Latest figures from the Association of Gaming Equipment Manufacturers (AGEM) show that for the third consecutive month its index rose. In May there was a 20.2% increase in value from the close of April 2009. In tandem with broader financial markets, the AGEM Index has rebounded to a new high for the year and is approaching levels not seen since September 2008. While all but two gaming equipment manufacturer posted a gain, several contributors to the index witnessed their stock valuations increase by double digits.

Selected positive contributors included: (1) International Game Technology (IGT), contributing 9.57 points to the index driven by a 40.57% increase in its stock valuation; (2) Konami (KNM), adding 2.51 points to the index due to a 22.36% increase in its stock valuation; (3) Aristocrat Technologies (ALL), which was up 0.83% and contributed 0.67 points; and (4) Bally Technologies (BYI), contributing 0.49 points to the index driven by a 6.95% increase in its stock valuation.

Wells-Gardner Electronics posted a modest decline in its stock valuation, reporting a 1.25% decrease in its stock price during the month, having minimal effect on the index. Lottomatica (GTECH) was the other loser in May with a decline of 5.29%. The strengthening of the Euro modestly impacted the index. Gains in the index can be attributed to a rise in consumer confidence and favourable reports from gaming operators and manufacturers.

According to AGEM, while conditions in the gaming and tourism industry remain somewhat volatile, negative indicators have begun to slow. This could suggest a possible end in sight for the recession. There is still speculation of high-profile restructurings for selected operators but the majority have navigated through the worst of this down cycle as stock market returns are considered a leading economic indicator, typically posting month-over-month gains prior to actual improvements in economic activity.
(E-06.11.09)

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