Charlotte Street Partners

DAILY BRIEFING

DAILY BRIEFING

All eyes on the panopticon

Written by Tom Gillingham, associate partner
Edited by Kevin Pringle,  partner
10 August 2021 

Good morning,

Sometimes it’s hard to know where to start with global news. Amid the surging firestorms and floods of climate change, or the slow horror of lingering Covid, it’s almost inevitable that some stories fly under the radar. 
 
It seems surprising that the hacking of an entire nation’s passport database is one of those, however.  
 
The name Alexander Lukashenko should be familiar, at least. The Belarusian dictator’s behaviour has periodically piqued international attention, with his regime’s attempted kidnap of Olympic sprinter Krystsina Tsimanouskaya recently snatching headlines away from more routine sporting coverage.  
 
But as of the start of this week, the authoritarian regime is not having things all its own way. 
 
Amidst new international sanctions to mark the first anniversary of unprecedented street protests triggered by a fixed election, another group has decided on a more unorthodox approach.  
 
In what is being dubbed one of “the most successful cyber attack[s] in the history of any nation state”, a group calling itself the Belarusian Cyber-partisans says it has hacked the servers of the Belarusian police and the country’s Interior Ministry.  
 
While this act may not sound hugely significant, the data taken is. Initial analysis suggests the hackers have access to the entire Belarusian passport database. Other files taken include logs of regime informants and details of special service members, and the hackers also gained access to cameras in sensitive locations like police stations.  
 
The data – if it can be verified – is already suggesting a shocking cover up in terms of the country’s Covid-19 death rate. Led by Lukashenko, the country eschewed meaningful restrictions, and researchers now believe its excess death rate could be 14 times higher than the previously disclosed official figures.  
 
At this point, only snippets of the hacked information have been released, with minimal media attention, but more is expected to arrive in the public domain in the coming days. The hackers claim that they will not touch data relating to Belarusians not working for the government, but with the potential for arbitrary judgements and the sheer scale of this alleged hack, there is huge potential for collateral damage – regardless of any noble intentions.   
 
If Lukashenko thought an accumulation of data could create a digital panopticon to control his citizens’ behaviour, it does not appear that the same effort was put into guarding his creation from prying eyes. Autocratic regimes around the world will now be watching nervously to see what comes next for this virtual Robin Hood heist. 

News

More than 75% of adults across the UK have now been fully vaccinated, the government confirmed yesterday. Prime minister Boris Johnson described the milestone in the vaccine rollout as a “huge national achievement” and urged those who have yet to be vaccinated to come forward and book their necessary jabs.
 
Students offered places at oversubscribed medical schools in England are being offered £10,000 to switch to a course at a university elsewhere after a surge in applications was followed by hundred more students meeting their expected grade offers. If not enough students choose to move, some are expected to be asked to defer a year by their university.
 
New York Governor Andrew Cuomo resigned following a report last week that revealed he had groped, kissed, or made suggestive comments to 11 women in violation of the law, which prompted prosecutors to launch a criminal investigation amid calls for him to be impeached. The decision is expected to take effect in two weeks.
 
US president Joe Biden said he does not regret his decision to withdraw troops from Afghanistan, as the Taliban continue to make advances. Violence escalated throughout the country following US-led forces withdrawal with the Taliban having taken at least eight of the country’s 34 provincial capitals and are threatening more.
 
A court in China convicted Michael Spavor, a Canadian businessman of espionage and sentenced him to 11 years in prison. The verdict is likely to strain diplomatic ties between Beijing and Ottawa.

Business and economy

A global chip shortage has helped to drive an increase in sales at Cambridge-based semiconductor IP company Arm ahead of its planned £29bn takeover by US rival Nvidia. Arm reported a 57% rise in total net sales to $675 in Q2 as a result of increases in both royalty and non-royalty revenue. Pre-tax profit for the quarter hit $80m, up from a loss of $60m in the same period last year.
 
The latest Land Registry transaction data analysed by Search Acumen indicates that the demand for expensive homes in the UK is shifting away from London, with the bulk of £1m-plus sales coming outside of Greater London in the first five months of 2021.
 
Amazon confirmed that starting from 1 September it will compensate customers who suffer injury or property damage from defective goods sold by independent sellers on its online platform. This decision comes as the company faces mounting pressure over product safety, following a series of court cases.

Columns of note

Chris Giles, economics editor at the Financial Times, cautions that there are signs we will soon have to worry about rising prices  despite the reassurances of central banks in the US and UK. “None of this suggests we are heading towards the wage and price spirals of the 1970s, but it does point towards a future in which we need to worry more about inflation than in recent years”, he writes.
 
The pandemic has yanked back the veil that had previously concealed the crisis in social care. Writing in The Guardian, Christine Corlet Walker attributes the crisis in social care to predatory financial tactics introduced by private equity and hedge funds that have placed its very survival at risk.

Cartoon source: The New Yorker

Markets

What happened yesterday?

London stocks closed in a positive state on Tuesday, as investors reflected on the latest retail sales data. The FTSE 100 ended the session up 0.4% at 7,161.04, while the FTSE 250 was up 0.51% at 23,572.05.
 
Sterling, however, was in a mixed state, trading 0.06% lower against the dollar at $1.38, while rising 0.08% against the euro, changing hands at €1.18
 
Wall Street stocks ended mixed on Tuesday, after a surge of new Covid-19 cases knocked both the Dow Jones Industrial Average and the S&P 500 off their all-time highs in Monday’s session.
 
At the close, the Dow Jones Industrial Average was 0.46% firmer at 35,264.67 while the S&P 500 rallied 0.1% to 4436.75. The tech-heavy Nasdaq Composite, however, was 0.49% weaker at 14,788.09. 
 
In company news
 
Private equity company Carlyle pulled out from a bidding war with Philip Morris International for UK inhaler manufacturer Vectura after it refused to raise its offer of 155p per share.
 
Software giant Salesforce announced the launch of Salesforce Plus which will look to harness the streaming model pioneered by Netflix and Disney to target businesses and professionals. The platform will include live experiences, original series and podcasts, the firm said.
 
Deliveroo’s revenue jumped 82% to £922m in the first six months of 2021, according to half-year results the company revealed this morning.

What’s happening today?

Interims
4Imprint
Admiral
CLS Holdings
Hill & Smith
Hostelworld
Quilter
RPS Group
Spirax-Sarco

AGMs
Albion En.Vct
Mountview Est.

Q2 Results
Vaalco Energy

Trading Announcements
Gem Diamonds Di

Int. Economic Announcements
(07:00) Consumer Price Index (GER)
(12:00) MBA Mortgage Applications (US)
(13:30) Consumer Price Index (US)
(15:30) Crude Oil Inventories (US)

Source: Financial Times

did you know?

As part of its COVID response, Seoul has recently banned gyms from playing music with a tempo higher than 120 beats per minute — so that people won’t breathe too fast or splash sweat on others. This means that Gangnam Style (132bpm) is officially banned. (Source: Qikipedia)

Parliamentary highlights

House of Commons

The House of Commons is in recess. The House will next sit on 6 September 2021.

House of Lords 

The House of Lords is in recess. The House will next sit on 6 September 2021.

Scottish parliament 

The Scottish parliament is in recess until 30 August.

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