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CIC Insurance Gains for Third Day From Record Low: Nairobi Mover

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Dec. 18 (Bloomberg) -- CIC Insurance Group Ltd., Kenya’s second-biggest insurer by premiums, rose for a third day, the longest set of gains in seven weeks, as the stock recovered from a record low.

The shares advanced 1.5 percent to close at 3.35 shillings in Nairobi, the capital. The stock traded at 3.10 shillings on Dec. 5, its lowest level since July 18 when it was listed on the Nairobi Securities Exchange at a price of 3.5 shillings.

“There was a decline and now the stock is going through a correction to get back some of the value it lost,” Eric Munywoki, a research analyst at Nairobi-based Old Mutual Securities Ltd., said by phone today. “Looking at the price to earnings ratio, the stock is overpriced compared to its peers, therefore the gains will be temporary.”

Jubilee Holdings Ltd., Kenya’s biggest insurer, has a price to earnings ratio of 5.67, according to data compiled by Bloomberg. Pan Africa Insurance Holdings Ltd. has a ratio of 8.71, while CFC Insurance Holdings Ltd.’s is 3.67, according to data compiled by Bloomberg.

CIC has a ratio of 12.8, based on earnings in the 12 months to December 2011, Munywoki said.

The company’s first-half profit fell 12 percent to 415.1 million shillings ($4.82 million) after costs and claims increased, it said in August.

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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