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headlines from BBC World News. Now for the latest financial news with | :00:00. | :00:00. | |
Sally Bundock and World Business Report. | :00:00. | :00:18. | |
41% and rising: Italy looks for a way out of its youth unemployment | :00:19. | :00:23. | |
crisis Plus, the most expensive real estate in the world. But is Hong | :00:24. | :00:28. | |
Kong's property market a bubble about to burst? Welcome to World | :00:29. | :00:38. | |
Business Report I'm Sally Bundock. Also in the programme, a new record | :00:39. | :00:42. | |
close on Wall Street, I'll bring you all the details in just a moment. We | :00:43. | :00:48. | |
start in Italy, where this man is offering himself as the solution to | :00:49. | :00:54. | |
the country's economic woes. He is Matteo Renzi, the 39 year old mayor | :00:55. | :00:57. | |
of Florence who was recently elected leader of Italy's Democratic Party, | :00:58. | :01:00. | |
and has his eye on the Prime Minister's job. Later today he'll | :01:01. | :01:07. | |
outline plans to reform Italy's labour market, make the country more | :01:08. | :01:09. | |
competitive and tackle soaring levels of youth unemployment. To | :01:10. | :01:15. | |
give you some context, in November Italy's total jobless rate hit a 37 | :01:16. | :01:22. | |
year high of 12.7%. But in the same month the jobless rate among 15 to | :01:23. | :01:26. | |
24 year olds hit an all time record of 41.6%. A job for life culture | :01:27. | :01:36. | |
among trade unions and a web of red tape make hiring and firing | :01:37. | :01:38. | |
notoriously difficult and expensive in Italy. Many young people have | :01:39. | :01:43. | |
simply given up trying to break into the jobs market and left the country | :01:44. | :01:48. | |
to find work. Mr Renzi is promising a radical change in his Jobs Act to | :01:49. | :01:54. | |
be outlined today. Let's talk to Rome correspondent Alan Johnston | :01:55. | :02:06. | |
full . Just reminders of the role he plays in Italian politics. Whether | :02:07. | :02:16. | |
see fit? Sally, right now he is the most dynamic figure on the Italian | :02:17. | :02:21. | |
political stage. The Mayor of Florence in just 39 years old. He | :02:22. | :02:25. | |
brings the promise of youth and freshness. He is often likened to | :02:26. | :02:34. | |
Tony Blair in his early days. Matteo Renzi has captured the leadership of | :02:35. | :02:37. | |
the biggest and most influential party in the country, the central | :02:38. | :02:45. | |
left Democratic party. He will try and arrange Italy out of its | :02:46. | :02:49. | |
economic stagnation. Nothing will be easy or straightforward for him. His | :02:50. | :02:57. | |
party has already in government. It dominates the coalition. Although | :02:58. | :03:02. | |
Matteo Renzi leads the party, he doesn't need the government. He is | :03:03. | :03:06. | |
not the Prime Minister. That belongs to another Democratic party man. As | :03:07. | :03:12. | |
he tries to drive through his agenda, he will have to work through | :03:13. | :03:17. | |
the Prime Minister and through the coalition administration which she | :03:18. | :03:22. | |
doesn't actually control. Tell us more about what he is proposing and | :03:23. | :03:29. | |
whether people believe it will work. Italy is just beginning to emerge | :03:30. | :03:33. | |
from its longest recession since World War II. It still feels like a | :03:34. | :03:39. | |
country in an economic crisis. Youth unemployment is beyond 40%. Creating | :03:40. | :03:45. | |
jobs and stimulative growth is the priority. This afternoon we will see | :03:46. | :03:51. | |
him put out the core of his party 's agenda. He will make the Italian | :03:52. | :03:56. | |
labour market more flexible and dynamic and accessible. A new style | :03:57. | :04:02. | |
of contract which young people find more easy to get work. They won't | :04:03. | :04:06. | |
have all the protection they would want, but they will be phased in | :04:07. | :04:11. | |
over time. Crucially, Matteo Renzi would want to drive down the cost to | :04:12. | :04:18. | |
employ people. Reducing the tax is at satiated with taking on employees | :04:19. | :04:24. | |
in Italy. He will reduce the red tape and regulations and labour | :04:25. | :04:30. | |
codes surrounding work. He will trade drive down the cost of energy | :04:31. | :04:34. | |
which is such a burden to Italian firms. Thank you very much. A very | :04:35. | :04:51. | |
interesting day ahead. China's holdings of US Government debt hit a | :04:52. | :04:54. | |
new record high in November according to official US figures due | :04:55. | :04:57. | |
to be released later. They show Chinese holdings of Treasuries | :04:58. | :04:59. | |
jumped by 12 billion dollars to a record 1.3 trillion dollars | :05:00. | :05:02. | |
according to Bloomberg, which got an early sight of the figures when they | :05:03. | :05:06. | |
were posted in error on an official website. China's vast foreign | :05:07. | :05:08. | |
