Category: Daily Financial Times

Cabinet Spokesperson and Minister Dr. Nalinda Jayatissa yesterday said the Government will continue its QR-based fuel distribution system as uncertainty surrounding conflicts in the Middle East continues to affect global oil markets,

He said the QR mechanism remains necessary to manage the country’s fuel supplies and ensure that available stocks are distributed without major disruption.

‘The continuation of the system is aimed at ensuring an orderly distribution of fuel, while we monitor developments in the global oil market and the ongoing instability in the Middle East,’ he added.

He said fuel consumption has declined since the QR system was introduced, although the reduction has been relatively limited.

According to the Cabinet Spokesman, diesel usage has fallen by 10%, while petrol consumption has declined by 9%.

Dr. Jayatissa opined that continued instability around the Strait of Hormuz is contributing to fluctuations in global crude oil prices and that the international oil crisis has not yet been resolved.

‘The oil crisis has not yet been resolved. As a country, we are using this system to maintain daily life as much as possible without disruption,’ he added.

He also said that fuel supplies are currently being prioritised for essential sectors, as the Government seeks to manage available stocks amid uncertainty in international energy markets.

Sri Lanka set a 5% inflation target in October 2023 under the flexible inflation-targeting framework legally supported by the Central Bank of Sri Lanka Act of 2023. The Act provides for the target to be reviewed every three years, and the first review is expected in late 2026. The review comes at an important moment, as Sri Lanka’s recent inflation outturn, generally speaking, has been well below the target, prompting debate over whether the 5% target should be retained or reduced substantially. This article contributes to that debate by assessing the issue through technical evidence, international experience, inflation-targeting practices, and relevant global best practices.

What should guide the inflation target review?

An inflation target review should be a diagnostic exercise, not a mechanical decision to change the target. It should be based on technical analysis, a cost-benefit assessment of any revision, and clear public communication. The review allows the central bank and Government to assess whether the existing target remains appropriate, whether any parameters need fine-tuning, and how best to explain the target and policy responses to the public. It also provides an opportunity to strengthen transparency, accountability, and public understanding of the inflation-targeting framework. It is also important to remember that reviewing the inflation target does not necessarily mean changing it.

International experience shows that changes to inflation targets are infrequent and, when needed, are usually gradual. Countries that adopted inflation targeting during periods of high inflation, such as Brazil, the Czech Republic, Poland, Indonesia and Georgia, generally used multi-year disinflation paths to bring inflation and expectations down sustainably. These adjustments were transparent, gradual, and supported by credibility gains, rather than abrupt changes in response to short-term inflation outturn. Many mature inflation-targeting economies, including India, Philippines, Thailand, and Mexico, have either maintained their targets or converged gradually to a medium-term target and kept it unchanged.

Furthermore, only a few countries have included stakeholders or public engagement in the inflation target review process, and this was typically introduced only at a mature stage of IT. By contrast, CBSL has begun public engagement during its first review, within three years of introducing the first statutory target. This reflects the high level of transparency CBSL has brought to the review process.

What is the global experience with inflation targets?

Countries adopt different inflation targets tailored to their economic conditions (Table 1). These targets can take various forms, such as a point target (2%), a point target with a band (2%, ±1 %), or a band target (1-3%). The width of the band also varies depending on country characteristics. A common observation is that advanced economies, which generally have lower trend inflation and lower inflation volatility, tend to set lower inflation targets than other countries. Most Emerging Market and Developing Economies (EMDEs) and early adopters of IT frameworks set relatively higher targets, usually with a band, to accommodate supply-side volatility. Meanwhile, some mature EMDEs, with a proven track record of inflation control, better-anchored inflation expectations, and strong credibility in their IT frameworks, have gradually lowered their targets over time.

Why is recent inflation a poor guide to set future target?

Inflation followed an unusual pattern worldwide in the post-pandemic period. From 2021 to early 2022, inflation accelerated because of both demand and supply pressures. As economies reopened, demand for goods and services strengthened, supported by fiscal stimulus and loose monetary policy in many economies. At the same time, supply bottlenecks persisted, commodity prices surged, and second-round effects from global price shocks added further pressure. Sri Lanka’s inflation episode was more complex. In addition to global drivers, domestic factors, including sharp currency depreciation, food price increases following supply shocks, and large one-time energy price adjustments and spillovers, pushed inflation to historically unprecedented levels. Subsequent monetary policy responses and the gradual normalisation of global commodity prices supported disinflation from 2023. Sri Lanka’s disinflation was steeper than in many countries and was followed by temporary deflation from late 2024 to mid-2025. However, a reversal of the disinflationary trend has begun to emerge worldwide, following the energy price shock and supply disruptions triggered by the Middle East conflict in early 2026. In Sri Lanka, too, inflation surged from 2.2% in February to 7.3% in July 2026, with inflation likely to remain elevated in the near term.

Chart 1 offers several important insights. First, inflation dynamics worldwide and in Sri Lanka have been abnormal since 2021. Second, average inflation in advanced economies is generally lower than in EMDEs. In the absence of major global shocks, inflation in advanced economies has typically hovered around 2%, while inflation in EMDEs has been around 5%-6%. Third, Sri Lanka’s inflation dynamics, shown on the right axis, were broadly comparable to those of EMDEs. Fourth, many countries likely missed their inflation targets in the post-pandemic period as inflation deviated sharply from historical trends. This shows that inflation trends since 2021 have been atypical and should not be used to infer an appropriate inflation target for the future.

