T

he Jakarta Futures Exchange (JFX) reported a significant increase in trading volume in 2011 due to an increase in gold trading.

The JFX recorded a total trade volume of 7.59 million lots in 2011, up 40 percent from 5.42 million in 2010. Bilateral transactions comprised 7.51 million lots while multilateral transactions accounted for 78,506 lots.

In bilateral trading, Loco London gold led the increase in trade volume, up 759 percent to 3.35 million lots in 2011 from 389,810 lots in 2010.  

“The increase in gold prices starting in the first quarter up to the third quarter of 2011 seemed to trigger gold contract transactions at JFX,” JFX President Director Made Sukarwo said on Tuesday.

However, Sukarwo expressed disappointment over the low number of multilateral transactions, despite a 392 percent increase in 2011 compared to 2010, which recorded 15,949 lots.

The main contributor to the increase in multilateral trading was also gold futures contracts, which accounted for 29,126 lots in 2011, up 437 percent from 5,418 lots in 2010.

Other gold products traded as multilateral contracts were rolling gold in US dollar, whose trade volume reached 13,660 lots in 2011, and the rolling gold index, with 20,859 lots.

The JFX also traded olein in multilateral trading, whose trade volume in 2011 was up 647 percent to 13,099 lots in 2011 from 1,754 lots in 2010.

Meanwhile, trading on cocoa contracts, which started on Dec.15, reached 1,762 lots, or 8,810 tons.

“We’ve seen encouraging response from cocoa contracts and estimate that their trading will keep growing in line with the volatile world cocoa price,” Sukarwo said.

Cocoa for March delivery jumped 7 percent to settle at US$2,170 per metric ton at the ICE Futures US in New York, the biggest gain since Oct. 5, 2009, Bloomberg reported on Jan. 9. Cocoa prices surged as a labor stoppage threatened to disrupt supplies from Nigeria, the world’s fourth-biggest producer.

Meanwhile, cocoa for March delivery was priced Rp 20,480 (US$2.20) a kilogram as of 5 p.m. on Tuesday at the JFX.

JFX director Roy Sambel said that the JFX recorded total transactions of Rp 1,100 trillion so far this year.  

He added that the growing volume of trade might result in a 35 percent increase in net profits in 2011, compared to 2010.

“We set a moderate target for trade volume to grow 10 to 15 percent this year because we will carry out many investments. The year of 2012 is time for mid-term and long-term investments,” Roy said.

Among JFX’s plans this year is introducing contracts on coal, rubber, coffee, tin and interest-rate futures.

“We will soon introduce futures and physical contracts on coal. For coffee, we may introduce futures and physical contracts in the second half of this year,” Roy said.

Roy added that the JFX would prepare itself for demutualization, to enlarge ownership from its 29 founding companies.

“We hope to demutualize in 2013, hoping for 10 to 20 more companies, both domestic and foreign investors, to hold ownership in the JFX. More shareholders means more capital that can be channeled to the JFX,” Roy said.

After carrying out demutualization, Roy said, the JFX would float its shares on the Indonesia Stock Exchange (IDX). “We hope to enter the capital market in 2015,” he said.

Meanwhile, a different bourse, the Indonesia Commodity & Derivatives Exchange (ICDX), has delayed for a second time the introduction of physical tin contracts to allow potential users more time to prepare, industry and government officials said.

Trading will start on Feb. 1 instead of Jan. 12, said Syahrul Sempurnajaya, head of the Commodity Futures Trading Regulatory Agency at the Trade Ministry. Initially, the new product was scheduled to start last month.

Indonesia is the world’s largest tin exporter and the agency said last month that it backed the attempt to create a new benchmark with “our own market”.

At present, the London Metal Exchange, the world’s largest metals bourse, offers cash and futures trading in the metal.

“Representatives from some Japanese and Korean buyers have shown interest in joining, but they need more time to get approval from their head office,” Sempurnajaya said as quoted by Bloomberg in a telephone interview from Jakarta.

“We’re preparing the transaction carefully so the contract can reflect the real physical trading to create a benchmark for Indonesian tin.”

Megain Widjaja, chief executive at ICDX, wasn’t immediately available to comment when contacted on his cellular phone. The ICDX was established in 2009, and offers gold contracts in rupiah and dollars and a palm oil contract in rupiah. Indonesia is the world’s largest palm oil producer, ahead of Malaysia.