SINGAPORE (Reuters) - ComfortDelGro shares surged on Wednesday to hit a seven-year top on better-than-expected first-quarter earnings and expectations of favourable policy changes, while the Singapore index rebounded from 1-month lows.

Shares of ComfortDelGro rose as much as 6.6 per cent to an intra-day high of $2.26, its highest since June 2007, after the transport operator posted a 9.7 per cent rise in net profit for the first quarter.

The gains helped the Singapore benchmark index bounce from a one-month low hit on Monday. The Straits Times Index was up nearly 1 per cent at 3,252.74 by midday. MSCI's broadest index of Asia-Pacific shares outside Japan edged up 0.7 per cent.

OCBC maintained its "buy" rating on ComfortDelGro shares, with a target price of $2.30, citing robust growth in its overseas business despite challenges in its Singapore operations.

The company's management has hinted at probable policy changes involving the new bus operating model framework to be announced at the next Parliamentary session on May 16, OCBC added.

ComfortDelGro has a 75 per cent stake in rail and bus operator SBS Transit. "Any measures which would enhance the sustainability of the transport sector would be a major catalyst to both ComfortDelGro and SMRT," OCBC said in a research note.

Shares in SMRT Corporation, Singapore's main rail operator, have appreciated 4 per cent so far this month after jumping nearly 20 per cent in April. SBS shares have risen about 7 percent since the end of March.