Bangkok--12 Nov--124 Communications
Vietnam, China, India and Singapore Still Optimistic; Hong Kong and Taiwan Register Steep Declines in Consumer Confidence Levels
Consumer confidence across the region has dropped seven points from six months ago, as a result of current economic volatility and the prospect of a global economic recession. Results from the latest MasterCard Worldwide Index of Consumer Confidence released today reveal that consumers in the region are pessimistic about the six month period ahead.
The current regional consumer confidence score of 47.4 is significantly below the score six months ago (55.0) and a year ago (67.3), though it is higher than the 1997-1998 Asian economic crisis average of 32.3. Overall consumer outlook has also fallen across the five indicators that make up the Index compared to six months ago: Employment (41.2 vs. 54.2 six months ago), Economy (42.1 vs. 51.8), Quality of Life (44.0 vs. 48.2) and the Stock Market (45.5 vs. 53.4) and Regular Income (64.3 vs. 72.2).
The Index is based on a survey which measures consumer confidence on prevailing expectation in the market for the next six months. It is calculated based upon percentage response figures, with zero as the most pessimistic, 100 as most optimistic and 50 as neutral.
Only four out of the 14 markets[1] surveyed — Vietnam, China, India and Singapore — are optimistic about the first half of 2009. Vietnam tops the Index with a score of 88.1, the only market that has increased its score from six months ago (86.2). Consumers continue to be upbeat about all factors, including Employment (91.2), where the score remains unchanged from six months ago, Economy (88.2 vs. 84.0 six months ago), Regular Income (94.7 vs. 97.0), Stock Market (79.4 vs. 72.7) and Quality of Life (86.9 vs. 86.0).
While China (76.6), India (63.9) and Singapore (62.3) remain optimistic about the first half of 2009, they are less optimistic than they were six months ago (China: 82.7; India: 82.1; Singapore: 87.3).
THAILAND (26.2)
Thai consumers continue to be pessimistic, though confidence levels have risen slightly from six months ago (23.7). The current score is however much lower than a year ago (44.2).
The political strife in the country seems to have impacted consumers’ confidence as they continue to be pessimistic about Employment (21.1 vs. 22.2 six months ago), Economy (22.4 vs. 16.2), the Stock Market (24.3 vs. 17.2) and Quality of Life (17.8 vs. 12.6) and Regular Income (45.4 vs. 50.5).
At the other end of the spectrum, nine markets are pessimistic about the first half of 2009, with Hong Kong (41.8 vs. 83.1 six months ago) and Taiwan (32.1 vs. 71.3 six months ago) recording the biggest declines.
HONG KONG (41.8)
Consumers in Hong Kong have become pessimistic for the first time since 2003, registering a substantive drop in consumer confidence scores from six months ago (83.1) and a year ago (85.9). The current score, although below the market’s historical average of 57.5, is still higher than Hong Kong’s 1997-1998 Asian financial crisis average of 16.9.
Consumer sentiment is very low on the Economy (28.4 vs. 88.9 six months ago) and the Stock Market (24.1 vs. 71.2), and outlook is pessimistic for Employment (41.7 vs. 88.2) and Quality of Life (48.6 vs. 75.5). Consumers, however, continue to be optimistic about Regular Income (66.4 vs. 91.7 six months ago), although the current score is a marked decline from scores in the 90s in the last five indices.
TAIWAN (32.1)
Taiwan consumers, who became optimistic for the first time six months ago after seven consecutive highly pessimistic periods, turned pessimistic again. Their current index score is a significant drop from that of six months ago (71.3) but is slightly better than a year ago (29.7).
Consumer sentiments have dropped to pessimistic levels on all five factors: Employment (25.0 vs. 75.0 six months ago), Economy (32.1 vs. 79.8), Regular Income (31.7 vs. 53.6), Stock Market (35.8 vs. 81.1) and Quality of Life (35.8 vs. 67.3).
Dr Yuwa Hedrick-Wong, economic advisor to MasterCard in Asia/Pacific said, “Consumers across Asia/Pacific are clearly feeling the effects of the global credit crisis. While Asian financial institutions may be less affected by the global credit crunch and the financial sector melt down, Asian markets have been just as severely impacts; and the regional powerhouses like China and India are equally affected. While the consumer confidence scores in China and India are still optimistic, confidence levels are still much lower than they were before.”
The latest survey was conducted from 1 September to 29 September 2008 and involved 6,019 consumers across 14 key Asia/Pacific markets.
About the MasterCard Worldwide Index? of Consumer Confidence
The MasterCard Worldwide Index? of Consumer Confidence survey has a 16-year track record of consumer confidence indices collected from more than 160,000 interviews, unequalled both in scope and history across Asia/Pacific.
