Category Archives: Blog

Building blocks of growth: Cities with the best infrastructure

Mercer, a global consulting firm, annually carries out a survey to help them rank the quality of living of various cities around the world. And this year, in the 19th Quality of Living Ranking, city infrastructure gets its own ranking, as Mercer believes that multinationals pay close attention to this when establishing overseas offices and sending workers abroad.

 

The survey considers the following aspects in ranking each city: traffic congestion, public transportation, the range of international flights available from local airports, telephone and mail services, electricity supply, and access to clean water.

 

Image source: The New York Times
Image source: The New York Times

 

Overall, coming in first place, and the only Asian country in the top five, is Singapore. In fact, Singapore has done so well in infrastructure that the World Bank has decided to create an Infrastructure and Urban Development Hub in its Singapore branch. Citing Kyle Peters, World Bank Senior Vice President for Operations,

 

“This agreement with Singapore to create the World Bank Group’s first global Infrastructure and Urban Development Hub is built on our mutual belief that sustainable infrastructure and urban development are critical to fostering economic growth, improving the quality of life of the poor and building opportunities for more equitable prosperity.”

 

And despite political and financial turmoil in Europe, the succeeding four ranks have an overwhelming majority of European cities with Germany’s Frankfurt and Munich both tied in second place. After all, both cities are known for their transit and airports, with Frankfurt known for having the “largest airport in continental Europe and the second-largest European train station” and Munich for having a vast system of metros, both above an underground.

 

Image source: metroeasy.com
Image source: metroeasy.com

 

Copenhagen, Denmark, bagged the fourth place. While the most popular mode of transportation here is the bicycle, Copenhagen also has a huge network of public transportation. Dusseldorf in Germany rounds up the top five.

 

In almost every case, quality infrastructure is the most important consideration when measuring a city’s capability to provide high living standards for its citizens, attract foreign investment, improve business operations, and display a positive overall reputation. Infrastructure is most especially critical for investors who want to make sure that they are pouring their assets in a globally competitive and vastly sustainable city.

Fundamentals: The mechanisms of the futures market

In the capital market, a trader has several options and investing opportunities in which he can foray into, depending which ones suit his needs, goals, risk profile, and personal preferences best. One of these is the futures market. Basically, buyers and sellers create and finalize agreements by entering into futures contracts. It is stated within the contract how much goods will be paid for and its date of delivery.  As The Balance defines it, a future contract is “an agreement between a buyer and seller of the contract that some asset—such as a commodity, currency or index—will be bought or sold for a specific price and quantity, on a specific day, in the future (expiration date).”

 

Futures-Contract

Image source: marketbusinessnews.com

 

As an example, let’s consider Ben and Marcus. Ben is a fisherman while Marcus is a fish vendor. They have entered into a contract wherein Ben has to sell Marcus 100 tunas at $1 per head for the next fishing season. Ben is trying to secure a future selling price, while Marcus on the other hand is trying to establish a fixed buying price. If the price of tuna increases to $2 the next day, then Marcus would have profited since the buying price is already fixed. Ben on the other hand would have incurred a loss since he can’t sell his products at the adjusted market price. These fluctuations are then calculated and monitored daily until an agreed upon date. If the next fishing season arrives and the price of the commodities hasn’t changed, then Ben would have lost $100 while Marcus would have made $100.

 

Futures-Contract2

Image source: entrepreneur.com

 

One economic importance of the futures market is price discovery. Because of its highly competitive nature, it becomes an important factor in determining the prices based on the present and future estimated supply and demand. It is also important in reducing risks when making purchases since the buying price can’t be changed even if the market price has increased (or decreased) significantly. Prices are fixed however the market moves.

 

To know more about futures contracts, trading, or the investment industry in general, consult with any of LOM Financial’s investment advisors.