Financial Times Europe - 10.10.2019

Thursday10 October 2019 ★ 11

The Financial Times Limited 2019© Week 41

Every Monday, Marcelo Klein briefs

Vale’s board on the miner’s response to

the dam disaster that killed more than

250 people in January. Mr Klein leads a

$6bn reparation project that he hopes

will help shape a new approach at Vale,

thebiggest producer ofiron ore.

AnalysisiPAGE 15

Vale makes reparation core

after Brazil dam tragedy

J U D I T H E VA N S A N D DAV I D C R OW

LONDON

Goldman Sachs as set up a disasterh

recovery trading floor in aWeWork

office in central London to enable the

bank to continue operating in the event

of a serious disruption.

The US bank, which advised the shared-

office provider during its ill-fated listing

process this summer, has rented the

space to replace an existing facility on

Paternoster Square near the London

StockExchange.

Hosting a trading floor is an unusual

venture for WeWork, which specialises

in shared offices known for freshly

ground coffee and fashionably deco-

rated communal areas. But the Gold-

man unit is not the first time that it has

done so, according to a person familiar

with the group. The trading floor will be

operationalbytheendoftheyear.

Thefacility is a “near-site business

continuity location” where the bank’s

most critical London traders could

quicklyrelocateintheeventofanemer-

gency affecting its new £1.2bn Euro-

peanheadquartersatPlumtreeCourt.

TheGoldmanfloorisinWeWork’ssite

on Waterhouse Square at 138-142 Hol-

born,the restored 19th-century former

Prudential Assurance Building. The

bank is moving its European headquar-

ters from Fleet Street to nearby Plum-

tree Court, an 826,000 sq ft building

opened this year. WeWork and Gold-

mandeclinedtocomment.

WeWork has beenwooingfinancial

groups,inpartbyprovidingsecurefacil-

ities for banks, and hasleased ,000 1

deskstoHSBC taWaterloosite.a

WeWorkis in crisis following the col-

lapse of its initial public offering last

monthandthedepartureofchiefexecu-

tiveAdam Neumann. Fitch last week

downgraded WeWork to a CCC+ rating,

estimating the group hadcash and cash

commitmentsforaboutfourquarters.

Goldman was one of several banks

that advised WeWorkon itslisting.

Goldman told WeWork that its value

could be $61bn-$96bn at the IPO. In the

event, it failed to secure support from

investors even at valuationslower than

the$47bnatwhichitwasvaluedafterits

mostrecentfundingfromSoftBank.

Goldman turns to WeWork for space

to keep disaster recovery trading floor

TikTok when searching for “Rockets”,

after theHouston Rockets eam’s gen-t

eral manager had posted a tweet in sup-

portofHongKongprotesters.

State broadcasterCCTV nda Tencent

have since halted plans to air some NBA

gamesinChina.

Mr Thompson wrote: “This should

raise serious concern in the US and

other western countries: is it at all

acceptable to have a social network that

has a demonstrated willingness to cen-

sor content under the control of a coun-

try that has clearly different views on

whatconstitutesfreespeech?”

Editorial Comment & Letters age 8p

Lexpage 10

includingApple, theNational Basket-

ball Association nd the video gamesa

groupActivision Blizzard ave foundh

themselves caught up in rows over free-

dom of expression related to the Hong

Kongprotestmovement.

After being granted expanded powers

retroactively to examine deals, Cfius

this year forced China’sBeijing Kunlun

Tech o sell dating appt Grindr, in which

ithadacquiredamajoritystakein2016.

ConcernthatTikTokmightbecensor-

ing search results at Beijing’s behest was

raised on Tuesday bytech analyst Ben

Thompson in his Stratechery newslet-

ter. He found few basketball-related

results on the international version of

ForeignInvestmentintheUnitedStates,

Cfius, the inter-agency group that vets

foreigntakeovers,toreviewthedeal.

“Today I will be asking Cfius to review

#TikTok’s acquisition of Musical.ly,” Mr

RubiosaidonTwitter.

“Ample & growing evidence exists

thatTikTok’splatformforwesternmar-

kets, including the US, are censoring

content in line with #China’s commu-

nistgovernmentdirectives.”

