Financial Times Europe - 06.09.2019

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Briefing

i nvestment bank revenues tumbleI

Top investment banks’ revenues hit a 13-year low in

the first half, with equities units in particular

suffering from lower demand for derivatives and

prime brokerage services.— PAGE 11

i hina and US to resume trade talksC

Washington and Beijing have said they will resume

face-to-face trade negotiations, offering modest

hope that a further deepening of their conflict can

be avoided.— PAGE 4

i Y chief attacks call for break-upE

Big Four firm EY has done

“zero” planning for how a split

of its UK business could affect

it in the US despite fears that if

Britain adopts stricter rules,

others could follow.— PAGE 14

i kraine frees pro-Russia separatistU

Ukraine has freed a man identified as a “person of

interest” over the 2014 downing of a Malaysia

Airlines flight, raising speculation that he could be

part of a prisoner swap with Moscow.— PAGE 2

i rump’s mideast envoy quitsT

Donald Trump’s Middle East peace envoy Jason

Greenblatt is to step down. A peace proposal he has

worked on for years with White House adviser Jared

Kushner is yet to be published.— PAGE 2

i unisia election favourite arrestedT

The populist frontrunner in Tunisia’s presidential

poll, tycoon Nabil Karoui, has been arrested on

claims of tax evasion and money laundering, raising

the prospect of him winning while in jail.— PAGE 2

i ooking for love on FacebookL

Facebook, the largest social media platform with

200m users listed as single, has said it will launch

its dating service in the US, taking on Match Group

and others in a $2.5bn market.— PAGE 11

Datawatch

Drugs test

Can J&J’s reputation recover from

the opioid crisis?— BIG READ,PAGE 7

FRIDAY6 SEPTEMBER 2019 WORLD BUSINESS NEWSPAPER EUROPE

World Markets

STOCK MARKETS

Sep 5 prev %chg

S&P 500 2976.75 2937.78 1.

Nasdaq Composite 8100.17 7976.88 1.

Dow Jones Ind 26783.01 26355.47 1.

FTSEurofirst 300 1518.32 1508.39 0.

Euro Stoxx 50 3482.55 3450.83 0.

FTSE 100 7271.17 7311.26 -0.

FTSE All-Share 3990.65 4007.19 -0.

CAC 40 5593.37 5532.07 1.

Xetra Dax 12126.78 12025.04 0.

Nikkei 21085.94 20649.14 2.

Hang Seng 26515.53 26523.23 -0.

MSCI World $ 2149.80 2126.92 1.

MSCI EM $ 990.61 973.27 1.

MSCI ACWI $ 513.64 507.76 1.

CURRENCIES

Sep 5 prev

$ per € 1.104 1.

$ per £ 1.233 1.

£ per € 0.896 0.

¥ per $ 107.050 106.

¥ per £ 131.934 129.

SFr per € 1.089 1.

€ per $ 0.906 0.

Sep 5 prev

£ per $ 0.811 0.

€ per £ 1.116 1.

¥ per € 118.221 117.

£ index 75.555 75.

SFr per £ 1.216 1.

COMMODITIES

Sep 5 prev %chg

Oil WTI $ 57.26 56.26 1.

Oil Brent $ 61.81 60.70 1.

Gold $ 1546.10 1537.85 0.

INTEREST RATES

price yield chg

US Gov 10 yr 132.73 1.58 0.

UK Gov 10 yr 150.85 0.53 0.

Ger Gov 10 yr -0.60 0.

Jpn Gov 10 yr 120.92 -0.28 0.

US Gov 30 yr 117.30 2.07 0.

Ger Gov 2 yr 101.24 -0.86 0.

price prev chg

Fed Funds Eff 2.13 2.40 -0.

US 3m Bills 1.97 1.98 -0.

Euro Libor 3m -0.48 -0.48 0.

UK 3m 0.76 0.76 0.

