New Zealand’s stock exchange is under scrutiny to prove its resilience after cyber attacks halted trading for a third straight day, frustrating investors as companies report earnings and the market nears a record high.

Exchange operator NZX was forced to impose another trading halt on Aug 27, citing connectivity issues, following similar outages the two previous days that it attributed to cyber attacks from abroad. The disruptions come at the worst possible time, with companies such as national carrier Air New Zealand reporting their first annual results since the outbreak of the coronavirus pandemic.

"The timing is not ideal,” said Michael De Cesare, a portfolio manager at Nikko Asset Management in Auckland. "Fund managers generally will be looking to be more active in response to the substantial new information being released to market. So clearly the disruption constrains that ability.”

Commerce Minister Kris Faafoi and the Financial Markets Authority, which regulates NZX, have both been in touch with the exchange over the incidents. NZX itself has yet to respond to Bloomberg News queries about what steps it’s taking to prevent further attacks and whether it has received any demands in conjunction with them.

The market was disrupted for the final hour of trading on Aug 25 and again for more than three hours on Aug 26. Today’s (Aug 27) outage began at 11:09am in Wellington and has yet to be resolved. The benchmark S&P/NZX-50 index was up 0.2% at 12,053, closing in on a record high of 12,073.

Cyber attacks aren’t common in New Zealand, but in neighboring Australia there has been an increase in incidents. In June, Australian Prime Minister Scott Morrison warned that the frequency of attacks on government, health and education services and various industries has been climbing over many months, and said organisations needed to improve their cyber resilience.

NZX has issued only brief statements to confirm the trading halts and say it’s working with service provider Spark New Zealand to fix connectivity issues. It has said that the incidents on Aug 25 and Aug 26 were caused by "volumetric distributed denial of service attacks from offshore” - an attempt to disrupt service by saturating a network with significant volumes of Internet traffic.

"Minister Faafoi is being kept updated on the situation and has spoken with the exchange,” his spokesman said today. "He has been advised it is working with its Internet service provider on a security solution and has asked to be kept informed.”

 - Bloomberg