In 2007, the Densification Task Team was charged by the Planning and Environment Portfolio Committee (PEPCO) to supervise the project of the densification strategy of the city of Cape Town. Afterwards the draft of the strategy was approved by PEPCO in 2009 along with comments from other stakeholders such as the Planning and Environment, Housing, Finance, Utility Services and Transport, Roads and Storm Water Portfolio Committees. In addition, in 2010 the draft of densification strategy was given for public comments and discussion the result of which had been included into a final report. As a result, the City of Cape Town’s Densification Policy came into effect on February 29, 2012.

Efficiency and sustainability along with the improvement of quality of construction are key aims of the densification policy. It encourages businesses and residents to utilize the space optimally, so it requires a minimum of 25 dwelling units per hectare across the city as a whole in the next 20 – 30 years. In order to give incentives to take part in a densification plan, the city offers municipal tax rebates in higher densification development districts.

Coverage

The densification strategy includes all areas of the city, but a “one size fits all” approach is not applied. However, a significant level of densification is promoted in areas with high traffic congestion and accessibility, commercial developments, social civility, and coastal nodes. Also, a small scale densification is allowed if it is relevant in terms of infrastructure accessibility.

Densification Strategy will be implemented following next steps:

• “ The construction of attached/detached second dwellings including the changing of non-residential buildings, or parts of buildings, to residential buildings (eg garages);
• The increasing of existing bulk rights through the extension of the building or adding on of floors to accommodate an increased number of units;
• Block consolidation of erven with redevelopment at higher densities;
• Subdivision of land and redevelopment at higher densities;
• Consolidation with re-development at higher-densities including the demolition and integration of existing structures;
• Higher density infill on vacant and under- utilized land throughout the built area of the city;
• Consolidation of sites within a street block to create a single larger parcel for redevelopment into multi-storey units”, source “http://www.capetown.gov.za”.

According to the Cape Town Densification Policy, distributional effect of its implementation will be taken into consideration while making proposals as realization of the densification strategy. As a result, a policy paper contains the points that need to be taken into account, so it points out,

“The affordability of the product and the compatibility of the intended market and/or product with the surrounding local communities require consideration. Consideration should be given to the fact that multistorey developments in low-income areas have not had a good track record, as they have become associated with negative social impacts.”

In order to encourage densification next mechanisms are used:

• “Municipal tax rebates in areas targeted for higher-density development
• Increased developer contributions/levies”, source “”

As a result, according to the text of the densification policy, as an implementation of the policy Rates Policy and Developer Contribution Policy need to be done. It has been only one year since Densification Strategy came into effect; therefore, in this step it is early to generalize the finding because as I understood it distributional impacts on poor and wealth are still in implementation. However, it is mentioned that it will have less impact on a social class since they will not incur the commuting cost from travelling from long destinations. And, also affordable housing programmes are considered by the government.

To sum up, I would say that the Densification Strategy city of Cape Town is a positive initiation. Even though, I cannot draw any evidence on facts that show its implementation, taking into account that Cape Town is known for its tourism and diverse nature, it would have a positive impact on city’s surrounding. In practice it is known that such kind of policies lead to segregation of the population of the city to poor and wealth because a social class may not afford living in a city due to expense of housing while wealth enjoy it more. However, a municipal government takes into account probability of inequality, and it is well –known that every innovative initiation has its advantages and disadvantages; therefore, I conclude that there will be controversies on this strategy afterwards, and it will be shown by time later.

References:

http://www.capetownpartnership.co.za/wpcontent/uploads/2012/10/City_of_Cape_Town_Densification_Policy.pdf

http://www.capetown.gov.za/en/sdf/Pages/CityofCTadoptsDensificationPolicy.aspx

http://en.wikipedia.org/wiki/Cape_Town

The central London congestion charging zone

“

Source: “http://www.cchargelondon.co.uk”

Introduction

In February 2003 the city of London was introduced with a new city congestion charge scheme. According to this legislation, all the vehicles, with some exemptions, operating within the Congestion Charge Zone (CCZ) in central area of London between 07:00 and 18:00 during weekdays are liable to a charge. Exemptions are applied to weekends and public holidays. The charge has been designed in order to reduce traffic congestion and raise the revenues to establish public transport improvements in the city.

Background

Traffic jam has been a substantial problem for many years for the central part of London. As a result, the congestion charging has been a subject for the discussion for many years. In 1995 the government Office for London released its London Congestion Research Programme in which the number of technical options for reducing traffic congestion and its benefits to the city were published. Afterwards in March 2000 “Road Charging Options for London, a technical assessment” was introduced to the public. Ken Livingstone – a candidate for the post of London Mayor in 2000, promised that he would reduce the traffic in London by 15% by 2010. He proposed several options to discourage residents not to make unnecessary journeys in a small zone of the city, and he, therefore, had aimed to promote more environmentally and economically efficient transport facilities. In the end, after comprehensive considerations and consultations with city residents and local authorities, the London Congestion Charge came into effect on February 17, 2003.