Higher inflation targets and wider tolerance bands in EMDEs, compared with advanced economies, are empirically justified. EMDEs are more exposed to food and energy price volatility, and these items account for a larger share of their consumption baskets. This makes inflation higher and more volatile. EMDEs are also more exposed to global shocks through exchange rate depreciation and stronger pass-through to inflation. Cross-country studies also point to weaker fiscal and monetary policy institutions, less-anchored expectations, and communication gaps as factors shaping inflation dynamics in EMDEs. These factors remain important when setting inflation targets.

The Balassa-Samuelson effect also helps explain the persistent positive inflation gap between EMDEs and advanced economies. In fast-growing EMDEs, productivity gains in the tradable sector, especially exports, allow firms to pay higher wages. These wage increases can spread to the non-tradable sector, where productivity growth is usually lower, pushing up costs and prices. A somewhat higher inflation target may therefore be justified in fast-growing, open EMDEs if this effect is persistent. Empirical evidence supports the effect, although estimates vary across countries. Recent estimates for India, for example, place it at about 1.7%-2.2%.

Would a sizeable reduction in Sri Lanka’s inflation target be prudent at this stage?

The long-term socioeconomic benefits of low inflation are well documented. However, reducing inflation to a low and less volatile level in EMDEs is not straightforward. A structural reduction in inflation takes time and requires several supporting conditions and policies. Mechanically lowering the inflation target as a shortcut to low inflation could have unintended consequences. The key arguments against notably lowering inflation target in this review are summarised below.

High transition cost of reducing the target: If the inflation target is reduced notably for the forthcoming period, current inflation needs to be brought down more quickly. This would require aggressive monetary policy tightening and higher interest rates. Lower inflation combined with high nominal interest rates would raise real interest rates and discourage investment. This would affect credit growth, consumption, investment, and ultimately economic growth. Higher interest rates would also increase the Government’s borrowing costs, public debt and weaken fiscal performance. A sharp rise in interest rates over a brief period could weaken financial institutions’ balance sheets, with adverse implications for financial system stability. A sudden and short-term disinflation process would therefore involve a high sacrifice ratio, output loss for inflation reduction.

Unfavourable global environment: Heightened geopolitical uncertainty, trade fragmentation, and related supply-side shocks and spillovers leave little room for drastic domestic policy changes.

Current macroeconomic conditions are not conducive for a target reduction: Sri Lanka is still recovering from the consequences of the recent economic crisis. The country remains exposed to external shocks, exchange rate volatility, and exchange rate pass-through to inflation. At this stage, the economy needs stable macroeconomic conditions, stronger growth, lower debt vulnerabilities, continued fiscal consolidation, and a resilient financial sector.

No evidence of a permanent shift to lower inflation: Although Sri Lanka experienced low inflation and even deflation in the recent past, this does not show that the economy has undergone a structural shift toward permanently lower inflation. Sharp surge in inflation following the global energy shock in early 2026 is a clear reminder that global supply shocks can cause large volatility in inflation within a brief period.

Inflation expectations have not shifted to a lower level: CBSL’s inflation expectations survey suggests that expectations are broadly anchored around the current target. Any significant reduction in the target would need to be supported by strong efforts to guide expectations toward the new target. International experience suggests that this process should precede, not follow, a target reduction.

Should the target shift from headline inflation to core inflation?

The debate in Sri Lanka has also raised the question of whether the target should shift from headline inflation to core inflation. Core inflation remains useful as it captures underlying inflation trends and helps guide monetary policy decisions. However, using core inflation as the formal target has important drawbacks for credibility and transparency. The public experiences inflation mainly through the prices of frequently purchased goods and services, especially food and energy. Their inflation expectations are also shaped by these prices. If the central bank targets an inflation measure that excludes such items, the public may find the target less credible, and expectations could diverge from it. Core inflation targeting can also make monetary policy communication more difficult. Since credibility and well-anchored expectations are central to successful inflation targeting, most countries use headline inflation as the formal target. Thailand, Korea, and the Czech Republic used core inflation targets at initial stages but later moved to headline inflation. Today, headline inflation is the formal target in majority of IT countries, with Uganda being a notable outlier.

In practice, core and headline inflation tend to converge over time, although the speed of convergence differs across countries. Headline inflation may rise temporarily because of supply-side shocks, such as increases in food or energy prices. If these shocks are temporary, the gap between headline and core inflation should close over time, provided there are no significant second-round effects or changes in inflation expectations. In general, headline inflation tends to return to core inflation after a temporary supply shock. However, if the shock is large and persistent, headline inflation can remain above core inflation for longer. Over time, higher food or energy prices may affect other goods and services, raise inflation expectations, and create wage pressures. These effects can eventually push core inflation higher as well. For this reason, central banks closely monitor both headline and core inflation, paying attention to supply-side shocks in addition to demand pressures that are directly relevant for monetary policy. Yet, headline inflation is used to set public inflation targets.

