First RI futures exchange starts trading<\/p>\n
JAKARTA (JP): After months of delay, Indonesia's first futures
\nexchange, the Jakarta Futures Exchange (JFX), finally launched on
\nFriday its first trading day on coffee robusta and olein.<\/p>\n
JFX president Hasan Zain Mahmud expressed confidence that JFX
\nwould strive on the potential of the local commodity markets and
\nthe demand for a hedging facility in Indonesia.<\/p>\n
\"The opportunities are enormous and now the doors are open,\"
\nHasan told reporters following the opening ceremony of JFX, which
\nwas attended by Minister for Industry and Trade Luhut Pandjaitan.<\/p>\n
Hasan said that in the initial step, JFX expected to test the
\nmarket and simply make known to other commodity futures markets
\nof its existence.<\/p>\n
\"There will be a grand launching once we are sure that the
\nbourse is running well and that transactions are proceeding
\nsmoothly,\" he said.<\/p>\n
JFX began trading with 12 brokerage companies and 10 traders,
\nall of whom just recently received their operation permits from
\nthe Commodities Futures Exchange Supervisory Board (Bappebti).<\/p>\n
The exchange itself received its permit only in late November
\nfrom Bappebti,<\/p>\n
JFX was established in August 1999 and should have began
\ntrading in March, but computer installation problems and
\nincomplete operational requirements forced the exchange to
\npostpone trading several times.<\/p>\n
Hasan said that JFX was targeting transactions worth an
\naverage of 300 lots a day for each of the two commodities.<\/p>\n
Under a coffee futures contract, each lot weighs five tons and
\ncarries a price of about US$600 per ton, depending on the market.<\/p>\n
For olein futures contracts, each lot weighs 20 tons and
\ncarries a price of about Rp 2,500 a kilogram, depending on the
\nmarket.<\/p>\n
He said that the higher the production of commodities were,
\nthe greater the need for hedging their prices, thus raising JFX's
\ntransactions value.<\/p>\n
Prices of coffee and olein, he said, were highly volatile
\npartly because they were perishable products and their quality
\ndepended on weather seasons.<\/p>\n
Price fluctuation risks cannot be accommodated elsewhere but
\nat the JFX, he explained.<\/p>\n
\"There are risk insurances, but not for prices,\" he said.<\/p>\n
He said that hedging oil prices, for instance, would help the
\ngovernment meet its budget targets.<\/p>\n
Hasan said that for the grand launching, he expected that
\nnew commodities could be made available for the bourse.<\/p>\n
As for now, he said, the government had issued a presidential
\ndecree on four additional commodities, plywood, chocolate, pepper
\nand rubber.<\/p>\n
Outside the four commodities other products were being
\nconsidered, such as gold and currency hedging, he added.<\/p>\n
He said the target was that by mid 2001, JFX could offer new
\ncommodities.<\/p>\n
\"It will depend on the demand from the market,\" he said.<\/p>\n
Hasan said that a study would precede any introduction of new
\ncommodities or products.<\/p>\n
As for traders and brokerage companies, he expected them to
\ngrow in numbers as new products would be introduced.<\/p>\n
Aside from the JFX, another group of commodities traders were
\nplanning to open a futures commodities exchange for the trading
\nof rice, sugar, soybeans, tobacco and cotton.<\/p>\n
But Bappebti could not issue an operating permit for the
\nsecond exchange, because the commodities proposed for trading had
\nyet to be approved under a presidential decree. (bkm)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/first-ri-futures-exchange-starts-trading-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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