First RI futures exchange starts trading
First RI futures exchange starts trading
JAKARTA (JP): After months of delay, Indonesia's first futures
exchange, the Jakarta Futures Exchange (JFX), finally launched on
Friday its first trading day on coffee robusta and olein.
JFX president Hasan Zain Mahmud expressed confidence that JFX
would strive on the potential of the local commodity markets and
the demand for a hedging facility in Indonesia.
"The opportunities are enormous and now the doors are open,"
Hasan told reporters following the opening ceremony of JFX, which
was attended by Minister for Industry and Trade Luhut Pandjaitan.
Hasan said that in the initial step, JFX expected to test the
market and simply make known to other commodity futures markets
of its existence.
"There will be a grand launching once we are sure that the
bourse is running well and that transactions are proceeding
smoothly," he said.
JFX began trading with 12 brokerage companies and 10 traders,
all of whom just recently received their operation permits from
the Commodities Futures Exchange Supervisory Board (Bappebti).
The exchange itself received its permit only in late November
from Bappebti,
JFX was established in August 1999 and should have began
trading in March, but computer installation problems and
incomplete operational requirements forced the exchange to
postpone trading several times.
Hasan said that JFX was targeting transactions worth an
average of 300 lots a day for each of the two commodities.
Under a coffee futures contract, each lot weighs five tons and
carries a price of about US$600 per ton, depending on the market.
For olein futures contracts, each lot weighs 20 tons and
carries a price of about Rp 2,500 a kilogram, depending on the
market.
He said that the higher the production of commodities were,
the greater the need for hedging their prices, thus raising JFX's
transactions value.
Prices of coffee and olein, he said, were highly volatile
partly because they were perishable products and their quality
depended on weather seasons.
Price fluctuation risks cannot be accommodated elsewhere but
at the JFX, he explained.
"There are risk insurances, but not for prices," he said.
He said that hedging oil prices, for instance, would help the
government meet its budget targets.
Hasan said that for the grand launching, he expected that
new commodities could be made available for the bourse.
As for now, he said, the government had issued a presidential
decree on four additional commodities, plywood, chocolate, pepper
and rubber.
Outside the four commodities other products were being
considered, such as gold and currency hedging, he added.
He said the target was that by mid 2001, JFX could offer new
commodities.
"It will depend on the demand from the market," he said.
Hasan said that a study would precede any introduction of new
commodities or products.
As for traders and brokerage companies, he expected them to
grow in numbers as new products would be introduced.
Aside from the JFX, another group of commodities traders were
planning to open a futures commodities exchange for the trading
of rice, sugar, soybeans, tobacco and cotton.
But Bappebti could not issue an operating permit for the
second exchange, because the commodities proposed for trading had
yet to be approved under a presidential decree. (bkm)