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IDX revives stock futures contract after six-year hiatus
A revival of futures: âA man passes the iconic round table on the trading floor of the Indonesia Stock Exchange (IDX)
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A revival of futures: âA man passes the iconic round table on the trading floor of the Indonesia Stock Exchange (IDX). After a six-year absence, Indonesia has a futures contract again. The IDX announced that the LQ-45 futures contract would be brought back to the market on Feb. 2. (thejakartapost.com/Wienda Parwitasari) (IDX). After a six-year absence, Indonesia has a futures contract again. The IDX announced that the LQ-45 futures contract would be brought back to the market on Feb. 2. (thejakartapost.com/Wienda Parwitasari)
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span class="inline inline-center">A revival of futures: 'A man passes the iconic round table on the trading floor of the Indonesia Stock Exchange (IDX). After a six-year absence, Indonesia has a futures contract again. The IDX announced that the LQ-45 futures contract would be brought back to the market on Feb. 2. (thejakartapost.com/Wienda Parwitasari)
The country has a stock futures contract again after a six-year hiatus. The Indonesia Stock Exchange (IDX) has announced that it will revive its futures contract based on the LQ-45 index'an index containing the 45-most liquid blue chips.
The futures would be traded by eight brokerage houses, an IDX spokesman said, explaining that futures were used for hedging purposes where investors could minimize loss in a normal situation or even a make gain in a bearish or declining market.
"With this contract, investors will be more interested to take position even in the bearish market. In the end, it will increase the transaction volume in IDX," said IDX director Alpino Kianjaya during a press conference on Friday.
The Indonesian market is in a sluggish period, where traders are unlikely to carry out massive transactions as the price decline curbs chances for scoring profit.
Therefore, Alpino expressed his confidence that it was the right time to launch the product to boost transactions.
"It was traded during 2001-2009 by the Surabaya Stock Exchange [before merging with the IDX], with 160 contracts transactions per day during that time. With current market conditions, it should attract more trading now," he said.
Alpino said that the derivatives product would be fulfilled by foreign investors who needed to invest in stock derivatives in the country.
Valbury Asia Securities president director Yohanes Sutikno said fund managers in Singapore and Hong Kong that had Indonesian stocks as their underlying assets, like those in the MSCI Indonesia Index, usually needed to trade the derivatives as well.
'Big investors and traders like banks for those Indonesian stocks used to go to Singapore or Hong Kong for futures contract," he said, arguing that the futures contract in Indonesia may attract them to enter Indonesia.
IDX announced that the futures contract was available as of Monday, sold through RHB Securities Indonesia, Henan Putihrai, Binaartha Prama, Nikko Securities Indonesia, Pacific 2000 Securities, Trimegah Securities, Universal Broker Indonesia and Valbury Asia Securities.
"Two more securities are ready to join, as they have submitted proposal. Danareksa has committed to be the liquidity provider," Alpino said. (ags)
