INDONESIA - TRADE FINANCE - Military Uniform Supplier Sritex Gets $400m Loan From Islamic Bank

www.thejakartaglobe.com - Textile manufacturer Sri Rejeki Isman has taken out a $400 million loan, tapping into $3.3 billion in funds that the Islamic Development Bank is making available to Indonesian companies.

Last May, the Saudi Arabia-based IDB announced that it would make the loans available to companies in Indonesia, both private and public.

“We want to see more private projects tap into the loan. The loans will be available until 2014 and 2015,’’ Armida Alisjahbana, the state minister of national planning and development, said on Tuesday.   (source)

INDONESIA - TRADE FINANCE - ITFC Signs US$60 million Structured Trade Finance Sugar Deal with Indonesia

http://www.itfc-idb.org - Jeddah, January  2012: The International Islamic Trade Finance Corporation (ITFC), a member of the Islamic Development Bank (IDB) Group, signed a US$60 million Syndicated Structured Finance with an Indonesian sugar refinery, PT Angels Products at IDB Headquarters in Jeddah.

The US$60 million structured trade financing for Indonesia’s PT Angels is for the purchase of raw sugar for the domestic demand. The agreement was signed by Mr Tony Wijaya Ng, Director, PT Pasifik Agro Sentosa, Indonesia and Eng. Hani Salem Sonbol, Deputy CEO of ITFC. Mr. Hasjim Oemar, President Director, PT Pasifik Agro Sentosa, and Mr. Teh Choon Bok, Independent Commissioner, PT Pasifik Agro Sentosa, attended the signing ceremony along with representatives from ITFC. (source)

INDONESIA - AWARDS - IFN Deals of the Year 2011

Commodity Murabaha USD 183 million - TH Indo Plantations Tawarruq applied to refinance shareholder advances from Tabung Haji. The cross-border transaction involves funding properties in Indonesia and addressing local regulations and language requirements.

Trade Finance : Natrindo Telepon Selular (Axis Indonesia) Financing : The winner is the complex and well structured Natrindo Telepon Selular (Axis Indonesia). This was the largest private sector financing in Indonesia in 2011 and first Islamic financing involving China Development Bank supporting the procurement of product and civil works services from Huawei Technologies Company for USD 400 million. The deal also included a USD 450 million syndicated Murabaha and a USD 350 million equipment purchase from Ericsson funded by AB Svensk Eksportkredit and backed by EKN Sweden's export credit agency. The transaction also included a political risk guarantee from the World Bank Groups' Multilateral Investment Guarantee Agency.

Country Winner: Perusahaan Penerbit SBSN Indonesia II USD 1 billion Trust Certificate Issuance : Indonesia'sUSD 1 billion  issuance via Perusahaan Penerbit SBSN Indonesia II represented Indonesia's return to the capital markets with a better credit rating, better pricing and a bigger size. (honorable mention for the Natrindo Telepon Selular (Axis Indonesia).

Source : www.islamicfinancenews.com

INDONESIA - BANKING - Maybank Islamic Financing Facilitation of Global Commerce

JAKARTA-Maybank Islamic provide financing facility to PT Global Trading Co, a company engaged in the service sector of logistics and transportation of offshore oil in the amount of financing of U.S. $ 12,500,000.00.
Shariah-based financing agreement was signed on December 6, 2011 in Jakarta.  (source)

INDONESIA - BANKING - Maybank Syariah and PT Global Futures Seeks Cooperation With Shariah Finance

REPUBLIKA.CO.ID, JAKARTA - Maybank Shariah Shariah-based financing partnering with Global Trading Co Ltd, a company logistics and transportation services sector, offshore oil, with the financing reached 12.5 million U.S. dollars. Kersajama Agreement was signed in Jakarta on 6 December past.

This funding facilities provided with a period of 5 years. With the funding, PT Global Trading Co can add two sea transport fleet, Floating Storage and Offloading namely (FSO) and Platform Supply Vessel (PSV). Both sea transport are under long term contracts with mining companies offshore oil and gas to transport the oil supply to the offshore platform and transport goods (supply of food, fresh water, and other crew accommodation) and personnel to and from oil and gas mining platform the.  (source)

WORLD - PUBLICATIONS - A Theory of Domestic and International Trade Finance

A Theory of Domestic and International Trade Finance 

Author/Editor: Ahn, JaeBin 

Authorized for Distribution: November 01, 2011 

Summary: This paper provides a theory model of trade finance to explain the "great trade collapse." The model shows that, first, the riskiness of international transactions rises relative to domestic transactions during economic downturns, and second, the exclusive use of a letter of credit in international transactions exacerbates a collapse in trade during a financial crisis. The basic model considers banks' optimal screening decisions in the presence of counterparty default risks. In equilibrium, banks will maintain a higher precision screening test for domestic firms and a lower precision screening test for foreign firms, which constitutes the main mechanism of the model.

WORLD - TRADE FINANCE - ITFC signs up HSBC as key trade finance partner

CPF FINANCIAL  - International Islamic Trade Finance Corporation (ITFC) and HSBS sign MoU to implement Shari’ah-compliant trade financing

Dr Waleed Al-Wohaib, Chief Executive Officer, International Islamic Trade Finance Corporation

HSBC has signed a Memorandum of Understanding with the Islamic Development Bank’s ITFC on trade finance and to provide help on various treasury activities such as joint trade financing and investment of liquidity. The MoU means ITFC customers will be able to use HSBC’s services to facilitate the issuance of Letters of Credit on behalf of ITFC for customers who import or export goods.

