software does most of the work, with most human involvement devoted to publishing and seeking up-to-date issued capital data from constituent companies. When the new entrants to the index were announced, Tony Chiu Man-cheong, manager of HSI Services, said it was a simple matter to update the system for the new companies. Simple task or not, HSI Services does the public a service by calculating and presenting the index. Its parent, Hang Seng Bank, does not operate its index subsidiary as a profit centre. Yet the publicity gained in the exercise is hard to value. Away from Hong Kong, there must be many more people outside the banking world who recognise the bank's name for the index it invented in the 1960s rather than the services it provides for its customers.