China Netcom, Chinese mainland��s second-largest fixed-line phone carrier, is seen as the frontrunner to join Hong Kong��s blue-chip Hang Seng Index (HSI), given its large market capitalization and robust turnover.

Market watchers, however, said recently-listed Netcom might need to wait before joining the benchmark, as the index compiler was not expected to make changes in its upcoming quarterly review, scheduled for Friday.

Mainland computer maker Lenovo Group and property conglomerate Wheelock & Co. Ltd. are viewed as the most likely to be ejected the next time the HSI makes a reshuffle.

��China Netcom��s market capitalization is big,�� said Veronica Ho, quantative analyst at UBS. ��Since HSI stresses so much on market cap, even if China Netcom can��t make it into the index this quarter, it will in the next review,�� she said.

China Netcom has a market cap of some US$10 billion, four times bigger than Lenovo's, and triple that of Wheelock. Lenovo and Wheelock have each accounted for half a percent or less of the index weighting over the past six months.

The 33 blue-chip constituents are reviewed every quarter and changes are typically made once a year based on market value, trading turnover and sector representation.

The index is dominated by banking, property and telecom stocks. It is becoming more mainland-focused, even though only some Hong Kong-listed mainland firms are eligible for inclusion.

Longer-shot candidates to join the HSI include Hong Kong Stock Exchanges and Clearing, mainland��s top chipmaker Semiconductor Manufacturing International Corp. and property developer Sino Land.

The prize for winning blue-chip status is inclusion in more portfolios as must-have holdings for index investors.

Some investors said an index reshuffle was unlikely, as the top official at index compiler HSI Services had said frequent changes to the makeup of the index were not desirable.

The previous reshuffle, in September, replaced broadcaster TVB and Shanghai Industrial with automaker Denway Motors and ports operator China Merchants Holdings.

Source: Shenzhen Daily-Agencies