Category: 3. Business

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Traders are piling into bets that Wednesday’s Budget will push the pound lower against the dollar, on fears that chancellor Rachel Reeves’ tax-raising measures could hurt the UK’s already-weak economic growth.

Trading volumes in put options, used to speculate on or hedge against a fall in the pound, have outstripped those of bullish call options by more than four to one over the past week, according to derivatives firm CME Group. 

That rush of bets on weaker sterling is “pointing to a market that is well positioned for a challenging outcome” for the pound, said Dominic Bunning, head of G10 FX strategy at Nomura.

Weaker than expected economic growth and a fall in inflation in recent weeks have already encouraged traders to intensify their bets on interest rate cuts, which weigh on the attractiveness of a currency.

Many investors think sterling, which is close to its weakest level against the dollar since April at about $1.30, could suffer further at the Budget if Reeves’ tax and spending plans darken the economic outlook — or if they are poorly received by investors already skittish about excessive government borrowing and the Labour leadership’s ability to push through its economic plans.

“It is hard to see how Reeves delivers an outcome which looks bullish [for] UK growth, in a way which would favour the pound,” said Mark Dowding, fixed income chief investment officer at RBC BlueBay Asset Management, adding that the risk of a negative Budget putting pressure on the Labour leadership could also push the pound lower.

Dowding has been betting the pound will weaken against the euro — against which it hit a more than two-year low this month — and the dollar in recent weeks, primarily through currency forwards, another common type of contract.

Some investors are also hoping for measures that will actively push down on inflation, such as reducing value added tax on energy bills. That could weigh on the pound by clearing the way for swifter Bank of England rate cuts.

Sterling puts expiring on Budget day are also significantly more expensive than calls, CME data shows, suggesting that traders think Reeves’ tax plans are more likely to be greeted by sterling weakness than strength.

This so-called skew is at its most pronounced since January, when traders were positioned for a period of sterling weakness around the inauguration of US President Donald Trump. The dollar, which then tumbled over the first half of the year, has stabilised against the pound and other currencies in recent months.

“We are seeing people trade sterling puts more intensively,” said Chris Povey, head of FX options at CME Group.

However, if Reeves is able to create sufficient fiscal headroom for herself, dispel fears of further tax rises next year and deliver better news on growth, sterling could rally, say analysts.

The Budget could serve as a “release valve” for the pound, said Kamal Sharma, director of G10 FX strategy at Bank of America. “[It is] the single most significant binary event of the year for sterling.”

Others warn that concerns over government debt levels could knock sterling, given the doubts over the amount of money Reeves can raise without increasing income tax, as had previously been planned before a U-turn earlier this month.

“If the market does not see enough signs of fiscal consolidation and credibility,” Nomura’s Bunning warned, there is a risk that the pound sells off with long-dated gilts, “a tie-up that has become a bit more frequent in recent years”.

He pointed to weakness in sterling assets in recent weeks on concerns about a potential challenge to Prime Minister Sir Keir Starmer from the left of the ruling Labour party.

“I haven’t heard anyone say good news about sterling or the UK in the last three months,” said Steve Englander, head of FX research at Standard Chartered, pointing to the UK’s “undynamic economy”, high government spending and its limited revenue-raising options given its promises not to raise taxes such as income tax and VAT.

At a high level, ammonia seems like a dream fuel: It’s carbon-free, energy-dense, and easier to move and store than hydrogen. Ammonia is also already manufactured and transported at scale, meaning it could transform energy systems using existing infrastructure. But burning ammonia creates dangerous nitrous oxides, and splitting ammonia molecules to create hydrogen fuel typically requires lots of energy and specialized engines.

The startup Amogy, founded by four MIT alumni, believes it has the technology to finally unlock ammonia as a major fuel source. The company has developed a catalyst it says can split — or “crack” — ammonia into hydrogen and nitrogen up to 70 percent more efficiently than state-of-the-art systems today. The company is planning to sell its catalysts as well as modular systems including fuel cells and engines to convert ammonia directly to power. Those systems don’t burn or combust ammonia, and thus bypass the health concerns related to nitrous oxides.

Since Amogy’s founding in 2020, the company has used its ammonia-cracking technology to create the world’s first ammonia-powered drone, tractor, truck, and tugboat. It has also attracted partnerships with industry leaders including Samsung, Saudi Aramco, KBR, and Hyundai, raising more than $300 million along the way.

“No one has showcased that ammonia can be used to power things at the scale of ships and trucks like us,” says CEO Seonghoon Woo PhD ’15, who founded the company with Hyunho Kim PhD ’18, Jongwon Choi PhD ’17, and Young Suk Jo SM ’13, PhD ’16. “We’ve demonstrated this approach works and is scalable.”

