Export Trade Fiance - Negotiation under Documentary credit

Negotiation under Documentary credit is, under the export L/C, the beneficiary (Exporter) use some export documents as a mortgage to the local bank to do the financing before they receive the money from their buyers(importers).

Things to be noted:

1. The exporter must get the L/C first then apply for this financing before they receive the money from buyers
2. The mortgage must be the export documents.  Normally those export documents ≈ the L/C issued from issuing bank, so it has the value.  Thus, the local bank in exporter side can still sell or do some secondary mortgage in the secondary market to distribute the risk.

Why exporters use this service?

The exporter can do some short-term financing to accelerate the capital turnover and increase the exportation scale as well.  It only takes the documents as mortgage, so it is comparatively easier to get the money for exporters under L/C.

In other aspects, under the circumstances of local currency appreciation, the negotiation can turn the foreign currency into local currency earlier, so it is also a way to avoid the FX risk.

For example, Chinese Firm A choose L/C as the settlement method,  exports to Turkey some fibers valued USD 1000000.00. on 20/07/2005, and submit the L/C to a local bank. Under this L/C, the payment criteria are after 180 days of the submission of L/C. On that day, the FX is USD100 = CNY826.46, and firm can enjoy the USD interest rate 5.5% pa.  When RMB appreciates, Firm A has 2 choices :

1. Finance manager may think, even though the negotiation can turn the future-received USD into CNY to use now and avoid the FX risk. However, The company must pay the interest to the local bank (Interest cost). At that time, the USD/CNY 6-month forward FX settlement is discount. (6-month later's settlement price < current settlement price) . So compared with the current settlement price, the company has some loss. The finance manager decides not to use this service and collect the money when L/C matures. On 25/01/2006, Firm A received the money from the foreign bank. Due to an appreciation of RMB of 2 % on 21/07/2005. the exchange rate on 25/01/2006 is USD100=CNY800.06. And after deduction USD 1350 service charge from the bank, The money received in the end is (USD1000000.00 -USD1350.00) * 8.0006 = 7989799.19 yuan.
2. Finance manager considered the interest cost if apply for the negotiation but can avoid the FX risk and increase the capital turnover. So on 21/07/2005, firm A does the negotiation. the total interest cost for this service is : 

USD 1000000.00 * 5.5% * 180/360 = USD27500.00

       The earning in the end is :
             (USD1000000.00 - USD1350.00 - USD27500.00) * 8.2646 = 8026166.29 yuan

So the comparison between choice 1 and choice 2 is

8026166.29 - 7989799.19 = 36367.10 yuan

So Choice 2 is better. And this hasn't added into the RMB saving interest benefit of 180 days.


Characters of Negotiation :

1. This financing method is used after L/C is issued 
2. This financing method's time is short, normally <= 360 days. However, for Big Equipment exportation, the receivables time is 3 ~ 5 years, so in practice, the negotiation service is also 3 ~ 5 years. So, multiple negotiations are involved, each of which is <= 360 days as well. 
3. For banks to conduct this service, there is a limitation for the bank. Only negotiation bank/issuing bank/confirmation bank which is related to the L/C can conduct this service, otherwise, it's hard for other banks to tell the veracity of documents which involves a big risk. On the other side, if a bank only conducts the negotiation service for this L/C but not other correspondent services related to the L/C, (eg: L/C issuing, L/C processing), it can't maximize the profit for the bank. So banks only continue to do those negotiations for L/C issued himself.
4. Bank has the right of recourse, normally, the prioritized money source is from L/C, if the company can't timely receive the money from foreign clients, the export company must pay the bank principal + interest or auto deduct from company's bank account by the bank.

Procedures of Negotiation:

1. The export firm receives the L/C from foreign clients, then do the negotiation service from a local bank to get some financing.
2. Firm and local bank sign contract/agreement for this. stipulating fee and conditions. 
3. Bank from foreign client-side/Foreign Bank (L/C issuing bank/confirming bank) give the money to bank from exporter side (local bank/L/C Negotiation bank) when L/C matures. 
4. The local bank receives the money from the foreign bank and helps the applicant (exporter) pay the principal + interest(fees) in this bank and transfer the remainings into exporter's private bank account and inform the exporter in the end. 

How to calculate the interest?

