Authorities In UK Investigating London Stock Exchange August 2019 Outage

  • Jan 06, 2020 GMT
  • Team Kalkine
Authorities In UK Investigating London Stock Exchange August 2019 Outage

The UK’s investigating agency, Government Communications Headquarters, popularly known as GCHQ, which monitors major financial trading platforms and critical infrastructure is suspecting a software code which might have been the trigger point for the outage on 16th August 2019, on Friday morning, when the trading on the FTSE 100 and FTSE 250 was delayed by an hour and forty minutes, the longest delay in last eight years.

The investigating agency is looking for clues to trace its origin by scrutinising the time stamps of the code that was executed for halting the trade. However, nothing can be said much about the actions which might be taken by the regulators or about the present status of the investigation.

The London Stock Exchange Group, which operates the exchange, said that there was a technical glitch in the software which resulted in trade coming to a halt in FTSE 100 and FTSE 250 securities, however, it didn’t specified any exact cause of the outage.

According to the people familiar with the government agencies, assuming that the issue was caused by a software code or a cyber-attack, the main objective could be weakening the confidence level of the people in critical national infrastructure of the country and causing market disruption. In addition, the London Stock Exchange was upgrading its systems, which might have created a room for attack and made it vulnerable to potential threats, according to people known to investigating agencies.

Interestingly, since the London Stock Exchange introduced new platform in 2011 known as Millennium Exchange, it has already suffered three outages in 2011, 2018, and 2019. However, it was not just London Stock Exchange that suffered these outages. Hong Kong Exchanges and Clearing had to suspend activity on its derivatives trading platform due to a bug in third party software in September last year. Similarly, in August, Dow Jones Industrial Average (DJI) and the S&P 500 (SPX) displayed delayed values due to some bug.

According to experts, earlier trading platforms were much safer as they were in closed networks. Now, with reliance on third party products and outsourcing, networks are open and have become vulnerable.

Some of the major companies which were under severe impact due to 16th August 2019 outage on the LSE, include AstraZeneca, BHP Group, BP, HSBC Holdings, Royal Dutch Shell and Unilever Plc. The comparative chart of stock prices is shown below.

(Source: Thomson Reuters)

AstraZeneca PLC (LON: AZN)

AstraZeneca PLC is a British pharmaceutical company. It was established on April 1999 after the merger of Astra AB and Zeneca PL; headquartered at Cambridge, the United Kingdom. The company is listed on London, New York and Stockholm exchanges, with the symbol AZN used in all the markets. The company has operations all over the world with business in over 100 countries, and its medicines are consumed by millions of patients across the globe. The company’s core team works with the world’s leading academic, biotech research institutions and have many clinical collaborations.

AZN-Stock price performance

On 06th January 2020, at the time of writing (before market close, GMT 12:45 PM), AstraZeneca PLC was trading at GBX 7,583.00. Stock's 52 weeks High and Low is GBX 8,227.88 /GBX 5,312.00. The company’s stock beta was 0.77, reflecting lower volatility as compared to the benchmark index. The outstanding market capitalisation was around £101.02 billion.

On 16th August 2019, AZN shares closed at GBX 7,256.00, an increase of 0.28 per cent from GBX 7,236.00 on 15th August 2019.

BHP Group PLC (LON: BHP)

BHP Group PLC is a London, the United Kingdom-based global resource company with 60,000 plus employees and contractors. The company primarily operates in Australia and America and is engaged in extracting and processing minerals, oil and gas. While the company’s global headquarters are in Melbourne, Australia, its products are sold worldwide.

BHP-Stock price performance

On 06th January 2020, at the time of writing (before market close, GMT 12:54 PM), BHP Group PLC was trading at GBX 1,774.80. Stock's 52 weeks High and Low is GBX 2,078.50/GBX 1,554.60. The company’s stock beta was 1.38, reflecting higher volatility as compared to the benchmark index. The outstanding market capitalisation was around £99.30 billion.

On 16th August 2019, BHP shares closed at GBX 1,755.20, a decrease of 0.49 per cent from GBX 1,763.80 on 15th August 2019.

