Orascom Telecom COMPANY NOTE EGYPT TELECOMS. Fortune favors the bold Upgraded to Strong Buy

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1 Orascom Telecom Fortune favors the bold Upgraded to Strong Buy Orascom Telecom (OT) [ORTE]'s 3Q10 earnings will be released on 7th November, and we cut 2010e earnings by 15% to USD379mn. But should we be concerned? Not really. Look at the intrinsic value of OT's operations; we think OT's parts could be worth more than their sum. We ran different scenarios, incorporating chances of the VimpelCom deal going or falling through and at different Djezzy valuation levels. Recent market price implies investors are giving more weight to the deal failing. Nonetheless, the riskreward ( 9% vs. +43%) is now more attractive. We cut LTFV, slightly up TP, but upgrade ORTE to Strong Buy (from Hold) for those bold enough! Change in estimates: We have upgraded our estimates for OT's total subs by an average of 8% over e versus old CICRe. We excluded Egyptian Company for Mobile Services (ECMS) [EMOB] from consolidated financials, hence OT's revenues and EBITDA were cut by an average of 20% and 19%, respectively, versus old CICRe. We trimmed our revenue forecasts for Koryolink and Telecel Globe on the back of lower subs but upgraded EBITDA forecasts for Mobilink and Koryolink on better margins in 2Q10. Scenario analysis: We consider six sub-scenarios under two major scenarios: (1) VimpelCom's deal "goes" through vs. (2) VimpelCom's deal "falls" through. At a chance for the two major scenarios and given different probabilities to each sub-scenario, we reached a probability-weighted value of EGP5/share or USD4.3/GDR. Recent market price implies investors are giving more weight to the deal failing. Our assessment does not take into account potential upside if the stub is sold in pieces at higher than 5x EBITDA, a discounted multiple vs. recent M&A deals. 3Q10 preview: We expect OT's net earnings to recover in 3Q10 to USD289mn, helped in part by two one-off items totalling USD325mn, related to ECMS and LINKdotNET. Excluding one-offs adjusted for tax, earnings could be USD29mn, notwithstanding any FX effect given relative stability in most of OT's major currencies. We expect revenues and EBITDA to remain flat QoQ at USD1.06bn and USD445mn, respectively, with EBITDA margin improving slightly to 42.1%. Valuation and recommendation. Our DCF-based SOTP model resulted in a 9% lower LTFV for OT's equity of EGP7.8/share (USD6.8/GDR; -12%) vs. our old LTFV. We slightly upped our multiple-based SOTP TP by 1% to EGP6.3/share (USD5.5/GDR). Our models incorporate cash in from FT and LINKdotNET's enterprise value (USD430mn) and cash out for Djezzy's claims (USD423mn). Given a 48% upside on the local share (+54% on GDRs), we upgrade our recommendation from Hold to Strong Buy with High Risk rating. Key performance indicators USD mn 2008 a 2009 a 2010 e 2011 e 2012 e Revenues 5,327 5,065 4,208 4,522 4,808 Growth rate 6.1% -4.9% -16.9% 7.5% 6.3% EBITDA 2,381 2,172 1,792 1,885 2,000 Growth rate 16.0% -8.8% -17.5% 5.2% 6.1% EBITDA margin 44.7% 42.9% 42.6% 41.7% 41.6% Net income Growth rate -77.3% -25.7% 19.2% 17.9% 25.8% Net margin 8.0% 6.3% 9.0% 9.9% 11.7% PER 8.8x 11.8x 9.9x 8.4x 6.7x P/BV 3.5x 2.9x 2.0x 1.6x 1.3x Cons. EV/EBITDA 3.7x 4.1x 4.6x 4.1x 3.5x Cons. net debt/ebitda 2.1x 2.4x 2.5x 2.1x 1.6x Dividend yield 4.4% 2.4% 0.0% 0.0% Source: Company reports and CICR estimates 0.0% 1 STRONG BUY (UPGRADED) LTFV: EGP7.8 USD6.8 (DOWNGRADED) TP: EGP6.3 USD5.5 (UPGRADED) COMPANY SYNOPSIS Orascom Telecom (OT) is one of the leading regional mobile operators and among the largest in the Middle East and Africa. OT s GSM networks cover 11 main countries with a total population of around 530 mn. OT operates GSM operations in Egypt, Pakistan, Algeria, Tunisia, and Bangladesh. In December 2005, OT had acquired 19.3% of Hutchison Telecom International Limited (HTIL) for USD1.3bn. After receiving USD793 mn in special dividends from HTIL's sale of Hutch Essar, OT sold its entire stake in HTIL for a total value of USD1.3 bn. Historically, OT had restructured its operation with a wave of divestiture, selling its stakes in the Jordanian mobile operator, Fastlink and nine GSM mobile operators in Africa, in addition to Loteny (Ivory Coast), Oasis Telecom (DRC), and Libertis Telecom (Congo Brazzaville). In December 2007, OT sold its GSM operator in Iraq to MTC-Atheer (Zain) for USD1.2 bn. By end of January 2008, OT has been granted the first 25- year commercial license to provide mobile services in the Democratic People s Republic of Korea (DPRK) or North Korea, using 3G technology with an exclusivity period of four years. In partnership with Canada-based Globalive, OT won an AWS spectrum in Canada and started operations at end of 2009 under the brand name WIND Mobile. SHAREHOLDER STRUCTURE Weather Investments 51.7% Sawiris Family 74.0% Private equity investors 24.0% Other equity investors 2.0% Free Float 48.3% Total 100.0% STOCK DATA Reuters; Bloomberg ORTE.CA/ORTEq.L; ORTE EY Recent price as of 1-Nov-10 EGP 4.25 No. of O/S shares 5,246 mn Market cap EGP 22,294.2 mn 52-wk high / low EGP7.93/ EGP4.11 Avg. daily volume / turnover mn / EGP mn STOCK PERFORMANCE 52 WEEKS EGP Volume ORTE EGX 30 - rebased Nov-09 Jan-10 Mar-10 Jun-10 Aug-10 Oct-10 Source: Bloomberg mn shares AMR HUSSEIN ELALFY, CFA AMR.ELALFY@CICH.COM.EG YEHIA EL-SHERBINY YEHIA.ELSHERBINY@CICH.COM.EG

