In a landmark development for the Greek financial market, the Athens Exchange (ATHEX) is set to become an integral part of Euronext, a move hailed as one of the most significant in its history. This strategic integration will see ATHEX join a market that boasts a size twice that of the London Stock Exchange, with daily transactions amounting to approximately 12 billion euros.
A Unified European Market: The Euronext Vision
The acquisition of ATHEX by Euronext will enable participants in the Greek financial markets to join a network of over 1,800 listed companies with a combined market capitalization exceeding 6 trillion euros. This expansion aligns with Euronext’s long-term goal of building the backbone of the Capital Markets Union, creating a unified liquidity pool, a single order book, and a common technological platform. Stéphane Boujnah, CEO and Chairman of the Managing Board of Euronext, likened this ambition to creating an “Airbus” of capital markets within the European Union.
Benefits for Greek Companies: Enhanced Visibility and Liquidity
Historically, the Athens Exchange, despite its quality, has operated in relative isolation. Its integration into Euronext will provide a crucial link to a pan-European and global market. This transition from a local infrastructure to a pan-European technological platform, known as Optiq technology, will establish a unified order book and liquidity pool with a total capitalization of approximately 6.5 trillion euros.
Greek companies, regardless of their size, are expected to gain increased visibility and access to Europe’s largest liquidity pool. Currently, many Greek companies operate within a limited market, often necessitating delisting from ATHEX or seeking dual listings on foreign exchanges. Joining the Euronext network will allow them to remain listed in Greece while simultaneously accessing a broader European and international investor base. This is anticipated to enhance their liquidity, competitiveness, and attractiveness, drawing in more investors and potentially encouraging Greek companies, such as those in the shipping sector, to return to the Athens Exchange.
Capital Inflows to Europe: A Favorable Environment for Greece
The timing of Greece’s integration into Euronext is particularly opportune, as Europe is currently attracting significant capital inflows from around the world. Since last year, there has been a notable influx of capital from the United States, primarily due to Europe being perceived as undervalued compared to the US. Valuation multiples in the US are considerably higher, while those in Europe are lower, and the difference in corporate growth prospects does not justify this disparity in valuation multiples. Consequently, US capital is being invested in Europe to capitalize on these lower valuation multiples.
Moreover, another significant trend involves capital from Asia and the Middle East flowing into Europe. Investors from these regions believe they are overly concentrated in the US and that sound risk management and diversification strategies necessitate a greater and more strategic allocation of capital in Europe. This environment presents a unique opportunity for Greek companies, provided they are connected to a market with significant depth, such as Euronext’s pan-European integrated market.
Support for Small and Medium-Sized Enterprises (SMEs)
Euronext stands as the leading exchange group for SMEs in Europe, with approximately 1,400 listed small and medium-sized companies. Through initiatives like IPOready and Euronext Tech Leaders, Euronext offers top-tier tools for visibility, access to liquidity, and growth readiness. Greek SMEs will directly benefit from these programs, gaining access to the same tools and exposure as their European counterparts. Integration into the Euronext network, with its 6.5 trillion euro capitalization, implies deeper liquidity, more favorable financing terms, and stronger investor confidence, all while maintaining their headquarters in Athens.
Historical data from other markets integrated into Euronext demonstrates a consistent pattern of increased listing activity, greater visibility, and a significant boost to local economic activity. For instance, the Oslo Børs saw its listed companies grow from 197 in 2019 to 298 (+51%), while Borsa Italiana increased from 320 in 2021 to 408 today (+28%).
United in Diversity: Preserving Local Identity
The ATHEX Group will retain its status as a Greek company, supporting the domestic ecosystem. Brokers and investors will continue to play a leading role in the Greek market, and their activities are expected to be further enhanced as the ATHEX platform integrates into Euronext’s pan-European infrastructure. This will connect Greece with seven other markets, with the potential for more as Euronext continues its expansion. Euronext aims to foster a more dynamic and interconnected environment without replacing the existing ecosystem. Markets such as Oslo and Milan have experienced increased trading volumes, new listings, broader client engagement, and new cross-border business opportunities following their integration.
The ATHEX Group will remain headquartered in Athens and will continue to pay taxes in Greece. Decisions concerning the Greek market will still be made in close collaboration with the local ecosystem. Euronext’s success is rooted in its “united-in-diversity” model, where local exchanges maintain their identity, management, ecosystem, and influence while benefiting from Euronext’s shared infrastructure and scale.
In this framework, the ATHEX Group is poised to become a cornerstone of Euronext’s presence in Southeast Europe, leading the development of a regional hub to attract new listings and investments from neighboring markets. Greece will be fully represented in Euronext’s governance:
- The CEO of the ATHEX Group will join Euronext’s Managing Board.
- The Hellenic Capital Market Commission will be invited to Euronext’s College of Regulators.
- A prominent figure from the Greek business community will join the Supervisory Board.
This ensures that the Greek voice will be heard at every level of decision-making within a strong European framework.