Earlier this year, Amogy completed a research and manufacturing facility in Houston and announced a pilot deployment of its catalyst with the global engineering firm JGC Holdings Corporation. Now, with a manufacturing contract secured with Samsung Heavy Industries, Amogy is set to start delivering more of its systems to customers next year. The company will deploy a 1-megawatt ammonia-to-power pilot project with the South Korean city of Pohang in 2026, with plans to scale up to 40 megawatts at that site by 2028 or 2029. Woo says dozens of other projects with multinational corporations are in the works.

Because of the power density advantages of ammonia over renewables and batteries, the company is targeting power-hungry industries like maritime shipping, power generation, construction, and mining for its early systems.

“This is only the beginning,” Woo says. “We’ve worked hard to build the technology and the foundation of our company, but the real value will be generated as we scale. We’ve proved the potential for ammonia to decarbonize heavy industry, and now we really want to accelerate adoption of our technology. We’re thinking long term about the energy transition.”

Unlocking a new fuel source

Woo completed his PhD in MIT’s Department of Materials Science and Engineering before his eventual co-founders, Kim, Choi, and Jo, completed their PhDs in MIT’s Department of Mechanical Engineering. Jo worked on energy science and ran experiments to make engines run more efficiently as part of his PhD.

“The PhD programs at MIT teach you how to think deeply about solving technical problems using systems-based approaches,” Woo says. “You also realize the value in learning from failures, and that mindset of iteration is similar to what you need to do in startups.”

In 2020, Woo was working in the semiconductor industry when he reached out to his eventual co-founders asking if they were working on anything interesting. At that time, Jo was still working on energy systems based on hydrogen and ammonia while Kim was developing new catalysts to create ammonia fuel.

“I wanted to start a company and build a business to do good things for society,” Woo recalls. “People had been talking about hydrogen as a more sustainable fuel source, but it had never come to fruition. We thought there might be a way to improve ammonia catalyst technology and accelerate the hydrogen economy.”

The founders started experimenting with Jo’s technology for ammonia cracking, the process in which ammonia (NH₃) molecules split into their nitrogen (N₂) and hydrogen (H₂) constituent parts. Ammonia cracking to date has been done at huge plants in high-temperature reactors that require large amounts of energy. Those high temperatures limited the catalyst materials that could be used to drive the reaction.

Starting from scratch, the founders were able to identify new material recipes that could be used to miniaturize the catalyst and work at lower temperatures. The proprietary catalyst materials allow the company to create a system that can be deployed in new places at lower costs.

“We really had to redevelop the whole technology, including the catalyst and reformer, and even the integration with the larger system,” Woo says. “One of the most important things is we don’t combust ammonia — we don’t need pilot fuel, and we don’t generate any nitrogen gas or CO₂.”

Today Amogy has a portfolio of proprietary catalyst technologies that use base metals along with precious metals. The company has proven the efficiency of its catalysts in demonstrations beginning with the first ammonia-powered drone in 2021. The catalyst can be used to produce hydrogen more efficiently, and by integrating the catalyst with hydrogen fuel cells or engines, Amogy also offers modular ammonia-to-power systems that can scale to meet customer energy demands.

“We’re enabling the decarbonization of heavy industry,” Woo says. “We are targeting transportation, chemical production, manufacturing, and industries that are carbon-heavy and need to decarbonize soon, for example to achieve domestic goals. Our vision in the longer term is to enable ammonia as a fuel in a variety of applications, including power generation, first at microgrids and then eventually full grid-scale.”

Scaling with industry

When Amogy completed its facility in Houston, one of their early visitors was MIT Professor Evelyn Wang, who is also MIT’s vice president for energy and climate. Woo says other people involved in the Climate Project at MIT have been supportive.

Another key partner for Amogy is Samsung Heavy Industries, which announced a multiyear deal to manufacturing Amogy’s ammonia-to-power systems on Nov. 12.

“Our strategy is to partner with the existing big players in heavy industry to accelerate the commercialization of our technology,” Woo says. “We have worked with big oil and gas companies like BHP and Saudi Aramco, companies interested in hydrogen fuel like KBR and Mitsubishi, and many more industrial companies.”

When paired with other clean energy technologies to provide the power for its systems, Woo says Amogy offers a way to completely decarbonize sectors of the economy that can’t electrify on their own.

“In heavy transport, you have to use high-energy density liquid fuel because of the long distances and power requirements,” Woo says. “Batteries can’t meet those requirements. It’s why hydrogen is such an exciting molecule for heavy industry and shipping. But hydrogen needs to be kept super cold, whereas ammonia can be liquid at room temperature. Our job now is to provide that power at scale.”

