Gayan Lakmal Alwis, CFA

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Gayan Lakmal Alwis, CFA

@theGayan

I write about #investing and #PublicSpeaking to make you a better person than yesterday. https://t.co/vSoYUBv7Sc Personal views.NOT investment advice.RTs≠endorsements

Sri Lanka Katılım Eylül 2010

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Gayan Lakmal Alwis, CFA@theGayan·14 Tem

First time in our history, Fund Managers and Actuaries share the same stage! It was a pleasure and privilege to moderate a panel discussion at the 4th South Asian Actuarial Conference organised by the Actuarial Association of Sri Lanka (AASL). The panel was a balanced mix of fund managers (= guardians of assets) and actuaries (= gatekeepers of liabilities). We discussed about the multiple massive shocks (easter attacks, pandemic, debt default and restructuring, financial crisis, etc.), which our financial markets faced and overcame. Also, the fact that in hindsight, how all this now seem akin to a storm in a tea cup. But I pointed out that there are many elephants in the room and introduced the concept of “nexus events” - which could trigger an alternate timeline where history might rhyme. It was a thought provoking discussion and we concluded with points on how fund managers and actuaries could work closer to create synergies and value. I’d like to thank AASL and in particular Lakmali Gunasekara for providing this wonderful opportunity. Sincere appreciation to my fellow panelists - Nalin Subasinghe (Chief Actuarial Officer - HNB Assurance PLC), Kasun Nanayakkara (Director - Ceylinco Investcorp Pvt Ltd), Nilesh Amarasinghe (Chief Investment Officer - HNB Assurance PLC) and Rishikulya Gunasekera (AGM Actuarial Services - Ceylinco Life Insurance Limited).

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Gayan Lakmal Alwis, CFA@theGayan·2h

Light at the end of the tunnel? President Trump says: "US and Iran had "very good" conversations about an end to the conflict" and "instructed to postpone any and all military strikes against Iranian power plants and energy infrastructure for a five-day period". Source: Bloomberg

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Gayan Lakmal Alwis, CFA@theGayan·1d

@MangalaYapa Technically speaking, CGT is applicable only for specific investment assets, such as land, buildings, unlisted shares, etc. In this case, the super gains, i.e. increased selling price vs. low inventory cost, will be reflected in high gross profits, which leads to higher taxes.

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Eng. Mangala P.B. Yapa@MangalaYapa·1d

Would they be liable for Capital Gains Tax? If it was a private company, it would, unless they fudge the Stock Balances (which is easily verifiable), and will be a deterrent to horde large stocks.

Gayan Lakmal Alwis, CFA@theGayan

Fun Fact: For the folks in @CSE_Media, the biggest capital gain over the past few weeks have been the fuel left in our tanks (if any). 😀 On a serious note: Fuel prices are revised upwards by ~26%.

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Gayan Lakmal Alwis, CFA@theGayan·1d

@Rishi_BM @CSE_Media @CBSL Yes, we had below target inflation for a while without too many cuts, so reverse could also hold true. What matters most is the future trajectory, rather then where we are now. I don't know what CBSL would actually do. But this is my best guess.

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Rishi@Rishi_BM·1d

@theGayan @CSE_Media @CBSL Makes sense. I guess it depends on whether the overall inflation is within appetite.

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Gayan Lakmal Alwis, CFA@theGayan·1d

Fun Fact: For the folks in @CSE_Media, the biggest capital gain over the past few weeks have been the fuel left in our tanks (if any). 😀 On a serious note: Fuel prices are revised upwards by ~26%.

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Gayan Lakmal Alwis, CFA@theGayan·1d

@Rishi_BM @CSE_Media I think @CBSL will wait to see the impact of all this and whether the cause and effects are prolonged. Shifting gears in the monetary policy has a long-term impact on the growth trajectory and they will take all into account (in addition to pressure on prices) before acting.

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Rishi@Rishi_BM·1d

@theGayan @CSE_Media What’s your prediction on the imminent rate hike? How many BPs?

