Published March 13, 2009

ComfortDelGro, SMRT to be included in STI

They replace property counters Keppel Land and Yanlord Land Group

By JAMIE LEE

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TRANSPORT operators ComfortDelGro Corporation and SMRT Corporation will replace property counters Keppel Land and Yanlord Land Group in the Straits Times Index (STI).

This follows the latest half-yearly review of the index component stocks, said a joint statement yesterday from FTSE Group, Singapore Exchange and Singapore Press Holdings. FTSE ST indices also saw changes.

Half-yearly reviews are carried out to ensure that the indices remain an accurate reflection of the market that they represent, they said, adding that the changes will take effect on March 23.

The STI is made up of the biggest 30 companies by market capitalisation but their inclusion also encompasses other criteria such as free float and liquidity.

The latest review comes as the share prices of property counters have been hit by fears of dwindling sales and asset write-downs.

On the flip side, analysts prefer land transport stocks because they are seen as defensive during an economic slowdown.

'Transport counters are seen to be more resilient,' said a local bank analyst. 'But the property sector is going through a rough patch in terms of visibility and outlook.'

The changes were expected by some analysts. Nomura said in a March 6 report that the two transport counters were likely to nudge Keppel Land and Yanlord out of the index.

A Kelive report yesterday said that Keppel Land's 7 per cent fall in share price on Wednesday, which reduced it to below $1, could have been caused by the expected exclusion of the stock from the STI.

'There is no apparent reason for the 7 per cent plunge in share price, save for Keppel Land's potential exclusion from the index,' the report said.

The stock regained some ground yesterday. After touching a six-year low of 98.5 cents, it closed at $1.04, up 4.5 per cent.

Yanlord has lost 3.16 per cent since Wednesday, closing at 76.5 cents yesterday.

SMRT closed 1.3 per cent higher at $1.61 yesterday, while ComfortDelGro lost 2.2 per cent to finish at $1.32.