Prices are latest for edition Data provided by Morningstar

S E BA ST I A N PAY N E— LONDON

Jo Johnson, the brother of British prime

minister Boris Johnson, is quitting as

MP and universities minister, becom-

ing the first minister to leave the UK’s

recently formed government in a

thinly veiled attack on his sibling.

“In recent weeks I’ve been torn between

family loyalty and the national interest

— it’s an unresolvable tension & time for

others to take on my roles as MP

and Minister,” he wrote in a tweet yes-

terday.

His resignation is the latest in a series

of blows for Boris Johnson, who in his

short time as premier has suffered con-

secutive defeats in parliament over a

no-deal Brexit and calling a general

election.

One of the Conservative party’s most

prominent Europhiles, Jo Johnson was

head of the Downing Street policy unit

under former prime minister David

Cameron and played a leading role as

the architect of the party’s 2015 general

election manifesto.

He later served in several junior min-

isterial roles. This year, he quit Theresa

May’s government in protest over its

Brexit policy.

Downing Street said yesterday: “The

prime minister would like to thank Jo

Johnson for his service. He has been a

brilliant, talented minister and a fantas-

tic MP. The PM, as both a politician and

brother, understands this will not have

been an easy matter for Jo.”

Jo Johnson’s resignation came before

his brother Boris appeared at a press

conference, unusually flanked by police

officers, where he insisted that he would

“rather be dead in a ditch” than ask the

EU to delay Brexit beyond October 31, as

parliament has ruled this week.

After Mrs May resigned, Jo Johnson

backed his brother in the Conservative

party leadership race and returned to

his old brief as university and science

minister last month. But the words in

his resignation hinted that he had lost

confidence in the prime minister’s

ability to lead.

Jo Johnson’s decision to step down fol-

lowed growing tension between Down-

ing Street and MPs over the more than

20 Conservative rebels who were

removed from their party for voting

against the government in favour of the

Brexit delay this week.

Other Tory MPs also announced yes-

terday that they would quit, including

Caroline Spelman, the former chairman

of the Tory party, and Michael Fallon,

former defence secretary.

Philip Stephens age 9p

Johnson suffers another setback as

his brother leaves UK government

© THE FINANCIAL TIMES LTD 2019
No: 40,188★

Printed in London, Liverpool, Glasgow, Dublin,
Frankfurt, Milan, Madrid, New York, Chicago, San
Francisco, Orlando, Tokyo, Hong Kong, Singapore,
Seoul, Dubai, Doha

AnalysisiPAGE 19

Investors fear recession

angst will be self-fulfilling

Austria €3.80 North Macedonia Den
Bahrain Din1.8 Malta €3.
Belgium €3.80 Morocco Dh
Bulgaria Lev7.50 Netherlands €3.
Croatia Kn29 Norway NKr
Cyprus €3.60 Oman OR1.
Czech Rep Kc105 Pakistan Rupee
Denmark DKr37 Poland Zl 20
Egypt E£42 Portugal €3.
Finland €4.50 Qatar QR
France €3.80 Romania Ron
Germany €3.80 Russia €5.
Gibraltar £2.70 Serbia NewD
Greece €3.60 Slovak Rep €3.
Hungary Ft1200 Slovenia €3.
India Rup220 Spain €3.
Italy €3.60 Sweden SKr
Latvia €6.99 Switzerland SFr6.
Lebanon LBP7500 Tunisia Din7.
Lithuania €4.30 Turkey TL
Luxembourg €3.80 UAE Dh17.