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Gayan Lakmal Alwis, CFA@theGayan·1d

@ShavinWijetunge @CSE_Media Buy and hold has always been a good strategy in the equity market 😁 But in this case, it's outright illegal, unfair and unjust.

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Shavin Wijetunge@ShavinWijetunge·1d

@theGayan @CSE_Media So the hoarders have a ROI of more than 30% ...

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Gayan Lakmal Alwis, CFA@theGayan·6d

@Channa_Amare Excellent choice of meme! I watched the movie couple of months back and it fits this perfectly!

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Channa Amaratunga@Channa_Amare·16 Mar

Lots of new participants in #CSE #lka encountering a market correction for the first time ... ... and realising that markets can go down as well as up 😉 First timers also experiencing the dangers of being fully invested, possibly on margin, and especially in illiquid shares

Imtiaz Buhardeen@BuhardeenImtiaz

Looks like CSE is over reacting over 4% down is it for the war situation or QR? Asian markets it’s mixed some in Green and some down with maximum 0.7% US market futures pointing to Green opening, So what’s the panic here?🤷‍♂️

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Gayan Lakmal Alwis, CFA@theGayan·11 Mar

Purely looking at USD purchases: 1. It's actually the opposite. @CBSL needs to keep building reserves - which is vital in an environment like this. 2. More than CBSL buying, it's the Banks who are selling to them, to square their positions On a macro level: Given the impact on FX inflows (fall in remittances, tourism, etc.) and outflows (expensive fuel imports, etc.) means CBSL may not have enough USDs left in the market to buy. In both cases, LKR injections (due to USD purchases) are a side-effect.

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Ashan Thareendra Liyanaarachchi@ashan_tharee·11 Mar

@theGayan @CBSL With the inflation wave coming in (thanks to the global energy crisis), I believe the CBSL would be forced to move away from these kinds of expansionary policies in the coming months. What would CBSL do to build up reserves?

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Gayan Lakmal Alwis, CFA@theGayan·11 Mar

CBSL USD purchases more than DOUBLES in Feb! @CBSL purchased USD 461 Mn, with no sales during the month. This marks the highest purchases since Apr 2024 and continues the strong accumulation trend that began in Dec 2025.

Gayan Lakmal Alwis, CFA@theGayan

CBSL USD purchases off to a strong start! In Jan 2026, @CBSL purchased USD 210 Mn and sold 9.5 Mn. While this is lower vs. Dec 2025 (purchases USD 273 Mn; sales 19 Mn), a seasonal comparison with Jan 2025 (purchases USD 47 Mn; sales 29 Mn) shows an impressive start to the year.

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Gayan Lakmal Alwis, CFA@theGayan·11 Mar

Mar 2024 had USD 715 Mn. Feb 2026 is the highest since then. P.S. Pls note the footnote in my image above, i.e. CBSL changed the reporting to value date, which leads to restatement of figures.

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Ashan Thareendra Liyanaarachchi@ashan_tharee·11 Mar

@theGayan @CBSL Many thanks for the update. I believe this USD 461 Mn figure is the highest in the recent past (if not the highest ever)?

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Gayan Lakmal Alwis, CFA@theGayan·9 Mar

Liquidity differs from income. What you are seeing above is the amount of short-term funds held by Banks. Even the cash held by Govt. is with Banks as they have to keep those in state Banks. Even if they spend , it will again go from one Bank to another and won't affect the TOML.

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Johann Gunasekara@JayGunaseka1·9 Mar

@theGayan @CBSL A sector wise analysis would be useful (govt, business and retail) my guess a large % is unspent capital budget.

