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IDX revives stock futures contract, after 6 years hiatus
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A revival of futures -- A man passes the iconic round table in the trading floor of Indonesia Stock Exchange (IDX). After six years of absence, Indonesia ultimately has futures contract traded, again, in the stock market as the IDX has announced that the LQ-45 futures contract brought back in the market starting February, 2. (thejakartapost.com/Wienda Parwitasari)
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ndonesia finally has stock futures contract, again, after six years hiatus as the Indonesia Stock Exchange (IDX) has announced to revive futures contract based on LQ-45 index—an index containing top 45 most liquid blue chips.
The futures would be traded by eight brokerage houses, Indonesian Stock Exchange (IDX) spokesman said, explaining that futures was used for hedging purposes where investor could minimize loss in a normal situation or even 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.
Indonesian market is now in a sluggish period, where traders are unlikely to do massive transaction as the price decline curbs chances for scoring profit.
Therefore, Alpino expressed his confidence that it was the right time for launching the product to boost the transaction.
"It was traded during 2001-2009 by Surabaya Stock Exchange [before merged to IDX], with 160 contracts in transaction per day during that time. With the current market situation, it should attract more trading now," he said.
Alpino explained 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 funds managers in Singapore and Hong Kong that had Indonesian stocks as their underlying assets, like those in 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 future contract in Indonesia may attract them to enter Indonesia.
IDX announced that the futures contract was available since Monday, sold through RHB Securities Indonesia, Henan Putihrai, Binaartha Prama, Nikko Securities Indonesia, Pacific 2000 Securities, Trimegah Securities Tbk, 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)
