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WannaCry attack good news for cyber-safety services

New York Call it the flight to cyber-safety. After a wave of global online attacks over the weekend, companies, such as FireEye, that provide software security services gained on Monday on speculation that the exposed weaknesses may trigger a surge in security spending. The $967m PureFunds ISE Cyber Security ETF, or HACK, jumped the most in six months. The malware unleashed late last week used a technique purportedly stolen from the US National Security Agency. It s affecting companies, including FedEx and government agencies such as the UK s National Health Service. More than 200,000 computers in at least 150 countries have been infected, according to Europol, the EU s law enforcement agency. Last Thursday, President Donald Trump signed an executive order to focus attention on cyber-security improvements. Along with the attack, “we see both of these events as incrementally positive for cyber-security spend,” Pierre Ferragu, an analyst at Sanford C Bernstein & Co, wrote in a note on Monday. “The opinion of enterprise decision-makers is heavily influenced by such events, and this one is likely to support spending decisions.”

The HACK fund has benefited from headline-grabbing online crime before. The PureFunds ETF had one of the most successful debuts in history after investors poured $1.4bn into the fund following a breach at Sony Pictures Entertainment.

On Monday, the fund gained 3.2% to $30.69, the highest in almost two years, as of 10.03am in New York. FireEye the stock with the biggest weighting in HACK gained 6.8%. The ransomware used by hackers encrypted files within affected computers, making them inaccessible, and demanded ransoms typically $300 in bitcoin. After the first wave of attacks on Friday, bitcoin fell 7.1%, its biggest slide in almost two months. The digital currency pared some of those loses Monday, gaining 3.2%. UK healthcare services were among those hit, as health stocks dipped 0.8% during Monday trading. Yet losses were minimised as government agencies began to gain the upper hand. About 97% of UK facilities and doctors disabled by the attack were back to normal operation, UK Home Secretary Amber Rudd said on Saturday after a government meeting.

Bloomberg

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