TikTok did not respond to requests

for comment. Cfius declined to

comment. The senator’s call follows

suggestions that TikTok has been cen-

soringcontentatBeijing’srequest.

In recent days, US organisations

T I M B R A D S H AW— LONDON
K I R A N STAC E Y— WASHINGTON

TikTok’s owner has become the latest
Chinese tech group to find itself in US
crosshairs as Marco Rubio, a senator,
called on regulators to review its 2017
acquisition of the start-up that fuelled
theexplosivegrowthofthecompany.
ByteDance s one of the few Chinesei
techcompaniestoattractanaudienceof
hundreds of millions of users outside its
home market.TikTok, its popular viral
video-sharing platform and main inter-
national app, was boosted by the $1bn
acquisition ofMusical.ly, which had
officesinShanghaiandLosAngeles.
Mr Rubio wants the Committee on

Chinese app TikTok faces US heat

3 Owner ByteDance accused of censorship 3 Senator urges review of 2017 Musical.ly deal

Jamaica’sstockmarketistheworld’s

best-performingbourseoverthepast

year,afteraneconomicturnround

culminatinginthecountryexitingits

IMFplanwithflyingcolourslastmonth.

TheCaribbeannationhasstruggled

economicallyformostofitspost-

independencehistoryandafterthe

financialcrisisbecamemiredindebt.

Borrowingpeakedat147percentof

grossdomesticproductin2013with

servicingcostsconsumingathirdofthe

country’sbudget.InMaythatyear

Jamaicaentereda$2bnIMFplan.

Thecountrygraduatedfromthe

programmeaheadoftimein2016and

lastmonthexiteda“standby”dealto

unusuallyglowingpraisefromthefund.

Jamaica’sadherencetothestrictterms

pusheddebttoGDPbelow100percent

forthefirsttimeinnearlytwodecades.

Risingoptimismhashelpedpush

unemploymenttoarecordlowand

triggeredasharerally.

Despitearecentdip,Jamaica’s ourseb

isthebest-performingof94exchanges

trackedbyBloombergoverthepast

months,gaining35percent.Gainsover

thepastfiveyearscometomorethan

600percent—again,theworld’sbest.

Robin Wigglesworth, Steve Johnson and

Jude Webber

Caribbean pearl

Jamaica bourse is

best-performing

‘Evidence

exists that

TikTok’s

platform

for western

markets are

censoring

content’

Marco Rubio

Companies / Sectors / People

Companies
ASM International.................................. 20
Achaogen....................................................... 3
Activision Blizzard................................... 11
Adidas........................................................... 20
Adyen............................................................. 10
Affiliated Managers Group................ 12
Afreximbank............................................... 10
African Export-Import Bank............. 19
Amazon..................................................1,2,
Anglo American........................................ 15
Apple.........................................................1,3,
ArcelorMittal............................................... 12
Arqiva............................................................ 20
Asahi Kasei.................................................... 1
Ataer Holding............................................ 12
Atlas Mara................................................... 10
Axa Investment Managers................ 15
BASF............................................................... 10
BHP.................................................................. 15
BHR Partners............................................... 3
BP............................................................9,10,
Bank of China.............................................. 3
Bank of Georgia....................................... 10
Barclays......................................................... 10
Barratt............................................................ 14
Beijing Kunlun Tech............................... 11
Berkeley........................................................ 14
Berkeley...................................................... 14
Blackstone.................................................... 13
Blizzard Entertainment.......................... 3
BlueMountain Capital........................... 12
Bovis Homes.............................................. 14
British Steel................................................. 12

