Gross Income
Gross Income
Gross and net income are important ideas to understand whether you work for someone else or operate your firm. As a wage worker or business owner, knowing the difference will help you file your taxes or assess the health of your enterprise. Gross income is a crucial financial indicator that you may use to calculate other statistics and evaluate your company’s performance.
What is gross income?
The amount earned in a paycheck before taxes and other deductions is known as gross income. Salaries, rental income, interest income, and dividends are all included in this total.
Individual gross income is reported on an income tax return as adjusted gross income, which is transformed into taxable income after several deductions and exemptions. When applying for a loan, people could also be required to disclose their gross income. Businesses usually use gross income rather than net income to evaluate the performance of their products.
Understanding gross income
Gross profit, gross earnings, and taxable income are synonymous with “gross incom”. The metric, though, has several contexts for both people and organisations. It is the sum of an individual’s gross earnings for each period, excluding taxes and deductions. This includes rent, interest payments, dividends, commissions, and wages.
Lenders and landlords evaluate a person’s gross income to assess their suitability as a borrower or tenant. Before deducting deductions to calculate the amount of tax due, gross income is the starting point when filing federal and state income taxes.
Gross income is a metric used by businesses to assess how well their product-specific operations performed. A company can better understand what drives success or failure by using gross income and restricting the expenses included in the analysis.
Gross income formula
The formulas used to calculate the gross income of people and businesses are provided below:
- For Individuals:
Gross Income = Salary + Rent + Interest + Dividends
- For Businesses:
Gross Income = Revenue – Cost of Sold Goods
How to calculate gross income
Individuals’ gross income is their earnings before any withholdings or taxes are deducted. A full-time employee’s annual pay or wages before taxes is his gross income. A full-time employee’s salary must also consider any additional income sources he may have.
For instance, a person’s gross income should include any dividends received on equities he owns. Rent-related income, interest from savings and investments, and other income sources should also be considered. David works as a financial management consultant and receives a yearly salary of $100,000. In addition, David gets $50,000 in rental income from his real estate holdings, $10,000 in dividends from his Company ABC stock holdings, and $7,000 in interest from his savings account. So, David’s income is as follows:
Gross income is calculated as 100,000 + 50,000 + 10,000 +7,000 = $167,000.
Gross income examples
To better help you in grasping the idea, here is an example of gross income:
Human resources manager Meredith works at XYZ Inc. She makes US$90,000 a year as the team leader for several states. She also owns two rental properties, which bring in another US$2,000 per month.
She recently received a business proposal from a friend, but it requires her to invest US$3,500 monthly. Meredith determines if she can afford it by calculating her gross monthly salary. She chooses to calculate her compensation using the gross income method using the following equation:
Gross monthly income = 90,000/ 2
Monthly gross income = US$7,500
With this amount in mind, she can also include her US$2,000 rental income, bringing her total monthly payment to US$9,500. She knows that her monthly expenses typically range from US$4,000 to US$6,000, so she can afford a US$3,500 investment with careful planning.
Frequently Asked Questions
Your gross income is your entire before expenses, typically over a year. Consider the revenue you generated from your services – the total of all client billings before any withholding, taxes, or other deductions. Add together all of your annual client billings to determine your yearly gross income.
Your company’s profit after expenses and legal deductions is net income. Take your gross income, deduct all of your business expenses, and then add back any assumptions you may be entitled to, such as those for a home office, a retirement plan, or professional and legal fees. This will give you your net income.
Gross income, as opposed to net income, is frequently used by businesses to assess the performance of their products.
Lenders base their loan approval on a borrower’s gross income. Examples of loans include auto loans and mortgages. The lender will use the borrower’s debt-to-income ratio, or DTI, to decide how much money to lend. By dividing monthly debt payments by monthly gross income, the DTI is calculated.
A lender will be less likely to want to loan money to someone with a greater DTI, and the interest rate on a loan will also be higher. While a DTI of no more than 36% is ideal, some lenders will provide loans with DTIs as high as 50%.
Individuals’ gross income is their earnings before any withholdings or taxes are deducted. A full-time employee’s annual pay or wages before taxes is his gross income.
Your take-home pay is determined by deducting your employee provident fund contribution, source-deducted taxes, and any additional deductions required by business policy from your net compensation. For house loan qualifying purposes, your net income is typically considered.
