00:57.1
As for Wall Street,
00:58.5
futures are also pointing to a positive open with contracts tied to the tech-heavy Nasdaq up 1%.
01:06.0
Investors will now be turning their focus on core PCE numbers,
01:10.5
the Fed's preferred inflation gauge,
01:12.5
for more confirmation supporting a rate cut in September
01:16.0
after yesterday's better-than-expected GDP report.
01:22.4
Here are some stocks to watch out for.
01:24.4
For one, we're monitoring shares of Metro Bank UK,
01:27.4
which is selling its portfolio,
01:28.5
of prime residential mortgages to NatWest Group for US$3 billion.
01:34.0
Metro Bank shares rose 2%.
01:36.7
And speaking of NatWest Group,
01:38.6
its shares are also in focus after it reported an earnings beat and lifted forecasts.
01:44.1
The British lender shares jumped 5% on the news.
01:47.9
We're also keeping a close watch on shares of US footwear company Deckers,
01:52.1
which raised its annual profit forecast after beating first-quarter estimates.
01:57.0
The stock is soaring,
01:58.4
11% in pre-market trading.
02:03.8
Asian markets ended the week mostly higher as the global tech route steadied
02:08.1
and Fed rate cut bets firmed.
02:10.8
Australia's ASX 200 and the South Korean KOSPI index climbed 0.7% each.
02:18.0
Japan's Nikkei 225, however,
02:20.0
bucked the rally,
02:21.4
falling for an eighth straight session weighed by earnings news.
02:26.8
shares of Renaissance Electronics,
02:28.4
which sank another 4%,
02:30.4
plunged 14% on Thursday.
02:33.4
This after the chip manufacturer reported a 29% drop in its first half net profit.
02:40.2
And here at home,
02:42.0
the local borers capped a weak mark by President Marcos' State of the Nation address
02:46.5
and a typhoon with gains.
02:48.5
We've climbed at least, if I'm not mistaken, close to 5% month to date.
02:57.0
I think there's going to be a lot of growth.
02:58.1
There's going to be, again, consolidation.
03:00.1
Remember, next week is the closing of the month and then the earnings are going to start trickling in.
03:06.9
So probably, on top of buying the index as a whole which we saw for the month,
03:14.8
probably they might take specific positions when earnings come out.
03:19.2
Depending on how they perform, you could see more buying or selling depending on how the performance.
03:28.1
And here are some local corporate headlines.
03:30.1
A change of leadership in Robinson's Retail Holdings.
03:34.1
Its company directors elected Stanley Koh as their new president and CEO beginning next year.
03:40.1
Koh is currently Robinson's Retail's COO and has been climbing the ranks since joining the firm in 2003.
03:47.1
Meanwhile, Lance Gokongwei also stepping down as RRH chairman.
03:51.1
He will be replaced by his sister, Robina Gokongwei-Pe.
03:55.1
In the earnings stream,
03:56.1
Ayala Land Logistics said,
03:58.1
Ayala Land Logistics posts a net income of 413 million pesos in the first half of 2024.
04:05.1
That's 22% higher year on year.
04:08.1
The Ayala Land Unit cites operational improvements and robust market activity.
04:13.1
The sale of industrial lots brought in 1.7 billion pesos in revenue,
04:18.1
driven by sales at the Lagindingan Technopark in Mindanao,
04:22.1
and higher completion rates for developing industrial estates.
04:27.1
Felix Mining further bleeds halfway into the year.
04:30.1
Its core net income in the first half was down 42% to 410 million pesos.
04:37.1
The company says gold prices in the second quarter were slightly lower than the previous period,
04:42.1
while copper prices were slightly higher.
04:47.1
And members of the World Trade Organization finalized negotiations on an agreement drawing up global digital trade rules.
04:55.1
The new agreement recognizes the importance of global electronic commerce
04:59.1
in creating inclusive global trade and development.
05:02.1
It outlines protections for online consumers,
05:05.1
the digitalization of customs procedures,
05:08.1
and stricter facilitation of digital transactions worldwide.
05:12.1
The initiative follows five years of talks jointly convened by Australia, Japan, and Singapore.
05:18.1
The next phase would be to integrate the foundational rules into the organization system.
05:26.1
Chaos erupts in France's busiest rail lines as arsonists stage coordinated attacks
05:33.1
ahead of the Paris Olympics opening ceremony Friday.
05:36.1
The operator of the state-owned railway says the attacks targeted the train network's signaling installations,
05:43.1
leaving hundreds of thousands of people stranded.
05:46.1
Repairs are underway, but traffic is expected to be disrupted until at least the weekend,
05:51.1
dealing a blow to those traveling to Paris.
05:53.1
blow to those traveling to Paris for the Games.
