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Speaker 1: Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg

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Speaker 1: DAYBAQT podcast, available every morning on Apple, Spotify or wherever

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Speaker 1: you listen. It's Tuesday, the fourth of June in London.

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Speaker 2: I'm Caroline HEPCAF.

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Speaker 3: And I'm Stephen Carroll. Coming up today, India decides election

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Speaker 3: results trickle in for the world's biggest democracy.

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Speaker 4: As Nerandra Modi seeks a third term.

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Speaker 1: Bloomberg learns Rishi Sunak may harden his position on the

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Speaker 1: European Convention on Human Rights, as Nigel Fouage announces he

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Speaker 1: is standing for election.

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Speaker 3: Plus how Berkenstark, a two hundred and fifty year old

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Speaker 3: German shoe company, became an improbable luxury powerhouse.

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Speaker 2: Let's start with a round up of our top stories.

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Speaker 3: Early results in India's election indicate that the race is

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Speaker 3: much closer than any of the exit polls had estimated.

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Speaker 3: What Such polls have a mixed track record in Indian elections,

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Speaker 3: they correctly predicted the broad outlines of the results in

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Speaker 3: twenty nineteen and twenty fourteen. Neandromody and his BJP party

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Speaker 3: are seeking a third term in power, running the world's fastest.

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Speaker 4: Growing major economy.

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Speaker 3: Bloomberg's Mary Nicola says that markets are watching their results closely.

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Speaker 5: The key thing here is just about what happens in

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Speaker 5: terms of the formation of the government. If you get,

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Speaker 5: let's say, a supermajority. What happens if the government then

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Speaker 5: focuses more on its political agenda rather than the economic agenda.

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Speaker 5: And that's absolutely crucial and could actually put a little

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Speaker 5: bit of a stop into the rally in Indian equities

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Speaker 5: if we see that.

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Speaker 4: Our market's life strates.

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Speaker 3: Is Mary Nikola there referring to the supermajority of four

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Speaker 3: hundred seats in India's lower house that Mody is seeking.

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Speaker 1: Here in the UK, Rishisunak is considering an election pledge

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Speaker 1: to seek reform of or leave the European conventional human

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Speaker 1: rights sources of told Bloomberg the Prime Minister is discussing

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Speaker 1: the move to counter Brexit. Architect Nigel Farage is a

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Speaker 1: return to politics are UK politics reporter James Wilcock has more.

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Speaker 6: A highly respected u of mrp Pole predicted Labour would

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Speaker 6: get the largest majority in one hundred years last night.

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Speaker 6: That should be caused enough for conservative misery. Yet it

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Speaker 6: was this man who really started the despair.

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Speaker 7: They are split down the middle on policy and frankly

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Speaker 7: right now, they don't stand for a damn thing. So

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Speaker 7: our aim in this election is to get many, many

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Speaker 7: millions of votes.

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Speaker 6: Yes, Brexit headliner Nigel Farad has changed his mind and

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Speaker 6: plans on leading the right wing challenge to the Conservative Party.

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Speaker 6: If the new Reform UK leader can do, as he claims,

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Speaker 6: defense circuity grant chap swarms, it would erode the Tory votes.

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Speaker 6: A vote for reform very simply as a vote for Starmer,

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Speaker 6: and I don't believe that's sensible. I don't think it's

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Speaker 6: what the country really wants. This leaves Sunac headed to

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Speaker 6: TV debates tonight, needing to win back potentially both the

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Speaker 6: center and right wing of the electorates in London. Bloomberg

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Speaker 6: Radio James Wilcock.

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Speaker 3: British consumers are holding back on spending as higher bills

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Speaker 3: hit home card Data from Berkley's shows spending in Mayro's

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Speaker 3: by one percent compared to last year, the slowest pace

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Speaker 3: in three years. The pullback follows annual price hikes on

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Speaker 3: bills for households of centials in April, including council tax

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Speaker 3: and broadband.

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Speaker 2: Marks and spent A.

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Speaker 1: CEO, Stuart Macin, saw his pay increase by two million

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Speaker 1: pounds last year, according to the company's annual report. The

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Speaker 1: boost comes as the retailer enjoyed a revival in food

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Speaker 1: and clothing sales. Last month, Emins said that it was

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Speaker 1: in the strongest financial health since nineteen ninety seven. Makin's

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Speaker 1: total remuneration for twenty twenty three to twenty twenty four

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Speaker 1: will be four point seven million pounds.