Banks conducting the negotiation service normally don't collect fees but only collect the interest.

Negotiation interest  = Neotiation amount * interet rate * days/360

Exporter's receivables = negotiation amount - negotiation interest - bank fees

How does bank calculate Negotiation amount : 

Negotiation amount, in theory, can be 100% of L/C invoice amount. However in practice banks normally collect the interest in the first place (give out the money to exporter after deducting the interest first), so it's < 100% of L/C.

Under some circumstance of export, invoices stipulate some discount/commission
the negotiation amount shouldn't include them. For example, in a commercial invoice,

Total amount : USD100000.00,

Commission: 2%

Maximum negotiation amount : USD98000.00

Under some circumstance of export, some country has stamp duty tax, the export invoice amount and L/C amount has differences. then the bank will consider the lower one of 2 amounts.

Export invoice: USD98000.00,

L/C invoice amount: 95000.00%

Maximum negotiation amount : USD95000.00

How does bank confirm the interest rate :

Financing interest rate = Libor + Margin (0.5% ~ 1.5 %)

Difference between Packing loan and Negotiation :

1. Mortage is different, Packing loan takes the L/C as mortgage and negotiation take the documents as the mortgage.
2. Loan Amount is different, packing loan's loan amount <= 90% of L/C. Negotiation's loan amount <= 100% of some export bill/invoices. 
3. Usage is different. Packing loan's money can only be used for production/transportation... not some fix asset procurement. Negotiation's money has no limitation. 
4. Pressure is different. Packing loan is a financing method before all the documents ready. So exporter's pressure is little and it's good. Negotiation is a financing method after all documents ready. Exporters must produce, transport ... first incurring some expenses documents. So exporters have certain pressure. 

Convert HTML Table into EXCEL , MS Word , PDF in Java

Report generation in different formats is troublesome in most of the projects. However, there still is an easier way to do for experienced engineers. Here I will recommend a jar which can directly convert any HTML Table with CSS into 3 Main report formats (EXCEL, WORD, PDF). This project saves developers tons of efforts to manually write a utility class to parse the XPath in Apache POI or Doc4j and generate reports. here is the address :

https://github.com/alanhay/html-exporter

Here is the code example :

public static void main(String[] args) throws FileNotFoundException, IOException {
  
 String html = IOUtils.toString(new FileInputStream("./Sample.html"));
  
 new ExcelExporter().exportHtml(html, new File("./report.xlsx"));
}

If you are using this jar, 3 points need to be noted :

1. CSS Style must be defined in the <Style> tag.

<style type="text/css">
.pNewCounter {
  background: #FFC000;
 }

table, tbody, tfoot, thead, tr, th, td, footer, header {
  margin: 0;
  padding: 0;
  border: 0;
  font-size: 100%;
  font: inherit;
  vertical-align: baseline;
 }
</style>

                    2. Date format data must have data-date-cell-format attribute                              

   <tr>
          <td>Creation Date</td>
   <td data-date-cell-format="dd/MM/yyyy">06/08/2018</td>
   </tr>

3. Text Data must have data-text-cell attribute

    <tr>
   <td>Offer Expiry Date</td>
   <td data-date-cell-format="dd/MM/yyyy">14/09/2018</td> 
  <td data-date-cell-format="dd/MM/yyyy">14/09/2018</td>
    </tr>
 
 
    <tr>
   <td>Offered Amount</td>
   <td data-text-cell='true' >3,500,000.00</td>
                <td data-text-cell='true' ><strong>3,600,000.00</strong></td>
   </tr>
 
 
    <tr>
   <td>Offered Amount (%) </td>
   <td data-text-cell='true' >35.000%</td>
                <td data-text-cell='true'><strong>36.000%</strong></td>
    </tr>

Sample HTML :

https://github.com/callow/html-exporter/blob/master/Sample.html

Converted Result :

https://github.com/callow/html-exporter/blob/master/report.xlsx

Credit Card Recognition

Credit Card recognition will be based on the modal from OpenCV,  It's not necessary to train our own modal based on data as the card number format are mostly all the same.

