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Caution urged over SCF investor spend up

September 6, 2010

South Canterbury Finance investors are being told to sit on their hands, after news that some are already being courted to put their rescue payouts into other savings ventures.

More than $1.5 billion is due to be paid out from the tax-payer funded rescue package, in the biggest capital injection the New Zealand economy has seen in some time.

It is expected many investors will look to re-invest when the payments are made, prompting calls for caution.

Shane Edmond from Investment banking company Forsyth Barr said many SCF investors are confused and concerned.

“There’s been a lot of failures out there. They really want some guidance and direction.”

Federated Farmers president Don Nicolson said potential investors need to look at interest rates carefully.

“If you see an interest rate that’s higher than a mainstream bank, there’s higher risk there. You need to be mindful of that.”

But Canterbury Chamber of Commerce chief executive Peter Townsend said he was certain SCF investors will have learned from the current situation and do the right thing.

“I think a lot people will put their money away and be a little more conservative about how they invest it in the future.”

It will be at least another month before the payouts are made.

The trustees’ executor said in a statement today that “while it is difficult to be precise, they’re working with Treasury towards full repayment in about four to six weeks”.
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