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Four analysts and top management from twenty sector firms examine the investing in Canada sector in this special 129-page Investing in Canada issue from The Wall Street Transcript, available at (212/952-7433) or http://www.twst.com/info/info490.htm.

TWST: What are the characteristics of companies investors might want to avoid at this moment?

Mr. Rhamey: I won’t go into specific stock names, but when you take a look at some of the sectors, certainly the competitive local exchange market in North America is highly overbuilt and their balance sheets are encumbered. If you take a look at the restructuring that these companies are going through, what you’ll see is that this whole industry has to be refinanced. And from the ashes of this restructuring I think that you’re going to see a handful of stronger players emerge. But during this period of time, it’s very different to invest at the equity level in these companies until we get some clarity on the extent and the timing of all these restructurings that are going on. For portfolio managers who have a high-risk allocation within their portfolio, we have a company called GT Group Telecom (Nasdaq:GTTLB) here, which we have rated market perform, that is strategically very well positioned and has a good management team. But given the turbulence in the industry itself, we just have difficulty at this point in time indicating to the average investor that this would be a core holding for them.

TWST: Would GT Group be a stock investors should keep an eye on long term?

Mr. Rhamey: Yes. The investment bet with them is that they are Canada’s only independent non-aligned CLEC. They’ve got some interesting assets, and the real question here is, can they perform from an operational and financial perspective at a time when capital remains scarce and competition is intense. They are fully funded, but investors have heard that before and they remain skeptical on the sector.

TWST: When should investors get back involved in telecom in Canada?

Mr. Rhamey: I think in the telecom in Canada (and I would broaden that to telecom in North America), you’re looking at the second half of 2002 to look at investing. At that point in time we will have an additional two quarters under our belt of operation performance, and we will have a better indication of what the drag is on the traditional voice business and what the growth opportunities and will be the rebound is that we fully expect to occur. In the data area, we will have an opportunity to see which managements are best at cost reduction. Therefore, getting back to my comments earlier with regard to visibility, people can take a look at 2003 with some degree of confidence and decide whether this is a low single-digit growth business, or ultimately, they can grow business in the high single digits, low double digits, despite the secular changes going on in terms of competition and second line replacements that are going on in the industry right now. One thing I’ll say on the defensive side for those investors who are nervous or concerned with regard to the equity market is that the incumbent local exchange carriers (that would be the US RBOCs and certainly BCE here in Canada and, to an extent, Telus) offer attractive yields, and those yields are attractive relative to long-term government bonds. They’re back to historical norms of over 60% of government yields. So I would suspect that the potential for weakness is relatively modest provided rates remain low as many investors are looking for yield. Because these companies tend to generate strong cash flow, the dividends appear sustainable.

TWST: As a final word, what advice would you offer to investors looking at the group? How should they approach the group?

Mr. Rhamey: Very much to look for quality. Some of the large gains that we saw in some of the sectors — for example wireless or the CLECs — are probably not going to be repeated. So I think investors want to focus on the winners and recalibrate their expectations for relatively modest stock price appreciation on a going-forward basis.

This special issue includes:

1) Investing in Cananda - In an in-depth (4,700 words) Analyst Interview, Nick Majendie, Director and Senior Vice President of Canaccord Capital Corporation, examines the outlook for the sector and shares specific stock recommendations.

2) Canadian Telecommunications - In an in-depth (3,700 words) Analyst Interview, Peter Rhamey, Managing Director at BMO Nesbitt Burns, Inc., examines the outlook for the sector and shares specific stock recommendations.

3) Canadian Software & IT Services - In an in-depth (4,200 words) Analyst Interview, Paul Bradley, Technology-Software Analyst at Canaccord Capital Corporation, examines the outlook for the sector and shares specific stock recommendations.

4) Canadian Asset Management - In an in-depth (3,800 words) Analyst Interview, Bruce Brewington, Vice President at Putnam Lovell, examines the outlook for the sector and shares specific stock recommendations.

5) CEO interviews (average 2,500 words). Top management of twenty sector firms examine the outlook for their firm and the sector.