* Near perfect year for Africa equity fund inflows
* 2010 set to smash Africa investment records
By Ed Cropley, African Investment Correspondent
JOHANNESBURG, Sept 9 (Reuters) - African equity funds have attracted net new cash in 51 of the last year's 52 weeks, EPFR Global said on Thursday, underscoring the evolution of the continent's frontier markets as a serious investment play.
According to the Washington-based fund tracker, a net $660 million flowed into African regional funds over the last 12 months -- not vast sums on the global scale but far more than Africa has ever attracted in the past.
"Through the seven months of this year, the flows into Africa regional funds are already pretty close to four times the previous best year, which was 2007," EPFR global markets analyst Cameron Brandt told Reuters.
The one blip marring what would have been a clear run of 52 weeks of positive net inflows came in mid-July and only amounted to $750,000 of withdrawals.
"The sustained levels of flows have been pretty compelling and impressive because there have certainly been some bumps in the road this year," Brandt said.
EPFR includes North Africa in its definition of Africa, despite a preference by many investors to regard the sub-Saharan region as a whole and lump in the five Mediterranean littoral countries with the Middle East.
Some of the Africa funds surveyed include South Africa, Brandt said, although a cap on exposure to the continent's biggest and most sophisticated economy means the overall figures still give a clear picture of interest in "frontier Africa".
For most foreign portfolio investors, that means primarily Nigeria and Kenya. But it has also started to include the more illiquid markets of Uganda, Ghana, Zambia, Botswana and Zimbabwe, in all of which promising mineral deposits look set to underpin strong economic growth.
The steady flow of foreign cash has helped many African bourses post healthy recoveries from the lows of early 2009 when the full effects of the global slowdown on the continent's economy became apparent and ended the initial burst of enthusiasm for African frontier markets.
Kenya's main stock index .NSE20 is up 42 percent over the last 12 months and 37 percent year-to-date, while Nigeria's .NGSE30 has risen 18 percent this year. Uganda .ALSIUG is up 34 percent since a year ago.
However, the continent's growing appeal has also presented managers of the larger Africa funds with the challenge of finding a home for new money in a relatively limited investment universe dominated by banks and telecommunications firms in Nigeria and Kenya.
Foreign interest in the poorest continent has not stopped at its companies.
As with many emerging markets, domestic sovereign debt in the likes of Nigeria, Kenya, Uganda, Ghana and Zambia is enjoying unprecedented international interest, due in large part to the hefty yields on offer compared to developed-market bonds.
"We've really seen a broad re-rating of emerging markets in a very positive way, to the point where emerging market debt has almost been a flight to safety," Brandt said.
(Editing by Ed Stoddard and Stephen Nisbet)