The typical

resident of an

OECD country

generates more

than half a tonne

of waste a year,

with Danes

producing the

most. Americans

create three

quarters of a

tonne, while Japan

is one of the least

wasteful countries

Load of rubbish

Municipal waste, kg per capita

( or latest year)

    

Denmark

US

Germany

OECD

Italy

UK

Spain

Japan

Source: OECD

Sex, spies and files

Inside the high-stakes world of

asset recovery— ANALYSIS, PAGE 13

Gillian Tett

Why proposals for mass US student

debt forgiveness won’t work— PAGE 9

A N D R E W E D G E C L I F F E- J O H N S O N A N D
JA M E S F O N TA N E L L A- K H A N— NEW YORK
J U D I T H E VA N S A N D OW E N WA L K E R
LONDON

WeWork xpects to be valued at aboute
$20bn in its forthcoming IPO, less than
half the $47bn figure reached in its most
recent round of funding from Japan’s
SoftBank, according to people briefed
on the listing process.
The sharp fall comes after prospective
investors raised doubts about the ability
of the lossmaking shared-office pro-
vider to become profitable in the near
future, according to the people briefed
on the IPO. Wall Street has also voiced
concern about several breaches of cor-
porate governance norms.
“WeWork is finally coming to terms
with reality,” said one person working

with the company. “It’s just not worth

$50bn or $60bn, as they would like to be

valued.”

The lower valuation would be a big

blow to SoftBank, the world’s largest

technology investor and WeWork’s big-

gest backer, which invested money at a

$47bn valuation at the start of this year.

WeWork is expected to begin a road-

show as soon as next week ahead of the

IPO, which would rank as one of the

year’s biggest. The company hopes to

raise more than $3bn in the offering,

plus a further $6bn through a loan, $2bn

of which is contingent on the IPO.

A person close to the company said it

still hoped the valuation could finish in

the $25bn-$30bn range.

The banks working on WeWork’s IPO,

which include JPMorgan Chase and

Goldman Sachs, are concerned about

overvaluing the company when it lists,

as was the case for Uber, which has

traded down heavily since its flotation

earlier this year.

The lower valuation will leave co-

founder and chief executiveAdam Neu-

mann tretching to reach targetss

attached to part of his incentive pack-

age, which includes several tranches of

profit interests that would vest if the

company attained market capitalisa-

tions above $50bn, $72bn or $90bn.

Analysts have notedthe gulf between

WeWork’s valuation nda its largest rival,

London-listedIWG, which has a market

capitalisation of £3.7bn despite having

more sites than WeWork.

WeWorkthis week made two conces-

sions to public market investorsworried

about corporate governance. It added a

woman —former Uber executive

Frances Frei — toits board, and it

reversed highly criticised $5.9m pay-a

ment it had made to Mr Neumann’s

investment vehicle for the rights to use

the trademarked word “we”.

WeWork reported net losses of $1.9bn

for 2018 and said that losses had contin-

ued to grow in the first half of this year,

from $723m to $904m, despite reve-

nues doubling from $764m to $1.54bn.

One prospective investor complained

thatWeWork’s prospectus ontained “ac

very complex diagram about how the

company would be structured. With the

exception of some Chinese companies,

it’s the most complex one I’ve ever seen.

That’s a big red flag.”

Lex age 10p

WeWork’s valuation slashed to

$20bn from $47bn ahead of IPO

3 Investor doubts on office provider profits 3 Blow for backer SoftBank 3 osses increaseL

Protesters put

HK pressure

on Merkel

Protesters in Berlin appeal to Angela
Merkel to confrontBeijing over its
response topro-democracy demonstra-
tions in Hong Kong when she begins an
official visitto China today.
Domestic pressure is growing on the
German chancellor to use the trip to
warn Beijing of grave consequences if it
intervenes militarily to put down the
unrest in the territory.
The extradition bill that triggered the
13-week long protests was withdrawn
on Wednesday, but activists dismissed
the move as “too little, too late”.The
home of pro-democracy media tycoon
Jimmy Lai,labelled a traitor by China
state media, was firebombed yesterday.
Hong Kong dilemma age 4p
Editorial Comment age 8p
Markus Schreiber/AP

The office rental

group still hopes

the valuation

will finish in the

$25bn-$30bn

range, according

to a person close

to the company

SEPTEMBER 6 2019 Section:FrontBack Time: 5/9/2019- 19:10 User:adam.piggott Page Name:1FRONT USA, Part,Page,Edition:EUR, 1, 1