Private equity

One of the most significant aspects of today’s investment world, private equity, is its construct in giving financing for growth or restructuring- or finding difficult markets through all kinds of strategic and tactical approaches. It takes you through this medium in-depth, expounding upon the very nature of private equity and providing a general overview of how it constitutes part of the wider investment universe. 

Private equity

Private equity is an important source of financing. It refers to the investment of funds in a company that is not publicly traded. Investors seek private equity (PE) funds to generate higher returns than those available from the stock markets. However, there are certain aspects of the sector that you must be aware of.  

Institutional investors, such as pension funds and major private equity (PE) companies supported by accredited investors, make up the PE sector. Due to the direct investment needed by PE, frequently done to obtain control or influence over a company’s activities, the industry is dominated by funds with large financial reserves.

What is PE?

PE typically refers to investment funds rather than individual investments. These funds are set up by PE firms, which raise money from investors and use it to buy stakes in companies. The firms then work to improve the performance of these companies and sell them for a profit.  

PE firms typically charge investors a management fee, as well as a percentage of any profits that are made. These fees can be quite high, which is why PE is often considered a high-risk investment. 

 

Understanding PE 

PE companies raise client money to start PE funds, run them as general partners, and manage fund assets in return for fees and a cut of earnings over a certain minimum or hurdle rate. 

When stock markets are soaring, and interest rates are down, PE investment becomes more lucrative and well-liked; conversely, when those cyclical elements become less favorable, they become less lucrative and popular. 

The money invested in PE funds has a limited duration of 7 to 10 years and cannot be withdrawn again after the first investment. After a few years, the funds usually start paying out rewards to their investors.  

It’s more complex than buying and selling businesses in private equity. Instead, it is an active practice of management in which the investors really and closely work with the acquired businesses so they may change the way operations are conducted, minimise costs, and generate profit to maximum levels. It often involves restructuring management or simplifying the process through new technology. 

Besides that, private equity investments sell after about 5 to 10 years. During this period, private equity houses are very involved in running the businesses they have invested in and thus expand the business greatly. There is a level of risk involved with private equity investments because selling private companies is challenging, although the returns when things go right are very high in value. 

Types of Private Equity 

There are also many types of private equity that target various places in a firm’s life cycle. Some of the types of private equity include the following: 

  1. Venture Capital (VC): More or less, this is a type of private equity that is very risky, simply because all investments are made at very early stages of the projects or companies with great and massive growth possibilities, though without proof of any business model.
  2. Growth Capital Growth: PE focuses on more mature companies needing capital to take their operations to the next level, to develop new products or to new markets. Growth capital allows these companies to grow without necessarily deciding to go public.
  3. Buyouts: It invests directly in fairly mature companies, sometimes buying the whole business and running it. An acquirer may utilise LBOs or leveraged buyouts, wherein debt and equity combined make purchasing and financing the transaction possible, or MBOs, where management buys the firm.
  4. Distressed Investments: Those funds shall invest in firms that are comparatively illiquid and facing financial distress. They will purchase their debt or equity at a discount, with the object of rescuing the firms’ distress through operational improvements and restructuring actions.
  5. Mezzanine Financing: This type of PE delivers a hybrid source of funding that combines debt and equity financing to firms seeking expansion or transformative change.

Structure of Private Equity   

They can be formed as a limited partnership in which control of the fund is accorded to GPs while capital is drawn from LPs 

General Partners, GPs 

General Partners GPs shall raise funds, source deals, conduct due diligence, make investments, and manage portfolio companies. They are active managers who typically take performance-based fees known as carried interest for successful investments. 

Limited Partners, LP 

Limited Partners are Institutional investors such as pension funds, university endowments, insurance companies, and high-net-worth individuals who commit to private equity funds but do not actively participate in managing the fund. 

Investment Structure of Fund 

Private equity fund has an average life of around 10-12 years. It can be broadly divided into three stages: 

  1. Fundraising: Here, the GP raises capital from the LPs to raise the fund.
  2. Investment Period: It occupies the first five years. It is the period when the GP invests.
  3. Distribution or Exit Period: In the later years of the fund, the GP sells the investments and pays back the capital to the LPs along with any profit that may have been mad

Fee Structure: 

PE firms charge two types of fees: 

Management Fees are roughly 2% of the overall committed capital and are a cost of doing business. 

Carried Interest is a percentage of the profits—typically 20%—received by GPs after all the LPs have recovered the capital invested and realised some predetermined rate of return (the “hurdle rate”). 