2 Change in estimates We have upgraded our estimates for OT's total subscribers by an average of 8% over the next three years versus our old forecasts. Subscriber upgrades came from Banglalink (Bangladesh), Mobilink (Pakistan), Tunisiana (Tunisia), and Telecel Globe (Sub-Saharan Africa). On the other hand, we have downgraded our subscriber forecasts for WIND Mobile (Canada) and Koryolink (North Korea), while our forecasts for Djezzy (Algeria) and Mobinil (Egypt) were little changed. We have excluded ECMS from OT's consolidated financials, which is the main reason we cut revenues and EBITDA by an average of 20% and 19% over e, respectively. Otherwise, we have upgraded our revenue forecasts for Mobililnk and Banglalink following signs of strength in 2Q10. Yet, we trimmed our forecasts for Koryolink and Telecel Globe on the back of lower-than-expected subscriber figures. As for EBITDA margin, we upgraded Mobilink, Koryolink, and Telecel Globe on better-than-expected margins in 2Q10. Alternatively, we cut our estimates for Banglalink and Tunisiana: the former is due to weaker-thanexpected EBITDA margin in 2Q10, while the latter is due to expected stronger competition with the launch of Orange Tunisia, the country's third mobile operator, in 1H10. This resulted in an average consolidated EBITDA margin of 42% over e vs. our old forecasts of 41.4%. All in all, we have trimmed our earnings forecasts for e by an average of 8%. We have cut 2010e net income by 15% to USD379mn. Meanwhile, capex has decreased by an average of 5% over the same period, thanks to the exclusion of ECMS figures and lower capex in Djezzy. Total subs upgraded, thanks to Bangladesh, Pakistan, Tunisia, and Africa Revenues and EBITDA shrinking due to excluding ECMS from OT's consolidated financials; adjusting margins marginally higher in view of 2Q10 results Cutting 2010e earnings estimates by 15% 2

3 Figure 1 Changes in CICR forecasts ( e) 2010 e 2011 e 2012 e Old New Chg. Old New Chg. Old New Chg. EOP subs (mn)* % % % Djezzy % % % Mobilink % % % Mobinil % % % Tunisiana % % % Banglalink % % % Koryolink % % % WIND Mobile % % % Telecel Globe % % % USD mn Revenues 5,455 4,208-23% 5,647 4,522-20% 5,839 4,808-18% Djezzy 1,879 1,740-7% 1,878 1,809-4% 1,900 1,866-2% Mobilink 1,051 1,120 6% 1,044 1,141 9% 1,041 1,154 11% Mobinil 1, % 1, % % Tunisiana % % % Banglalink % % % Koryolink % % % Telecel Globe % % % Total GSM 5,107 3,873-24% 5,317 4,195-21% 5,524 4,459-19% Non GSM % % % EBITDA 2,269 1,792-21% 2,332 1,885-19% 2,405 2,000-17% Djezzy 1, % 1, % 1,007 1,008 0% Mobilink % % % Mobinil % % % Tunisiana % % % Banglalink % % % Koryolink % % % Telecel Globe % % % Total GSM 2,328 1,834-21% 2,389 1,930-19% 2,461 2,043-17% Non GSM (58) (42) -28% (57) (45) -22% (56) (43) -24% EBITDA margin 41.6% 42.6% 1.0pp 41.3% 41.7% 0.4pp 41.2% 41.6% 0.4pp Djezzy 56.0% 56.0% 0.0pp 55.0% 55.0% 0.0pp 53.0% 54.0% 1.0pp Mobilink 37.0% 39.8% 2.8pp 37.5% 38.0% 0.5pp 38.0% 38.0% 0.0pp Mobinil 45.0% N/A NM 44.8% N/A NM 44.5% N/A NM Tunisiana 52.2% 52.7% 0.5pp 50.2% 47.9% -2.3pp 48.2% 44.0% -4.2pp Banglalink 42.0% 31.2% -10.8pp 44.0% 33.6% -10.4pp 45.0% 37.0% -8.0pp Koryolink 25.1% 73.7% 48.6pp 30.0% 60.0% 30.0pp 35.0% 55.0% 20.0pp Telecel Globe 12.0% 22.2% 10.3pp 17.0% 25.0% 8.0pp 25.0% 27.0% 2.0pp Total GSM 45.6% 47.4% 1.8pp 44.9% 46.0% 1.1pp 44.6% 45.8% 1.3pp Non GSM -16.8% -12.6% 4.2pp -17.4% -13.7% 3.6pp -18.0% -12.4% 5.6pp NPAT % % % Capex % % % Djezzy % % % Mobilink % % % Mobinil % % % Tunisiana % % % Banglalink % % % Koryolink % % % Telecel Globe N/A 24 N/A N/A 20 N/A N/A 18 N/A Total GSM % % % Non GSM NM NM NM Capex as a % of revenues 16.0% 16.7% 0.7pp 13.9% 16.7% 2.9pp 11.7% 15.2% 3.5pp Djezzy 15.1% 8.7% -6.4pp 14.4% 11.5% -2.9pp 13.7% 11.0% -2.7pp Mobilink 14.8% 12.0% -2.8pp 11.8% 12.0% 0.2pp 8.8% 10.0% 1.2pp Mobinil 19.7% % % Tunisiana 11.3% 9.2% -2.1pp 10.9% 11.0% 0.1pp 10.3% 11.0% 0.7pp Banglalink 24.6% 43.5% 18.8pp 19.7% 34.9% 15.2pp 17.7% 25.0% 7.3pp Koryolink 71.5% 96.6% 25.2pp 27.8% 50.0% 22.2pp 15.0% 45.0% 30.0pp Telecel Globe N/A N/A N/A N/A N/A N/A N/A N/A N/A Total GSM 16.7% 15.8% -0.9pp 14.4% 16.1% 1.7pp 12.1% 14.8% 2.7pp Non GSM 5.8% 27.0% 21.2pp 5.7% 24.4% 18.8pp 5.1% 20.6% 15.5pp Simple FCF 1,397 1,089-22% 1,547 1,128-27% 1,721 1,268-26% * Including ECMS subscribers. Source: CICR estimates. 3