The amount that a person makes each month before deductions is referred to as his gross income. Your total monthly income, which includes regular pay and revenue from side employment and investments, is what you make on a gross monthly basis. Lenders consider your gross monthly income when determining your creditworthiness and ability to repay loans.
Additionally, your year-end W2 or 1099 will show your entire gross income. A different way to figure out your gross income is to multiply your hourly pay rate by the amount of time you’ll work in a particular month, or by your monthly income before taxes.
Related Terms
- Cost of Equity
- Capital Adequacy Ratio (CAR)
- Interest Coverage Ratio
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- Income Statement
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Company Overview Yangzijiang Maritime Development Ltd (YZJ Maritime) operates as a maritime financial solutions provider, spun off from Yangzijiang Financial Holding Ltd and listed on the SGX Mainboard in November 2025. The company manages a diversified fleet of over 80 vessels with newbuilding orders for up to 50 additional vessels across Chinese shipyards. Led by Executive Chairman and CEO Mr Ren Yuanlin, who brings over 50 years of experience in shipbuilding and finance, the Group serves as a strategic hub connecting shipyards, shipowners, charterers, and capital markets. Investment Merits and Strategic Positioning YZJ Maritime's unique positioning allows it to capture economic value across the entire vessel lifecycle. The company generates revenue through multiple streams: procurement margins at build stage (up to 20% below first-tier shipyard prices), charter income during vessel operation, interest on finance leases, and capital gains upon exit. This comprehensive approach spans across tankers, gas carriers, bulkers, containerships, and offshore support vessels. The company's diversified portfolio demonstrates strong risk management capabilities, maintaining a zero non-performing loan track record over three years across its extensive fleet operations. In FY25, the Group generated US$32.3mn in charter income, US$33.2mn from finance lease interest, and US$13.7mn in capital gains from joint venture vessel sales. Shipping Cycle Capitalisation YZJ Maritime is strategically positioned to benefit from the current shipping cycle upswing, with vessel prices reaching 15-year highs and increasing 95% year-on-year. This favourable market environment has accelerated the company's transition from lower-margin cash management activities to higher-returning maritime assets. Maritime Business income surged 61% to US$69.9mn, now representing 49% of total income compared to 29% in FY24, whilst Cash Management income declined 56% to US$33.5mn. Financial Strength and Growth Potential The Group maintains exceptional financial strength with US$400mn in cash, zero borrowings, and total liabilities representing just 3.1% of total assets. Net cash of approximately S$507mn represents 26.9% of market capitalisation, providing substantial financial flexibility. The company's unleveraged position offers significant upside potential, with management planning to introduce leverage through bank borrowings, convertible notes, and asset-backed loans, potentially boosting project internal rates of return from the current 10-15% to 20-30%. Research Recommendation Phillip Securities Research initiates coverage with a BUY rating and target price of S$0.69, based on a 1.0x price-to-book FY26e valuation. This represents an 11% premium to peer valuations of 0.9x price-to-book, justified by the Group's substantial net cash position, rapid book value growth trajectory from S$0.5bn to S$2.0bn in net assets over three years, and differentiated positioning as a full-lifecycle maritime financial platform. Frequently Asked Questions Q: What is YZJ Maritime's core business model? A: YZJ Maritime operates as a maritime financial solutions provider that captures value across the entire vessel lifecycle, from newbuilding procurement to charter operations, financing, and eventual capital gains on exit across various vessel types. Q: How has the shipping cycle affected YZJ Maritime's business mix? A: The shipping cycle upswing has accelerated YZJ Maritime's transition from cash management to maritime assets. Maritime Business income surged 61% to US$69.9mn and now contributes 49% of total income, whilst Cash Management income fell 56% to US$33.5mn. Q: What is Phillip Securities Research's recommendation and target price? A: Phillip Securities Research initiates coverage with a BUY rating and target price of S$0.69, pegged to 1.0x P/B FY26e, representing an 11% premium to peer valuations. Q: How strong is YZJ Maritime's financial position? A: The Group maintains US$400mn in cash with zero borrowings and total liabilities of just 3.1% of total assets. Net cash of S$507mn represents 26.9% of market capitalisation. Q: What growth opportunities exist for the company? A: Management plans to introduce leverage through various financing methods, potentially boosting project IRRs from 10-15% to 20-30%. The company also has up to 50 newbuilds in the pipeline with US$1.3bn across two funds. Q: How diversified is YZJ Maritime's vessel portfolio? A: The Group operates across tankers, gas carriers, bulkers, containerships, and offshore support vessels, managing 80+ vessels with a zero NPL track record over three years. Q: What market conditions support the investment thesis? A: Vessel prices are at multi-year highs (+95% YoY), the Baltic Dry Index is at approximately 2,000 (+22% YoY), and the shipping cycle upswing provides favourable conditions for maritime asset deployment. 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.
