Investing August 24, 2004

S&P Predicts Positive Capital Expenditure Numbers for 2004

August 24, 2004 (PLANSPONSOR.com) - Standard & Poor's is predicting that for the first time in two years, capital expenditures for the S&P 500 are expected to be positive, with a change of 5.53% over last year's numbers anticipated.
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The first quarter of 2004 saw the first quarter over quarter increase in capital expenditures in the S&P 500 since the final quarter of 2001, with a 5.36% increase seen over the same time in 2003. Historically, capital expenditures have been skewed towards later quarters.   Thirty-two percent of expenditures are usually made in the first six months of the year, while the third quarter usually accounts for 29% and the fourth quarter 39%.

“Given a fourth quarter boost from the demise of the accelerated depreciation schedule this year, 2004 capital expenditures for the S&P 500 should show a 5.53% improvement, compared to the -8.95% for 2003 and -15.16% registered for 2002,” said Howard Silverblatt, Equity Market Analyst at Standard & Poor’s, in a news release.   “While capital expenditures are expected to increase for 2004, they are still 3.92% off their 2002 and 18.49% off their 2001 levels.”

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Not all the news is good news though, as capital expenditures for the Utilities and Financial sectors continued to lag. Telecommunication and Industrial capital expenditures, however, saw a dramatic increase.

– Kip McDaniel

Compliance August 23, 2004

State Advisers to Register in Federal Databank

August 23, 2004 (PLANSPONSOR.com) - State-registered investment advisers seeking investment manager status under federal benefits law must register electronically through the Investment Adviser Registration Depository (IARD).
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The US Department of Labor’s Employee Benefits Security Administration (EBSA) announced the rule Monday covering advisers looking for the manager status under the Employee Retirement Income Security Act (ERISA).

The IARD is a centralized electronic filing system for investment advisers created by the US Securities and Exchange Commission (SEC) and state securities regulators.   A majority of state-registered investment advisers who are investment managers of ERISA-covered plans already file registration forms electronically through the IARD, the EBSA said in a news release.

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“Our rule allows plan fiduciaries to consult a single source to find out whether an investment advisor is registered, while also streamlining the process through the elimination of paper filings,” said Ann Combs, assistant secretary of EBSA, in the news release.

Under ERISA, plan trustees are relieved of certain liabilities relating to management of plan assets by a registered investment adviser, bank or insurance company who meet certain requirements to be appointed an investment manager for an ERISA-covered plan.

The EBSA said the final rule will apply to investment adviser registration filings due on or after October 25, 2004.  More information on IARD is at http://www.sec.gov/divisions/investment/iard.shtml .

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