HSI adds Lenovo, dumps Chalco

Hong Kong's benchmark Hang Seng Index will no longer include the loss-making state-owned enterprise Aluminum Corp of China, also known as Chalco, but will add computer manufacturer Lenovo, Hang Seng Indexes said in a quarterly review yesterday.

Lenovo, the world's second-largest maker of personal computers, will gain blue-chip status from March 4, with the overall number of index constituents remaining unchanged at 50.

The addition of Lenovo will help expand the weighting of the information technology sector in the benchmark after Tencent, China's biggest internet company, was included in September 2008.

The Chinese personal computer giant reported a 34 per cent net profit increase in its fiscal third quarter ended December 31 to a record US$204.9 million, up from US$153.4 million a year earlier. That hefty gain was attributed to a record high shipment of personal computers to 14.1 million units last quarter and strong sales of its smartphones and media tablets.

Lenovo shares have gained more than 20 per cent this year, compared with Chalco which has edged up 2.3 per cent.

As a result of the latest index adjustment, HSBC, the heavyweight index mover, saw its weighting give up 27 basis points to 15 per cent, while the pan-Asian insurer AIA advanced by 45 basis points to 4.93 per cent and the local Hong Kong stock exchange gained 10 basis points to 2.17, effective from March 4, the company said in the statement.