Robust Consumer Spending in Russia and Eastern Europe Bodes Well for Upscale, Branded Products, Says Turner Investment Partners Commentary

Business Wire, April 18, 2008

BERWYN, Pa. -- Have American consumers finally shopped until they've dropped? U.S. retail sales have waned in recent months due to high gasoline and food prices, a housing downturn, and a soft job market. But consumer spending in Russia and Eastern Europe is downright vigorous and purveyors of upscale, branded products will likely benefit from this trend. That's the conclusion of the latest Sector Focus commentary by four consumer analysts at Turner Investment Partners.

Turner, an investment firm based in Berwyn, Pennsylvania, publishes Sector Focus commentaries monthly as part of the continuing efforts of its five analyst teams to monitor the market sectors for its growth-stock portfolios.

The piece, entitled From Russia and Eastern Europe, with affluence, notes that Russia and nations such as Ukraine, Kazakhstan, and Romania are flush with cash, "thanks to a regional economy benefiting from high oil prices, the commodities boom, double-digit annual gains in wages, and low unemployment." The commentary was written by Jillian Batten, security analyst; Bill McVail, senior portfolio manager/security analyst; Halie O'Shea, security analyst/portfolio manager; and Jason Schrotberger, security analyst/portfolio manager.

The authors contend that Russian and Eastern-European consumers are seeking more choices in products, especially more upscale, branded alternatives. Indeed, the region accounts for at least 10% of sales of luxury goods worldwide, from one estimate. "Our research shows that luxury-goods sales in Russia and Eastern Europe have been rising at double-digit rates annually in the past few years, as has real disposable income," the analysts note. And unless oil and commodity prices and the global economy slump drastically, those trends could remain intact over the next four years, they conclude.

The commentary identifies eight companies in the apparel, beverage, fashion accessories, and media industries that appear likely to benefit from the boost in consumer spending: Central European Distribution, Coca-Cola Hellenic, Diageo, Guess, Inditex, Luxottica, Central European Media Enterprises, and CTC Media.

To read this April 2008 Sector Focus in its entirety, see the Turner Investment Partners Web site, www.turnerinvestments.com/sectorfocus. Or call 484-329-2439 for a free copy of the piece.

As of March 31, 2008, Turner held in client accounts 849,220 shares of Central European Distribution, 3,260 shares of Diageo, 4.9 million shares of Guess, 299,842 shares of Central European Media Enterprises, and 355,780 shares of CTC Media. Turner held no shares of Coca-Cola Hellenic, Inditex, and Luxottica.

The views expressed represent the opinions of Turner Investment Partners as of the date indicated and may change. They are not intended as a forecast, a guarantee of future results, investment recommendations, or an offer to buy or sell any securities. Opinions about individual securities mentioned may change, and there can be no guarantee that Turner will select and hold any particular security for its client portfolios. A company's fundamentals or earnings growth is no guarantee that its share price will increase. Past performance is no guarantee of future results.