TalkTalk hack attack boosts cybersecurity stocks
The hacking scandal at broadband provider TalkTalk has heightened interest in stocks and companies dealing in cybersecurity, with some fund managers betting on more growth in the sector.
Market research firm Gartner has estimated that global spending on IT security is set to increase 8.2pc in 2015 to €70bn.
Corporations around the world will spend €92bn on information security in 2018, Gartner says. Those figures have caught the attention of financial markets.
The ISPY exchange-traded-fund, which lets investors hold a basket of cybersecurity stocks - such as Cisco Systems and Sophos Group - has risen around 3pc.
"As cybercrime continues to grow, governments and companies are prioritising cybersecurity as an essential investment. This is a sector we can expect to dominate headlines and corporate budgets," said Kris Monaco, the head of ISE ETF Ventures.
Others focused on some relatively small British stocks whose shares have risen, in contrast to those of TalkTalk whose stock has fallen 6pc in the last week.
Falanx Group has climbed 15pc over that same period. NCC Group and Corero Network Security - an offshoot of the former Corero software business - have risen 3pc.
Corero's products include software that protects against attacks on internet sites and domain addresses.
NCC has similar services, including one to test how vulnerable a company is to "phishing" - where internal emails are hacked by someone posing as an employee or outside contact - while Falanx has services monitoring clients' computer infrastructure for signs of suspicious activity.
John Blamire, a former British Army officer who is chief executive at Falanx, said customer interest had risen since the attack on TalkTalk.
"Incidents such as the one at TalkTalk actively brings attention to organisations such as ours," he said.
British police said on Friday that they had arrested a second teenager in connection with the breach at TalkTalk, which may have led to the theft of personal data from among the company's more than four million customers.
TalkTalk was not the first such incident, but traders and investors said it should re-ignite interest in companies offering protection against hack attacks.