Specialty of PE 

Private equity

Some PE funds and businesses focus only on one type of PE investment. Although venture capital is sometimes referred to as a part of PE, its unique role and skill set it apart. They led to the emergence of specialized venture capital companies that now rule their industry. Other areas of specialization in PE are: 

  • Investing in distressed situations and focusing on financially troubled businesses. 
  • Growth equity invests in growing businesses after they leave the startup stage. 
  • Experts in their fields, with some PE companies specializing only in energy or technology agreements. 
  • Secondary buyouts entail the company’s ownership transfer from one PE group to another. 
  • Carve-outs involving the acquisition of business units or subsidiaries. 

How does PE work? 

PE firms raise capital from institutional investors (such as pension funds, sovereign wealth funds, insurance companies, and family offices) to invest in private businesses, grow them, and then sell them years later to provide investors with higher returns than they can dependably expect from investments in the public markets. 

PE fund managers are typically very experienced and knowledgeable in the businesses they invest in. They work closely with the companies’ management teams in their portfolio to provide advice and guidance on improving performance.  

In many cases, the fund manager will also take an active role in the company’s management, working to implement changes to help the company achieve its growth potential. 

Who is a PE investor? 

A PE investor is an individual or firm that invests in companies that are not publicly traded. PE investors typically seek to invest in companies with the potential for high growth and need capital to finance their expansion. PE investors are typically willing to take on more risk than traditional investors, such as banks or insurance companies, in exchange for the potential for higher returns. 

PE investors typically invest through a private equity firm, a partnership that pools the capital of multiple investors. The PE firm then uses this capital to invest in companies that fit its investment criteria. The PE firm typically seeks to exit its investment within a few years through a sale of the company to another firm or through an initial public offering (IPO). 

Examples of Private Equity 

Private equity can be credited with being behind some of the most dramatic changes that have taken place in businesses across the world. There are two such examples: 

  1. Dell Technologies: As of this writing, the company, which was considered one of the world’s largest technology companies, was purchased privately by its founder, Michael Dell, and Silver Lake Partners in 2013 for a staggering $24.4 billion. Much of that was meant to help Dell start competing more viably against the rapidly changing world of technology by focusing more on enterprise solutions and, more specifically, software.
  1. Hilton Hotels: In 2007, private equity major Blackstone Group acquired Hilton Hotels in a deal worth $26 billion. Blackstone restructured Hilton’s operations and expanded the company worldwide. By 2013, Hilton returned to the public markets with a very successful IPO, raising enormous returns for Blackstone.

Frequently Asked Questions

A PE firm is an investment firm that specializes in investing in and acquiring private companies. PE firms typically invest in companies that are not publicly traded on a stock exchange. Their goal is to generate a return on their investment through various means, including selling the company outright, taking it public, or selling it to another private equity firm.  

PE firms typically have a team of investment professionals who work to identify potential investments, perform due diligence, and negotiate and execute transactions. PE firms typically raise capital from various sources, including institutional investors such as pension funds, endowments, insurance companies, and high-net-worth individuals. 

PE firms include venture capital, leveraged buyout, and growth equity firms. Each type of firm has a different focus, but all are looking to invest in companies with high growth potential. 

PE and venture capital are both forms of investment in companies, but there are some key differences:  

  • PE typically invests in more established companies, while venture capital is for early-stage or startup companies.  
  • PE is usually a longer-term investment, while venture capital is typically shorter-term.  
  • Finally, PE is typically more hands-off than venture capital, with the latter often being about more active involvement in the company’s management. 

PE funds are managed in various ways, depending on the type of fund and the goals of the fund managers. In general, PE funds are managed with a focus on maximizing returns for the investors in the fund. This typically involves making investments in companies that have a high potential for growth and profitability and then working to improve the performance of those companies so that they can generate higher returns. 

The history of PE investments can be traced back to the early days of capitalism. The first PE firm in the United States was established in 1869. Since then, PE firms have played a vital role in the development of the American economy. 

Today, PE firms are a major source of capital for businesses of all sizes. They provide the capital that businesses need to grow and expand. PE firms also help businesses restructure and become more efficient. 

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    Published on Jul 31, 2026 54 