4 Scenario analysis Given uncertainties where more than one outcome is potentially possible, scenario analysis can prove to be a helpful method. In this section, we try to count ORTE's blessings and suggest six different sub-scenarios under two main scenarios, involving both the VimpelCom deal and Djezzy's valuation. Of course, investors can have other scenarios in mind, but we try to capture the most optimistic and most pessimistic possible scenarios and other less so in between. In each scenario, we come up with a value for ORTE, while keeping our multiple-based valuation unchanged for all other operations. We take into account a potential capital gains tax of 20% for any value above USD1.1bn, Djezzy's book value. Considering our subjective probability ratios, we ultimately came up with a probability-weighted value for ORTE. So, let's take it one scenario at a time. Six sub-scenarios to capture the best and worst cases for the VimpelCom deal and Djezzy's valuation Figure 2 Six sub-scenarios in assessing OT's fortune Scenario ORTE's Weighted price Weighted price VIP Djezzy value/scenario Djezzy for each scenario VIP x Djezzy for all joint prob. Probability* Scenario Implied EV/EBITDA EGP/ share USD/ GDR Probability EGP/ share USD/ GDR Joint probability (1) (2) (3) (4) (2) x (4) (3) x (4) (5) = (1) x (4) (2) x (5) (3) x (5) 1. Deal 17% % sold, firm valued at USD7.8bn. 7.9x % % % sold, firm valued between USD3-7.8bn, avg. USD5.4bn. 5.5x % % Status quo: No sale, go for arbitration (at 4x EV/EBITDA). 4.0x % % % % Upside vs. mkt 43% 47% 2. No Deal 83% 2.1. Status quo: No sale, go for arbitration, 10% discount to x % % % sold, firm valued at USD3bn. 3.1x % % Nationalized at ZERO equity value. 0.0x % % Total 100% Total 100% % Downside vs. mkt -9% -6% Cumulative total 100% Equally weighted Prob. weighted* * As implied by recent market price. Upside vs. mkt 17% 20% Upside vs. mkt 0% 3% Source: CICR estimates. 1. VimpelCom deal "goes" through a 50% chance EGP/ share USD/ GDR % sold, firm valued at USD7.8bn a 10% chance This is the most optimistic scenario where Algeria would acquire OT's 96.8% stake in Djezzy at a firm value of USD7.8bn, the same value previously offered by South Africa's MTN Group. This implies a 2010e EV/EBITDA of 7.9x. We estimate this would translate into EGP8.1/share or USD7/GDR % sold, firm valued between USD3-7.8bn, or an average of USD5.4bn a 65% chance This is what we think would be the most likely scenario if the VimpelCom deal was to go through and all issues are straightened out with Algeria. Our best bet on how much Djezzy would be valued at was to take the simple average between the most optimistic value of USD7.8bn and what we deem the "most realistic" lowest value Djezzy could be valued at which is USD3bn. If Djezzy is valued at USD5.4bn, this implies a 2010e EV/EBITDA of 5.5x. We estimate this would translate into EGP6/share or USD5.2/GDR. 4

5 1.3. Status quo: No sale, go for arbitration a 25% chance If VimpelCom and Algeria do not come to terms and the former pressed ahead and finalized its deal with Weather, it would be left with the "arbitration" option. This in our opinion would prolong the battle for Djezzy while limiting dividend repatriation and adding further pressure on its operations. Assuming no "nationalization at zero value" scenario, we think a 2010e EV/EBITDA of 4x would be fair for Djezzy pending outcome of the arbitration process. We estimate this would translate into EGP5.3/share or USD4.6/GDR. 2. VimpelCom deal "falls" through a 50% chance 2.1. Status quo: No sale, go for arbitration, 10% discount to No above a 40% chance If VimpelCom pulls out of its deal with Weather, undoubtedly OT's Sawiris would feel abandoned. He would be left with two choices in our opinion either to (i) acquiesce Djezzy at Algeria's valuation (whatever it is) or (ii) go for international arbitration. We think under this sub-scenario, Sawiris would go for the last option, given his perseverance and his previous experience in that arena. We think a 10% discount off subscenario 1.3. (the status quo under the VimpelCom deal) would be justified, given that he would still have a chance to keep Djezzy under control until the international arbitration decision is made. This implies a 2010e EV/EBITDA of 3.6x. We estimate this would translate into EGP4.9/share or USD4.2/GDR % sold, firm valued at USD3bn a 40% chance In case the VimpelCom deal falls through, this is Sawiris' other option of giving up Djezzy at whatever valuation Algeria's investment bank comes up with. Although we would not think a "fair" assessment of Djezzy by a reputable international bank should be less than USD3bn, we picked that as the minimum possible valuation. Under normal circumstances, a control premium (since the stake in question is 96.8%) is justifiable, which should render USD4.5-5bn the lowest possible valuation. Nevertheless, a USD3bn valuation would imply a 2010e EV/EBITDA of 3.1x. We estimate this would translate into EGP4/share or USD3.5/GDR Nationalized at ZERO equity value a 20% chance This is by and large the most pessimistic scenario which we find to be very unlikely. Nationalizing Djezzy at a "zero" equity value would potentially fire back at Algeria which would be viewed by the world as an investment-unfriendly environment. It would also mean the potential delay of Algeria's becoming a member in the World Trade Organization (WTO) which we think would be a major setback for the Algerian government. Needless to say, this would imply a zero value for Djezzy's equity. We estimate this would translate into EGP1.6/share or USD1.4/GDR. Taking the probability-weighted valuation under Scenario 1 (the VimpelCom deal "goes" through), OT would be valued at EGP6.1/share or USD5.3/GDR. On the other hand, under Scenario 2 (the VimpelCom deal "falls" through), OT would be valued at EGP3.9/share or USD3.4/GDR. Compared to a market price of EGP4.25/share, investors would be comparing between risking 9% versus a 43% upside, implying a close to 5-for-1 bet which we think is worth taking. Assigning a probability to both Scenarios 1 and 2, we would end up with OT valued at EGP5/share (a 17% upside) or USD4.3/GDR (a 20% upside). At market price, we calculate investors are implicitly giving more weight to Scenario 2 "deal failing" (an 83% chance) vs. Scenario 1 "deal succeeding" (a 17% chance). 5

