Political crisis? Where?
Brazil's turbulent 2016 — in which the country played host to a troubled Olympics as corruption scandals swirled around impeached President Dilma Rousseff and her successor, Michel Temer — would normally be enough to scare off investors.
Nevertheless, the country that put the 'B' in the bloc of emerging market powerhouses known as BRICS continues to deliver hefty returns on its stocks, even weathering a deep economic downturn and loose monetary policy.
Days ago, Brazil's central bank (Copom) surprised the market with a larger-than-expected rate cut, showing that it stands ready to act to help the country out of its deep recession. Lower rates tend to dim the allure of yield-hungry investors.
That may not prove to be the case for Brazil, however. According to MSCI data, Brazil's broad stock index returns topped 60 percent in U.S. dollar terms in 2016. Excluding dividends, this was the best-performing emerging market.
Most of this optimism within the market remains pinned on potential government reforms. In addition, the International Monetary Fund is now forecasting Brazil's growth to rebound from a steep contraction of more than 3 percent in 2016 to a "modest gain" of 0.5 percent this year.
"On the growth front, the good news is that about one-third of Brazilian exports are sent to either China or the United States," Douglas Johnson, managing director of Miami-based investment banking firm Cranganore, told CNBC in an interview.
"Better growth in those economies in 2017 will ricochet to Brazil."