Passive Income

Passive income is one of the most talked-about ideas in the financial world. The idea is marketed as a means to financial freedom and long-term wealth. Unlike active income, which requires continuous effort and time, passive income allows money to be earned with minimal, if any, ongoing effort once the basic work is done. To the beginner investor or the financially independent individual, learning the basics of passive income is important.

This guide explores passive income’s concept, types, benefits, and risks, giving clear examples and answers to common questions to help you get started.

Table of Contents

What is Passive Income?
Understanding Passive Income
Types of Passive Income
Benefits of Passive Income
Examples of Passive Income
Frequently Asked Questions

What is Passive Income?

It means earnings obtained from sources that have little or no demand on one’s time, with respect to the hours worked or the effort put in, such as traditional employment or business activities. Once established, passive income flows automatically and requires minimal day-to-day input.

Passive income is a financial strategy with low maintenance. It does not demand constant, day-to-day work to generate money. Of course, the initial setup or investment can be costly. Still, subsequent maintenance is low, enabling regular income flow, often monthly or quarterly, from the same asset or activity.

Diversification is what makes passive income of high quality. Income can be derived from many different sources, including real estate rental, dividend-paying stocks, intellectual property royalties, and income from digital products. Diversified sources help reduce the risk of this kind of income and guarantee a stable flow of funds.

Building a strategic portfolio of passive income streams allows individuals to achieve financial freedom and long-term wealth.

For example, the most widely used sources of passive income are acquiring dividends from stocks or renting a building. The idea is to establish a steady income that creates financial growth without actually requiring full-time work.

Understanding Passive Income

It’s not about overnight riches. It’s a strategy that involves assets, skills, or technology to produce sustainable revenue over time. The fundamental principle is putting in huge effort or investment upfront to create income streams that generate money passively.

Why Passive Income Matters

Financial Security: It acts like a shock absorber, absorbing the shock of a job loss or the general economic downturn.

Freedom of Time: Passive income decreases the dependence on performing active work and offers the individual more time for hobbies, traveling, or other activities.

Road to Riches: Once the multiple passive income streams are created, achieving great wealth over time becomes easy.

Many people think that generating passive income is easy. Though it does not consume much time, establishing it requires thoughtful planning, resources, and constant action.

Types of Passive Income

Passive income comes in different forms, depending on how they are generated and their origin. Below are some of the most common and profitable ones;

Real Estate Income

This is one of the more popular forms of passive income due to its returns in real terms. Investors can make their money from;

Rental Properties: The generation of returns by renting out residential and commercial property pieces.

Real Estate Investment Trusts (REITs): Investing in REITs allows individuals to earn dividends without owning physical properties.

Dividend Income

Investing in dividend-paying stocks provides a steady stream of income. Many well-established companies, such as Apple or Procter & Gamble, distribute a portion of their profits as dividends to shareholders.

Royalties

Creators of intellectual property, such as authors, musicians, or inventors, can earn royalties. For instance:

Authors earn royalties with every sale of their books.

Musicians make money with royalties from streams and plays.

Digital Products and Online Content

The digital world has streamlined the process of producing content and monetising it as well. Some examples are

Online Courses: Websites such as Udemy or Teachable enable creators to earn money by selling courses.

eBooks: Self-publishing through Amazon Kindle can generate royalties while requiring little maintenance afterward.

YouTube and Blogging: Ad revenue and affiliate marketing partnerships can turn content into passive income streams.

Peer-to-Peer Lending

Online platforms like LendingClub and Prosper enable peer-to-peer loans. Investors receive a predictable income stream on the money that they lend.

High Yield Savings Accounts and Bonds

Although offering lower returns, high-yield savings accounts or government bonds provide stable, risk-free income. These options are suitable for conservative investors.

Affiliate Marketing

Marketing items or services on a blog or social media outlets could generate sales. Recommending financial tools or software via affiliate links on a blog is also very common.

Benefits of Passive Income

Generating passive income has several benefits that make it a very attractive financial objective.

Freedom from Financial Constraints

Passive income does not rely on one income-generating source, like a salary. With this type of income, people can continue paying for life’s essentials even when unemployed or facing a financial crisis.

Time Freedom

Time allocated to continuous work is not present in passive income, which can be used for business ideas, learning new things, or family time.

Wealth Creation

Thus, passive income can be reinvested to create more assets or streams of income that will grow exponentially over time. For instance, dividend investment simply means buying more shares to increase total returns.