Software Sector Shows Resilience Despite AI Concerns, Analyst Maintains Overweight Rating
Strong Revenue Growth Signals Recovery The software sector has faced significant headwinds in 2025, declining 24% year-to-date compared to the S&P 500's more modest 7.5% drop. The sector sits 34% below its mid-September 2025 peak, primarily driven by concerns over AI disruption and decelerating revenue growth. This downturn represents the fourth-largest decline in the sector's history, trailing only the dot-com bubble crash (-63%), the Global Financial Crisis (-50%), and the post-COVID technology selloff (-46%). However, beneath the surface volatility, fundamental performance indicators suggest the sector's underlying strength remains intact. Software growth has demonstrated notable reacceleration since mid-2023, with last twelve months total revenue climbing 15% year-over-year in the fourth quarter of 2025. This marks the highest growth rate since early 2023 and represents a significant 4 percentage point improvement from the 11% recorded a year earlier, when excluding cloud providers from the analysis. Large-Cap Outperformance Drives Sector Dynamics A clear bifurcation has emerged within the software landscape, with large-cap Software-as-a-Service (SaaS) companies significantly outperforming their smaller counterparts. Large-cap firms are demonstrating a 7 percentage point advantage over smaller peers amid ongoing AI disruption concerns. These established players recorded revenue growth of 17% year-over-year in the fourth quarter of 2025, compared to 12% in the same period of 2024, with expectations for this 17% growth rate to continue into the first quarter of 2026. Strategic AI Positioning Supports Investment Case The analyst maintains an overweight rating on the software sector, citing strategic positioning around artificial intelligence adoption. Large-cap software companies are prioritising AI usage growth over aggressive upselling of premium packages, demonstrating a measured approach to monetisation. Clear revenue generation pathways have emerged through premium stock keeping units (SKUs) and generative credit consumption via usage-based pricing models. This strategic shift away from traditional seat-based subscription models provides crucial protection against revenue erosion from industry-wide layoffs. The current valuation environment presents an attractive entry point, with the EV/Sales ratio for large-cap SaaS companies trading below the negative one standard deviation level of 9.4, despite rising software revenue and net income performance. Frequently Asked Questions Q: How has the software sector performed compared to broader markets in 2025? A: The software sector has declined 24% year-to-date, significantly underperforming the S&P 500's 7.5% drop, and sits 34% below its mid-September 2025 peak. Q: What are the main factors driving the software sector decline? A: The primary drivers are AI disruption concerns and slowing revenue growth, making this the fourth-largest sector decline historically. Q: How does current revenue growth compare to previous periods? A: Software revenue growth has reaccelerated to 15% year-over-year in Q4 2025, the highest since early 2023 and 4 percentage points above the 11% recorded a year ago. Q: Are large-cap and small-cap software companies performing similarly? A: No, large-cap SaaS companies are outperforming smaller peers by 7 percentage points, with large-cap revenue up 17% year-over-year versus 12% in the prior year. Q: What is the analyst's recommendation on the software sector? A: The analyst maintains an overweight rating on the software sector despite recent volatility. Q: How are software companies adapting their AI strategies? A: Large-cap companies are prioritising AI usage growth over aggressive premium package upselling, focusing on clear monetisation routes through premium SKUs and usage-based pricing. Q: What protection do companies have against industry layoffs? A: The shift from seat-based subscriptions to usage-based pricing models helps protect revenue from industry-wide employment reductions. Q: How attractive are current valuations? A: The EV/Sales ratio for large-cap SaaS is trading below the negative 1 standard deviation level of 9.4, despite rising revenue and net income, suggesting attractive valuations. 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.