6 Things to consider OT's parts can be worth more than their sum In all above scenarios, we used our multiple-based SOTP model to reach OT's value. This means we valued the stub (OT ex-djezzy) at 5x 2010e EV/EBITDA, with the exception of WIND Mobile which we value at its investment cost. In other words, all above scenarios do not take into account the potential windfall from divesting any of the stub at higher than a 2010e EV/EBITDA of 5x. Consider recent acquisition multiples in the region: Meditel: 8.4x in 2009 and 10.8x in Zain Group's African assets: 11.6x in Etisalat's bid for Kuwait's Zain Group: 9.3x in We think OT can bring to the table a deal with a multiple that is within the lines of the above and definitely in excess of our assumed fair value of 5x. In other words, we believe OT's parts (all subsidiaries) can be worth more than their sum, given normal circumstances and no "forced seller" pricing. For instance, OT's stub valued at 8x 2010e EV/EBITDA with Djezzy valued at "zero" would translate into EGP5.2/share or USD4.5/GDR still higher than recent market price and incidentally in line with our equally-weighted two major scenarios above. A break-up valuation could mean more value for OT If Djezzy is valued at "zero" and OT's stub valued at 8x 2010e EV/EBITDA, OT would still be worth north of EGP5/share History often repeats itself Valuation and scenarios aside, let's take a closer look at OT's local share performance since the company was listed on the Egyptian Exchange (EGX) in July Over the stock's 10+ years of history, OT as a company has gone through a series of ebbs and flows that were brought about by its high leverage at times and legal disputes at other times! Sounds familiar? Today, OT may be considered somewhat highly leverage with net debt-to-ebitda well above 2x at end of 30th June 2010, even after considering the sale of LINKdotNET. Also, OT is currently going through the most important legal dispute of its life so far in Algeria! Early in the decade, just when many investors were talking about OT going bankrupt, the stock traded as low as EGP6.6/share in November 2002 (equivalent to today's adjusted EGP0.13/share). Back then OT even had financial problems paying off its vendors! However, several major milestones paved the way for OT to emerge from its financial troubles, the two most important of which were: In January 2002, OT began restructuring its 12-operations Sub-Saharan African business under Telecel and later sold seven of them in May In December 2002, OT sold Jordan's No. 1 player at the time Fastlink (now known as Zain Jordan) for USD423mn. Once thought to be going bankrupt, OT is currently falling prey to negative news and bad omens! Selling assets can be a last resort to buy time and restructure OT's stock price had generated a return of around 1500% ever since up to January 2004 when it closed above EGP100 for the first time ever! We have already seen a taste of this kind of performance more recently in 2010 when MTN was said to have offered USD7.8bn for Djezzy. OT's stock generated a return 36% in a month to around EGP7.8 by 21st April 2010 before it retreated 30% the month after in view of Algeria's disapproval. While history often repeats itself, we think by putting today's circumstances (the pieces) together, we can only try to make sense of OT's story (the picture). Putting things into perspective, investors have to keep track of actions/talks coming out of several stakeholders currently involved with OT that at any moment can make (or break) OT's fortune: VimpelCom (mainly the Russians): By agreeing to support the Weather deal and further finalizing it, some uncertainties will be cleared away. However, it remains to be seen how the Russians will ever persuade the Algerians to come to terms. Telenor: Given its voting power, we think Telenor could kill the Weather deal in VimpelCom's extraordinary general meeting if it chose to. However, reading into Telenor's CEO's recent comments, we cannot tell for certain if Telenor is for or against the Weather deal 100%! 6

7 The Algerian government: This is probably the most important stakeholder involved with the highest weight. It is Algeria that has been creating negative news flow over the past few months, ranging from more back tax claims and fines by the Algerian central bank to talks of not renewing Djezzy's mobile license by 2016 and several references to "nationalization", which many investors confuse with "expropriation"! Figure 3 OT's stock historical performance since IPO ( ) Source: Reuters. 7

8 Figure 4 OT's stock historical performance ( ) 14 Jan-01: OT loses Nigeria and announces acquisition of a license in Syria. Mar-02: OT wins Tunisia's second mobile license for USD454mn. Oct-03: A consortium led by OT will provide mobile telephony services in Iraq Jul-01: OT won Algeria's second mobile license for USD737mn. Oct-01: Algerian food group acquires a 3.4% stake in Djezzy. Feb-02: OT launches Djezzy's network. Jun & Jul-02: OT obtained an injunction order over its shares in SyriaTel and preventing local partner from voting in GMs. Sep & Oct-02: OT began repaying debt to its network suppliers & was close to reach an agreement with equipment supplier creditors. Dec-02: OT is to sell its stake in Fastlink and issues an injunction against it local partner in SyriaTel. Feb-04: OT announced the sale of its equity stake in Ivory Coast s GSM operator. Jul & Sep-04 : OT renews Mobilink s Pakistani GSM license for an additional 15 years & acquires 100% of Banglalink. 4 2 Jan & May-03: OT announced the completion of selling Fastlink & seven mobile operations. Dec-05: OT sells its 65% equity stake in Congo. Mar & May-05: OT & Telecom Egypt won a 15- year fixed-line telephony license in Algeria & increases its stakes in its Algerian & Tunisian affiliates. 0 Source: Reuters and CICR database. 8

9 Figure 5 OT's stock historical performance ( ) Jan & Mar-09: OT announced the sale of M-Link for USD77mn, acquired a Namibian mobile operator Cell One for USD59mn & awarded the Canadian GSM license Nov-06: OT to acquire a 1.21% stake in OTA. Dec-07 & Jan-08: OT announced the sale of Iraqna to MTC-Atheer for USD1.2bn & acquired the first mobile license in North Korea. Nov & Dec-08: OT Agrees with Telecom Egypt to liquidate CAT, OT sells OrasInvest & launches its mobile services in North Korea. Oct-10: VimpelCom to combine with Weather to create the 5 th largest telecom group by subs. 4 2 Jun-10: OT approves the sale of LINKdotNET and Link Egypt. 0 Source: Reuters and CICR estimates. 9

10 3Q10 preview We expect ORTE s reported earnings to recover in 3Q10, with net income after minority interest of USD289mn 1 compared to a consensus estimate of USD186mn. Our forecast includes two one-off items: (i) a cash inflow of USD300mn from France Telecom (FT) related to OT's agreement over the EVMS and (ii) an estimated capital gain of USD25mn related to the sale of LINKdotNET to ECMS. Excluding these two items adjusted for tax, earnings would be USD29mn, notwithstanding the impact of FX movements. We expect neither a huge net FX income nor expense given the overall stability in most of ORTE s major currencies, especially the USD-EGP exchange rate, which remained nearly flat compared to 2Q10. We expect both revenues and EBITDA to hold largely steady on the quarter at USD1.06bn and USD445mn, respectively. EBITDA margin should improve slightly to 42.1% in 3Q10, up from 41.7% in 2Q10, as lower GSM margins (due to Djezzy) will be more than offset by higher telecom services margins (i.e. Ring). We expect total subscribers to grow 18% YoY to 103.9mn (+6% QoQ), driven mainly by Banglalink, Mobilink, Tunisiana, and ECMS. We expect a stable operational performance vs. 2Q10 Figure 6 2Q10 Review and 3Q10 Preview ORTE Source: Company reports, Bloomberg, and CICR Estimates. 1 After taking into account ECMS' 3Q10 earnings which missed CICRe by c. EGP107mn. 10