The MasterCard Worldwide Index of Consumer Confidence is the most comprehensive and longest running survey of its kind in the region. It has demonstrated its precision at several important junctures as a barometer of consumer sentiment. In June 1997, the Index revealed a decline in consumer confidence — one month prior to the devaluation of the Thai baht that triggered the regional economic crisis. More recently in June 2003, the Index score for Employment in Hong Kong dropped to a low of 20.0. This was subsequently reflected in Hong Kong’s unEmployment rate, which peaked just before September 2003 at 8 percent.
The survey began in 1H 1993 and has been conducted twice yearly since. 14 markets participate in the survey: Australia, China, Hong Kong, India, Indonesia, Japan, Korea, Malaysia, New Zealand, Philippines, Singapore, Taiwan, Thailand and Vietnam. The last Asia/Pacific MasterCard Worldwide Index of Consumer Confidence survey was conducted from 1 September and 29 September 2009. 6,019 qualified respondents were surveyed in the 13 markets with the sample being representative of the middle and upper income groups in each market. In each market except China and India, 400 or more people were surveyed. In China and India, a total of 600 interviews were conducted in Beijing, Shanghai and Guangzhou, and New Delhi, Mumbai and Bangalore.
The Index is calculated based upon percentage response figures, with zero as the most pessimistic, 100 as most optimistic and 50 as neutral. Five economic factors are measured: Employment, the Economy, Regular Income, Stock Market and Quality of Life. The responses are consumers' thoughts on the six months ahead (i.e. January to June 2009). Data collection was via personal, telephone and Computer Aided Telephone interviews with the questionnaire translated to the local language wherever appropriate and necessary. The survey has a margin of sampling error of plus or minus four percentage points at the 90 percent confidence level, except China, where because of the larger sample, the margin of sampling error is plus or minus three percentage points.
About MasterCard Worldwide
MasterCard Worldwide advances global commerce by providing a critical economic link among financial institutions, businesses, cardholders and merchants worldwide. As a franchisor, processor and advisor, MasterCard develops and markets payment solutions, processes over 18 billion transactions each year, and provides industry-leading analysis and consulting services to financial institution customers and merchants. Through its family of brands, including MasterCard?, Maestro? and Cirrus?, MasterCard serves consumers and businesses in more than 210 countries and territories. For more information go to: www.mastercard.com.
Forward-Looking Statements
Statements in this press release which are not historical facts, including any statements about MasterCard's plans, strategies, beliefs and expectations, are forward-looking and subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements speak only as of the date they are made. Accordingly, except for the company's ongoing obligations under the U.S. federal securities laws, the company does not intend to update or otherwise revise the forward-looking information to reflect actual results of operations, changes in financial condition, changes in estimates, expectations or assumptions, changes in general economic or industry conditions or other circumstances arising and/or existing since the preparation of this press release or to reflect the occurrence of any unanticipated events. Actual results may differ materially from such forward-looking statements for a number of reasons, including those set forth in the company’s filings with the Securities and Exchange Commission (SEC), including the company’s Annual Report on Form 10-K for the year ended December 31, 2007, the company’s Quarterly Reports on Form 10-Q and Current Reports on Form 8-K that have been filed with the SEC during 2008, as well as reasons including difficulties, delays or the inability of the company to achieve its strategic initiatives set forth above. Factors other than those listed above could also cause the company’s results to differ materially from expected results.
The Region's MasterCard Worldwide Index of Consumer Confidence
HISTORICAL
CRISIS AVERAGE
CURRENT PERIOD AGO YEAR AGO AVERAGE MASTERCARD
MARKETS 1H 2009 2H 2008 1H 2008 1H 98 — 2H 98 WORLDWIDE INDEX
Australia 49.0 42.8 64.9 43.0 56.4
China 76.6 82.7 85.5 55.6 75.6
Hong Kong 41.8 83.1 85.9 16.9 57.5
India 63.9 82.1 86.6 45.1 62.3
Indonesia 38.5 36.7 57.8 27.2 64.8
Japan 17.2 29.0 48.6 5.4 31.4
South Korea 31.4 27.7 64.1 26.1 50.9
Malaysia 35.9 36.9 72.5 40.9 71.7
New Zealand 33.7 37.1 56.3 38.5 58.1
Philippines 40.0 43.2 67.7 47.7 50.5
Singapore 62.3 87.3 83.6 34.4 67.6
Taiwan 32.1 71.3 29.7 45.1 47.6
Thailand 26.2 23.7 44.2 25.6 54.0
Vietnam 88.1 86.2 94.3 0.0 91.4
The Region 47.4 55.0 67.3 32.3* 60.0
[1] Markets surveyed include Australia, China, Hong Kong, India, Indonesia, Japan, South Korea, Malaysia, New Zealand, Philippines, Singapore, Taiwan, Thailand and Vietnam.
Note: The Crisis period in the chart above is based on the reflection of the MasterCard Worldwide Index of Consumer Confidence results, which may or may not coincide with actual chronology or the definitions of others.
Historical Average is the mean average of all Index scores up through six months ago but not including the current Index.
* The average excludes Vietnam as this market was not surveyed in 1997/98.
Contact: 124 Communications Plc Tel 0 2662 2266
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