JFX eyes Antam as market maker for gold trading
The Jakarta Post, Jakarta
The Jakarta Futures Exchange (JFX) said it was eyeing state- owned gold mining company PT Aneka Tambang (Antam) to become its market maker for boosting gold trading at the country's flagging futures commodities market.
JFX director JW Sudomo said Antam had agreed to join PT Pacific 2000 Futures as the bourse's current market marker for gold trading.
"Antam's preparations have been going on for quite some time, but because they are a state company the process has taken a while," Sudomo was quoted as saying by detik.com at the grand launching of JFX gold trading on Tuesday.
A market maker promotes trading by constantly placing bids and offers at the bourse to entice investors to sell or buy. JFX extracts fees from each transaction.
Trading at the country's first futures commodity market has been sluggish since it kicked off in December 2000.
A JFX official said the bourse initially traded olein and coffee, but suspended the latter last year on lack of interest.
Last year's inclusion of crude palm oil did little to arouse trading, he said, and the commodity was also dropped from the bourse. Trading is now limited to olein and gold, he said.
The prospects for gold are perceived to be better, with some using it as a proxy to hedge their currencies against depreciation.
"Price fluctuation of gold always moves in line with that of the U.S. dollar against the rupiah," said Coordinating Minister for the Economy Dorodjatun Kuntjoro-Jakti, who attended Tuesday's grand launch.
Another benefit of having futures gold trading, he said, was the creation of a price benchmark for gold.
He said the World Gold Council showed that people from the low-income group tended to sell their gold at levels below global market prices as they lacked market information.
Sudomo said JFX introduced gold trading in February with trading volume having met the JFX daily target of 300 lots, where each lot equals 1 kilogram.
To this, Dorodjatun said that in Tokyo daily gold trading volume averaged 100,000 lots in spite of Japan not being a gold- producing country.
Sudomo said that one market maker was not enough to further boost trading, citing three as the ideal number.
"However we haven't found our third candidate," he said.
Market maker Pacific 2000 executive Sulung Poniman said around 500 investors participated in daily gold trading. Most were individual investors and none was institutional, he said.
He expected the figure to grow to 3,000 investors within the next six months.
According to Pacific 2000, Indonesia is the 11th-largest gold producer in the world, with an annual output of about 140 tons.
Pacific 2000 is a unit of PT Dewa Arjuna Putra -- the holding company of the Pacific Group, which provides investment banking and underwriting services.