Tax Efficiency

In some countries, it is taxed less than income accrued from regular employment, such as dividends or capital gains.

Diversification

Besides, investing and real estate are passively generated income streams, which leads to the diversification of financial resources and risk.

Examples of Passive Income

Investment Rentals

It has been demonstrated that investing in rental houses in high-demand cities like New York City or Singapore makes money. For example,

An investment of US$300,000 in a property with a monthly rental income of US$2,500 yields predictable cash flows when considering maintenance, other expenses, and property taxes.

Dividend Stocks

Investing US$10,000 in a stock with a 5% annual dividend yield can earn US$500 annually. Reinvesting dividends can create more future income through compounding.

Selling Digital Products

Creating an online course about personal finance, selling it at US$100, and selling it to 100 people yearly can generate US$10,000 annually. Platforms like Coursera or Skillshare make it easy to reach a global audience.

Peer-to-Peer Lending

A borrower paying US$5,000 in a peer-to-peer platform at an annual interest rate of 10% may earn a passive income of US$500 after deducting the platform fee and defaults.

Licensing of Intellectual Property

A music composer licensing his song for a commercial shall enjoy the right to royalties every time the commercial is aired. For instance, the same license may fetch him US$1,000 for each broadcast.

Frequently Asked Questions

How is passive income different from active income?

Active income requires personal engagement, such as employment or operating a business. On the other hand, passive income continues without requiring regular active work. A freelance graphic designer earns active income from every completed project. Similarly, a landlord generates passive income through rental payments every month.

Do I Need a lot of money to start generating Passive Income?

Only some of the passive income streams need large capital. Examples:

Low-Cost Options: Blogging, affiliate marketing, and creating digital products consume more time than money.

Investment-Based Options: Investment in real estate or the stock market can be initiated with an initial investment but scaled up gradually.

Is Passive Income Guaranteed?

Passive income is a good thing. The market may change, the economy may worsen, or the consumer might change his buying habits. Diversify and manage your risk to decrease losses.

What are the Risks associated with Passive Income?

Some of the major risk factors are:

Market Fluctuation: Stock dividends may vary with the company’s fluctuations.
Rental Property: Tenancy disputes, maintenance costs or vacancies may occur in rental properties.
Regulatory Risks: Law changes in terms of tax or business operations can influence profitability
Digital Platform Dependency: It can decline as a source of income if the algorithms are changed or the market becomes saturated.

How Do I Calculate My Passive Income?

To calculate passive income:

List your sources of income (i.e., rent, dividend, royalties).
Add the total earnings to each source for a defined period.
Subtract related expenses, such as property upkeep or investment fees.

Illustration:

Rental income: US$2,000/month.

Dividend income: US$300 per month

Passive income in a month: US$2,300.

Related Terms

Other Terms

Know More about

Margin Trading

Bond Trading

Securities Lending

Supplementary Retirement Scheme

Money Market Funds

REITs ETF

Singapore Stocks

Opening Investment Account

Tools/Educational Resources

Markets Offered by POEMS

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Wells Fargo Maintains Growth Momentum Despite Rate Headwinds