At a time where demand for high-speed, resilient network services is constantly increasing, RailTel has put its trust in Nokia to ensure its critical network modernization project is successful. We have unmatched credentials in supporting open network architectures which integrate into any customer ecosystem, and the use of our latest set of IP routers and optical transponders will help RailTel to reduce costs and improve operational efficiency.”

Prashant Malkani, Head of Sales, Network Infrastructure, India, Nokia

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Unlock the Editor’s Digest for free

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

UK higher education, long one of the country’s leading service exports, is experiencing its sharpest slowdown in years as visa curbs and proposed levies squeeze overseas demand and university finances.

Business schools — which provide UK universities with about a third of international students and the largest share of income from all tuition fees — are particularly exposed, with two in three students coming from overseas.

That dependence is proving costly: the Chartered Association of Business Schools (CABS) says international postgraduate enrolments fell this year at nearly two-fifths of UK schools, although this was an improvement on three-quarters the previous year. Many in the sector believe MBAs have borne the brunt of the ban on most overseas students bringing dependants.

Meanwhile European schools saw a marked rise in applications across programmes, according to the Graduate Management Admission Council.

The restrictions have had a personal impact on candidates like Ricardo Urso, a Brazilian MBA student at Alliance Manchester Business School in north-west England, whose wife and daughters were barred from joining him in the UK this year.

“This is the first time in 13 years of marriage I’ve moved to another country without my wife. It’s been hard being away from my family,” says Urso, an entrepreneur who co-founded a financial advisory firm in Brazil.

Despite the separation, Urso says the UK remained the best option for his MBA, citing its strong academic reputation and value for money in Manchester. “It’s one of the UK’s largest regional economies, and living costs are significantly lower than in London,” he says.

Urso’s choice reflects the UK’s enduring pull. The 2025 Business of Branding survey by education consultancy CarringtonCrisp shows the UK tops the list of destinations considered by potential business students.

But schools warn that the advantage is narrowing as tighter visa and post-study minimum salary rules risk curbing competitiveness. There is concern about plans to shorten the Graduate Route visa — the time most graduates can stay in the UK after study — from two years to 18 months from 2027, and for a levy on international student fees.

“Uncertainty around the post-study work visa has made some students more hesitant about choosing the UK,” says André Spicer, executive dean of Bayes Business School in London.

Figures from the Graduate Management Admission Council show applications to UK postgraduate business programmes slipped 4 per cent this year. The decline is reflected across higher education: the UK issued 403,497 study visas to overseas students in the year to March 2025, 10 per cent down on the year before. 

Madeleine Sumption, director of the Migration Observatory at Oxford university, points out that overall international student numbers remain high by historical standards. Sumption says that global macroeconomics, not just UK policy, explains part of the post-Covid downturn. “Nigeria had a currency crisis, followed by a big decrease in the numbers coming to the UK,” she notes, for example.

Business schools are central to the UK higher education sector’s finances. Stewart Robinson, chair of CABS, says there have been “significant financial cuts” with “more and more institutions going into redundancies”.

The strains come after UK business schools weathered Brexit better than many feared, offsetting a sharp fall in EU enrolments with rising demand from outside Europe. That resilience is now being tested.

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Even so, pockets of the sector remain strong. Ken McPhail, head of Alliance MBS, says the UK market is fragmenting, with growth in digital skills programmes but weaker demand elsewhere.

McPhail also points to signs of international demand shifting to undergraduate courses at his school. “Economic development has led to a significant increase in families able to fund education abroad at an earlier age,” he says.

UK universities face additional financial strain. A proposed 6 per cent levy on overseas tuition fees in England — intended to fund domestic skills programmes — would strip about £621mn a year from their budgets, according to the Higher Education Policy Institute think-tank. Jamie Arrowsmith, director at Universities UK International (UUKI), which represents the sector globally, warns the levy would force institutions to cover the loss with money that would otherwise support research and teaching. “It’s in effect taxing international student fees,” he says.

Many universities forecast deficits, hit by the new levy and fewer international students than expected. Sergei Guriev, dean of London Business School, says passing on the additional cost is not an option, citing students’ sensitivity to price and exchange rates. A weaker dollar has made tuition at UK institutions relatively more expensive for those paying in US currency, adding to the pressure.

Guriev says London remains a major asset for business schools, offering access to global employers and talent. “London is a bigger business capital than Fontainebleau,” he says, referring to Insead in France. But he adds that the UK’s sluggish economy and its effect on job opportunities is beginning to blunt the capital’s edge.