BP PLC (LON: BP.)

Britain-based international oil and gas company, headquartered in London, BP PLC provides energy services and products globally. It is a vertically integrated company, engaged in activities ranging from exploration and production of oil and natural gas to marketing chemicals and generating solar energy. The company’s operations are differentiated in three segments: Upstream, Downstream Rosneft, and other business verticals. The company has a primary listing on the London Stock Exchange (LSE) with secondary listings on the New York Stock Exchange and the Frankfurt Stock Exchange. BP PLC is a constituent of the London’s Broader benchmark index FTSE 100.

BP-Stock price performance

(Source: Thomson Reuters)

On 06th January 2020, at the time of writing (before market close, GMT 12:57 PM), BP PLC was trading at GBX 504.03. Stock's 52 weeks High and Low is GBX 583.41 /GBX 461.15. The company’s stock beta was 1.42, reflecting higher volatility as compared to the benchmark index. The outstanding market capitalisation was around £100.24 billion.

On 16th August 2019, BP shares closed at GBX 490.20, an increase of 0.37 per cent from GBX 488.40 on 15th August 2019.

HSBC Holdings PLC (LON: HSBA)

HSBC Holdings provides banking and financial services worldwide. It offers various banking products and business operations spread across Asia, Europe, the Middle East, North Africa, North America and Latin America. The company operates in 65 plus countries with a worldwide representative base of more than 200 thousand employees. The company was established in 1865 and is headquartered in London, the United Kingdom.

HSBA-Stock price performance

On 06th January 2020, at the time of writing (before market close, GMT 1:02 PM), HSBC Holdings PLC was trading at GBX 582.20. Stock's 52 weeks High and Low is GBX 687.70/GBX 552.30. The company’s stock beta was 1.06, reflecting slightly higher volatility as compared to the benchmark index. The outstanding market capitalisation was around £120.74 billion.

On 16th August 2019, HSBA shares closed at GBX 597.20, an increase of 0.84 per cent from GBX 592.23 on 15th August 2019.

Royal Dutch Shell PLC (LON: RDSA)

Royal Dutch Shell PLC is a Hague, Netherlands-based international group of energy and petrochemical company, which engages in exploring, producing, refining and marketing oil and natural gas. The group also manufactures and markets chemicals. Royal Dutch Shell PLC, which is incorporated in England and Wales, is the parent company of the Shell group. Royal Dutch Shell’s operations are differentiated into three operating segments: Upstream, Downstream, and Integrated Gas and New Energies, and Downstream.

RDSA-Stock price performance

On 06th January 2020, at the time of writing (before market close, GMT 1:08 PM), Royal Dutch Shell PLC were trading at GBX 2,319.50. Stock's 52 weeks High and Low is GBX 2,811.38/GBX 2,143.00. The company’s stock beta was 0.97, reflecting slightly lower volatility as compared to the benchmark index. The outstanding market capitalisation was around EUR 212.99 billion.

On 16th August 2019, RDSA shares closed at GBX 2,273.00, an increase of 0.09 per cent from GBX 2,271.00 on 15th August 2019.

Unilever Plc (LON: ULVR)

London headquartered, Unilever Plc is a global company selling fast-moving consumer goods. The company is engaged in the production and marketing of a variety of products from different categories such as home care, food, health, beverages and wellbeing. The company has divided its operations into three reportable segments being Foods & Refreshment, Home Care and Beauty & Personal Care.

ULVR-Stock price performance

On 06th January 2020, at the time of writing (before market close, GMT 1:10 PM), Unilever Plc was trading at GBX 4,317.00. Stock's 52 weeks High and Low is GBX 5,333.00/GBX 3,904.94. The company’s stock beta was 0.60, reflecting lower volatility as compared to the benchmark index. The outstanding market capitalisation was around £114.62 billion.

On 16th August 2019, ULVR shares closed at GBX 5,011.00, an increase of 0.56 per cent from GBX 4,983.00 on 15th August 2019.

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