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Speaker 3: A software update glitter the New York Stock Exchange sparked

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Speaker 3: trading halts and false displays of ninety nine percent drops

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Speaker 3: and companies including Warren botch Att's Berkshire Hathaway. The destruction

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Speaker 3: is one of multiple trading hiccups in recent days. It

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Speaker 3: was resolved after forty five five minutes when the exchange

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Speaker 3: reverted to running a different software version. Bloomberg's finance supporter

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Speaker 3: Catherine Doherty says the frequency likely isn't a coincidence.

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Speaker 8: We have seen three incidents in the last week or

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Speaker 8: so since T plus one was implemented, So in every

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Speaker 8: time that like this morning, there's been incidents like this,

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Speaker 8: the answer has been, oh, it's not tied to T

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Speaker 8: plus one, but again if you have the third time

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Speaker 8: within a less than week timespan. I think the questions

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Speaker 8: are still going to be asked, and hopefully we'll get

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Speaker 8: more answers.

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Speaker 3: Bloomberg's Catherine Doherty there the New York Stock Exchange says

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Speaker 3: that they'll cancel the bad trades in Berkshire Hathaways and

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Speaker 3: is reviewing the erroneous Holts to determine whether to cancel

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Speaker 3: any of those. Last week, a computer era prevented prices

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Speaker 3: from printing on the exchange for over an hour.

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Speaker 1: The retail stock trader who drove the game stop craze

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Speaker 1: is apparently worth two hundred and ninety million dollars. Rowing

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Speaker 1: Kitty posted a screenshot of his portfolio on Reddit showing

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Speaker 1: a huge bet on the company. Bloomberg's Bailey Lipschultz says

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Speaker 1: that it's impossible to verify if it's real the.

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Speaker 9: Last time he posted an update on that portfolio. Last

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Speaker 9: time checking in on the portfolio was worth about thirty

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Speaker 9: four million dollars, so a humongous jump in terms of

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Speaker 9: the actual value underlying that position, in addition to the

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Speaker 9: fact that there's some forty five million dollars potentially in cash,

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Speaker 9: but Nonetheless, it drove a flory of training activity.

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Speaker 1: But to Bloomberg's Lipshultz as there are questions about how

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Speaker 1: far the game Stop rally can go.

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Speaker 2: Given them many changes since.

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Speaker 1: The Meme rally in twenty twenty one, game Stop shares

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Speaker 1: jump twenty one percent yesterday, adding roughly one point seven

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Speaker 1: billion dollars to its market cap. Now in a moment

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Speaker 1: euphoria cut short. Narendra Modi is expected to win a

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Speaker 1: third term as Prime Minister in India, but perhaps by

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Speaker 1: a much smaller margin. Well, we'll be discussing the outcome

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Speaker 1: as the counting of those votes is underway. Still a

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Speaker 1: lot of uncertainty, but quite a bit of market reaction

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Speaker 1: to discuss. But before that, a nice story on the

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Speaker 1: Bloomberg terminal that at least I found very interesting lab

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Speaker 1: grown diamonds.

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Speaker 2: Anyone.

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Speaker 1: De Beers says no thanks. After a six year foray

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Speaker 1: into making these deeply discounted synthetic gems so sort of

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Speaker 1: man made gems, they are pulling out of this offering.

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Speaker 1: The whole idea actually for de Beers had been to

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Speaker 1: try to drag down the price of lab grown diamonds

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Speaker 1: so that they did not compete with obviously what Deberz

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Speaker 1: is most well known for, which is the mind gems.

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Speaker 3: But there would be two sort of products of the

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Speaker 3: people because there was being able to choose farm and

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Speaker 3: there would be a clear distinction between them. But now

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Speaker 3: in the revamp of Anglo American, who was currently owned

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Speaker 3: Yber's but is trying to sell it off, essently, this

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Speaker 3: has led to a rethink of that business as well.

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Speaker 3: So they're going to be winding down that six year

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Speaker 3: program that broke one of its oldest taboos.

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Speaker 2: Yeah.

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Speaker 1: Absolutely, it's a really interesting piece on the Bloomberg terminal

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Speaker 1: for you this morning. I think the most important line

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Speaker 1: out of the whole thing. Apparently the technology is so

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Speaker 1: advanced now that experts need a machine to tell the

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Speaker 1: difference between a mind geminis synthemay.

