AGEM Index rises sharply in April
May 12, 2009
As of
April 2009, the AGEM Index rose sharply to 75.21, which represented an increase
of 15.91 points (26.8 percent) from the 59.30 value reported at the close of
March 2009. This is the second consecutive monthly gain in the index since December
2007. Similar to the Nasdaq Composite Index, April’s move to higher ground
reverses the losses incurred during
the
first three months of 2009. While the Index remains 73.2 percent below its
posting one year ago (April 2008), the majority of global gaming suppliers
reported significant increases in their stock values this month. Selected
positive contributors included: (1) International Game Technology (IGT) that
contributed 5.27 points to the index driven by a 33.95‐percent
increase
in its stock valuation; (2) WMS Industries (WMS) that added 3.58 points to the
index due to a 53.56‐percent increase in its stock valuation; (3) Bally
Technologies (BYI) that was up 42.13 percent and contributed 2.56 points; and
(4) Lottomatica (LTO.MI) contributed 2.35 points to the index driven by a 20.60‐percent
increase in its stock valuation.
A few
suppliers, albeit with minimal effect, reported negative contributions to the
index. Konami (KNM) reported a modest decline in valuation, while Ainsworth
Game Technology (ASX.AGI) reported a 41.67‐percent decline in its stock price
during the month.
Conditions
in the gaming and tourism industry and speculation of high‐profile
restructurings for selected operators continue to play an integral role in the
performance of the global gaming suppliers. Navigating through the economic
conditions of individual markets will be important for equipment manufacturers’
ability to bounce back from the losses incurred during the
current
recessionary cycle. It is important to note that stock market returns are
considered a leading economic indicator usually posting gains prior to actual
improvements in economic activity, potentially indicating the bottom of the
cycle is near.
The Association of Gaming
Equipment Manufacturers (AGEM) produces the monthly AGEM Index that
comprises 16 global
gaming suppliers throughout the world. A total of 12 suppliers are based in the
United
States and are listed on
the NYSE, Nasdaq, or AMEX, while two trade on the Australian exchange, one
supplier trades on the Milan exchange and
another trades on the Taiwan OTC exchange. The index is
computed based on the
month-end stock price (adjusted for dividends and splits) of each company and
weighted based on
approximation of market capitalization. Market capitalizations for
manufacturers
trading on foreign
exchanges have been converted to US dollar-equivalents as of month-end for
comparability purposes. The AGEM Index is based on a 100-point value as of
January 2005.
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