Johannesburg — BIZARRE doesn't begin to describe the situation facing anyone whose London job description - at least in part - boils down to "selling SA" to foreign investors.

Things are unhinged - or you are - when a reality check tells you one thing (that SA's not looking too bad), while market indices tell you another (that the country's in the toilet).

Many international markets expect low growth or no growth next year; some, such as the UK, expect outright recession. However, SA is looking at a moderate slide from 3,7% growth in gross domestic

product (GDP) this year to 3% next year.

Banks, mortgage lenders and insurers wobble from New York to London to Frankfurt while South African institutions remain rock solid, untouched by the subprime crisis and dodgy debt packaging.

Despite the "party" enjoyed in many international centres, their governments entrenched long-term deficits throughout the good years. SA maintained fiscal discipline and still runs a surplus.

The dollar strengthens; the rand plunges and has been the worst-performing emerging market currency this year. Yet Washington presided over the current mess, not Pretoria.

In developed markets, cautionary announcements and downward revision of earnings expectations are routine. In contrast, corporate earnings are not nearly so uncertain in SA.

Despite these generally supportive factors, JSE valuations have fallen so low they were only found consistently at these subterranean levels in the days of PW Botha's Rubicon speech, when the world despaired of the apartheid regime's ability to reform itself.

But a lot has changed in three decades (except some JSE prices).

Who cares about this? I do. South Africans do. But logic and long-term thinking hardly characterise international markets at the moment.

Investor sentiment is really negative when you have to apologise for passing on good news. That's what I found myself doing in my last report to international investors on fundamental factors underpinning the South African economy.

I prefaced a list of positives with an admission that only "committed contrarians" would read it.

For the purpose of maintaining morale, let me dig out some of those nuggets of positive information.

The JSE all share index, even in dollar terms, has not been a conspicuously bad relative performer. Most of the Bric economy stock markets (Brazil, Russia, India and China) are worse.

SA is not immune to falling commodity prices but less than 20% of GDP is dependent on resources.

Fixed investment growth is forecast to remain above 8% during 2009-11, helping to sustain domestic growth despite a global slowdown.

The South African economy is sound. The country runs a primary budget surplus. The only other major countries to do so are Russia, South Korea and China.

The US and Euroland run big primary budget deficits, likely to grow even larger as the costs of the bank bail-outs hit national balance sheets.

Government debt in SA as a percentage of GDP is 26% and foreign debt is minimal. This compares to well over 100% in Japan, more than 60% in Germany, France and the US, and 44% in the UK.

SA's debt-to-GDP ratio is at a 30-year low.

The country's corporations are cash-flush. Cash on corporate balance sheets amounts to 46% of GDP, one of the highest ratios in the world.

Okay, some negatives have to be acknowledged, too.

The rand can be volatile. Incredibly, it is the world's sixth-most traded currency and is used as a proxy for emerging market currencies. When emerging markets are out of favour, many hedge funds and other investors protect their other emerging market holdings by selling the rand short.

Rand weakness is also made worse by a current account deficit running at more than 8% of GDP. However, much of this deficit is due to the import of material and equipment required to develop national infrastructure and in better times would be regarded as "virtuous".

Admittedly, uncertainty grows on the run-in to a presidential election, but there is little prospect that a new South African government would turn its back on policies that have driven solid growth for nearly a decade.

It should also be acknowledged that the local consumer is suffering, with retail sales down a real 5,5% in the year to September 1.

But for signs of real suffering take a look at the faces of some of the financial sector executives sipping their dry sherries in the wine bars in and around the City of London.

Unfortunately, the collateral damage extends way beyond the supposedly hallowed square mile, as any South African will confirm.

Evans is Stanlib's London-based director of global investment marketing.