Published on Oct 21, 2026 39

Overview Wells Fargo reported third-quarter 2026 earnings of US$6 billion, up 6% year-on-year, though below analyst estimates due to lower net interest income and trading gains. Investment advisory fees rose 15% as client assets grew, while investment banking fees increased 6% from market share gains. The company maintained its BUY rating with a reduced target price of US$105, down from US$115. Investment Positives Wells Fargo demonstrated strong operational efficiency through successful cost management initiatives. Expenses fell 1% year-on-year despite a 15% increase in revenue-related expenses, as non-revenue-related expenses declined 4%. The bank achieved this through workforce optimisation, with headcount falling 8% year-on-year to 194,000, marking the 24th consecutive quarterly decline. This drove efficiency ratio improvement to 63% from 65% in the prior year, with management expecting to absorb approximately US$400 million of higher revenue-related expenses within unchanged full-year guidance. The bank's commercial client franchise powered impressive balance sheet growth. Average loans surged 11% year-on-year to US$1.03 trillion, led by Corporate and Investment Banking (+19%), Wealth and Investment Management securities-based lending (+16%), and Commercial Banking (+10%). Deposits mirrored this growth, rising 11% year-on-year to US$1.48 trillion, with Corporate and Investment Banking up 22% and Commercial Banking advancing 16%. Auto balances showed particularly strong momentum, climbing 31% year-on-year. Credit quality metrics remained robust throughout this expansion. The net charge-off ratio improved to 0.38% from 0.40% in the prior year quarter, whilst nonperforming assets declined to 0.70% of loans from 0.83%. Investment advisory fees benefited from market tailwinds, rising 15% year-on-year as higher stock and bond prices lifted Wealth and Investment Management client assets by 11%. Investment banking fees grew 6% year-on-year as strategic hiring enhanced market share in mergers and acquisitions and equity capital markets. Challenges Lower interest rates compressed loan yields, offsetting the benefit of strong loan growth on net interest income performance. A sharp move in interest rates in late September also slowed client activity in fixed income, currencies and commodities, impacting trading revenues. The bank faced headwinds from lost lease income following its rail car business sale and lower mortgage banking fees, which left non-interest income down 1% year-on-year despite gains in other areas. Outlook Wells Fargo maintained its full-year 2026 net interest income guidance at approximately US$50 billion, though it lowered Markets net interest income expectations to approximately US$1.8 billion from the previous US$2 billion estimate. The bank expects continued earnings growth from balance sheet expansion capabilities, with maturing card vintages and investment banking share gains contributing to earnings into fiscal year 2027. The company targets return on tangible common equity of 17% to 18%, supported by ongoing cost discipline and revenue growth initiatives. Recommendation & Target Price Phillip Securities Research maintains a BUY recommendation on Wells Fargo with a target price of US$105, reduced from the previous US$115. The firm lowered fiscal year 2026 earnings estimates by 8% due to reduced net interest income, investment advisory, and other non-interest income projections. The valuation assumes 1.85x fiscal year 2026 price-to-book value and return on equity estimate of 16.7%. 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 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.

Raffles Education Set for Growth Pivot as Focus Shifts to ASEAN K-12 Expansion

Published on Oct 21, 2026 19

Brief Overview Phillip Securities Research has initiated coverage on Raffles Education with a BUY rating, citing the company's strategic pivot towards ASEAN K-12 expansion whilst divesting lower-return assets. The firm expects the education group to return to net cash through substantial asset monetisations exceeding S$500 million in gross proceeds, which will fund growth initiatives across Thailand, Malaysia and Indonesia. Investment Positives Strengthening ASEAN Regional Presence Raffles Education is strategically expanding its K-12 education footprint through Malaysia, Thailand and Indonesia. The analyst believes the company is well-positioned to capitalise on two key trends: the increasing regionalisation of higher education within Asia and the expanding base of affluent locals driving demand for international schools. Visa restrictions, rising tuition fees, and policy uncertainty in the US and UK are expected to redirect outbound Asian education demand back towards the ASEAN region. This shift is already evident in strong enrolment trends, with Raffles University enrolment more than doubling from 438 students in 2022 to 1,002 in 2025. Strategic Asset Disposal Programme The company has embarked on a comprehensive asset disposal strategy, having already sold its 51 Merchant Road property in Singapore for S$121.8 million (generating a S$52.3 million gain) and Wanbo College, Hefei, for S$78.4 million in FY26. The analyst expects additional asset divestments worth more than S$500 million in gross proceeds before tax deductions. These lower-return assets are primarily vacant land or China-based properties, with ASEAN assets demonstrating superior efficiency at 0.22x revenue per dollar of non-current assets versus China's 0.09x. The disposal of low-return China assets will transform Raffles Education into a more ASEAN-focused business, potentially narrowing its valuation gap to Southeast Asian peers. Robust Local Demand Foundation Most of Raffles Education's assets benefit from strong affluent local demand, with only Raffles Singapore and RAS Iskandar relying on expatriate populations. The analyst expects increased investment in Southeast Asia to expand the base of affluent locals through several major infrastructure and economic development projects. These include the RTS link and Johor-Singapore Special Economic Zone, Thailand's Eastern Economic Corridor special economic zone, and Indonesia's participation in the Belt and Road project, all of which are expected to drive job creation and inward investment, supporting demand for international schooling. Challenges The report does not explicitly outline significant investment challenges or negative factors for Raffles Education, focusing primarily on the positive transformation and growth opportunities ahead. Outlook The analyst projects Raffles Education will achieve net cash status by FY27/28, supported by the substantial asset disposal programme and improved operational efficiency from focusing on higher-return ASEAN markets. The company's current valuation of approximately 11x FY27e EV/EBITDA appears attractive given the strategic transformation underway. Recommendation & Target Price Phillip Securities Research initiates coverage with a BUY rating and target price of S$0.20. The valuation is based on DCF analysis using a 7% WACC and 7.5x EV/EBITDA exit multiple derived from peer comparables. The analyst notes that the target price is conservative, incorporating dilution from warrants and approximately S$35 million of resulting cash proceeds. 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.

