The Indonesia Stock Exchange plans to reintroduce stock-option trading next year to lure investors as it aims to double market capitalization by 2015, according to a director at the bourse.
Options may begin as soon as the end of June, pending the completion of a new trading system and a revision to rules on derivatives, Friderica Widyasari Dewi, director of business development at PT Bursa Efek Indonesia, which runs the exchange, said in an interview.
The bourse introduced options in 2004, then shut them down in 2006 because of weak demand, Widyasari said. Trading was thin partly because the bourse capped profits on options to keep volatility in check, she said.
“We don’t want to make the same mistake again,” Widyasari said in Jakarta on Oct. 12. “We will focus on foreign investors and institutional investors, who have a need for hedging.”
New products may help the bourse, Southeast Asia's third- largest after Singapore and Malaysia with a market capitalization of $369 billion, attract more investors. Indonesia’s economy is forecast by the government to expand this year at the fastest pace since 1996, boosting demand from companies for funding.
Overseas investors bought a net $1.91 billion of Indonesian equities this year through yesterday, down from $1.96 billion in the same period last year, according to data compiled by Bloomberg.
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