Mumbai: MasterCard Worldwide has announced the survey findings of the MasterCard Worldwide Index of Consumer Confidence for the first half of 2008. Conducted across key countries in South Asia, Middle East and Africa (SAMEA), the Index revealed that consumer confidence in India has increased considerably, demonstrating a new wave of optimism across the country.

Indian consumers have never been as optimistic about the next six months as now. The current Index score of 86.6 is the highest on record for India since the survey commenced in 2004. It is significantly higher when compared to the second half of 2007 survey results (63.6), the corresponding period last year (65.1) and the historical average of the country (67.4).

The MasterCard Worldwide Index of Consumer Confidence is the only one of its kind in the SAMEA region and has been conducted on a bi-annual basis since 2004.  A similar survey has been conducted in the Asia/Pacific region for the last 14 years and has proved to be an important barometer of consumer sentiment. Commissioned by MasterCard Worldwide and conducted bi-annually in select markets in SAMEA, the survey analyses consumers' perceptions of economic conditions for the six months ahead.

The scores, ranging from 0 to 100, are based on responses on five variables: employment, economy, regular income, stock market and quality of life. A score of 50 represents the mid-point. A score above 50 indicates that consumers are optimistic about the economic climate, while a score below 50 signals that consumer are pessimistic about the economic situation.
The survey found that the Bangalore consumers are the most optimistic with an Index score of 99.0. Mumbai consumers (80.4) have become significantly more optimistic than ever before.  The most considerable increase in consumer confidence is seen in New Delhi, which has increased to 78.0 from 47.2 in the second half of 2007.

The increased consumer confidence in all three cities contributes to India's current record high optimism. Significantly, the Indian consumers' high degree of optimism is both deep-rooted and all-pervasive.

This is indicated by the high scores India achieves on all the five indicators that determine the overall scores for the market:

• These factors are:
• Employment: 85.0
• Economy: 84.6
• Regular income: 89.6
• Stock market: 87.7
• Quality of Life: 86.0.

The most significant increases in consumer confidence was seen for Employment, which jumped from 49.4 in the second half of 2007 to 85.0 the first half of this year and in Regular Income, which increased from 67.7 in 2H 2007 to 89.6 for the first half of this year.

"These results are quite unexpectedly buoyant." reviewing the survey findings, Suman Bery, director-general, National Council for Applied Economic Research (NCAER) observed. "The survey measures sentiment among middle-class consumers in the major metros. It reveals increased optimism across the board, but most strikingly with respect to employment. This differs radically from the usual view portrayed in India's business press that rising lending interest rates and a weakening dollar have created increased consumer insecurity.

"It is however consistent with other press reports that show continued buoyancy in service sector wages. What this also means is that India is likely to have continued strength in domestic demand, both from the consumer as much as from corporate investment. With lending interest rates likely to have peaked, consumer sentiment strong and a stable political system, India is probably better placed than most other Asian countries to weather the slowdown in the US.

"Looking across the other countries in the SAMEA region, it is remarkable how little consumer sentiment in the Gulf countries is affected by the volatile geopolitics of that region. It is also striking that confidence of Indian consumers is as high as those in countries enjoying an unprecedented oil boom. Indians clearly believe in the India story."

"The Index of Consumer Confidence is a credible, tried and tested barometer for historical consumer sentiment trends and analysis," explained Nitin Gupta, general manager, South Asia, MasterCard Worldwide. "When leveraged as a barometer of consumer sentiment for the six months ahead the Index provides valuable understanding in shifts in consumer sentiments, as well as the identification of market trends over time,"

He continued "With the MasterCard Worldwide Index of Consumer Confidence survey being one of the region's most comprehensive surveys of consumer sentiment, we are confident that the survey will continue to deliver comprehensive information that will help both the private and public sectors in their decision making and strategic planning."

The MasterCard Worldwide Index of Consumer Confidence survey is designed to detect changes in the perceptions of consumers about the future and gauge their sentiments about whether the situation will become better, remain the same or worse.  This dynamic aspect of the survey and its frequency enables decision-makers to identify impending turning points as perceived by consumers.