Should the inflation target move from the Colombo Consumer Price Index (CCPI) to the National Consumer Price Index (NCPI)?

The national measure of inflation has several merits, as it provides wider coverage of both geographic regions and the consumption basket. However, at this stage, it also has some weaknesses as a formal inflation target. First, food has a much larger weight in the NCPI than in the CCPI (39% compared with 26%). As a result, NCPI inflation is more vulnerable to volatility from supply-side disruptions and is less responsive to monetary policy. Second, the data release lag is long, with NCPI published after 21 days, compared with the immediate release of the CCPI. This limits its usefulness for timely policy decisions. Third, the NCPI has a much shorter data series, starting only in 2014, compared with the CCPI, which dates back to 1953. This makes the NCPI less suitable for macroeconomic modelling and inflation forecasting, both are important for monetary policy formulation.

Reliable inflation forecasting based on high-frequency data and indicators is central to an IT framework. Therefore, adopting an NCPI-based inflation target at this initial stage could raise credibility concerns. Over time, as Sri Lanka’s statistical system matures, data become timelier, and the NCPI series becomes sufficiently long, Sri Lanka could revisit the case for moving toward a nationally representative inflation measure as the formal target.

Conclusion

There is no compelling reason to make a notable reduction in Sri Lanka’s inflation target at this stage. Although inflation outturn in 2024/25, following the historic inflation peak, has been well below the current target, this alone does not justify changing the target for the next three years. This conclusion is especially relevant given the uncertain global geoeconomic environment and Sri Lanka’s ongoing domestic macroeconomic recovery. Moreover, an abrupt reduction of more than half of the original target at an early stage of inflation-targeting adoption, as some have proposed for Sri Lanka, would be globally unprecedented and impractical. It is therefore premature to make any sizeable change to the inflation target. An overly ambitious short-term disinflation path, supported by a lower target at this review, could weaken the credibility of the flexible inflation targeting framework at an early stage before its benefits are fully realised. Sri Lanka could consider lowering the target gradually in the future, once credibility is stronger, inflation volatility has declined, and the economy has structurally shifted toward a lower-inflation environment.

(The author currently serves as the Alternate Executive Director at the Executive Board of the International Monetary Fund (IMF) and is a former Director of the Economic Research Department of the Central Bank of Sri Lanka (CBSL). The views expressed in this article are her own and do not necessarily reflect those of the IMF or the CBSL)

Pasindu Sooriyabandara who made his mark in Test cricket with a solid knock of 80 on the second day of the second Test against India at the SSC grounds yesterday said that playing first-class cricket and, for the Sri Lanka ‘A’ team helped him get into the national side.

Sooriyabandara who has been playing first-class cricket since 2018 and has scored 14 centuries, four of which he has converted to double hundreds said: ‘Playing first-class cricket is a good experience for any player. Coupled with playing in the ‘A’ team is very helpful. It is certainly important for any player to reach international level. The more you play, the more the player will mature.’

Sooriyabandara got the opportunity to break into the Test scene when Dinesh Chandimal was concussed and was ruled out of the first Test at Galle which resulted in him playing as a concussion sub. He was asked to bat at number three in Chandimal’s position and was dismissed for a golden duck in his very first Test innings.

‘I couldn’t make use of the first opportunity I got in Test cricket to score some runs for the team at Galle. I thought from the second opportunity I got, that I must contribute something to the team,’ said Sooriyabandara at the end of the day. ‘I think the 80 I scored today I could have gone and made a big score. Although I am happy with my innings I could have gone and played a bigger knock.’

‘After I was out for a duck in my first Test innings I got the backing of the coaches and the players and from my parents, friends and supporters. That backing is important for any player and I am thankful to them. It’s a big privilege to get the opportunity to play in the national team. Once you get there, it’s your maturity that matters. You have to do your basics right at whatever level you play.’

Sooriyabandara said that Sri Lanka’s challenge tomorrow was to get the 39 runs to avoid the follow-on.

‘More than the pacers, the wicket helped the spinners. We have to adapt to it on how to score runs in such conditions. As a batsman what we could not achieve in the first innings we will try to do in the second.’ (ST)

Frontier Energy Network will take Sri Lanka’s newly launched oil and gas licensing round to the international upstream market through a targeted campaign aimed at connecting the country with global operators and investors capable of evaluating and investing in the four offshore blocks on offer.

UK-based Frontier Energy Network Founder and CEO Gayle Meikle, speaking virtually yesterday at the launch of the ‘Sri Lanka Licensing Round 2026’, said the company, through its global upstream investment-promotion platform PetroInvest, would work alongside the Petroleum Development Authority of Sri Lanka (PDASL) to market the opportunity internationally.

‘Firstly, a sincere congratulations to the Government of Sri Lanka, the Ministry of Energy and the Petroleum Development Authority of Sri Lanka on the launch of the Sri Lanka Licensing Round 2026. It is a privilege for Frontier, through our PetroInvest service, to be working alongside the team and to have the responsibility of taking this opportunity to the international market,’ Meikle said.

Frontier has been appointed as the specialist international marketing and promotion partner for the licensing round, under which Sri Lanka is offering four offshore exploration blocks covering nearly 34,000 sq. km in the Mannar Basin.