05:56.9
Railway firm Eurostar, which connects the UK, France, Belgium, the Netherlands, and Germany,
06:02.9
has also canceled some of its trips.
06:05.4
The Olympic opening ceremony is happening at 1 a.m. Manila time.
06:10.2
So far, no one has claimed responsibility for the attacks.
06:15.4
North Korea's economy grew sharply in 2023 after three years of contraction.
06:20.6
That's according to estimates by South Korea's central bank.
06:24.7
Pyongyang's GDP print came in at 3.1% last year, its biggest percentage growth since 2016.
06:31.7
That's as its trade with China increased after the easing of COVID pandemic border controls.
06:37.6
The Bank of Korea believes trade with Beijing accounted for 98% of Pyongyang's trade volume.
06:43.9
The Bank of Korea has been publishing estimates of the North Korean economy since 1991,
06:50.0
based on intelligence.
06:50.6
and data from Seoul's Unification Ministry.
06:55.5
And we're taking a quick break.
06:57.2
Up next, a discussion on last week's global tech outage that paralyzed airports and other industries
07:03.4
with the Institute of Corporate Directors Technology Governance Committee.
07:20.6
The cybersecurity firm CrowdStrike was recently at the center of a widespread technology outage
07:25.7
that hit companies across the globe.
07:28.5
Fortune 500 companies in America were seen to lose some $5.4 billion due to the outage.
07:35.0
Globally insured losses are expected to go up to $1.5 billion.
07:40.1
To break down what happened, we have now with us Jojo Aquino and Philip Kwa
07:44.3
from the Institute of Corporate Directors Technology Governance Committee.
07:48.4
Thank you, gentlemen, for joining me tonight.
07:52.8
Two of the individuals who are considered experts in cybersecurity and technology governance.
08:01.8
A lot of experience here.
08:03.8
Let us talk first about the outage last week.
08:07.0
Seven days ago, we've seen in the news all of these long lines at airports,
08:13.3
people not being able to pay with their cards.
08:16.4
I was at the Asian Development Bank having lunch and nobody could pay with their cards.
08:20.5
Nobody could pay with their credit cards at that time.
08:22.7
Tell me about a breakdown what actually happened here.
08:27.7
Let's throw it to Philip, who's the real expert.
08:30.9
So basically, what is happening, what happened here is, you know, the CrowdStrike platform, Falcon,
08:38.1
on the Windows platform, there is a software bug that they did not pick it up.
08:43.6
And because of this software bug that was pushed through, right,
08:47.4
it goes down into the updating process.
08:50.5
It goes down into the updating process of the customers and therefore hitting all the customers that is running the Windows platform.
08:57.4
This only happened to customers that are using the Windows platform.
09:03.2
And I remember reading that there was, you know, this, CrowdStrike does this regularly, right?
09:09.3
This is what it does.
09:10.3
It sends updates so that all PCs using the Microsoft software will be protected from any threat,
09:20.5
From outside hackers or malware or ransomware or whatever.
09:25.0
But this time, there was one line of code that was a bug and that thing caused this huge outage.
09:33.7
What do you think of that?
09:36.5
If I may, Philip, maybe a line, think about it as oil for a car.
09:44.5
All of a sudden, you normally use this oil, but, you know, you're putting it on your best Mercedes.
09:49.9
So, you probably should test a new oil or test your oil on some cars.
09:56.4
So, what happens is everybody just accepted it because that was the norm.
10:00.1
It was a good brand and something failed.
10:04.6
And, you know, while this was happening, I said, there's no, no one's crying.
10:10.3
It's kind of alive.
10:11.8
Is there some talk of, you know, this global thing just freezing a lot of business activities?
10:19.8
And I know that in the Philippines, we also felt it here.
10:23.5
What was your assessment, Philip?
10:25.9
Well, I mean, it hits a lot of customers because if you look at the CrowdStrike market share, right,
10:31.0
they are the market leader in the EDR space, Endpoint Detection and Response space.
10:37.1
And if you look at, you know, in the year January 31st to 2023,
10:42.6
they have about 15 of the 20 U.S. banks as their customers, right?
10:49.8
Of the Fortune 500 companies as their customers, right?
10:53.0
So, when such a glitch happens, it happens to these customers who are using their Windows platform.
10:59.0
So, as a result of that, you see an enormous impact on the economy.
11:04.8
Just very quickly, Jojo, could this have been averted?
11:08.8
What could have been done?
11:10.4
So, I see you laughing.
11:13.5
We don't want this thing happening again.
11:16.2
That's a huge loss on all aspects in the business sector.
11:19.8
What was the thing that could have been done to stop this from happening?
11:24.7
The rule of thumb for cybersecurity is you trust but verify.
