Donald Trump and Argentina’s President Mauricio Macri didn’t get off to the most auspicious start: According to a book by Macri’s father, the 45th U.S. president once broke Macri’s golf clubs over his legs, one by one.

But depending on one’s politics, Argentina‘s president resembles his American counterpart, at least in the sense that each is a former real estate developer who promised an economic boost and presided over a big stock rally in 2017.

But, sorry Donald, Mauricio’s was bigger. Bigly bigger.

“Argentina is becoming the rising star in the whole [South American] region, and that is because of the change in politics and economics from President Macri,” said Alfredo Coutino, an economist at Moody’s Analytics. “The free-market model is something Argentina was missing.”

Argentina‘s benchmark stock index rose 77 percent last year. The key was a series of fundamental reforms to make the economy more free-market-oriented, which investors and lenders have cheered. The emergence of smaller technology and energy companies that bolster Argentina’s traditional strength in agriculture has also led to additional market gains.

But can it last?

Like Trump, Macri is a real estate developer with a rich father who set out to turn his country’s economy around. But his challenge was not to implement populist measures, but to reverse decades of populism dating to strongman Juan Peron, first elected president in 1946. From here the path of the Merval, the primary Argentine stock market index, will turn on whether Macri’s shift in politics proves to be the right approach.

Back when Macri took office in 2015, Argentina was heading into a recession. Its economy shrank 2.2 percent in 2016. But the Merval jumped 45 percent as investors bought into the beginnings of Macri’s reform plans.

They were right. Macri reversed capital controls imposed by his two predecessors and eliminated popular, populist price controls on food and gasoline. Those policies, among others, had trapped Argentina into perennially tough access to much needed foreign capital, Coutino said.

A 2016 settlement of a longstanding dispute with hedge funds that owned bonds on which Argentina had defaulted also made the country more attractive to foreign lenders and investors, according to the International Monetary Fund. That set the stage for the country’s first new debt offering in 15 years.

“Controls were good for Argentina in that prices were flat, but if you can’t get gasoline, what’s the point?” Coutino said. “The most important change was unwinding capital controls.”

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The IMF continues to look for more structural changes from Argentina. A report last month praised a tax-reform bill that would lower income taxes for lower-income workers and trim Social Security contributions in exchange for making more income taxable. The IMF also wants to see changes in labor markets and a crackdown on corruption.

The bad news is that inflation remains high and unemployment is about 9 percent, with 30 percent of workers working off the books. Gross domestic product growth is still below the country’s capacity, at about 2.75 percent expected for this year.

“Policy changes have put the economy on a stronger footing and eliminated most of the most urgent macroeconomic imbalances,” the IMF said. “Progress on supply-side reforms will support growth, raise productivity, incentivize private investment and erode some of the currency overvaluation. Reforms will need to make sure that the benefits from stronger growth extend to all parts of society, lowering poverty, improving job quality and reducing [participation in the off-the-books economy], particularly for the young and for women.”

A midterm election last October consolidated Macri’s control, which is positive for Argentine stocks, said Verena Wachnitz, manager of the $683 million T. Rowe Price Latin America Fund, which has gained 30 percent in the last year.

While undoing the capital controls brought a wave in new commitments from companies in 2015, a 2016 dip in investments makes it unclear how quickly companies are following through on those promises.

A very important long-term trend is that the Argentine market is getting more diversified and includes more companies as well as industries to invest in, the T. Rowe Price manager said. Financials, oil and gas, utilities, infrastructure and even some tech companies are coming to the market. Its best-known, homegrown company is the e-commerce company MercadoLibre, which is incorporated in the United States.

For the time being, though, Argentina is considered a “frontier” market, less advanced even than emerging markets like Brazil or China, and it’s not included in the index that Wachnitz’s fund uses as a benchmark. While the opportunity set is expanding, the country has yet to prove that its economy has become more stable, and hence it remains a risky market to invest in, she said.

That’s why she thinks another positive would come if the nation is added to Morgan Stanley’s emerging-market indices, expanding the range of investors looking at the country’s equity market. Argentina has room to grow because its corporate debt levels are lower than in other Latin nations and companies can borrow more now that lenders don’t consider Argentina as risky, and a better economic outlook is driving demand for credit, she said.

There are only a few exchange-traded funds that specialize in Argentina, and they are fairly small. The purest Argentina play is the The Global X MSCI Argentina ETF (ARGT), which holds only $219 million in assets under management. Its largest holdings are MercadoLibre, which has nearly doubled in the last year; oil-drilling supplier Tenaris; and the bank Grupo Financiero Galicia.

— By Tim Mullaney, special to CNBC.com