Press Office

Auckland, 21 December 2007 - Whether it’s New Zealand’s recent lackluster performance on the sporting stage, unpredictable property prices or the ever-increasing cost-of-living, the inescapable fact is that Kiwis are feeling less than confident about their quality of life.

New Zealanders are approaching 2008 with a degree of trepidation according to research from MasterCard Worldwide, released today, which reveals consumer confidence is down on last year.

While feeling a sense of optimism when it comes to factors such as the economy and regular income it is quality of life that has dragged down New Zealand’s score in the latest MasterCard Worldwide Index of Consumer Confidence.

The findings reveal that New Zealanders are feeling less optimistic about the coming six months than they have for some time, with a MasterIndex score of 56.3, compared to 57.1 in the last round of research as well as a year ago (61).

New Zealand’s MasterIndex score on quality of life has dipped 14 points over the past year to 39.5, compared to 53.6 this time a year ago.

The research analyses prevailing consumer perceptions of economic conditions for the six-month period ahead and has been conducted across the Asia/Pacific region for 14 years.

Kiwis remain confident about the economy with a MasterIndex score of 53.4, up slightly from 48.3 six months ago. Their feelings on regular income are more or less unchanged (80.4 vs. 80.2) however it is the areas of employment (51.9 vs. 52.7), stock market (56.5 vs. 61.3) and perhaps most worryingly – quality of life (39.5 vs 43.1) – where confidence has dipped.

While Australia’s MasterIndex score has also dipped slightly (64.9 vs. 68.3) the Aussies’ outlook on quality of life has eclipsed that of New Zealand (60.8 vs. 39.5).

“It has been a difficult year for New Zealanders with rising interest rates, an increase in the price of fuel and general grocery products and uncertainty in the country’s property market,” said Dr. Yuwa Hedrick-Wong, economic advisor, Asia/Pacific, MasterCard Worldwide. “All in all it seems these factors have taken their toll on New Zealanders’ sense of confidence looking forward to the next six months.”

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 which was done in May 2007. The view on employment (63.8) remains constant.

Looking to the region, Vietnam (94.3) and Hong Kong (85.9) registered the most buoyant consumer sentiment. Korea showed the largest increase in optimism with its index score increasing 15.6 points to 64.1.

According to Dr. Hedrick-Wong the volatility in financial markets across the world, announcement of heavy sub prime losses by financial heavyweights Citigroup, Merrill Lynch and UBS, rising oil prices and inflation costs, seem not to have dampened confidence for the first half of 2008 for the region as a whole.

The MasterCard Index is the region’s most comprehensive and longest running consumer confidence survey. The scores, ranging between 0 and 100, are based on responses on five variables: employment, economy, regular income, stock market and quality of life. Scores above 50 indicating extent of optimism, scores below 50 indicating the extent of pessimism, and 50 being neutral.

The latest MasterCard Index survey was conducted from 8 to 29 October 2007 for all markets except Indonesia (which was conducted from 18 October to 5 November 2007 because of Ramadan). It involved 5,411 consumers across 13 key Asia/Pacific markets. In its fourteenth year, the six-monthly survey analyses prevailing consumer perceptions of economic conditions for the six-month period ahead.

Other highlights of the latest MasterCard Worldwide Index of Consumer Confidence survey are:

• China (85.5), Hong Kong (85.9) and Singapore (83.6) all registered high levels of consumer confidence. Consumers in China are showing record-high levels of optimism about employment. Consumers in China also continue to be bullish about the stock market, while consumers in Hong Kong and Singapore, while still positive, are reflecting a slight dip in sentiment.
• Japan (48.6), which saw a massive recovery in consumer confidence levels in 2006 to its historical high and the first half of this year, has slipped back somewhat and is now just holding at around neutral levels. Its Index score dropped 18.2 points, from a clearly optimistic 66.8 in the previous survey to 48.6 for the six months ahead. Whether consumers have turned pessimistic or are adopting a wait-and-see attitude, the more than 20-point loss of confidence, manifested particularly in the regular income, economy and quality of life indicators, is worth monitoring.
• Taiwan (29.7) has the weakest consumer sentiment of all 13 markets. Outlook is pessimistic on most of the five economic factors, with views on employment and quality of life being the most pessimistic among consumers in the Asia/Pacific region.

Australia (64.9)
Consumer sentiment in Australia is down slightly from six months ago. This is a result of the less optimistic outlook on employment, the economy and the stock market. While less bullish on the economy, employment, and stock market, consumers have however become more optimistic about their regular income and quality of life, with the Index score for regular income increasing 9.2 points.

China (85.5)
Chinese consumers continue to be highly optimistic, with a bullish outlook for the first half of 2008. Consumers are highly positive on all fronts, with Index scores for employment, regular income, stock market and quality of life improving from the previous six months.

In the respective Chinese cities, consumers in Beijing (85.8 vs. 85.7 six months ago vs. 81.9 a year ago), Shanghai (92.1 vs. 90.4 six months ago vs. 82.4 a year ago) and Guangzhou (78.3 vs. 74.5 six months ago vs. 79.2 a year ago) continue to be highly optimistic.

Hong Kong (85.9)
Sentiments in Hong Kong have inched up from six months ago, with consumers highly optimistic about employment, the economy, regular income and quality of life. With the exception of outlook towards the stock market, sentiments on all the other economic factors have improved from the previous six-month period. Bullishness towards the stock market has slipped slightly, possibly attributed to the ongoing financial market violability.