1.  download the OpenCV jar file and add into classpath or import as maven, then static import the OpenCV c++ library as below:

static {
        System.loadLibrary(Core.NATIVE_LIBRARY_NAME);
    }

2. read the credit card image into the program into the Mat object

public static void main(String[] args) {
        Mat srcImage = loadImage("img/card.jpg");
}

public static  Mat loadImage(String path) {
 Mat newImage = Imgcodecs.imread(path);
 return newImage;
}

3. turn the card image into grey color (grey scale process)

public static void main(String[] args) {
 Mat srcImage = loadImage("img/card.jpg");
 Mat grey = grey(srcImage);
}

public static Mat grey(Mat srcMat) {
 Mat dest = new Mat (); 
 Imgproc.cvtColor(srcMat, dest, Imgproc.COLOR_RGB2GRAY);
 return dest;
}

4. turn the grey scale image into a black & white image. (binary process)

public static void main(String[] args) 
{
 Mat srcImage = loadImage("img/card.jpg");
 Mat grey = grey(srcImage);
 Mat binary = blackWhite(grey);
}

public static Mat blackWhite(Mat grayMat) {
  Mat binaryMat = new Mat(grayMat.height(),grayMat.width(),CvType.CV_8UC1);
         Imgproc.threshold(grayMat, binaryMat, 30, 200, Imgproc.THRESH_BINARY);
         return binaryMat;
}

5. Erode the black & white image to make the word bolder and clearer so as to be easy to be recognized.

public static void main(String[] args) {
 Mat srcImage = loadImage("img/card.jpg"); 
 Mat grey = grey(srcImage);
        Mat binary = blackWhite(grey);
 Mat erode = imageErode(binary);
}
public static Mat imageErode(Mat srcMat) {
 Mat destMat = new Mat();
 Mat element = Imgproc.getStructuringElement(Imgproc.MORPH_RECT, new Size(3, 3));
        Imgproc.erode(srcMat,destMat,element);
        return destMat;
}

6. crop the key region to remove the noise.

public static void main(String[] args) {
 Mat srcImage = loadImage("img/card.jpg");
 Mat grey = grey(srcImage);
        Mat binary = blackWhite(grey);
 Mat erode = imageErode(binary);
        Mat adjust = filterAndcut(erode);
}
public static Mat  filterAndcut(Mat destMat) {
  int a =0, b=0, state = 0;
         for (int y = 0; y < destMat.height(); y++) //row
         {
             int count = 0;
             for (int x = 0; x < destMat.width(); x++) //column
             {
                 // get the row pixel value 
                 byte[] data = new byte[1];
                 destMat.get(y, x, data);
                 if (data[0] == 0)
                     count = count + 1;
             }
             if (state == 0)//not a valid row
             {
                 if (count >= 150)//find a valid row
                 {//valid row qualify a 10 pixel noise
                     a = y;
                     state = 1;
                 }
             }
             else if (state == 1)
             {
                 if (count <= 150)// find a valid row
                 {//valid row qualify a 10 pixel noise
                     b = y;
                     state = 2;
                 }
             }
         }
         System.out.println("filter upper bound "+Integer.toString(a));
         System.out.println("filter lower bound "+Integer.toString(b));


         //crop the valid region
         Rect rect = new Rect(0,a,destMat.width(),b - a);
         Mat resMat = new Mat(destMat,rect);
         return resMat;
 }

7. recognize and print the result.

public static void main(String[] args) {
  Mat srcImage = loadImage("img/card.jpg");
  Mat grey = grey(srcImage); 
  Mat binary = blackWhite(grey);
  Mat erode = imageErode(binary);
  Mat adjust = filterAndcut(erode);
  
  printResult(matToBufferImage(adjust)); 
}

public static BufferedImage matToBufferImage(Mat grayMat) {
 if (grayMat == null) {
      return null;
 }
 byte[] data1 = new byte[grayMat.rows() * grayMat.cols() * (int)(grayMat.elemSize())];
 grayMat.get(0, 0, data1);
 BufferedImage image1 = new BufferedImage(grayMat.cols(), grayMat.rows(),BufferedImage.TYPE_BYTE_GRAY);                           
 image1.getRaster().setDataElements(0, 0, grayMat.cols(), grayMat.rows(), data1);
 return image1;
}

public static void printResult(BufferedImage src) {
 ITesseract instance = new Tesseract();
 instance.setDatapath("F:/Tess4J-3.4.8-src/Tess4J/tessdata"); // Credit card trained data
 long startTime = System.currentTimeMillis();
 String ocrResult;
 try {
       ocrResult = instance.doOCR(src);
       System.out.println("OCR Result: \n" + ocrResult + "\n spend：" + (System.currentTimeMillis() - startTime) + "ms");
 } catch (TesseractException e) {
       e.printStackTrace();
 } 
}

That's all for this project.

