lim hng kiang : the singapore financial services sector address by mr lim hng kiang, deputy chairman of the monetary authority of singapore and minister for trade and industry, at the abs annual dinner, singapore, 29 june 2007. * * * chairman, abs council members of abs ladies and gentlemen it is good to be here tonight. the abs dinner is an excellent opportunity for the singapore financial services community to get together, catch up and look ahead. state of the singapore financial sector 2006 has been a good year for singapore. the financial services sector has done particularly well. all in, financial services grew 9. 2 % in 2006, outperforming singapore ’ s overall gdp growth of 7. 9 %. this momentum has carried into this year. 2007 first quarter growth for the financial services sector came in at 13 % on a year - on - year basis. growth has been broad - based, with brokerage, treasury and advisory - related services being the largest contributors. volumes in the singapore foreign exchange market have also grown steadily. the equity markets have been hot. volume of securities traded has gone up sharply. the local debt market has also registered good growth in 2006. in the latest annual corporate debt review for 2006 which mas released today, the total market capitalization of the singapore bond market has reached s $ 243 billion. indeed, the government ’ s efforts to grow the singapore government securities ( sgs ) market have produced results. since 1996, outstanding sgs has grown from s $ 20. 5 billion to s $ 85. 8 billion in december 2006. this year we issued the first 20 - year sgs. the 20 - year sgs has extended the benchmark yield curve as a price discovery mechanism and liquid hedging instrument for the broader singapore debt market. the corporate debt market has also seen good growth. as at the end of last year, outstanding corporate debt securities were up 14 % from a year earlier. this represents an increase of more than 6 times in size since 1996 to s $ 157 billion. another encouraging development has been an increase in the diversity of issuers. we have seen more real - estate borrowers and foreign issuers tapping the sgd bond market. almost one - fourth of sgd - denominated bond issuance, or s $ 6 billion, was made up by foreign entity issuers. we have issuers from the us, europe and more recently from korea, latin america and the middle east. in line with the growing

managed. many countries in the middle east are keen to engage asia but i have been told that their businessmen are not so familiar with doing business in china and southeast asia. this is where singapore can play a role. as a key financial and commercial hub, singapore is well - positioned as a gateway for middle east companies to expand in asia. middle eastern investors can leverage on singapore's networks and knowledge to venture into asian markets. there is much that asia and the middle east can do together, as we embark on this journey of rediscovery. although there are significant differences between asia and the middle east, we also share common interests and common challenges. we both want to reconcile tradition with modernity and change, to develop without losing our core values. both asia and the middle east can profit by sharing experiences. this was the reason why singapore had initiated the asia - middle east dialogue ( amed ). amed would help to share developmental experience, promote greater understanding and serve as a bridge between the two regions. before stepping down as prime minister, i stepped up singapore's relations with the middle east, and continue to do so in my present capacity. in the past three years, i have visited almost all the middle eastern and the maghreb countries – egypt, algeria, jordan, the gulf states, iran, israel and the palestinian territories – to name a few. trade and investment between singapore and the middle east have shot up. to date, singapore companies have secured more than s $ 6 billion worth of projects. funds from the middle east managed in singapore have increased to around s $ 28 billion. but there is room for greater growth. i have started a second round of visits to the middle east, beginning with abu dhabi this year. i want to further strengthen singapore's relations with them. let me now turn to the theme of today's conference – integrating awqaf into the islamic financial sector. i have dealt at some length on relations between asia and the middle east because i wanted to put this conference in a larger context. the evolution of awqaf and islamic finance is in a sense about how muslims are adapting traditional concepts to modern living and how islamic finance is moving out of the middle east into the rest of the world. growth of islamic finance the growth of islamic finance as an ethical means of investing wealth arose because muslims wanted to invest their monies to get good returns, but in accordance with islamic principles. while the proportion of islamic banking assets as