Don't be lured into Mexican shares, Credit Suisse says

Nevertheless, while they continued to recommend underweighting Mexican shares versus their benchmark, they now did so less aggressively than before, moving from 20% underweight to 10% underweight, adding that the cash released by that move would be temprarily plowed into additional cash.

The eight reasons cited by the Swiss broker were: (1) despite a new more conciliatory US tone, substantial NAFTA related risks remain; (2) growth dynamics-particularly the investment outlook-remain depressed; (3) the 2017/18 equity climate will likely be characterized by tightening real interest rates; (4) Mexico's low proportion of USD sales minimises hedging of any MXN weakness; (5) the ascendance of MORENA's popularity risks a more leftist political agenda; (6) valuations remain expensive and earnings growth has been elusive for a decade; (7) there is 19% USD potential downside for Mexican equities on our macro model; and (8) GEM equity and debt investors are already broadly exposed to Mexican assets.

Over the past month, MSCI Mexico has outperformed emerging markets as an asset class by 10% when measured in US dollar terms and the benchmark IPC index was now at an all-time high.

On a separate note, Credit Suisse listed the eight "value-creating" names which it continued to rate at 'Overweight'.

They were: FEMSA, Banorte, CocaCola Femsa, Fresnillo, Cemex, Arca Continental, Santander Mexico and Industrias Penoles.