The slowdown matters: UUKI says that international students from the 2021-22 cohort contributed a net £37.4bn to the UK economy. Facing leaner years ahead, business schools are diversifying recruitment towards south-east Asia and parts of Africa, according to CABS.

Sector leaders are now calling for policy stability to restore confidence among international students and protect the UK’s global standing. Arrowsmith says: “We need consistency and a clear message that international students are welcome.” 

• Ever wondered if Thermo Fisher Scientific’s stock is truly worth its current price? Let’s dive into what those numbers may be telling us.

• The share price has climbed an impressive 14.4% over the past year, with a 12.2% gain so far in 2024. This signals growing investor confidence and possible changes in how the market perceives the company’s risks and rewards.

• Recently, Thermo Fisher has been in the spotlight after expanding partnerships with major pharmaceutical players and making acquisitions aimed at boosting its life sciences capabilities. These moves have not only captured the industry’s attention but may also have played a role in the recent share price uplift.

• According to Simply Wall St’s value checks, Thermo Fisher Scientific scores a 3 out of 6 on the undervalued scale. This gives us a jumping-off point for examining how the market values this stock. Stay tuned, as we will unpack commonly used valuation approaches and reveal what might be an even smarter way to think about valuation later in the article.

Thermo Fisher Scientific delivered 14.4% returns over the last year. See how this stacks up to the rest of the Life Sciences industry.

The Discounted Cash Flow (DCF) model estimates a company’s true value by projecting its future cash flows and then discounting those amounts back to today’s dollars. This approach aims to capture the intrinsic worth of Thermo Fisher Scientific based solely on its ability to generate cash in the years ahead.

Currently, Thermo Fisher Scientific reports a Free Cash Flow (FCF) of $6.1 Billion. Analyst forecasts show FCF rising steadily each year, reaching a projected $11.3 Billion by 2029. While these analyst estimates extend for about five years, forecasts beyond that are extrapolated to provide a longer-term picture of cash generation potential.

According to the DCF analysis, Thermo Fisher Scientific’s intrinsic value stands at $605.35 per share. Based on recent share prices, the stock is trading at about a 3.2% discount to this estimated fair value. This suggests the market price and the underlying value are quite closely aligned.

Result: ABOUT RIGHT

Thermo Fisher Scientific is fairly valued according to our Discounted Cash Flow (DCF), but this can change at a moment’s notice. Track the value in your watchlist or portfolio and be alerted on when to act.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Thermo Fisher Scientific.

For profitable companies like Thermo Fisher Scientific, the Price-to-Earnings (PE) ratio is one of the most widely used methods to gauge valuation. This metric compares a company’s share price to its per-share earnings, making it particularly useful for investors trying to determine if a stock is expensive or attractively priced relative to profits.

The appropriate, or “fair,” PE ratio for a company reflects expectations of both future growth and risk. Companies with higher growth prospects or lower risk usually command higher multiples, while those facing uncertainty or slower growth often see lower ratios.

Thermo Fisher Scientific has a current PE ratio of 33.5x. This compares with an industry average of 35.7x and a peer average of 36.9x, suggesting its valuation is slightly lower than its sector peers. However, industry averages do not tell the full story as they may not factor in Thermo Fisher’s unique growth, profitability, and risk profile.

Simply Wall St provides a “Fair Ratio” calculation, which considers factors like the company’s earnings growth, profit margins, industry sector, size, and risks. With a Fair Ratio for Thermo Fisher of 29.9x, we see that the stock’s current multiple is only marginally higher than what we’d expect for a business like this. Unlike comparisons to peers or industry averages, the Fair Ratio gives a more tailored assessment by blending all the relevant fundamentals.

Given the small difference between the Fair Ratio (29.9x) and Thermo Fisher’s current PE (33.5x), the stock appears to be priced about right by this measure, neither substantially overvalued nor undervalued.

Result: ABOUT RIGHT

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1440 companies where insiders are betting big on explosive growth.

Earlier we mentioned that there is an even better way to understand valuation, so let’s introduce you to Narratives. A Narrative is a simple, approachable tool that lets investors tell the story behind their numbers by combining their perspective on a company’s future (like assumptions about fair value, future revenue, earnings, and margins) with a clear financial forecast and estimated fair value.

By connecting Thermo Fisher Scientific’s business story to concrete projections, then comparing that fair value to the current price, Narratives help you make buy or sell decisions with more confidence and transparency. These are available to all users on Simply Wall St’s Community page, making powerful valuation tools accessible to millions of everyday investors.

