In addition, these stocks are often majority-owned by the founding family or the founder itself, meaning free-float investors have little influence over how the company is run. And that puts off potential investors. Why invest in a company where the founder alone runs the show and where investors cannot change course by raising their voice at the annual general meeting? This is exacerbated, when the founder has no interest in improving company operations or increasing shareholder return.

And lastly, the Singapore stock market ecosystem attracts a certain type of investor. Singaporeans often favor “boring”, defensive stocks with a solid dividend yield instead of demanding higher overall returns. They actually see their equity investment more as a fixed income: Give me my annual dividend and I don’t care about higher valuation.

And related to that, Singaporean (and generally speaking many Asian) shareholders are more passive than their counterparts in Europe or the U.S. To put it bluntly, an annual general meeting in the city-state might be more like the summer camp of choir boys compared to the sometimes rambunctious events in the western world.

So, buying Singapore stocks might be the right thing for value investors. But even more so it’s fertile ground for activism. Because buying undervalued equities might not be enough as the stock just keeps its low valuation. It needs someone (like an activist investor) to step in, make his voice heard and engage with the management and the public to maximize shareholder value.