imilar to the Nasdaq Composite Index, April’s move to higher ground reverses the losses incurred during the first three months of 2009.
The index that measures performance of 16 global gaming suppliers had its second consecutive monthly gain since December 2007, the association noted. Positive contributors included IGT, which contributed 5.27 points to the index driven by a 33.95 % increase in its stock valuation; WMS Industries, that added 3.58 points to the index due to a 53.56 % increase in its stock valuation and Bally Technologies, which was up 42.13 % and contributed 2.56 points. Lottomatica contributed 2.35 points to the index driven by a 20.60 % increase in its stock valuation.
While the Index remains 73.2 % below its posting one year ago (April 2008), the majority of global gaming suppliers reported significant increases in their stock values this month. "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 said in the index release.
Based on a 100-point value, the AGEM index is computed based on each company's month-end stock price and weighted based on approximation of market capitalization.
A few suppliers, albeit with minimal effect, reported negative contributions to the index. Konami reported a modest decline in valuation, while Ainsworth Game Technology reported a 41.67 % 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.