    Company Overview Alphabet Inc. (GOOGL) operates as a technology conglomerate primarily through its Google subsidiary, focusing on internet search, online advertising, cloud computing services, and artificial intelligence solutions. The company's core business segments include Search, YouTube advertising, and Google Cloud, serving both consumer and enterprise markets globally. Strong Financial Performance Driven by AI Integration Alphabet delivered robust second-quarter 2026 results, with adjusted profit after tax and minority interest growing 24% year-on-year to US$35 billion. Revenue increased 24% to US$119.8 billion, representing 45% of full-year forecasts for revenue and 42% for profit, reflecting typical seasonal patterns in the advertising segment. The company's performance was underpinned by resilient advertising growth of 14% year-on-year, enhanced by Gemini integration across Search platforms and improved monetisation of YouTube Shorts and connected television offerings. Additionally, the fastest cloud growth on record, surging 82% year-on-year, demonstrated strong enterprise demand for AI products and services. Record Cloud Segment Expansion Google Cloud emerged as the standout performer, with revenue accelerating to US$24.8 billion in the second quarter, compared to 32% growth in the prior year period. This exceptional growth was driven by robust demand for Enterprise AI products and services, with nearly 90% of Fortune 100 companies adopting Gemini Enterprise solutions. Operating margins in the Cloud segment expanded significantly to 35.6% from 20.7% in the previous year, reflecting improved operational leverage. The Cloud backlog grew 3.8 times year-on-year to US$514 billion, with management expecting approximately 50% recognition as revenue over the next 24 months. To address supply constraints, Alphabet plans to increase third-party compute capacity usage from the third quarter onwards. AI-Enhanced Advertising Performance Search revenue demonstrated strong momentum, increasing 17% year-on-year to US$63.3 billion, with retail and finance sectors providing the largest contributions. YouTube advertising revenue rose 13% to US$11.1 billion, supported by continued Shorts and connected TV growth. The FIFA World Cup 2026 provided additional tailwinds, driving record Search usage and YouTube's highest viewership as an official broadcast partner. AI Mode inference costs have declined to their lowest levels since the 2025 launch, indicating improving monetisation efficiency. Paid clicks grew 13% year-on-year, marking three consecutive quarters of double-digit growth and suggesting successful Gemini integration. Investment Outlook and Rating Phillip Securities Research upgraded Alphabet to a BUY rating whilst lowering the DCF target price to US$425 from US$450. The firm reduced FY26 revenue and profit forecasts by approximately 2% and 4% respectively, reflecting moderate margin expansion amid ongoing supply chain constraints. Despite temporary free cash flow pressure from heavy AI investments, analysts remain constructive on the long-term outlook. Alphabet's vertically integrated AI ecosystem, spanning custom silicon, optimised data centres, and high-performing Gemini models, should continue supporting robust growth across advertising and cloud businesses. 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. 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    Keppel DC REIT Delivers Strong 11% DPU Growth on Acquisitions and Rising Rents, ACCUMULATE Rating with S$2.46 Target

    Published on Jul 31, 2026 35 

    Company Overview Keppel DC REIT is a Singapore-listed real estate investment trust that owns and operates a diversified portfolio of data centres across key markets. The REIT focuses on providing mission-critical infrastructure to support the growing digital economy, with properties spanning multiple geographical regions including Asia-Pacific and Europe. Strong Half-Year Performance Driven by Strategic Acquisitions Keppel DC REIT delivered impressive results in the first half of FY26, with distribution per unit (DPU) reaching 5.71 Singapore cents, representing an 11.3% year-on-year increase. This performance was in line with analyst expectations and constituted 52% of the full-year forecast. The growth was primarily attributed to the accretive acquisition of Tokyo Data Centre 3, combined with positive rental reversions and escalations across the portfolio. However, these gains were partially offset by the divestment of Kelsterbach Data Centre. Distribution income increased by 18.5% year-on-year, outpacing DPU growth due to an expanded unit base following equity fund raisings to finance recent acquisitions. Rental Market Dynamics and Portfolio Performance The REIT maintained healthy rental reversions at 10% during the first half, though second-quarter reversions moderated to approximately 5% compared to the exceptional 51% recorded in the first quarter. Looking ahead, rental reversions in the second half are expected to be higher, supported by the Gore Hill Data Centre lease renewal where rents more than doubled and will contribute from the third quarter onwards. Portfolio occupancy declined to 92.5% from 95.6% in the first quarter due to the expiry of the Cardiff Data Centre contract. Despite this decrease, the earnings impact should be limited as 95% of revenue-generating power capacity remains contracted. Financial Strength and Growth Prospects The REIT maintains a robust balance sheet with ample debt headroom for future acquisitions. Aggregate leverage improved by 110 basis points quarter-on-quarter to 34% following repayment of the consumption tax loan for Tokyo Data Centre 3, leaving approximately S$673 million of debt headroom against its 40% internal cap. The average cost of debt increased marginally by 10 basis points to 2.7%, with forecasted foreign-sourced distributions substantially hedged through the first half of FY27. Analysts maintain an ACCUMULATE rating with a raised target price of S$2.46, up from S$2.37, reflecting higher rental assumptions and continued NetCo Bonds contribution. 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. 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    OUE REIT Hospitality Segment Delivers Strong Performance, Maintains BUY Rating with S$0.45 Target Price