The markets surveyed are Egypt, India, Kuwait, Lebanon, Saudi Arabia, South Africa and the UAE. The survey found that consumers in the Gulf countries such as Kuwait, Saudi Arabia and UAE are between fairly and very optimistic. South African consumers continue to be very optimistic. Egyptian consumers have become pessimistic on their outlook on Quality of Life; pulling down with it the overall consumer confidence in this market, which despite the severe loss encountered, still seem slightly optimistic. Lebanese consumers continue to be rather pessimistic since falling off sharply from the moderately optimistic to neutral levels of 2006 and the later half of 2005.

While SAMEA as a whole has seen a slight drop in the Index score (78.4 vs 79.3 a period ago), consumers continue to remain positive in the next six months. Consumer sentiments towards Employment (82.8 vs 77.2 a period ago) and Stock Market (78.0 vs 74.2) have remained high, while consumer sentiment towards Quality of Life (66.7 vs 75.3 a period ago) and Regular Income (81.7 vs 87.7 a period ago) seemed to have dampened slightly. Sentiments towards Economy (82.6 vs 82.3 a period ago) stayed somewhat constant.

Overall outlook across Asia/Pacific with regards to the economy (68.3), regular income (81.0), stock market (66.5) and quality of life (66.7) have improved from the previous survey. The view on employment (63.8) remains constant. 

Ten out of the 13 Asia / Pacific markets have registered an increase in consumer confidence levels. Vietnam (94.3) continues to top the region's markets as the most buoyant in consumer sentiment for the six-month period ahead, followed by Hong Kong (85.9), China (85.5) and Singapore (83.6). Korea shows the largest increases in optimism, with its index score increasing 15.6 points to 64.1.

1H 2008 MasterCard Worldwide Index of Consumer Confidence:  SAMEA Highlights

India - Index  86.6
Indian consumers have never been as optimistic about the next six months as now.  The market's Index score of 86.6 is the highest on record, significantly more optimistic than a period ago (63.6), one year ago (65.1) and the market's historical average (67.4). The current very optimistic outlook is supported by equally high and record breaking optimistic sentiments on all five factors: Employment (85.0 vs. 49.4 six months ago); Economy (84.6 vs. 56.1 six months ago); Regular Income (89.6 vs. 67.7 six months ago); Stock Market (87.7 vs. 76.8 six months ago) and Quality of Life (86.0 vs. 67.8 six months ago).

Historical average: 67.4

Egypt - Index 65.9
After hitting record high optimism in the preceding period of 2H 2007, consumer confidence in Egypt has now decreased considerably. The current Index score of 65.9 is significantly lower than the scores received in 2H 2007 (94.3), 1H 2007 (78.2) and 2H 2006 (83.0).  However, it currently is more positive than 2004 and 2005 and is on par with the Historical Average (65.5). The current Index of 65.9 indicates consumers are generally and fairly somewhat optimistic about the next six months.

Consumer sentiments on most of the five economic factors are generally lower than the previous three measurements but consumers are still somewhat to rather optimistic about the Economy (87.2 vs. 97.5 six months ago), Employment (79.2 vs. 94.6 six months ago), the Stock Market (79.0 vs. 92.4 six months ago) and Regular Income (64.5 vs. 96.5 six months ago).  However, consumers seem to have lost most of their previous confidence and have in fact turned gravely pessimistic on Quality of Life (19.5 vs. 90.6 six months ago). Consumer confidence on Regular Income also takes a tumble from the 2H 2007 high of 96.5 to its current 64.5

Kuwait - Index 93.3
Kuwaiti consumers are very optimistic about the next six months. The current Index of 93.3 is marginally higher than in the second half of 2007 (91.6) and just slightly lower than the record high score received in the first half of 2007 (94.5). Outlook on Employment (96.8 vs. 94.1 six months ago), Economy (94.5 vs. 93.7 six months ago), Regular Income (97.8 vs. 93.6 six months ago) and Quality of Life (91.0 vs. 93.3 six months ago) is among the market highs with most Index scores soaring above ninety. Sentiment on Stock Market (86.5 vs. 83.3 six months ago) though having improved compared to the second half of 2007, is still below most previous readings. The current Index of 93.3 is marginally stronger than the markets' Historical Average of 92.4.