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Speaker 3: I think you'd still know, Caroline, Yeah, Sup was to

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Speaker 3: bite or was that silver?

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Speaker 4: I can't remember?

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Speaker 3: Anyway, Let's get back to our top story this morning

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Speaker 3: and the vote counting underway in India close to nine

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Speaker 3: hundred and seventy million voters. Indian stocks have been pulling back,

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Speaker 3: though from record highs. The Rupean bonds of weekends of

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Speaker 3: Prime Minister in Randromodi's party is seen winning a narrow victory.

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Speaker 3: Joining us now with the Datusasimmy and HISS director Raslin

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Speaker 3: matheson Raz Good Morning, talk us through what we know

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Speaker 3: about the vote counting process near and Dromodi still projected

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Speaker 3: to win at this stage.

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Speaker 10: Well, that's right, he's still expected to win. The question

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Speaker 10: is by how much. He already had a majority going

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Speaker 10: into this election. But he needs two hundred and seventy

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Speaker 10: two seats to win. And we had those exit polls

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Speaker 10: yesterday which have bounced us around a bit because they

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Speaker 10: were indicating quite a whopping victory for Modi. Some exit

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Speaker 10: polls we're talking about three hundred and fifty seats, even

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Speaker 10: four hundred seats out of a what five hundred and

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Speaker 10: forty plus seat parliament, and that's a super super majority.

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Speaker 10: And so there was a bit of exuberance about the

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Speaker 10: possibility of a very big win for Mody, and what

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Speaker 10: we're seeing in the actual vote count it's not going.

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Speaker 4: To be as big as that.

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Speaker 10: In fact, it could be around the margin of what

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Speaker 10: he already had in the prior election, which is still

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Speaker 10: pretty good. But when your Modi, the expectations are you're

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Speaker 10: going to do better every time, and that seems to

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Speaker 10: be where the disconnect has come in the question is

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Speaker 10: does he have enough to govern outright on his own

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Speaker 10: with his own party or is he forced into more

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Speaker 10: of an alliance which is quite uncomfortable for him with

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Speaker 10: some of the smaller parties. And that's where you get,

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Speaker 10: you know, difficulty for him with those smaller parties, you know,

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Speaker 10: with their policies and demands, and he has to start

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Speaker 10: to govern in a more of an unwieldy coalition. At

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Speaker 10: this point, it does seem he's leading in about three

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Speaker 10: hundred seats, which is enough for him to govern on

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Speaker 10: his own, But we need to see how the full

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Speaker 10: vote plays out to see if he can really do.

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Speaker 1: That or not in terms of what it might mean

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Speaker 1: then for key policies, especially around spending, of which there

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Speaker 1: has been a lot under the last Modi administration, economic

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Speaker 1: growth and also youth unemployment the big lines.

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Speaker 2: Well, that's right.

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Speaker 10: I mean, he's really pushed a lot around infrastructure to

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Speaker 10: build ports, roads, airports are sorts of things that will

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Speaker 10: draw investment because the key thing for him has been

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Speaker 10: about enticing businesses to come to India as opposed to China.

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Speaker 10: And to bring that money in, but that's not been

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Speaker 10: evenly spread across India. So you've seen a lot of

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Speaker 10: spending in certain areas which are like proximate to ports

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Speaker 10: and so on, but inequality rising and many other parts

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Speaker 10: of India, so youth unemployment rising in many poorer states,

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Speaker 10: for example, not a lot of investment going in there.

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Speaker 10: And so you can see a scenario in a smaller

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Speaker 10: majority for Modi or even a coalition, where he's going

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Speaker 10: to be pressed to spread that money a bit more

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Speaker 10: evenly across India and to invest more in some of

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Speaker 10: those poorer states where we can see inequality really rising.

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Speaker 10: And so you could see some of the investment being

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Speaker 10: shifted to different parts of the country as a result.

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Speaker 10: And so he could be a bit hamstrung by parliament.

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Speaker 10: I mean, India's parliament is notoriously rowdy. You know, quite

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Speaker 10: often you see big disruptions that go on. It takes

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Speaker 10: ages for some legislation to get through. So you could

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Speaker 10: just see that things slow down for Modi in terms

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Speaker 10: of the pace of which he can get things done.

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Speaker 3: Can we say or how can we say that this

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Speaker 3: perhaps vote might reflect the changing opinions of Nerandromodi and India.

