Washington // State-sponsored hackers who unleashed a digital bomb in key parts of Saudi Arabia’s computer networks over the last two weeks damaged systems at the country’s central bank, known as the Saudi Arabian Monetary Agency.
The central bank said late on Friday that its systems had not been breached and that it has continuous surveillance to protect against cyber threats.
The attacks, which afflicted at least eight government entities, used a computer-killing malware known as Shamoon that is linked to Iran, according to two people briefed on an ongoing investigation of the breach.
The malware had the potential to inflict damage on targets across several critical sectors, including finance and transportation.
The investigation is still in its early stages and the determination of responsibility could change, the two people said. The number of entities where damage occurred is likely to grow as the probe continues, a third said.
The monetary agency joins the ranks of central banks that have suffered digital attacks in the past year. Russia’s central bank said Friday that hackers have stolen more than 2 billion rubles (Dh115m) from correspondent accounts at there and from client accounts at Russian banks. In February, hackers stole US$8m (Dh297.5m) by manipulating the international payment system at the central bank in Bangladesh.
Along with the General Authority of Civil Aviation, which runs Saudi airports, the hackers also hit the Ministry of Transportation, which oversees the kingdom’s road network, one of the people said.
The central bank is a most sensitive target. It manages the kingdom’s foreign-exchange reserves, supervises commercial banks, and runs the country’s electronic-payments system.
It is unclear what part of the central bank’s information systems were damaged in the attack. There have not been reports of outages in the electronic-payments system or other parts of the banking sector.
The Shamoon malware used in the attacks is the same one that was used in a devastating attack on Saudi Aramco in 2012 that destroyed 35,000 computers within hours. US officials have said Iran was behind that attack.
Although hackers usually add enhancements to malware to advance its capabilities and make it harder to detect, in this case they used the same file as in the Aramco incident, the people familiar with the investigation said. The malware, which overwrites the master boot record of a computer, rendering it inoperable, has destroyed thousands of computers across multiple government agencies, two people familiar with the probe said.
The software that destroyed the Aramco computers four years ago was programmed to leave an image of a burning American flag before making the computer inoperable. In this attack, the software displayed an image of Alan Kurdi, the three-year-old Syrian boy who drowned fleeing the conflict in Syria, said Dmitri Alperovitch, chief technology officer at the security firm Crowdstrike, whose team has examined the malware.
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
The Settlers
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If you go
The flights
There are direct flights from Dubai to Sofia with FlyDubai (www.flydubai.com) and Wizz Air (www.wizzair.com), from Dh1,164 and Dh822 return including taxes, respectively.
The trip
Plovdiv is 150km from Sofia, with an hourly bus service taking around 2 hours and costing $16 (Dh58). The Rhodopes can be reached from Sofia in between 2-4hours.
The trip was organised by Bulguides (www.bulguides.com), which organises guided trips throughout Bulgaria. Guiding, accommodation, food and transfers from Plovdiv to the mountains and back costs around 170 USD for a four-day, three-night trip.