    Published on Jul 31, 2026 20 

    Company Overview OUE REIT is a Singapore-listed real estate investment trust with a diversified portfolio spanning hospitality and commercial properties. The REIT operates prominent hospitality assets including Hilton Singapore Orchard and Crowne Plaza Changi Airport, alongside commercial properties such as OUE Downtown and maintains a stake in Salesforce Tower. Strong First Half Performance Driven by Hospitality Sector OUE REIT delivered robust first-half 2026 results, with gross revenue and net property income rising 3.8% and 4.8% year-on-year to S$136.1 million and S$110.3 million respectively, representing 50% and 51% of full-year forecasts. Distribution per unit surged 28.6% year-on-year to 1.26 cents, exceeding expectations and forming 55% of the full-year forecast. The standout performer was the hospitality segment, which demonstrated remarkable resilience and growth momentum. Revenue increased 11.2% year-on-year to S$50.1 million, whilst net property income climbed 12.3% to S$45.1 million. The segment's revenue per available room rose 10.7% to S$258, driven by strategic commercial execution and operational improvements. Key Positive Drivers The hospitality segment's strong performance reflects proactive management initiatives and market positioning. Hilton Singapore Orchard achieved a 12.6% year-on-year RevPAR increase through successful corporate account acquisitions and higher occupancy rates. The property's positioning as a premium US corporate brand enabled it to capture rising American corporate demand, which increased approximately 4% year-on-year, offsetting softer tourist arrivals from Indonesia and China. Crowne Plaza Changi Airport contributed with a 7.5% year-on-year RevPAR improvement, benefiting from increased transit passenger volumes despite a 1.7% decline in international passenger numbers during the period. Financial costs provided additional support, declining 16.6% year-on-year to S$37.8 million. The average cost of debt improved from 4.2% to 3.6%, whilst interest coverage strengthened to 2.8 times from 2.6 times previously. Investment Outlook and Recommendation Phillip Securities Research maintains a BUY recommendation with an unchanged dividend discount model-based target price of S$0.45. The REIT trades at a forward dividend yield of 6.2% and price-to-net asset value of 0.57 times. Expected catalysts include accretive redeployment of divestment proceeds into Salesforce Tower, successful backfilling of Deloitte's 150,000 square feet space at OUE Downtown at market rents, and continued cost savings from refinancing S$400 million of debt maturities due in 2027. 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. 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    SIA Engineering Co. Maintains BUY Rating Despite Temporary Earnings Dip, S$4.06 Target Price Unchanged

    Published on Jul 31, 2026 13 

    Company Overview SIA Engineering Co. Ltd (SIAEC) is a leading aircraft maintenance, repair and overhaul (MRO) service provider operating across the Asia-Pacific region. The company provides comprehensive maintenance services including airframe and line maintenance, engine and component services, with operations spanning Singapore, Malaysia, Cambodia, the Philippines, India, and recently China through strategic joint ventures. First Quarter Performance Analysis SIAEC reported a 6.1% year-on-year decline in first quarter FY27 profit after tax and minority interests to S$40.3 million, representing 22% of the full year estimate. The earnings decline was primarily attributed to a S$7 million reduction in share of profits from the engine and component segment, driven by higher investment costs associated with the SAESL joint venture. Associates and joint venture income fell 18% year-on-year to S$31 million, with the engine and component segment declining 19.2% due to elevated investment costs. However, this was partially offset by the airframe and line maintenance segment, which posted a 14.3% year-on-year increase driven by growth in flight handling volume, which rose 2.9% year-on-year. Core Business Resilience Evident Despite the headline revenue decline of 8.6% year-on-year to S$327.6 million, the underlying business fundamentals remain intact. The revenue drop was attributed to the scope and work content performed during the quarter, with lower materials-related work being conducted. Heavy checks performed decreased 13% to 20 checks, whilst managed fleet size for components revenue fell 9% to 151 aircraft, indicating reduced parts-intensive work during the period. Importantly, operating profit surged 159% due to lower material costs and reduced outsourced repair costs. Ex-materials revenue grew 4.2% year-on-year, demonstrating that direct labour-related revenue increased, with line maintenance operations handling 2.9% more flights year-on-year to 40,615 flights. Strategic Positioning and Outlook Phillip Securities Research maintains its BUY recommendation with an unchanged target price of S$4.06. The research house highlights SIAEC's strengthening position in the Indian MRO market through Air India partnerships, regional maintenance capacity expansion across Southeast Asia, and market entry into China via the Arport AME joint venture. These strategic initiatives position the group to capture growing APAC MRO demand. Investment costs at SAESL are expected to peak during the current financial year. The stock trades at a FY27 estimated price-to-earnings ratio of 19.9 times. Frequently Asked Questions [market_journal_faq]   This article has been auto-generated using PhillipGPT. 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    Singapore REITs Poised for DPU Growth in First Half 2026 Amid Lower Interest Rates

