Federal Open Market Committee

Table of Contents

Federal Open Market Committee
What is the FOMC?
Understanding the FOMC
FOMC meetings
FOMC operations
Examples of FOMC
Frequently Asked Questions

Federal Open Market Committee

Twelve people make up the Federal Open Market Committee, or FOMC. Together with the five Presidents of the Federal Reserve Banks, these members make up the seven members of the Board of Governors of the Federal Reserve System. While the other four posts are filled by the remaining Federal Reserve Banks on an annual rotation, the President of the Federal Reserve Bank of New York is a permanent voting member. The FOMC conducts meetings approximately eight times a year to assess economic conditions and determine the course of monetary policy.

What is the FOMC?

The FOMC is a crucial part of the American Federal Reserve System, sometimes known as “the Fed”. It is essential to the development and execution of monetary policy in the US. The FOMC is in charge of making crucial choices that affect the financial and economic climate of the nation. The money supply and interest rates, which are at the centre of these decisions, have an effect on everything from borrowing costs to total economic development.

Understanding the FOMC

Full employment and maintaining price stability are the FOMC’s top priorities. In order to manage inflation and increase employment, it has a dual mandate. The FOMC primarily employs two policy instruments to achieve these goals:

Interest rates

The FOMC sets the federal funds rate, which is the interest rate at which depository institutions lend funds to each other overnight. Changes in the federal funds rate have a domino effect on various interest rates across the economy, influencing borrowing and spending.

Open market operations

The FOMC has the authority to purchase or sell Treasury bonds and other US government securities on the open market. These exchanges have a direct impact on the money supply, which in turn affects short-term interest rates.

FOMC meetings

The FOMC meets regularly to examine the state of the economy and make decisions about monetary policy. Financial markets and the general public are quite interested in these meetings because they offer information on the Fed’s outlook for the economy. Important details concerning FOMC meetings include:

Frequency

The FOMC usually meets eight times a year, approximately every six weeks.

Transparency

After each meeting, the FOMC issues a statement detailing its decisions and reasoning, which is closely analysed by financial markets and economists.

Press conferences

On some occasions, the Fed Chair holds a press conference after FOMC meetings to provide further context and answer questions from the media.

Economic projections

The FOMC also releases economic projections, including GDP growth, inflation, and unemployment forecasts. These projections offer insights into the Committee’s expectations for the US economy.

FOMC operations

The FOMC uses open market operations to implement its monetary policy decisions. These transactions include the open market purchase or sale of US government securities. The most common forms of open market operations are:

Open market purchases

By buying US government securities, the Fed injects funds into the banking system. This increases the money supply and lowers short-term interest rates.

Open market sales

Selling government securities removes funds from the banking system, reducing the money supply and raising short-term interest rates.

These operations directly affect the federal funds rate, which, in turn, influences a wide range of interest rates throughout the economy. For example, when the FOMC lowers the federal funds rate through open market purchases, it becomes cheaper for banks to borrow money, making it more affordable for consumers and businesses to borrow as well.

Examples of FOMC

To illustrate the FOMC’s role and impact, consider these examples:

Recession mitigation

During an economic downturn, the FOMC may lower interest rates to stimulate borrowing and spending, thus helping to combat a recession.

Inflation control

If inflation is rising above the target range, the FOMC may raise interest rates to curb excessive price increases.

Financial crisis response

The FOMC may take extreme steps, such as executing quantitative easing, to stabilise financial markets and spur economic development in times of financial crisis, like the global financial crisis of 2008.

Long-term economic growth

The FOMC’s policies also aim to support long-term economic growth by maintaining a stable economic environment that fosters investment and job creation.

Frequently Asked Questions

What does the FOMC do?

Decisions about monetary policy that affect the American economy must be made by the FOMC. It manages interest rates and the money supply to achieve the dual mandate of controlling inflation and maximising employment. The FOMC meets often to evaluate the status of the economy, examine the position of the financial markets, and decide on the best course of action to fulfil its twin mission of maintaining price stability and maximising sustainable employment.

The FOMC employs instruments including interest rate changes, open market operations, and forward guiding to have an impact on the economy. The FOMC’s actions, which have an effect on borrowing costs and the money supply, are intended to stimulate economic development, rein in inflation, and preserve financial stability.

Is the FOMC the same as the Fed?

No, the FOMC is a part of the Federal Reserve System. The Fed includes the FOMC, the Board of Governors, and the Federal Reserve Banks. The FOMC is the body that formulates and executes monetary policy.

How often does the FOMC meet?

The FOMC typically meets approximately eight times a year, roughly every six weeks. The exact schedule is determined by the Committee and can vary. The seven members of the Board of Governors and the five presidents of the Reserve Banks that make up the FOMC meet during these times to discuss and evaluate the state of the economy, inflation, and employment statistics. They also discuss monetary policy measures like interest rates.

What is the effect of FOMC?

The FOMC’s actions have a significant impact on the economy. By adjusting interest rates and the money supply, it influences borrowing costs, spending, and overall economic growth.

What does the FOMC buy and sell?

The FOMC primarily buys and sells Treasury bonds, which are US government assets. These open market transactions have a direct impact on interest rates and the money supply. The Committee’s policy choices decide which particular securities are purchased or sold, as well as the amounts.

