CIC: This stock is rated as a Buy with a medium term target price of about Sh. 15 per share. This is according to Eric Munywoki, an investment analyst at Old Mutual Securities. He notes that since the listing of CIC at the NSE at a price of Sh. 3.50 per share, the counter has risen from the ashes to a high of Sh. 12.40 per share. This is attributed to the company’s growth and diversification strategy.
“CIC is the first to tap into the micro-insurance segment, having launched M-Bima, a product that is targeting low-income earners. With insurance penetration in the East African regional at around 3 per cent, this further gives it a higher upward potential,” says Mr. Munywoki.
Currently, CIC is the third largest insurance firm, having attained a 9 per cent gain of the insurance industry’s total gross premiums by September last year. Similarly, the insurer has expanded into Malawi and Uganda through joint ventures.
“CIC also has a 26 per cent stake in Takaful Insurance of Africa, which allows it to offer Shariah-compliant products through Takaful,” says Mr. Munywoki. “All these components, together with its entry into the real estate sector add to its existing value.” Currently, CIC is planning to break into the health sector with Sh. 800 million set aside for the construction of a medical facility.
In the first half of 2014, CIC reported a 67 per cent jump in gross profit and is expected to announce increased annual profits. On Friday, CIC opened the market at Sh. 11.15 per share from the previous day’s Sh. 10.95 per share.
