Consumer confidence in Hong Kong sagged in the final quarter of last year, with a survey showing it was dragged below the worst depths plumbed during the Asian financial crisis. The outcome was in sharp contrast to sentiment across the border. The confidence of mainland consumers soared to the highest level recorded in the MasterCard International MasterIndex survey, which has been conducted twice yearly since the second quarter of 1993. The SAR's collapsing property prices and a rising incidence of householders with negative equity - where the value of the property falls below the size of the home loan - were among the main reasons for the fall in confidence, MasterCard International vice-president and Hong Kong manager Danny Cheung said. As last year drew to a close, people were polled on their expectations for the first half of this year. Hong Kong responses scored a dismal 12.5 on an index of zero (most pessimistic) to 100 (most optimistic). The bleakest assessment on record previously was 13.1, polled in the second quarter of 1998, and the highest was 74.2 recorded in the second quarter of 2000. The index has been on a steady decline for the past three quarters. The bulk of the 400 Hong Kong people in the survey sample said the outlook would grow worse, vastly outnumbering optimists, those who said it would get better, in all five economic variables they were asked to rate. On the outlook for their quality of life in the next six months, 32.4 per cent said it was likely to grow worse, with just 0.5 per cent predicting better times and 67.2 per cent expecting things to remain the same. That converted to an index score - determined by dividing the percentage of optimistic replies by the percentage of optimistic and pessimistic replies multiplied by 100 - of just 1.5. The outlook for the economy was scored at just 4.1 on this basis, employment at 5.4, regular income at 26.5 and stock market prospects at 25.1. The mean score of these relative indices was 12.5. Mr Cheung said the economic consultant to the survey, Yuwa Hedrick-Wong, had judged that falling property prices and negative equity had combined to 'virtually wipe out consumer spending power'. But Dr Hedrick-Wong had a word of comfort for Hong Kong consumers - the likelihood that the present bleak sentiment would prove to be the low point in the cycle. A recovery was on the cards, aided by falling mortgage interest rates and a recovery in the United States economy, he said. It would ease unemployment and gradually restore consumer confidence. With an index score of 84.8, mainland consumers were the most confident about their future in the 13 markets surveyed, followed by consumers in South Korea (68.1), and New Zealand (62.4). That score extended an uninterrupted march of confidence that began in 1998, with Shanghai respondents being the most upbeat on the mainland, the survey showed. The survey, completed in December last year, canvassed 5,457 respondents for their views. MasterCard International senior vice-president for corporate services in the region, Stuart McDonald, said: 'The survey was conducted when consumers in Asia were grappling with a global economic downturn, political and social upheavals, and of course the September 11 aftermath. 'It is noteworthy that despite all these challenges, there are markets that are optimistic about the next six months. 'There have been signs of recovery in some sectors, and we all hope that these positive developments will eventually pave the way for a regional rebound,' he said.