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Centurion Corporation Maintains Strong Growth Trajectory with BUY Rating and S$1.94 Target Price

Published on Aug 21, 2026 33

Centurion Corporation Ltd (CCL), a leading provider of purpose-built worker accommodation (PBWA) and student accommodation across Singapore, Malaysia, Australia, and the UK, has demonstrated robust growth momentum in its 1H26 results. The company operates a diversified portfolio of accommodation assets serving both migrant workers and students across multiple markets. Strong Revenue Growth Driven by Strategic Acquisitions CCL's revenue performance has been particularly impressive, with first-half 2026 revenue surging 31% year-on-year to S$184.9 million, marking the company's strongest growth since the first half of 2022. This exceptional performance was primarily driven by a series of strategic acquisitions and asset enhancement initiatives across key markets. The revenue acceleration reflects several major acquisitions that have significantly expanded CCL's capacity. The company acquired an additional 55% stake in the 8,006-bed Westlite Mandai Purpose-Built Workers' Accommodation (PBWA) facility, representing 19% of Singapore's capacity. In Malaysia, CCL acquired the 7,083-bed Harum Megah PBWA, adding 20% to the country's capacity. The Australian market saw the addition of the 732-bed EPIISOD Macquarie Park facility, which boosted Australia's PBSA capacity by 82%. Beyond acquisitions, ongoing asset enhancement initiatives have contributed substantially to growth. These projects added 5,460 beds, representing a 13% increase in Singapore capacity through expansions at Westlite Toh Guan and Westlite Mandai PBWA facilities, which are currently in the occupancy ramp-up phase. Market Dynamics Signal Continued Demand A significant positive development for CCL came through securing a three-year lease extension from JTC for the 1,224-bed Westlite Tuas Avenue 2 quick build dormitory, with options for an additional 3.5-year extension. 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Disclaimer These commentaries are intended for general circulation and do not have regard to the specific investment objectives, financial situation and particular needs of any person. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of any person acting based on this information. You should seek advice from a financial adviser regarding the suitability of any investment product(s) mentioned herein, taking into account your specific investment objectives, financial situation or particular needs, before making a commitment to invest in such products. Opinions expressed in these commentaries are subject to change without notice. Investments are subject to investment risks including the possible loss of the principal amount invested. The value of units in any fund and the income from them may fall as well as rise. Past performance figures as well as any projection or forecast used in these commentaries are not necessarily indicative of future or likely performance. Phillip Securities Pte Ltd (PSPL), its directors, connected persons or employees may from time to time have an interest in the financial instruments mentioned in these commentaries. The information contained in these commentaries has been obtained from public sources which PSPL has no reason to believe are unreliable and any analysis, forecasts, projections, expectations and opinions (collectively the “Research”) contained in these commentaries are based on such information and are expressions of belief only. PSPL has not verified this information and no representation or warranty, express or implied, is made that such information or Research is accurate, complete or verified or should be relied upon as such. Any such information or Research contained in these commentaries are subject to change, and PSPL shall not have any responsibility to maintain the information or Research made available or to supply any corrections, updates or releases in connection therewith. In no event will PSPL be liable for any special, indirect, incidental or consequential damages which may be incurred from the use of the information or Research made available, even if it has been advised of the possibility of such damages. The companies and their employees mentioned in these commentaries cannot be held liable for any errors, inaccuracies and/or omissions howsoever caused. Any opinion or advice herein is made on a general basis and is subject to change without notice. The information provided in these commentaries may contain optimistic statements regarding future events or future financial performance of countries, markets or companies. You must make your own financial assessment of the relevance, accuracy and adequacy of the information provided in these commentaries. Views and any strategies described in these commentaries may not be suitable for all investors. Opinions expressed herein may differ from the opinions expressed by other units of PSPL or its connected persons and associates. Any reference to or discussion of investment products or commodities in these commentaries is purely for illustrative purposes only and must not be construed as a recommendation, an offer or solicitation for the subscription, purchase or sale of the investment products or commodities mentioned. This advertisement has not been reviewed by the Monetary Authority of Singapore.

Frencken Group Outlook Strengthens on Semiconductor Recovery, Upgraded to Buy with S$3.30 Target Price

