MasterIndex of Consumer Confidence continues to show strong optimism in the UAE

The current UAE MasterIndex score at 88.8 out of a possible score of 100 is an improvement on the 80.0 score received six months ago. The latest survey measures perception of consumer confidence in the six months ahead. Indications are that consumer sentiment is increasingly more positive and optimistic. In the Middle East and Levant (MEL), the UAE ranks fourth in overall consumer confidence for the second half of 2007.

Commissioned by MasterCard Worldwide and conducted bi-annually in selected markets in South Asia, Middle East and Africa (SAMEA), the survey analyses consumers' perceptions of economic conditions over the six months ahead. The MasterIndex has a range of 0 to 100 with 50 as the mid-point. A score above 50 indicates that consumers are optimistic about the economic climate, while a score below 50 signals that consumers are pessimistic about the economic situation.

The countries surveyed are Egypt, Kuwait, Lebanon, Saudi Arabia, UAE, South Africa and India. The scores are based on respondents' answers to questions relating to five key economic barometers: Employment, Economy, Regular Income, Stock Market and Quality of Life. Bi-annual MasterIndex surveys have been held across SAMEA for the past three years and across Asia Pacific for the last 15 years.

In the latest survey, UAE consumer sentiment on Employment rose to 95.2, from 77.4, in the second half of 2006, and 79.0 in the first half of 2007. Employment dipped considerably from its high of 90.5 in the second half 2005 but is now surpassing this mark considerably.

Perception on Quality of Life registers a slight decrease from 80.6 six months ago to 79.1 in the current survey. All the other consumer sentiments measured improved considerably. Sentiment on Economy improves from 85.7 to 96.0 and is close to the record level from 2H2005 which registered a high of 97.9. Regular Income went from 78.4 to 92.2, climbing again after a sharp decrease in the second half of 2006 (77.1 vs. 91.3 in 1H2006). The Stock Market variable moves from 76.5 to 81.5, also approaching the level of confidence registered in the second half of 2005 (88.2). The mark dropped in the first half of 2006 to 74.7.

On a market basis, Egypt (94.3 vs. 78.2 six months ago) tops the list of Middle East countries with the highest consumer confidence and registers the biggest increase as well. Saudi Arabia comes second with a MasterIndex score of 92.0, however registering a decrease from 97.3 in the first half of 2007. These are followed by Kuwait (91.6 vs. 94.5 six months ago), the UAE (88.8 vs. 80.0), South Africa (80.7 vs. 86.5 six months ago), India (63.6 vs. 65.1 six months ago) and Lebanon with the sharpest decrease from 67.6 in the first half of 2007 to 38.6 in the current survey.

Overall confidence across the Middle East & Levant (MEL) stays at the same level of confidence with 83.6 as compared to 83.9 in the last survey. Since the MasterIndex initiative was introduced in 2004, overall consumer confidence in MEL has increased steadily from the first average score of 66.1 and currently has an historical average of 76.7

Survey results for the larger South Asia, Middle East and Africa (SAMEA) region showed a trend of improvement until this latest survey when the result further slipped from 82.2 in the second half of 2006 to 80.3 six months ago to now 79.3. Overall SAMEA has a historical average of 75.6.

SAMEA Highlights of the 2H, 2007 MasterIndex of Consumer Confidence Findings

• United Arab Emirates
The current MasterIndex of 88.8 is higher than the previous two periods surveyed (80.0 in 1H07 and 77.5 in 2H06). Sentiment on Employment (95.2 vs. 79.0 six months ago), Regular Income (92.2 vs. 78.4) and Economy (96.0 vs. 85.7) significantly improved, followed by Stock Market (81.5 vs. 76.5). Quality of Life dropped from 80.6 in the first half of 2007 to 79.1 in the current survey.

• Egypt
With a MasterIndex score of 94.3, consumer confidence in Egypt is at a record high, increasing from 78.2 in the first half of 2007. The trend analysis shows a steady increase in consumer confidence from 43.2 in the second half of 2004 to the record high of 94.3 in the current survey. The latest survey scores are Economy (97.5 vs. 73.0 six months ago), Quality of Life (90.6 vs. 77.7), Employment (94.6 vs. 81.2), Regular Income (96.5 vs. 83.0) and Stock Market (92.4 vs. 75.9).

• Lebanon
In the 1H2006 survey, Lebanon consumer sentiments on all five economic factors were optimistic, with optimism dropping off in 2H 2006 and increasing again in 1H 2007 to a MasterIndex score of 67.6. The current score represents a sharp decrease in the overall score (38.6) and all key barometers. The latest survey scores are Economy (43.9 vs. 71.1 six months ago), Quality of Life (22.6 vs. 54.7), Employment (38.3 vs. 87.0), Regular Income (67.9 vs. 69.3) and Stock Market (20.5 vs. 55.7).

• Kuwait
The current MasterIndex score in Kuwait of 91.6 is slightly lower than the score of 94.5 in 1H2007. The Employment score slightly improved from 92.4 six months ago to 94.1, though the sentiment against the other factors declined marginally with the following scores: Quality of Life (93.3 vs. 94.6 six months ago), Economy (93.7 vs. 96.9), Regular Income (93.6 vs. 97.2) and Stock Market (83.3 vs. 91.4).

• Saudi Arabia
The current MasterIndex of 92.0 has decreased from the score registered six months ago (97.3) and ranks Saudi Arabia as the second in ME&L. The record all time high was in 1H 2005 with a score of 98.4. The results have since shown a regular trend of increasing respectively decreasing confidence each wave. The current result shows that consumers are less however still highly optimistic. The current scores are Employment (91.3 vs. 97.9 six months ago), Economy (90.5 vs. 98.8), Regular Income (94.0 vs. 96.5), Stock Market (89.8 vs. 95.8) and Quality of Life (94.5 vs. 97.6).

• South Africa
Consumer sentiment in South Africa has dipped from the record high a year ago (91.1), although it is still strong in comparison to previous surveys. The current MasterIndex of 80.7 is down from the score of 86.5 in the last survey six months ago. The score results are: Employment (81.2 vs. 83.3 six months ago), Economy (88.2 vs. 86.3), Regular Income (98.3 vs. 96.8), Stock Market (66.8 vs. 83.4) and Quality of Life (77.9 vs. 82.8).

• India
India's current MasterIndex of 63.6 is a significant reduction from last year's result of 76.4 which was the strongest on record. The score results are: Stock Market sentiment (76.8 vs. 77.0 six months ago), Economy (56.1 vs. 61.9), Employment (49.4 vs. 56.3), Regular Income (67.7 vs. 70.6) and Quality of Life (67.8 vs. 59.8).