Are stocks Haram? Profit on profit if you know

Are you an Allah-fearing Muslim? Do you comply with Halal and Haram in your business? That’s why you are looking for the answer to this question – stocks Haram?

Then you have come to the right place. In your view article, we give a complete idea about buying stroke and the Islamic perspective. 

This article will discuss some effective ways to avoid haram stores and inv st in halal ways.

Concept of halal and stocks Haram

The halal and haram aspects of stock stocking mainly depend o the stock. Because stroke is ownership of a small unit of a public company ‍and fund, a person who owns a store can sell his stock to others at will. 

But the buyer should buy these stocks knowing whether it is halal or Haram. For the store to be halal, one must be fully aware of the company’s policies and Islamic restrictions on the product. 

If these are Islamic, it will be legal to buy. Or not valid. But there needs to be a lot of discussion about what a company’s policy and product policy would be. It is amicably acceptable.

Are you Stocks Haram?

No, stocks, in general, are not haram. Because many products are in the stock market, its stocking and selling policies are compatible with Islamic buying and selling. So it will be halal. But stocks that violate Islamic trading principles are haram like liquor bar stock, pork stock, night club business etc.

But in most cases, the conventional stock market prohibits trading strokes.

Because there is a violation of Islamic business principles in everything from the stroke of a contract to the sales process, especially there, the interest trading is very strong.

Moreover, a fundamental condition of Islamic business principles is the existence of the product and its presence in front of the buyer and seller at the time of sale. But this is not the case with conventional stocks.

Rather, the stock is haram because a fixed price is fixed for an imaginary or non-existent product and sales activities are carried out according to that price.

Opinion of Islamic scholar

Shaykh Ibn Baz – Rahimahullah – said in his Majmu’ fatawa that it is impossible to buy or sell bank shares; Because it is a sale for money without conditions of equality and exchange.

And since it is a usurious institution, it is not permissible to cooperate with it in buying and selling. For Allah says, Cooperate one another in good deeds and piety, but do not cooperate in sin and aggression {Al-Ma’idah: 2}

The Fatwa Committee’ Al Lajnatud Dayma’ was questioned about charity and shares in agricultural companies, banks, insurance, and oil companies. Then they replied:

It is permissible for any person to participate in these companies unless the interest is traded. If they deal with usury, it is unacceptable because the prohibition of usury is proven in the Qur’an, Sunnah, and consensus.

Similarly, it is not permissible for an individual to contribute to a commercial insurance company, as insurance contracts involving uncertainty, ignorance, and usury are prohibited in Islamic law. Islamic Fatwas (2/43).

Debate among scholars on buying stocks

Some contemporary scholars believe a stock does not represent the future share ders’ ownership of the company’s assets and capital.

But rather the specific amount of money the concerned person has given to the company – the shares are the certificate. 

It is like other instruments of debt – like bonds etc. Similarly, they are also a type of loan document. 

The only difference here is that the interest on bonds is charged at a fixed rate; however, the interest rate on shares is not fixed. 

Rather, a proportional share of the profits earned by the company is also given to the shareholder. 

If stock represented ownership of the company’s subs airy assets and capital, the stock could be forfeited like its other assets if the stockholder went bankrupt, but it is not. 

From this point of view, it is not halal to take stock, and it is also not halal to buy and sell it more or less.

However, the deep thinking of Islamic scholars has proved this view unacceptable. Because the external characteristics of the company and the literature on the subject make it clear

That the ‘stock-owners’ have proportionate ownership of the company’s assets and capital. For this reason, if the company is liquidated through mutual negotiations, the shareholder

Each shareholder is given a proportional part of the company’s assets, capital, and invested money.

Criteria for determining halal stocks

There are two main criteria for deciding haram stocks.

  • Company Business Policy
  • Goods are purchased items.

It is not permissible to purchase the stock of a company that has formulated its business policy based on a condition that is not acceptable in Islam.

Companies investing in brothels, liquor bars, dance clubs, casinos, etc. Or buying company stock where the company’s transparent plan of investing money and gaining profit is hidden.

, Also, the products in the sector the company has invested in must be halal products of Islam.

If a company owns a product, Islam declares Haram; it is Haram to buy its stocks, such as liquor, pork, movie deals, and rs, money lending companies on interest.

Types of halal stocks

There are many types of Halal stocks. Among them, the basic principle of halal stock is that the company’s products will be managed according to the halal tenets of Islam.

A, also the products will be halal. Below is a list of some such halal stocks.

  • Real estate business
  • Cloth factory
  • fish fishery
  • Cow and goat farm
  • immovable land
  • flower garden
  • Educational institution
  • Pharmaceutical companies
Impact f a company’s activities on halal stock status

The company’s position must be based on being halal from start to finish. Many companies are like that; the product sold in stock does not exist.

The stock price determines the estimated market price of a planned product. Buying such stock is completely prohibited.

The Messenger of Allah, may God bless him and grant him peace, said:

حكيم بن حزام رضي الله عنه قال: أتيت رسول الله صلى الله عليه وسلم فقلت: يأتيني الرجل يسألني من البيع ما ليس عندي، أبتاع له من السوق ثم أبيعه؟ فقال: لا تبع ما ليس عندك.

Hakim bin Hizam, may God be pleased with him, said: I came to the Messenger of God, may God’s prayers and peace be upon him, and I said:

A man comes to me asking me about selling what I do not have. Should I buy it from the market and then sell it? He said: Do not sell what you do not have. (Narrated by al-Tirmidhi – 1232)

It may also happen that a company’s goods are not in their hands. It is under someone else’s control.

They have the right to sell it to someone else without confiscating it. Buying stocks Haram of such products is also prohibited because Islam does not allow buying and selling intangible goods.

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