11 Valuation and recommendation Long-term fair value To reach our long-term fair value (LTFV) for OT's equity, we discounted each subsidiary's free cash flow to the firm (FCFF) over the next 10 years ( e) by its respective WACC and adding OT's net debt on the holding level from which we subtracted USD430mn (a USD300mn cash-in from FT and an enterprise value of USD130mn for the LINKdotNET sale). For each subsidiary, we estimated its terminal value beyond 2019 by taking the average value reached by (i) using a terminal WACC and a terminal growth rate and (ii) assuming an EV/EBITDA multiple of 5x. We later discount the terminal value. With regards to Djezzy's valuation, we took into account both the USD230mn of back taxes as well as the reported USD193mn said to be claimed by the Algerian central bank: a total of USD423mn in government charges. We reached an LTFV of EGP7.8/share, which is 9% lower than our old LTFV (USD6.8/GDR; 12%). LTFV cut by 9% (12%) to EGP7.8/share (USD6.8/GDR) Figure 7 DCF-based sum-of-the parts valuation model Company Country Equity Valuation stake % method Accounting method Avg. WACC (2010e- 2019e) EV Net debt Equity (at beg. of 2010) USD Equity (as of today) Equity (in 12 months) Attrib. equity (in 12 % of total months) GSM % of total equity value In 12 months Equity Equity per per share GDR (EGP) (USD) Djezzy - Algeria 96.8% DCF Full cons. 17.4% 4,121 (281) 3,840 4,225 5,062 4,900 47% 68% Mobilink - Pakistan 100.0% DCF Full cons. 13.8% 2,087 (792) 1,296 1,475 1,712 1,712 16% 24% Mobinil (1) - Egypt 34.7% DCF Equity 13.9% 3,453 (1,051) 2,402 2,551 2,925 1,014 10% 14% Tunisiana - Tunisia 50.0% DCF Prop. cons. 10.3% 1,942 (86) 1,856 1,759 2,215 1,108 11% 15% Banglalink - Bangladesh 100.0% DCF Full cons. 12.3% 697 (429) % 5% Koryolink - North Korea 75.0% DCF Full cons. 21.5% % 7% WIND Mobile - Canada 65.4% DCF Equity 4.7% 1,521 (650) , % 9% Telecel Globe (2) - Sub Saharan Africa 100.0% DCF Full cons. 22.8% % 2% Sub-total investments 10, % 146% OT's separate net debt (30-Jun-10) (3) 100.0% (3,269) -46% (3.5) (3.1) Total OT Group 7, % No. of outstanding local shares (mn) 5,246 EGP USD No. of outstanding GDRs (mn) 1,049 Old LTFV New LTFV % change -9% -12% Recent price % up/(dn) 83% 90% Note: All figures are in million except for share data; OT's local share and GDR prices as of 1 Nov (1) Mobinil's long-term fair value EGP167/share. (2) CAR, Namibia, Burundi, and Zimbabwe. (3) Including cash compensation of USD300mn related to Mobinil and an EV of USD130mn related to the sale of LINKdotNET to Mobinil. Source: CICR Estimates. 11

12 Target price As for our target price (TP), we assumed the fair value for each operations is based on a 2010e EV/EBITDA multiple of 5x (an 11% discount to peer average, please see Figure 9), then we added 2010e net debt after taking into account the cash inflow from FT and LINKdotNET's enterprise value. When valuing Djezzy, we also took into account the USD423mn of government charges (please refer to the previous section). We reached a TP of EGP6.3/share, which is just 1% higher than our old TP (USD5.5/GDR; -3%). TP upped by 1% to EGP6.3/share (USD5.5/GDR) Figure 8 Multiples-based valuation model USD Company Country Valuation method Equity stake % EBITDA 2010e EV 2010e Net debt 2010e Equity Attrib. Equity % of total GSM % of total equity value Equity per share (EGP) Equity per GDR (USD) Djezzy - Algeria 5x 96.8% 983 4,913 (412) 4,501 4,357 50% 75% Mobilink - Pakistan 5x 100.0% 432 2,162 (692) 1,469 1,469 17% 25% Mobinil (1) - Egypt 5x 34.7% 789 3,944 (957) 2,987 1,036 12% 18% Tunisiana - Tunisia 5x 50.0% 411 2,054 (142) 1, % 17% Banglalink - Bangladesh 5x 100.0% (381) % 6% Koryolink - North Korea 5x 75.0% % 3% WIND Mobile (2) - Canada Investment cost 65.4% (230) N/A (799) % 6% Telecel Globe (3) - Sub Saharan Africa 5x 100.0% % 2% Sub-total investments 8, % 152% OT's separate net debt (31-Dec-10) (4) 100.0% (3,001) (3,001) (3,001) -52% (3.3) (2.9) Total OT Group 5, % No. of outstanding local shares (mn) 5,246 EGP USD No. of outstanding GDRs (mn) 1,049 Old TP New TP % change Recent price % up/(dn) Note: All figures are in million except for share data; OT's local share and GDR prices as of 1 Nov (1) Mobinil's target price is based on 2011e EV/EBITDA or EGP170/share. (2) We used the lower end of OT's suggested range of investment there as the minimum required return of capital. (3) CAR, Namibia, Burundi, and Zimbabwe. (4) Including cash compensation of USD300mn related to Mobinil and an EV of USD130mn related to the sale of LINKdotNET to Mobinil. Source: CICR estimates Source: CICR Estimates. 1% -3% % 54% Figure 9 Peer multiples Company 2010e EV/EBITDA Vodafone Group 8.4x Zain 8.0x Maroc Tel 7.8x Mobily 7.7x Turkcell 7.1x TELENOR ASA 6.7x STC 5.6x Telekomunikacja Polska 5.2x Qtel 5.2x MTN Group 4.8x VimpelCom 4.7x Wataniya 4.7x Batelco 4.7x China Mobile 4.5x Omantel 4.4x Etisalat 3.0x Telkom SA 2.3x Peer average 5.6x Source: Bloomberg. 12