Nanofilm Technologies Targets Growth Through Commercialisation of Deep Tech Solutions

Published on Oct 21, 2026 18

Brief Overview Phillip Securities Research expects Nanofilm Technologies to benefit from higher demand for its functional hinge coatings driven by customer Z's foldable phone launch in 4Q26e, whilet the company's proprietary coating solutions are moving from R&D into commercial applications across semiconductor, industrial, and automotive sectors. The research house anticipates that the Industrial Equipment Business Unit revenue could increase more than 35% from FY25 to FY27e as products transition to commercialisation. Investment Positives The investment case centres on Nanofilm's expanding opportunities across multiple business segments. In the 3C sector, customer Z's new foldable phone model launching in 4Q26e is expected to drive demand for Nanofilm's functional hinge coatings. Additionally, customer Z has transitioned premium-tier smartwatch housings from aluminium to titanium, expanding Nanofilm's decorative coating product range. These new 3C programmes are expected to ramp up in 2H26e and into 2027e, potentially driving Advanced Materials Business Unit revenue up more than 25% from FY25 to FY27e. The commercialisation of new products presents significant growth potential. Several products are reaching the commercialisation stage, particularly in printed circuit board drills, advanced packaging, and hydrogen fuel cells. Nanofilm's rainbow tetrahedral amorphous carbon extends PCB drill bit life by 3.3x, addressing growing needs as layers increase in AI server boards. The company's approximately 1-nanometre barrier coating providessolutions for 3D AI packaging by evenly lining deep, narrow through-silicon vias (TSVs) and through-glass vias (TGVs) that conventional sputtering struggles to coat. Notably, Sydrogen secured new business worth at least tens of millions in revenue with a leading Chinese automaker for its SydroDIAMOND hydrogen fuel cell coating. Operational improvements are driving margin expansion. Since the founder returned as CEO in January 2025, there has been a refocus from R&D to commercialisation, workshop consolidation in Singapore and China, and prioritisation of asset utilisation. Gross margins expanded by 6 percentage points year-on-year to 39% in 1H26, the highest since FY22. Challenges The report does not explicitly identify specific investment risks or challenges facing Nanofilm Technologies. Outlook With Nanofilm's cost base largely fixed through staff costs and depreciation making up about two-thirds of FY25 expenses, rising volumes should flow through to margins. The major capex cycle is largely complete, and new 3C, semiconductor, industrial and automotive programmes are expected to raise utilisation from 2H26e into 2027e. This should lift net margin from 4.9% in FY25 to 8.6% in FY27e, with the ramp-up and stabilisation of new programmes expected to drive net profit growth by more than 75% from FY25 to FY27e. Recommendation & Target Price Phillip Securities Research initiates coverage with a BUY recommendation and target price of S$1.20. The target price is based on 28x FY27e P/E, in line with peers' average. 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.

