When Coca-Cola Hellenic Bottling Co. SA, the world's second-largest Coca-Cola bottler, quits the Athens stock exchange for London next year, it will leave the Greek market smaller than Vietnam.

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

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

“The fact that a very well-known and established international company is moving away from the Athens Stock Exchange is a negative situation,” said Theodore Krintas, who helps oversee 80 million euros ($104 million) as managing director of Attica Wealth Management in Athens. “Although the Athens Stock Exchange is considered to be a developed market, it becomes more like developing than developed when you lose this kind of company.”

Coca-Cola HBC, based in the Greek capital, currently accounts for 23 percent of the benchmark ASE Index's weighting, with a market value of 6.23 billion euros, data compiled by Bloomberg show. At the time of the October 2009 Greek election, it accounted for 8.3 percent of the ASE, with National Bank of Greece SA, the country's largest lender, the top stock with a 19 percent weighting. Greece's four largest banks currently make up 16 percent of the weighting on the ASE, down from 38 percent.

Spiralling budget deficits in Europe's weakest economies forced Greece to accept a 110 billion-euro rescue package in May 2010. Finance ministers from the 17 nations that share the euro approved a second round of assistance, worth 130 billion euros, in March 2012.

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

Coca-Cola HBC operates in 28 countries across three continents and employs more than 40,000 people, generating sales last year of 6.9 billion euros. Ninety-five percent of its business and shareholders are outside Greece.

London Listing

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

“Greece is downgraded to just one country in the portfolio of an offshore company,” said Jason Manolopoulos, director of Dromeus Capital Management and author of Greece's Odious Debt. “On the stock-exchange level, it's around 10 percent of transactions, which implies a loss of earnings for the Hellenic Stock Exchange.”

Alexandra Grispou, head of communications and public relations at Hellenic Exchanges SA, operator of the Athens bourse, didn't immediately respond to requests for comment.

Moody's Investors Service downgraded Coca-Cola HBC to Baa1 from A3 on June 15, citing the economy and concern about the potential impact from turmoil in Greece. Standard & Poor's cut the company's debt rating to BBB+ from A on June 7.

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

“The decision was triggered by the concerns from our investors with regards to the liquidity, so obviously we have addressed the liquidity by listing on the London Stock Exchange,” Lois said. “The second element was the downgrade from the two rating agencies. With these downgrades, the cost of potential borrowing was going up.”

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

The Greek government must work hard to prevent more companies fleeing overseas, according to Attica Wealth Management's Krintas.

“The government needs to understand the problems these companies are facing,” he said. “You can't discuss growth, you can't try to get out of the recession without utilizing the arsenal you've got and the arsenal in this case is the big, productive enterprises in Greece.”

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Coca-Cola Hellenic's Exit Shrinks Greek Stock Market

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