13 Investment Rationale Leading positions in core markets (Algeria, Tunisia, Egypt, Pakistan, and Sub-Saharan Africa). The Algerian government's recent tax claims of USD230mn (for the years 2008 and 2009) are already priced in the stock. Non-repatriation of dividends out of Algeria would likely lead OT to unlock hidden value in other operations, such as Tunisiana, Mobilink, or Banglalink. OT's stock price fall is overdone and will likely trigger interest by value investors. OT's major markets are stabilizing despite intensified competition. Applying a cash optimization program via selling non-gsm businesses and cutting capex in weakening operations. Potential long-term growth to come from mobile-banking initiative and potential 3G-based services in most of OT's markets. Risks to our recommendation Potential disagreement between OT's new owners (VimpelCom) and the Algerian government may lead to further pressure on Djezzy's operations. Global recession may result in worse-than-expected deterioration of OT markets. Stronger-than-expected ARPU erosion in subsidiaries may dent revenue growth. Macroeconomic slowdown and FX fluctuations in core markets and political instability in Pakistan and North Korea. 13

14 Summary Income Statement 2008 a 2009 a 1Q10 a 2Q10 a 3Q10 e 4Q10 e 2010 e 2011 e 2012 e 2013 e 2014 e Consolidated revenues 5,327 5, ,059 1,056 1,102 4,208 4,522 4,808 5,126 5,414 Djezzy 2,041 1, ,740 1,809 1,866 1,919 1,951 Mobilink 1,208 1, ,120 1,141 1,154 1,150 1,151 Mobinil Tunisiana Banglalink Koryolink Telecel Globe GSM revenues 4,779 4, ,016 3,873 4,195 4,459 4,753 5,029 Telecom services revenues Internet services revenues Opex (2,946) (2,893) (554) (617) (611) (633) (2,416) (2,637) (2,808) (2,992) (3,170) Consolidated EBITDA 2,381 2, ,792 1,885 2,000 2,134 2,244 Djezzy 1,290 1, ,008 1,017 1,014 Mobilink Mobinil Tunisiana Banglalink Koryolink (2) Telecel Globe 2 (0) GSM EBITDA 2,413 2, ,834 1,930 2,043 2,177 2,290 Telecom services EBITDA 31 (10) Internet services EBITDA (0) OT Holding & Others (63) (67) (12) (22) (20) (20) (74) (72) (72) (74) (76) Depreciation and amortization (912) (984) (199) (200) (203) (203) (805) (806) (854) (833) (825) Impairment losses (39) (38) (4) (31) - - (35) EBIT 1,430 1, ,079 1,146 1,300 1,419 Net interest income / (expense) (415) (416) (118) (97) (97) (92) (404) (380) (340) (279) (202) (Loss) / Gain from currency revaluation (201) 27 8 (122) - - (114) Invest. inc. and inc. from sale of subsidiaries (0) (0) - - (1) Share of loss of associates (net) (3) (47) (34) (33) (11) (3) (81) Net other income - (15) Profit for the year before income tax ,120 1,330 Income tax expense (403) (361) (57) (65) (115) (43) (280) (177) (223) (280) (333) Profit for the period (41) Attributable to: Shareholders of the Parent Company (66) Non-controlling interests Profit for the period (41) Note: All figures are in USD mn. Source: Company reports and CICR estimates 14

15 Summary Balance Sheet 2008 a 2009 a 1Q10 a 2Q10 a 3Q10 e 4Q10 e 2010 e 2011 e 2012 e 2013 e 2014 e ASSETS Cash and bank balances Trade and other receivables Other current assets ,818 1,268 1,322 1,322 1,386 1,442 1,538 1,624 Total current assets 1,685 1,732 1,802 3,530 2,149 1,936 1,936 2,110 2,149 2,417 2,598 Property and equipment 5,053 5,032 4,991 3,965 3,954 3,953 3,953 3,904 3,782 3,719 3,707 Investment in associates Intangible assets 2,384 2,261 2,209 1,723 1,723 1,723 1,723 1,723 1,723 1,723 1,723 Other non-current assets , Total non-current assets 8,244 8,367 8,390 6,759 6,973 6,989 6,989 6,995 6,865 6,832 6,828 Total assets 9,929 10,099 10,192 10,289 9,122 8,925 8,925 9,105 9,014 9,249 9,426 LIABILITIES AND EQUITY Due to banks ,006 1, , Trade and other payables 1,186 1,043 1, Other current liabilities 1,282 1,428 1,226 1, ,020 1,088 1,149 Total current liabilities 2,999 3,469 2,953 3,657 2,644 2,377 2,377 2,202 3,473 2,877 2,499 Due to banks 5,205 4,874 4,678 4,213 4,300 4,179 4,179 3,926 1,957 1,986 1,585 Other non-current liabilities Total non-current liabilities 5,729 5,214 5,039 4,497 4,585 4,463 4,463 4,211 2,241 2,270 2,368 Total equity (parent company's shareholders) 1,080 1,276 2,076 1,981 1,696 1,871 1,871 2,411 2,932 3,626 3,956 Non-controlling interests Total equity 1,201 1,416 2,201 2,134 1,893 2,084 2,084 2,692 3,299 4,101 4,559 Total Liabilities and Equity 9,929 10,099 10,192 10,289 9,122 8,925 8,925 9,105 9,014 9,249 9,426 Summary Cash Flow Statement 2008 a 2009 a 1Q10 a 2Q10 a 3Q10 e 4Q10 e 2010 e 2011 e 2012 e 2013 e 2014 e Operating profit before WC changes 2,372 2, ,910 1,885 2,000 2,134 2,244 Working capital changes (40) 82 (209) (321) (5) 3 (532) Cash generated from operations 2,332 2, ,379 1,889 2,006 2,141 2,250 Income tax and interest paid (909) (1,094) (265) (146) (233) (157) (801) (597) (578) (574) (550) Net cash provided by operating activities 1,423 1, ,292 1,429 1,568 1,700 Net cash used in investing activities (66) (1,220) (406) 81 (208) (133) (666) (670) (663) (698) (702) Net cash from financing activities (1,902) (196) 73 (463) (271) (527) (797) (720) (924) Net incr./(decr.) in cash & equivalents (545) 130 (41) (110) 71 (280) (359) 95 (32) Cash & equivalents at beg. of period 1, Others (42) (22) (16) (79) - - (94) Cash and cash equivalents at end of period Note: All figures are in USD mn. Source: Company reports and CICR estimates 15

