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Investor Optimism holds steady

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UBS/Gallup Index of Investor Optimism at 79, Down One Point from February Price of Energy and Federal Budget Deficit Seen as Serious Drags on Investment Climate Investors Concerned about Illegal Immigration

Investor optimism remained steady this past month, with the UBS/Gallup Index of Investor Optimism registering 79, essentially unchanged from the 80 reading in February. This leveling-off follows a 13 point decline from January to February.

Half of all investors responded that they are optimistic about U.S. economic growth, and more than half are optimistic about the performance of the stock market, with a total of 62 percent believing that now is a good time to invest in the financial markets.

Despite the moderate optimism, investors see certain key issues as potentially harmful to the investment climate in the U.S. Investors continue to see the price of energy as the most harmful influence on the U.S. investment climate, among ten items measured in the poll. Sixty-nine percent say it is hurting the investment climate a lot and another 22 percent say it is hurting a little, a sentiment that has essentially held steady since last November. Over half of investors believe that the federal budget deficit and close to half, 48 percent, cite the Iraq war as hurting the investment climate a lot.

Additionally, outsourcing of U.S. jobs to foreign countries continues to be cited as a significant concern to investors. Fifty-three percent of investors see job outsourcing as hurting the U.S. investment climate a lot. However, this represents an 11 point decline since November 2005, when 64 percent of respondents held that view.

"Even with rising stock prices and an improving job market, investors remain cautious about their outlook for the economy as they look at current economic trends and political issues around the world," said Robin Miranda, Associate Strategist, UBS Wealth Management Research.

The monthly poll of investors also found somewhat negative reactions to the issue of illegal immigration in the United States. Over half of all investors identified illegal immigration as having a harmful impact on the U.S. economy. Only six percent of investors say illegal immigration helps the U.S. investment climate.

Sixty-eight percent of investors feel that illegal immigrants cost taxpayers too much money by using government services such as education and medical care. Just 25 percent of investors believe that illegal immigrants eventually become productive citizens and pay their fair share of taxes. And 80 percent of investors believe that the federal government is not doing enough to prevent the flow of illegal immigrants into the United States.

However, investors have differing opinions on illegal immigration nationally versus locally. More than half of respondents believe that illegal immigrants have either no impact or a somewhat helpful impact on their local economies. And 84 percent of investors polled believe that illegal immigrants generally take jobs Americans do not want.

These findings are part of the 96th Index of Investor Optimism, which was conducted March 1-16, 2006. To track and measure Index changes on an ongoing basis, new samplings are taken monthly. Dennis J. Jacobe, research director for Gallup, said the sampling included 802 investors randomly selected from across the country. For this study, the American investor is defined as any person who is head of a household or a spouse in any household with total savings and investments of $10,000 or more. Nearly 40 percent of American households have at least this amount in savings and investments. The sampling error in the results is plus or minus four percentage points.

For more than 60 years, the Gallup Organization has been a recognized leader in the measurement and analysis of people's attitudes, opinions and behavior. While best known for the Gallup Poll, founded in 1935, Gallup's current activities consist largely of providing marketing and management research, advisory services and education to the world's largest corporations and institutions. newLine/>
UBS is the world's largest wealth manager, a top tier investment banking and securities firm, and one of the largest global asset managers. In Switzerland, UBS is the market leader in retail and commercial banking.

UBS is present in all major financial centers worldwide. It has offices in 50 countries, with about 39% of its employees working in the Americas, 37% in Switzerland, 16% in the rest of Europe and 8% in Asia Pacific. UBS's financial businesses employ more than 69,500 people around the world. Its shares are listed on the SWX Swiss Stock Exchange, the New York Stock Exchange (NYSE) and the Tokyo Stock Exchange (TSE).

month

2006

2005

2004

2003

2002

2001

2000

1999

1998

1997

1996

December

79

79

104

52

88

106

174

141

151

November

50

69

93

41

84

130

148

125

October

47

62

69

29

86

132

139

124

September

34

74

54

60

50

147

160

147

151

August

61

77

61

52

76

160

149

July

58

88

54

46

74

143

166

June

54

95

77

72

85

149

146

160

152

May

50

71

42

90

90

155

163

April

52

73

66

89

81

140

168

March

79

74

85

5

121

82

150

151

161

February

80

82

97

9

92

77

168

167

158

January

93

76

108

38

115

96

178


New York, March 27, 2006
UBS