JAKARTA PT Bursa Efek Indonesia (IDX) together with PT Kliring Penjaminan Efek Indonesia (KPEI) and PT Kustodian Sentral Efek Indonesia (KSEI), as well as with the support of the Financial Services Authority (OJK) will launch a new derivative product called Foreign Index Future Contract (KBIA).
Chief Executive of the OJK Capital Market, Derivative Finance and Carbon Exchange Supervisory, Inarno Djajadi, said that the launch was aimed at increasing the diversity of traded instruments, encouraging the development of derivatives in the Indonesian capital market, and increasing the exposure of foreign investment in the Indonesian Capital Market.
Inarno said KBIA would use the index for the effects recorded on foreign exchanges as an underlying. This product can be used by investors to gain exposure to Index movements with foreign stock constituents.
Inarno explained that the support provided by the OJK for the plan to issue KBIA is in line with the mandate of the Law of the Republic of Indonesia Number 4 of 2023 concerning the Development and Strengthening of the Financial Sector (UUP2SK) which regulates the transfer of authority to regulate and supervise financial derivative products to OJK which will be effective on January 10, 2025.
"We will also launch a new derivative product, namely the Foreign Index Future Contract (KBIA), with the underlying MSCI Hong Kong Listed Large Cap, which the IDX has officially collaborated with MSCI. Through the issuance of this new product, it is hoped that the Indonesian derivative market will have a wider investment variety and its growth will increase in the future." he said in his statement, Tuesday, December 31.
IDX Development Director Jeffrey Hendrik said that his party had issued KBIA with an underlying MSCI Hong Kong Listed Large Cap index. This index represents the movement of stocks with a large market capitalization and is listed on the Hong Kong Exchange.
Meanwhile, KBIA MSCI Hong Kong Listed Large Cap has a contact size of IDR 10,000 per index point with a leverage of up to 33 times so that the capital needed for KBIA transactions is very affordable for investors.
Jeffrey conveyed that to maintain the reasonableness of transactions and risks from KBIA, the range of daily price movements or KBIA auto rejection was limited to 15 percent of the previous day's settlement price.
Jeffrey added that the KBIA MSCI Hong Kong Listed Large Cap product published by the IDX has obtained an OJK permit and a license from MSCI.
In 2025, Jeffrey said the IDX will continue to add to the foreign effects used as underlying KBIA, so investors have more options to get exposure to foreign market movements.
Jeffrey conveyed that for investors who already have a stock account and want to make a KBIA transaction, it is enough to open a Derivative Securities Sub Account (SRE) on Exchange Members who already have a Derivative permit from the IDX.
In addition, Jeffrey added that KBIA has also gone through a clearing process as well as transaction guarantees carried out by KPEI on SRE Derivatives owned by each customer to ensure that the rights and obligations of the transacting party are fulfilled.
Apart from KBIA, Jeffrey said that there are also other financial derivative products that are available on the IDX, such as Single Stock Futures which will only be launched in 2024, then LQ45 Futures, IDX30 Futures, Indonesia Government Bond Futures, and Basketball Bond Futures.
"With the presence of KBIA products, it is hoped that it can provide opportunities for investors to expand investment strategies and optimize portfolio profits through diversification of investment products originating from more than one market. KBIA is also expected to encourage financial derivative market liquidity growth in Indonesia," he concluded.
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