Market Performance Review Singapore equities concluded a remarkable ten consecutive months of gains with a 2.2% decline in March, though the first quarter of 2026 still delivered a positive 5.1% return. The market reached all-time highs on 23rd February before the Iran war drove significant sector rotation, boosting performance in defence spending, biofuels, and capital markets. Banks demonstrated resilience, maintaining gains even during March's decline and outperforming throughout the quarter with their stable dividend yields. However, REITs faced substantial pressure as interest rate expectations shifted from anticipated cuts to potential rate hikes. Consumer segments also weakened as rising inflation compressed disposable income. Strategic Outlook: Capital Preservation in Volatile Times Phillip Securities Research adopts a cautious stance, emphasising capital preservation over prediction in the current uncertain environment. Equities have transformed into volatile, leveraged instruments tied to oil price movements. The closure of the Straits of Hormuz presents dual risks: driving higher energy prices and inflation whilst threatening global production through material shortages. The current conflict's impact could exceed previous disruptions. Unlike pandemic-era bottlenecks affecting vessel availability, the present situation threatens feedstock and raw material supplies. Singapore has already experienced force majeures at chemical facilities, affecting industries from plastics to pharmaceuticals. Historical precedent suggests oil prices could reach US$200 per barrel, based on the Kuwait war pattern when crude oil surged 275% from US$15 to US$42. Investment Recommendations: Capitalising on Capex Cycles Despite geopolitical uncertainties, Phillip Securities Research identifies opportunities within expanding global capital expenditure cycles. Key sectors include data centres, with hyperscalers increasing AI and data centre capex by approximately 60% in 2026. Singapore's recent 200MW data centre application request in Jurong reflects this trend. The semiconductor sector benefits from AI and memory chip demand driving foundry capacity expansion. Defence spending increases as countries prioritise domestic military capabilities, whilst renewable energy gains importance for energy security. Singapore's construction sector enjoys multi-year demand growth. Primary beneficiaries include IT service companies like Telechoice, bidding for regional data centre projects, and Frencken, positioned to benefit from semiconductor equipment demand. Oiltek targets sustainable aviation fuel opportunities. Conversely, REITs face near-term underweight recommendations due to stagflationary pressures affecting rents, interest expenses, and valuations. Singapore's macro fundamentals remain robust, with semiconductor exports surging 51% in February and loan growth reaching 6.3%, the fastest in over four years. Building materials demand shows strength with ready-mixed concrete up 47% year-on-year. Frequently Asked Questions Q: What caused Singapore equities to decline in March 2026? A: Singapore equities fell 2.2% in March, ending ten consecutive months of gains, primarily due to the Iran war's impact on global markets and sector rotation towards defence, biofuels, and capital markets. Q: How are Singapore banks performing compared to other sectors? A: Banks demonstrated resilience by maintaining gains even during March's market decline and outperformed throughout the quarter, supported by their stable dividend yields. Q: What is Phillip Securities Research's investment strategy recommendation? A: The research house advocates for capital preservation over prediction, emphasising that equities have become volatile instruments tied to oil price movements, making cautious positioning essential. Q: Which sectors are expected to benefit from current global developments? A: Key beneficiary sectors include data centres, semiconductors, defence, renewable energy, and construction, all driven by expanding global capital expenditure cycles accelerated by geopolitical tensions. Q: What are the risks to oil prices from the current conflict? A: Oil prices could potentially reach US$200 per barrel based on historical precedent from the Kuwait war, when crude oil surged 275% from US$15 to US$42 due to supply disruptions. Q: How is Singapore's domestic economy performing? A: Singapore shows strong macro fundamentals with semiconductor exports up 51% in February, loan growth at 6.3% (fastest in four years), and building materials demand surging with concrete up 47% year-on-year. Q: Which specific companies are positioned to benefit from current trends? A: Telechoice is bidding for regional data centre projects, Frencken will benefit from semiconductor equipment demand, and Oiltek is targeting sustainable aviation fuel opportunities. Q: Why are REITs facing pressure in the current environment? A: REITs are experiencing headwinds due to shifting interest rate expectations from cuts to potential hikes, creating a stagflationary environment that pressures rents, increases interest expenses, and compresses valuations. 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.
