, we are stepping up consolidated supervision of financial groups. in banking, mas has always conducted group wide supervision. we are increasingly focusing on areas such as mitigating intra - group contagion risk, preventing the multiple use of capital within the group, and limiting group concentration risk exposures. for insurance groups, we will be enhancing our supervisory practices. we issued a consultation paper in february this year, with detailed proposals. we will also introduce a new financial holding companies act. this will cover companies incorporated in singapore, which hold as their subsidiary or subsidiaries, banks, insurance companies, or both, but does not itself conduct banking or insurance business. third, regulation of the fund management industry. all fund management companies will have to meet the enhanced competency, business conduct, and capital requirements by august. those with assets under management greater than s $ 250m will have to be licensed, while those below this threshold may operate under the “ registered fund management company ’ regime, which will replace the existing “ exempt fund manager ” regime. i will now touch on the performance and development of singapore as a financial centre. financial centre : well - positioned for growth singapore financial sector activity subdued in weak global environment, but longer - term prospects remain bright singapore ’ s financial sector contracted on a sequential basis for two consecutive quarters in q4 2011 and q1 2012, amidst heightened risk aversion in global financial markets. we expect financial services activity to remain subdued given uncertainty and weakness in the global economic environment. activities such as trading – which are very sensitive to sentiment – bore the brunt of adjustment. but other activities – tied to asian demand – have remained resilient. they are well - positioned for growth. asia ’ s demand for financial services will continue to be driven by rapid urbanisation, the demographics of a growing middle - class, and the rise of regional multinational companies in need of funding. let me highlight a few of these growth areas. first, asset management. as at end - 2011, total assets managed by singapore - based asset managers amounted to s $ 1. 34 trillion. this is a slight dip of 1. 2 % from 2010, but not bad, considering the weak performance of global equity market and the volatile financial markets in general. indeed, we have seen a more diversified base of asset managers offering a greater variety of investment strategies. the number of investment professionals increased by 15 % last year. and we continue to see strong interest from global fund houses seeking to set up or

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