Published on Aug 21, 2026 21

Frencken Group Ltd, a leading provider of precision engineering and manufacturing services across semiconductor, medical, automotive, and industrial automation sectors, has received an upgraded rating from Phillip Securities Research following its 1H26 results and improved outlook for the remainder of the year. Mixed First Half Performance Sets Stage for Recovery The company's 1H26 revenue and profit after tax and minority interests (PATMI) came in within expectations, representing 47% and 45% of full-year forecasts respectively. PATMI declined 3% year-on-year to S$19.2 million, primarily due to anticipated weakness in semiconductor and analytical life science segments. However, this decline was partially offset by robust performance in medical, industrial automation, and automotive divisions. Key Positive Developments Drive Optimism The medical segment showed particularly strong momentum, with 2Q26 revenue accelerating to 16% year-on-year growth, reaching S$35.8 million compared to just 5% growth in 1Q26. This acceleration was driven by increased orders from Europe for digital pathology equipment, highlighting the company's strong positioning in advanced medical technology manufacturing. Industrial automation also demonstrated resilience, with 2Q26 revenue rebounding 19% year-on-year to S$10.8 million following a 1% decline in 1Q26. This recovery was attributed to higher orders from the company's data storage customer, though management cautioned that 2H26 industrial automation revenue is expected to decline due to changes in customer sourcing arrangements. The automotive segment maintained steady growth momentum, with 1H26 revenue advancing 10% year-on-year to S$32.2 million. This performance was underpinned by increased production of radar antennas. Notably, Frencken's European automotive customer is transitioning from pilot production in Sweden to high-volume production in China, with management guiding a production ramp that will increase volumes quarter-by-quarter over the next two years. Second Half Recovery Expected Phillip Securities Research anticipates 2H26 growth in Frencken's semiconductor, automotive, and medical segments will offset the projected decline in industrial automation. The semiconductor outlook appears particularly promising, with DUV and metrology demand expected to surge for the company's Netherlands front-end semiconductor customer in 2H26. Additionally, some demand pull-in is anticipated from automotive customers. Based on these developments, Phillip Securities Research upgraded Frencken Group to BUY from ACCUMULATE whilst maintaining the target price at S$3.30, representing a valuation of 29x FY27 price-to-earnings ratio. Frequently Asked Questions [market_journal_faq] This article has been auto-generated using PhillipGPT. It is based on a report by a Phillip Securities Research analyst. Disclaimer These commentaries are intended for general circulation and do not have regard to the specific investment objectives, financial situation and particular needs of any person. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of any person acting based on this information. You should seek advice from a financial adviser regarding the suitability of any investment product(s) mentioned herein, taking into account your specific investment objectives, financial situation or particular needs, before making a commitment to invest in such products. Opinions expressed in these commentaries are subject to change without notice. Investments are subject to investment risks including the possible loss of the principal amount invested. The value of units in any fund and the income from them may fall as well as rise. Past performance figures as well as any projection or forecast used in these commentaries are not necessarily indicative of future or likely performance. Phillip Securities Pte Ltd (PSPL), its directors, connected persons or employees may from time to time have an interest in the financial instruments mentioned in these commentaries. The information contained in these commentaries has been obtained from public sources which PSPL has no reason to believe are unreliable and any analysis, forecasts, projections, expectations and opinions (collectively the “Research”) contained in these commentaries are based on such information and are expressions of belief only. PSPL has not verified this information and no representation or warranty, express or implied, is made that such information or Research is accurate, complete or verified or should be relied upon as such. Any such information or Research contained in these commentaries are subject to change, and PSPL shall not have any responsibility to maintain the information or Research made available or to supply any corrections, updates or releases in connection therewith. In no event will PSPL be liable for any special, indirect, incidental or consequential damages which may be incurred from the use of the information or Research made available, even if it has been advised of the possibility of such damages. The companies and their employees mentioned in these commentaries cannot be held liable for any errors, inaccuracies and/or omissions howsoever caused. Any opinion or advice herein is made on a general basis and is subject to change without notice. The information provided in these commentaries may contain optimistic statements regarding future events or future financial performance of countries, markets or companies. You must make your own financial assessment of the relevance, accuracy and adequacy of the information provided in these commentaries. Views and any strategies described in these commentaries may not be suitable for all investors. Opinions expressed herein may differ from the opinions expressed by other units of PSPL or its connected persons and associates. Any reference to or discussion of investment products or commodities in these commentaries is purely for illustrative purposes only and must not be construed as a recommendation, an offer or solicitation for the subscription, purchase or sale of the investment products or commodities mentioned. This advertisement has not been reviewed by the Monetary Authority of Singapore.

Pan-United Corporation Delivers Stellar 1H26 Results with Surging Margins and Volume Growth