JPMorgan Chase Maintains ACCUMULATE Rating Despite Lower Target Price

Published on Oct 21, 2026 21

Brief Overview JPMorgan Chase reported 3Q26 adjusted earnings of US$15.8bn, representing a 10% year-on-year increase but falling short of analyst estimates. The performance was impacted by weaker-than-expected Fixed Income trading and investment banking fees, as client activity in Rates, Credit and Commodities weakened following a late September bond sell-off. Despite earnings growth, share buybacks declined significantly to US$1.1bn from US$8.3bn in the prior year, whilst dividends per share increased 10% to US$1.65. Investment Positives Prime financing emerged as a key growth driver, significantly boosting Equity Markets performance and Markets net interest income. Equity Markets revenue surged 49% year-on-year to US$5.0bn, driven by Prime and Derivatives activities. This growth expanded the balance sheet substantially, with average Markets interest-earning assets rising 20% year-on-year to US$1.7tn. The yield on these assets improved markedly to 0.57% from 0.19% in 3Q25, propelling Markets NII to US$2.4bn compared to US$0.7bn previously. The Consumer & Community Banking division delivered strong performance with net income rising 13% year-on-year to US$5.7bn. Card Services & Auto revenue increased 15% year-on-year, supported by 7% card loan growth and an improved card net revenue rate of 10.76% versus 10.03% in 3Q25. Deposit growth remained healthy at 4% year-on-year, bolstered by 650,000 net new checking accounts. Asset management fees rose 15% year-on-year on higher market levels and net inflows. Credit quality showed improvement with the Card net charge-off rate declining to 2.91% from 3.15%, whilst firmwide net charge-offs fell US$389mn year-on-year due to lower wholesale charge-offs. Management raised FY26 NII guidance to approximately US$106.2bn from US$105.5bn previously, with 2027 central case NII ex-Markets projected at US$107bn. Challenges Fixed Income trading faced headwinds with revenue declining 4% due to lower performance in Commodities, Rates and Credit segments. Investment banking deals stalled following the late September bond sell-off, contributing to underperformance relative to expectations. Principal transactions showed weakness, leading to downward revisions in earnings estimates. Adjusted expense guidance was raised to approximately US$108.6bn from US$107.5bn previously, indicating cost pressures. Outlook Phillip Securities Research maintains a positive outlook on JPMorgan Chase, highlighting the bank's earnings diversity and asset-sensitive balance sheet as key strengths. Rate hikes are expected to contribute to NII growth in 2027, with approximately a quarter of projected growth stemming from rate increases. Prime financing and advisory services are positioned to deliver fee growth independent of rate movements. Management's strategy to redirect capital from buybacks into loans is expected to generate returns exceeding the approximately 6% earnings yield on shares, supporting book value growth into FY27. Recommendation & Target Price Phillip Securities Research maintains an ACCUMULATE recommendation for JPMorgan Chase with a revised target price of US$370, reduced from the previous US$380. The target price reduction reflects a 3% decrease in FY26 earnings estimates due to lower principal transactions, asset management and investment banking projections. The valuation assumes 2.93x FY26 price-to-book value and a return on equity estimate of 23.0%. 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.

