Leading FOREX broker in Indonesia discusses the capital markets

Interview with Mr. Jeffrey Ng, Advisor to Monex Investindo Futures

When and why was Monex Investindo Futures created?

If you look at the futures industry, futures is no more than actually an extension of our normal trading. If you look at the futures trading history, it started with the forwards contacts. Later on, in order to have more liquidity, people have standard contacts. That is why the futures markets came into being. Monex saw an opportunity in an important developing market, and offered itself in the market in the year 2000, the company formally registered and became a fully-operational company.

What have been the key milestones in these first 16 years?

There have been many milestones over the past 16 years. As a leader in the industry for over 10 years, Monex has introduced many new products to the market. For example, the most competitive spreads, with contract spreads from zero, for  example. Monex has a tremendous amount of transparency in our business by introducing market execution. Market execution is a directly executed trade in the market without any third parties. You have wprice visibility and the execution being done totally transparently by the trader. 

There is tremendous amount of development in the market. Monex also introduced partial contracts into the market, which provides tremendous opportunity for people to manage their risk. Rather than taking the whole regular lot, you can take partial lots. These are important developments  Monex developed products  not just from a commercial point of view, but to help and sustain the company’s clients so they will be able to have a more access to opportunities and profitable trading experience.

Do you have any new, upcoming changes?

Monex is always continuing to develop because we an STP and ECN broker.  The company’s first priority is to our client. The market is now in tremendous turmoil with a new presidency in America, with Brexit, so Monex has introduced for our premium clients a dial-up service where they can speak to a key market strategist on how the market will go. This is an important development for the company. This is a service that Monex will provide its clients: a 180 minute slot that clients can ring up to find out where the experts think the market will go. This is a new market product which Monex will announce in December.

Do the clients ask, “What shall I do?”

Experts do not actually tell you what to do. They give you a lot of recommendations. Expert views are important, because they have a sense of the market and share what will you do when the market is going up? What will you do when the market is going down? What will you do when the market is in a throttling position?

You have a very good track record.

Monex has been very successful in introducing its education program. One of the most successful things that the company can show with pride, is by introducing Monex as a premier brokerage house with a very high level of education services to our customer. All of Monex’s educators are certified by the government. They have a license to be front-facing. That is very important, because it is fully compliant with the rules. Secondly, they are individually certified by the products’  vendors. For example, Monex has  trading tools. They are certified by the trading tool provider that they are competent enough to speak about the tool. Therefore, Monex’s educators are very competent and certified to provide the programs. Monex has different levels of educators, from the very basic, going up to advanced level. This is an important element in Monex’s development. 

In addition to that, Monex brings in top economist from Indonesia and world to talk about how the economy is going, both in Indonesia and globally. 
The company brings in top traders who talk about how the market is trending. Monex gives all these practical insight on a regular basis. Every three months, there is an exclusive Monex trading session that is provided to all its clients. The most recent one was done in three major cities: Jakarta, Surabaya and Bandung. The Trader actually travelled with the company through all the major cities where our guests were invited.

What is the feedback you get from the client?

It is very important that what the company provides fills a need for the client. Monex is very cognizant of that, and through our anonymous interviews and reviews, the company receives 80 to 85 percent response from the clients that they are very satisfied with both the material and the speaker, this is important. Not only is the speaker evaluated, but also the materials that he gives. On a monthly basis, Monex also conducts training seminars throughout all its branches on the same day. This is an important element, because all the materials are standardized. The teaching quality is standardized. There will be some variation in that some speakers are a little bit different, but by and large, the delivery and the materials are so precise that the company gets a general feedback that is very consistent.

Do you think face-to-face meetings are more valuable than online for your client?

Face-to-face and online meetings are both valuable, because Monex’s clientele is actually very varied. The company has the millennials, who are a little  friendlier towards the internet space. They like in their own time to view, and would probably like an on-demand webinar, which the company’s serves. The company has people who really prefer live interaction with the speakers, and that is also provided. What the company does, is to provide both a live webinar, as well as an online webinar where you can on demand call for the session that you wish.

Is confidence rising in the futures market?

Investment is very personal for each and every individual. Not one investment instrument or tool is suitable for everyone. In terms of futures and trading, it is important that the prospective investors actually assess their own risk appetite. They must know what their risk appetite is. They must also understand the risk involved in this particular investment tool, which is a high-risk and a  high-return investment . It is important that Monex gives this message to our client, to make sure that they understand this.