Published on Aug 21, 2026 25

Pan-United Corporation Ltd, a leading ready-mixed concrete (RMC) provider in Singapore, has reported exceptional first-half 2026 results that significantly exceeded expectations. Phillip Securities Research maintains its BUY recommendation whilst raising the target price to S$1.96 from the previous S$1.73, reflecting improved revenue and earnings forecasts. Company Overview Pan-United Corporation operates as a primary supplier of ready-mixed concrete in Singapore's construction sector, serving major infrastructure and residential development projects. The company has invested in digital technology platforms to enhance operational efficiency and maintains a strong market position in the local construction industry. Strong Revenue Growth Driven by Multiple Factors The company delivered impressive first-half 2026 performance with revenue accelerating 37% year-on-year to S$549.6 million, marking the biggest increase since 2H21. This stellar performance was underpinned by an estimated 26% increase in RMC volume alongside a 9% rise in average selling prices. The volume growth stemmed from significant construction projects including Changi Airport Terminal 5, Thomson-East Coast Line/Downtown Line 2 extension, healthcare facilities such as the New Tengah General & Community Hospital, and ongoing Build-To-Order flat construction. Higher RMC prices resulted from supply chain disruptions and rising fuel costs due to Middle East conflicts, which elevated aggregate and cement costs. Despite these input cost pressures, Pan-United demonstrated remarkable pricing power by effectively passing increased costs to customers whilst maintaining strong demand. Margin Expansion Through Operational Excellence Particularly noteworthy was the company's ability to expand margins despite higher input costs. EBITDA and net margins improved by 82 and 55 basis points year-on-year respectively, demonstrating effective cost management and operational leverage. The company achieved higher operational efficiencies from increased volumes delivered through its Air Digital technology platform, which enhanced productivity and resource allocation. PATMI surged 52% year-on-year to S$31.3 million, representing the strongest growth since 2H23. This performance reflected both volume growth and improved operational efficiency rather than merely price increases. Positive Outlook and Shareholder Returns Construction visibility remains healthy with 1H26 contracts awarded increasing 9% year-on-year to S$31 billion. Industrial projects showed particular strength with 63% growth in twelve-month tenders through June 2026, supported by JTC industrial site tenders and PUB upgrade projects. The company increased its interim dividend by 50% to 1.5 cents per share whilst maintaining a consistent 34% payout ratio, providing shareholders with enhanced returns alongside capital appreciation potential. Frequently Asked Questions [market_journal_faq] This article has been auto-generated using PhillipGPT. It is based on a report by a Phillip Securities Research analyst. Disclaimer These commentaries are intended for general circulation and do not have regard to the specific investment objectives, financial situation and particular needs of any person. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of any person acting based on this information. You should seek advice from a financial adviser regarding the suitability of any investment product(s) mentioned herein, taking into account your specific investment objectives, financial situation or particular needs, before making a commitment to invest in such products. Opinions expressed in these commentaries are subject to change without notice. Investments are subject to investment risks including the possible loss of the principal amount invested. The value of units in any fund and the income from them may fall as well as rise. Past performance figures as well as any projection or forecast used in these commentaries are not necessarily indicative of future or likely performance. Phillip Securities Pte Ltd (PSPL), its directors, connected persons or employees may from time to time have an interest in the financial instruments mentioned in these commentaries. The information contained in these commentaries has been obtained from public sources which PSPL has no reason to believe are unreliable and any analysis, forecasts, projections, expectations and opinions (collectively the “Research”) contained in these commentaries are based on such information and are expressions of belief only. PSPL has not verified this information and no representation or warranty, express or implied, is made that such information or Research is accurate, complete or verified or should be relied upon as such. Any such information or Research contained in these commentaries are subject to change, and PSPL shall not have any responsibility to maintain the information or Research made available or to supply any corrections, updates or releases in connection therewith. In no event will PSPL be liable for any special, indirect, incidental or consequential damages which may be incurred from the use of the information or Research made available, even if it has been advised of the possibility of such damages. The companies and their employees mentioned in these commentaries cannot be held liable for any errors, inaccuracies and/or omissions howsoever caused. Any opinion or advice herein is made on a general basis and is subject to change without notice. The information provided in these commentaries may contain optimistic statements regarding future events or future financial performance of countries, markets or companies. You must make your own financial assessment of the relevance, accuracy and adequacy of the information provided in these commentaries. Views and any strategies described in these commentaries may not be suitable for all investors. Opinions expressed herein may differ from the opinions expressed by other units of PSPL or its connected persons and associates. Any reference to or discussion of investment products or commodities in these commentaries is purely for illustrative purposes only and must not be construed as a recommendation, an offer or solicitation for the subscription, purchase or sale of the investment products or commodities mentioned. This advertisement has not been reviewed by the Monetary Authority of Singapore.

Prime US REIT Shows Recovery Momentum with Occupancy Gains, Maintains US$0.25 Target Price & Buy Rating

