Ghana stocks head for the lowest in 21 months as banking concerns linger

This is due to investors selling shares to free up cash as they battle the fallout from banking reforms in the West African nation.

The Ghana Stock Exchange Composite Index retreated 1.5% as of 12:09 p.m. in Accra Wednesday, heading for the lowest close since October 2017.

The Bank of Ghana (BoG) started a sector clean-up and recapitalization exercise in 2017. This exercise which saw 9 banks closed down led to several mergers, cutting the number of lenders to 24 from 34.

Six months after the clean-up ended, some investors are still complaining that some investors their funds aren’t available because some lenders have been recapitalised through bonds and have low cash levels, impeding clients’ access to savings.

A stocks analyst at SAS Finance Group, Eli Keledorme told Bloomberg that the stock market weakness is caused by the “after-effects of the banking crisis.”

“A lot of investors have funds locked up in some of these institutions and some investors had to sell because of the need for funds,” he added.

The stocks benchmark has dropped 8.5% this year. And dealing has dwindled, with 88.8 million cedis ($16.6 million) in stocks traded in the first half, down from 456.3 million cedis a year earlier, according to Central Securities Depository Ghana Ltd.