Maximizing Retirement Wealth: How to Invest CPF-OA and SRS in SGX ETFs

Published on Oct 20, 2026 63

For working professionals in Singapore, building a comfortable retirement nest egg requires more than just relying on monthly salary savings. The Singapore government offers two powerful retirement savings vehicles: the Central Provident Fund Ordinary Account (CPF-OA) and the Supplementary Retirement Scheme (SRS). While keeping cash in these accounts guarantees safety, holding idle funds during inflationary periods risks eroding your long-term purchasing power. By strategically investing CPF-OA and SRS funds into Exchange-Traded Funds (ETFs) listed on the Singapore Exchange (SGX), you can harness market growth while enjoying tax efficiency. 1. The Baseline: Understanding Your Minimum Target Returns Before investing, consider both the returns you may gain by keeping your money in its existing account and the potential benefits and risks of investing it instead. As a rule of thumb, your expected investment returns should be higher than the risk-free interest rate guaranteed by each account since investing involves taking on greater risks: · CPF-OA Target Return (2.50% p.a. base): CPF-OA provides a risk-free guaranteed return of 2.5% per year (and up to 3.5% on the first S$20,000 of OA balance via extra CPF interest). Additional CPF interest may also apply to eligible balances, depending on your age and total CPF savings. However, additional interest earned on OA savings is credited to your Special Account or Retirement Account, rather than retained in the OA. Investing your CPF-OA only makes sense if your target portfolio can consistently yield 5.0%–7.0% per year over a long horizon (10+ years). · SRS Target Return (0.05% p.a. base): The SRS is a voluntary retirement savings scheme that offers tax benefits to eligible contributors. Uninvested cash in an SRS account earns a basic bank savings rate of just 0.05% per year. Leaving SRS funds idle will result in a loss of buying power to inflation over time. The Power of Compounding S$10,000 Over 20 Years Investment Strategy Projected Return (p.a.) Value After 20 Years Idle in SRS 0.05% ~S$10,100 Idle in CPF-OA (Base Rate) 2.50% ~S$16,386 Core SGX ETF Strategy 6.50% (Projected) ~S$35,236 Investing SRS funds gives you the opportunity to seek higher returns over time, although this comes with investment risk. The choice of investments should reflect your financial objectives, risk tolerance and retirement timeline. 2. Option 1: Investing CPF-OA via CPFIS Rules & Eligibility To invest CPF-OA funds under the CPF Investment Scheme (CPFIS-OA), you must: Be at least 20 years old and not an undischarged bankrupt. Maintain a mandatory minimum balance of S$20,000 in your CPF-OA (only funds above S$20,000 can be invested). Complete the online CPFIS Self-Assessment Test (SAT). Opened a CPF Investment Account with one of the three approved agent banks Note: Not all investments are eligible under CPFIS. Investors should check the scheme's requirements and the eligibility of specific products before committing their savings. Popular CPFIS-Approved SGX ETFs CPFIS sets strict limits on management fees and risk levels. Top approved ETFs on SGX include: Ticker ETF Name Asset Class / Focus CPFIS Risk Level ES3.SI SPDR Straits Times Index ETF Top 30 Singapore Listed Companies Low to Medium Risk G3B.SI Nikko AM Singapore STI ETF Top 30 Singapore Listed Companies Low to Medium Risk A35.SI ABF Singapore Bond Index Fund Singapore Government & AAA-Rated Bonds Low Risk 3. Option 2: Supercharging Retirement with the Supplementary Retirement Scheme (SRS) Tax Relief Mechanics SRS is a voluntary account that helps you save on taxes today while building wealth for tomorrow. Annual Contribution Caps: Up to S$15,300 for Singaporeans/PRs (and S$35,700 for foreigners). Tax Benefit: Every dollar contributed directly reduces your taxable income for that year (e.g., contributing $15,300 to SRS reduces your taxable assessable income for the year by $15,300). Tax-Free Withdrawals at Retirement: 50% of SRS withdrawals are tax-exempt if made on or after the statutory retirement age (age 63, moving to 64 in July 2026 and 65 by 2030). Broader Choice of Investments Unlike CPF-OA, SRS funds can be invested in a wider range of eligible products, such as any ETF listed on SGX, allowing for broader global and sector exposure. e available choices differ from those under CPFIS, so investors should verify whether a particular product is eligible before investing. Examples of ETFS to research include: Regional Technology: Lion-OCBC Securities Hang Seng TECH ETF (HST.SI) Real Estate Income (S-REITs): Lion-Phillip S-REIT ETF (CLR.SI) or NikkoAM-STC Asia REIT ETF (CFA.SI) Global / US Equities: SPDR S&P 500 ETF (S27.SI) 4. Sample Model Portfolios for CPF-OA & SRS The appropriate allocation depends on your retirement horizon, financial circumstances, risk tolerance and existing investments. The following examples illustrate how investors might approach portfolio construction Strategy A: Conservative Growth & Income (CPF-OA Focus) Designed for stability with steady dividend income: 70% Allocation: SPDR STI ETF (ES3.SI) — Captures ~3.5%–4.5% annual dividend yield from Singapore's top banks and companies. 30% Allocation: ABF Singapore Bond Index Fund (A35.SI) — Provides fixed income backed by Singapore Government Securities. Strategy B: Global Growth & Yield (SRS Focus) Designed for long-term wealth growth and income: 50% Allocation: SPDR S&P 500 ETF (S27.SI) — Broad exposure to the top 500 US companies. 30% Allocation: Lion-OCBC Hang Seng TECH ETF (HST.SI) — Targeted growth exposure to major Asian tech leaders. 20% Allocation: Lion-Phillip S-REIT ETF (CLR.SI) — Generates regular dividend payouts from Singapore Real Estate Investment Trusts. 5. Key Considerations & Best Practices Mind the Transaction Fees: Transaction fees, agent bank charges and other applicable costs can affect your net returns, particularly when making smaller investments. For example, CPFIS trades incur agent bank clearing fees ($2 to $2.50 per transaction for CPFIS). Review the full fee schedule and consider how frequently you trade. Investing larger amounts less frequently may reduce the proportion of costs relative to the amount invested, although this should not come at the expense of an appropriate investment strategy. Reinvest Dividend Distributions: Dividends and fund distributions can contribute to long-term portfolio growth. If your objective is to accumulate retirement savings, reinvesting these proceeds may help your investments compound over time. Cash dividends from CPFIS and SRS investments flow back into your agent bank account. Set a calendar reminder to manually reinvest these funds periodically so your wealth keeps compounding. Avoid Early SRS Withdrawals: Withdrawing SRS cash before reaching your statutory retirement age incurs a 5% penalty, and 100% of the withdrawn amount will be taxed as income. Plan your contributions with your expected cash-flow needs in mind, and avoid committing money that you may need access to before retirement. 5. Key Takeaways CPF-OA and SRS serve different purposes, and investing through either scheme involves trade-offs. Beat the Hurdle Rates: CPF-OA provides a base interest rate (2.5% p.a.) and additional interest may apply under CPF rules, while SRS offers potential tax benefits and access to eligible investments. The decision is not simply about seeking the highest possible return. It is about understanding the benefits you may be giving up, the risks you are taking, and how each investment fits into your broader retirement plan. Optimise Taxes & Costs: Utilise SRS for immediate dollar-for-dollar tax deductions and batch your CPFIS trades to keep agent bank fees low. Stay Invested: Automate dividend reinvestments and hold your SRS positions until reaching the statutory retirement age to avoid early withdrawal penalties. As always, before investing, review your financial needs, compare the costs and investment options available, and ensure that your portfolio is appropriate for your circumstances. A well-considered strategy should support your retirement goals without exposing you to risks you cannot afford to take. 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.

