IDX proposes extending trading day by one hour

The Indonesian Stock Exchange (IDX) says it will propose extending daily trading to six hours a day, up from five hours, to meet a surging number transactions.

“Trading hours will be extended so that trading sessions can be longer and transaction values will increase,” IDX president director Ito Warsito said on Monday during a ceremony to mark the start of the trading for 2011.

The stock exchange currently begins trading at 9:30 a.m. and closes at 4 p.m., with a break from 12:00 p.m. to 1:30 p.m. on Mondays to Thursdays and from 11:30 p.m. to 2:00 p.m. on Fridays, for a total of five hours a day, according to Ito.

“Several bourses have six hours of trading a day, and we’re heading in that direction,” he told reporters at the ceremony, which was also attended by President Susilo Bambang Yudhoyono.

The move might increase the average value of daily transactions on the IDX to Rp 4.85 trillion (US$538.5 million) by the end of 2011, up from Rp 4.8 trillion in 2010, Ito said.

The average value of daily transactions in 2010 was up 18.5 percent from Rp 4.05 trillion in 2009, he added.

The average number of daily transactions on the IDX rose 21.64 percent to 105,878 in 2010 while average annual trading volume slid 10.67 percent to 5.44 billion shares, according to IDX data.

The proposed change in hours was still being assessed by stock exchange officials and would be presented to the Capital Markets and Financial Institutions Supervisory Agency (Bapepam-LK) before the end of this year for approval, according to reports.

“We hope it will be officially introduced in the first half of this year,” Ito said.

IDX director of trading and member regulations Wan Wei Yiong said that online services have made trading much easier.

“In the old days, everything was manual. Now everything is paperless so there is a need to be fast,” he said.

The IDX has informally expressed its desire to extend trading hours to Bapepam-LK and has received positive response, Wan added.

Bapepam-LK chairman Fuad Rahmany said the stock exchange’s intentions were good but had to be coordinated with several parties, including the central government, members of the stock exchange and the Indonesian Central Securities Depository (KSEI). (est)