Published on Aug 21, 2026 11

Company Overview Prime US REIT is a real estate investment trust focused on freehold integrated urban logistics properties strategically located across major gateway markets in the United States. The REIT owns a diversified portfolio of logistics assets serving key metropolitan areas. Mixed Performance Amid Recovery Trajectory Phillip Securities Research maintains a BUY recommendation for Prime US REIT with a revised target price of US$0.25, down from the previous US$0.32. The adjustment reflects updated forecasts following the REIT's first-half 2026 results, which showed mixed performance indicators against a backdrop of ongoing occupancy recovery. The REIT reported a 1H26 distribution per unit (DPU) of 0.50 US cents, representing 38% of Phillip Securities Research's full-year forecast. Whilst this figure fell below estimates, it marked a remarkable 317% year-on-year increase, primarily driven by management's decision to raise the payout ratio significantly to 65% from just 10% in the previous corresponding period. However, distributable income declined 33.1% year-on-year due to elevated operating costs and finance expenses, which rose 17% following incremental drawdowns on debt facilities to fund capital expenditure. Positive Portfolio Momentum The standout performance metric was the continued improvement in portfolio occupancy, which recorded its fifth consecutive quarter of growth. Occupancy levels reached 84.1% in the second quarter, advancing from 83.1% in the first quarter and representing a substantial improvement from 78.9% in the first quarter of 2025. The leasing momentum remained robust, with 90,000 square feet of new leases secured during the second quarter at a positive rental reversion of 6.2%. Notably, 29,000 square feet of this leasing activity came from existing tenant expansions, demonstrating the quality and stickiness of Prime's tenant base. The REIT has 492,000 square feet of committed leases representing 11.7% of net lettable area yet to commence cash contributions, scheduled to contribute progressively from the third quarter onwards. Stable Financial Metrics Despite operational challenges, Prime US REIT maintained stable balance sheet metrics. Aggregate leverage remained steady at 44.9% with an interest coverage ratio of 1.6 times. The weighted average interest rate increased modestly by 10 basis points to 5.5%, with further increases expected following hedge expirations in June 2026. Frequently Asked Questions [market_journal_faq] This article has been auto-generated using PhillipGPT. It is based on a report by a Phillip Securities Research analyst. Disclaimer These commentaries are intended for general circulation and do not have regard to the specific investment objectives, financial situation and particular needs of any person. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of any person acting based on this information. You should seek advice from a financial adviser regarding the suitability of any investment product(s) mentioned herein, taking into account your specific investment objectives, financial situation or particular needs, before making a commitment to invest in such products. Opinions expressed in these commentaries are subject to change without notice. Investments are subject to investment risks including the possible loss of the principal amount invested. The value of units in any fund and the income from them may fall as well as rise. Past performance figures as well as any projection or forecast used in these commentaries are not necessarily indicative of future or likely performance. Phillip Securities Pte Ltd (PSPL), its directors, connected persons or employees may from time to time have an interest in the financial instruments mentioned in these commentaries. The information contained in these commentaries has been obtained from public sources which PSPL has no reason to believe are unreliable and any analysis, forecasts, projections, expectations and opinions (collectively the “Research”) contained in these commentaries are based on such information and are expressions of belief only. PSPL has not verified this information and no representation or warranty, express or implied, is made that such information or Research is accurate, complete or verified or should be relied upon as such. Any such information or Research contained in these commentaries are subject to change, and PSPL shall not have any responsibility to maintain the information or Research made available or to supply any corrections, updates or releases in connection therewith. In no event will PSPL be liable for any special, indirect, incidental or consequential damages which may be incurred from the use of the information or Research made available, even if it has been advised of the possibility of such damages. The companies and their employees mentioned in these commentaries cannot be held liable for any errors, inaccuracies and/or omissions howsoever caused. Any opinion or advice herein is made on a general basis and is subject to change without notice. The information provided in these commentaries may contain optimistic statements regarding future events or future financial performance of countries, markets or companies. You must make your own financial assessment of the relevance, accuracy and adequacy of the information provided in these commentaries. Views and any strategies described in these commentaries may not be suitable for all investors. Opinions expressed herein may differ from the opinions expressed by other units of PSPL or its connected persons and associates. Any reference to or discussion of investment products or commodities in these commentaries is purely for illustrative purposes only and must not be construed as a recommendation, an offer or solicitation for the subscription, purchase or sale of the investment products or commodities mentioned. This advertisement has not been reviewed by the Monetary Authority of Singapore.

PopNex Market Share Advances Despite Challenging New Home Sales Environment, Maintains S$2.08 Target Price & Accumulate Rating

Published on Aug 21, 2026 13

Company Overview PropNex Ltd is Singapore's leading property agency services company, operating across multiple segments including private resale transactions, HDB resale, rental services, and project marketing for new home developments. The company has demonstrated consistent market share gains across its key business segments. Mixed Performance in Challenging Market Conditions PropNex delivered 1H26 results that were within expectations, with revenue and PATMI representing 53% and 57% of full-year forecasts respectively. The company reported a modest 3% year-on-year decline in PATMI to S$41 million, despite facing challenging market conditions and record comparatives from the previous year. The interim dividend remained steady at 5 cents, reflecting management's confidence in the business fundamentals. Key Positives: Resilient Private Resale Growth The standout performer was the private resale market, which generated S$167.5 million in revenue, marking a solid 6.9% year-on-year increase. This growth was primarily driven by the landed resale segment, which surged 25% to S$42 million. The significant discount between resale properties and new launch prices continues to support transaction volumes in this segment. PropNex strengthened its market position further, with private resale market share increasing by one percentage point to 66.3%. Key Negatives: New Home Sales Under Pressure Project marketing sales faced headwinds, declining 8% year-on-year to S$238.4 million. This weakness reflected broader industry challenges, with new home sales falling 9.4% year-on-year to 4,154 units during 1H26. The decline stems from fewer new launches in the market, creating a more constrained environment for project marketing activities. Outlook and Investment Recommendation Despite current challenges, PropNex continues to gain overall market share, reaching 64.3% of all HDB resale and private residential transactions, up from 60.6% in FY25. The company expects a more exciting pipeline in 2027, with potentially 11,000 units launching compared to 8,500 units in 2025. Phillip Securities Research maintains its Accumulate recommendation and DCF target price of S$2.08, noting that PropNex offers an attractive yield of 5.2%, supported by net cash of S$130 million and an impressive return on equity of 58%. Frequently Asked Questions [market_journal_faq] This article has been auto-generated using PhillipGPT. It is based on a report by a Phillip Securities Research analyst. Disclaimer These commentaries are intended for general circulation and do not have regard to the specific investment objectives, financial situation and particular needs of any person. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of any person acting based on this information. You should seek advice from a financial adviser regarding the suitability of any investment product(s) mentioned herein, taking into account your specific investment objectives, financial situation or particular needs, before making a commitment to invest in such products. Opinions expressed in these commentaries are subject to change without notice. Investments are subject to investment risks including the possible loss of the principal amount invested. The value of units in any fund and the income from them may fall as well as rise. Past performance figures as well as any projection or forecast used in these commentaries are not necessarily indicative of future or likely performance. Phillip Securities Pte Ltd (PSPL), its directors, connected persons or employees may from time to time have an interest in the financial instruments mentioned in these commentaries. The information contained in these commentaries has been obtained from public sources which PSPL has no reason to believe are unreliable and any analysis, forecasts, projections, expectations and opinions (collectively the “Research”) contained in these commentaries are based on such information and are expressions of belief only. PSPL has not verified this information and no representation or warranty, express or implied, is made that such information or Research is accurate, complete or verified or should be relied upon as such. Any such information or Research contained in these commentaries are subject to change, and PSPL shall not have any responsibility to maintain the information or Research made available or to supply any corrections, updates or releases in connection therewith. In no event will PSPL be liable for any special, indirect, incidental or consequential damages which may be incurred from the use of the information or Research made available, even if it has been advised of the possibility of such damages. The companies and their employees mentioned in these commentaries cannot be held liable for any errors, inaccuracies and/or omissions howsoever caused. Any opinion or advice herein is made on a general basis and is subject to change without notice. The information provided in these commentaries may contain optimistic statements regarding future events or future financial performance of countries, markets or companies. You must make your own financial assessment of the relevance, accuracy and adequacy of the information provided in these commentaries. Views and any strategies described in these commentaries may not be suitable for all investors. Opinions expressed herein may differ from the opinions expressed by other units of PSPL or its connected persons and associates. Any reference to or discussion of investment products or commodities in these commentaries is purely for illustrative purposes only and must not be construed as a recommendation, an offer or solicitation for the subscription, purchase or sale of the investment products or commodities mentioned. This advertisement has not been reviewed by the Monetary Authority of Singapore.