Lion-Phillip S-REIT ETF: Analysts Maintain Positive Outlook Despite Rate Headwinds

Published on Oct 15, 2026 114

Brief Overview Phillip Securities Research maintains its ACCUMULATE recommendation on Lion-Phillip S-REIT ETF (SREITS) with a reduced target price of S$0.85, down from S$0.90. The ETF has undergone portfolio changes with Keppel DC REIT becoming the top holding, replacing CapitaLand Ascendas REIT, while Mapletree Logistics Trust remains the third-largest position. The fund continues to offer diversified exposure across retail, commercial, industrial and data-centre assets, balancing stable income with growth opportunities. Investment Positives The ETF's strongest advantage lies in its well-diversified portfolio structure across eight property sectors. Industrial assets form the largest allocation at 35.6%, followed by retail at 17.5%, providing investors with broad exposure across Singapore's REIT market while reducing concentration risk in any single sector. The diversified exposure to retail, commercial, industrial, and data-centre assets create a balanced investment proposition that combines stable rental income streams with structural growth opportunities. This diversificiation allows the ETF to benefit from different property cycles and tenant demand patterns across various sectors. Looking ahead, analysts expect organic rental growth to support the ETF's performance. In addition, easing domestic financing costs should provide tailwinds for the underlying REITs, contributing to a gradual recovery in distribution per unit (DPU) through FY27. Challenges The primary concern facing the ETF is uncertainty over the interest-rate outlook, which may limit near-term valuation upside. Interest rate movements typically have an inverse relationship with REIT valuations, and the current uncertain environment creates headwinds for immediate price appreciation. Outlook Despite near-term challenges from interest rate uncertainty, the analysts maintain a constructive medium-term outlook. The combination of organic rental growth and easing domestic financing costs is expected to support a gradual recovery in DPU throughFY27, providing a pathway for improved performance as interest rate concerns subside. Recommendation & Target Price Phillip Securities Research maintains its ACCUMULATE recommendation for Lion-Phillip S-REIT ETF. The analysts have lowered their target price to S$0.85 from the previous S$0.90, derived using a combination of historical dividend yield spread and price-to-book ratio methodologies, with equal weighting applied to both valuation approaches. 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.