What is the perception that Southeast Asians as opposed to Indonesians have of the futures market?

There is no particular survey that actually gives an opinion of what people think. I suggest that one should be done. If you take some random off-the-cuff survey, you would get a very varied response. Some will say it is always a very high reward investments, some people will tell you it is very risky. You get these two polarities, but it would be interesting to get a better picture. The industry needs to conduct a survey to give a better response.

Do you see education changing the mindset of some people?

Education is crucial for any investment, but more so in this particular industry. Why so? Because global markets are very complex market. An example is today’s  global outlook is so complicared. The global financial situation is complex with multiple financial products. There are three major global financial trading sessions:  New York, London and Singapore. There are individual risk and profit objectives. When confronted with such varied options and complexities, education will point you in the right direction.

There does not seem to be much support of the government.

Monex is actually very pleased with the government. BAPPEBTI or CoFTRA, who is the governing body for futures trading in Indonesia is one of the highest authorities that demands compliance. Nowhere else do you need to do 70 ticks  before you can open an account. Strong compliance gives comfort to the client, to show that there is government support in terms of looking out for the client, in terms of they must be aware of the financial risks and opportunities. The clients must know the brokerages are properly licensed and can visit their offices. Indonesia’s regulatory body demands that client accounts be kept in segregated accounts. Also is the policing that companies are compliant. Indonesia probably ranks as one of the highest regulatory support in terms of support to the clients, the brokerage and the liquidity providers. As a whole, the government has been very supportive by providing a very strong network of regulations and protection to everyone.

Can Indonesia become the price reference?

Indonesia’s aspirations are  global .  As a global producer of palm oil, it is important that Indonesia plays a crucial role. Who can tell you what the supply will be, if not the producer? This is a natural development, that Indonesia will be the price reference for the products that are produced here, like palm oil, rubber and other commodities. Indonesia will be a great place for having such an exchange.

Are there any issues that should be worried about, like taxation?

Indonesia is very friendly and welcomes investments. You can see our BKPM, coordinating body for investments, has done a wonderful job going all around the world to say how wonderful Indonesia is. It is the fourth most populous country in the world. It has the fifth largest middle-class potential. It is a country that is reaching a GDP of one billion US Dollars. This is such an important market. All serious investors who come to Indonesia are welcomed.

Can the developing economies of Indonesia grow now that other markets are dropping?

That is why the regulators have such a crucial role to play. Compliancy in regulation gives assurance to the investors. Indonesia’s regulators have the right approach in terms of regulation, flexibility  and compliance. I am very confident Indonesia will grow.

How do you teach your users in terms of risk and profitability?

All of Monex’s clients are introduced to a financial health check, to see whether this particular investment is a suitable investment. If the client does not qualify, then we suggest this is not an investment for them at this time. Secondly, Monex explains the risks and possible associated benefits, so the client has a very clear idea. Futures trading, FOREX trading  are in  dynamic markets.  On one hand you see the possibilities. with USD 500 dollars, you can actually enter into a global financial market. What particular instrument will allow you to do that? It is such power on one hand, but power comes with responsibility, that you need to understand the markets. You need to trade the markets intelligently. Monex tells our investors that this is not gaming. It is definitely not for entertainment. This is a serious investment business for serious investors. This is how the company tries to continually give the message. There are opportunities, and there is also risk. You must have an understanding and the ability to navigate the markets intelligently to meet your own financial objectives.

Talk about Indonesia as a gateway.

Every country has their own possibilities. On a strategic  perspective, not only is Indonesia the most populous nation in ASEAN, it is also a bridge between India and China. Traditionally, and now in the modern day, Indonesia is well-poised to be the gateway not only for ASEAN, but for the rest of the world. Indonesia is physically in between the two Asian giants of China and India. Number one, any sea trade has to pass through Indonesia. Secondly, Indonesia is the fourth most populous nation in the world, with the highest population with the third  most access to mobile technology. Over 60 percent of Indonesia has access to digital media. Indonesia is the number one capital for Facebook outside of America. However, there is not enough attention to promote Indonesia in this way. A better job must be done to promote Indonesia as the leading nation and as a global player in the world