Foreign exchange firm Moneycorp has bought a stake of 45% in the Brazilian currency trader Novo Mundo Corretora de Câmbio, which is the company’s first overseas purchase and an attempt to become a global player in the currency market.
Moneycorp expect to acquire the whole business after proving themselves to the trader within the next few years, as foreign finance firms cannot acquire 100% of a domestic business up front under Brazilian law, according to The Telegraph.
The Telegraph also reports that CEO Mark Horgan expects it to take at least a year for Moneycorp to acquire the entire business. “We’ve been looking at Brazil since 2009, and sourcing a clean, well-managed Brazilian foreign exchange house is quite a difficult task – you’ve got to be careful about your own reputation,” Horgan said.
Horgan continues to say that they intend on working with Brazil on a grander scale as it is the eighth biggest economy in the world because of the trading with North America and Asia and which would increase good cross-border flow dynamics.
At the moment, 96% of the Brazilian foreign exchange market is owned by the banks and restrictions on foreign currency transfers mean that customers will need to report trades to the central bank, regardless of how small they are.
Horgan also mentioned that he will be targeting EU countries that are not part of the Eurozone because they prefer euro-non-euro flow. “We like Scandinavia, which has a lot of cross-euro business. Canadian-US trade is also strong. We also like Latin America, but we have not really interrogated Asia at this point, even though we know there is good Asian business to be had if we get that far,” Horgan said.