Sea Ltd Shows Strong Growth Momentum with BUY Rating and US$170 Target

Published on Aug 21, 2026 6

Sea Ltd, a leading Southeast Asian digital entertainment, e-commerce, and digital financial services platform, continues to demonstrate robust performance across its key business segments. Phillip Securities Research maintains its BUY recommendation with an unchanged target price of US$170.00, citing significant growth runway ahead for the company. Strong Revenue Performance Across Business Units The company delivered impressive second-quarter results with revenue growth of 48% year-on-year, driven by strong performance across its three main divisions. Shopee, the e-commerce arm, posted 49% year-on-year growth, whilst Monee, the digital financial services division, expanded rapidly with 59% year-on-year growth. Garena, the digital entertainment segment, showed more modest but steady growth of 16% year-on-year. Revenue slightly exceeded expectations, though elevated sales and marketing expenses and higher provision for credit losses impacted earnings. Shopee Maintains Healthy Growth Trajectory Shopee continues to demonstrate strong market momentum with gross merchandise value growing 28% year-on-year to US$38.3 billion, marking eight consecutive quarters of sequential growth. The platform benefits from robust user acquisition and engagement metrics, with monthly active buyers increasing 18% year-on-year and new active buyers surging 35% year-on-year. Purchase frequency also improved by 8% year-on-year, indicating deeper user engagement. Advertising revenue remains a significant growth driver, expanding 70% year-on-year with advertising take rates improving by 90 basis points. The company's investments in logistics, fulfilment, ShopeeVIP, and content initiatives are gaining traction, with fulfilment volume growing 20% quarter-on-quarter and VIP membership increasing 25% quarter-on-quarter. Livestream and short-video orders experienced particularly strong growth of 50% year-on-year. Monee Expands Through Enhanced Credit Models Monee's sophisticated approach to credit risk management is enabling aggressive expansion of its borrower base. The division has refined its credit-risk models by combining transactional data with external data sources, improving approval rates by 10% whilst maintaining similar risk levels. AI-based income document verification has reduced review time by 95%, streamlining operations significantly. The loan book reached US$11.1 billion, representing 52% year-on-year growth, whilst maintaining a low 90-day non-performing loan ratio of 1.0%. Monee added 5.3 million first-time borrowers during the quarter, with active credit users growing 34% year-on-year to 40 million users. Frequently Asked Questions [market_journal_faq] This article has been auto-generated using PhillipGPT. It is based on a report by a Phillip Securities Research analyst. Disclaimer These commentaries are intended for general circulation and do not have regard to the specific investment objectives, financial situation and particular needs of any person. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of any person acting based on this information. You should seek advice from a financial adviser regarding the suitability of any investment product(s) mentioned herein, taking into account your specific investment objectives, financial situation or particular needs, before making a commitment to invest in such products. Opinions expressed in these commentaries are subject to change without notice. Investments are subject to investment risks including the possible loss of the principal amount invested. The value of units in any fund and the income from them may fall as well as rise. Past performance figures as well as any projection or forecast used in these commentaries are not necessarily indicative of future or likely performance. Phillip Securities Pte Ltd (PSPL), its directors, connected persons or employees may from time to time have an interest in the financial instruments mentioned in these commentaries. The information contained in these commentaries has been obtained from public sources which PSPL has no reason to believe are unreliable and any analysis, forecasts, projections, expectations and opinions (collectively the “Research”) contained in these commentaries are based on such information and are expressions of belief only. PSPL has not verified this information and no representation or warranty, express or implied, is made that such information or Research is accurate, complete or verified or should be relied upon as such. Any such information or Research contained in these commentaries are subject to change, and PSPL shall not have any responsibility to maintain the information or Research made available or to supply any corrections, updates or releases in connection therewith. In no event will PSPL be liable for any special, indirect, incidental or consequential damages which may be incurred from the use of the information or Research made available, even if it has been advised of the possibility of such damages. The companies and their employees mentioned in these commentaries cannot be held liable for any errors, inaccuracies and/or omissions howsoever caused. Any opinion or advice herein is made on a general basis and is subject to change without notice. The information provided in these commentaries may contain optimistic statements regarding future events or future financial performance of countries, markets or companies. You must make your own financial assessment of the relevance, accuracy and adequacy of the information provided in these commentaries. Views and any strategies described in these commentaries may not be suitable for all investors. Opinions expressed herein may differ from the opinions expressed by other units of PSPL or its connected persons and associates. Any reference to or discussion of investment products or commodities in these commentaries is purely for illustrative purposes only and must not be construed as a recommendation, an offer or solicitation for the subscription, purchase or sale of the investment products or commodities mentioned. This advertisement has not been reviewed by the Monetary Authority of Singapore.

