For Immediate Release

HC Brokerage Initiates Coverage of Telecom Egypt with an Accumulate Recommendation

Cairo, Egypt -December 1st, 2005- The Research Department of HC Brokerage, one of Egypt’s top brokerage firms, initiated coverage on Telecom Egypt, which recently announced the offering of its shares on both the Cairo Alexandria stock exchange and the London stock exchange, with an “Accumulate” recommendation.

“We are initiating coverage on Telecom Egypt with an “Accumulate” recommendation, based on our DCF target price of EGP17.5 per share,” said Nashwa Saleh, Head of Research at HC Brokerage. “Based on the maximum offering price of EGP14.8 for the public tranche, the stock trades at a forecast P/E of 13.3x for the 2005 fiscal year and 13.3x for the 2006 fiscal year, compared to the market average of 15.2x and 12.0x, respectively. TE’s offering EV/EBITDA stands at an attractive 5.7x, higher than South Africa’s Telekom at 5.0x, Magyar Telecom in Hungary’s 5.6x, but lower than Cesky Telecom, Maroc Telecom and Jordan Telecom at 6.0x, 7.5x and 8.0x, respectively,” she added.

Telecom Egypt has a monopoly position in the fixed-line market in Egypt where the market is currently underserved with only 14.3% of the population having telephone lines. However, the penetration rate is expected to significantly increase in the near future to 20 per cent by 2009.

“It is our role to work towards enhancing market efficiency through the provision of a superior research product to our clients and investors in Egypt and abroad, to enable informed decision making and industry growth – the financial services industry in any country is nothing but a reflection of the caliber and integrity of the group of professionals and regulators who operate in it,” said Hussein El Sherbiny, Chairman and Managing Director of HC Brokerage.

HC Brokerage research has a sound reputation for providing independent quality research on actively traded companies in Egypt and shortly in the Gulf in line with the company’s regional expansion plan. While the HCMI, a market cap weighted index and sector indices are used as a proxy for market performance by a number of institutions. On the back of the distinct research product by HC Brokerage, a number of leading industry information services such as Reuters, Bloomberg and ISI Emerging Markets, post HC research, and have signed contributor agreements with HC Brokerage.

For further details, refer to the initiation of coverage report by HC Brokerage, issued on November 29th, 2005.

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About HC Brokerage:
HC Brokerage (HCB), a fully owned subsidiary of HCSI, has rapidly grown to become one of the top three brokerage firms in Egypt, providing clients with unrivalled brokerage services and a wide-array of products, superior-quality research and customer service. Also, HCB’s fixed income desk is among the three most active in terms of bond trading volume. HCB provides a number of services to clients namely; brokerage of securities (stocks and bonds) on the Cairo and Alexandria Stock Exchange, brokerage of Egyptian securities listed on the London Stock Exchange, brokerage of Sovereign Eurobond issues of Egypt and other countries, intermediation of transactions involving unlisted securities in the Over-The-Counter (OTC) market, listing of companies on the Cairo and Alexandria Stock Exchange, in addition to acting as bank agent for custody and bookkeeping services

About Telecom Egypt:
Telecom Egypt was established in 1998 as the country’s sole fixed-line provider upon the split of Arab Republic of Egypt National Telecommunication Organization (ARENTO) into three new entities. The company’s activities comprise of fixed line services (local and international), communication and internet services and value-added services (VAS).

For Further Information:
Malak Madkour