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 33.95âpercent increase in its stock valuation; (2) WMS Industries (WMS) that added 3.58 points to the index due to a 53.56âpercent 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 20.60âpercent 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 41.67âpercent decline in its stock price during the month.
Conditions in the gaming and tourism industry and speculation of highâprofile 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.