Meikle said launching a licensing round was only the first step, with its success dependent on how effectively the opportunity was presented to potential international investors.

‘Launching a licensing round is an important moment for the country and taking that opportunity successfully to the international market is a crucial part. It requires clear positioning, specialist industry marketing and, most importantly, reaching companies and decision-makers capable of evaluating and investing in those opportunities,’ she said.

‘Frontier is the specialist international marketing and promotion partner supporting the Sri Lanka Licensing Round through our PetroInvest service. We are working alongside the Petroleum Development Authority of Sri Lanka to take the licensing round to the international upstream market.’

The upstream petroleum industry covers the exploration and production end of the oil and gas business, including the search for resources, drilling and eventual extraction.

Meikle said Frontier’s mandate was not limited to general promotion, but involved identifying and engaging companies and individuals with the technical expertise and capital to consider Sri Lanka’s offshore acreage.

‘Our role is to position the opportunity, communicate it effectively and connect Sri Lanka with Frontier’s international network of operators, investors, technical experts and senior industry decision-makers worldwide,’ she said.

A key part of the campaign is a dedicated digital hub developed for the Sri Lanka Licensing Round 2026, intended to provide potential bidders with a single point of access to information on the acreage and bidding process.

‘The website provides a single international destination for companies interested in understanding, evaluating and participating in the bid round,’ Meikle said.

She said the opportunity section introduces the licensing round and provides an overview of Sri Lanka’s offshore petroleum prospects and the acreage being offered, while a separate team section introduces the PDASL officials responsible for delivering the bid round.

Maps available through the platform allow potential investors to examine the acreage and locations of the four blocks.

‘Ultimately, creating the digital platform is only part of the job. Our role is to take the Sri Lanka opportunity out to the international market. Frontier is supporting an integrated campaign combining international communications, specialist marketing, direct investor engagement and promotion through our global upstream network,’ she said.

The international campaign will begin with investor engagement in London at the World Energies Summit on 29 and 30 September.

‘This includes international investor engagement in London at the World Energies Summit on the 29th and 30th of September, putting Sri Lanka in front of senior upstream leaders from across the global upstream sector,’ Meikle said.

A dedicated virtual investor briefing will follow on 21 October, giving prospective investors direct access to Sri Lankan officials and an opportunity to examine the licensing round in greater detail.

‘On the 21st of October, a dedicated virtual investor briefing will give interested companies the opportunity to hear directly from Sri Lanka, understand the licensing round in greater detail and engage with the team,’ she said.

The campaign will then move to Asia, with Sri Lanka’s exploration acreage to be promoted to investors at the Asia Petroleum Geoscience Conference and Exhibition in Kuala Lumpur on 16 and 17 November.

‘And lastly, in November, the campaign moves into Asia with investor engagement in Kuala Lumpur at the Asia Petroleum Geoscience Conference and Exhibition on the 16th and 17th of November,’ Meikle said.

The international campaign will run alongside the formal bidding process for the four Mannar Basin blocks. Prospective companies will be able to access technical information to assess the geological potential of the acreage before deciding whether to bid.

Meikle said Frontier’s role was ultimately to connect Sri Lanka’s upstream petroleum potential with companies able to assess and invest in it.

‘Ultimately, our role is about creating the bridge between the country’s upstream opportunity and the international market. For Sri Lanka, that means building international awareness, making the opportunity easy to understand and access, targeting the right companies and creating opportunities for meaningful investor engagement,’ she said.

‘This is what Frontier brings to the Sri Lanka Licensing Round 2026: specialist upstream marketing, international reach and a coordinated campaign to take Sri Lanka’s opportunity to the world.’

Meikle invited prospective investors to examine the licensing opportunity and formally register their interest as the international campaign gets underway.

‘If you are interested in the Sri Lanka Licensing Round, please visit the website, explore the opportunity and register your interest. We look forward to welcoming you and engaging with you soon,’ she said.

Sri Lanka has resumed international licensing for offshore oil and gas exploration after more than a decade, offering four Mannar Basin blocks covering 33,964 square kilometres in a fresh attempt to attract global energy companies to develop the country’s hydrocarbon resources.

The move comes more than a decade after Cairn India exited Sri Lanka following an exploration campaign that discovered natural gas and condensate but did not progress to commercial production.

Petroleum Development Authority of Sri Lanka (PDASL) Director General Dr. Neil De Silva said bids under the Sri Lanka Licensing Round 2026 (SL2026-01) were expected to close in early 2027, followed by evaluation and the award of blocks through Petroleum Resources Agreements. Seismic surveys and drilling would follow, with commercial production targeted by 2032 if commercially viable resources are established.

Sri Lanka already has two gas discoveries in the Mannar Basin, Dorado and Barracuda, both made in 2011. Dr. De Silva said Dorado has an estimated P50 resource of 314 billion cubic feet (bcf) of gas and Barracuda 525 bcf, giving a combined estimate of 839 bcf. P50 is the most-likely estimate, representing a 50% probability that the actual resource will equal or exceed that volume.

‘Barracuda is very interesting because the upside potential of the Barracuda discovery is at least four times that,’ Dr. De Silva said.

