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Huawei-built data centre a ‘failed investment,’ Papua New Guinea says – The Globe and Mail

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A surveillance camera is seen in front of a Huawei logo in Belgrade, Serbia on Aug. 11, 2020.

MARKO DJURICA/Reuters

A Huawei-built data centre in Papua New Guinea is a “failed investment,” that country’s government says, after a technical review found serious security vulnerabilities in what was designed to be an important piece of the country’s digital infrastructure.

Dated encryption technology and the placement of some devices in the centre meant that “data flows could be easily intercepted,” according to a review commissioned by Papua New Guinea’s National Cyber Security Centre and obtained by The Globe and Mail. The security centre receives funding from Australia’s Department of Foreign Affairs and Trade. Canberra was given a copy of the report, whose findings were first reported by the Australian Financial Review.

The report details numerous technical deficiencies in the National Data Centre, including firewall devices “with basic settings for defence”; the use of 3DES, a 1995-era encryption standard “considered openly broken since 2016”; and the installation of core switches outside firewalls, which means “remote access would not be detected.” The physical configuration of the data centre was different from the schematics for its design, and the differences made it more vulnerable to hacking.

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The data centre was financed by a US$53-million loan from the Export-Import Bank of China and designed by engineers from Huawei Technologies Co. Ltd. Its deficiencies have renewed questions about the trustworthiness of Huawei technology at a time when Ottawa and other Western capitals are mulling whether to allow equipment from the Chinese company in 5G networks.

“To some extent, we can conclude that it truly is a failed investment,” Timothy Masiu, Papua New Guinea’s Minister for Information and Communication Technology, said in a statement on Thursday. He suggested looking instead to cloud storage from companies like Amazon.comInc. and Microsoft Corp., before cautioning against geopolitical point-scoring over digital infrastructure. “Our national issues are our business, and must not be used to fit any other narrative,” he said.

Outside Papua New Guinea, however, the problems with the data centre add to concerns about the security of technology made by a company headquartered in China, where the law compels organizations and citizens to “support, assist and co-operate” with the country’s intelligence apparatus.

The United States, the U.K. and Australia have to varying degrees banned Huawei’s 5G technology.

Last year, the UK’s Huawei Cyber Security Evaluation Centre oversight board faulted Huawei more broadly for problems with “basic engineering competence and cyber security hygiene that give rise to vulnerabilities that are capable of being exploited by a range of actors.” In April, 2019, Ian Levy, the technical director of the National Cyber Security Centre in the U.K., told the BBC that “the security in Huawei is like nothing else – it’s engineering like it’s back in the year 2000 – it’s very, very shoddy.”

Huawei was also the main digital supplier to the Chinese-built African Union headquarters, where, for five years, data were transferred to servers in Shanghai, according to reports in Le Monde Afrique and The Financial Times. Officials have denied such problems existed, and Huawei has said that if any data leaked, it wasn’t from the company’s equipment.

Still, such problems point to “a relatively immature … security culture in the company,” said Christopher Parsons, a senior research associate at The Citizen Lab, which specializes in communications and security studies at the Munk School of Global Affairs and Public Policy.

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In Papua New Guinea, “some of the issues being raised are not particularly advanced problems to have identified and then remediated,” Mr. Parsons said. “The fact they weren’t is unfortunate, and speaks poorly of the security culture that Huawei has.”

Huawei did not offer an on-record response to detailed questions about the Papua New Guinea data centre from The Globe. It told the Australian Financial Review: “This project complies with appropriate industry standards and the requirements of the customer.”

Huawei has a deep foothold in Papua New Guinea. The company built 4G networks for the country, a high-speed broadband network, and a network of submarine cables to connect coastal settlements. At least one local community complained that excavators used to lay underwater cable broke reefs.

Huawei was also the contractor for a national identity project that includes an electronic identification (e-ID) system backed by a database. That database, service for which has occasionally been interrupted for days, is at the National Data Centre.

The company’s importance to Papua New Guinea means trouble with the data centre is “a very sensitive issue,” the Ministry of Information and Communication Technology said in a chat message.

In Beijing, foreign ministry spokesman Zhao Lijian said the “Chinese government always requires Chinese companies, in their overseas operations, to strictly follow international regulations.” But, he said, the Chinese government firmly opposes “some foreign media’s malicious discussions about the data centre.”

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In Papua New Guinea, security vulnerabilities have become less of a concern than disrepair. The data centre has a slow internet connection, and some of its components – including backup batteries and an e-mail server – are broken. Software licences have expired, and the report says local authorities do not have enough funds to properly maintain the centre.

As a result, it “is not currently used by a significant portion of the government of PNG,” the report found. “It is assessed that a full rebuild would need to occur to modernize the facility.”

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Big Six banks expand investment offerings – Wealth Professional

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“ZMMK provides a solution for investors looking for a liquidity sleeve, or a place to hold their cash as they assess the market for other investments,” Mark Raes, head of Product at BMO Global Asset Management, said in a statement.