Shopify Positioned to Lead AI Commerce Revolution Despite Margin Pressures, Accumulate Rating at US$170 Target

Published on Aug 21, 2026 8

Strong Performance Drives Forecast Upgrades Shopify Inc., the leading e-commerce platform provider, continues to demonstrate robust growth momentum as it positions itself at the forefront of artificial intelligence-driven commerce. The company's second quarter performance exceeded expectations, with both revenue and adjusted profit after tax and minority interests surpassing forecasts due to stronger-than-expected gross merchandise value growth and broad-based merchant momentum. Revenue climbed 34% year-on-year, supported by growth across both subscription solutions (+23% YoY) and merchant solutions (+37% YoY). The merchant solutions growth was particularly driven by strong GMV expansion and higher Shopify Payments penetration. However, margins declined 90 basis points year-on-year due to a mix shift toward lower-margin merchant solutions revenue and increased AI and large language model costs. Analyst Outlook and Recommendation Phillip Securities Research has downgraded its recommendation from Buy to Accumulate, citing recent share price movement, whilst raising the target price to US$170 from US$160. The research house has increased its FY26 revenue and profit forecasts by 3% and 1% respectively to reflect the stronger-than-expected GMV growth, whilst maintaining unchanged terminal growth and weighted average cost of capital assumptions. AI Integration Strengthens Competitive Position The positives surrounding Shopify's strategic direction are compelling. AI is increasingly emerging as a significant tailwind for the platform, with traffic on agentic and AI-attributed orders both tripling year-on-year in the second quarter. Sidekick daily active users rose 3.6 times year-on-year, whilst catalogue conversion rates are double those of general search. The company's Catalogue feature could become a structural competitive advantage as AI-driven shopping gains traction. It provides AI agents with richer, structured product data to match products with specific consumer intent rather than simply ranking by keywords. This particularly benefits Shopify's long-tail merchants, with 75% of AI-attributed orders coming from outside its top 100 categories. Additionally, as AI agents and other channels create a more fragmented commerce environment, Shopify's ability to manage complex transaction flows across taxes, discounts, inventory, fulfilment, and payments provides critical infrastructure. Shop Pay GMV grew 53% year-on-year, whilst Shopify Payments penetration reached 68% of GMV, up from 65% in the prior year period. Frequently Asked Questions [market_journal_faq] This article has been auto-generated using PhillipGPT. It is based on a report by a Phillip Securities Research analyst. Disclaimer These commentaries are intended for general circulation and do not have regard to the specific investment objectives, financial situation and particular needs of any person. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of any person acting based on this information. You should seek advice from a financial adviser regarding the suitability of any investment product(s) mentioned herein, taking into account your specific investment objectives, financial situation or particular needs, before making a commitment to invest in such products. Opinions expressed in these commentaries are subject to change without notice. Investments are subject to investment risks including the possible loss of the principal amount invested. The value of units in any fund and the income from them may fall as well as rise. Past performance figures as well as any projection or forecast used in these commentaries are not necessarily indicative of future or likely performance. Phillip Securities Pte Ltd (PSPL), its directors, connected persons or employees may from time to time have an interest in the financial instruments mentioned in these commentaries. The information contained in these commentaries has been obtained from public sources which PSPL has no reason to believe are unreliable and any analysis, forecasts, projections, expectations and opinions (collectively the “Research”) contained in these commentaries are based on such information and are expressions of belief only. PSPL has not verified this information and no representation or warranty, express or implied, is made that such information or Research is accurate, complete or verified or should be relied upon as such. Any such information or Research contained in these commentaries are subject to change, and PSPL shall not have any responsibility to maintain the information or Research made available or to supply any corrections, updates or releases in connection therewith. In no event will PSPL be liable for any special, indirect, incidental or consequential damages which may be incurred from the use of the information or Research made available, even if it has been advised of the possibility of such damages. The companies and their employees mentioned in these commentaries cannot be held liable for any errors, inaccuracies and/or omissions howsoever caused. Any opinion or advice herein is made on a general basis and is subject to change without notice. The information provided in these commentaries may contain optimistic statements regarding future events or future financial performance of countries, markets or companies. You must make your own financial assessment of the relevance, accuracy and adequacy of the information provided in these commentaries. Views and any strategies described in these commentaries may not be suitable for all investors. Opinions expressed herein may differ from the opinions expressed by other units of PSPL or its connected persons and associates. Any reference to or discussion of investment products or commodities in these commentaries is purely for illustrative purposes only and must not be construed as a recommendation, an offer or solicitation for the subscription, purchase or sale of the investment products or commodities mentioned. This advertisement has not been reviewed by the Monetary Authority of Singapore.