Lebanon - Index 38.7
Consumer confidence in Lebanon (38.7) remains unchanged from 2H 2007 (38.6) which is significantly lower than 1H 2007 (67.6) and two of the three preceding periods of 2006 and 2005 as well as the market's Historical Average (46.5).

Compared to 2H 2007, expectations of Employment have improved significantly (56.4 vs 38.3 six months ago). Similarly, sentiments on the Stock Market (32.2 vs 20.5 six months ago) and Quality of Life (36.7 vs 22.6 six months ago) have improved though still very pessimistic. The reverse is true for the outlook on Economy (30.0 vs 43.9 six months ago) and Regular Income (37.9 vs 67.9 six months ago) which has become pessimistic. In all cases, current sentiments (except on Employment 56.4) are pessimistic and significantly below the score in 1H 2007 and two of its three preceding readings.

Saudi Arabia - Index 92.2
Saudi Arabian consumers are highly confident in the next six months as they have been over previous studies. The current Index of 92.2 is slightly higher than 6 months ago (92.0) although lower than one year ago (97.3). Consumer sentiments on Employment (95.6 vs. 91.3 six months ago), Economy (97.2 vs. 90.5 six months ago), Regular Income (95.5 vs. 94.0 six months ago) and Stock Market (94.4 vs. 89.8 six months ago) continue to be very highly optimistic. However, consumer outlook on Quality of Life (78.1 vs 94.5 six months ago), though still optimistic, has declined significantly to its lowest level since to start of the Index in 2004.

South Africa - Index 83.7
South African consumers continue to be optimistic about the next six months overall and on all five economic factors.  The current Index of 83.7 suggests a slight improvement versus a period ago (80.7) and somewhat higher optimism among consumers than the markets' Historical Average (79.6).  However, consumers are currently slightly less optimistic than a year ago (86.5) and significantly less so compared to its peak in 2H 2006 (91.1).

Consumers are about equally optimistic on most if not all the five factors - Employment (81.9 vs. 81.2 six months ago); Economy (81.9 vs. 88.2 six months ago); Regular Income (89.0 vs. 89.3 six months ago); Stock Market (83.0 vs. 66.8 six months ago) and Quality of Life (82.9 vs. 77.9 six months ago).

United Arab Emirates - Index 78.5
The current Index of 78.5 is slightly lower than the previous two periods surveyed (88.8 in 2H07 and 80.0 in 1H07). Consumer sentiment on all indicators decreased with a steep downward trend in Regular Income (70.3 vs. 92.2 six months ago), followed by Employment (85.6 vs. 95.2 six months ago), Economy (87.1 vs. 96.0 six months ago), Stock Market (73.4 vs 81.5 six months ago) and Quality of Life (75.9 vs. 79.1 six months ago). 

The index is calculated based upon percentage response figures, with zero as the most pessimistic, 100 as most optimistic and 50 as neutral.  The MasterCard Worldwide Index of Consumer Confidence is the Mean Score of the Five Relative Indices. The Relative Indices measure the relative optimism of the respondents in Employment, Economy, Regular Income, Stock Market and Quality of Life. 

The relative indices are computed using the percent of optimistic replies divided by the percent of optimistic and pessimistic replies multiplied by 100. Using this method of computation, the Relative Indices will always be 50 if there are as many optimistic replies as pessimistic replies. The possible score ranges from 0 (most pessimistic) to 100 (most optimistic) with 50 denoting a situation of neutrality or implies no significant change is anticipated in consumer confidence over the next six months. 

MasterCard Worldwide Index of Consumer Confidence - Respondent Base.