Interest Rates Hit 45-Month Low Singapore's banking sector faces a mixed outlook as interest rates continue their downward trajectory whilst geopolitical tensions create market volatility. March's 3M-SORA declined 5 basis points month-on-month to 1.09%, marking the lowest level since July 2022. This represents a significant 153 basis points year-on-year decline, though notably, the decline is also the smallest yearly decrease in nine months. The interest rate environment reflects Singapore's status as a "safe haven" destination, with capital inflows driving FX reserves up 10% year-on-year in February 2026. However, analysts expect the 3M-SORA decline to moderate for the remainder of the year as Middle East conflict concerns reduce expectations for Federal Reserve rate cuts. Banking Fundamentals Show Resilience Despite the challenging rate environment, Singapore banks demonstrate solid underlying fundamentals. Loan growth continues its upward trajectory, with February 2026 figures showing 6.3% growth, whilst banks guide for low to mid-single digit expansion. Current Account and Savings Account (CASA) deposits rose 11% year-on-year, with the CASA ratio improving to 20% from 19.8% in January 2025. This improvement provides a crucial tailwind for banks by lowering funding costs and cushioning net interest margin compression. The sector's exposure to potential regional risks appears well-contained. Trade, Services and Commodities loans, including Oil & Gas exposure, represent only approximately 7% of total gross loans across the three major banks. Sector non-performing loan ratios remain benign at 0.3-2.0%, whilst ASEAN loan growth averages low-to-mid single digits year-on-year, suggesting limited risk from Middle East conflicts. Market Outlook and Investment Preference The escalation of Iran conflict and oil prices surging past US$100 per barrel have prompted the Federal Reserve to raise its 2026 PCE inflation forecast to 2.7%. Markets now price in zero rate cuts for the remainder of 2026, creating a higher-for-longer rate backdrop that supports net interest margins. Quarter-on-quarter NIM stabilisation is already evident at OCBC and UOB in Q4 2025. Heightened market volatility continues benefiting capital markets income and wealth management fees, providing meaningful offset to net interest income headwinds. Banks maintain attractive dividend yields at 4.9%, with ongoing buybacks improving return on equity. The research maintains a NEUTRAL sector rating, expressing preference for DBS due to its fixed-dividend policy and OCBC for wealth management growth and excess capital. Frequently Asked Questions Q: What is the current level of Singapore's 3M-SORA and how does it compare historically? A: March's 3M-SORA stands at 1.09%, representing the lowest level in 45 months since July 2022. It declined 5 basis points month-on-month and 153 basis points year-on-year. Q: How are Singapore banks performing in terms of loan growth? A: Singapore loan growth continues climbing, with February 2026 showing 6.3% growth. Banks are guiding for low to mid-single digit growth going forward. Q: What is the banks' exposure to potential Middle East conflict risks? A: Singapore banks' TSC loans, including O&G exposure, represent only approximately 7% of total gross loans in aggregate, with sector NPL ratios remaining benign at 0.3-2.0% across the three banks. Q: How are deposit trends affecting the banking sector? A: CASA deposits rose 11% year-on-year with the CASA ratio improving to 20% from 19.8% in January 2025, providing a tailwind by lowering funding costs and cushioning NIM compression. Q: What is the research recommendation for Singapore banks? A: The research maintains a NEUTRAL rating on the sector, with preference for DBS due to its fixed-dividend policy and OCBC for wealth management growth and excess capital. Q: How are current market conditions affecting bank revenues? A: Heightened market volatility benefits capital markets income and wealth management fees, providing meaningful offset to net interest income headwinds from the rate environment. Q: What are the dividend prospects for Singapore banks? A: Banks maintain attractive dividend yields at 4.9%, with ongoing buybacks improving return on equity, making them appealing for income-focused investors. 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. 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Oil ETF Set to Continue Outperformance in April as Most Asset Classes Face Headwinds
Exchange-traded funds (ETFs) experienced a challenging March, with most asset classes posting negative returns as market volatility persisted across global markets. However, oil and Bitcoin emerged as notable exceptions, demonstrating resilience amid broader market weakness. Mixed Performance Across Asset Classes in March The commodity sector provided the standout performance in March, with the SPDR S&P Oil & Gas Exploration & Production ETF (XOP) surging 18.7% for its third consecutive monthly gain. This impressive rally maintained oil's uptrend trajectory, positioning it as the clear winner amongst major asset classes. Bitcoin also bucked the broader negative trend, with the ProShares Bitcoin Strategy ETF (BITO) gaining 2.9% during the month. This positive performance helped snap a four-month losing