Meanwhile, CIBC has again expanded its lineup of Canadian Depositary Receipts (CDRs), which offer an affordable way to invest in some of the world’s largest companies with a built-in notional currency hedge, with eight new listings on the NEO Exchange.

The new CDRs include:

  • Advanced Micro Devices Canadian Depositary Receipts (CAD Hedged) – AMD
  • Berkshire Hathaway Canadian Depositary Receipts (CAD Hedged) – BRK (underlying shares Berkshire Hathaway Inc. Class B Common Stock (NYSE: BRK.B))
  • Costco Canadian Depositary Receipts (CAD Hedged) – COST
  • Salesforce.com Canadian Depositary Receipts (CAD Hedged) – CRM
  • IBM Canadian Depositary Receipts (CAD Hedged) – IBM
  • JPMorgan Canadian Depositary Receipts (CAD Hedged) – JPM
  • Mastercard Canadian Depositary Receipts (CAD Hedged) – MA
  • Pfizer Canadian Depositary Receipts (CAD Hedged) – PFE

They join 10 other CDRs that were launched on NEO in July and October. According to NEO, the average number of client trades in CDRs grew from around 700 per day in September to roughly 5,500 since the start of November. The CDRs on the exchange have also continued to track their underlying stocks precisely even during highly volatile periods.

“We are pleased with the reception we’ve seen so far for CDRs with Canadian investors. It’s clear this meets a need in the market,” said Elliott Scherer, managing director and head of Sales, Wealth Solutions Group, CIBC Capital Markets. “This expansion of our CDR offering provides greater opportunity for investors to diversify their portfolio without being exposed to currency risk at a fraction of the price per share.”

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TSX rallies as dividend increases help underpin financial shares

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Canada‘s main stock index rebounded on Thursday from a seven-week low hit in the previous session, with financials contributing to broad-based gains as major lenders boosted their dividends.

The Toronto Stock Exchange’s S&P/TSX composite index ended up 297.43 points, or 1.45%, at 20,762.03, after posting on Wednesday its lowest close since Oct. 12.

Wall Street also rallied as market participants snapped up bargains while digesting the implications of a shifting pandemic. The Omicron variant has spooked investors for about a week.

“The market is awaiting confirmation on the severity of the new COVID-19 variant, the degree to which it escapes existing vaccines, and how infectious it is given this will likely dictate the global response in terms of restrictions,” said Russ Mould, investment director at AJ Bell.

Financials, which account for about 30% of the Toronto market’s value, gained 2.2%. Toronto-Dominion Bank and Canadian Imperial Bank of Commerce joined rivals in announcing higher dividends and share repurchases.

TD rose 4.9%, while CIBC ended down 2.8% after missing profit estimates as costs climbed.

All 11 major sectors ended higher.

The energy sector advanced 1.8% as oil prices rebounded after OPEC+ stuck to its policy of incrementally boosting output. U.S. crude oil futures settled 1.4% higher at $66.50 a barrel.

Consumer cyclical stocks gained 2.4%, helped by gains for Restaurant Brands International Inc and Magna International Inc.

Canadian Prime Minister Justin Trudeau’s government will outline limited new spending in a fiscal update to be released later this month, a source said, as inflation soars and some business groups and opposition politicians call for restraint.

 

(Reporting by Fergal Smith; Additional reporting by Amal S in Bengaluru; Editing by Peter Cooney)

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Metaverse won’t be turning point in cryptocurrency adoption, investor Chesnais says

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The growth of online virtual worlds will help advance the mainstream adoption of cryptocurrencies for payment transactions but it won’t be a game-changer, according to Frédéric Chesnais, chief executive of French fintech company Crypto Blockchain Industries.

In blockchain-based 3D virtual worlds, often referred to as metaverses, users can purchase and trade virtual assets and services using cryptocurrencies. Some analysts have argued the growing popularity of metaverses will drive an explosion in digital tokens.

“I think it will be important but I don’t think this is the key turning point,” Chesnais, who was until earlier this year the CEO of videogame company Atari told a Reuters NEXT panel on Thursday.

Interest in the metaverse exploded after Facebook said in October it was changing its name to Meta and would be focusing on building its own virtual world. Other big companies and smaller fintechs are also rushing to develop digital worlds.

Crypto Blockchain Industries invests in blockchain projects and is developing AlphaVerse, a blockchain-based metaverse.

Chesnais said that the mainstream adoption of cryptocurrencies will be driven by the more than one billion people globally who do not have access to a bank account because they may not have an address or an official identity.

“The only way for these people to have access to a better way of life and be part of the economic system is to have a wallet and to be paid in cryptocurrency,” he said.

“This is the most important moment for crypto.”

On Wednesday, Yat Siu, the chairman and co-founder Animoca Brands — which invests in and builds various virtual worlds — cautioned that while digital assets are set to grow as virtual worlds become more popular, investors in these technologies will face “bumps in the road” as the technologies mature.

 

 

(Reporting by Michelle Price; Editing by Nick Zieminski)

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