By Clarence Leong

The compiler of Hong Kong's equities benchmark on Friday unveiled two industrial companies and a property-management provider as its newest constituents, the start of an overhaul to improve its mix of industries and broaden representation.

The compiler of the Hang Seng Index, a key gauge of Hong Kong's $6 trillion-plus stock market, named Xinyi Solar Holdings Ltd., BYD Co. and Country Garden Services Holdings Co. as its newest members in its first quarterly review since proposing sweeping changes in March.

No company was cut from the benchmark, taking the total number of constituents to 58 from 55, with changes to take effect on June 7.

This came after HSI's compiler in March announced its intention to change the composition of the key stocks index by having 80 constituents by mid-2022, eventually broadening to include up to 100 companies. The efforts will help diversify the key Asian index and reduce the outsize impact of the financial sector. It plans to allow some companies to join the benchmark after being listed for three months down from a requirement of two years currently.

The index compiler also said it would cut the maximum weight of any single company in the index to 8% from 10%. For companies with supervoting shares or secondary listings in Hong Kong, such as Chinese tech company Alibaba Group Holding Ltd., it raised the maximum weighting to 8% from 5%. These previously proposed changes will start to take effect with an index rebalancing in June. Altogether, they mark one of the HSI's biggest revamps since it was launched in 1969.

The changes also come after a period of underperformance. The HSI is up almost 17% in the past 12 months, but it lags benchmarks in China and other major exchanges across Asia.

The compiler plans to keep no more than 25 Hong Kong companies as constituents in the index, which is dominated by mainland Chinese businesses.

Write to Clarence Leong at clarence.leong@wsj.com

(END) Dow Jones Newswires

05-21-21 0725ET