BOND TRADING MECHANISM

What is FITS

Fixed Income Trading System (FITS) is a trading system for bond listed in Indonesia Stock Exchange. It’s a script less trading system integrating three different mechanisms: trading, clearing and settlement activities.

FITS allows the bonds traded in retail basis (retail bond). Retail bond is bond traded in the Exchange with relatively small nominal value, starting from Rp 5 millions and its denominator.

FITS system uses Automated Securities Trading System (ASTS) platform which allows members to do remote trading so that the trader didn’t have to meet each other on the trading floor. All the transaction activities can be carried out from the Exchange Member's office.

FITS Facilities

FITS trading system allows member to do bond  transaction in the two trading boards of Indonesia Stock Exchange:

• Regular Outright Board is the trading mechanism in which anonymous
  continuous auction forms the market price, and the trading method is based on
  price and time priority.

• Negotiated Board is the facility that allows Exchange Member to report the results
  of its negotiation with other Exchange Member or other party. FITS also gives
  advertising order tools to indicate the selling and buying orders.

Advantage 
FITS as a trading system for bond transaction has its distinctive feature compared to other systems. FITS integrates three different systems. They are trading, clearing and settlement systems.

Trading Hours

Monday - ThursdayFirst Session      : 09.30 - 12.00 WIB
Second Session  : 13.30 - 16.00 WIB

Friday
First Session       : 09.30 - 11.30 WIB
Second Session   : 14.00 - 16.00 WIB

IDX Corner

The establishment of IDX Corners is to introduce the Capital Market as early as possible to the academic world. Currently, the establishment of IDX Corners is using the concept of 3 in 1 (co-operation between JSX, University and Security Company) so that the academia can not only learn the Capital Market theoretically, but are also able to practice it.

The purpose of IDX Corners is to reach out the educated groups so that they can understand the Capital Market better.

IDX Corners have all the publications on Capital Market published by the IDX, including the Law of capital Market. Information and IDX data can be used by the academia for academic purpose, not for commercial purpose of share trading.

It is hoped that through this cooperation, the information of Capital Market will be spread out, and that the academics, economic practitioners, investors, capital market observers and public will receive optimum benefits of capital market, either for socialization, education or economically.

Benefits received by each party that established IDX Corners.

For IDX, IDX Corners have become means of socialization and education among the academics, so that the academics do not only know about the capital Market from the theoretical side, but also are able to practice it.

For the universities, IDX Corners are strategic alliances to Capital Market practitioners (IDX, Exchange Members, and Vendor Data) and a way to improve their Brand Name and value of the University.

For the Data Vendor, IDX Corners are product promotion Medias among the academics, and as a media for human resource recruitment.

The obligations of each party

Indonesia Stock Exchange will send publications published by the IDX to support the activities related to Capital Market educational Socialization, give opportunity of internship and facilitate investment clubs.

The university must provide the space and infrastructure needed for the gallery of the IDX Corners and Capital Market Lab.  It includes providing proper PCs according to the necessity (minimum of 3 PCs: 2 for the Realtime Data and 1 for the operation of IDX Corners).

The Securities Company has to give educational and socialization service of Capital Market, sharing profit according to the agreement, and giving the opportunity of internship.

The Vendor of Realtime Data has to give a free subscription at least for 1 terminal in the Capital Market Lab, giving educational service and socialization of Realtime Data, and also giving the opportunity for internship.

Procedures of IDX Establishment in Universities

Step I : Correspondence

• It is the correspondence phase, where proposals and the university’s profile are studied and discussed to understand the commitment of both sides.
• Proper test to see the potentials of the campus for IDX Corners, such as its capacity.
• Finding the strategic location for the IDX Corner, such as:
  - Easily accessed by the students
  - Located in an area often passed by the students.
  - Minimum size of the room is 6 m x 5 m
  - Attractive room design.
• Choosing the Security Company and preparing the data from the Data Vendor.

Step II: Location Survey

• Finding the strategic location and preparing all things needed for the IDX Corner.

Step III: Agreement Signing and Inauguration of the IDX Corner

• IDX Corner is ready to open any time after the cooperation agreement and all other requirements have been fulfilled.

EQUITY

Stock (Share) is one of the most popular securities available. If a company wants to raise capital, one of its options is to issue stock. Stock also offers interesting return rate for its investors. That is why most investors choose stock for their investment.  

Stock can be defined as a sign of ownership of an individual or institution in a corporation. The person or institution who owns the stock can claim on the company's earnings, assets, and rights to attend its General Meeting of Shareholders.