11:30.3
A good friend of ours always says that.
11:32.6
So, even though the software or the firm is very established,
11:37.2
when you receive an update, strictly speaking,
11:40.7
all managers or infrastructure managers should test it out first
11:46.6
with a few, one or two servers,
11:49.3
and then continue to test it out.
11:49.8
But, hang on, hang on.
11:52.0
For each update, for each update, it should be tested?
11:57.3
Yes, you test each update.
12:01.7
I think we lost Jojo there.
12:05.4
Can you hear me now?
12:08.5
Yes, we can hear you now, Jojo.
12:13.3
So, you test every update within a few of your devices
12:18.8
before you test it out.
12:19.8
Before you roll it out.
12:21.9
Whether it's a new software or a new version, etc.
12:25.5
The problem is, again, companies can get used to the fact that
12:33.6
And here's our message from a cybersecurity standpoint.
12:37.8
The world is digital now.
12:40.1
And therefore, we have to make sure that...
12:49.8
It's freezing a little bit.
12:51.1
I'm not sure if you can hear us, Jojo,
12:53.0
but I'll move to Philip for now.
12:55.6
Philip, can you continue his thought?
12:59.2
So, Jojo is speaking from the end user point of view, right?
13:03.2
But from my point of view,
13:04.7
if you are the software developer, right?
13:06.7
Software developer really needs to have a security by design mindset.
13:12.6
So, when they do their design of the systems,
13:14.8
they have to have a security mindset out front.
13:18.3
And when they do testing,
13:19.4
they have to bear all this in mind to ensure that their testing is
13:23.4
somewhat complete before they roll it out to their end customers.
13:28.5
I can imagine if you're the one making...
13:31.4
This was Strike Falcon, right?
13:33.4
And if you actually tested this before you rolled it out,
13:36.6
you would have seen the blue screen of death in your computers
13:41.2
before the whole world got it.
13:43.2
So, that's a very interesting comment from the two of you.
13:46.1
But now, let's move on to creating better systems.
13:49.4
Because as you said, Philip,
13:52.1
I mean, as you said, Jojo,
13:55.5
the world is digital.
13:57.5
And for sure, sometime in the future,
14:01.5
something like this is going to happen.
14:04.0
And what happened last week just underscored the fact that
14:07.8
while the world now has AI and quantum computing,
14:11.6
we're not equipped to deal with a bug, right?
14:15.7
We're not equipped.
14:17.1
What are the things that each corporate,
14:19.4
each corporation have to do now
14:22.6
so that the ecosystem is protected from these kinds of bugs?
14:29.0
Typically, the board creates policies on the rules
14:32.4
that their cybersecurity and technology people have to do.
14:36.2
You're talking about board of directors in every corporation.
14:41.5
So, each board of director,
14:43.1
whether you're a big corporation, a mid-size or a small-size corporation,
14:49.1
policy set in place.
14:52.2
And those policies says,
14:54.1
test before you roll out everything.
14:59.1
make sure you write down your recovery procedures.
15:02.2
And many companies don't.
15:03.8
And number three,
15:04.8
you test your recovery procedures.
15:06.7
So, those are the rules that have to be followed.
15:09.8
We have to assume that things like this will happen.
15:13.5
You know, I would like to nitpick a little bit on the second comment.
15:19.1
Because if you...
15:20.3
I remember reading that, Falcon,
15:23.6
your problem was getting back online.
15:27.5
And some computers, you had to do it manually.
15:31.6
And people were not equipped to have manual recovery procedures.
15:37.3
That's why it took a lot of time.
15:39.0
But for some corporations, just a matter of hours.
15:42.5
Some corporations, it took days.
15:47.2
And Finlick would probably...
15:49.1
I don't even know that.
15:52.9
But for yourself.
15:55.3
Philip, you have to hack Jojo's brain.
15:58.5
So, I guess some corporations are more ready than others, right?
16:02.1
So, if they have gone through like what Jojo was talking about,
16:05.5
that you went through and exercise on your own
16:08.1
to ensure that you have, you know, you are ready.
16:12.0
So, an event like this happens to you, right?
16:14.6
So that you can be ready to back up your systems.
16:18.3
And you'll be ready.
16:19.1
And you'll be ready to go into operational stage again very fast, right?
16:23.9
Was there something the...
16:25.6
Is there something the government could do?
16:27.2
So, we're talking on the firm level.
16:30.0
Company, board of directors, they have to have these procedures set in place.
16:36.1
Is there anything else before we move on to governments?
16:42.4
From, I mean, the way I look at it is, you know,
16:47.6
there are governments.
16:49.1
They are looking at things like cybersecurity labelling scheme
16:54.1
to ensure that systems are good before they are being rolled out to other companies, right?