JavaScript !function()

If you like to read some JavaScript plugin source code online you may frequently encounter something like this below :

so how do we interpret this?

If we print this out it is like this below, why? because an anonymous function is undefined, and !undefined is true, we don't care whether it returns true or false but care that the JavaScript engine can parse it perfectly. 

!function(){alert('sd')}()        // true

But you may wonder how does an anonymous function can call itself with no error.

We normally see the below formats more frequently :

(function(){alert('123')})()        // true
(function(){alert('123')}())        // true

Anyway whichever format it is, its main purpose to put a bracket around is to turn a function declaration into an Expression which can be parsed/ Run. for example

function a(){alert('zsd')}   // undefined

This is a function declaration if we put a bracket behind directly, JavaScript Engine certainly doesn't understand. so Syntax error will come.

function a(){alert('iifksp')}()  // SyntaxError: unexpected_token

This code makes the engine confused between function declaration and function call. However, putting a bracket around is different, it turns a function declaration into an expression, the engine will understand it is no more a function declaration but an expression, So this expression will be called when the code is run into this line.

In short, Any grammar that can help to make the engine clearly differentiate function declaration and expression will be accepted by Javascript. For example:

var i = function(){return 10}();        // undefined
1 && function(){return true}();        // true
1, function(){alert('as')}();        // undefined

Assignment Operators,  Logic Operators, and even a comma can tell then engine that this is not a function declaration but a function expression. The unary operator is said to be the fastest way to clear the ambiguity for the engine, exclamation mark (!) is just one of them. here come some examples:

!function(){alert('as')}()        // true
+function(){alert('as')}()        // NaN
-function(){alert('as')}()        // NaN
~function(){alert('as')}()        // -1

void function(){alert('as')}()        // undefined
new function(){alert('as')}()        // Object
delete function(){alert('as')}()        // true

(function(){alert('as')})()        // undefined
(function(){alert('as')}())        // undefined

More Examples  

Option	Code
!	!function(){;}()
+	+function(){;}()
-	-function(){;}()
~	~function(){;}()
-1	(function(){;})()
-2	(function(){;}())
void	void function(){;}()
new	new function(){;}()
delete	delete function(){;}()
=	var i = function(){;}()
&&	1 && function(){;}()
||	0 || function(){;}()
&	1 & function(){;}()
|	1 | function(){;}()
^	1 ^ function(){;}()
,	1, function(){;}()

Export Trade Fiance - Packing Finance（Under L/C）

Export Trade Finacing is basically for the sellers/exportors to finance for themselves. There are quite a lot of ways for them to get money from banks, for example packing fiance/Loan, Negotiation under documentary credit, Discount, Forfeiting, Confirmed L/C,  Factoring  etc. Among them , Packing Finance/Loan , Silent Confirmation, Forfeiting and several others occurs when both parties' dealing based on L/C.

Basis

Packing Loan: Exportors(choosing L/C as the way of transaction settlement) can apply for a certain amount of financing before their cargo loading upto the ship to export(Packing stage). Exportors just need to submit the L/C they received from buyer side's bank to the bank they plan to apply the loan from as a collateral to get the money.

Packing Loan initially  is invented to solve the  fiancing need for exportors in their packing stage. But nowadays, most of banks don't follow this. whatever reasons like : goods replenish, goods processing and other steps before the shippment of the goods . you all can appy for packing loan as long as your L/C is real!

Some Banks will need the L/C as a collateral to give the loan out. some just need to check the exportor's credit . but in Aisa, most of banks still need the L/C as a colateral.

