The document provides an economic capsule with the following key points: - Commercial Bank was named the most valuable private bank brand in Sri Lanka and won an award for social media brand of the year for the second year running. - Sri Lanka's inflation rate increased in April 2019 driven mainly by higher non-food prices. The central bank governor sees a strong case for relaxing monetary policy. - The central bank raised USD 165.5 million through Sri Lanka development bonds and plans to raise up to USD 2 billion in international bonds before elections. The CSE and LSE also signed an agreement to facilitate dual listing of Sri Lanka dollar bonds. - Internationally, the US imposed restrictions on Huawei,

1. Economic Capsule
May 2019
269th Issue
Research & Development Unit

2. CONTENTS BANKING & FINANCE
 ComBank named Most Valuable Private Bank brand in Sri Lanka
 ComBank wins ACEF ‘Social Media Brand of the Year’ award for 2nd year running
ECONOMY & BUSINESS
 NCPI – April 2019 Inflation
 CB Governor says seeing strong case for relaxing monetary policy
 CB raises USD 165.5mn via SL Development Bonds
 CSE, LSE sign MoU in London for dual listing of Lankan dollar bonds
INTERNATIONAL
 Trump administration hits China's Huawei with one-two punch
 OECD cuts global growth forecast as US-China tensions rise
 Pakistan reaches accord with IMF on USD 6bn bailout
 Japan economy beats expectations of slowdown

3. Banking & Finance

4. Research & Development Unit
ComBank named Most Valuable Private Bank brand
in Sri Lanka
• Commercial Bank has been named the most valuable private bank brand in
Sri Lanka in 2019 in the 16th edition of the Brand Finance rankings of the country’s
most valuable brands.
• The only private bank among the five most valuable consumer brands in the
country, Commercial Bank has retained its position at No 4 and has the honour of
being in the top 10 of this prestigious ranking since its inception.
• Brand Finance assigned Commercial Bank a brand value of Rs 37.269 billion for
2019, up 27% from last year, reaffirming Commercial Bank’s status as the largest
private bank and the leading private bank brand in Sri Lanka.
• Brand Finance computes the value of brands listed on the Colombo Stock Exchange
using a method based on the Royalty Relief approach – a brand valuation method
used by the company globally.

5. Research & Development Unit
ComBank wins ACEF ‘Social Media Brand of the Year’
award for 2nd year running
Commercial Bank has been adjudged the ‘Social
Media Brand of the Year 2019’ for the second
consecutive year at the 8th Global Customer
Engagement Forum & Awards in Mumbai, sharing
the honour with joint Gold winner Switzerland
Tourism.
The prestigious ‘Grand Prix’ award presented by the Asian Customer Engagement Forum (ACEF)
recognises the Bank’s effective, innovative and refreshing use of five leading social media platforms to
engage with and motivate target audiences in the preceding year.
Commercial Bank has carved a unique position for itself in the social media arena by reaching out to
younger audiences with inspirational concepts and a fresh and distinctive look and feel on Facebook,
Viber Public Chat, Instagram, YouTube and LinkedIn.

6. Economy & Business

7. NCPI – April 2019 Inflation
NCPI
Point to Point
NCPI
Annual Average
Source: DCS
April 2019 Month Ago Month AgoApril 2019
3.6% 2.9% 1.9% 1.7%
6.3% 5.8% 3.7% 3.3%
April 2019 Month Ago Month AgoApril 2019
NCPI Core
Point to Point
NCPI Core
Annual Average
Research & Development Unit
 The increase in NCPI –Point to Point inflation was largely due to the increase in prices of the items in the
non-food category . Contribution of food commodities to inflation (NCPI –Point to Point) was ‐0.55% in
April 2019 . Contribution of non-food items was 4.15%. (Source: DCS)

8. Research & Development Unit
Source: Daily Mirror
CB Governor says seeing strong case for relaxing
monetary policy
Central Bank Governor Dr. Indrajit Coomaraswamy has hinted
a strong possibility of a policy rate cut at the next monetary
policy review, as he sees “a strong case for relaxing monetary
policy.”
“If you look at all indicators, there’s a strong case for relaxing
the monetary policy,” Governor Coomaraswamy told
Bloomberg.
“All options are there. It could be a SRR, it could be a policy-
rate reduction, it could be a combination of the two,” he said,
referring to the statutory reserve ratio.
The next monetary policy review, the third one for this year, is
scheduled for May 31.