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Gayan Lakmal Alwis, CFA@theGayan·9 Mar

Money market just reached a level we have never seen before. On 6th Mar 2026, Total Outstanding Market Liquidity (TOML), i.e. @CBSL measure of net overall surplus liquidity in the banking system, reached LKR 413 Bn. An all-time high. Four years ago, TOML was at a massive deficit of LKR 757 Bn. The banking system was a net borrower from CBSL. That was April 2022, i.e. peak of the financial crisis. The reversal from that to now is LKR 1,170 Bn. When TOML rises, short-term rates usually face downward pressure and banks have greater capacity and incentive to disburse credit into the real economy. Given the current global uncertainty and the spillover effect of that on our domestic markets, such ample levels of liquidity provides cushion and comfort to absorb short-term shocks. What does this massive liquidity surplus tells you? • Further dip in T Bill rates? • Private sector credit to trend higher? • Reflation to accelerate? • Pressure on LKR? • Impact on @CSE_Media? Drop your views below. P.S. If you are publishing my analysis in your media, please be kind enough to attribute and give due credit. Thank you.

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Gayan Lakmal Alwis, CFA@theGayan·9 Mar

Interesting - I just learned there's a config file format called TOML! Thanks for sharing @sanjiva. I've heard about ASM, learned a bit of GW-BASIC and Pascal during my school days (which obviously was long ago) and this brought back those memories. P.S. TOML is not a standard abbreviation. I just used it to save some space.

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Sanjiva Weerawarana@sanjiva·9 Mar

Wow TOML stands for something else too. Who knew. toml.io/en/

Gayan Lakmal Alwis, CFA@theGayan

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Gayan Lakmal Alwis, CFA@theGayan·9 Mar

Dear Dr. @NCdeMel, Thank you for your insights and candor. I've followed your work over the years - from "stitch in time saves nine" (paper you wrote on advancing DDR) and have built a deep respect for you. At this juncture, I am demystifying economic concepts and events for others. Eventually, and hopefully, when I get to where you are, I will question the authoritative sources 😊

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Nishan de Mel@NCdeMel·9 Mar

@theGayan @IMFNews Appreciate your inputs Gayan, very much. I think we shld double check "authoritative" sources. sadly, govt claim you cited is easily shown to be incorrect (see my previous) and what panned out in terms of BoP was the opposite of what IMF projected in its paper to justify RFI.

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Gayan Lakmal Alwis, CFA@theGayan·8 Mar

Was the IMF RFI too expensive? Following Cyclone Ditwah, Govt. drew USD 206 Mn under the @IMFNews's RFI (Rapid Financing Instrument) to address urgent Balance of Payments and fiscal pressures. Some questioned the cost. At a recent meeting held with external creditors, Govt. clarified that the applicable rate was 3.27% and remains well below market borrowing costs. In my view, during a crisis (like the one that prevailed in Dec 2025) the perception of access to liquidity matters more than the liquidity itself. In such moments, the cost of funding becomes a secondary concern. Bird in the hand is worth two in the bush.

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Gayan Lakmal Alwis, CFA@theGayan·9 Mar

@ShavinWijetunge @CBSL A small portion, yes. Pls see below on the major possible sources. x.com/theGayan/statu…

Gayan Lakmal Alwis, CFA@theGayan

Impact of CBSL on the Money Market Liquidity How does @CBSL operations impact Money Market (MM) liquidity? • Money going into CBSL (denoted -) decreases market liquidity. • Money coming out of CBSL (denoted +) increases market liquidity. What was the impact during 2025? 1. T Bond Maturities LKR -7 Bn When CBSL collect maturity proceeds of their T Bonds, liquidity flows out of the market. 2. SRR and Other Absorptions -19 Bn Increase in money held under SRR (Statutory Reserve Ratio) (likely due to increase in Bank deposit base) leads to an absorption of liquidity. 3. Coupon Payments to CBSL -189 Bn When CBSL collect coupons on their T Bonds, liquidity flows out of the market. 4. Net Currency Withdrawals -210 Bn Market liquidity falls when Banks withdraw cash from their CBSL account. 5. Net Govt. Foreign Loan Repayments -356 Bn When Govt. buys USDs for repayments and settles corresponding LKR, market liquidity falls, as it’s a movement of money from MM to CBSL. 6. Net CBSL FX Swaps +259 Bn On net terms, CBSL has purchased FX and sold (injected) LKR. 7. Net USD Purchases +530 Bn On net terms, CBSL has purchased USDs from the market, injecting LKR as settlement of the said purchases. Note: Kudos to Central Bank of Sri Lanka for making this simple, by splitting previous years item “Net T Bill/Bond Transactions” into two, i.e., “T-bond Maturities” and “Coupon Payments to the Central Bank”. If you enjoyed this: • Like to show some love • Repost to share with others • Follow me @theGayan for more insights on investing.