Characteristic

1. Exportor can only use this money to designated items. they can't use it to other investment e.g fix asset investment etc.
2. Bank will keep the original L/C  as collateral to make sure the applier/Exporter do the presentation of documents in this bank so as to monitor all the way how's the L/C's status. 
3. Packing loan's time is short. <= 36 days.
4. With recourse. If exportor can't get the money from importor, bank have the right to deduct principal + interest from the exportor's other account directly

Documents Needed

1. Company basic liscences and certificates . e.g: tax register liscense. business entity information...
2. Fill the application form that bank provides
3. Provide the company financial health evidence e.g Audited P/L, Balance sheet...
4. Original L/C and contracts
5. Deposit
6. Others

Interest Calculation

Loan Amount: 

The Amount Exportor can get(Loan Amount)  = L/C Amount * Margin  

The Margin is set by the bank internally.normally the higher the credit of the exportor , the higher the margin will be . normally the margin is between 70%~90%，if A L/C is 1M , then normally the company can get 700K ~90K loan amount.

Annual Interest Rate:

Annual Interest rate is calculated based on different currencies .If Loan is USD, then use USD loan interest rate , if Loan is YEN, then use Yen loan  interest rate.The interest rate is synced with the central bank. Normally , The bank will choose the latest loan expiry date to let the exportor pay back the principal and interest rate together.

Foreign Currency Financing normally is based on the Inter-Bank Offer Rate (e.g: USD : Libor, YEN: Tibor) + Margin. For exmaple, For USD, Normally the interest rate = Libor + 0.5%~1.5%.For some companies with good credit/reputation, The bank also can only charge Libor + 0.25% as the interest.

Take the data from 28th April 2006 as a example, 12 month Libor is 5.28%, So the bank can choose the interest rate between 5.53% (5.28% + 0.25%)  ~ 6.78% (5.28% + 1.50%) to charge the exportor.

Of course , there're still some banks taking the approach of  20th century, No matter how long the loan they give, alwayse use 1 year walking capital interest rate to charge even though some are less than 1 year. For Example, 2006 April, 1 year foreign currency walking capital loan rate is 6.75%, then the annual interest rate the bank charge the exportor apply for the packing loan is 6.75% as well.

Libor : Currently is regaded as a basis rate of  floating rate(USD), It is regarded as a financing cost of  ( borrow money and re-lend out). The 3 month and 6 Month Libor are most universally used.

Packing Loan giving days:

Packing Loan giving days  = the day to apply for packing loan ~ the latest shipment date stipulated in L/C + 30 Days

For Example , The L/C beneficiary(Exportor) apply for a packing loan on 10/11/2013, The Lastest shipment date in L/C is 31/12/2013. So The Packing Loan giving days are  (10/11 ~ 31/12)  +30 days = 81days. That is between 10/11/2013  ~ 31/01/2004. Normally It is less than 1 year. So The bank will give the money to the exportor gradually within this period.

For Companies to consider

1. Company should maintain a good credit and no bad records in the bank.
2. make sure the issuing bank's country economy stability and no political risk, so the payment can be done successfully.
3. Read the L/C clause carefully.The more complex the clause , the harder the beneficiary to follow.
4. Make sure the L/C is irrevocable L/C as the bank only can give packing loan based on this.
5. Choose the correct currency to save the cost.

Exportor can choose domestic currency or froeign currency from bank. company may need to consider the national foreign currency control policy. In Recent years, In China , The foreign Currency loan interest rate is lower than the RMB loan interest rate. So companies may consider to choose foreign currency as loan currency . when using RMB, they will convert the foreign currency into RMB to save the cost.

For example, If exportor need 1M RMB to buy raw material and apply for the packing loan.the company can choose foreign currency packing loand or RMB packing loan. In 2004, RMB loan interest rate is 4.65% and USD loan interest rate 2.98%. Exchange rate at that time is USD100 = CNY826.46 .If choose foreign currency packing loan for 90 days, the interest exportor need to pay :

$ 1M * 2.98% * 90/360 = $ 7649
$ 7649 = 61.7 K (RMB)

If choose RMB packing loan , company need to pay interest:

$ 1M * 8.264 * 4.65% * 90/360 = 96.1K (RMB)

So ,Choose USD packing loan is better.

For Banks to consider

1. Understand application company's credit and capital situation 
2. verify the L/C(By SWIFT)
3. Understand Issuing Bank's credit and rate(Moody's Finth Rating).
4. verify the clause of L/C
5. Control the date of giving loan
6. make sure the Risk Index and credit limit

Credit Limit(trade finance) = walking capital loan amount *   (1 / risk index)

For example:

    If bank of china gives the company A 1M USD loan limit, then A can transfer this 1M loan limit into guarantee limit:

    

guarantee limit  = 1M USD * (1/0.25) = 4M USD

Any Question About this Product Can leave your comments below.

