and products both in their own countries and outside. singapore has a good brand name in the middle east and awareness about us is increasing. there are many opportunities for our businesses there. 20. during my visits to the middle east, i sensed their interest in investing in asia. many are keen to engage china and india but their businessmen told me that they were not so familiar with doing business in china. singapore can serve as a bridge, given our knowledge and connections. furthermore, indian, chinese and singaporean financial institutions could tap into islamic funds from the middle east for infrastructural and other major projects in india and china. 21. as an international financial centre, singapore is well placed to intermediate and facilitate investment flows between asia and the middle east. already, funds managed in singapore from the middle east have increased by over 70 % to s $ 22 billion in 2004. but this is still a small figure, given the trillions of dollars of wealth in the middle east. we should work with credible partners to offer a wider suite of islamic financial services and products. the role of mas 22. mas will continue to support and partner the financial industry to seize the opportunities. last year, i highlighted three strategic priorities for mas and our financial sector. they are first, strengthen our position as a leading financial centre in asia ; second, maintain excellence in a riskier environment ; and third, leverage and build on our reputation. we have made good progress on all three fronts. strengthening our position as a leading financial centre in asia 23. as mas chairman, i regularly meet ceos of global banks and big companies. they give me a feel of how singapore is viewed. one of the top bankers told me that he saw singapore emerging as one of the top financial centres in asia in the longer term. our strong fundamentals will enable us to play a role in asia's transformation. another ceo told me that his bank found skill levels and costs in singapore competitive enough for them to outsource processing work, including operations and it development from europe to singapore. 24. in 2004, our treasury and capital markets grew strongly. for instance, the singapore debt market grew by 20 % to s $ 123 billion. our fund management industry has continued to flourish, with assets under management ( aum ) rising to almost s $ 600 billion. on the singapore exchange, the structured warrants market has seen tremendous growth. 25. a vibrant and dynamic financial centre depends on a vibrant and dynamic talent pool

letter of intent for closer cooperation in capital markets. 14. next month, singapore and vietnam will sign the framework agreement on connectivity, which will help us leverage on each other's strengths and complementarities. areas of cooperation include finance, ict ( information and communications technologies ), investments, trade and services, transport and education. singapore is the second largest foreign investor in vietnam, after taiwan but ahead of japan. the connectivity agreement will further open up opportunities for singapore firms in vietnam. seizing the opportunities 15. governments in asia see the benefits of economic cooperation and are building closer links, both on a multilateral as well as bilateral basis. this will enable the private sector to take full advantage of the rich array of opportunities. i strongly encourage singapore - based companies and financial institutions to ride the growth momentum. 16. let me highlight a few such opportunities. as capital restrictions are gradually liberalised in their countries, chinese and indian individuals, financial institutions and corporates will begin to invest overseas. singapore - based financial institutions could partner them to use singapore as a base to expand into the region. 17. the comprehensive economic cooperation agreement ( ceca ) is a win - win outcome for singapore and india. singapore can offer a platform for indian firms to build up their global exposure and branding. india is also a promising investment destination for singapore firms. under ceca, our domestic banks are allowed to open up to 15 branches in india, and they are in the process of preparing for expansion into this market. to deepen the linkage, mas will allow indian banks that meet our prudential standards to expand their presence in singapore. we have approved the entry of two indian banks which do not yet have a presence in singapore. 18. the japan - singapore economic agreement for a new age partnership ( jsepa ) has brought a new era of closer economic cooperation. investments by japan and singapore in each other s markets have increased. japanese companies which are looking to diversify some of their business operations into southeast asia can use singapore as the gateway. singapore - based companies can take advantage of not just the jsepa but bilateral free trade agreements ( ftas ) singapore has signed with other countries to expand into the region and beyond. when i was in tokyo, i suggested that the jsepa should be reviewed to see where it could be further broadened and deepened. the japanese leaders were receptive. 19. the middle east is another promising region. middle eastern investors are looking for suitable investment destinations