London - Finance Minister Pravin Gordhan won applause for an impromptu London roadshow this week but left many global investors sceptical he could defend South Africa's investment grade rating - or even stay in office.
Appointed after a predecessor's sudden sacking, Gordhan is trying to woo back UK and US-based investors and repair the damage from 9/12, the December day when President Jacob Zuma suddenly switched finance ministers. It took the subsequent appointment of Gordhan, respected for a previous stint at the ministry, to calm markets.
But 9/12 was seen to have seriously dented South Africa's institutional credibility, adding to investor worries about an economy growing at less than 1%, high inflation, a balance of payments hole, weak commodity prices, frequent labour unrest and power shortages.
Hanging over all that is the very real risk South Africa will lose its investment-grade rating by mid-year, potentially raising borrowing costs for government and firms alike.
Investors who attended the London roadshow told Reuters they were open to being convinced by Gordhan.
"I left the place thinking the minister has good intentions, hopefully he stays in his job," said Claudia Calich, head of emerging debt at M&G Investments. "But I wasn't thinking 'Wow, I should rush out and buy South Africa'."
With Treasury officials, heads of companies such as Investec and Barclays Africa, and representatives of powerful trade unions all wearing scarves depicting South Africa's multi-hued flag, "it was clearly a show of strength and to some extent it worked", said one bond investor who asked not to be named.
"But I didn't hear anything that made me believe there would be long-term reforms."
Gordhan told Reuters the gathering reflected a "new process of dialogue" in an economy sapped by labour unrest.
But on Tuesday Moody's moved a step closer to cutting South Africa's rating to junk while data showed the current account deficit widening further and more South African firms heading overseas to invest.
Politics larger than Gordhan
With two major agencies rating South Africa just a notch above junk, Gordhan's recent budget sharply cut deficit projections.
But sovereign bonds and credit default swaps (CDS) continue to price South Africa as if it were rated BB-plus, the highest junk category. Investors also questioned Gordhan's revenue targets and the absence of privatisation plans.
Then there are doubts over Zuma's backing for Gordhan after a public spat with revenue service chief Tom Moyane.
"People seemed too frightened to ask outright (about Gordhan) during the presentation," another attendee said.
But Nomura strategist Peter Attard Montalto said Gordhan had been quite open during the presentation and one-on-one meetings.
"Investors remain very worried on the politics, and their views are not really shifting on the inevitability of downgrade," he said.
Kevin Daly, a portfolio manager at Aberdeen Asset Management, said he came away from the meetings "cautiously optimistic", adding: "They did their best to allay concerns about the reputational damage of '9/12'.".
Foreigners have sold stocks worth a net R14bn already this year, an acceleration from last year's R765m net outflow, stock exchange data shows.
Local bonds, which yield 8% to 9%, are however still attracting money after a net R6.5bn in 2015.
The bond investor said his allocation was smaller than South Africa's weight in indices. Asked if the roadshow changed his view, he said: "I am not going to put more money in, but maybe I won't take more out."
The roadshow moves on to Boston and New York.