    Published on Jul 31, 2026 13 

    Market Performance and Outlook Singapore Real Estate Investment Trusts (S-REITs) demonstrated modest resilience in June 2026, with the S-REITs Index gaining 0.4% following May's 1.6% decline. The sector is positioned for stronger performance ahead, with analysts expecting approximately 3% year-on-year distribution per unit (DPU) growth for the second quarter of 2026, driven by improved net property income from higher rents and reduced financing costs in a lower interest rate environment. Sector Dynamics and Interest Rate Environment The average cost of debt for S-REITs has declined by approximately 40 basis points year-on-year as of end-March 2026, with expectations of a further 10 basis points reduction throughout the remainder of the year. This improvement is supported by refinancing opportunities at lower Singapore Dollar benchmark rates, particularly benefiting REITs with substantial SGD-denominated debt portfolios. The 3-month Singapore Overnight Rate Average (SORA) has stabilised around 1.1%, remaining approximately 100 basis points below levels from a year ago. However, overseas interest rates have begun to edge higher amid expectations of renewed inflationary pressures from the ongoing Middle East conflict. The Reserve Bank of Australia, European Central Bank, and Bank of Japan have all raised policy rates this year, suggesting that borrowing costs for foreign currency-denominated debt will gradually increase, though existing interest rate hedges should cushion the impact. Sectoral Performance and Investment Strategy The diversified REIT sub-sector led performance in June with a 3% gain, while the overseas commercial REIT sub-sector declined 6.5%. Retail, office, and industrial REITs are expected to continue delivering mid- to high-single-digit rental reversions, though hospitality REITs face softer operating performance due to higher airfares and travel disruptions from Middle East conflicts. Analysts maintain an overweight stance on S-REITs whilst remaining selective, favouring REITs with robust balance sheets, defensive earnings profiles, and higher proportions of fixed-rate debt to limit interest rate volatility exposure. Retail S-REITs remain preferred, supported by healthy tenant sales and limited new supply, which should underpin mid- to high-single-digit rental reversions in 2026. Frequently Asked Questions [market_journal_faq]   This article has been auto-generated using PhillipGPT. It is based on a report by a Phillip Securities Research analyst.   Disclaimer These commentaries are intended for general circulation and do not have regard to the specific investment objectives, financial situation and particular needs of any person. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of any person acting based on this information. You should seek advice from a financial adviser regarding the suitability of any investment product(s) mentioned herein, taking into account your specific investment objectives, financial situation or particular needs, before making a commitment to invest in such products. Opinions expressed in these commentaries are subject to change without notice. Investments are subject to investment risks including the possible loss of the principal amount invested. The value of units in any fund and the income from them may fall as well as rise. Past performance figures as well as any projection or forecast used in these commentaries are not necessarily indicative of future or likely performance. Phillip Securities Pte Ltd (PSPL), its directors, connected persons or employees may from time to time have an interest in the financial instruments mentioned in these commentaries. The information contained in these commentaries has been obtained from public sources which PSPL has no reason to believe are unreliable and any analysis, forecasts, projections, expectations and opinions (collectively the “Research”) contained in these commentaries are based on such information and are expressions of belief only. PSPL has not verified this information and no representation or warranty, express or implied, is made that such information or Research is accurate, complete or verified or should be relied upon as such. Any such information or Research contained in these commentaries are subject to change, and PSPL shall not have any responsibility to maintain the information or Research made available or to supply any corrections, updates or releases in connection therewith. In no event will PSPL be liable for any special, indirect, incidental or consequential damages which may be incurred from the use of the information or Research made available, even if it has been advised of the possibility of such damages. The companies and their employees mentioned in these commentaries cannot be held liable for any errors, inaccuracies and/or omissions howsoever caused. Any opinion or advice herein is made on a general basis and is subject to change without notice. The information provided in these commentaries may contain optimistic statements regarding future events or future financial performance of countries, markets or companies. You must make your own financial assessment of the relevance, accuracy and adequacy of the information provided in these commentaries. Views and any strategies described in these commentaries may not be suitable for all investors. Opinions expressed herein may differ from the opinions expressed by other units of PSPL or its connected persons and associates. Any reference to or discussion of investment products or commodities in these commentaries is purely for illustrative purposes only and must not be construed as a recommendation, an offer or solicitation for the subscription, purchase or sale of the investment products or commodities mentioned. This advertisement has not been reviewed by the Monetary Authority of Singapore.

