Investors 'rush to finance companies'

Investors are rushing to take advantage of finance companies' high interest rates, following the announcement of the Government's deposit guarantee scheme.

Investment advisers said finance companies had seen an explosion of new money in the two weeks since the policy was announced, The National Business Review reported today.

Adviser Chris Lee said many investors were not waiting for the guarantee to be settled to invest in top-tier firms, but were not yet putting their cash into second-tier financiers.

Asia-Pacific Risk Management director Roger Kerr said many financiers were likely to cut deposit rates quite quickly as lending could not keep pace with the influx of funds.