Shows largest increase since April after declining three of the past four months

After declining three of the last four months, the AGEM Index witnessed its largest increase since April. During the month of August, the composite score of 17 global gaming suppliers rebounded 5.15 points, or 5.86 percent, to 93.04.

While the latest movement is positive, it is important to note that the index remains down 20.3 percent from a year ago. Additionally, the AGEM Index fell short of the gains reported in the broader equity markets as the Dow Jones Industrial Average and Standard and Poor's 500 Index increased 7.7 percent and 8.8 percent, respectively, during the month of September.

The AGEM Index is largely driven by the performance of slot manufacturers, which has remained relatively weak due to many casino operators reducing their capital expenditures during the latest business cycle. With the contraction in slot replacements over the last several years, it is inevitable that operators will need to increase their investments in new hardware. If not solely to remain competitive, within the next two years many gaming properties will eventually need to begin rotating machines and systems that will have become largely antiquated over what will have been more than three years of downturn.

Selected positive contributors to the index during the month included Lottomatica (LTO) adding 1.56 points to the index based on a 4.56-percent increase its stock performance, and Konami (KNM) contributing 1.24 points to the index based on a 10.17-percent gain in its stock valuation.