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Shavin Wijetunge@ShavinWijetunge·9 Mar

@theGayan @CBSL Is it because CBSL did not sell all tbills last week ?

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Gayan Lakmal Alwis, CFA@theGayan·9 Mar

@himaljaya @CBSL Usually, yes. But largely depends on how and where this liquidity is disbursed.

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Himal Jayasuriya@himaljaya·9 Mar

@theGayan @CBSL So that's inflationary ?🙏

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Gayan Lakmal Alwis, CFA@theGayan·9 Mar

Dear Dr. @NCdeMel, Thank you for your insights. On the details of the loan and cost, as stated in my tweet, I've shared what the Govt. has shared with the external creditors (in writing). However, I stand by the part where I share my views (which literally reads "in my view"). In hindsight, we could advise many courses of actions. But during an actual crisis, the options are neither clear, linear nor efficient. Also, securing funding during such a crisis is critical and never comes at a speed we want, since creditors usually take a wait and see approach. I'm linking my thread on the IMF analysis of the BOP impact which I did back in Dec 2025. But I do understand your views could differ mine and that's how we have efficient markets. x.com/thegayan/statu…

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Nishan de Mel@NCdeMel·8 Mar

@theGayan @IMFNews Please check data/facts before you write Gayan. data contradicts - balance of payment issue - liquidity pressure factually - non-liquidity fiscal pressure is eased by grants, not loans - screenshot claim of surcharge not applying now is false; check imf doc published with loan

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Gayan Lakmal Alwis, CFA retweetledi

Gayan Lakmal Alwis, CFA@theGayan·2 Mar

Self-fulfilling prophecy. What’s happening now is a stark reminder of the importance of supply chain resilience and "just-in-case" (JIC) inventory management vs. the old "just-in-time" (JIT) - @elerianm. JIT inventory minimises waste and holding costs by receiving goods only as needed, but risking stock-outs during disruptions. JIC stockpiles extra inventory, to ensure continuity during supply chain disruptions at the expense of higher storage costs. But irrespective of what you follow (or say), consumers’ belief trumps it all. Image credit: Daily Mirror

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Gayan Lakmal Alwis, CFA@theGayan·2 Mar

Current CCPI was published from Feb 2023 and uses 2021 as the base year, while weights are based on consumer expenditure in 2019. The previous CCPI (published from Jan 2017 to Jan 2023) used 2013 as the base year, based on data from the Household Income and Expenditure Survey 2012/13.

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Blindhog@mr_blindhog·1 Mar

@theGayan I was shocked to hear DSC use 2019 food basket for inflation.

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Gayan Lakmal Alwis, CFA@theGayan·28 Şub

An 11-month run of rising inflation just reversed. Can you guess why? Colombo Consumer Price Index (CCPI) headline inflation fell to 1.6% year-on-year in Feb, down from 2.3% in Jan 2026. That breaks a streak that began in Feb 2025, when inflation sat at -4.2%. The driver was entirely food inflation - which collapsed to 0.2% in Feb from 3.3% in Jan - a 310 basis point swing in a single month, mostly due to fall in vegetable prices. Non-food inflation moved in the opposite direction, accelerating to 2.3% from 1.8%. @CBSL expects inflation to hit 5%, although gradually, by second half of 2026. I believe this would be by end 2026, especially if electricity price revision turns out to be low or zero. When do you think inflation will hit 5%?

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@MangalaYapa @Rishi_BM @CSE_Media @CBSL @ShavinWijetunge @Channa_Amare @elonmusk @BarackObama