Basically, there are two benefits for stock investors:

1.       DividendDividend is the earning given to the company's shareholders from the company's income. The amount of dividend paid to the shareholders is decided in the Company's Annual General Meeting. To receive dividend, a buyer of a stock  must own the stock for a relatively long period until it passes its ex-dividend date, where he/she will be acknowledged as the shareholder who has the right to obtain the dividend.

2.       Capital Gain
Capital gain is the positive different between the purchase price and the selling price of a stock. Capital gain is formed through the stock trading activities in the secondary market. For example, an investor bought ABC’s stock for Rp 3,000 per share and then sold it for Rp 3,500 per share. It means the investor receive capital gain of Rp 500 for every sold share.

However, like other instruments of investment, stock has its own risks:

1.       Capital LossIt is the reverse of Capital Gain. It is a condition when the stock is sold for a price that is lower than its original purchase price. For instance, an investor bought the stock of PT XYZ for Rp 2,000 per share, but aftermath the stock price fell to the level of Rp 1,400 per share. Afraid of continuous declines, the investor sells the shares for Rp 1,400 per share. The investor has retained a capital loss of Rp 600 per share.

2.       Liquidity Risk
A Company, whose shares are owned by public, is stated for bankruptcy by the Court or is being dismissed. In this case, the claim of the shareholders' rights will get the last priority after all the company’s liabilities have been settled (through the selling the company’s assets). The rest of the company’s wealth, if exist, will be distributed proportionally to the shareholders. However, if there is no rest left, the shareholders will not receive anything. This is the worst condition a shareholder might go through. Thus, a shareholder needs to monitor every development happens in the company.

In the secondary market or daily stock trading, stock price fluctuates. Stock price is formed by the demand and supply of the stock, while  the supply and demand of a stock are influenced by many factors, such as the company and industry’s performance, the macro factors (interest rate, inflation, currency rate), the non-economical factors (social and political conditions), and so on.

Trading Schedule

Securities trading in the Regular, Cash and Negotiated Markets are carried out during the trading hours on every Exchange Day based on the JATS timer.

Trading hour in the Regular and Negotiated Markets:

Day	1st Session	2nd Session
Monday – Thursday	09:30 to 12:00 WIB	13:30 to 16:00 WIB
Friday	09:30 to 11:30 WIB	14:00 to 16:00 WIB

 Pre-Opening Session for the Regular Market is opened every Exchange Day:

Time	Activity
09:10:00 AM to 09:25:00 PM	The Exchange Members input their purchase and sell orders.
09:25:01 AM to 09:29:59 PM	JATS processes the Pre-opening Price forming and transactions allocation.

Trading Hour of the Cash Market:

Day	Time
Monday – Thursday	09:30:00  to 12:00:00 WIB
Friday	09:30:00  to 11:30:00 WIB

TRADING HOLIDAY 2010

TRADING HOLIDAY 2010

 

Month	Day	Date	Remarks	Trading Days
January	Friday	01	New Year’s Day	20
February	Friday	26	Birth of the Prophet Muhammad SAW	19
March	Tuesday	16	Saka New Year 1932 (Nyepi)	22
April	Friday	02	Good Friday	21
May	Thursday	13	Ascension Day of Jesus Christ	19
	Friday	28	Birth of Buddha 2554 (Vesak Day)
June			No trading holidays, except for Saturday and Sunday	22
July			No trading holidays, except for Saturday and Sunday	22
August	Tuesday	17	The Independence Day of Indonesia	21
September	Wednesday	08	Trading Holiday	17
	Thursday	09	Public Holiday (Commemoration of Ied ul-Fitr 1431 H)
	Friday	10	Ied ul-Fitr 1 Shawwal 1431 H
	Monday	13	Public Holiday (Commemoration of Ied ul-Fitr 1431 H)
	Tuesday	14	Trading Holiday
October			No trading holidays, except for Saturday and Sunday	21
November	Wednesday	17	Ied ul-Adha 1431H	21
December	Tuesday	07	Islamic New Year 1432 H	20
	Friday	24	Public Holiday (Commemoration of Christmas Day)
	Friday	31	Trading Holiday
Total Trading Days				245

 

 

* Note:

 

1. The above trading holidays are set based on the JointMinisterialDecree (SKB) of the Minister of Religious Affairs, the Minister of Manpower and Transmigration, and the State MinistryforState Apparatus Empowerment Apparatus No. 1 Year 2009, No. SKB/13/M.FAN/8/2009, and No. KEF.227/MEN/VIII/2009 dated 07 August 2009 on National and Public Holidays for Year 2010, and also based on the additional Exchange Trading Holiday on 08 September, 14 September and31 December 2010.
2. Beside as mentioned above, a trading holiday can be announced later if Bank Indonesia decides to close all clearing activities or if the Indonesian Government announces another national holiday.