streak, though the cryptocurrency remains in a broader downtrend pattern. Conversely, precious metals faced significant headwinds, with the SPDR Gold MiniShares Trust (GLDM) tumbling 10.9% in March. This sharp decline snapped a seven-month winning streak for gold, marking it as the month's worst performer. Traditional equity markets also struggled, with the Vanguard S&P 500 ETF (VOO) declining 5.0% for its second consecutive monthly retreat. Similarly, the Hang Seng China Enterprises Index ETF fell 5.9%, extending its weakness into a second consecutive month. Outlook for April Points to Continued Oil Strength Looking ahead to April, technical analysis suggests oil is positioned to extend its outperformance relative to other asset classes. The oil ETF is expected to continue its upward momentum, with potential to test the US$202 level, representing a 13.6% upside from current prices. Meanwhile, several asset classes are expected to face continued pressure. Both the S&P 500 and gold ETFs are anticipated to extend their March weakness, with potential retests of key support levels. The S&P 500 ETF may challenge the US$464.30 swing low established in July 2025, whilst gold could retest the US$86.09 support level formed in March 2026. Other asset classes, including US Treasury bonds, Bitcoin, and Singapore equities, are expected to remain rangebound in April, trading within established consolidation patterns as markets await clearer directional catalysts. Frequently Asked Questions Q: Which ETF performed best in March? A: The SPDR S&P Oil & Gas Exploration & Production ETF (XOP) was the top performer, surging 18.7% for its third consecutive monthly gain. Q: What was the worst-performing asset class in March? A: Gold was the worst performer, with the SPDR Gold MiniShares Trust (GLDM) tumbling 10.9%, snapping a seven-month winning streak. Q: Which asset class is expected to continue outperforming in April? A: Oil is expected to continue outperforming other asset classes in April, with potential to test the US$202 level representing a 13.6% upside. Q: What is the outlook for Bitcoin in April? A: Bitcoin is expected to remain rangebound in April despite gaining 2.9% in March and snapping a four-month losing streak. Q: How did US equities perform in March? A: US equities struggled, with the S&P 500 ETF declining 5.0% for its second consecutive monthly retreat and entering a range consolidation pattern. Q: What support levels are being watched for major indices? A: The S&P 500 ETF may test the US$464.30 swing low from July 2025, while gold could retest the $86.09 support level formed in March 2026. Q: Which asset classes are expected to remain sideways in April? A: US Treasury bonds, Bitcoin, and Singapore equities are all expected to remain rangebound in April, trading within established consolidation patterns. 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. 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iX Biopharma – The Year of the Unicorn , BUY Rating with S$1.00 Target Price
Company Overview iX Biopharma Ltd is a pharmaceutical company founded in 2008 and listed on SGX Catalist in 2015. The company specialises in proprietary drug delivery technologies, WaferiX and WaferlogiX, which enable sublingual delivery of therapeutics with enhanced bioavailability and rapid absorption. With a pipeline of over 30 pharmaceutical drugs and 7 nutraceutical products, iX operates a manufacturing facility in Melbourne, Australia. The company's lead drug, Wafermine, is a ketamine-based wafer for pain management that has successfully completed Phase 2b clinical trials. Major DoD Funding Validates Technology Platform iX Biopharma has achieved a significant milestone by securing US$41 million in funding from the US Department of Defence (DoD), representing a watershed event that de-risks Wafermine's final Phase 3 development. This funding validates the WaferiX technology platform and provides entry into the US$5-6 billion acute pain market in the United States. The DoD endorsement serves as major external validation of the company's sublingual technology, offering a superior outcome compared to typical Phase 2 out-licensing deals where partners capture the majority of upside. Immediate Revenue Potential The near-term revenue driver centres on supplying Wafermine to the DoD under an Emergency Use Authorisation for immediate battlefield deployment and operational military medical use. Initial orders of US$3 million are expected in FY27e. The larger opportunity lies in Wafermine adoption into standard field kits and sales into the non-military commercial market following full US FDA approval. Additionally, iX is monetising its compound pharmacy operations in the US market, worth US$6 billion. Through partnership with Orion Specialty Labs, the company can supply personalised drugs via a capital-light manufacturing and distribution route, with NAD+ (nicotinamide adenine dinucleotide) serving as the near-term revenue driver. Investment Recommendation Phillip Securities Research has re-initiated coverage on iX Biopharma with a BUY recommendation and a sum-of-the-parts derived target price of S$1.00. The research identifies three pathways to monetise Wafermine: full commercialisation upon FDA approval in 1Q29, out-licensing, or an outright sale of the drug. Until