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Listed companies seeking to boost their stock performance should consider investing more time and money into building up their brand.

A study of 552 listed firms has shown that strong company branding contributes to a stronger stock performance. According to a DMG-StrategiCom study last year on brand strength versus share returns expectation, it was found that companies in the real estate, retail, food and beverage and environment industries have a higher positive correlation between their companies' perceived brand strength and their share-returns expectations.

"The property bull run last year, together with higher media coverage on en bloc deals and rising rentals, have resulted in a high level of awareness among Singaporeans for firms in the property and real estate investment trust industry," said Ms Audrey Lim from B2B branding specialist consultancy StrategiCom.

While external factors such as economic growth and regulatory framework are major determinants of share returns, Ms Lim advises firms to build up their brand to stay competitive.

The study also found that finance, manufacturing, services and technology companies showed little or no correlation between perceived brand strength and stock performance. Ms Lim said the lack of correlation for the finance industry is surprising and attributed this to the spread of the sub-prime crisis overseas. The sub-prime problem "may have affected some market indicators and sentiments to out-of-the-ordinary shifts and, as such, no correlation could be found in this industry where one would have expected a correlation somewhat", she said.

DMG and Partners Securities' senior vice-president of research, Mr Terence Wong, gave examples of companies with weak branding and whose shares are performance poorly, including Creative Technology, whose share price fell from $64 in 2000 to about $6.40 now. "The brand is not strong enough internationally."

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