One major advantage is that Narratives update automatically as new information comes in, whether it is earnings reports or industry news, ensuring your investment case stays relevant. For example, based on recent perspectives, one investor’s bullish Narrative might see Thermo Fisher’s fair value at $767 per share, factoring in strong R&D growth and margin expansion. A more cautious Narrative might set fair value at $490, emphasizing sector headwinds and regulatory risks. Narratives empower you to clearly see which story you believe, adjust with real-time facts, and make wiser decisions as new data emerges.

For Thermo Fisher Scientific, however, we’ll make it really easy for you with previews of two leading Thermo Fisher Scientific Narratives:

• 🐂 Thermo Fisher Scientific Bull Case

  Fair value: $613.58

  Currently trading at 4.5% below this fair value

  Revenue growth assumption: 5.2%

  • Analysts see consistent expansion in pharma manufacturing, innovation in analytical tools, and deeper customer relationships as engines of long-term recurring revenue and competitive advantage.

  • Cost discipline, AI-driven productivity, and ongoing acquisitions are forecast to boost margins and support sustainable returns even if core demand is muted.

  • Risks include uncertainty in academic/government funding, margin pressure from global headwinds, and some leadership transition risk. The consensus price target sits well above current prices.

• 🐻 Thermo Fisher Scientific Bear Case

  Fair value: $540.27

  Currently trading at 8.5% above this fair value

  Revenue growth assumption: 7%

  • Demand resilience and recurring revenues from services and consumables underpin stability, but pandemic-related tailwinds are fading and M&A integration poses new challenges.

  • Long-term catalysts include growth in personalized medicine and emerging markets. Regulatory hurdles, macro slowdowns, or acquisition overreach could weigh on future results.

  • Valuation is seen as fair but no longer deeply discounted, so further upside relies on TMO outperforming already strong expectations while avoiding sector or execution risks.

Do you think there’s more to the story for Thermo Fisher Scientific? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include TMO.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com

US dollar strength drives AUD/USD lower amid global risk aversion

AUD/USD finished lower last week at 0.6455, down 1.22%. The decline came against a backdrop of broad-based US dollar, with the US Dollar Index (DXY) hitting its highest level since late May.

The big dollar’s rally was fuelled by a combination of risk-aversion flows, disappointing economic data out of Europe and the United Kingdom, and a sharp sell-off in the Japanese yen ahead of the sizeable fiscal stimulus package formally approved on Friday. Reinforcing the move, several regional Federal Reserve (Fed) presidents sounded hawkish, expressing concerns about additional rate cuts due to lingering inflation risks.

Dovish tone emerges ahead of December meeting

However, that hawkish tilt began to reverse on Friday when New York Fed President John Williams indicated he still saw scope to lower rates further ‘in the near term’. The dovish message gained further traction overnight when Fed Governor Christopher Waller noted that the recent softening in the labour market made a December rate cut quite plausible.

The probability of a 25 basis point (bp) cut at the 10 December Federal Open Market Committee (FOMC) meeting has surged from around 30% in the middle of last week to approximately 80% now. This rapid repricing of Fed expectations has provided immediate support to AUD/USD and other risk-sensitive assets, allowing the pair to stabilise into the Friday close and extend a modest recovery into the early part of this week.

Key drivers ahead

Whether a stronger bounce can follow will depend on several key drivers:

1. It is crucial that risk sentiment remains stable.
2. Month-end rebalancing flows are expected to support the Australian dollar due to the Australian stock market’s underperformance this month.
3. The market will be influenced by upcoming US data releases tonight, including the producer price index (PPI), retail sales and consumer confidence, followed by an inflation update in Australia tomorrow previewed below.
4. Tomorrow’s Reserve Bank of New Zealand (RBNZ) interest rate meeting. While a 25 bp rate cut is widely expected, a larger 50 bp cut cannot be ruled out, which would weigh heavily on NZD/USD and, to a lesser extent, AUD/USD.

October inflation

Date: Wednesday, 26 November at 11.30am AEDT

Australia is transitioning from a quarterly to a full monthly consumer price index (CPI) as its primary measure of headline inflation – a change that will start this Wednesday. This alignment with other Group of Twenty (G20) countries will facilitate easier comparisons of inflation trends with other advanced economies.

There is ongoing debate about whether the new monthly data should be compared with the previous quarterly figures or the last monthly CPI indicator, and it will take time before the Reserve Bank of Australia (RBA) can fully rely on the monthly CPI for a complete and accurate assessment of inflation pressures compared to the more consistent quarterly data.

