(#089)
Is it permissible to purchase shares in the stock market?
Answer
بسم الله الرحمن الرحيم
السلام عليكم و رحمة الله و بركاته
حامدا و مصليا و مسلما
Muhtaram
We acknowledge receipt of your question pertaining to the Shar’i ruling of Shares. Our response is as follows:
As we mentioned that there is a difference of opinion amongst the Ulema concerning investment in shares on the stock market.
Some Ulema permit the purchasing of shares in certain selected companies (such as those that do not engage in invalid Shar’i business transactions, nor deal in buying and selling of Haraam commodities and/or whose income is not dependent on interest-based transactions). However, other Ulema, amongst them a prominent and renowned Mufti of the Indo-Pak subcontinent (viz. Faqeehul Ummah Hadhrat Mufti Mahmood Saheb Rahmatullahi Alaihi) after being explained the mechanism of the Stock Market felt that such an investment does not fall within the ambit of any legal Shar’i transaction. Thus, concerning the buying of shares on the stock market he answered:
Translation: “In terms of the Shariah this (buying and selling of shares in the company set up) is not a Baie (Sale), nor Ijaarah (Leasing), nor Shirkah (Partnership), nor Mudharabah (Sleeping partnership), nor Qardh (monetary Loan), nor Aariyah (Loan of an item), nor Wadee’at (Trust), it is not in any class of a Shar’iee transaction. Never should one enter into such a transaction.”
Thus, these Ulema do not permit dealing in any shares of the share market as such.
Hence, to be on the safe side one should avoid investing with shares. Also due to the unknown modus operandi of these companies’ transactions, their methods of dealing with capital, etc. there is a strong possibility that their transactions and/or activities may include methods deemed impermissible in Shari’ah. Hence, our advice is that caution would dictate that one abstains entirely from buying and investing in any type of Shares.
And Allah Ta’ala Knows Best
(Mufti) Muhammed Irshad Motara
13th Jumaadal Ukhraa 1435
13th April 2014
Checked and approved by:
Mufti Musayab Sahib