 Aims

According to London city Mayor’s Transport Strategy, the congestion charge was accompanied with other types of public transportation improvement proposals. All of them intended to make public transport efficient, affordable, and more reliable.

According to Mayor’s Transport Strategy, the London Congestion Charge aims:

“

• to reduce congestion
• to make radical improvements to bus services
• to improve journey time reliability for car users
• to make the distribution of goods and services more efficient”, (Impacts monitoring, Sixth Annual Report, July 2008)

As implementation of London Congestion Charge, Transport for London (TfL) charges during the weekdays from 7 am to 6 pm except bank and public holidays a daily charge of £10. According to the regulation, the charge of £10 applies if you pay in advance or on the day, but it increases to £12 if payment is made by midnight on the following charging day. Also, if drivers register to Congestion Charging Auto Pay, the daily charge of £9 applies, and businesses are eligible for the payment of £9 for each vehicle detected within the charge zone if they register with TfL.

A number of network cameras have been installed to control the car movements in London. The network cameras picture vehicles’ number plates after they enter, drive around and leave the charge zone. The vehicles’ number plates are matched against database of those who have already paid or are exempt for the charge, so if it is matched, the photographic images of those cars are automatically erased from the control database machine. If vehicles had been in the charge zone and recorded as a daily charge has not been paid, those vehicles are penalized by paying a penalty fine of £120. If it is paid within 14 days, it is reduced to £60, but if those failed to pay it is increased to £187 after 28 days.

Scope and Coverage

London Congestion Charge applies to the central zone of London to all vehicles crossing the entry points from 7am to 6.30pm Monday to Friday with some exemptions.

According to an official website of Transport for London, some are free from the congestion charge if they register with TfL and also if the vehicle reported at the Driver and Vehicle Licensing Agency under the next exemption categories:

“

• Two-wheeled motorbikes (and sidecars), and mopeds
• Emergency service vehicles, such as ambulances and fire engines, which have a taxation class of ‘Ambulance’ or ‘Fire engine’
• NHS vehicles that are exempt from road tax
• Vehicles used by disabled people that are exempt from road tax and have a ‘disabled’ taxation class
• Vehicles for more than one disabled person (for example Dial-A-Ride) exempt from road tax and have a ‘disabled’ taxation class
• HM Coastguard and Port Authorities
• Certain operational vehicles used by the London boroughs
• The armed forces
• Royal Parks Agency
• Breakdown organisations
• a London licensed minicab or taxi
• Certain vehicles, including buses, registered in European Economic Area member states “(http://www.tfl.gov.uk, 2013).

Boundary

London Congestion Charge zone covers both London Inner Ring Road and West End. The London Inner Ring Road is the primary financial centre while the West End is known as city’s heart for entertainment and shopping.

“

Source: “Photo Gallery: London congestion charge”

In order to assist drivers to recognize the congestion charge applicable area the signs were set up and symbols were painted in the charge zones.

Allocation of Revenue

According to Mayor’s Transport System, all the revenue raised from the congestion charge must be spent on the improvement of public transport and road safety. In general, according to Greater London Authority Act 1999, the congestion charge was forecasted to generate £121 million of net revenue.

“Application of net congestion charging revenue for 2003–04

”,

source: “http://eprints.ucl.ac.uk/14932/1/14932.pdf, London Congestion Charge, page 12.”

Impact on Residents

According to Mayor of London, the low income family would not be affected by London Congestion Scheme since they may not afford having a car and already rely on public transport. A study conducted by the Commission for Integrated Transport of restaurant, hospitality and health workers concludes the congestion charge does not fall heavily on low paid workers in Central London because of low occurrence of car ownership and reliance on public transport. Conversely, those low income residents benefit from the well-organized public transportation system since its improvement is a part of Mayor’s Transport System.

Furthermore, there are controversies on the impacts of the congestion fee on businesses in central part of London. Some claim that the charge constrains the development of the business while others say that decongestion have been conducive to working environment. A number of surveys had been conducted to analyze the impact of the charge on businesses; however, because of their ambiguity Transport for London in its report on Congestion charging in July, 2008 concluded that it awaits the availability of independent dataset on the influence of the congestion charge on the businesses in the light of macro-economic volatility. The Transport for London in its report in 2008 reported,

”General economic trends were seen to have been the predominant influence on the performance of central London businesses over recent years, and the central London economy had actually performed particularly strongly since the introduction of congestion charging in 2003, which itself coincided with an economic upturn.”

In other words, there is no clear evidence that the charge has been a burden for businesses in a central part of London.

