ANALYSIS OF PLANNING CROSS-LISTED IDX STOCK INDEX AS AN UNDERLYING DERIVATIVE PRODUCT IN SGX; A COMPARISON STUDIES BETWEEN JCI AND LQ 45

Abstract

This research is about the relationship between satellite market and home market, and the analysis of planning cross-listed IDX stock index as an underlying derivative product in SGX. People in the Indonesia Stock Exchange has inspired researcher to do this analysis study, and researcher found that, it is something new in financial market in Indonesia, and the idea was quite interesting, so in this research, researcher is well supported by the IDX.

There is still no derivative product in Indonesia Stock Exchange (IDX) as underlying stock index traded through cross-listing in other foreign market, so it is necessary to conduct a study analyzing of the potential benefits and risks when the derivative product or index listed in IDX would be traded in another foreign market.

Since the purpose of this research is simply finding out the benefits and potential risks of planningin collaboration between IDX and SGX in terms planning of cross-listing of IDX underlying stock index to be listed in Singapore Exchange, and to identify what proper stock index that may be matched as an underlying derivative product to be listed in Singapore Exchange in the future, the researcher would like to use qualitative method as a useful tool to do the research.

The results of this feasibility study is to review the IDX’s managementto take any decision related to collaboration between IDX with SGX in terms of using U.S. denominated withinIDX 45 futures and IDX 45 options as the underlying stock index LQ 45 at IDX.May in the future it will be created an advantageous relationship from cross-listed stock index between SGX and IDX.