They are more bullish over jobs and the overall economy: MasterCard survey
A NEW survey has found that Singapore consumers are highly optimistic about the economy but slightly less upbeat about the stock market.
Their counterparts in Hong Kong are also bullish about the economy, but confidence in the stock market has fallen even more sharply there.
The latest MasterCard Worldwide Index of Consumer Confidence survey found that, in the two economies, sentiment towards the stock market had dipped amid caution over wild swings in share prices.
Overall, the index was up: For Singapore, it rose to 83.6 from 83.3 six months ago; for Hong Kong, it rose to 85.9 from 84.7.
Published twice a year, the index is calculated based on percentage response figures, with zero denoting the most pessimistic view and 100 the most optimistic, while 50 would be neutral.
In terms of the stock market, sentiment in Singapore slipped slightly, to 75.4 from 76.6 a year ago. In Hong Kong, it fell more sharply, to 69.3 from 76.7 a year ago.
Five economic factors were measured in the survey: employment, the economy, regular income, the stock market and quality of life.
Conducted in October across 13 Asia-Pacific markets, including China, Indonesia and Vietnam, the survey polled more than 5,000 people in the middle- and upper-income groups.
It found that Singaporeans remained bullish about employment and the economy, but were less sanguine about regular income and the quality of life, due to rising living costs.
People were worried about the goods and services tax, higher food costs and oil prices, said CIMB-GK research head Song Seng Wun. ‘If they took the survey today, the index levels might fall further. People react depending on how full or empty their pockets are.’
Vietnam continued to top the region’s markets in terms of consumer sentiment. It had the most buoyant view for the six-month period ahead. Next came Hong Kong, China and Singapore.
Participants from South Korea showed the sharpest increases in optimism. The country’s score increased by a whopping 15.6 points to 64.1. At the opposite end of the spectrum was Taiwan, which registered the lowest score at a very gloomy 29.7.
Dr Yuwa Hedrick-Wong, MasterCard’s economic adviser, noted that while the overall outlook for consumer confidence had improved in most countries, this merely reflected current economic conditions on the ground.
‘If you have bonuses doubling, do you think you’d be pessimistic?’ he asked.
There could be greater uncertainty going into the year ahead if there are more fund failures, asset downgrades and bank write-offs, leading to a slowdown in consumer spending. If Asia begins to see the cancellation of export orders, this could hurt its corporate earnings, Dr Hedrick- Wong noted.
‘For 2008, the critical uncertainty is therefore China, which has become an increasingly important market for exports from the rest of Asia,’ he added.
Source: The Straits Times 14 Dec 07