HSBC Amanah, the bank’s global Islamic finance business, is present in seven countries, four of which contribute more than 50 per cent to the GDP of Organisation of Islamic Conference (OIC) member countries. (source)

INDONESIA - TRADE FINANCE - The ITFC signed a with MoU with Bank Muamalat Malaysia Berhad and two $1 million Murabaha financing agreements with Indonesian coffee exporting companies, CV Arvis Sanada and CV Ujang Jaya.

Jakarta, May, 2011: The International Islamic Trade Finance Corporation (ITFC), a member of the Islamic Development Bank (IDB) Group, signed a memorandum of understanding with Bank Muamalat Malaysia Berhad and two $1 million Murabaha financing agreements with Indonesian coffee exporting companies, CV Arvis Sanada and CV Ujang Jaya.

The signing took place during the “IDB Day” in Indonesia which was held by the Government of the Republic of Indonesia and the Islamic Development Bank in Ritz Carlton Hotel in Jakarta.(source)

INDONESIA - BANKING - Bank Muamalat launches international services

Jakarta (29 / 7) obsession to become one of the national banking system continues to be conducted by Bank Muamalat Indonesia (BMI). In addition to building core banking infrastructure sharia, BMI also showed a serious effort to boost its international business.

Director of International Banking and Financial Institution BMI, Farouk A. Alwyni product launches international services BMI in Jakarta (28 / 7), said international transaction volume and value increases with the increasing importance of the role of Indonesia in the global economy, BMI is ready to facilitate this activity by sharia. (source)

TRADE FINANCE - MIGA Covers Murabaha Facility for Indonesia Telecoms Expansion

Project Example of Agency’s Work with Islamic Finance Deal Structures

WASHINGTON, DC, June 16, 2011—The Multilateral Investment Guarantee Agency (MIGA), the political risk insurance arm of the World Bank Group, announced today that it has provided $450 million in investment guarantees to support the expansion of telecommunications services in Indonesia. MIGA’s guarantees are backing a $450 million Murabaha financing facility underwritten by Deutsche Bank and Saudi British Bank (SABB). (source)

TRADE FINANCE - Islamic trade finance sector to see expansion

Islamic trade finance has benefitted from shifting preferences towards Shariah-compliant banking and could serve as one of the key growth drivers to help the nearly $1 trillion Islamic finance industry double in size. 

The global Islamic finance industry, which has been growing between 15 to 20 per cent a year, is widely expected to reach $2 trillion in the next three to five years.

While Islamic banking and Islamic bonds, or sukuk, are expected to lead growth, bankers say Islamic trade finance could serve as the dark horse emerging to propel the industry further.

Trade finance, the lifeblood of global commerce, underpins 60-80 per cent of the $12-13 trillion trade in global merchandise and practitioners say it is safer than other forms of lending. (source)

TRADE FINANCE - Islamic trade finance seen lifting growth of sector

DUBAI, June 9 (Reuters) - Islamic trade finance has benefitted from shifting preferences towards Sharia-compliant banking and could serve as one of the key growth drivers to help the nearly $1 trillion Islamic finance industry double in size.\

The global Islamic finance industry, which has been growing between 15 to 20 percent a year, is widely expected to reach $2 trillion in the next three to five years. (source)

FINANCE - STC Indonesia unit secures $1.2bn funding

Saudi Telecom Company (STC), said its Indonesian unit Axis has secured $1.2 billion in financing to help fund its expansion and growth strategies for the next five years.

The finance deal, with a tenor of seven and a half years, involves several local and international financial institutions and all facilities have been structured in a sharia-compliant manner, said a STC statement. (full story - trade arabia)

TRADE FINANCE - IDB entities boost trade finance ties with Indonesia

The Jeddah-based Islamic Development Bank (IDB) Group) is boosting its ties with Indonesia, the world's most populous Muslim country, under its Member Country Partnership Strategy (MCPS), a new initiative launched by the IDB in 2010 to identify, target, allocate, implement and evaluate its financing more efficiently in member countries. Thus far, already $3.5 billion have been allocated under this program to Indonesia for 2011-2014.

The latest initiatives under the MCPS include a Strategic Partnership Agreement (SPA) signed during the IDB Group/Indonesia meeting held in Jakarta on in May 2011 by the Islamic Cooperation for the Development of the Private Sector (ICD), the private sector financing arm of the IDB Group, and the Lembaga Pembiayaan Ekspor Indonesia (Indonesia Eximbank), to jointly explore investment opportunities in Indonesia and other IDB member countries. (full story - arab news)

ISLAMIC TRADE FINANCE - Presentation

There is an interesting presentation (mix Bahasa Indonesia / English) of Muhammad Syafi Antonio available on the website of MES Masyarikat Ekonomi Syariah.

You can download it HERE.

FINANCE - Sukuk market will bounce back over the next two years

ELAF Bank is a wholesale Islamic bank incorporated in Bahrain in 2007. Its shareholders include Aref Investment Group of Kuwait; Kuwait Investment Company (KIC); Sukuk Holding Company; Islamic Corporation for the Development of the Private Sector (ICD), the private sector funding arm of the Islamic Development Bank; and Qatar Islamic Bank.

It started with the original objective of developing a secondary market in sukuk and to be a market maker. In fact its original name was the cumbersome Sukuk Exchange Central Bank. But the oncoming global financial crisis forced the bank to retreat into more vanilla investment banking to generate enough income to cover its expenses and to prepare for the recovery in the market in 2010-2011.