Index-linked futures trading to open on SSX

Index-linked futures trading to open on SSX

JAKARTA (JP): The Surabaya Stock Exchange (SSX) will introduce
trading in futures contracts next year to provide greater
investment opportunities on the country's second stock market.

The president of the SSX, Anton Natakoesoemah, said here on
Tuesday the futures contracts would be based on the LQ45 Index,
the price barometer of the 45 most actively traded shares on the
Jakarta Stock Exchange.

"Investors can use the index-linked futures contracts as their
equity investment hedging tools," Anton said following the
signing of a cooperation agreement between the SSX and JSX.

Under the agreement, the Surabaya bourse will be allowed to
use the LQ45 Index as the reference for its futures contract
trading.

JSX president Mas Achmad Daniri welcomed the launch of futures
trading, saying it would enable investors to protect their
investments.

"Investors can offset the risk exposure of taking a bullish
view in their equity investments by taking a bearish view through
a futures index contract," he said.

Daniri also praised the use of the LQ45 Index as the reference
for futures trading, saying the index reflected the prices of the
most actively traded shares on the exchange.

Shares included in the LQ45 Index currently account for some
80 percent of total daily trade on the JSX and are reviewed every
six months to ensure they meet minimum standards.

Anton said the JSX would soon seek the approval of the Capital
Market Supervisory Agency (Bapepam) for the index-linked futures
contracts trading.

"After receiving Bapepam's approval, we will go abroad to
conduct a comparative study of countries that already have
experience in such futures contracts trading," he said.

Most of the shares listed on the SSX are cross-listed with the
JSX. The SSX also will began trading government bonds next year.
(udi)