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Speaker 3: He's been criticized during his tenuears and powers seeing an

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Speaker 3: increasing focus on majority Hindus, attacks against Muslims, and erosion

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Speaker 3: of India's democratic values.

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Speaker 10: Well, he's personally incredibly popular. That's interesting thing about India.

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Speaker 10: Even as his party or his government gets criticized for,

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Speaker 10: you know, failing to improve youth employment and so on,

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Speaker 10: none of it seems to stick to him.

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Speaker 4: He's a bit like Teflon.

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Speaker 10: He's one of those leaders where he personally is not

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Speaker 10: held responsible by most people in India for what's happening there. However,

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Speaker 10: they do seem to be perhaps holding his party a

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Speaker 10: bit responsible and individual constituencies and so that's where you

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Speaker 10: might see some of these votes shift in interesting ways.

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Speaker 10: But as you say, you know, Mody has been criticized

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Speaker 10: both internally and externally for pushing quite a hard you know,

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Speaker 10: Hindu nationalist agenda, you know, and that traces back to

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Speaker 10: Gujarat when he was the Chief Minister in two thousand

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Speaker 10: and two. We saw the communal violence that happened there,

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Speaker 10: and certainly he's been criticized by human rights groups for

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Speaker 10: less tolerance of dissent. More broadly, freedom of the press,

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Speaker 10: the ability to have robust debate in society, and for

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Speaker 10: potentially encouraging some of that kind of communal tension that

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Speaker 10: we've seen flare up, and that's been awkward inside India,

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Speaker 10: but also for allies like the US Western countries that

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Speaker 10: need India in the tent when it comes to China.

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Speaker 10: But then can they really criticize mode for human rights

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Speaker 10: at home? And that's presented them with quite a dilemma.

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Speaker 1: Also, Yeah, Wilson, thank you so much for being with us.

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Speaker 1: Bloomberg's EMEA News director of Roslyn Matheson so will continue

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Speaker 1: to track then as the vote counting continues in India now.

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Speaker 3: The German sandal maker Birkenstock held its IPO in the

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Speaker 3: New York Stock Exchange last year. After a decade of

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Speaker 3: explosive growth, the two hundred and fifty year old brand

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Speaker 3: has managed to emerge from family squabbles to transform itself.

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Speaker 4: Into a luxury behemoth.

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Speaker 3: The CEO, Olivia Reichert, who's the first non Birkinstock family

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Speaker 3: member to ever run the company, says the brand can

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Speaker 3: keep up its growth. Bloomberg's Tim Lowe has written a

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Speaker 3: piece that captures how the orthopedic shoemaker has become an

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Speaker 3: improbable luxury empire. Tim joins us now, Tim, good morning.

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Speaker 3: What is it that makes Berkins distinct?

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Speaker 4: Then? As a footwear brand?

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Speaker 11: It certainly is a distinct brand in terms of the

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Speaker 11: footwear industry. Two things jump to mind that sort of

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Speaker 11: set it apart. One, the company has kind of bucked

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Speaker 11: industry trends over the decades. It still manufactures its own footwear.

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Speaker 11: It never outsourced a production to lower cost countries in

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Speaker 11: Asia back in the eighties and nineties, and those factories

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Speaker 11: are located almost primarily in Germany. There's one small one

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Speaker 11: in Portugal, but so it still produces basically thirty million

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Speaker 11: pairs of sandals a year, almost all in Germany. And

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Speaker 11: it is basically obsessed with what it calls the foot bed,

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Speaker 11: which is sort of the chunky soul that anyone who's

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Speaker 11: worn a pair or seen them will instantly recognize, which

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Speaker 11: is made of quark and latex and has sort of

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Speaker 11: been It's the secret sauce for this Stock family. It

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Speaker 11: was developed over about three generations, and it wasn't until

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Speaker 11: Carl Birkenstock in the early nineteen sixties sort of took

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Speaker 11: this platform that his father and grandfather had been tinkering

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Speaker 11: with since about nineteen hundred and put it on the

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Speaker 11: bottom of an open toed sandal that the family had

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Speaker 11: finally put all the pieces together and created a shoe

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Speaker 11: that they could scale and sell, and it created this

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Speaker 11: sort of cult classic that you know has had such

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Speaker 11: a run for the last sixty years or so.

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Speaker 3: This is Bloomberg Daybreak Europe, your morning brief on the

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