    Suntec REIT Shows Strong Singapore Performance with 24.8% DPU Growth, ACCUMULATE Rating and S$1.69 Target Price

    Published on Jul 31, 2026 10 

    Strong First Half Performance Driven by Singapore Assets Suntec REIT delivered robust first-half results with distributable per unit (DPU) of 3.936 Singapore cents, representing a substantial 24.8% year-on-year increase. This performance aligned with analyst expectations and constituted 52% of the full-year forecast. The growth was primarily attributed to an S$9.4 million (11.6%) reduction in finance costs and enhanced contributions from the Singapore office and retail portfolios. Company Overview Suntec REIT is a Singapore-based real estate investment trust that owns and manages a diversified portfolio of office, retail, and convention properties. The trust's flagship assets include Suntec City, Marina Bay Financial Centre properties, and overseas holdings including The Minster Building and 55 Currie Street. Singapore Portfolio Maintains Near-Full Occupancy The core Singapore operations demonstrated exceptional resilience, with both office and retail portfolios achieving near-full occupancy rates of 99.5%. The office portfolio recorded strong positive rental reversions of 10.1%, whilst the retail segment achieved even stronger rental growth of 10.7% during the first half. Analysts expect healthy rental reversions to continue, forecasting 5% for the office portfolio and 10% for retail in the full year. Key Positive Drivers The Singapore operations remain the primary earnings driver, with office occupancy rising 0.7 percentage points quarter-on-quarter to 99.5%. This strong performance is supported by limited core CBD supply and tight market vacancy, with demand coming from financial services and technology sectors. The retail segment benefited from major events including the F1 Singapore Grand Prix and BTS concert, which supported tenant sales growth of 7% in the first half. Tenant sales growth was primarily driven by food and beverage outlets, whilst discretionary retail remained resilient. Suntec Convention is expected to maintain stable performance with a healthy MICE pipeline providing support despite Middle East conflict uncertainties. Financial Position and Outlook Aggregate leverage increased to 43.0% from 41.6% following the redemption of S$150 million in perpetual securities. Phillip Securities Research maintains an ACCUMULATE recommendation with a raised target price of S$1.69, up from the previous S$1.63. The trust currently trades at an FY26e dividend yield of 5.45% and price-to-NAV of 0.72x. 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.

    Tesla Inc. Delivers Record Volumes but Margin Pressures Mount, SELL Rating Maintained with US$220 Target

    Published on Jul 31, 2026

    Company Overview Tesla Inc. operates as a leading electric vehicle manufacturer and clean energy company, designing, developing, manufacturing and selling electric vehicles, energy generation and storage systems globally. The company has established itself as a dominant player in the electric vehicle market while expanding into energy storage and autonomous driving technologies. Strong Operational Performance Amid Financial Headwinds Tesla's second quarter 2026 results presented a mixed picture, with record operational achievements overshadowed by mounting financial pressures. The company delivered 480,000 vehicles, marking a 25% year-on-year increase and setting a new second-quarter record. This strong delivery performance was complemented by record energy storage deployments of 13.5 GWh, representing 41% year-on-year growth and the second-highest quarterly deployment in company history. Revenue performance remained robust, with the company achieving 26% year-on-year growth and surpassing US$100 billion on a trailing twelve-month basis for the first time. The Services and Other segment particularly excelled, generating US$4.6 billion in revenue with 50% year-on-year growth and achieving record gross profit of US$648 million at a 14.1% margin. Margin Compression Concerns Despite operational successes, Tesla faced significant margin pressures during the quarter. Adjusted profit after tax and minority interests fell 17% year-on-year to US$1.2 billion, primarily due to a 47% surge in operating expenses, reduced regulatory credits, and a substantial US$240 million energy warranty charge. Free cash flow turned negative at US$1.1 billion as capital expenditure more than doubled to US$5.8 billion. Full Self-Driving Progress Tesla's Full Self-Driving technology showed encouraging momentum with active supervised FSD subscribers reaching 1.48 million by quarter-end, representing 56% year-on-year growth. In North America, 55% of deliveries included FSD subscriptions at delivery, marking a record attachment rate. The Robotaxi service expanded to seven US metropolitan areas following launches in Miami, Orlando, and Tampa in July. Investment Recommendation Phillip Securities Research maintains its SELL recommendation with an unchanged DCF target price of US$220. The firm remains cautious, citing margin compression from rising operating expenses and fading regulatory credits, alongside substantial capital expenditure requirements exceeding US$25 billion in FY26e. With meaningful revenue from FSD, Robotaxi, and Optimus still expected to be more than five years away, the current valuation of 216x PE FY26e already incorporates much of this future upside potential. Frequently Asked Questions [market_journal_faq]   This article has been auto-generated using PhillipGPT. It is based on a report by a Phillip Securities Research analyst.   Disclaimer These commentaries are intended for general circulation and do not have regard to the specific investment objectives, financial situation and particular needs of any person. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of any person acting based on this information. You should seek advice from a financial adviser regarding the suitability of any investment product(s) mentioned herein, taking into account your specific investment objectives, financial situation or particular needs, before making a commitment to invest in such products. Opinions expressed in these commentaries are subject to change without notice. Investments are subject to investment risks including the possible loss of the principal amount invested. The value of units in any fund and the income from them may fall as well as rise. Past performance figures as well as any projection or forecast used in these commentaries are not necessarily indicative of future or likely performance. Phillip Securities Pte Ltd (PSPL), its directors, connected persons or employees may from time to time have an interest in the financial instruments mentioned in these commentaries. The information contained in these commentaries has been obtained from public sources which PSPL has no reason to believe are unreliable and any analysis, forecasts, projections, expectations and opinions (collectively the “Research”) contained in these commentaries are based on such information and are expressions of belief only. PSPL has not verified this information and no representation or warranty, express or implied, is made that such information or Research is accurate, complete or verified or should be relied upon as such. Any such information or Research contained in these commentaries are subject to change, and PSPL shall not have any responsibility to maintain the information or Research made available or to supply any corrections, updates or releases in connection therewith. In no event will PSPL be liable for any special, indirect, incidental or consequential damages which may be incurred from the use of the information or Research made available, even if it has been advised of the possibility of such damages. The companies and their employees mentioned in these commentaries cannot be held liable for any errors, inaccuracies and/or omissions howsoever caused. Any opinion or advice herein is made on a general basis and is subject to change without notice. The information provided in these commentaries may contain optimistic statements regarding future events or future financial performance of countries, markets or companies. You must make your own financial assessment of the relevance, accuracy and adequacy of the information provided in these commentaries. Views and any strategies described in these commentaries may not be suitable for all investors. Opinions expressed herein may differ from the opinions expressed by other units of PSPL or its connected persons and associates. Any reference to or discussion of investment products or commodities in these commentaries is purely for illustrative purposes only and must not be construed as a recommendation, an offer or solicitation for the subscription, purchase or sale of the investment products or commodities mentioned. This advertisement has not been reviewed by the Monetary Authority of Singapore.

