April 20, 2015

When Bloomberg had a global blackout on Friday, I was not online thankfully. For I can well imagine the panic that an outage of such scale and duration would have elicited in me, who has never experienced that for 18 years.

Not only did the chat systems fail, which happens regularly for short intervals, the entire system was inaccessible which included the trading platform that most of the street has grown used to and for some, all they only know.

Back in the 90’s, there were alternatives. We had Reuters which operated this D2000 dealing terminals that was DOS-based in all its green and black glory. In fact D2000 was the main form of trading for most interbank folks in forex, swaps and options. I distinctly remember the trauma of each incessant beep that comes with each interbank call, jumping to attention and rushing to make a price to be transmitted and then having the finger on the “Interrupt” button to disrupt the unseen adversary before they “hit” me.

We also had the Reuters screen showing just about anything from news to live-fed prices to be customised in as small a quadrant as you would like such that you can have a page full of mini screens that was limited to the keenness of sight.

Bloomberg lent an air of finesse to the markets, making it necessary for us to remember the codes to each screen if we want to pull up global equities (WEI), futures and more. It is like a secret language much like Freemasonry hand signals that only those in the inner circle of Bloomberg users would comprehend and master only over time.

Besides, Bloomberg has always been the platform for the bond chaps and when I moved to bonds, to the higher echelons of the intellect ladder of the dealing room, it was almost snobbery to ask someone if they were “on Bloomberg” instead of commonplace Reuters where the forex chaps were to be found.

Thus, when banks started their cost cutting and justification exercises after the Lehman collapse, Reuters screens were done away with and only Bloomberg remained, all of us fully aware of the risk that Bloomberg was a private company that ran its own servers and connections in their secured in-house systems.

Michael Jackson was playing in my head as I pondered on the consequence of the event. Too big to fail? 3 bio worth of deals postponed because of a 150 min breakdown (Deals postponed after Bloomberg terminals go down in Europe and Asia). Not to mention the number of lost trades, stuck trades and

Annie, are you OK?
so, Annie, are you OK?
are you OK Annie?
you’ve been hit by
you’ve been struck by
A smooth criminal

Cyber threats and cyber security. Data security, network security, hackers, cyber drones and more.

Most companies believe they will be hacked this year, according to a poll. And some of them will not even know it. The World Economic Forum warns that it will only get worse this year.

The White House has deemed the Sony hack late last year as a national security matter. Not only was the controversial film on North Korea, The Interview, lost to them, several other unreleased films were compromised, sensitive emails were leaked and inconceivable goodwill lost.

Remember our Terminator Future piece some weeks back on drones in our lives? Well, cyber drones now outnumber humans on the internet and not all of them are as friendly as the Transformers we see in the films.

The world’s top hotels have been found to have vulnerable Wi-Fi routers putting guests at risk.

We need not look very far back to the NSA debacle of personal data breaches to feel vulnerable each time we use the internet but we continue to shop, bank and work online anyway, chancing the unlucky lottery ticket that we will be a victim. That is because even if you use a physical ATM and happen to be around the vicinity of a cyber attack drone, there is a chance you will lose your PIN number as well.

There is no way we can avoid it if the banks can’t. Earlier in February, it was unveiled that Cyber-hackers are thought to have stolen hundreds of millions of pounds from up to 100 banks and financial institutions across the world, including the UK over the last 2 years. JP Morgan customer accounts were hacked last year, 5 million Gmail passwords were leaked, 2.2 million people downloaded Expendables 3 in a leak, and many a retailer such as Target and Home Depot suffered customer information breaches last year.

Virtual currencies are not safe in their virtual vaults as we count the Bitcoins lost in numerous on line raids!

Even our Samsung TVs may be listening to us as robo-advisors dispense financial advice these days.

Needless to say, terrorists have also moved into the cyber attack arena with 19,000 websites attacked in France within a week and blacked out 11 French TV channels earlier this month.

You see, cyber crime pays alot more than cyber security. And the most talented would fall to the temptation of a crime that may never be detected. How much does a company invest in the cost centre of cyber security when the benefits are unseen? Or when the costs are difficult to estimate at best?

What can we expect?

Governments will be beefing up which is never too late, of course. Big budgets will be set for cyber security issues.  Singapore set up a Cyber Security Agency Singapore back in January with the purpose of overseeing the industry after some malicious attacks on government websites last year.


For me, I see this as a talent quest.

Cyber security experts are just about as valuable to society as doctors, architects and accountants, in that order of importance to my eccentric mind. Doctor fails, 1 patient dies. Architect fails, building collapses and hundreds die. Accountants and auditors fail and thousands will lose their jobs. Cyber security expert fails and millions will lose their passwords, bank account details and more. Cyber security companies will be in demand and I am not talking about McAfee (owned by Intel, INTL US) or Norton Antivirus (owned by Symantec, SYMC US) or Oracle (ORCL US) or Cisco (CSCO US). The IPO of the year I was eagerly awaiting for was that of Palantir Technologies but alas, they announced in Dec 2014 that they will not be pursuing an IPO (maybe till they hit Facebook valuations?).

Source: Wikipedia

As it turned out, Singapore does have a company listed in the Top 100 Hottest and Most Innovative Cybersecurity Companies to watch in 2015 list. The company is none other than i-Sprint Innovations which is owned by Automated Systems Holdings (771 HK, P/E 18.93) listed in HK which is mainly a software seller and services provider.

Chart of stock price

The other Singapore company is DMX Technologies Group which has been suspended since 19 March after reports of a HK police probe.

I am undeterred. Investments are going to soar!

Cyber security will be the investment theme of the future, for sure, even as we continue to chase those internet titans like Apple, Facebook, Google and more.

Besides the big brand names, I would also be on the lookout for takeover targets in the security space. These little companies will be prime acquisitions to augment the brand names on the hunt to bolster their foothold in the marketplace. And I would not let the reader, who has endured reading my rant till now, go without some names to work with.

BEIJING VENUST-A Shares YTD +76.83% P/E 113
Chengdu Santai A Shares YTD +78% P/E 179

Trend Micro Inc (4704 JP) YTD+20.8% P/E 24

KSign Co Ltd (192250 KS) YTD 9%
Ahnlab Inc (053800 KS) YTD 33% P/E 46

Scan Associates  ( SCAN MK) YTD 30%

F-Secure OYJ Finland (FSCV1 FH) YTD 27% P/E 27
SSH Communications Finland (SSH1V FH) YTD 133%

Fortinet Inc (FTNT US)YTD +10% P/E 215 * / **
Palo Alto Networks (PANW US) YTD 16% * / **
FireEye Inc (FEYE US) YTD 29% P/E 41 **
Aruba Networks (ARUN US) YTD 35% P/E 700
Barracuda Networks (CUDA US) YTD 21% P/E 450
Check Point Software (CHKP US) YTD 4% P/E 24 *

*Marketwatch: The 3 Best Cybersecurity Stocks You Can Buy Today 

**CNBC: Cramer’s top stocks for safety 

I shudder every time I login to electronic banking these days. Nothing will ever be safe again. But rest assured, they are going to be spending a pretty penny to make us feel better and that Annie Is Ok.