Semiconductor Sector Shows Strong Growth Acceleration Led by Custom ASIC Players

Published on Oct 15, 2026 48

Brief Overview The semiconductor sector has demonstrated mixed performance over the past three months, with the Semiconductor ETF rising 2.4% but underperforming the S&P500's 4.1% gain. Equipment players faced headwinds due to elevated valuations, while memory companies declined amid HBM4 shipment uncertainties. However, enterprise and sovereign AI buildout is driving higher demand, with Coreweave and Nebius' combined remaining performance obligations reaching US$141 billion in June 2026. Investment Positives The semiconductor sector presents compelling growth opportunities across multiple segments. Custom ASIC companies are leading the acceleration, with Broadcom and Marvell guiding 3Q26e revenue to surge 89% year-on-year to a combined US$38 billion, surpassing the combined growth guidance of 83% from NVIDIA and AMD. Equipment manufacturers are experiencing robust demand, with their combined 3Q26e revenue guided to reach 52% year-on-year growth to US$31.4 billion, representing potentially the largest growth since 2021. This equipment demand is underpinned by TSMC's increased capital expenditure guidance of US$62 billion, marking a 15% increase, alongside memory players' higher equipment spending as new fabrication facilities ramp up production. The broadening customer base strengthens the sector's resilience. Coreweave and Nebius have expanded their client roster to include major enterprises such as Caterpillar, Grammarly, Databricks, Reflection, AI neolabs and quantitative trading firms. This diversification across AI neoclouds, enterprises and sovereign nations makes NVIDIA and AMD's growth more resilient should hyperscaler capital expenditure moderate. From a valuation perspective, large-cap SaaS companies are trading at roughly -1 standard deviation, with an EV/Sales multiple of 9.5x versus their 3-year average of 10.8x, suggesting attractive valuations despite strong performance. Enterprise and sovereign nations' AI buildout continues to drive substantial demand growth, with Coreweave and Nebius' combined remaining performance obligations increasing 72% from December 2025 to reach US$141 billion by June 2026. Challenges Valuation concerns persist in certain segments of the semiconductor sector. Equipment players AMAT and Lam Research have experienced significant pullbacks, declining 10.6% and 3.7% respectively, as they trade at elevated forward price-to-earnings ratios of 40x and 34x, compared with the sector average of 27x. Memory companies face headwinds from currency fluctuations and product transition uncertainties. SK Hynix declined 17% while Samsung fell 1.9%, laregly due to uncertainty surrounding HBM4 shipment timelines and the impact of a stronger Korean won on their financial performance. Outlook The outlook for the semiconductor sector remains positive, supported by accelerating growth across the custom ASIC, equipment and foundry segments. Revenue growth acceleration is expected in 3Q26e across these key areas, with custom ASIC companies leading the charge. The diversification of AI demand across multiple customer segments provides additional stability to the growth trajectory. Recommendation & Target Price Phillip Securities Research maintains an OVERWEIGHT recommendation on the semiconductor sector, reflecting confidence in the strong growth momentum of custom ASIC companies, equipment manufacturers and foundry operations. 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.

Software Sector Stages Strong Recovery as AI Concerns Subside

Published on Oct 15, 2026 18

Brief Overview The software industry has experienced a significant re-rating, with the iShares Software ETF (IGV) rebounding 17% in 3Q26 and now sitting just 7% below its September 2025 peak. SaaS LTM revenue growth accelerated to 17.5% YoY in 2Q26, marking the strongest growth in 15 quarters. Phillip Securities Research maintains an OVERWEIGHT stance on software, favouring SaaS infrastructure, data analytics, and cybersecurity as key AI beneficiaries. Investment Positives The software sector's recovery has been driven by easing concerns over AI disruption, with market leader Microsoft surging 30% following its 4Q26 results. Microsoft's performance was supported by Azure growth exceeding 40% YoY, no unexpected incremental capital expenditure announcements despite peers raising spending, and the introduction of usage-based billing. The rebound has also extended to data and AI platform companies, with Palantir gaining 61% and Snowflake rising 35% during the quarter. Salesforce also advanced following the launch of Claudeforce, its joint application with Anthropic, reinforcing the value of proprietary enterprise data despite increasingly capable AI models. Large-cap SaaS companies continue to outperform, benefiting from AI-tier upgrades, usage-based pricing, and seat expansion. These companies are enjoying higher sales growth of 18.2%, which is 0.7 percentage points higher year-on-year, as enterprises spend more on higher-priced AI tiers, increase adoption of usage-based pricing, and expand seat usage. Excluding Microsoft and Oracle, growth remained healthy at 16.3%. From a valuation perspective, large-cap SaaS companies are trading at roughly -1 standard deviation, with an EV/Sales multiple of 9.5x versus their 3-year average of 10.8x, suggesting attractive valuations despite strong performance. Challenges Cybersecurity valuations remain elevated, with companies trading at stretched multiples. This has led to concerns about sustainability of current price levels in this subsector, despite its strong year-to-date performance. Outlook The software sector appears to be emerging from what the research describes as the "SaaSpocalypse", with growth rates expected to persist in 3Q26e. The preferred investment areas include SaaS infrastructure, data analytics, and cybersecurity as key AI beneficiaries. Top picks are supported by strong AI adoption, expanding backlog conversion, and rising enterprise data demand. Recommendation & Target Price Phillip Securities Research maintains an OVERWEIGHT recommendation on the software sector. Preferred names include Microsoft, Oracle, Palantir, and Snowflake. However, the firm has downgraded Palo Alto Networks to NEUTRAL, as its valuation appears stretched, trading at 97x P/E versus its 5-year average of 54x. 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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【辉立周末报】金融股反弹撑恒指重回二万四｜OpenAI收入逊于市场预期触发科技股沽压｜辉立周末报｜黄玮杰、章晶