In conclusion, Transport for London had expected that after imposition of the congestion charge driving residents of London would switch to public transport. As implementation of Mayor’s Transport Strategy, over the last years there have been improvements on public transport services. A number of night busses as well as frequency and capacity of daytime busses have been increased. TfL’s figures shows that there has been a 7 percent increase in the number of passengers taking a public transport in recent years. As I mentioned before, a number of surveys and studies have been conducted to weigh the effectiveness of the regulation. However, there are controversies related to its implementation, but there is still no evidence against it. Therefore, it will remain as one of regulatory instruments to control the traffic in London. Briefly, in the short run people have transferred to public transport and started to bike while in the long run businesses may reallocate themselves outside the charge zone. All in all, taking into account density of London, in my opinion, London Congestion Charge is a constructive instrument for the regulation of traffic in the city because it encourages people not to make unnecessary journey in the centre of the city instead it motivates residents to switch to more efficient transport while saving their precious time.

References:

1. http://www.tfl.gov.uk/assets/downloads/sixth-annual-impacts-monitoring-report-2008-07.pdf
2. http://www.tfl.gov.uk/roadusers/congestioncharging/6723.aspx
3. http://eprints.ucl.ac.uk/14932/1/14932.pdf
4. http://legacy.london.gov.uk/assembly/reports/transport/congestion_charging_feb04.pdf
5. http://www.economicinstruments.com/index.php/air-quality/article/83-
6. http://www.theaa.com/motoring_advice/congestion_charging/index.html
7. http://www.tfl.gov.uk/roadusers/congestioncharging/17098.aspx
8. http://www.economicshelp.org/blog/143/transport/how-effective-is-a-congestion-charge/

In this week I have been using the same source of information from the previous weeks. They are:

http://farmfutures.com

http://www.agrimoney.com

http://www.grainews.ca

http://www.cmegroup.com

http://www.weather.com

This week on Friday I traded two soybean contracts, it was quite successful since I made some profits.

Holding 6 – short on S3F                  mark to market

price in:       1457.00
today’s price:  1451.25
committed:      $2700.00
gain/loss:      $287.50

Holding 7 – short on S3F                 mark to market
price in:       1457.00
today’s price:  1451.25
committed:      $2700.00
gain/loss:      $287.50

Ending balance as of 11-09-2012,

Position Value: $5975.00
Cash Available: $29783.76
Equity:         $35758.76
Realized Gains: $-4817.50

On Friday the USDA’s supply and demand report was expected, so everyone was expecting volatility in the grain prices. I decided to go short soybean contracts because I knew that the soybean prices would be down since the last report was quite positive and as well as other forecasts made by private companies such as Informa Economics, Inc.

The soybeans were down on Friday after USDA announced its estimate for soybean harvest; it was more than expected by analysts.

The USDA increased its estimate on the soybeans up from 2.86 billion bushels to 2.971 billion bushels. Also, according to USDA’s report the global soybean stockpiles will be higher than anticipated, so it is increased to 60.02 million metric tons.

In the week ahead

The corn and soybean traders will continue to follow news on weather forecasts for grain-growing regions in South America.  Also, Ukraine and Russia’s crop conditions will be on monitor as well as North American’s since these countries are main exporter of wheat. In addition there will be USDA’s weekly crop progress report and export data.

What I will be doing

In last week I was writing that I would learn the technical analysis, so for that Andrew’s presentation was very useful. I will continue working on the technical analysis and try to apply it this week.

Furthermore, we have an assignment #5 in which the question 4 on technical analysis, so there is an opportunity to learn more about it.

This week I have been looking for new source of information to enhance my understanding of commodity market, so I have come up with two sources that might be interesting for some who are interested on news overall on market.

There is one website called “FOREXPROS financial markets worldwide”.  This website is not only on commodity futures but also on other financial markets, thus I have found it very comprehensive if one wants to read some interesting news on financial market.

Especially, I recommend an article “After Sandy Commodities Switch Focus To US Election” at “http://www.forexpros.com/analysis/after-sandy-commodities-switch-focus-to-us-election-142237” in the section “Comments”. This article describes all recent events on financial and commodity markets that the beginning of week has started on hurricane Sandy that the gasoline prices have gone up then the next event was USA’s updates on employment that pushed the dollar and stocks up. It is said that the next focus will be on November 6, 2012 USA’s election. Also, this article provides an interesting data on performance of sectors in 2012.

”

“

The data was taken from the website “http://www.forexpros.com/analysis/after-sandy-commodities-switch-focus-to-us-election-142237”

Another source is “http://www.agriview.com/app/markets/futures/”.

Well, the midterms are over, so now there is a little bit more time to focus on trading. Thus, I have a few goals for the coming weeks.

This week I have traded two short contracts on corn and wheat because I have been trading only soybeans since I wanted to learn more about soybean futures and soybean as a commodity. Now I want to focus on two commodities: corn and wheat, therefore, to do some market analyses.

