(Bloomberg) -- Global investors are betting that Brazil’s stock market may be nearing a bottom after one of the world’s worst performances this year.

The $5.1 billion iShares MSCI Brazil ETF, known as EWZ, the biggest U.S.-listed fund tracking Brazilian stocks, received a $200 million daily inflow earlier this week, the largest in almost two years, according to data compiled by Bloomberg. The fund hasn’t had a daily outflow since August, and this week’s injection trimmed the exodus this year to $735 million. Latin American ETFs led inflows among emerging markets last week, while omicron fears took a toll on Asian markets. 

The cheapest stock valuations in a decade are luring traders able to look past the prospects of higher interest rates and weaker growth in Latin America’s biggest economy. After falling almost 10% this year, Brazil’s benchmark Ibovespa equity index is trading at about 7.9 times forward earnings, well below historical averages. It reached as low at 7.5 times earlier this month.

Despite a tough macro scenario and greater volatility stemming from presidential elections scheduled for October, JPMorgan Chase & Co. expects the Ibovespa to end 2022 at 133,000, implying upside potential of about 24% from Tuesday’s close. The negative news is already priced in, strategist Emy Shayo wrote in a report. 

Read More: JPMorgan Says Bottom Is Near for Stock Market That Plunged Most

Earlier this week, HSBC Holdings Plc also wrote a favorable report on Brazil stocks, saying that trader sentiment may improve significantly in the first quarter of next year. 

Brazil’s key rate should peak at 10.25% in February, while a more stable Brazilian real ahead could help companies with costs in U.S. dollars like brewer Ambev SA and clothing retailer Lojas Renner SA, strategists led by Nicole Inui wrote in a report dated Dec. 6.

“We recommend positioning ahead of time and maintain our overweight stance on the market,” Inui wrote. 

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