He said the discoveries represented only part of the Mannar Basin’s potential, with substantial areas yet to be explored.

Cairn drilled four wells in the Mannar Basin between 2011 and 2013. However, the deepwater location, high development costs and lack of supporting infrastructure made commercial development difficult at the time.

Dr. De Silva said conditions had changed considerably since Cairn’s exit, with technological advances making deepwater exploration and extraction more feasible and more companies entering the sector. While the cost of deploying a deepwater drilling rig remained broadly comparable to a decade ago, technology had improved the economics of exploration, with Chinese companies and technology also becoming more prominent globally.

The 2032 production target remains dependent on seismic studies and drilling establishing commercially recoverable resources. Companies awarded blocks will have to undertake seismic surveys and exploration and appraisal drilling before commercial development can proceed.

Seylan Bank PLC has announced the appointment of Krishan Thilakaratne, Non-Executive Director, as the Deputy Chairman of the Board with effect from 17 August 2026.

Thilakaratne was appointed as a Non-Executive Director to the Board in 2018, and the progression to Deputy Chairman, reaffirms his long-standing governance role and leadership capacity.

He currently serves as Director/CEO of LOLC Finance PLC and is a member of the Senior Management Team of LOLC Holdings PLC.

Thilakaratne carries over three decades of experience in banking and finance. He began his career at Seylan Bank in September 1990, at the age of 19, as a Banking Assistant, before joining LOLC Group in 1995. Today, he counts more than 31 years of expertise in management, credit, channel management, marketing, factoring, portfolio management, and Islamic finance.

He holds extensive international exposure, serving on boards in Southeast Asia and Central Asia, including the Philippines, Indonesia, Pakistan, Kyrgyzstan, Kazakhstan, Tajikistan, Uzbekistan, and Egypt. His leadership roles extend to LOLC Moliya, Tajikistan, OJSC Micro Finance Company ‘ABN’, Kyrgyzstan, Finance, Kazakhstan, Prasac Microfinance Institution Ltd, Cambodia, LOLC Egypt, and additionally advising Lombard Micro Finance Company in Tajikistan.

In Sri Lanka, Thilakaratne has contributed significantly to the financial services sector, serving as a Board Member of the Credit Information Bureau of Sri Lanka (CRIB), Commercial Insurance Brokers Ltd. He has also held the position of Chairman of the Finance Houses Association of Sri Lanka (FHASL), the apex body for Non-Bank Financial Institutions.

A Passed Finalist of the Chartered Institute of Management Accountants (CIMA) UK and Associate Member of the Institute of Bankers of Sri Lanka (AIB), Thilakaratne has completed the Strategic Leadership Training Program in Microfinance at Harvard Business School, USA.

Harry Kane has been voted Germany’s footballer of the year for 2026, becoming the first Englishman to win the award.

The Bayern Munich striker scored 61 goals in all competitions last season as his side completed a league and cup double and reached the semi-finals of the Champions League.

Bundesliga players or German players playing abroad are eligible for the award, which is organised by Kicker magazine and voted for by 695 members of the German sports journalists association.

Kane received 272 votes, with Bayern team-mate Michael Olise – runner-up in 2025 behind Florian Wirtz – again second, this time with 203 votes

‘It’s almost impossible to find the right superlatives to describe Harry Kane – sometimes I’m at a loss for words,’ Bayern sporting director Max Eberl said.

‘He’s already been named England’s Footballer of the Year, and now he’s also won it in Germany.’

The England captain is among the favourites to win the 2026 Ballon d’Or, which will be awarded in London in October. If he wins, he will become the second English player to receive the honour while representing a German club, joining Kevin Keegan who won in 1978 and ’79 while playing for Hamburg.

Bayern boss Vincent Kompany was named coach of the year, while their women’s captain Giulia Gwinn won the award for best female player.

Kane and Kompany will be honoured on Friday at Bayern’s Bundesliga opener against VfB Stuttgart at the Allianz Arena.

Bayern began their season with silverware on Saturday as they beat Borussia Dortmund 2-1 in the German Super Cup.

On Wednesday, Kane received the 2026 Golden Shoe award for being the top scorer across Europe’s top leagues last season.

The Colombo stock market yesterday opened the week in red, with deals in CT Holdings and Cargills boosting turnover to over Rs. 16.8 billion, a more than one-year high.

With 62 counters ending in the green against 130 in the red, the ASPI ended down 0.34% or 71.84 points at 21,344.77 and the active S and P SL20 ended down 0.31% or 18.69 points at 6,009.40.

The session’s record turnover was generated by over 67 million shares traded. Foreign investors were net sellers on a net inflow of Rs. 909.9 million.

Negative contributions to the ASPI came from COMB, MELS, BREW, CTC, and RICH.

CT Holdings contributed Rs. 11.58 billion to turnover, with Cargills contributing Rs. 4.2 billion. A 10% stake of CT Holdings and 2.32% of Cargills traded.

Asia Securities investment banking arranged the entire transaction and stockbroking executed all of the selling and half of the buying. CT Holdings ended up Rs. 25.75 to Rs. 550.50 and Cargills closed down Rs. 5.50 at Rs. 680.75

The third highest contribution to turnover came from Sunshine Holdings at Rs. 178.4 million.

