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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 type of guidance are you getting from the software companies?

Mr. Bradley: Actually, that’s interesting. It’s mixed, and probably a lot less detailed or explicit than they have given in the past. In part this is the result of a widespread reaction to Regulation FD. Under that regulation, they don’t feel they’re under any obligation to give anything more than basic information. I think the other factor is that all these companies went through a period when they were using the term “lack of visibility” about future business prospects. They’ve got into a newly acquired habit of not really giving very much guidance. Therefore, I think they don’t feel they’re under any obligation to give detailed guidance for the rest of the year. So the analysts are on their own. That’s not universally true, but many of the companies effectively gave no guidance for their new financial year. As a result, for example, one of them — BCE Emergis, a large, IT services company — lost about 15% of its value in the days following the last results call. I think that was perceived as “no news is bad news” rather than “no news is good news.”

TWST: Should investors be getting involved in investing in Canada right now?

Mr. Bradley: The answer isn’t a straight yes or no. If you’re a US investor, one of the issues you do have to worry about is the relative weakening of the Canadian dollar against the US dollar. So although your choice of investment in Canada may perform well in Canadian dollar terms, if the Canadian dollar continues to depreciate against the US dollar, then you’ve got to make up for the exchange-rate risk. In the software sector, effectively, investors can hedge themselves by buying the NASDAQ-listed stocks. The ones that I would recommend are the large cap, more liquid stocks. Cognos (Nasdaq:COGN) would be near the top of my list as a perennial solid performer with an excellent management team. Open Text (NasdaqOTEX) is another one that has done very well indeed.

TWST: You had also mentioned Open Text and Hummingbird (Nasdaq:HUMC). Would you explain why?

Mr. Bradley: Broadly speaking, they’re actually competitors. Open Text is really in the document collaboration space, a market that’s built around some of the same capabilities that Hummingbird is built around, although I’m not sure that the two companies see each other competing for the same customers. But I think if you look at it closely, you can see that what the two of them are trying to do is not dissimilar: allowing people inside and outside organizations to collaborate on projects. Open Text has performed very well throughout 2000. Of all the companies on the Canadian software scene, it’s actually the only one that hasn’t shown any signs of its revenue growth rate slowing. Both Cognos and Hummingbird did see revenues fall year over year (2001 from 2000); Open Text has not experienced that phenomenon — and certainly the guidance from the company doesn’t suggest that revenue growth is slowing up. They have a new product, MeetingZone, to help spur further growth. Particularly appropriate in the aftermath of September 11, it is a way for large numbers of people to get together, share documents online and avoid some of the need to travel for meetings. The product seems to be well received by the existing customer base and, conceivably, will be something picked up by other organizations. Both of these companies are well positioned, I think, to do well in an environment where IT spending is expanding slightly, as opposed to declining.

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.