NZ Consumer Confidence at Near Record High

Latest MasterIndex Survey Shows New Zealand Consumer Confidence at Near Record High

Markets Latest MasterIndex Shows Highly Optimistic Consumer Confidence in Outlook

Nine of the 13 Asia/Pacific markets surveyed show highly optimistic outlook for next six months

Auckland, 3 February 2004 – New Zealand’s consumer sentiment for the first six months of 2004 has rebounded significantly from June last year, according to MasterCard’s latest MasterIndex™ of Consumer Confidence survey. New Zealand’s average is 73.7, up from 56.6 on the previous period, and compares very favourably with the current regional MasterIndex average of 64.9.

New Zealanders are most optimistic about their prospects of regular income (89.4), the outlook for the economy (73.0) and employment (70.8) over the next six months. Their expectations of the stock market (65.9) and quality of life (69.2) are also significantly higher than the two preceding periods.

The twice yearly MasterIndex survey is the most comprehensive and longest running consumer sentiment survey in the Asia/Pacific region. The survey covers 13 markets and is conducted in June and December to analyse prevailing consumer perceptions of economic conditions for the six-month period ahead. The scores ranging between 0 and 100 are based on responses to questions on five variables: employment, economy, regular income, stock market and quality of life.

Leigh Clapham, senior vice president and general manager Australasia, said “New Zealand is one of the few countries in the region which has been consistently optimistic for the last seven periods surveyed, and this rebound from 56.6 to 73.7 brings it back up to levels not seen since June 2002.

“The results underline an upbeat mood relating to life and career opportunities in 2004, and reflect the trend for increased optimism across Asia/Pacific.”

This local optimism is especially obvious in the travel and retail sectors (as recorded in the MasterIndex™ of Travel and MasterIndex™ of Retail January 2004). For the first half of 2004, retail sales in New Zealand are expected to grow by 5%, reaching NZ$15.2 billion in sales value. Meanwhile the international tourism market in New Zealand is forecast to grow with increases in arrivals from Australia, Japan and Korea and a 19% increase in outbound travellers to see 620,000 New Zealanders travelling overseas.

Clapham said some of New Zealand’s optimism seems to have rubbed off on Australia, where the MasterIndex has rocketed from 45.3 six months ago to 80.9. Optimism about regular income also topped the list there at 87.3, followed by the stock market’s prospects at 83.5 and quality of life at 81.0.

Among the other countries surveyed, Thailand, Malaysia and Vietnam - which made its MasterIndex debut - topped the list of highly positive markets; while Hong Kong, Australia, Singapore and Taiwan, were the most improved. Of the 13 markets surveyed, only Indonesia, Korea, the Philippines and Japan had a pessimistic view of the six months ahead, although Japan is noted for its marked improvement in outlook from the last survey.

A total of 5,447 people were surveyed between 27 October and 15 December 2003 for this report. Regional highlights include:

 Remaining in top position from the previous survey is Thailand with its record high score of 95.1, followed closely by Malaysia with its record high score of 93.5. Thailand’s score is the second highest ever achieved by any market in the survey’s 11 years of history (the highest: Indonesia’s 95.9 in June 1997).

 Vietnam makes its debut with a highly optimistic outlook (91.0).

 China is up again (83.7) post-SARS after its confidence dip in the previous report.

 Impressive improvements in outlook were manifested by Hong Kong (81.1), which has bounced back significantly from the pessimism seen in the last five consecutive MasterIndex reports; Australia (80.9) and New Zealand (73.7) with near record highs; Taiwan (65.7) and Singapore (65.3), which have made remarkable recoveries from recent bouts of near record low consumer confidence.

 Japan, has historically remained in the pessimistic range under the MasterIndex score. However, in this survey it has made a marked improvement with its highest score (31.8) since June 2000.

“The results from this latest round of the MasterIndex of Consumer Confidence reflect a rising resilience of Asia/Pacific consumers in spite of increasing volatility in the global and regional environments. The most resilient countries are those that have been most successful in developing their domestic consumer markets as an engine of economic growth to complement the export sector. The ability to mobilize and effectively deploy domestic resources to generate growth, such as the case in Thailand and China, will be the hallmark of long term success in Asia/Pacific in the years to come,” said Dr. Yuwa Hedrick-Wong, economic advisor, Asia/Pacific, MasterCard International.

Individual country findings are available upon request.