First Capital Research said sentiment in the bourse was largely influenced by the escalating tensions between the US and Iran.

Retail investor participation remained moderate. The Food and Staples Retailing sector led the daily turnover with a share of 94%, followed by the Food, Beverage and Tobacco and Capital Goods sectors collectively contributing 3%.

In today’s increasingly competitive and fragmented business environment, media planning has become far more than deciding where and when to place advertisements. It is a critical business function that connects marketing investment with business growth by identifying the right audiences, selecting the most relevant channels, managing budgets effectively and balancing immediate performance with long-term brand building. The quality of media planning can directly influence whether a business builds awareness, creates demand, increases penetration, protects customer loyalty or wastes resources by pursuing the wrong objective. This makes the discussion around Artificial Intelligence and the future of media planning especially important.

Artificial Intelligence (AI) is rapidly changing the way media planning is performed. Tasks that once required several days of data collection, calculation and manual analysis can now be completed within minutes or less. AI can process large volumes of audience data to identify patterns, forecast performance, optimise budgets and even recommend an effective combination of media channels.

This poses an important question: Will AI eventually replace the media planner?

The answer is no or at least not in the forcible future.

AI may replace many of the tasks traditionally performed by media planners, but it cannot completely replace the multi-faceted role that media planners play. This is because media planning is not simply solving a mathematical problem. It is a strategic decision-making process that often requires human judgement, contextual understanding, creativity and the ability to connect business problems with consumer behaviour.

So, this leads us to ask the question: What can AI actually replace?

A significant portion of traditional media planning involves repetitive and data-intensive work. These are areas where AI can perform faster and, in many cases, more accurately than humans. For example, AI can analyse audience reach, frequency, duplication and cost efficiency across multiple channels. It can evaluate thousands of possible budget combinations and recommend an allocation that is likely to produce the highest return. It can also forecast media inflation, identify underperforming placements and adjust campaigns based on real-time results.

In programmatic and digital advertising, AI already plays a central role in audience targeting, bidding, placement selection and campaign optimisation. Machine-Learning (ML) models can identify which audiences are more likely to respond, which messages perform better and which platforms are producing stronger outcomes.

AI can therefore replace or significantly reduce the time required for:

nData collection and organisation

nAudience profiling and segmentation

nReach and frequency calculations

nMedia cost comparisons

nBudget allocation and optimisation

nCampaign performance monitoring

nPredictive modelling and forecasting

nStandard reporting and dashboard preparation

These capabilities will make media planning faster, more efficient and increasingly evidence based.

However, efficiency is not the same as strategy.

AI works with data – a media planner works with meanings

AI is excellent at identifying patterns in available data. But it does not automatically understand and explain why those patterns exist or whether they are strategically important.

For example, an AI model may identify that a particular television program provides the lowest cost per rating point. A good media planner may still decide not to prioritise it because the program environment does not match some important attributes such as brand’s personality, creative idea and emotional context in which the message should be received.

Similarly, an algorithm may recommend concentrating the budget on platforms that provide immediate conversions. But a media planner may recognise that the brand also needs long-term salience, cultural relevance and future demand creation.

AI can tell us what is happening. A planner must interpret what and how it means for the brand.

Media strategy begins with the business problem

Before selecting channels, audiences or media weights, someone must define the real problem the brand is trying to solve. That is: Is the objective to increase penetration? Build awareness? Encourage product usage? Protect loyalty? Enter a new market? Attract younger consumers? Change a deeply established perception?

The above questions cannot be answered by media data alone.

The same set of media numbers can lead to very different strategies depending on the business context. A category leader seeking to defend its market share requires a different approach from a new entrant searching for better visibility. A low-involvement FMCG brand cannot be planned in the same way as a bank, automobile or telecommunications brand.

AI can optimise against an objective, but the media planner must decide whether it is the right objective.

Optimising the wrong objective simply allows a brand to make the wrong decision more efficiently.

Human judgement is essential

Media decisions are often made with incomplete, imperfect or conflicting information. Research data may be outdated. Digital platforms may use different metrics. Competitive activity may change unexpectedly. Consumer behaviour may shift because of economic, social or cultural developments.

In such situations, the planner must use experience and judgement.

A strong planner knows when to trust the data, when to challenge it and when to search for additional evidence. The planner also understands that not everything valuable can be measured immediately.

Brand associations, cultural impact, word of mouth, program context, consumer trust and emotional relevance are difficult to capture through a single metric. Yet these factors can strongly influence the long-term success of a campaign.

AI can calculate probabilities. Human planners must take responsibility for decisions.

Creativity cannot be reduced to an optimisation solution

Media planning is also a creative discipline.

The most powerful media ideas do not always emerge from selecting the cheapest channel or the most efficient placement. They come from finding a meaningful connection between the brand, the consumer, the message and the moment.

A media planner may identify a television program that naturally reflects the brand’s purpose. The planner may create a partnership that turns a normal sponsorship into a cultural conversation. The planner may recognise an overlooked occasion, location or behaviour that allows the brand to enter consumers’ lives in a more relevant way. AI can generate options and identify patterns. But original media thinking requires curiosity, imagination and an understanding of human emotions. A machine can recommend where an advertisement should appear. A planner decides how the brand should participate.