    invest in Swiss market

    Why Invest in Swiss Stocks? A Guide for Singapore Investors

    Published on Jul 29, 2026 96 

    If your portfolio is mostly made up of Singapore blue chips, US tech giants, and a REIT or two, chances are Swiss stocks may not have crossed your mind. Yet Switzerland is home to some of the world’s most established companies, with businesses built on global reach, strong cash flows, resilient balance sheets, and a track record of rewarding shareholders. Think Nestlé. Roche. Novartis. UBS. These are not speculative growth firms or flashy startups chasing the next trend. They are global category leaders that have continued to compound shareholder wealth through wars, recessions, market crashes, and pandemics. For Singapore investors looking to diversify beyond the usual US and domestic markets, Swiss equities offer exposure to defensive sectors, global consumer brands, healthcare innovation, and a market built on stability. In this guide, we will explore why Swiss stocks may deserve a place in a long-term portfolio, what makes the Swiss market unique, and how Singapore investors can start investing in it. What Makes Switzerland Such an Interesting Market? Switzerland punches way above its weight economically. Despite its tiny population, Switzerland is home to a disproportionate number of world-leading multinationals. Its listed companies are leaders in industries such as pharmaceuticals, consumer goods, luxury goods, banking, and industrial technology. Three Swiss companies alone - Nestlé, Roche, and Novartis, are consistently ranked among Europe's largest listed businesses by market capitalisation. So, what makes the Swiss market stand out? Political and economic stability. Switzerland has a long tradition of neutrality, low public debt, and predictable governance. This creates a predictable and resilient investment landscape that appeals to long-term investors. A famously strong currency. The Swiss franc (CHF) has a well-earned reputation as one of the world's premier "safe haven" currencies. During periods of market uncertainty, investors often flock to CHF-denominated assets, potentially providing an additional layer of resilience for international investors. Quality over quantity. Although the Swiss stock market has fewer listed companies than larger exchanges such as the NYSE or London Stock Exchange, many of its businesses generate substantial revenues overseas. Home to strong brands with pricing power, their earnings are driven by worldwide demand rather than the relatively small domestic economy. In fact, the SIX is home to three of the top five most highly capitalised blue-chip companies in all of Europe, and leads the continent outright in sectors like pharma, food products, and life sciences. A genuine innovation hub. Switzerland consistently ranks among the world's most innovative economies, supported by significant investment in research and development across pharmaceuticals, biotechnology and precision engineering. Companies like Roche and Novartis continue to lead on a global scale. It's showing real momentum, not just stability. The benchmark Swiss Market Index has been pushing to record highs in 2026, with monthly trading turnover growing at a healthy clip. Stability and growth aren't mutually exclusive here, that's arguably the whole appeal. The Big Names You'll Come Across You do not need to memorise the entire Swiss Market Index (SMI) to get started, but understanding several of its largest companies provides a useful foundation.: Nestlé (SIX: NESN) Nestlé is the world's largest food and beverage company, with a portfolio spanning coffee, bottled water, infant nutrition, and pet food. It's often held up as the archetypal "defensive" global consumer stock. Roche (SIX: ROG) and Novartis (SIX: NOVN) Two of the largest pharmaceutical companies globally, both heavily invested in oncology, immunology, and cutting-edge biotech. Together with Nestlé, these three names account for a significant proportion of the entire Swiss market's value. UBS Group (SIX: UBSG) UBS is Switzerland's largest bank and one of the world's leading wealth managers, further strengthening its market position following the acquisition of Credit Suisse. Richemont (SIX: CFR) Richemont owns globally recognised luxury brands including Cartier and Van Cleef & Arpels, providing investors with exposure to the premium luxury goods sector. ABB (SIX: ABBN) and Zurich Insurance (SIX: ZURN) ABB is a global leader in industrial automation and electrification, while Zurich Insurance is one of the world's largest insurance providers. Together, they broaden the sector diversification available within the Swiss market. The common characteristic shared by many Swiss blue-chip companies is that the majority of their revenues are generated outside Switzerland. You're not really betting on the Swiss domestic economy,but you are getting access to global consumer spending, global healthcare demand, and global wealth management, through businesses headquartered in one