16 Operating KPIs 2008 a 2009 a 1Q10 a 2Q10 a 3Q10 e 4Q10 e 2010 e 2011 e 2012 e 2013 e 2014 e Total subscribers Djezzy Mobilink Mobinil Tunisiana Banglalink Koryolink Wind Mobile Telecel Globe Global ARPU (USD/month) - consolidated Djezzy Mobilink Mobinil N/A N/A N/A N/A N/A N/A N/A Tunisiana Banglalink Koryolink Wind Mobile N/A Telecel Globe Revenue - proportionate 4,517 4, ,000 1,003 1,052 3,988 4,378 4,790 5,156 5,467 EBITDA - proportionate 2,103 1, ,769 1,913 2,029 2,195 2,321 EBITDA Margin - consolidated 44.7% 42.9% 44.1% 41.7% 42.1% 42.5% 42.6% 41.7% 41.6% 41.6% 41.5% Djezzy 63.2% 57.1% 55.6% 56.3% 55.5% 56.5% 56.0% 55.0% 54.0% 53.0% 52.0% Mobilink 40.7% 36.4% 38.8% 40.3% 40.1% 40.0% 39.8% 38.0% 38.0% 38.0% 38.0% Mobinil 48.2% 48.8% N/A N/A N/A N/A N/A N/A N/A N/A N/A Tunisiana 57.9% 53.9% 52.6% 52.7% 53.4% 52.0% 52.7% 47.9% 44.0% 43.0% 42.0% Banglalink 4.7% 33.4% 42.7% 27.1% 27.0% 30.0% 31.2% 33.6% 37.0% 38.0% 39.0% Koryolink % 66.1% 64.8% 90.5% 70.0% 70.0% 73.7% 60.0% 55.0% 53.0% 50.8% Telecel Globe 7.4% -0.2% 14.9% 23.1% 25.0% 25.0% 22.2% 25.0% 27.0% 30.0% 32.0% GSM EBITDA margin 50.5% 47.8% 47.9% 47.4% 46.7% 47.5% 47.4% 46.0% 45.8% 45.8% 45.5% Telecom services EBITDA margin 6.6% -3.5% 19.6% 3.6% 8.7% 7.1% 9.4% 8.8% 8.8% 8.6% 8.4% Internet services EBITDA margin -0.1% 11.7% 14.1% 11.6% 5.0% 5.0% 10.6% 5.0% 5.0% 5.0% 5.0% EBIT Margin 26.8% 22.7% 23.6% 19.8% 22.9% 24.1% 22.6% 23.9% 23.8% 25.4% 26.2% Effective tax rate 44.7% 48.7% 49.4% 272.1% 25.0% 25.0% 36.4% 25.0% 25.0% 25.0% 25.0% Net Margin 9.4% 7.5% 5.9% -3.9% 32.6% 11.6% 11.6% 11.8% 13.9% 16.4% 18.4% YoY growth rates 2008 a 2009 a 1Q10 a 2Q10 a 3Q10 e 4Q10 e 2010 e 2011 e 2012 e 2013 e 2014 e Total subscribers 11.6% 17.4% 18.6% 17.7% 18.2% 16.8% 16.8% 9.8% 5.7% 5.3% 4.5% Global ARPU (USD per month) -7.1% -9.8% -12.6% -15.2% -18.9% -15.8% -17.6% -4.3% -1.6% -0.1% -0.5% Consolidated revenues 6.1% -4.9% -17.3% -17.3% -18.2% -14.9% -16.9% 7.5% 6.3% 6.6% 5.6% Consolidated EBITDA 16.0% -8.8% -16.9% -22.9% -23.0% -5.5% -17.5% 5.2% 6.1% 6.7% 5.2% EBIT 11.5% -19.6% -18.1% -33.5% -24.8% 17.1% -17.2% 13.4% 6.2% 13.5% 9.1% Net earnings, net of minority interest -77.3% -25.7% -32.0% % 59.7% % 19.2% 17.9% 25.8% 25.5% 18.8% Liquidity 2008 a 2009 a 1Q10 a 2Q10 a 3Q10 e 4Q10 e 2010 e 2011 e 2012 e 2013 e 2014 e Current Ratio 0.6x 0.5x 0.6x 1.0x 0.8x 0.8x 0.8x 1.0x 0.6x 0.8x 1.0x Acid Test Ratio 0.5x 0.4x 0.5x 0.9x 0.7x 0.7x 0.7x 0.8x 0.5x 0.7x 0.9x Days' Sales Outstanding Creditor Days Outstanding Per share ratios and multiples 2008 a 2009 a 1Q10 a 2Q10 a 3Q10 e 4Q10 e 2010 e 2011 e 2012 e 2013 e 2014 e Weighted avg. outstanding shares then (mn) 1,046 1,046 1,046 1,046 1,046 1,046 1,046 1,046 1,046 1,046 1,046 Weighted avg. outstanding shares (mn) 1,046 1,046 1,046 1,046 1,046 1,046 1,046 1,046 1,046 1,046 1,046 Adjusted EPS (USD per GDR) (0.06) Adjusted DPS (USD per GDR) Stock price (USD per GDR) PER 8.8x 11.8x 19.2x NM 3.2x 8.7x 9.9x 8.4x 6.7x 5.3x 4.5x Dividend yield 4.4% 2.4% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 13.3% EV / Revenues - consolidated 1.7x 1.8x 2.1x 2.0x 2.0x 1.9x 2.0x 1.7x 1.4x 1.2x 0.9x EV / EBITDA - consolidated 3.7x 4.1x 4.8x 4.8x 4.8x 4.4x 4.6x 4.1x 3.5x 2.9x 2.3x Net debt / EBITDA - consolidated 2.1x 2.4x 2.7x 2.7x 2.7x 2.4x 2.5x 2.1x 1.6x 1.1x 0.6x EV / Revenues - proportionate 1.9x 2.2x 2.5x 2.4x 2.3x 2.2x 2.3x 2.0x 1.7x 1.4x 1.1x EV / EBITDA - proportionate 4.0x 4.9x 5.3x 5.3x 5.4x 4.9x 5.2x 4.5x 3.9x 3.2x 2.7x Net debt / EBITDA - proportionate 2.2x 2.9x 3.1x 3.2x 3.2x 2.9x 3.1x 2.6x 2.1x 1.5x 1.0x P / BV 3.5x 2.9x 1.8x 1.9x 2.2x 2.0x 2.0x 1.6x 1.3x 1.0x 0.9x Note: All figures are in USD mn, except for margins and per-share data. Source: Company reports and CICR estimates 16

