When Coca-Cola Hellenic Bottling Co. SA, the world'ssecond-largest Coca-Cola bottler, quits the Athens stock exchangefor London next year, it will leave the Greek market smaller thanVietnam.

The company's departure will cut the value of equities listed inAthens to about $31 billion from $39.2 billion, data compiled byBloomberg show. Vietnam is valued at $35.2 billion. Greece's bourseis already the smallest among 24 developed markets tracked byBloomberg.

Coca-Cola HBC, Greece's largest company by market value, isfleeing the epicenter of Europe's sovereign-debt crisis. The Greekmarket has lost 86 percent of its value since peaking at $273billion in November 2007 as surging borrowing costs forced thegovernment to accept two European Union-led bailouts. The economyis mired in a fifth straight year of recession, and analysts'forecasts collated by Bloomberg predict further contraction in 2013and 2014.

“The fact that a very well-known and established internationalcompany is moving away from the Athens Stock Exchange is a negativesituation,” said Theodore Krintas, who helps oversee 80 millioneuros ($104 million) as managing director of Attica WealthManagement in Athens. “Although the Athens Stock Exchange isconsidered to be a developed market, it becomes more likedeveloping than developed when you lose this kind of company.”

Coca-Cola HBC, based in the Greek capital, currently accountsfor 23 percent of the benchmark ASE Index's weighting, with amarket value of 6.23 billion euros, data compiled by Bloombergshow. At the time of the October 2009 Greek election, it accountedfor 8.3 percent of the ASE, with National Bank of Greece SA, thecountry's largest lender, the top stock with a 19 percentweighting. Greece's four largest banks currently make up 16 percentof the weighting on the ASE, down from 38 percent.

Spiralling budget deficits in Europe's weakest economies forcedGreece to accept a 110 billion-euro rescue package in May 2010.Finance ministers from the 17 nations that share the euro approveda second round of assistance, worth 130 billion euros, in March2012.

The ASE climbed 0.8 percent to 841.8 at 12:16 p.m. in Athenstoday, as Coca-Cola HBC advanced 1.2 percent.

Coca-Cola HBC operates in 28 countries across three continentsand employs more than 40,000 people, generating sales last year of6.9 billion euros. Ninety-five percent of its business andshareholders are outside Greece.

London Listing

A new company established in Switzerland by one of the bottler'smain shareholders will make a share-exchange offer for Coca-ColaHellenic and seek a primary listing on the London Stock Exchange,according to an Oct. 11 Athens bourse filing. The move will make iteligible for inclusion in the benchmark FTSE 100 Index and the firmwill also seek to list in New York.

“Greece is downgraded to just one country in the portfolio of anoffshore company,” said Jason Manolopoulos, director of DromeusCapital Management and author of Greece's Odious Debt. “On thestock-exchange level, it's around 10 percent of transactions, whichimplies a loss of earnings for the Hellenic Stock Exchange.”

Alexandra Grispou, head of communications and public relationsat Hellenic Exchanges SA, operator of the Athens bourse, didn'timmediately respond to requests for comment.

Moody's Investors Service downgraded Coca-Cola HBC to Baa1 fromA3 on June 15, citing the economy and concern about the potentialimpact from turmoil in Greece. Standard & Poor's cut thecompany's debt rating to BBB+ from A on June 7.

Coca-Cola HBC Chief Executive Officer Dimitris Lois said in aBloomberg Television interview broadcast yesterday that the ratingsdowngrades played a role in the decision to move, along with“stability both in the economic environment and regulatoryenvironment” in Switzerland.

“The decision was triggered by the concerns from our investorswith regards to the liquidity, so obviously we have addressed theliquidity by listing on the London Stock Exchange,” Lois said. “Thesecond element was the downgrade from the two rating agencies. Withthese downgrades, the cost of potential borrowing was goingup.”

Coca-Cola HBC leaving Greece will make National Bank of Greeceonce again the largest stock in the ASE Index, if weightings stayas they are. The lender jumped 5.7 percent on Oct. 8 after offeringto acquire its largest domestic rival, Eurobank Ergasias SA.

The Greek government must work hard to prevent more companiesfleeing overseas, according to Attica Wealth Management'sKrintas.

“The government needs to understand the problems these companiesare facing,” he said. “You can't discuss growth, you can't try toget out of the recession without utilizing the arsenal you've gotand the arsenal in this case is the big, productive enterprises inGreece.”

Bloomberg News

Copyright 2018 Bloomberg. All rightsreserved. This material may not be published, broadcast, rewritten,or redistributed.