17:00.2
So, you know, things like cyber labelling scheme may help in such a process, right?
17:06.0
And as what Jojo said, that the board of directors should put policies in place.
17:10.7
In fact, companies should look at themselves and ask themselves,
17:13.9
do they really need the latest update, right?
17:17.4
There are organizations that actually...
17:19.1
There are organizations that actually have policies that say they will only use N-2, right?
17:24.2
So, they will use two versions before.
17:26.6
Because an update is just a new function and the new features.
17:30.1
Do you really need those new functions and features?
17:33.0
If you don't need it, why do you need to update to the latest version?
17:38.0
So, it's time for organization to look at their policies and say,
17:41.2
you know, do they have N-2 policies or N-3 policies?
17:46.2
Who in each corporation?
17:49.1
Who in government should be responsible for this?
17:52.9
For creating these systems?
17:57.4
I think what you meant was who in government should force corporations to be more diligent?
18:03.9
And without surprise, regulators already do that.
18:07.7
So, if a bank will fail, regardless of the reason, BSP will call you to task.
18:13.7
We'll call the president.
18:14.8
We'll call the members of the board maybe to task.
18:19.1
There are already rules and pains.
18:21.3
Some firms in the U.S. were penalized for failures.
18:25.4
Even if it is something like this.
18:27.7
Am I correct in saying, gentlemen, that in the future,
18:31.8
we might not be so lucky to have an outage like this just because of a bug?
18:37.4
It could be malicious.
18:39.0
And what will happen around the world could be a lot worse than just long lines at the airports
18:45.2
or people not being able to transfer money or pay with cards,
18:48.6
which are, by the way, really bad already.
18:52.9
Things could be a lot worse in the future, correct?
18:57.4
Yes, but if you follow the rules that we stated earlier,
19:03.2
the impact will not be as severe.
19:06.2
If you follow those rules.
19:10.3
Inside Institute of Corporate Directors,
19:13.3
you have a lot of events.
19:16.4
You have a lot of seminars.
19:18.6
You teach current board of directors in many,
19:23.2
even enlisted corporations and mid-sized corporations in the Philippines.
19:27.7
What is your assessment of their readiness to deploy policies on cyber security?
19:35.6
I see Jo just laugh.
19:37.9
What is your assessment?
19:45.9
Again, ultimately, there's a guide.
19:48.6
ESP gives good guides.
19:51.5
But are most firms ready on cyber security?
19:55.2
Maybe the simple answer is not really.
19:58.8
And Philip, maybe you can give the better answer.
20:04.0
It's because of that review that not all the boards are ready.
20:08.9
And that is the one reason why behind this,
20:11.6
we set up the Technology Governance Committee.
20:15.0
We believe in setting this up so that we can share.
20:18.6
So that we can share knowledge across different groups of people and learn from each other, right?
20:22.7
It's a good process for us to learn from each other anyway.
20:26.8
Would you be able to make an assessment and differentiate the large capitalized companies versus mid-sized companies?
20:36.3
Are they very, very different in terms of capability?
20:41.6
If I venture, yes, because a larger firm has more money to spend
20:47.2
for technology processes, for cyber security.
20:52.1
Smaller firms have challenges because hiring the people is also difficult.
20:57.1
There's not enough of this.
20:58.6
Oh yeah, I heard people like you earn a lot of money.
21:02.6
Philip is in a good program in AIM because, especially because of this need.
21:10.7
There's not enough.
21:12.3
They're creating, they have a master's in cyber security.
21:17.2
That builds up the base of people.
21:20.9
How about capability of people in government?
21:24.6
Of the different regulatory agencies, that's BSP, SEC, NPC, DICT, what's your assessment?
21:36.6
Well, maybe I should, I'll take that.
21:38.6
My assessment is, you know, the capabilities are there.
21:41.6
The challenges for them is, you know, how do they be able to retain these people?
21:47.2
Right, because we all know that, you know, if you're in the government practice or in academia,
21:51.7
you don't get as well paid as those in the private sector.
21:55.1
So, yes, we do face challenges in the sense of being able to retain the people that we want, right?
22:02.2
But it should not be taken as a setback.
22:05.8
It should be, in fact, looked at ways to, you know, how do we actually want to attract these people
22:11.9
to come and work for us.
22:14.5
Thank you, Philip and Jojo.
22:15.9
This has been fun.
22:16.8
We haven't even talked about AI and quantum computing,
22:19.8
but hope to have you here in the show sometime in the future, hopefully in person.
22:24.0
Thank you so much, gentlemen.
22:27.4
And that's your Business Outlook.
22:29.1
I'm Sabi Duplito.
22:30.1
The world tonight comes your way at the top of the next hour.
22:32.8
Keep it here on ANC.
