SINGAPORE - Mainboard-listed logistics firm CWT announced on Tuesday (Sept 20) that its financial services arm Straits Financial Group has obtained a regulatory licence from the Indonesian authorities to operate a physical commodity exchange and a dedicated clearing house in Indonesia.

The physical exchange will be branded separately as Asia Commodity Marketplace (ACM).

ACM intends to offer an organised marketplace for local producers and international market participants to transact directly and negotiate anonymously over an electronic platform, said CWT. This will allow market participants to access a larger pool of counterparties to trade physical commodities and settle the transaction through the clearing house, the company added.

It said market participants can expect cargoes to be delivered through secured bonded warehousing facilities, both inland and along major seaports in Indonesia, operated by reputable warehouse operators including CWT.

Said Mr Loi Pok Yen, CWT group CEO: "A physical exchange is a natural business extension for Straits and further creates synergies for the CWT Group as a whole as it taps on our commodity logistics competency and expertise in operating physical delivery and warehousing for various commodity exchanges.

Said Mr Arwadi Setiabudi, CEO for ACM: "With this licence, ACM has the potential to revolutionise traditional practices of physical trading in Indonesia by connecting buyers directly to the production source, and, more importantly, for the transaction to be backed by a central clearing counterparty for risk mitigation."

He said ACM plans to roll out a suite of agricultural products in 2017 such as cocoa, coffee, rubber, soybean and sugar.