Singapore Exchange Limited Delivers Record Performance, Downgraded to Neutral at S$25.00 Target

Published on Aug 21, 2026 9

Strong Cash Equities Growth Drives Record Year Singapore Exchange Limited, one of Asia's leading multi-asset exchanges providing trading, clearing, settlement, and depository services across equities, derivatives, and fixed income, delivered a record-breaking performance in FY26 driven primarily by exceptional cash equities growth. The exchange operator's 2HFY26 revenue and earnings met analyst estimates, with full-year results coming in at 102% and 101% of forecasts respectively. Key Performance Drivers Cash equities emerged as the standout performer, contributing 59% of 2H26 revenue growth with revenues surging 40% year-on-year to S$282 million. This represented S$80 million of the S$135 million group increase, positioning cash equities revenue at nearly 1.5 times equity derivatives, up from 1.1 times previously. The strong performance was underpinned by FY26 securities daily average value (SDAV) rising 35% to S$1.8 billion, marking an 18-year high, whilst maintaining the average net clearing fee at 2.61 basis points. Fixed income, currencies and commodities (FICC) also delivered robust growth, with revenue increasing 21% year-on-year on record FY26 currency and commodity derivatives volumes, particularly in INR/USD, USD/CNH and iron ore contracts. SGX FX average daily value expanded 33% in FY26 through client expansion into EMEA and the Americas. Mixed Performance Across Segments Equity derivatives trading and clearing revenue showed modest growth of 2.5% year-on-year, though the average net fee per contract declined 7% to S$1.20. Management attributed this decline to Singapore dollar strength and a higher proportion of clients benefiting from volume tier pricing, expecting this trend not to persist. Notably, equity derivatives have fallen to become the third-largest segment, overtaken by FICC. Analyst Outlook and Valuation Concerns Phillip Securities Research has downgraded Singapore Exchange to Neutral whilst raising the target price to S$25.00 from S$18.30 previously. The upgrade in target price reflects increased FY27 estimates by 11% due to higher FICC and equities revenue alongside lower operating expenses. However, the downgrade reflects valuation concerns, with SGX trading at 38.6 times FY26 P/E versus a five-year mean of approximately 22 times, suggesting record performance levels are already priced into current valuations. Frequently Asked Questions [market_journal_faq] This article has been auto-generated using PhillipGPT. It is based on a report by a Phillip Securities Research analyst. Disclaimer These commentaries are intended for general circulation and do not have regard to the specific investment objectives, financial situation and particular needs of any person. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of any person acting based on this information. You should seek advice from a financial adviser regarding the suitability of any investment product(s) mentioned herein, taking into account your specific investment objectives, financial situation or particular needs, before making a commitment to invest in such products. Opinions expressed in these commentaries are subject to change without notice. Investments are subject to investment risks including the possible loss of the principal amount invested. The value of units in any fund and the income from them may fall as well as rise. Past performance figures as well as any projection or forecast used in these commentaries are not necessarily indicative of future or likely performance. Phillip Securities Pte Ltd (PSPL), its directors, connected persons or employees may from time to time have an interest in the financial instruments mentioned in these commentaries. The information contained in these commentaries has been obtained from public sources which PSPL has no reason to believe are unreliable and any analysis, forecasts, projections, expectations and opinions (collectively the “Research”) contained in these commentaries are based on such information and are expressions of belief only. PSPL has not verified this information and no representation or warranty, express or implied, is made that such information or Research is accurate, complete or verified or should be relied upon as such. Any such information or Research contained in these commentaries are subject to change, and PSPL shall not have any responsibility to maintain the information or Research made available or to supply any corrections, updates or releases in connection therewith. In no event will PSPL be liable for any special, indirect, incidental or consequential damages which may be incurred from the use of the information or Research made available, even if it has been advised of the possibility of such damages. The companies and their employees mentioned in these commentaries cannot be held liable for any errors, inaccuracies and/or omissions howsoever caused. Any opinion or advice herein is made on a general basis and is subject to change without notice. The information provided in these commentaries may contain optimistic statements regarding future events or future financial performance of countries, markets or companies. You must make your own financial assessment of the relevance, accuracy and adequacy of the information provided in these commentaries. Views and any strategies described in these commentaries may not be suitable for all investors. Opinions expressed herein may differ from the opinions expressed by other units of PSPL or its connected persons and associates. Any reference to or discussion of investment products or commodities in these commentaries is purely for illustrative purposes only and must not be construed as a recommendation, an offer or solicitation for the subscription, purchase or sale of the investment products or commodities mentioned. This advertisement has not been reviewed by the Monetary Authority of Singapore.

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