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Kenya Re Jumps to Three-Week High on Shariah Plan: Nairobi Mover

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Aug. 6 (Bloomberg) -- Kenya Reinsurance Corp., a state-owned reinsurer, jumped to its highest level in more than three weeks after saying it introduced a Shariah-compliance team to evaluate new products and investments.

Kenya Re, as the company is known, climbed 2 percent to 10.45 shillings by the close in Nairobi, the strongest price since July 11.

The board’s role is to “evaluate all our business and ensure that we are Shariah-compliant,” Managing Director Jadiah Mwarania said in a phone interview today. “It will also evaluate our investments and ensure they are complaint to Islamic guidelines.”

In June the company announced plans to tap into the expanding Islamic-finance industry in Africa and the Middle East. The company will also venture into micro-insurance and political-risk insurance, Mwarania said June 13.

The plan to introduce Shariah-compliant products “widens their income streams; investors must have taken that positively,” Brenda Kithinji, a research analyst at Nairobi-based Standard Investment Bank Ltd. said in a phone interview today.

In May, the Capital Markets Authority, Kenya’s financial-markets regulator, said the east African nation aims to introduce new products including Islamic bonds, Shariah-compliant mutual funds, exchange-traded funds and venture capital funds.

Kenya Re, which has risen 67 percent year to date and is the second best performing Kenyan stock, is scheduled to release first-half earnings on Aug. 10.

To contact the reporter on this story: Eric Ombok in Nairobi at eombok@bloomberg.net.

To contact the editor responsible for this story: Shaji Mathew at shajimathew@bloomberg.net

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