Brown Shipley............................................ 12

Burisma............................................................ 3

ByteDance.................................................... 11

CCTV................................................................ 11

Calpers........................................................... 15

Cathay Pacific............................................. 8

Cellnex.......................................................... 20

China Development Bank..................... 3

China Postal Savings Bank................. 3

Church of England Pensions............ 15

Citigroup....................................................... 10

Commerzbank........................................... 10

Crest Nicholson...................................... 14

DEA................................................................. 10

Dahua............................................................. 10

Deutsche Bank....................................12,

Deutsche Telekom................................. 20

Didi Chuxing................................................. 3

Dior................................................................... 12

EDF.................................................................. 14

EasyJet............................................................ 9

Elliott Management................................ 13

Eni....................................................................... 9

Equinor............................................................ 9

Ethio Telecom........................................... 14

Etisalat........................................................... 14

Facebook.............................................1,10,

Ferteco Mineração.................................. 15

Fidelity........................................................... 10

Flutter............................................................ 20

Fortress.......................................................... 13

GGV Capital................................................ 10

GVC................................................................. 20

Galliford Try............................................... 14

Goldman Sachs....................................10,

Google............................................................... 1

Grindr.............................................................. 11

HIS.................................................................... 13

HSBC................................................................ 11

Halyk Bank................................................ 10

Hargreaves Lansdown........................ 20

Hermès........................................................... 12

Hikvision....................................................... 10

Hong Kong Exchanges....................... 20

Houston Rockets...................................... 11

Huawei.......................................................4,

IDG Capital.................................................. 10

IFlytek............................................................ 10

ING................................................................... 14

IRobot............................................................ 20

Intel.................................................................. 10

JPMorgan..................................................... 10

Johnson & Johnson.........................12,

Just Eat........................................................ 20

KBL................................................................... 12

Kaspi.kz...................................................10,

Kering............................................................. 12

LVMH...........................................................1,

LetterOne.................................................... 10

Linden Homes........................................... 14

London Stock Exchange..............19,

Louis Vuitton............................................. 12

MTN................................................................ 14

Megvii.........................................................3,

Mitsubishi..................................................... 13

Musical.ly....................................................... 11

National Basketball Assoc’n..........8,

Netflix.........................................................1,

Nike................................................................. 20

Nissan............................................................. 13

Nvidia............................................................. 10

Orange........................................................... 14

Pacific Gas and Electric....................... 12

PayPal............................................................ 10

Persimmon.................................................. 14

Purdue Pharma.......................................... 9

Qiming Ventures..................................... 10

Qualcomm....................................................

Redrow.......................................................... 14

Refinitiv........................................................ 20

Renault........................................................... 13

Richemont.................................................... 12

Robeco............................................................. 9

Royal Dutch Shell..................................... 9

SSAB................................................................ 12

SenseTime................................................... 10

Shopify.......................................................... 10

Silver Lake.................................................. 10

Snam............................................................... 12

Société Générale...................................... 19

SoftBank...................................................11,

Sojitz................................................................ 13

Square............................................................ 10

Standard Life Aberdeen..................... 15

Stripe.............................................................. 10

Takeaway.com.......................................... 20

Tecno................................................................ 9

Telford Homes.......................................... 14

Tencent.......................................................... 11

TikTok............................................................. 11

Total.................................................................. 9

Twitter............................................................ 12

UBS............................................................10,

UniCredit...................................................... 14

Unizo............................................................... 13

Vale.................................................................. 15

Vodafone...................................................... 14

WeWork.......................................................... 11

Wintershall.................................................. 10

Zain.................................................................. 14

Zed World Wide....................................... 10

Sectors

Automobiles................................................ 13

Banks..............................................10,11,12,

Construction............................................... 14

Energy........................................................3,

Financial Services.................................... 12

Financials.....................3,10,12,13,15,19,

Food & Beverage................................... 20

Industrials..................................................... 12

Media....................................................3,12,

Mining............................................................. 15

Oil & Gas...............................................3,9,

Personal & Household Goods...12,

Pharmaceuticals....................................... 12

Property........................................................ 13

Retail.............................................................. 20

Retail & Consumer................................ 20

Technology..............................1,3,10,12,

Telecoms............................................9,14,

Travel & Leisure..................................... 20

Utilities...........................................................

