Cyber ​​Security: Which security stocks are benefiting from cyber attacks

by Jörg Billina, Euro on Sunday

The European Network and Information Security Agency (ENISA) has sounded the alarm: Russia is threatening to expand its cyber attacks, which have been targeting Ukraine in recent months, to western states in retaliation for western sanctions. Government agencies, communication structures, administrations, electricity suppliers and companies are at risk from “distributed denial of service” attacks. Servers are deliberately overloaded and made inoperable.

Concerns about a hybrid war and the need to invest heavily in firewalls are driving stocks from IT security providers. Companies like Fortinet have the know-how and equipment to fend off malicious attacks. The US company’s stock rose 15 percent in a week. The German company secunet Security Networks developed even better. The value scored 36 percent in five days. It cannot be ruled out that the company will revise its earnings forecast for 2022 earlier this year, which has disappointed investors.

The iShares Digital Security Index, which includes 122 positions, brings it to six percent. Since the beginning of the year, however, the Exchange Traded Fund has still lost around twelve percent. But since last week, investors have realized how urgent protective measures are.

Poland’s government has already reported a significant increase in attacks on its clearing and settlement systems. Warsaw is currently stepping up its digital defense efforts. The Baltic states of Estonia, Latvia and Lithuania are also arming themselves. They fear attacks on their central banks, among other things.

After Berlin agreed to the exclusion of Russian banks from the Swift international payment system and the approval of arms deliveries to Ukraine, Germany could also come under increasing scrutiny. Lower Saxony’s Minister of the Interior, Boris Pistorius, warns that if attacks on the critical infrastructure and authorities are successful, basic services will be at risk.

German publishers are already reporting unwanted digital activity. According to the Funke Media Group, websites of daily newspapers that provide information about the Ukraine war are being attacked. In addition, it is currently being checked whether the failure of the KA-SAT satellite network on the day of the Russian invasion is also connected to a cyber attack. The wind turbine manufacturer Enecorn is affected by the disruption to the satellite network. According to the company, the wind turbines are still running and continue to supply electricity, but they can no longer be monitored and controlled remotely.

Like ENISA, the US authority Cybersecurity and Infrastructure Security Agency (CISA) also recognizes a greatly increased risk and fears for public safety. Every organization in the US is currently at risk from destructive Russian cyber aggression.

Unscrupulous malware

Russia or the hacker groups financed by Moscow do not lack the necessary expertise. After the annexation of Crimea in the winter of 2014/2015, they paralyzed the power supply in parts of Ukraine. In June 2017, the malicious program known as “NotPetya” spread to companies around the world, presumably starting from an update to Ukrainian accounting software.

The Maersk network was badly hit by the attack at the time. The Danish container shipping company was forced to work analogously for ten days. 3,500 servers and 49,000 laptops were destroyed at the time. Management put the damage at 300 million euros. NotPetya is said to be responsible for losses of ten billion dollars worldwide. “Cyclops Blink” is the name of another cyber attack weapon. She is assigned to the Sandworm hacker group, which in turn is said to be linked to the Russian military intelligence service GRU. According to “ComputerWeekly”, the malware is difficult to detect, survives reboots and, once it has crept in, is difficult to eliminate. One percent of all network firewall devices from the network device manufacturer Watchguard are said to be infected worldwide.

Not only Russian hackers with Putin in the background are forcing companies and state institutions to invest a lot of money in their IT security. Recently, US security specialists discovered the “Daxin” malware attributed to Chinese cyberattackers. She is said to have been spying on government agencies in industrialized countries and ministries in Asia and Africa since 2013.

Not only states, but also individuals or small groups are active. IT functions are usually paralyzed and only released again after a ransom has been paid. According to the digital association Bitkom, the damage caused by theft, espionage and sabotage for German companies alone amounted to 224 billion euros last year. This means that the amount of damage is twice as high as in 2018/2019. “The force with which ransomware attacks are shaking our economy is worrying and is affecting companies of all industries and sizes,” says Bitkom President Achim Berg.

Attacks and costs are also increasing worldwide. The analysis house Cybersecurity Ventures predicts global damage of the equivalent of nine trillion euros for the year 2025.

watch the world burn

Hackers are not always motivated to pay ransom, weaken a state, damage a company or spy on data. Some just wanted to watch the world burn, says Charles Carmakal, Mandiant’s chief technological officer. The company has set itself the task of protecting companies and organizations from cyber attacks using innovative technology and intelligent advice. Mandiant is very successful in doing this. Since the beginning of the year, the share has increased by 18 percent.

The title still has potential. According to a report by the Bloomberg news agency, Microsoft is said to be considering a takeover. The purchase would make sense. Not only because of the good business prospects, but also for your own protection. Microsoft itself or the company’s customers have repeatedly been the target of attacks in the past. With Mandiant, Microsoft would have the necessary security experts in-house.

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