IDX Officially Opens Foreign Index Futures Contract Trading

The opening of trade in the framework of launching new derivative products Foreign Index Futures. (Photo: Aris Nurjani/VOI)

JAKARTA - PT Bursa Efek Indonesia (IDX), PT Kliring Penjaminan Efek Indonesia (KPEI), and PT Kustodian Sentral Efek Indonesia (KSEI), together with the Financial Services Authority (OJK) and MSCI officially opened the Foreign Index Futures trading or the Foreign Index Future Contract (KBIA).

Meanwhile, the IDX collaborated with MSCI in launching Foreign Index Futures with the underlying MSCI Hong Kong Listed Large Cap index.

Director of Development of PT Bursa Efek Indonesia (IDX) Jeffrey Hendrik conveyed the launch of this derivative product to provide a portfolio diversification option for investors in the Indonesian capital market and expand market access.

"This index was created to represent the performance of stocks with large market capitalization recorded on the Hong Kong Stock Exchange," he explained.

Meanwhile, MSCI is a market index provider and data that investors can use to make investment decisions.

Jeffrey said the selection of the MSCI index as an underlying was carried out because this index was generally used as a reference by global institutional investors to track stock market performance in various countries.

The issuance of Foreign Index Futures products is in line with the mandate of the Republic of Indonesia Law 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 has been effective on January 10, 2025 and OJK Regulation (POJK) Number 1 of 2025 concerning Financial Derivatives with Assets Based on Infrastructure of Effects.

According to him, when compared to other investment products, Foreign Index Futures has several advantages.

First, Foreign Index Futures products can be used to transact the effects of foreign exchanges while remaining an investor in the Indonesian capital market.

Second, Foreign Index Futures can also be utilized when the market is bullish or bearish so that investors can gain potential profits by taking a purchase position (long) when the market is bullish or in a selling position (short) when the market is bearish.

Third, Foreign Index Futures has a level of leverage of up to 33 times with a contact size of Rp. 10,000.00 per index point, so that this product is relatively affordable and the funds needed to transact this product are around Rp. 200,000.00.

Fourth, the realization of investor profits is obtained faster, because the completion of derivative products is completed in cash in 1 Exchange Day (T+1).

In addition, Jeffrey said that just like other products that were transacted and supervised by the IDX, Foreign Index Futures trading is a safe and transparent transaction because it is transacted in real time, and the completion of transactions is guaranteed by KPEI.

"With the launch of Foreign Index Futures, investors are expected to manage global market risks more effectively and take advantage of market volatility to optimize their investment portfolio profits," he explained.

Jeffrey said that Index Futures is expected to increase the attractiveness of the financial derivative market in Indonesia, open up wider opportunities of participation for various types of investors, and increase capital market liquidity.