Unga Group Ltd. (UNGL), a Kenyan grain miller, rose to its highest level in two weeks after the government approved the use of genetically modified foods as drought damages crops in the East African country.
The stock closed trading 5.6 percent higher at 10.45 shillings as of 3:00 p.m. in the capital, Nairobi, the strongest level since June 21.
Kenya enacted a law allowing the use of genetically modified organisms and products, including food, which took effect this month, Hellen Sambili, the minister of higher education, said in a government notice published on July 1. The Star newspaper reported the information today.
“Unga had closed six of its processing plants so it means they will have a respite because the maize shortage is really biting,” George Bodo, an equity strategist at Nairobi-based Apex Africa Ltd., a brokerage, said in a phone interview today. “This is a knee-jerk reaction from the market after the announcement.”
Kenyan President Mwai Kibaki declared the drought a national disaster on May 30. More than 10 million people living in parts of Kenya, Djibouti, Ethiopia, Somalia and Uganda are facing the worst drought conditions in six decades, according to the United Nations.
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