ENDS

NOTE TO EDITORS: This news release is distributed with an accompanying chart (see page 5) that shows current MasterIndex of Consumer Confidence scores by market compared with several significant points in the history of the survey.

More information on MasterIndex can be found at the website www.mastercard-masterindex.com

About MasterIndex

MasterCard’s MasterIndex™ of Consumer Confidence survey has an 11-year track record of consumer confidence indices collected from more than 100,000 interviews, unequalled both in scope and history in Asia/Pacific.

The MasterIndex survey of Consumer Confidence is the most comprehensive and longest running of its kind in the region. MasterIndex has demonstrated its precision at several important junctures as a barometer of consumer sentiment. In June 1997, MasterIndex revealed a decline in consumer confidence – one month prior to the devaluation of the Thai baht that triggered the regional financial crisis. More recently in June 2003, MasterIndex 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 Sept 2003 at 8%.

The survey began in Quarter 2 of 1993 and has been conducted twice yearly since. Thirteen markets participate in the survey: Australia, China, Hong Kong, Indonesia, Japan, Korea, Malaysia, New Zealand, Philippines, Singapore, Taiwan, Thailand and Vietnam. Vietnam made its debut in the December 2003 report, replacing India, which will henceforth be covered by the SAMEA (South Africa/Middle East/Africa) MasterIndex survey to be launched in early 2004. The last Asia/Pacific MasterIndex survey was conducted from October to December 2003 among a sample of approximately 400 (total sample of 5,447) across the middle and upper income groups in each market, except in China where approximately 600 respondents were surveyed.

The MasterIndex 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 2004). Data collection was via personal and 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% confidence level.

Launched as part of MasterCard’s knowledge leadership in Asia/Pacific, MasterIndex™ of Retail and MasterIndex™ of Travel join MasterIndex of Consumer Confidence as MasterCard’s MasterIndex suite of research products. Launched in July 2003, MasterIndex of Travel is a short-term forecast of outbound travel in the 12 key Asia/Pacific markets -– Australia, China, Hong Kong, Indonesia, Japan, Korea, Malaysia, New Zealand, Philippines, Singapore, Taiwan and Thailand. Launched in August 2003, MasterIndex of Retail is a short-term forecast of retail sales growth in the same 12 Asia/Pacific markets. Both forecasts are conducted twice a year, in June and December.

About MasterCard International

MasterCard International is a leading global payments solutions company that provides a broad variety of innovative services in support of our global members' credit, deposit access, electronic cash, business-to-business and related payment programs. MasterCard International manages a family of well-known, widely accepted payment cards brands including MasterCard®, Maestro® and Cirrus® and serves financial institutions, consumers and businesses in over 210 countries and territories. The MasterCard award-winning Priceless® advertising campaign is now seen in 98 countries and in 46 languages, giving the MasterCard brand a truly global reach and scope. For more information go to www.mastercardinternational.com.

The following Chart shows the performance of each market at different key intervals and important turning points in the history of the Region’s MasterIndex of Consumer Confidence.

The MasterIndex of Consumer Confidence in Asia/Pacific

Period Year Crisis Pre Crisis Historical

Current Ago Ago Average Average (Up Average

Markets 4Q 2003 2Q 2003 4Q 2002 4Q 97 - 4Q 98 Thru’ 2Q 97) MasterIndex

Australia 80.9 45.3 44.6 43.0 61.6 56.1

China 83.7 68.0 84.4 55.6 71.7 71.2

Hong Kong 81.1 23.2 21.3 16.9 55.9 46.3

Indonesia 49.0 57.5 56.0 27.2 87.7 68.9

Japan 31.8 17.4 15.0 5.4 30.5 22.5

Korea 43.6 31.0 39.2 26.1 64.9 56.7

Malaysia 93.5 71.8 73.0 40.9 88.9 74.8

New Zealand 73.7 56.6 65.8 38.5 64.1 59.7

Philippines 34.3 50.1 33.6 47.7 79.5 53.2

Singapore 65.3 33.9 31.4 34.4 75.4 65.6

Taiwan 65.7 26.5 38.9 45.1 56.7 50.8

Thailand 95.1 80.3 70.3 25.6 53.0 52.9

Vietnam 91.0 0.0 0.0 0.0 0.0 0.0

The Region

{ex-Vietnam} 64.9 44.9 44.5 31.9 65.3 55.2

Note: The Crisis period in the Chart above is based on the reflection of the MasterIndex of Consumer Confidence™ results, which may or may not coincide with actual chronology or the definitions of others.

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