Although neither option provides a perfect comparison, we have opted to go with the recently released third quarter (Q3) numbers for clarity. In Q3 2025, headline CPI rose 1.3% quarter-on-quarter (QoQ), bringing the annual rate to 3.2% year-on-year (YoY), up from 2.1% previously. The trimmed mean increased 1.0% QoQ, lifting its annual rate to 3.0% YoY from 2.7%, marking the first increase since December 2022.

Following this, expectations are for a monthly increase of 3.6% over the year and for a reading of 2.9% for the trimmed mean. The Australian interest rate market starts the day pricing in 2 bp of easing for the RBA’s December meeting, with roughly 13 bp of cuts anticipated by May 2026.

 All groups CPI and trimmed mean chart

Embracing the future: next-gen railway asset lifecycle management for a growing market

The global rail market is expansive, and revenues are projected to grow by 19% by the year 2029. This growth brings with it an urgent demand for next-gen railway asset management systems. Now is the time for the sector to embrace the technologies that make smart railway asset management possible.

As the rail sector continues to evolve, asset owners and operators (AOOs) face a complex landscape shaped by legacy infrastructure, sustainability pressure, and rapid digitalization. Today’s challenges demand a strategic rethink of railway asset lifecycle management.

Currently, asset value is primarily concentrated in just a handful of countries, underlining the need for targeted investment and innovation. To address this, the industry is increasingly turning to smart asset strategies and adopting business models that prioritize modern technologies and collaborative ecosystems. These approaches are essential for building resilient, efficient, and sustainable rail networks.

Capgemini is exploring how advanced analytics, digital twins for capital projects, and other intelligent solutions are redefining asset lifecycle management for railways – empowering the sector to meet rising expectations for safety and performance.

Enhance your rail asset management system

Railway asset management is being completely transformed to ensure a safer, more resilient future for the global rail sector. By addressing legacy challenges and climate risks with smart technologies and collaborative approaches with next-gen solutions like complex infrastructures digital twins, asset owners and operators can achieve safer, more efficient, and resilient operations – laying the foundation for long-term value and reliable mobility.

Climate adaptation has emerged as one of the defining priorities of our time. Nowhere is this challenge more acute than in the ASEAN region, where climate-related risks—rising sea levels, floods, droughts, and extreme heat—threaten the foundations of economic stability, livelihoods, and ecosystems. Addressing these risks requires mobilizing enormous levels of finance—both public and private—and ensuring that investments are aligned with resilience outcomes.

A new white paper, the first output from a collaboration among the ASEAN Capital Markets Forum (ACMF), Sustainable Finance Institute Asia (SFIA), and United Nations Environment Programme Finance Initiative (UNEP FI),^* lays the groundwork for a forthcoming guide that aims to channel more finance towards building adaptation and resilience capacity in support of Environmental Objective (EO) 2 of the ASEAN Taxonomy for Sustainable Finance (ASEAN Taxonomy). The work is financially and technically supported by the European Union Sustainable Finance Advisory Hub (EUSFAH), which promotes interoperable and credible sustainable finance frameworks globally.

The ASEAN Taxonomy is a valuable tool for governments and the private sector to identify economic activities in the region that support climate-positive outcomes and other sustainability goals—and in turn, to finance aligned activities. Taxonomies have proven instrumental in directing capital towards mitigation, but additional information to provide clear, sector-specific guidance for assessing what qualifies as an “adaptation-aligned” investment can enhance the orientation of capital towards adaptation. The additional guidance can be useful for financial institutions to identify, assess, and report on credible adaptation opportunities—promoting the flow of private finance into projects that build resilience.

To address this, ACMF, chaired by SC Malaysia, in collaboration with UNEP FI, will develop a mitigation co-benefit and Adaptation for Resilience (mARs) Guide to serve as a companion to the ASEAN Taxonomy, providing the methodological foundation for identifying the key principles and sectoral priorities that can enhance the functionality and usability of the taxonomy to channel  adaptation finance.

The new white paper marks the first phase of the collaboration among the EUSFAH, UNEP FI, ACMF, and SFIA to translate high-level objectives into practical guidance that financial institutions, regulators, and issuers can apply when identifying, assessing, and tracking adaptation-aligned investments, and aims to catalyze adaptation finance in the region.

“The ACMF is committed to advancing sustainable finance in the region. The mARs Guide will complement the ASEAN Taxonomy by providing practical tools for adaptation finance, ensuring that our markets remain resilient and future-ready. This white paper outlines the key elements and considerations that will guide the development of the mARs Guide, and highlights the need to address the adaptation funding gap, through mechanisms such as blended finance, which is key to funding non-bankable but necessary projects.”