People

Achleitner, Paul........................................ 12

Alverà, Marco............................................. 12

Bartolomeo, Eduardo............................ 15

Browne, John............................................. 10

Collison, John............................................ 10

Dalton, Nathaniel..................................... 12

Diamond, Bob............................................ 10

Dudley, Bob.............................................9,

Feldstein, Andrew................................... 12

Fitzgerald , GregFridman, Mikhail............................................................................ (^1410)
Galvão, Rogerío........................................ 15
Ghosn, Carlos............................................. 13
Gupta, Ashwani........................................ 13
Hamers, Ralph........................................... 14
Hartnett, Bill............................................... 15
Heady, Christopher.................................. 3
Kawaguchi, Hitoshi................................. 13
Kimura, Yasushi........................................ 13
Klein, Marcelo............................................ 15
Looney, Bernard...................................9,
Lévy, Jean-Bernard................................ 14
Mackenzie, Andrew................................ 15
Mustier, Jean Pierre.............................. 14
Nada, Hari.................................................... 13
Neumann, Adam....................................... 11
Oramah, Benedict................................... 19
Ren, Zhengfei.............................................. 4
Saikawa, Hiroto......................................... 13
Senard, Jean-Dominique..................... 13
Sewing, Christian..................................... 14
Siani, Luciano............................................. 15
Siderow, Stephen..................................... 12
Thomas, David.......................................... 14
Uchida, Makoto......................................... 13
Waldron , John............................................ 3
Yamauchi, Yasuhiro............................... 13
Zeltner, Jürg............................................... 12
ClockedQuestions emerge over Nissan’s
post-Ghosn leadership reset— ANALYSIS, PAGE 13
Heat exchangerThe hydrogen key to
solving steel’s carbon issue— INSIDE EUROPE, PAGE 12
Katie
Martin
Tail
Risk
One thing is clear from the behaviour of UK markets this
week:investorsareeternaloptimists.
Early yesterday, after a bruising few days, the pound
suddenlypopped higher, driven at first by news that some
Conservative MPs might refuse to back a no-deal Brexit in
anelectionandlaterhelpedbyareportsuggestingthatthe
EUmightbewillingtomakeconcessionsonthequestionof
theIrishborder.
The latter of those was swiftly pooh-poohed by the EU
andbyNorthernIreland’sDemocraticUnionistparty.How
seriously you take the former depends on how much you
believeinrecalcitrantToryMPs.
The result, for markets at least, was that the pound
quickly fell back to earth, dropping the best part of a cent
to $1.22, making this a rally that was well over by
lunchtime.
But let us be clear: at or around that level, a no-deal
Brexit is nowhere close to being priced in. The assumption
remains that the UK will balk at the very last minute.
News, or hints of news, that
suggest a deal can be found
are still seized upon as a trig-
ger for sterling gains, even
after all the noise of the past
threeyears.
Late last week, Goldman
Sachs recommended buying
the pound, with a view to it
striking $1.30, judging that
the UK government’s new
Brexit proposals at least formed the basis for serious dis-
cussions. Since then, the pound has fallen 1 per cent. The
stop-losslimit,orpointatwhichthebankwouldgiveupon
thisforecast,is$1.19.
If no deal emerges, the pound stands to lose another 10
per cent, MSCI estimated this week, adding that it could
gain8percentifabreakthroughwerefound.
It is not only UK markets that are at risk here. MSCI also
reckons that the euro would take a hit of 5 per cent against
the dollar if the Brits leapt into the unknown. German
stocks would also lose 5 per cent, it estimates; US stocks,
3percent.
Given the other threats to global markets right now —
the age of the cycle, the suspicion that central bankers are
running out of ideas, the capricious nature of Donald
Trump’s approach to trade and geopolitics — it is not too
hard to imagine that Brexit could turn out to be a big
shock, not just to UK assets in the coming weeks but to the
rest of the world too. The assumption that this is a little-
island problem with no global ramifications is at best
hopefulandatworstfoolish.
Federal Reserve chairman Jay Powell’s speech this week
wasmostlyscrutinisedforitsapproachtoshort-termlend-
ingmarkets,understandablyso.Butanothersectionsticks
out: when discussing risks to the global outlook, Mr Powell
firstpointedtotradewars.Secondonhislist:Brexit.
[email protected]
Brexit could turn
out to be a big
shock, not just
to UK assets
but to the rest
of the world too
Angela Weiss/AFP/Getty
OCTOBER 10 2019 Section:2Front Time: 10/20199/ - 19:12 User:keith.allen Page Name:2FRONT USA, Part,Page,Edition:EUR , 11, 1