Credit Suisse says buying back Mexican stocks after slump

LONDON (Reuters) - Credit Suisse said on Friday it was buying back Mexican equities after their sharp fall in the wake of the shock U.S. election outcome, noting that the peso's slump already reflects election-related risks.

The bank said in a note it was closing its 20 percent underweight position on Mexican stocks, held since April, and moving back to benchmark weight. Mexican assets have been at the forefront of emerging market weakness after Republican Donald Trump unexpectedly won this week's U.S. presidential election.

Trump has threatened to scrap the key NAFTA trade treaty and build a wall to cut immigration from Mexico. The peso fell 3 percent on Friday to new record lows against the dollar

Credit Suisse said however "the Mexican peso is now discounting a correction in the country's global export market share to pre-NAFTA levels... The peso has already weakened to reflect U.S. related external risks."

Mexican manufacturing labour costs are also more competitive, it said.

The bank also added that it was cutting South African stocks to a 15 percent underweight.

(Reporting by Sujata Rao; editing by Karin Strohecker)