– Dato’ Mohammad Faiz Azmi, Chairman of the Securities Commission Malaysia, the current Chair of the ACMF

Strengthening adaptation finance in ASEAN

The white paper highlights that adaptation finance remains significantly underfunded compared to mitigation, with current flows falling far short of the scale required to protect communities and markets. As detailed in UNEP’s latest Adaptation Gap Report, developing countries require between USD 310 billion and USD 365 billion annually by 2035 to meet climate adaptation needs, yet only approximately USD 26 billion was available from international public finance in 2023. Mobilizing both public and private capital toward resilience outcomes is therefore an urgent priority.

Taxonomies play a critical role in mobilizing finance by providing a common language and classification system that helps investors, regulators, and issuers identify credible activities, including adaptation-aligned activities, and channel capital toward them with confidence. UNEP FI’s earlier analysis of ASEAN Member States’ sustainable finance taxonomies shows increasing alignment between domestic taxonomies and the regional ASEAN Taxonomy in areas such as climate change mitigation, adaptation, biodiversity, and circular economy priorities. The mARs Guide builds on this progress by offering the practical detail and sector-level guidance needed for financial institutions to integrate adaptation criteria into investment decisions, product design, and disclosure frameworks.

By mapping national adaptation priorities across ASEAN Member States, the white paper identifies areas of convergence that can serve as a regional baseline for adaptation-aligned finance. It also proposes for discussion a set of key principles for the mARs Guide, which complement the existing Five Core Principles of the ASEAN Taxonomy and its Guiding Principles for EO2. The proposed principles for the mARs Guide underscore that the guide would be:

• Science-based and evidence-led
• Context-relevant and locally prioritized
• Inclusive across AMS
• Maladaptation risk management (uncertainty-aware)
• Interoperable and comparable
• Usable for finance and the real economy

Together, these findings and principles establish the methodological foundation for the mARs Guide to become a key regional reference. They also highlight how it can complement the ASEAN Taxonomy and support the application of existing assessment requirements by providing more detailed information on adaptation-relevant technologies and activities, as well as additional guidance in conducting maladaptation and climate risk and vulnerability assessments.

“This white paper is a critical step in building the foundations for adaptation finance in ASEAN. By aligning financial flows with resilience outcomes, the mARs Guide will help ensure that capital markets play their part in safeguarding communities and ecosystems against climate risks.”

– Eric Usher, Head of UNEP FI

A long-term, collaborative effort

Financial institutions and market participants from across ASEAN have contributed valuable feedback throughout the process, helping to ensure that as the mARs Guide is developed, it will reflect both climate science and practical considerations. This multi-stakeholder exchange underscores the importance of dialogue between the public and private sectors in advancing a coherent, proportionate, and credible policy enabling environment for adaptation finance.

“Our mitigation efforts need to be supported by adaptation action as climate change impacts intensify. Guided by the key principles set out in the white paper, the mARs Guide will be developed to help providers and users of finance identify the technologies and approaches that capital should support to achieve the paradigm shift needed for resilience.”

– Eugene Wong, CEO of SFIA

UNEP FI is supporting the ACMF’s work in partnership with SFIA and a broad community of technical experts and financial institutions, in close consultation with the ASEAN Taxonomy Board. The European Union’s Sustainable Finance Advisory Hub (EUSFAH) has provided technical and financial support to this project.

The next phases of work—carrying through 2026 and 2027 with SEC Philippines and Monetary Authority of Singapore here as succeeding Chair of ACMF, respectively—will build on these principles to develop operational guidance and practical tools that under the mARs Guide. Stakeholders are encouraged to engage with the process and contribute to the development of the Guide. By working together, ASEAN can build a financial system that mobilizes more investments towards the decarbonization of the region, while enhancing its resilience and adaptive capacity.

 

 

 

* About the partners involved in the collaboration

ASEAN Capital Markets Forum (ACMF): The ACMF is a high-level grouping of capital market regulators from all 11 ASEAN jurisdictions, namely Brunei Darussalam, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, Philippines, Singapore, Thailand, Timor-Leste and Vietnam. The ACMF’s primary goal is to develop a deep, liquid and integrated regional capital market.

ASEAN Taxonomy Board (ATB): The ATB was set up in 2021 under the auspices of the ASEAN Finance Ministers and Central Bank Governors’ Meeting (AFMGM) and is jointly driven by the ACMF, ASEAN Insurance Regulators Meeting (AIRM), the Senior Level Committee on Financial Integration (SLC) and the Working Committee on Capital Market Development (WC-CMD). Its establishment is a response to the call at the 6th AFMGM to work towards “furthering a cohesive sustainable finance agenda cutting across banking, capital markets and insurance areas at the ASEAN Finance Ministers’ Meeting and AFMGM respectively, with greater coordination amongst the relevant ASEAN working committees.”

