AGEM Index

The AGEM Index ended the month of January 2010 at 102.88, dipping 3.44 points or 3.23 percent from the previous month and falling back to a level not seen since July 2009. The AGEM Index has been in tow with the broader S&P 500 Index over the last few months, which also slid 3.7 percent during the month of January 2010. However, it is important to note the extent of movement in the index relative to the latest downturn in the business cycle. The AGEM Index remains down 32.2 percent since it reached its zenith of 151.84 at the beginning of the recession in December 2007, but reversibly, it has gained nearly 55.2 percent from when it closed at 66.30 12 months ago. While market confidence has edged upward from its abyss, the timing for valuations approaching pre‐recessionary levels will be slowed by investor caution. The global gaming suppliers’ ability to continue investing in innovation and diversification of new product lines while maintaining strong balance sheets will be key considerations going forward.

Selected positive contributors to the index during the month include: (1) Global Cash Access (GCA) with the largest contribution, adding 0.26 points to the index based on an 8.14‐percent increase in its stock price and (2) Shuffle Master (SHFL) contributing 0.21 points with a 7.89‐percent increase in its stock performance.

Selected negative contributors to the index include: (1) INTRALOT S.A. (INLOT) with its stock price dropping 21.95 percent, contributing ‐0.93 points to the index and (2) WMS Industries (WMS) posting ‐0.88 points to the index with a 7.30‐percent decline in its stock valuation.

While we continue to note that new markets will drive valuations, which we have recently seen through favorable gaming legislation, it is important not to lose focus on consumers in existing markets, where leisure and business travel remain remarkably down. These areas will be closely watched during 2010.

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