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Gayan Lakmal Alwis, CFA

@theGayan

Mar 13

@CSE_Media

Should I go short- or long-term with my savings?

That's a question posed by most.

I've been managing investments for the last 16+ years.

Here are five steps you can steal, to stay ahead in the game.

1/9

@CSE_Media #investing

First, some background.

Interest rates were much higher. In fact, all-time high.

But now, they are on a downward trend.

What goes up must come down, right?

It does, always. It won' t be different this time.

2/9

Don't overthink whether rates will go up or down.

It might matter given the levels of inflation and market volatility we’ve seen in the past.

But it doesn't matter as much.

Also, no one ever gets it right always. Markets will find ways to surprise you.

Follow below steps.
3/9

Read 9 tweets

Gayan Lakmal Alwis, CFA

@theGayan

Feb 19

@NCdeMel

Domestic Debt Restructuring (DDR): A stitch in time saves nine.

Excerpts of an interview with Dr. @NCdeMel by
@MarianneDavid24

Details why DDR should be done sooner, rather than later.

Links to full interview + paper is on the last tweet.

@CSE_Media #EconomicCrisisLK

1/10

How to tackle a DDR?

So far #SriLanka has talked about restructuring ext debt & not domestic debt.

Our paper shows that current IMF targets for DR are unlikely to deliver a sustainable pathway for econ recovery & debt management, unless rates are brought down by over 10%.
2/10

We don’t see a path for reducing int rates adequately, given high risk in the economy & lack of confidence on financial management.

Int rates are also high because Govt has a huge borrowing appetite simply to repay what has already been borrowed.

That is a vicious cycle.

3/10

Read 10 tweets

Gayan Lakmal Alwis, CFA

@theGayan

Feb 19

@CSE_Media

🤔 Playing it safe? 🚫
You might be risking everything! 💥

The biggest #risk in life isn't taking risks! 💪

💼 Every decision, every business, has risks and rewards. You can't have your cake and eat it too!

No risk, no reward! 🎂

1/5
@CSE_Media

📚ISO 31,000 defines risk as “effect of uncertainty on objectives”.

There’s no free lunch. 🍚
Nothing ventured - nothing gained.

So don't focus on the risk.
Rather, focus on the objective! 🎯

🔍 Don't miss out on opportunities because you're scared of uncertainty!

2/5

@morganhousel

An event that seems certain may not happen. Something that seems unlikely could turn out to be a huge win! 🎉

🌟 Remember, luck and risk doesn't discriminate!

💡“You can be smart and end up wrong. Or dumb and end up right. That’s how luck and risk work” - @morganhousel

3/5

Read 5 tweets

Gayan Lakmal Alwis, CFA

@theGayan

Feb 18

@CSE_Media

Finance Fallacy: Real rate = Nominal rate – inflation rate

Most investors rely on this formula, which is WRONG!

Let me tell you why.

1/6
@CSE_Media #EconomicCrisisLK

First, let's look at the meaning of those terms?

• Nominal int rate: rate of return earned in “money” terms

• Real int rate: rate of return earned in “real” (purchasing power) terms. It's the return after adjusting for effect of #inflation (impact of rising price levels)

2/6

Why the formula is wrong?

“Fisher's Equation” gives the link between:
• Real rate (R),
• Nominal rate (N), and,
• Expected inflation rate (E).

1 + N = (1 + R) * (1 + E)

So,
R = {(1 + N)/(1 + E)} – 1

An “approximation” of this turns out to:
R = N - E

3/6

Read 6 tweets

Gayan Lakmal Alwis, CFA

@theGayan

Feb 9

@CBSL

History Repeats:
@CBSL imposes restrictions on discretionary payments (DPs) of banks

What?
CBSL imposed set of restrictions on DPs of banks.

When?
With immediate effect.

These mirror the set of restrictions issued in May 2022, for Financial Year (FY) 2022.

1/9
@CSE_Media

Why?
This was issued considering:

• possible adverse impact on liquidity and capital position of banks due to the current economic conditions, and,

• importance of maintaining appropriate levels of liquidity and capital levels to ensure sustainability.

2/9

So what?

Given current challenges, this aims to ensure stability of the banking system and preserve valuable foreign exchange.

However, this will depress the equity valuations of banks in the perspective of investors.

3/9

Read 9 tweets

Gayan Lakmal Alwis, CFA

@theGayan

Feb 3

@CSE_Media

#SriLanka ISB holders Group insists that Domestic Debt is "reorganised"

This has both good as well as bad sides.

Let me tell you all about it, in English.

1/12

@CSE_Media #EconomicCrisisLK

The "Group"
• Known as "an ad-hoc creditor committee"
• Consists of 100+ foreign investors
• Led by a steering committee of 10+ members
• Represents over 55%+ of ISBs non- domestic holdings
• Advised by Rothschild and White & Case

Source: Min. of Finance (23.09.2022)

2/12

Summary

• They are ready to hold debt restructuring talks - quickly and effectively

• They acknowledge Sri Lankan authorities’ engagement with official creditors toward a resolution of the current crisis and restoration of debt sustainability.

3/12

Read 12 tweets

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