Securities Commission Malaysia (SC): The SC was established on 1 March 1993 under the Securities Commission Act 1993 (SCA). It is a self-funded statutory body entrusted with the responsibility to regulate and develop the Malaysian capital market. Its mission is to promote and maintain fair, efficient, secure and transparent securities and derivatives markets; and facilitate the orderly development of an innovative and competitive capital market.

Sustainable Finance Institute Asia (SFIA): SFIA is an independent institute established to catalyse ideas on sustainable finance at the policy level, as well as propel action in support of those policy ideas in Asia, particularly in ASEAN. It aims to provide thought leadership and act as a one stop centre for sustainable finance in ASEAN through collaborations with governments, regulators, central banks, multilateral development banks, industry, academia and non-governmental organisations.

The EU Sustainable Finance Advisory Hub: The EU Sustainable Finance Advisory Hub is a technical assistance facility funded by the EU and BMZ. It supports low and middle income countries in developing credible and interoperable sustainable finance taxonomies tailored to their environmental, social, and economic contexts.

UNEP Finance Initiative (UNEP FI): UNEP FI brings together a large network of banks, insurers, and investors that collectively catalyzes action across the financial system to deliver more sustainable global economies. Financial institutions work with UNEP FI on a voluntary basis, and UNEP FI helps them to apply the industry frameworks and develop practical guidance and tools to position their businesses for the transition to a sustainable and inclusive economy.

By Emily Bary

Meta reportedly is considering using Alphabet’s custom chips for its data centers. Nvidia and AMD shares fall on the prospect of more formidable semiconductor competition.

Google designs in-house chips in partnership with Broadcom.

Meta Platforms investors may not know how to feel about the Facebook parent company’s stepped-up artificial-intelligence investments lately, but Alphabet investors seem to be liking the sound of them.

Shares of Alphabet (GOOG) (GOOGL) rose 2.7% in after-hours trading Monday, toward fresh highs, after The Information reported that Meta (META) was considering outfitting its data centers with perhaps billions of dollars’ worth of custom chips from Google.

The prospect of this development positions Alphabet as a more foreboding rival to Nvidia (NVDA) and Advanced Micro Devices (AMD) in the red-hot market for AI infrastructure.

Representatives from Meta and Google didn’t immediately respond to a MarketWatch request for comment.

For Google, the report is the latest signal of broad-based AI momentum. The company said it trained its new Gemini 3 model on tensor processing units, its custom chips, and there seems to be growing outside interest in Google’s semiconductor work.

See more: Google may be Nvidia’s biggest rival in chips – and now it’s upping its game

Alphabet shares have surged 68% so far in 2025, with most of that coming in the past few months, reflecting optimism about Google’s TPU business as well as its Gemini AI model. The latest version has won praise in the technology world, reinforcing a view that Google is positioned to be an AI winner, perhaps at the expense of OpenAI.

Shares of Alphabet’s suppliers continued to rise in conjunction with Google’s momentum. Broadcom shares (AVGO) advanced 1.7% in Monday’s extended trading, as the company partners with Alphabet on the TPUs. Celestica (CLS) and Lumentum Holdings (LITE), two optical suppliers whose stocks saw outsize increases in Monday’s regular session, added to their gains in the aftermarket.

Don’t miss: Broadcom and these AI stocks are surging as plays on Alphabet’s rapid rise

Meta shares ended fractionally higher in Monday’s extended session. The company’s talk of heightened AI spending spooked Wall Street in the wake of the company’s last earnings report in late October, with investors still unsure about whether the company will be able to monetize all its AI investments. Meta said that AI has helped it improve advertising products and recommendation engines, but the company has struggled to match rivals in terms of momentum for its AI chatbot.

Meanwhile, an emerging narrative in the AI trade is that what’s good for Google and its universe of suppliers isn’t necessarily good for AI players generally. Google’s TPUs are a type of application-specific integrated circuit, and the debate over ASICs versus graphics processing units, like those made by Nvidia and AMD, is nothing new. But Google’s apparent internal and external momentum for its TPUs suggests budding competition for Nvidia, by far the most dominant seller of AI hardware to a broad list of customers, and AMD, which already has a relationship with Meta and has been trying to win more GPU business.

See more: Google is crushing it. Why that’s worrying investors in Nvidia and other AI stocks.

Shares of Nvidia and AMD each lost more than 1% in Monday’s after-hours trading.

-Emily Bary

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