Furthermore, besides reading news I want to learn the basics of technical analyses because today I was reading the cool source of information recommended by Ishrat, so I understand that the technical analyse is another great tool to predict the future instead of looking at current price movements due to daily news because the price cycles have pattern to repeat.

In addition to learning corn and wheat markets and to get familiar with technical analyses, I would like to learn the limit order and options futures. I have tried the market and spread order, but I still don’t know anything about limit order, so in order to be familiar with basics of futures market I think it is necessary to learn about this trading type.

Briefly, I would like to enhance my comprehension on commodity futures, thus corn and wheat market analyses, technical analyses, limit order, and option futures are my goals for the coming weeks.

Good luck!

The last week I closed two contracts on soybeans and wanted to trade a new commodity and make some profit like my classmates. However, my attempt was unsuccessful. On Thursday I went sell two short corn and wheat contracts since the grain market was down. Thus, I ended up with equity balance of $35535.52 and I incurred loss of (-150) on wheat and gain of (+25) on corn such an anecdotic situation.

So what has happened in the market?

Overall, the grain market was down on Friday with expectation of plentiful harvest for soybeans and corn and less demand from buyers.

The market was affected by employment data and uncertainty of upcoming elections in USA that pushed the US’s dollar up. As a result, the grain prices were down since currency appreciation has a negative impact on export, making commodities less attractive for overseas buyers.

Furthermore, due to forecast of Informa Economics, the corn was down since it is forecasted at 10. 738 billion bushels relatively up from the USDA’s October forecast of 10.706 billion bushels.

However, the wheat prices were up on Friday because of disruption of global supply. It is announced that Ukraine will ban export of wheat from November 15. Therefore, it is expected that the reduction of supply from Ukraine would increase demand for USA’s wheat.

The focus of the market for the next week

The adverse weather is expected in South hemisphere, so next week soybean traders will follow weather forecast while wheat traders will focus on crop conditions in Russia and Ukraine since there is an expectation of export restrictions by these countries, as a result the  USA’s and Canada’s supply of wheat will be on fortune.

Not only the weather and crop conditions will interest traders but also upcoming USDA’s report, so on Monday there will be USDA’s weekly crop progress report, on Thursday export report, and on Friday supply and demand report.

In the light of all these events, the next week is going to be full of ups and downs.

Reference

http://www.forexpros.com/news/commodities-news/grain-futures—weekly-outlook:-november-5—9-240264

Well, after trading for three weeks the soybeans I decided to close my spread order (one short and one long) position on Thursday because it is expected that the price would go down due to a decrease of export expectations. USDA said, “China cancelled two cargoes of corn last week and 173,000 tonnes of soybeans previously earmarked for China were switched to Taiwan and Thailand”.

Even though, I was spread that means I was indifferent because in either price movements I could avoid losses, I was hoping to make some profits on a Short position. Thus, I ended up with this result,

Closed Contracts

Overall, the price went down after its climb because of fear that the demand for soybeans would go down because the sales did not meet the expectation. Even though the soybean futures had upward trend in the beginning of week due to a higher trade, on Friday it was closed with downward trend since it is announced by the USDA in its weekly export sales that soybean sales were expected to be at 522,200 down from the previous forecast of 650,000 to 850,000 tonnes.

the data was taken from the website “http://farmfutures.com/story.aspx?s=64403&c=0“

In the light of these events, my equity balance at the end of week was “$35661.27”

“IGC cuts grain stocks forecast to five-year low”

The International Grains Council on October 25 made changes on its estimate for the world grains stocks (maize and wheat) in 2012-2013.

In a monthly market report the IGC pointed out that the grain inventories from the major suppliers will be relatively small and the lowest for 17 years. As a result, the IGC made some cuts on its forecast of grains stocks, so it is forecasted 328 million tonnes, cutting 4 million tonnes from the previous estimation.

According to IGC the scarce availability of stocks and corresponding high prices have to rationalize the demand, leading to the shrinkage of consumption since 1998-1999.

To conclude, the IGC explains its forecast as a result of the decrease of world production of grains in main exporter countries such as Ukraine, Russia, Kazakhstan, and USA. The severe summer draught was main reason of the shrinkage of global supply that has compelled to impose restrictions on export in order to maintain a lower domestic price for the grain products (eg. Russia, Ukraine).

Briefly, this news has to do with what we have learnt in class, so an expectation of a higher price due to a lower storage can have a significant effect on prices because of arbitrage until it equals to zero or in other words to the level of storage costs.

Reference

http://www.agrimoney.com/news/top-exporters-grain-stocks-to-fall-to-17-year-low–5147.html

http://www.grainews.ca/news/igc-cuts-grain-stocks-forecast-to-five-year-low/1001797739/