9. Research & Development Unit
CB Governor says seeing strong case for relaxing
monetary policy (cont.)
 Central Bank Governor Coomaraswamy told Bloomberg Television that Sri Lanka would raise
up to USD 2bn through international bond sales before the presidential elections scheduled
to be held later this year.
 He said that it should help boost foreign reserves to USD 8bn by the end of the year after
they fell to USD 6.7bn in the aftermath of last month’s attack.
 After the resolution of the political impasse in December, 2018, Sri Lanka, this March,
successfully raised USD 2.4bn from international capital markets through USD 1bn 5-year
and USD 1.4bn 10-year issuances.
 IMF last week said Sri Lanka could tap international bond markets for funds as soon as the
country’s security situation stabilizes.

10. Research & Development Unit
Source: Sunday Times
CB raises USD 165.5mn via SL Development Bonds
The Central Bank (CB), on behalf of the Government, has raised USD
165.5mn via the latest issuance (22nd May) of Sri Lanka Development
Bonds (SLDBs) from USD 196mn worth of bids received.
 The multi-tenor SLDB issuance with fixed and floating interest rates was
for USD 200mn.
In January, the first-ever SLDB issue for 2019 worth USD 200mn went
undersubscribed with USD 181.73mn bids received.

11. Research & Development Unit
Source: Daily FT
CSE, LSE sign MoU in London for dual listing of
Lankan dollar bonds
The Colombo Stock Exchange
(CSE) and the London Stock
Exchange (LSE) , signed a
Memorandum of Understanding
(MoU), aimed at facilitating the
dual listing of dollar bonds
issued by the Government of
Sri Lanka, on both exchanges.
The MoU will immensely strengthen Sri Lanka debt market offering as a gateway to a global
exchange with truly world class regulation, technology and depth of market participants. This
initiative provides investors the ability to invest in securities that are also listed in one of the
most prominent markets in the world, through Sri Lanka, which in turn would propel the CSE
to greater heights and increase its visibility both locally and internationally

12. International

13. Research & Development Unit
Source: Reuters
Trump administration hits China's Huawei with one-two
punch
The Trump administration on Wednesday
took aim at China’s Huawei Technologies Co
Ltd, banning the firm from buying vital U.S.
technology without special approval and
effectively barring its equipment from U.S.
telecom networks on national security
grounds.
Taken together, the two moves threaten
Huawei’s ability to continue to sell many
products because of its reliance on American
suppliers, and represents a significant
escalation in the U.S. government’s
worldwide campaign against the company.
The steps also come at a delicate time in relations between China and the United States as the world’s
two largest economies ratchet up tariffs in a battle over what U.S. officials call China’s unfair trade
practices. (Source: Reuters)

14. Research & Development Unit
Source: AFP
OECD cuts global growth forecast as US-China tensions rise
 The OECD cut its forecast for the world economy, urging
governments to resolve their trade disputes as the latest
flare-up in the US-China trade war threatens to crimp
global growth. “Governments must act urgently to
reinvigorate growth that benefits all,” the Organization
for Economic Co-operation and Development said as it
pared back its forecast for global growth to 3.2% this
year from 3.3% earlier.
 “Resolve trade disputes through increased international
cooperation while fixing the international rules-based
system,” said the OECD, a Paris-based forum that advises
the world’s advanced economy.
As both Washington and Beijing slap trade tariffs on more and more of each other’s goods, President Donald
Trump has barred US companies from engaging in telecommunications trade with foreign companies said to
threaten American national security (Source: AFP)

15. Research & Development Unit
Source: Reuters
Pakistan reaches accord with IMF on USD 6bn bailout
 Pakistan has reached an accord with the
International Monetary Fund over a
three-year, USD 6bn bailout package
aimed at shoring up fragile public
finances and strengthening the slowing
economy, officials said.
 “Pakistan is facing a challenging
economic environment, with lacklustre
growth, elevated inflation, high
indebtedness, and a weak external
position,” the IMF said in a statement
outlining the framework of a deal
reached after months of negotiations.

16. Research & Development Unit
Source: Reuters
Japan’s economy beats expectations of slowdown
 Japan's economy unexpectedly grew in the
three months to March, 2019 shrugging off
forecasts for a contraction in the world's
third largest economy.
 The economy grew at an annualized 2.1% in
the period, preliminary gross domestic
product (GDP) data showed.
 That beat analyst expectations for a 0.2%
contraction, as imports fell faster than
exports.

17. The views expressed in Economic Capsule are not necessarily those of the Management of Commercial Bank of Ceylon PLC
The information contained in this presentation has been drawn from sources that we believe to be reliable. However, while we have taken reasonable care to maintain accuracy/completeness of the information,
it should be noted that Commercial Bank of Ceylon PLC and/or its employees should not be held responsible, for providing the information or for losses or damages, financial or otherwise, suffered in consequence
of using such information for whatever purpose.
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John Wooden