17 Other ratios & KPIs 2008 a 2009 a 1Q10 a 2Q10 a 3Q10 e 4Q10 e 2010 e 2011 e 2012 e 2013 e 2014 e Return on Equity (beg.) 15.4% 31.6% 16.4% -7.5% 64.5% 27.0% 34.5% 25.5% 24.9% 25.5% 24.3% Return on Assets (beg.) 4.4% 3.8% 2.3% -1.6% 13.4% 5.6% 4.8% 6.0% 7.3% 9.3% 10.8% Asset Turnover 0.54x 0.50x 0.39x 0.41x 0.46x 0.49x 0.47x 0.50x 0.53x 0.55x 0.57x Financial Leverage: TA/TE 8.27x 7.13x 4.63x 4.82x 4.82x 4.28x 4.28x 3.38x 2.73x 2.26x 2.07x Return on Invested Capital (beg.) 12.1% 11.4% 9.7% 7.6% 6.9% 12.4% 9.2% 13.0% 13.1% 14.9% 15.6% Working Capital / Revenue -24.7% -34.3% -29.0% -3.0% -11.7% -10.0% -10.5% -2.0% -27.5% -9.0% 1.8% Capex - consolidated 1,595 1, Capex / revenues 29.9% 20.5% 19.7% 10.9% 18.2% 18.3% 16.7% 16.7% 15.2% 15.0% 15.0% Djezzy (3) Mobilink Mobinil Tunisiana Banglalink Koryolink Telecel Globe Others Depreciation and amortization (D&A) 951 1, D&A/Revenue 17.9% 20.2% 20.5% 21.9% 19.2% 18.4% 20.0% 17.8% 17.8% 16.3% 15.2% Consolidated free cash flow (FCF) 1,357 (34) (357) 87 (1) 183 (88) Debt & enterprise value 2008 a 2009 a 1Q10 a 2Q10 a 3Q10 e 4Q10 e 2010 e 2011 e 2012 e 2013 e 2014 e Total Debt - consolidated 5,735 5,872 5,371 5,219 5,303 4,844 4,844 4,333 3,558 2,865 1,973 Net Debt - consolidated 5,084 5,113 4,659 4,806 4,717 4,538 4,538 3,933 3,189 2,347 1,381 Net Debt - proportionate 4,729 5,437 5,445 5,669 5,502 5,298 5,422 4,907 4,208 3,363 2,401 Market cap 3,754 3,754 3,754 3,754 3,754 3,754 3,754 3,754 3,754 3,754 3,754 Enterprise value - consolidated 8,837 8,867 8,413 8,560 8,471 8,292 8,292 7,686 6,943 6,100 5,134 Enterprise value - proportionate 8,483 9,191 9,199 9,423 9,255 9,052 9,176 8,661 7,962 7,117 6,155 Debt Ratio D/A 0.58x 0.58x 0.53x 0.51x 0.58x 0.54x 0.54x 0.48x 0.39x 0.31x 0.21x Debt to Equity 4.77x 4.15x 2.44x 2.45x 2.80x 2.32x 2.32x 1.61x 1.08x 0.70x 0.43x Capitalization Ratio: D/(D+E) 83% 81% 71% 71% 74% 70% 70% 62% 52% 41% 30% EBIT / Interest 3.4x 2.8x 2.0x 2.2x 2.5x 2.9x 2.4x 2.8x 3.4x 4.7x 7.0x EBITDA / Interest 5.7x 5.2x 3.7x 4.5x 4.6x 5.1x 4.4x 5.0x 5.9x 7.7x 11.1x Note: All figures are in USD mn, except for margins and per-share data. Source: Company reports and CICR estimates 17

18 Contacts and Disclaimer: CI CAPITAL RESEARCH Mark Rorison Group Director, Head of Research Amr Hussein Elalfy, CFA Director Mona Mansour Director CI CAPITAL SECURITIES BROKERAGE (EGYPT & UAE) Khaled Abd El Rahman MD & Global Head of Securities Brokerage DYNAMIC SECURITIES CI CAPITAL HOLDING 8, Nadi El-Seid Street, Third Floor Dokki, Giza Egypt Reuters pages: COIW, COIX, COIY, and COIZ Bloomberg page: COIB <GO> For more information, please contact CI Capital Research on +2 (02) , send to or visit our website at Ahmed Roushdy Managing Director RATING SYSTEM In February 2009, CI Capital Research (CICR) launched a new rating system to give analysts more freedom to be market responsive. This is to make one element of our research more dynamic, namely the advertising of target prices and recommendations. What we did not change is our assessment of the Long Term Fair Value (LTFV), nor have we stopped our detailed industry and company research. What we did is changing the target price to trade in the balance of where a share should trade and where we think it w ill trade. LTFV: As before we continue to estimate a fundamental valuation, largely DCF and/or NAV based. Target Price: The target price, which is not necessarily the LTFV, is where the analyst, given all (qualitative as well as financial) information available, thinks the share price can get to within the next 3-12 months. This can be changed at any time on changing facts, and perceptions. Recommendations: Our new rating system falls out from the total return relating to the share price performance to the target price, and including any distributions as may not be included in the target price calculation. This is shown in the table below, and to be BUY must return over 19%, an arbitrary hurdle rate we think reasonable given prevailing interest rates and risks. (Please see table below.) Recommendation structure: Change to Target Price Strong BUY > 30% Strong Conviction BUY > 20% < 30% Hold > 10% < 20% Underw eight > 0% < 10% SELL < 0% DISCLAIMER The information used to produce this market commentary is based on sources that CI Capital Research (CICR) believes to be reliable and accurate. This information has not been independently verified and may be condensed or incomplete. CICR does not make any guarantee, representation or warranty and accepts no responsibility or liability to the accuracy and completeness of such information. Expression of opinion contained herein is based on certain assumptions and w ith the use of specific financial techniques that reflect the personal opinion of the authors of the commentary and is subject to change without notice. It is acknowledged that different assumptions can always be made and that there is a wide choice of techniques that can be adopted each of which can lead to a different conclusion. Therefore, all that is stated herein is of an indicative and informative nature as forward-looking statements, projections, and fair values quoted may not be realized. Accordingly, CICR does not take any responsibility for decisions made on the basis on the content of this commentary. This commentary is made for the sole use of CICR s customers and no part or excerpt of its content may be redistributed, reproduced or conveyed in any form, w ritten or oral, to any third party without the prior written consent of CICR. This commentary does not constitute a solicitation or an offer to buy or sell securities.