JFX ready to face new competitors<\/p>\n
JAKARTA (JP): The Jakarta Future Exchange (JFX) said the
\nopening of Indonesia's second futures commodities exchange next
\nmonth would not undermine its operation.<\/p>\n
JFX director J.W. Sudomo said on Wednesday the planned
\noperation of the Jakarta Commodities Exchange (Jacom) would help
\npromote the country's infant futures trading market.<\/p>\n
\"In the short term, there will be no competition at all
\nbecause the two exchanges will trade different commodities,\" he
\ntold The Jakarta Post in an interview.<\/p>\n
Trade at the JFX, which started business in December last
\nyear, remains sluggish, with daily trading volume still far lower
\nthan hoped.<\/p>\n
The exchange currently is allowed only to trade olein and
\nrobusta coffee. It has booked total trading volume of 218 lots of
\nolein, or 4,360 tons, and 91 lots of coffee, or 455 tons, since
\nopening on Dec. 15.<\/p>\n
One lot of olein comprises 20 tons and a lot of robust coffee
\nis five tons.<\/p>\n
Sudomo said the exchange's daily trading volume was still far
\nbelow the ideal level, shown by the fact that the transaction
\nfees received from traders was still more than enough to cover
\noperating costs.<\/p>\n
But he believed trading activities would increase as more
\npeople became aware of the existence of the bourse.<\/p>\n
He said that in the long term, especially after trading became
\nmore active, the two exchanges would be better off merging to
\ncreate a better synergy, not only in cutting operational costs
\nbut also in providing services to traders.<\/p>\n
Jacom, established by a number of local commodities traders,
\nplans to start operations next month. The exchange will initially
\ntrade rubber and cocoa.<\/p>\n
Under government regulation, commodity exchanges are allowed
\nto trade six commodities: robusta coffee, olein, rubber, cocoa,
\nplywood and pepper.<\/p>\n
Both bourses have applied for licenses to trade all six of
\nthese commodities.<\/p>\n
Joko Prianto, the president of the task force working to make
\nJacom operational, rejected the idea of merging the two futures
\nexchanges.<\/p>\n
\"Let us compete against each other ... we prefer to operate
\nindependently,\" he said after a visit by several members of the
\nHouse of Representatives to his office on Thursday.<\/p>\n
Joko said he and several other sponsors of Jacom initially
\nproposed joining JFX, but the proposal was rejected.<\/p>\n
In addition, he said Jacom would have a different trading
\nsystem, which would make it difficult to merge with the JFX.<\/p>\n
He said Jacom, through its operator PT Bursa Komoditi Jakarta,
\nwas still trying to get the necessary government permits to begin
\noperations as planned.<\/p>\n
Jacom has to obtain the approval of the justice ministry
\nbefore it can receive a permit from the Commodities Exchange
\nSupervisory Board.<\/p>\n
Joko said he was optimistic Jacom would receive the permit by
\nthe end of February because all of the requirements had been
\ncompleted, and the exchange had the support of the House.<\/p>\n
To date, Jacom has 50 members, though it is targeting 200
\nmembers, he said.<\/p>\n
Jacom is hoping for a total trading volume of 4,100 lots in
\nrubber and cocoa within the first month of its operation. \"In the
\nfollowing months we are confident we will reach 200 lots daily.\"<\/p>\n
Each lot of cocoa and rubber is five tons.<\/p>\n
Joko said approximately Rp 10 billion ($1.05 million) had been
\ninvested to establish Jacom. (05)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/jfx-ready-to-face-new-competitors-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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