Indonesia (57.8)
While consumer sentiments in Indonesia have improved from six months ago, they are still less optimistic compared to a year ago. Though consumers are less optimistic towards employment and the economy compared to six months ago, they are expecting improvements in regular income, the stock market and quality of life. In particular, the Index score for quality of life has increased significantly, by 19.2 points.

Japan (48.6)
Japanese consumers have been mostly very pessimistic for the first twelve years of the survey until the historic turnaround in 4Q 2005 when sentiments turned positive for the time. Outlook for the first six months of 2008 is however turning cautious, as consumer confidence drops 18.2 points to 48.6.

Currently, outlook on all five economic factors are less optimistic than both six months and a year ago, with a more than 20-point loss of confidence in the regular income, economy and quality of life indicators.

That said, the current Index score of 48.6 is still much stronger than the market Historical Average of 30.9 (which had largely been deflated by years of pessimistic consumer expectations arising from the deflation and stagnation of the Japanese economy since the bursting of its last real estate bubble).

Korea (64.1)
Consumer confidence in Korea is seeing a turnaround, with the market seeing a large jump in optimism - the largest increase in Index score among all the Asia/Pacific markets. The current Index score of 64.1 is the highest since 4Q 2002.

Korean consumers are feeling a lot more optimistic towards the economy, with the Index score jumping 23.7 points. Sentiments towards employment, regular income and quality of life have also vastly improved from both six months and a year ago, with consumers most optimistic about regular income.

Consumers are however still cautious in their outlook towards employment (48.4), which seems to suggest that some lingering doubts still remain.

Malaysia (72.5)
Malaysia’s current Index score of 72.5 is a slight improvement from six months ago, and a huge leap from a year ago. Consumers are positive on all five economic factors, with consumers most optimistic about their regular income. Sentiments towards quality of life are also highly positive, with the indicator seeing a close to 10-point increase from six months ago.

New Zealand (56.3)
Consumer confidence in New Zealand has dipped slightly from six months and a year ago. While consumers are still optimistic about their regular income, sentiments on employment, stock market and quality of life have taken a slight beating, causing the slight decline in the overall Index score for New Zealand.

Philippines (67.7)
Sentiments in the Philippines continue to improve from six months and a year ago. The current Index score is the highest since 4Q 1997.

The current fairly optimistic sentiments in the market are supported by a highly positive outlook on regular income as well as large improvements in sentiments towards the stock market. With the exception of sentiments on quality of life, outlook for the rest of the indictors have improved from six months ago.

Singapore (83.6)
Consumers in Singapore continue to be highly optimistic, with the current Index score well above the market's historical Index score. Consumers are especially bullish on the economy. While outlook for all of the five economic indicators remain highly positive, there has been a slight dip in sentiments towards regular income, the stock market and quality of life, due to financial market volatility and rising costs of living.

Taiwan (29.7)
Consumer sentiments are currently very pessimistic. The current Index score of 29.7 is the sixth lowest since the inception of the survey. It is well below the market’s Historical Average of 47.4 and is the only market to fall below the Asian Crisis Average of 45.1.

Consumer sentiment on employment, the economy, regular income and quality of life is highly pessimistic, with consumers marginally positive in terms of outlook on the stock market.

Thailand (44.2)
Thai consumers have regained some of the confidence they lost six months ago. However, the current Index score of 44.2 is still below the market's Historical Average of 55.7. While consumers have regained some confidence with regards to outlook on employment, the economy, stock market and quality of life, sentiments towards regular income have dropped 17.1 points.

Vietnam (91.3)
Vietnamese consumers continue to enjoy high levels of consumer confidence. The market’s high Index score is supported by very bullish sentiments on employment, the economy, regular income, quality of life and the stock market.

The market’s Historical Average is an astonishing 91.7, the highest among all Asia/Pacific markets.

Vietnamese consumers look set to continue with their euphoric optimism for sometime to come barring a significant global or internal economic downturn, or a major political upheaval.

NOTE TO EDITORS: This news release is distributed with an accompanying chart (see page 9) that shows current MasterCard Worldwide Index 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.masterintelligence.com.

The MasterCard Worldwide Index of Consumer Confidence survey has a 14-year track record of consumer confidence indices collected from more than 135,000 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, 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 is now covered by the SAMEA (South Asia/Middle East/Africa) MasterIndex survey. The last Asia/Pacific MasterIndex survey was conducted from 2 May to 31 May 2007 among a sample of approximately 400 (total sample of 5,407) 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 2006). 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, except China, where because of the larger sample, the margin of sampling error is plus or minus three percentage points.

This chart shows the performance of each market at different key intervals and important turning points in the history of the MasterCard Worldwide Index of Consumer Confidence.

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.

Historical Average is the mean average of all MasterIndex scores up through Period Ago but not including the Current Period.

* The average excludes Vietnam as this market was not surveyed in 1997/98.

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 16 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 http://www.mastercard.com.

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, 2006 and Current Reports on Form 8-K that it has filed with the SEC during 2007, as well as reasons including difficulties, delays or the inability of the company to achieve its strategic initiatives. Factors other than those listed above could also cause the company's results to differ materially from expected results.

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