Phase 3 trial completion, iX Bio will benefit from three new revenue sources through Wafermine EUA sales, DoD grant funding, and compound pharmacy operations in the US. Frequently Asked Questions Q: What is the significance of the US DoD funding for iX Biopharma? A: The US$41 million DoD funding represents a watershed event that de-risks Wafermine's Phase 3 development, validates the WaferiX technology platform, and provides access to the US$5-6 billion acute pain market whilst allowing iX to retain full ownership and control. Q: When are initial DoD orders expected and what revenue potential exists? A: Initial orders of US$3 million are expected in FY27e under Emergency Use Authorisation. The larger opportunity involves standard field kit adoption and commercial market sales following FDA approval. Q: What is iX Biopharma's core business and technology? A: iX Biopharma is a pharmaceutical company with proprietary WaferiX and WaferlogiX drug delivery technologies enabling sublingual delivery of therapeutics with enhanced bioavailability and rapid absorption, with a pipeline of over 30 pharmaceutical drugs and 7 nutraceuticals. Q: What are the three pathways to monetise Wafermine? A: The three pathways are full commercialisation upon FDA approval in 1Q29, out-licencing the drug to partners, or an outright sale of Wafermine to interested parties. Q: How does the compound pharmacy strategy contribute to revenue? A: The US compound pharmacy market is worth US$6 billion. Through partnership with Orion Specialty Labs, iX can supply personalised drugs using WaferiX technology without further FDA approvals, with NAD+ as the near-term revenue driver. Q: What is Phillip Securities Research's recommendation and target price? A: Phillip Securities Research has issued a BUY recommendation with a sum-of-the-parts derived target price of S$1.00, applying a 40% discount to Wafermine's net present value and valuing the compound pharmacy at 20x PE. Q: What other revenue sources will iX benefit from before Phase 3 completion? A: Until Phase 3 trial completion, iX will enjoy three new revenue sources: Wafermine EUA sales to the DoD, DoD grant funding for development, and compound pharmacy operations in the US market. 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. 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Strategic Divestment to Enhance Portfolio Quality First REIT has announced a comprehensive divestment strategy for its Indonesian healthcare assets, proposing to sell eight hospitals and three non-hospital properties for S$471.5mn. The purchaser, PT Siloam International Hospitals Tbk, will acquire these assets in the first tranche of what represents a strategic pivot towards developed markets. Company Overview First REIT operates as a healthcare-focused real estate investment trust with assets spanning Singapore, Japan, and Indonesia. The REIT specialises in healthcare properties including hospitals and medical facilities across the Asia-Pacific region. Two-Tranche Divestment Structure The proposed transaction follows a carefully structured two-phase approach. The initial tranche involves eleven Indonesian assets valued at S$471.5mn, comprising eight hospitals for IDR5.1tn (S$389.2mn) and three non-hospital assets for IDR1.1tn (S$82.4mn). This pricing represents a 2.1% premium over the average of two recent independent valuations. Additionally, First REIT has secured a put option for the remaining six Indonesian hospitals, valued at S$294.8mn, exercisable until 31 October 2026. This structure provides flexibility whilst ensuring complete exit from the Indonesian market if desired. Financial Impact and Capital Allocation The divestment will generate significant financial benefits for unitholders. The S$9.7mn premium over appraised value will be distributed as special dividends over two quarters following completion. The manager has waived its S$2.4mn divestment fee to align with unitholder interests. Net proceeds of S$464.2mn will primarily reduce debt, with S$362.7mn (78%) allocated to debt repayment. This will dramatically improve the REIT's leverage profile, reducing aggregate leverage from 42.1% to 16.7%. The remaining debt will largely comprise lower-cost JPY-denominated borrowings. Strategic Outlook and Research Recommendation The divestment addresses rental arrears issues whilst enabling capital recycling from non-core assets. First REIT plans to focus on assets in Singapore and Japan whilst pursuing expansion opportunities in developed markets, which offer lower equity risk premiums, reduced debt costs, and more stable currencies. Phillip Securities Research maintains an ACCUMULATE recommendation with a revised target price of S$0.25, down from S$0.29. The valuation methodology has shifted to 1x FY25 P/NAV from the dividend discount model, reflecting uncertainty over future portfolio composition pending the strategic review. Frequently Asked Questions Q: What assets is First REIT proposing to divest? A: First REIT is proposing to divest eight hospitals and three non-hospital assets in Indonesia for S$471.5mn, with an additional put option for six remaining hospitals at S$294.8mn. Q: Who is purchasing the Indonesian assets? A: PT Siloam International Hospitals Tbk (Siloam) is the purchaser of the eight hospitals in the first