The Brazilian stock market is on an amazing tear this year

Brazilian equities continued their climb higher on Monday, hitting their highest level in more than four years.

Bovespa (Sao Paulo Stock Exchange: .BVSP), Brazil's benchmark stock index hit 64,691.43, its highest level since April 2012. Bovespa has been on a tear in 2016, rising nearly 48 percent, lagging only behind Argentina's Merval (Buenos Aires Stock Exchange: .MERV), which is up 57 percent. The iShares MSCI Brazil Capped ETF (EWZ) (NYSE Arca: EWZ), which tracks Brazilian stocks, gained 0.82 percent.

Brazilian stock valuations "became very depressed in the early part of the year, as there were fears that the impeachment process of [former president] Dilma Rousseff could not succeed," said Alberto Ramos, head of Latin American economics at Goldman Sachs. "We're seeing a rebound from that and, while we're much higher, we're still below the [highest] levels hit in 2012."

At its 2012 peak, Bovespa closed at 68,394.33, a level reached March 13 of that year. The index's all-time closing high is 73,516.81, a level struck on May 20, 2008.

Bovespa (blue) and Merval (green) in 2016

Source: FactSet

Rousseff was successfully impeached in late August amid a slew of corruption charges surrounding her government, leading then Vice President Michel Temer to assume the role of president. Temer, a known conservative.

Temer's rise to power and Rousseff's ousting has sparked hope that economic and political reform may be at hand in Brazil. That said, Temer faces an uphill battle.

Eduardo Cunha, the former speaker of Brazil 's lower chamber, was arrested on charges of corruption, sparking worries that a spending cap may be voted down.

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