Kenya Re hits all-time high on foreign interest

Kenya Reinsurance Company (Kenya Re) has stuck at its all-time high of Sh23 since late last week driven by heavy foreign investor trading amidst a huge dip of the entire bourse.

The reinsurer has seen an increase in shares traded in the past one week, where investors have moved on average 2.55 million daily. Yesterday the counter saw 3.8 million shares changing hands.

Foreign investors have dominated trading on the counter in the last several days, accounting for 99 per cent of both buys and sales.

The share price has been in the range of Sh22.50 to Sh23 in the period, which is indicative of block cross-trades between investors.

“Kenya-Re remained on the top movers list as foreign investors continued with their notable buying activity. The local re-insurer, which is among the best performing counters this year, closed at a high of Sh23,” said Standard Investment Bank in a daily market report.

Last week, the firm moved 6.55 million shares to emerge one of the top movers in the market alongside large cap stocks of Safaricom, EABL, KCB and BAT, which have traditionally traded high volumes.

Kenya Re has been the best performing insurance counter over the past year, having closed 2016 with a full-year gain of 7.1 per cent. Since the beginning of this month, the counter has gained a further 2.2 per cent.

The stock enjoys the protection of having a smaller float in the hands of retail investors; 80 per cent of the company’s shares are in the hands of large institutional shareholders, including the 60 per cent that is held by the government.

Kenya Re is the largest reinsurer in the country with insurers mandated by the law to book a fifth of their reinsurance business with it.

It is, therefore, set to reap big from the new law that requires all imports to be insured locally, which is expected to grow insurance premiums It controlled a third of the reinsured marine business in the nine months to September 2016.