Bloomberg News

Brazil’s Prime Brokerage Is in Talks to Be Sold, CEO Reis Says

December 28, 2011

Dec. 28 (Bloomberg) -- Prime SA Corretora de Cambio e Valores, the Brazilian brokerage owned by former Rio de Janeiro Exchange President Carlos Reis, is in talks to be sold as costs rise.

“I’ve been studying all possibilities,” Reis, Prime’s chief executive officer, said yesterday in a telephone interview from Rio de Janeiro. “All brokerages are in talks, except for the big, foreign and bank-owned ones.”

The average daily volume of equity trading on the Sao Paulo exchange is at 6.19 billion ($3.3 billion) this year, down 5.9 percent from 6.58 billion in 2010, according to BM&FBovespa SA data. The benchmark Bovespa index has fallen 18 percent this year, after rising 1 percent in 2010 and 83 percent in 2009.

Larger brokerages attract the more “profitable business,” Reis said. “I’m not drowning, none of the brokerages are, but no one likes to lose money or break even every month.”

Um Investimentos, another Rio de Janeiro-based brokerage, has also been contacted by a firm, controlling partner Fernando Opitz said.

“We saw an interest from a financial institution, which wanted to know whether we’d be willing to start talks,” Opitz said on a telephone interview yesterday, declining to disclose the name of the firm. “I don’t have an exact idea of what their goal is.”

XP Investimentos CCTVM SA’s partner and general director, Guilherme Benchimol, said the firm is in talks to acquire one brokerage in Sao Paulo and one in Rio before the end of the year as it seeks to challenge banks in the business of investment services.

“Every month, brokerages lack revenue, so they have to keep innovating”, Prime’s Reis said. “But someone with more courage can make that stand up.”

--Editors: Katerina Petroff, Jonathan Roeder

To contact the reporter on this story: Felipe Frisch in Sao Paulo at ffrisch1@bloomberg.net

To contact the editor responsible for this story: Helder Marinho at hmarinho@bloomberg.net


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