Singapore Exchange adds ComfortDelGro, SMRT to index

SINGAPORE, March 12 (Reuters) - Singapore Exchange said on Thursday it will add transport firms ComfortDelGro (CMDG.SI) and SMRT (SMRT.SI) to its benchmark Straits Times Index and remove property counters Yanlord Land (YNLG.SI) and Keppel Land (KLAN.SI). The changes after the twice-yearly review of the 30-stock index .FTSTI come into effect from March 23.

SGX (SGXL.SI) and its index partners Singapore Press Holdings (SPRM.SI) and FTSE Group said the changes would make the index more accurately reflect the market.

Property firms have been battered by weakening asset values and slowing demand for new project launches, while public transport operators are seen by investors as a more defensive sector to withstand Singapore's worst ever recession. "I think SMRT and ComfortDelGro will be more sought after by institutional investors who are index driven," said Kevin Scully, managing director at NRA Capital in Singapore. "The counters that are taken out will definitely fall...because institutions which have them for the index weighting will have to sell."

ComfortDelGro and SMRT operate buses, taxis and the subway system in Singapore. ComfortDelGro also derives significant revenues from overseas, including buses and taxis in China and the United Kingdom.

"With two property (counters) coming out -- and you already have a lot of property in the index -- may be it's a reflection that they want to broaden the representation of the index," Scully said.

"I don't think there will be much impact on the index performance of these changes." (Reporting by Laurence Tan; Writing by Neil Chatterjee; Editing by Anshuman Daga)