Media planner must understand culture

Media consumption does not happen in isolation. It is shaped by language, family structures, social values, economic realities, local traditions and cultural tensions.

A platform that is growing globally may not have the same role in every market. A message that succeeds among urban youth may be inappropriate for rural families. A program with high ratings may have very different meanings across social groups.

These cultural nuances are often difficult to capture in structured datasets.

Media planners bring local knowledge and sensitivity to the process. They understand not only where consumers can be reached, but also how they may interpret the message.

This becomes even more important in diverse markets where audiences consume content across different languages, regions and social contexts.

Future is not about a contest between AI and the media planner

The real future of media planning is not a competition between humans and machines. It is a partnership between the two.

AI should take over repetitive calculations, large-scale data processing, scenario modelling and continuous optimisation. This will allow media planners to spend more time on areas where human contribution creates the greatest value:

nUnderstanding the business challenge

nIdentifying meaningful consumer insights

nDeveloping differentiated media strategies

nEvaluating cultural and brand context

nCreating media ideas and partnerships

nChallenging assumptions and interpreting results

nAligning clients, creative teams, media owners and technology partners

The role of the planner will therefore evolve. Tomorrow’s media planner may spend less time preparing spreadsheets and more time framing problems, questioning models, interpreting evidence and designing strategic solutions.

AI will not replace media planners – but planners using AI may replace those who do not

Instead of resistance, media planners should embrace AI by learning to use it effectively. The strongest planners will understand both the possibilities and limitations of AI. They will know how to provide the right inputs, question the outputs and combine machine intelligence with human insight.

A planner who simply repeats what an algorithm recommends will add limited value. But a planner who can use AI to explore more possibilities, improve decision-making and create stronger strategies will become even more valuable.

AI can replace tasks-but not human judgement. It can automate calculations, repetitive analysis, and manual processes, but it cannot replace curiosity, empathy, cultural understanding, strategic judgement, creativity, or accountability.AI can help create a media plan, but still a media planner can develop a winning media strategy.

((The author is an experienced media planning professional currently serving at MTM Group, where he has played a key strategic role in shaping the direction of one of Sri Lanka’s largest media investment management groups.He holds a BSc (Hons) from the University of Peradeniya and a Master of Business Analytics from the University of Moratuwa. Dr. Indra Mahakalanda is a Senior Lecturer at the Department of Decision Sciences, University of Moratuwa. He holds a PhD from University of Canterbury, an MSc and BSc (Hons) in Engineering from the University of Moratuwa. His research interests are business analytics and electricity markets)

From left: Adithya Ayurveda CEO Ranuka Karunarathna, Hettigoda Group Chairman and The Hotels Association of Sri Lanka (THASL) President Asoka Hettigoda, Tourism Deputy Minister Prof. Ruwan Ranasinghe, University of Colombo Faculty of Indigenous Medicine Professor in Ayurveda Prof. S. M. K. Harapathdeniya, Thema Collection and Connaissance Ceylon Founder, Chairman and Managing Director Chandra Wickramasinghe, and MDF Sector Coordinator – Tourism Nimesha Palliyaguru (Moderator)

Australia’s MDF and Thema Collection convene industry to explore way forward for wellness tourism

Aims to leverage Ayurvedic heritage, culture and hospitality to become a globally recognised wellness destination

MDF sees wellness tourism as a way to attract higher-spending visitors, tap markets such as Japan, Australia and MidEast; reduce seasonal dependence

Panel discussion highlights stronger policy coordination, sustainability practices and private-sector investment are needed to turn wellness potential into long-term, sustainable tourism growth

Sri Lanka is seeking to position wellness tourism as a strategic pillar of its tourism offering, with the Government and industry turning to the country’s Ayurvedic heritage, natural assets and sustainability credentials to attract higher-value visitors from emerging markets.

The push was highlighted at the ‘Positioning Sri Lanka as a Sustainable Wellness Destination’ forum hosted by Australia’s Market Development Facility (MDF) in partnership with hotel chain Thema Collection last week.

Tourism Deputy Minister Prof. Ruwan Ranasinghe said Sri Lanka possessed the core ingredients to become a globally recognised wellness destination, but stronger policy coordination and collaboration between the Government and industry were needed to convert that potential into investment, market diversification and sustainable growth.

‘Sri Lanka has all the elements to become a globally recognised wellness destination, from our Ayurvedic heritage to our culture and hospitality,’ he said.

The forum brought together Government representatives, tourism industry leaders and academia, while MDF presented findings from its assessment of Japan’s outbound wellness tourism market, identifying traveller motivations and potential opportunities for Sri Lankan businesses.

The initiative comes as global tourism demand increasingly shifts towards experiences combining wellbeing, nature, culture and sustainability. Sri Lanka’s Ayurvedic traditions, which date back more than 2,000 years, provide a potential point of differentiation as destinations compete for wellness-conscious travellers.

Sri Lanka was ranked first in the 2026 BookRetreats Wellness Destination Index, further highlighting its potential in the segment.

MDF has identified wellness tourism as a potential avenue for Sri Lanka to diversify beyond traditional source markets, attract higher-spending visitors and reduce the sector’s reliance on seasonal demand.

