05/12/2016 World Business Report

Now for the latest financial news with Sally Bundock

Italy votes "No" in the referendum, and as promised, Prime Minister

We assess what's at stake for Europe's economy.

The new connection between the Hong Kong and Shenzhen stock

We will take you there for all the latest. Hello, and welcome.

Also in the programme, President-Elect Donald Trump

Italy has voted a resounding "No," rejecting the electoral reforms put

forward in the referendum brought by Prime Minister Matteo Renzi,

who has since announced his intention to resign.

The result has ushered in a fresh crisis for the Eurozone,

with one of the founder members of the European project mired

Here's a look at some of the problems facing the country:

The economy has barely grown over the last eight years,

and is likely to remain the slowest in Europe.

Meanwhile, public debt is around 130% of GDP.

In other words, the economy doesn't sell and produce enough goods to pay

That's about 2% above the Eurozone average of 9.8%.

Youth unemployment is nearly among young people is almost 39%.

In other words, almost four out of every ten young people

The IMF estimates that Italian banks are holding around $400 billion

This amounts to about one-third of all bad loans in the euro area.

More than 75% of these are loans to companies.

Now that we have a "No" vote, we could see the failure of up

Prime Minister Matteo Renzi's bank bailout programme

One-fifth of loans in the banking system are categorised as troubled.

After the vote was announced, Matteo Renzi announced his

resignation and said he had no regrets about

TRANSLATION: Today's Italian democracy is based on a

parliamentary system. We proposed to simplify the system, eliminate

separate assemblies, and broaden the areas of Iraq democracy. This is the

reform were brought to the referendum. -- direct democracy. I

am sorry, but I do away with no regrets. We fought the good fight

with passion and determination. It was obvious and evident from day

one. My experience and is here. With me is Doni Imeri, a country

risk analyst for IHS-Markit. It is good to see you. We heard from

Matteo Renzi. He said he would resign if the result was no and he

has followed through. The euro is sinking. What do you think will

happen? The markets will have a mixed reaction. To some extent

markets have been anticipating this. They were also anticipating

containment plans from Italy and the EU. But the ECB is likely to extend

its asset purchase programme so as not to repeat 2012. The main risk is

to bank shares and what happens to it ali in banks. Italian banks are

under considerable strength. -- Italian banks. They have to offload

loans. The minimal requisite for this is political stability. It is

precisely that which they might lack right now unless there is a quick

caretaker government that might stabilise the situation. In terms of

the Italian economy, it has been in a difficult place for quite some

time, hasn't it? That is why politicians are having a tough time

in Italy. Caucus through what needs to happen in the short-term to

prevent, you know, a collapse of Italian banks and the economy as a

whole in the EU. -- talk us through stability plan has been to have a

private-sector rescue plan for the banks, creating a second market for

the purchase of non-performing loans. If pressure keeps heaping on

the banking sector today and in coming days, there could be a

situation where the Italian government has to inject capital

into the banking system to stabilise it. The private sector bailout of

banks is all right, but who wants to buy from the private sector? That is

the problem. Exactly. It will be much more difficult to attract

investors at this particular juncture. We might have such a

situation where the state has to intervene. The fallout of such an

intervention would entirely depend on what they agree with the European

Commission and what rules will apply and whether bond rules will have to

take a hit. If they do, there has to be, they would have to be some sort

of compensation scheme going on. Unless they want to avoid a surge in

popularity for antiestablishment parties. Thank you for your time and

giving us a sense of what we can expect in the weeks ahead. We will

be looking at that later on the BBC. Join us to see how markets begin

their day in Europe. The long-awaited connection

between the Hong Kong and Shenzhen Foreign investors can now buy

mainland Chinese shares in nearly Chinese investors can access

Hong Kong listed companies. For the latest, let's cross over

to Helier Cheung who's Helier Cheung is our

reporter in Hong Kong. Helier Cheung, it is good to see

you. Tell us how it is going. It is the first day. Tell us why the

authorities have linked the two up the pillow yes. It is the first day.

Earlier we had a launch which was very busy. Quite a lot of people are

happy about the stock connect and some newspapers have called it an

historic day. Why have they been linked out? China once to

nationalise the Yuan and internationalise its markets and

attract more investment. You might remember earlier this year the MSCI

index decided not to include Chinese indexers. They said they were

worried about access ability issues with the Chinese market. This will

be seen as a step that will help combat that and improve that. On the

Hong Kong side, Hong Kong sees itself as a link between China and

the rest of the world. This morning, the Chief Executive, CY Leung, said

it will connect international and national wealth. What is the

interest like from outside of Hong Kong and China in what is listed in

gems and? -- Shenzen. At the start of this year we were influenced by

the casino-style trading in China. It is extremely volatile. Last year

it plunged by 14%. The level of interest depends on who you talk to.

Some feel investors will be put off by it volatility. Others say it has

long-term potential. Thank you so much, Helier Cheung. Live from the

Stock Exchange in Hong Kong. Let us squeeze in other stories.

US President-Elect Donald Trump says he will impose punitive taxes on US

firms that move manufacturing overseas.

Mr Trump promised a 35% tax on products sold in the US by any

business that fired American workers, and built

Firms should be "forewarned prior to making a very expensive

Mr Trump has promised to help blue-collar workers,

as well as reduce taxes and regulations on businesses.

Donald Trump has also strongly attacked China in a series

He complained about China devaluing its currency,

Last week, Mr Trump was criticised for taking a phone call

from the President of Taiwan, an island the US hasn't had

diplomatic ties with for almost 40 years.

The US Army has decided not to allow an oil pipeline to cross under

a reservoir on land it controls in North Dakota in a move

The Standing Rock Sioux Tribe hailed an "historic decision" and said

it was "forever grateful" to President Obama.

Instead, the US Army Corps of Engineers will look

at alternative routes, a statement by the campaigners said.

The Sioux have been protesting since April against the pipeline

That is a quick look at international business stories.

The euro is at a 20 month low against the dollar. I will see you

soon. Some communities in Britain

are becoming increasingly divided as they become more ethnically

diverse, according to a review