Waltham, MA, 20 December 2007 - Global Insight, the world's leading company for economic and financial analysis and forecasting, today released its findings showing that the information technology, telecoms, utilities, and healthcare sectors hold the most promise for Eurozone stock markets investors in 2008. The sectors for the least potential are predicted to be financials, materials, and consumer staples, according to Global Insight's latest stock sector rotation strategy advisory.

The IT sector currently has the best attributes for an overweight position among the broad sectors that comprise the Eurozone stock markets, with improvements expected in both the fundamental metrics and risk profile. While the dividend yield is low relative to other sectors; the payout ratio from IT has been rising strongly and is much higher than the historical norm. The P/E ratio is similarly high compared to other sectors, but is low compared to its own historical averages. In addition, the robust future growth prospects for earnings and free cash flow offset the relative disadvantage from a high pricing multiple.

Healthcare also provides attractive investment opportunities, based on strong demand fundamentals and good relative value. The dividend yield is higher, and the P/E ratio is lower than is typically seen in this sector. At the same time, an aging population in Europe has continued to fuel volumes growth and the pipeline has new patents that should support future pricing power. Profits and free cash flow will continue to benefit from aggressive cost cuts, more collaboration between Western companies, and low-cost manufacturers in China and India.

Telecommunications services are another high-tech sector with an overweight recommendation. Market maturity in the mobile segment combined with the expansion of broadband connectivity and multi-play services should boost further growth in profitability. Additional impetus may come from consolidation in the sector: the European market remains quite fragmented and mid-range companies are possible targets for a take-over. Dividend payouts from the telecoms industry have been rising faster than any other sector, resulting in a dividend yield that is one of the most attractive in all sectors and when compared to the telecomm sector's own history.

The utilities sector also merits an overweight in 2008. Although current valuations in the sector are in line with historical averages, free cash flow in this sector has been on an uptrend and a strong forward profit growth rate is expected. Furthermore, July 2007 has seen the opening of Europe's energy markets, with all domestic consumers able to select their electricity and gas suppliers. This should lead to more cross-border operations and benefit to the biggest players, though dominant national incumbents should persist and greater competitiveness may also mitigate flexibility in output pricing.

The energy and consumer discretionary industries outlook remains positive, but merits only a small overweight. Both sectors show a very attractive sector valuation, with a P/E one third below its historical average. Energy companies also deliver among the highest dividend yields compared to other sectors. Payout ratios from Eurozone energy companies have been rising sharply, in contrast to the lagging payouts seen in the United States. The energy sector does have rising costs from machinery and components, although high energy prices have cushioned the sector's profits and free cash flow.

Given their larger exposure to economic cycles, the consumer discretionary sector is expected to face risks from the deceleration of Eurozone GDP, according to Global Insight' forecast. The valuation metrics and future growth prospects are not compelling compared to other sectors, or compared to the sector's own history.

The financials and materials sectors are recommended to be underweight, and to a lesser extent, consumer staples. The banking and real estate industries are particularly affected. Coming off of years of record profits, they are significantly impacted by the credit squeeze, U.S. mortgage market problems, and slower future prospects. The financial sector is expected to experience further dislocation to balance sheets and corporate strategies, resulting in poor returns. However, it is expected that the current credit problems will begin to clear and the "beaten up" financial sector should bounce back some time in 2008.

Consumer staples companies such as producers of food, beverages, and tobacco should see their profitability hampered by the rising costs of agriculture products and other key inputs, while demand will be affected by a projected deceleration of consumer spending. In addition, within the Eurozone stock market, the dividend yield and P/E ratios of consumer staples are not very compelling, while payouts have been lagging. Finally, industrials remain at an equal weight, although the sub-sector composition has mixed prospects. In particular, the transport logistics, machinery, and engineering segments within capital goods are attractive, while the aerospace and shipping segments look less compelling.

Global Insight's sector rotation strategy is developed using the company's expert macroeconomic and industry analysis, and is part of its World Industry Service Stock Sector Benchmarks, which assists asset managers in identifying the most profitable sectors for investment in EMU and international stock markets.

To see the full sector rankings and for further information visit: www.globalinsight.com/SectorRotation.

Contact:
Mark Killion, CFA, MD World Industry Service, Global Insight
+610 490.2547 (mark.killion@globalinsight.com)

Natasha Muravytska, Economist, Global Insight
+610.490.2558 (natasha.muravytska@globalinsight.com)

Jim Dorsey, Media Relations, Global Insight
+781.301.9069 (jim.dorsey@globalinsight.com)

About Global Insight
Global Insight, Inc. (http://www.globalinsight.com/) is a privately held company that brought together the two most respected economic information companies in the world, DRI and WEFA. Global Insight provides the most comprehensive economic and financial information available on countries, regions and industries, using a unique combination of expertise, models, data and software within a common analytical framework to support planning and decision-making. Through the world's first same-day analysis and risk assessment service, Global Insight provides immediate insightful analysis of market conditions and key events around the world, covering economic, political, and operational factors. The company has over 3,800 clients in industry, finance, and government with revenues in excess of $95 million, over 675 employees and 25 offices in 14 countries covering North and South America, Europe, Africa, the Middle East, and Asia.