S.Africa investor index falls on global uncertainty

JOHANNESBURG Dec 1- Investor confidence in South African assets fell sharply to 81.9 in the third quarter from an upwardly revised 99.4 in Q2, as risk aversion grips foreign players rattled by the debt crisis in Europe, compilers ETM and Maxim said on Thursday.
"The domestic growth outlook also continued to moderate in Q3 2011, continuing a trend that began in mid-2010. The SARB (South African Reserve Bank) leading indicators suggest that the growth outlook in the months ahead remains benign," ETM and Maxim said in a statement.
They noted a shift in domestic unit trust asset allocation with flows surging into bonds at the expense of equities during the third quarter.
But the shift by locals into bonds came during a quarter when foreign investors sold South African bonds in a global flight from assets perceived as carrying more risk.
"The move by locals is a strong indication that they view domestic sovereign debt risks as low and that foreign-led bond market sell-offs open up large pockets of value in the local bond market," ETM and Maxim said.
(Reporting by Stella Mapenzauswa, editing by Ed Stoddard)