Greece ETF Could Lose Largest Holding
The Global X FTSE Greece 20 ETF (NYSE: GREK), the lone ETF devoted to the now infamous debt-laden PIIGS nation, could lose its largest holding, Coca-Cola Hellenic Bottling (NYSE: CCH). Last month, the company announced it was looking to shift its listing to the London Stock Exchange from the Athens Stock Exchange.
"In October, 2012, Coca-Cola Hellenic announced plans to move its primary listing from ASE to the London Stock Exchange, to seek approval to have a secondary listing on the ASE, and move its headquarters from Athens to Switzerland. The completion of these transactions may result in Coca-Cola Hellenic no longer meeting the Index Provider's criteria for inclusion in the Underlying Index.
"As a result, the Fund may need to reduce or eliminate its holdings in Coca-Cola Hellenic. The removal of Coca-Cola Hellenic from the Underlying Index and the resulting reduction or elimination of the Fund's holdings in Coca-Cola Hellenic may have an adverse impact on the liquidity of the Fund's underlying portfolio holdings and on Fund performance," according to a supplement to GREK's prospectus.
The news was also reported by Index Universe, which noted Global X expects Coca-Cola Hellenic to remain part of the FTSE/ATHEX 20 Capped Index "for now."
In October, Benzinga reported that Coca-Cola Hellenic's listing plans could hasten Greece's demotion to emerging market from developed market.
Coca-Cola Hellenic, the world's second-largest bottler of the popular soda, accounted for 18.4 percent of GREK's weight as of November 12, according to Global X data. GREK's next largest holding is National Bank of Greece (NYSE: NBG) at almost 11.6 percent.
Earlier this year, index provider MSCI (NYSE: MSCI) put Greece on its list for possible reclassification down to emerging markets status.
"In addition, the Greek equity market is the only Developed Market in which in‐kind transfers and off‐exchange transactions are prohibited and stock lending as well as short selling practices are not well established. This has created significant concerns for market participants and in particular for passive portfolio managers. The Greek authorities have not been receptive to repeated complaints from the international investment community and did not manage to bring equity market regulations and practices in line with the evolving standards of Developed Markets," MSCI said in June.
In September, FTSE Group, the index provider for GREK, said Greece is on the firm's list for possible reclassification to advanced emerging markets status, according to Index Universe.
GREK, which has $20.2 million in assets under management, has gained almost nine percent year-to-date.
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