The development agency has been working with tourism partners to target wellness travellers from Japan, Australia and the Middle East, while supporting businesses to strengthen sustainability and competitiveness.

Thema Collection, which operates 17 properties including two Ayurvedic properties, has also placed sustainability at the centre of its strategy.

Thema Collection Chairman Chandra Wickramasinghe said wellness and sustainability were inseparable, arguing that authentic wellness experiences depended on healthy ecosystems, thriving communities and respect for local heritage.

MDF has supported Thema Collection in assessing its carbon footprint, resulting in the hotel group becoming one of the first in Sri Lanka to complete independently verified, portfolio-wide carbon calculations.

Australian Deputy High Commissioner Ruth Baird said wellness tourism could help Sri Lanka generate economic opportunities while protecting the natural and cultural assets underpinning its tourism proposition.

‘Global travellers are increasingly choosing destinations that combine authenticity, wellbeing and sustainability,’ she said.

The forum also featured a panel discussion on ‘Unlocking wellness tourism opportunities in Sri Lanka’ comprising the policymakers, private sector leaders and academic experts featuring; University of Colombo Faculty of Indigenous Medicine Professor in Ayurveda Prof. S. M. K. Harapathdeniya, Tourism Deputy Minister Prof. Ruwan Ranasinghe, Thema Collection and Connaissance Ceylon Founder, Chairman and Managing Director Chandra Wickramasinghe, Adithya Ayurveda CEO Ranuka Karunarathna and Hettigoda Group Chairman and The Hotels Association of Sri Lanka (THASL) President Asoka Hettigoda. The session was moderated by MDF Sector Coordinator – Tourism Nimesha Palliyaguru.

They highlighted the need for closer collaboration between Government, tourism businesses and development partners to develop wellness products capable of competing in international markets.

The panelists opined for Sri Lanka, the opportunity extends beyond positioning wellness as another tourism niche. A successful strategy could help the country move towards higher-value, experience-led tourism, broaden its source-market base and build a more resilient year-round tourism economy.

Fintrex Finance PLC delivered a robust start to the 2026/27 financial year, more than doubling its profit after tax (PAT) to Rs. 209.93 million for the three months ended 30 June 2026. This represented a year-on-year increase of 104% from Rs. 103 million reported in the corresponding quarter of the previous year. Profit before tax (PBT) increased by 102% to Rs. 340.59 million.

The performance was supported by strong growth across the Company’s principal income streams. Gross income rose by 57% to Rs. 2.05 billion, while interest income increased by 50% to Rs. 1.70 billion. Net interest income advanced by 55% to Rs. 961.95 million, reflecting the continued expansion of the lending portfolio and improved earnings momentum.

Net fee and commission income more than doubled to Rs. 334.77 million, contributing to a 65% increase in total operating income, which reached Rs. 1.31 billion during the quarter.

The significant improvement in earnings was achieved despite a 43% increase in impairment charges on loans and receivables to Rs. 278.73 million. After absorbing these higher provisions, net operating income rose by 72% to Rs. 1.03 billion, while operating profit before taxes on financial services increased by 89% to Rs. 463.48 million.

Fintrex also maintained strong balance-sheet growth during the quarter. Total assets increased by 9% to Rs. 34.45 billion as at 30 June 2026, compared with Rs. 31.50 billion as at 31 March 2026. Combined loans and lease receivables expanded by 7% during the three-month period to Rs. 30.37 billion.

Total equity grew by 5% to Rs. 4.59 billion, while net assets per share improved to Rs. 16.01 from Rs. 15.28 at the beginning of the financial year.

Commenting on the results, Chairman Ajit Gunewardene said: ‘These results mark an encouraging start to the financial year and reflect the progress Fintrex continues to make in building a stronger and more resilient financial institution. The Board remains committed to ensuring that the Company’s growth is anchored in sound governance, prudent risk management and a strong foundation of capital. We are confident that Fintrex is well positioned to build on this momentum and create sustainable long-term value for its customers, depositors, shareholders and the wider economy.’

CEO Jayathilake Bandara said: ‘Our first-quarter performance reflects the disciplined execution of our growth strategy and our ability to translate business momentum into stronger earnings. More than doubling of profit after tax, supported by robust growth in net interest income and fee-based income, demonstrates the resilience of our business model. Importantly, this performance was delivered after absorbing higher impairment provisions as the portfolio expanded.’

‘We will continue to pursue growth with discipline, maintaining a strong focus on asset quality, funding resilience, operational efficiency and technology-enabled customer service. Our priority is to deliver sustainable and responsible growth while creating lasting value for all our stakeholders,’ he added.

Building on this strong first-quarter performance, Fintrex will remain focused on prudent portfolio expansion, strengthened risk management, greater productivity and customer-centric innovation as it advances its growth journey during FY2026/27.

Board of Directors

Ajit Gunewardene (Chairman); Ronnie Peiris (Retired w.e.f.29.06.2026); Shantanu Nagpal; Ahamed Sabry Ibrahim; Shrihan B. Perera; Nilam Jayasinghe; Jayashantha De Fonseka; Indrajit Wickramasinghe; Darshan Perera; Nirodha S. Kalansooriya; and Udesh Gunawardena.