tranche. Q: When will the divestment be completed? A: The divestments are subject to unitholders' approval at an Extraordinary General Meeting scheduled for June 2026, with targeted completion in August 2026. Q: How will the proceeds be used? A: Net proceeds of S$464.2mn will primarily reduce debt (S$362.7mn or 78%), with S$9.7mn distributed as special dividends and the remainder allocated to capital expenditure and working capital. Q: What is Phillip Securities Research's recommendation and target price? A: Phillip Securities Research maintains ACCUMULATE with a lower target price of S$0.25, reduced from the previous S$0.29. Q: How will the divestment impact leverage? A: Aggregate leverage would decline significantly to 16.7% from the current 42.1%, assuming completion on 31 December 2025. Q: What is First REIT's strategic direction following the divestment? A: First REIT plans to focus on Singapore and Japan assets whilst transitioning toward developed markets, which offer lower equity risk premiums, lower debt costs, and more stable currencies. Q: Will unitholders receive any special distributions? A: Yes, the S$9.7mn premium over appraised value will be distributed as special dividends over two quarters following completion of the divestment. This article has been auto-generated using AI tools. 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. 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Company Overview The CSOP iEdge S-REIT Leaders Index ETF (SRT) is an exchange-traded fund that provides diversified exposure to Singapore's real estate investment trust market. The ETF maintains a well-balanced portfolio across eight sectors, with industrial properties representing the largest allocation at 29.3%, followed by office properties at 20.1%. This diversification strategy positions the fund to capture broad-based performance across Singapore's REIT landscape. Valuation Methodology and Target Price Revision Phillip Securities Research employs a dual valuation approach for SRT, utilising both historical dividend yield spread analysis and price-to-book ratio methodologies. These approaches yield target prices of S$0.77 and S$0.74 respectively. By applying equal weightage to both valuation methods, the research house has established a revised target price of S$0.755, representing a decrease from the previous target of S$0.815. Despite this downward adjustment, Phillip Securities Research maintains its ACCUMULATE recommendation for the ETF. Portfolio Composition Changes Recent portfolio rebalancing has resulted in changes to SRT's top holdings. CapitaLand Ascendas REIT and CapitaLand Integrated Commercial Trust have secured positions among the top three holdings, displacing Mapletree Logistics Trust and Mapletree Industrial Trust. Keppel DC REIT maintains its presence in the portfolio, albeit with a marginally reduced weighting. These changes reflect the dynamic nature of the Singapore REIT market and the fund's responsive allocation strategy. Market Environment and Outlook The Federal Reserve's recent communications suggest that energy price pressures are unlikely to significantly impact the broader inflation trajectory, whilst maintaining flexibility for potential future rate cuts. This monetary policy stance creates an increasingly favourable environment for Singapore REITs. Lower anticipated funding costs are expected to serve as a tailwind for earnings performance and provide support for distribution per unit growth extending into FY26. This improved cost environment should benefit the underlying REITs within SRT's portfolio, potentially enhancing the fund's overall performance prospects. Frequently Asked Questions What is Phillip Securities Research's recommendation and target price for SRT? Phillip Securities Research maintains an ACCUMULATE recommendation with a target price of S$0.755, down from the previous target of S$0.815. How does Phillip Securities Research value the CSOP iEdge S-REIT Leaders Index ETF? The research house uses a combination of historical dividend yield spread and price-to-book ratios, yielding target prices of S$0.77 and S$0.74 respectively, with equal weightage applied to both methods. Which REITs have entered the top three holdings recently? CapitaLand Ascendas REIT and CapitaLand Integrated Commercial Trust have entered the top three holdings, replacing Mapletree Logistics Trust and Mapletree Industrial Trust. What is the sector allocation of SRT? SRT is diversified across eight sectors, with industrial being the largest at 29.3% and office being the second-largest at 20.1%. How might Federal Reserve policy impact Singapore REITs? The Fed's indication that energy price pressures won't derail inflation outlook whilst keeping the path open for rate cuts creates a more favourable environment for S-REITs through lower funding costs. What is the outlook for distribution per unit growth? Lower funding costs ahead are expected to provide a tailwind to earnings and support DPU growth into FY26. Has Keppel DC REIT maintained its position in the portfolio? Yes, Keppel DC REIT remains in the portfolio but at a slightly lower weight than before. This article has been auto-generated using AI tools. 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. 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