JFX ready to trade gold in January

Tantri Yuliandini, The Jakarta Post, Jakarta

The Jakarta Futures Exchange (JFX) is ready to trade in gold by the end of January next year following a positive response to the commodity during the trade simulation period, JFX president Hasan Zein Mahmud announced on Wednesday.

He said that gold as a commodity was the most ready to be traded at the JFX as it has a higher economic value than other commodities such as sugar, peanuts and plywood.

According to the presidential decree dated Nov. 26 2001, the bourse could begin the trading of 22 commodities including coffee, oil, plywood, rubber, cacao, pepper and sugar.

Also specified in the decree are peanuts, soya beans, cloves, shrimp, fish, oil, natural gas, electricity, gold, coal, tin, pulp and paper, thread, cement and fertilizer.

The 1997 law on futures commodity stipulated that all trade commodities must be approved by the government through a presidential decree.

"But the JFX must prioritize which commodities are the most ready, and gold is the most ready," Hasan was quoted by Antara as saying, adding that besides gold the bourse would also prepare the trading of fertilizer, coal and cloves.

However, the bourse would not be in a hurry to trade oil, natural gas and electricity because their prices are still determined by the government.

"One of the prerequisites for commodities traded in the bourse is that prices are determined by the market, not by the government," Hasan said.

The JFX first opened for trade on Dec. 15, 2000, after a two- week simulation period, with olein, a derivative of crude palm oil (CPO), and robusta coffee as the initial commodities.

Commenting on the performance of JFX after one year of operating, Hasan said that progress of the bourse has been slow but has shown a positive trend especially during the last few months.

"JFX's performance hasn't been too bad although the trading volume hasn't been big," he said, adding that he was optimistic trade would continue to improve next year along with the people's increasing awareness of the bourse.

Hasan said that in the last six months of the year the volume of olein traded in the bourse increased by an average of 20 percent a month, with 2,902 lots in July, 3,522 lots in August, 4,528 lots in September, 4,506 lots in October, 7,370 lots in November and as of Dec. 10, 2,064 lots.