10/12/2012 World Business Report

has won the presidential election in the first round, but the main

opposition party has challenged the result. Those are the latest

headlines from BBC World News. Now for the latest financial news with

World Business Report. Hello and welcome to World Business

Report. The headlines: Italy's leadership crisis, how will the

markets react following news that Prime Minister Monti is making an

early departure? Mixed signs from the Chinese economy, factory

activity expands in November but overseas trade slows down. The Cat

and crew of Cathay Pacific Airlines will vote in a couple of hours

whether to go on strike over pay. - - the cabin crew. The markets will

get their first chance to react to news over the weekend that Italian

Prime Minister Mario Monti will resign much sooner than expected.

Mr Monti said he will step down as soon as parliament approves next

year's budget. That could mean elections as early as February,

rather than April when the government's mandate runs out.

Former Prime Minister Silvio Berlusconi says he will run for

office again. Analysts say that might not be in Italy's best

interests. Silvio Berlusconi is not going to win, but he can position

the new government. He could get around 20%. That will give him a

strong hand in deciding what to do. It is not good news for Italy. It

means that all the austerity measures that Mario Monti has put

through could be for nothing. It means we are possibly heading

towards the great style instability. -- Greek style. Christian Schulz is

the Senior Economist at Berenberg Bank. Silvio Berlusconi is someone

you cannot understand. Markets have been very critical of him.

Everybody thought it would be possible that people would vote for

him again, but the Italian steadfast that is the -- the at --

Italians did. That is something the markets have to factor in now. One

thing interesting about this, there is not such a high-risk situation

that Italy is in any more. The ECB could buy all these bonds to

support the country. The real low risk situation is that Italy has

gone through much of the austerity already this year under Mario Monti.

The next government does not have to do more austerity. They just

have to stick with what he has done. Whatever government is going to

come in, it is unlikely it will be powerful, the likelihood they will

do nothing and stick with what Mario Monti did is very high. Very

different from Greece and Spain were a lot more has to be done. You

need a strong government to do that. Italy does not need that. Maybe

Berlusconi coming in is not such a big risk. It is not clear as to

whether he will get in. There is a lot of dissension within the ranks,

even from his own party. The centre right do not one to be associated

with dollars scanner's policies. -- want to be associated with Silvio

Berlusconi's policies. For the centre-left, it might be good. On

the other hand, you might have a populist election campaign. It

looks most likely that the centre- left will win. They will have to do

a little bit of backtracking on Mario Monti's reforms, but not

enough to rattle the situation. This is a decision by Mario Monti

that we could live without. We have cut the German elections next year.

We do not know how Spain is going to fare. -- got the. Markets are

doing much better. The ECB safety net has improved the mood Eilat.

This does not do anything to improve things. -- a lot. This is

not a good development. Thank you for your perspective. We start the

week with a bundle of important economic data from China. The

nation's factories were busier in November with output expanding at

an annual rate of more than 10%. Retailers also saw an expansion of

activity. But figures on trade were less encouraging. Export growth

slowed to 2.9% from a year earlier and import growth fell to zero.

Cabin crew at Hong Kong based Cathay Pacific are voting on

whether to strike. Rico Hizon is in the BBC's Singapore office.

This is a crucial vote. It is over pay. Whether they will accept

Cathay Pacific's offer of a 2% wage increase. If they vote against the

offer the cabin crew could strike during the Christmas travel season.

The union, representing more than 5,800 flight attendants, will vote

in a couple of hours' time. That is 3pm Hong Kong time. They want a 5%

salary increase. If this industrial action materialises, it will upset

holiday plans over Christmas and New Year. The pay row comes amid

moves by Cathay Pacific to cut costs. The Hong Kong carrier

reported a first-half loss last month. They have cut entertainment

spending to a bare minimum. Align management says the pale an

increase of the two cabin crew is fair, reasonable and competitive. -

- airline. -- pay increase. Thank you. Other business stories

around today. President Barack Obama held talks at the White House

with Republican Speaker of the House, John Boehner, on Sunday. The

two were discussing the so-called fiscal cliff issue. That's the

automatic spending cuts and tax increases that will start next year

unless politicians can agree on alternative spending measures.

White House officials did not give any detail about Sunday's meeting.

US insurance giant AIG is selling its aircraft leasing business. A

group of Chinese investors is paying $4.2 billion for an 80%

stake in ILFC with the option to buy another 10%. With more than 900

aircraft, ILFC is one of the world's biggest owners of passenger

jets. Skyfall returned to the top of the North American box office

over the weekend. The latest James Bond movie starring Daniel Craig

took another $11 million. Since its release five weeks ago Skyfall has

taken almost $1 billion worldwide, making it the biggest-grossing Bond

movie. That is the key moment in the film if you have not seen it

yet. This is a look at the market. Asia is a bit mixed at the moment.

Slight gains, not particularly strong. We mentioned the news about

China, we could not talk with an expert. Export growth has slowed

quite a bit. The market's not getting too wobbly about this. The

general consensus is that economy has stabilised. A lot of data

coming three indicates that. Having said that, it is not completely

clear how next year will go for China. Europe is such an important

trading partner for China. That is not good news for a time at all. I