《爱 》- 张爱玲

      这是真的。 
      这个村庄的小康之家的女孩子，生的美，有许多人来做媒，但都没有说成。那你她不过十五六岁吧，是春天的晚上，她立在门后，手扶着桃树。她记得她穿着一件月白色的衫子，对门住的年轻人，同她见过面，可是从来没有打过招呼的。他走了过来，离的不远，站定了，轻轻说了一声：“噢，你也在这里吗。”她没有说什么，他也没有再说什么，站了一会，各自走开了。 

     就这样就完了。 
    后来这女人被亲眷拐了，卖到他乡外县去作妾，又几次三番被转卖，经过无数的惊险的风波，老了的时候她还记得从前的那一回事，常常说起，在那春天的晚上，在后门口的桃树下，那年轻人。

      于千万人之中遇到你所要遇到的人，于千万年之中，时间的无涯的荒野中，没有早一步，也没有晚一步，刚巧赶上了，那也没有别的话好说，唯有轻轻的问一声：“噢，你也在这里吗？”

Java 8 - Parallel data processing

In Java 7 , If you want to process data in parallel, you may consider the ForkJoinPool which is one of the threadpool factory with number of initial thread equalising the number of procesor of the computer :

Runtime.getRuntime().available-Processors() // show initial number of thread

System.setProperty("java.util.concurrent.ForkJoinPool.common.parallelism","12"); // change the number of initial thread

In current multi-core PC world, parallel processing will  mostly increase the performence. And the way to implement the parallelism is as simple as just adding one methond parallel()  into the normal Stream. This parallel() will automaticly make use of the ForkJoinPool behind and dynamicly assign the data into threads.

public static long parallelSum(long n) {
     return Stream.iterate(1L, i -> i + 1).limit(n).parallel().reduce(0L, Long::sum);
}

On the contrary , if you want to abandon parallel(), a sequential() will help you switch back smoothly. Well , In practice, whether to choose sequential() , parallel() or normal for loop , all depend on practical measurement, There is no one golden rule saying that parallel() is the best, you must measure the time and choose which one to apply.

long start = System.nanoTime();
// apply batch calculation here
long duration = (System.nanoTime() - start) / 1_000_000;

In most of the cases , the efficiency lost in the parallel processing is due to autobox problems,  one of the methods to increse the paralle() is to avoid the autobox using LongStream, IntStream... This is important!

public static long parallelRangedSum(long n) {
    return LongStream.rangeClosed(1, n).parallel().reduce(0L, Long::sum);
}

ForkJoinPool

Above, I have mentioned the ForkJoinPool in Java 7 and the parallel() in Java 8 is implemented by it . So how do people use this ForkJoinPool? Answer :  extends RecursiveTask<T>

public class ForkJoinSumCalculator extends RecursiveTask<Long> {
       // constructors and fields .... 
@Override
 protected Long compute() { // rewrite abstract method
    if (length <= 1000) {
  // Don't use parallel
    }
    ForkJoinSumCalculator leftTask = new ForkJoinSumCalculator(20000, 1, 10000);
  
    leftTask.fork(); // start left half tasks asyncronously in another ForkJoinPool
  
    ForkJoinSumCalculator rightTask = new ForkJoinSumCalculator(20000, 10001, 20000);
  
    Long rightResult = rightTask.compute(); // start the right half tasks
  
    Long leftResult = leftTask.join(); // read the left half tasks result. blocking
  
    return leftResult + rightResult; // combine
 }
}

Parallel() is not only implemented by ForkJoinPool but also with the help of Spliterator. With these 2 weapons, parallel() in Java 8 can flexibly split big task ,compute and join together to return values.

Spliterator

Spliterator looks similar to iterator in versions before Java 8. It also helps to iterate data but in parallel way.

public interface Spliterator<T> {
   boolean tryAdvance(Consumer<? super T> action); // iterate all elements Consumer provides
   Spliterator<T> trySplit(); // split data into another Spliterator
   long estimateSize(); // return the size of collection
   int characteristics();
}

Ok, I am still working to produce an example , I will give it out later.