WisdomTree India Earnings Fund (ETF) (NYSEARCA:EPI) Consolidates – Post Overseas Rupee Bond Offer


Dallas, Texas 10/21/2013 (Financialstrend) – WisdomTree India Earnings Fund (ETF) (NYSEARCA:EPI) is a exchange traded fund which concentrates on garnering investment returns by investing into choice emerging market success stories. Adventurous investors who have bought into the stock in order to have exposure to the emerging markets growth story would have been pleasantly surprised at the steady returns from them over the past few weeks.

The trigger for this spurt in market valuation is tied to the Indian reserve bank decision to further liberalize the Indian rupee. The move involves tying up with World Bank to float an offshore rupee bond offer. As part of the deal World Bank’s trading arm International Finance Corporation will sell $ 1 billion of rupee linked bonds to global investors.

The investment mechanism will work as follows. The International Finance Corporation will accumulate dollar investments by selling the rupee bonds. It will in turn convert the dollars raised into Indian currency and use the proceeds to invest in India based business opportunities. The overseas investors into these bonds will get paid returns which will be dependent on the currency value fluctuations interplay between the dollar and rupee. International trade watchers have commended this approach of the Indian agencies to bring in foreign investments into India. This is because the rupee bonds will be backed by World Bank and will carry a credit rating of AAA where as the India credit rating has taken a severe beating over the past few quarters.

In a related development, post a slew of measures which were introduced by new Governor of Reserve Bank of India has helped shore up the value of the Indian rupee by a significant extent. The Rupee which had fallen to record lows against the U.S. dollar has recovered 9% in the past month. The momentum built up has taken the rupee growth rate past the Euro and the British pound in the same period.