RPT-PREVIEW-Pacific Metals, Haseko seen joining Nikkei 225

(Repeats with no change in text)

What: Annual reshuffle of Nikkei 225 stock average

When: Announcement early September, carried out Oct. 1

Outcome: Included shares may surge, deleted ones may fall

By Elaine Lies

TOKYO, Aug 27 (Reuters) - As the annual Nikkei 225 .N225 reshuffle draws near, market players reckon that Pacific Metals Co Ltd (5541.T: Quote, Profile, Research, Stock Buzz) and Haseko Corp (1808.T: Quote, Profile, Research, Stock Buzz) are top picks to join the blue-chip average, while Kumagai Gumi (1861.T: Quote, Profile, Research, Stock Buzz) is likely out.

Stocks newly added to the benchmark will benefit because 4.4-4.9 trillion yen ($40-45 billion) worth of funds are estimated to track the Nikkei. They must include the new additions in their portfolios, and sell shares of companies that are deleted.

Index compiler the Nihon Keizai Shimbun, publisher of the Nikkei business daily, will announce its additions and deletions for the benchmark early next month. They will take effect from the first business day of October.

The Nikkei does not reveal all the methodology behind its choices, but analysts say the decision is a combination of trade volume and maintaining a balance between six broad sectors.

Factors such as the impact of a stock's inclusion and how long it has been listed can also come into play.

In addition, the number of stocks involved differs each year. This time, because of rejigs carried out earlier this year due to companies delisting, two or three at most will change.

Pacific Metals, Japan's largest producer of the stainless steel ingredient ferronickel, and condominium builder Haseko are leading contenders to join, according to reports from Daiwa Institute of Research, Nomura Securities and Shinko Securities.

Other candidates are venture capital firm SBI Holdings Inc (8473.T: Quote, Profile, Research, Stock Buzz), chipmaker Elpida Memory Inc (6665.T: Quote, Profile, Research, Stock Buzz) and Hitachi Construction Machinery Co Ltd. (6305.T: Quote, Profile, Research, Stock Buzz).

Though shares seen as candidates for addition often rise once analysts have issued their reports, this year is different, with only Pacific Metals gaining in August -- by 4 percent.

"People aren't really buying on this kind of thing right now -- it's a bear market," said Koichi Ogawa, chief portfolio manager at Daiwa SB Investments.

Everyone agrees Kumagai Gumi, a general contractor that for years has been a candidate for deletion, is nearly sure to go. Kumagai Gumi's shares fell 39 percent in August compared with the Nikkei's 4.7 percent decline.