of the world's most stable economies. The Risks Worth Being Honest About Concentration risk Switzerland's market is dominated by a handful of global champions, including Nestlé, Roche, and Novartis. While these businesses have historically demonstrated resilience, their significant weighting means index performance can be influenced by relatively few companies. Rather than replacing your existing investments, Swiss equities can complement them by adding exposure to resilient, cash-generative businesses in sectors like healthcare, consumer staples, luxury goods, and banking—helping to diversify beyond the technology-heavy US market. Valuation Quality tends to come at a price. Blue-chip names such as Roche, Novartis, and Nestlé have historically traded at premiums due to their resilient earnings and strong competitive advantages. While Swiss equities can be a valuable addition to a diversified portfolio, investors shouldavoid assuming that quality automatically translates into superior future returns, particularly when valuations are already elevated. General market risk Like any equity market, Swiss share prices can decline as well as rise, and past resilience doesn't guarantee future performance. The Bottom Line Although Swiss stocks may not be the flashiest addition to your portfolio, it offers investors exposure to genuinely world-class, globally diversified businesses, wrapped in one of the most stable political and economic environments anywhere. For a Singapore investor already comfortable navigating US and regional markets, adding a modest allocation to Swiss equities is a reasonable way to diversify beyond the usual suspects, without taking on undue risk in the process. Getting started is simple: open an account with us, and you will have direct access to the Swiss market with every trade settled conveniently in SGD. Open an Account Now!   Explore Swiss Market Trading   For more information, you may visit the POEMS website or you can visit our website or reach out to our Night Desk representatives at 6531 1225. Frequently Asked Questions   Is Switzerland a safe market to invest in? Switzerland is widely regarded as one of the more stable markets globally, thanks to its long-standing political neutrality, low public debt, and strict regulatory environment. That said, "stable" refers to the economic and political backdrop, individual share prices still rise and fall like any equity market. Do Swiss stocks pay dividends? Yes, many of Switzerland's largest companies including Nestlé, Roche, and Novartis have long histories of consistent dividend payments. Dividends are subject to a 35% Swiss withholding tax at source, though Singapore-based individual investors are generally entitled to a reduced 15% rate under the Singapore-Switzerland tax treaty. Which Swiss companies are most popular with international investors? Nestlé, Roche, Novartis, and UBS are typically the most widely held Swiss names internationally, given their scale, global revenue base, and long operating histories. Are Swiss stocks only for large or institutional investors? No, Swiss blue chips are accessible to individual retail investors too. The main consideration is understanding sector concentration (heavy in pharma, consumer staples, and luxury) rather than any minimum investment size. What is the main index for Swiss stocks? The Swiss Market Index (SMI) is the primary benchmark, tracking roughly 20 of the largest, most liquid Swiss-listed companies. Broader indices, such as the UBS 100 Index, cover a wider slice of the market for investors seeking more diversification. How do I start investing in Swiss stocks from Singapore? Simply open an account with us. Once your account is set up, you'll have direct access to the Swiss market, with every trade settled conveniently in SGD.   DisclaimerThese 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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    This material is provided by Phillip Capital Management (S) Ltd (“PCM”) for general information only and does not constitute a recommendation, an offer to sell, or a solicitation of any offer to invest in any of the exchange-traded fund (“ETF”) or the unit trust (“Products”) mentioned herein. It does not have any regard to your specific investment objectives, financial situation and any of your particular needs. You should read the Prospectus and the accompanying Product Highlights Sheet (“PHS”) for key features, key risks and other important information of the Products and obtain advice from a financial adviser (“FA“) pursuant to a separate engagement before making a commitment to invest in the Products. In the event that you choose not to obtain advice from a FA, you should assess whether the Products are suitable for you before proceeding to invest. A copy of the Prospectus and PHS are available from PCM, any of its Participating Dealers (“PDs“) for the ETF, or any of its authorised distributors for the unit trust managed by PCM.  

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