KUALA LUMPUR (April 29): Yinson Holdings Bhd shares rose 9 sen or 1.8% in early trade today, following news that Japan's Sumitomo Corp is acquiring 25% in its US$5.4 billion Marlim 2 floating production, storage and offloading (FPSO) asset project in Brazil.

At 10.23am, Yinson's share price was still up 8 sen or 1.6% to RM5.09, putting it among Bursa Malaysia's top gainers at the time of writing, with 60,900 shares traded.

Yinson's indirect subsidiary, Yinson Acadia Ltd, and Sumitomo’s wholly-owned unit, Japan Offshore Facility Investment Pte Ltd, entered into an agreement on April 28 to facilitate the stake acquisition.

The stake is valued at US$3.34 million (RM14.57 million), Yinson said.

Sumitomo's entry is solidified at a time when oil prices hovered at 20-year lows amid the double whammy of supply-demand shock in the global oil market.

Kenanga Research, in a note today, said it is neutral on the deal, as it maintained its “outperform” call with an unchanged target price of RM6.55 per share on the counter.

"We are neutral on the news, given that this has already been widely expected, being a formalisation from the previous binding MoU signed on April 20, 2018 and the letter of agreement entered on Feb 18, 2019.

"This means Sumitomo Corp will be undertaking a 25% equity stake for the Marlim 2 FPSO awarded by Petrobras on Oct 11, 2019," it said.

"To recap, the Marlim 2 FPSO award carries a contract value of US$5.4 billion with a 25-year tenure.

"Capex for the FPSO is estimated to be US$1 billion, and charter is expected to commence in 1Q23," the research house added.