Equity Analysis /
Sri Lanka

Sri Lanka Industry Watch: January 2020 – Commodity prices stabilising

    Isuri Munasinghe
    Naveed Majeed
    Mangalee Goonetilleke
    Lakshini Fernando
    Asia Securities
    24 January 2020
    Published byAsia Securities
    • Risks to global growth weakening remain
    • YTD Spot appreciation increased to 0.8% by December (vs. 0.4% September YTD) indicating less pressure on the currency
    • AWPLR drop outpaced that of AWDR in 4Q CY19 indicating a sequential narrowing of banks’ NIMs in 4Q CY19
    • Easing US-China trade tensions and sequential pick in demand from China sees commodity prices stabilising during the quarter
    • However, Crude oil prices remain soft on US production pick up and prevailing sentiment of global growth slowdown
    • Brent prices reached USD 66.00/bbl and WTI USD 61.06 /bbl as of end December 2019
    • Brent futures show prices weakening to cUSD 65.04/bbl levels by March 2020
    • Copper prices strengthened in 4Q CY19 due to an increase in demand from China