exchange reserves hit a new record of 3.8 trillion dollars at the end | :05:09. | :05:11. | |
of last year according to its own figures. Microsoft's board is | :05:12. | :05:17. | |
considering Ericsson CEO Hans Vestberg as a potential successor to | :05:18. | :05:20. | |
departing leader Steve Ballmer, according to sources quoted by | :05:21. | :05:26. | |
Bloomberg. Former Nokia boss Stephen Elop is also thought to be on the | :05:27. | :05:29. | |
short list. Microsoft's lead independent director John Thompson, | :05:30. | :05:32. | |
who is heading the search, wrote in a December blog post that the board | :05:33. | :05:36. | |
plans to decide by the early part of 2014. Bank of America says profits | :05:37. | :05:43. | |
surged to more than 3.4 billion dollars in the fourth quarter. | :05:44. | :05:47. | |
That's four times what it made in the same period a year ago, when bad | :05:48. | :05:50. | |
mortgage debt was still weighing on its earnings. The results were much | :05:51. | :05:55. | |
better than Wall Street was expecting, and Bank of America's | :05:56. | :05:57. | |
shares hit their highest in more than three and a half years. They | :05:58. | :06:01. | |
are up some 250% from their post-crisis lows. This week, we have | :06:02. | :06:17. | |
been looking at global property hotspots. The next stop is Hong Kong | :06:18. | :06:22. | |
where prices have skyrocketed since 2009 as Asia was spared the worst of | :06:23. | :06:26. | |
the global financial crisis. Chinese buyers have been pouring in. But is | :06:27. | :06:32. | |
Hong Kong in danger of another property collapse? Our chief | :06:33. | :06:34. | |
business correspondent Linda Yueh reports from Hong Kong. | :06:35. | :06:39. | |
The most expensive properties in the world are found here in Hong Kong. A | :06:40. | :06:45. | |
house sold for 70,000 US dollars per square foot. The street down the | :06:46. | :06:51. | |
road is the most expensive property in all of Hong Kong. Overall prices | :06:52. | :06:58. | |
hit a new high. The capital gains tax and Chinese money mean that Hong | :06:59. | :07:01. | |
Kong is an attractive place to invest. To deter speculation, | :07:02. | :07:06. | |
foreigners now have to pay tax equal to a quarter of that purchase price. | :07:07. | :07:15. | |
The transaction costs have become so high that it has made Hong Kong a | :07:16. | :07:18. | |
less attractive place to speculate and invest. They are now trimming | :07:19. | :07:26. | |
its cash injections which give higher global interest rates and | :07:27. | :07:34. | |
mortgage costs. It is hard not to wonder if there is a bubble. House | :07:35. | :07:38. | |
prices are estimated to be overvalued by 30 to 40%. One of the | :07:39. | :07:42. | |
most overvalued markets in the world. When the last bubble burst | :07:43. | :07:48. | |
during the Asian financial crisis, house prices fell by 60% and | :07:49. | :07:54. | |
continued to decline for six years. The trouble with bubbling markets is | :07:55. | :07:59. | |
that once interest rates rise, so does the risk of collapse. Property | :08:00. | :08:04. | |
developers say that it is different this time. In 1987, the interest | :08:05. | :08:12. | |
rate was above 10%. Now it is only 3%. -- 1997. House prices are 13 | :08:13. | :08:26. | |
times the average salary. Even higher than during the last bubble. | :08:27. | :08:34. | |
I work in a hotel, and I need to spend about 50 to 60% of my whole | :08:35. | :08:41. | |
salary to pay for the mortgage. Even if they spend nothing, I have to | :08:42. | :08:52. | |
save for two years for the deposit. Adding further pressure, public | :08:53. | :08:57. | |
housing is inadequate. It covers only 30% of the population. This | :08:58. | :09:03. | |
lady and her family live in a 400 square feet flat. The size of a | :09:04. | :09:10. | |
studio. TRANSLATION: The rent is really high. It is our biggest | :09:11. | :09:15. | |
expenditure. It takes half of our monthly income, and we don't earn | :09:16. | :09:20. | |
much. She still one of the lucky ones. Illegal flats on rooftops have | :09:21. | :09:25. | |
sprung up to cope with the unaffordable and inadequate housing. | :09:26. | :09:32. | |
This is the dark side of being a property hotline. | :09:33. | :09:45. | |
The biggest in Australia today is the unemployment figure went up | :09:46. | :09:52. | |
surprisingly high. A real expectation that the central bank in | :09:53. | :09:57. | |
Australia is poised to cut interest rates to stimulate growth. You can | :09:58. | :10:03. | |
see the market is up. Japan having a good session up 2.5%. Another strong | :10:04. | :10:12. | |
close in the US. This trend all three year low against the US | :10:13. | :10:20. | |
dollar. Just to say, the earnings we have mentioned that the bank of | :10:21. | :10:29. | |
America. Goldman Sachs released earnings today. We are keeping an | :10:30. | :10:30. | |
eye on that as well. The number of cases of gout being | :10:31. | :10:47. | |
recorded in the UK | :10:48. | :10:48. |