Ruling on dealing in stocks?
Machine translationRead the Arabic original
The Shaykh : Excuse me, what are you asking?
The questioner: Yes.
The Shaykh : Clarify the question for me.
The questioner : I am saying that here there is what is called the Amman Financial Market.
The Shaykh : Which market?
The questioner : The Amman Market.
The Shaykh : The Amman Market, yes.
The questioner : The financial one.
The Shaykh: Yes.
The questioner : Established companies that exist, not imaginary ones, and they have stocks.
The Shaykh : Yes, that is right.
The questioner : And they have stocks, and some of the brothers among the worshippers, meaning those who seek what is lawful and what is forbidden,
The Shaykh : Yes.
The questioner : engage in this work, which is subject to profit and loss.
The Shaykh : Yes, that is right.
The questioner : And so on. So, I am actually hesitant about this.
The Shaykh : Now I understand the question and the answer.
The questioner : A married woman... after the marriage, he changed toward me, meaning his behavior changed; he hits and insults... and records calls...
The Shaykh : As for the partnership, we see no objection to it, provided there is no dealing with banks. And I think you know that any company today cannot do anything but deal with banks, correct?
The questioner: Yes.
The Shaykh : So, from this perspective, these partnerships are not permissible.
The questioner: Yes.
The Shaykh: Is it clear?
The questioner : Yes, yes.
The Shaykh : Ah, another thing I want to mention is another religious violation, but this occurs before these stocks become a real company, whether a factory, a store, or whatever. These stocks are offered in the market, as you mentioned, and are bought and sold at prices either higher than their value or lower.
The questioner: Yes.
The Shaykh : This constitutes open riba (usury or interest).
The questioner : That is.
The Shaykh : Yes?
The questioner : This is also riba (usury or interest).
The Shaykh : This is open riba (usury or interest), because the share belonging to one of the people is worth a thousand, but in the market it is sold for a thousand and one hundred, or for nine hundred, depending on the rise and fall.
The questioner: All right.
The Shaykh : And this is still cash money, did you understand?
The questioner: Yes.
The Shaykh : I told you, before these dirhams or dinars
The questioner : are converted into stocks.
The Shaykh : No, they are stocks; do not rush me.
The questioner : ...
The Shaykh : I mean, let us assume the following scenario.
The questioner: Yes.
The Shaykh : One hundred people subscribed, for example, to establish a factory.
The questioner: Yes.
The Shaykh : So they made each share worth a thousand dinars, so they had ten thousand dinars, okay?
The questioner: All right.
The Shaykh : The ten thousand dinars have not yet been converted into a factory, meaning they have not been used to buy it.
The questioner : Yes, yes.
The Shaykh : It is still cash.
The questioner: Correct.
The Shaykh : And the company grew and its capital increased, so it gained value, and the share worth a thousand is sold for a thousand and one hundred, for example. Here, it becomes open riba (usury or interest): a thousand for a thousand and one hundred.
The questioner: Yes.
The Shaykh : What is the one hundred for? The share is still a physical share. But if it is converted into a factory, then it becomes trade, clear?
The questioner : Yes.
The Shaykh : Ah, so before it is converted into a factory or converted into a type of goods, etc., it is not permissible to sell these stocks. And this happens frequently, where they are bought and sold either for more than their capital if they are successful in terms of reputation, or for less. If they are not converted into a factory, company, or goods, the problem arises that the money invested because of these goods is transferred to the bank, and then they also take what is called, unjustly, interest. So at that time, they fall into another problem. Therefore, we do not encourage any righteous Muslim to participate in stocks in any company unless there is a company, and perhaps soon there will be one, that does not deal with banks.
The questioner : We ask Allah for that. So now, the second prohibition that I know of here is that some of the brothers, before them, are dealing in the buying and selling of stocks.
The questioner: Yes.
The Shaykh : Clarify the question for me.
The questioner : I am saying that here there is what is called the Amman Financial Market.
The Shaykh : Which market?
The questioner : The Amman Market.
The Shaykh : The Amman Market, yes.
The questioner : The financial one.
The Shaykh: Yes.
The questioner : Established companies that exist, not imaginary ones, and they have stocks.
The Shaykh : Yes, that is right.
The questioner : And they have stocks, and some of the brothers among the worshippers, meaning those who seek what is lawful and what is forbidden,
The Shaykh : Yes.
The questioner : engage in this work, which is subject to profit and loss.
The Shaykh : Yes, that is right.
The questioner : And so on. So, I am actually hesitant about this.
The Shaykh : Now I understand the question and the answer.
The questioner : A married woman... after the marriage, he changed toward me, meaning his behavior changed; he hits and insults... and records calls...
The Shaykh : As for the partnership, we see no objection to it, provided there is no dealing with banks. And I think you know that any company today cannot do anything but deal with banks, correct?
The questioner: Yes.
The Shaykh : So, from this perspective, these partnerships are not permissible.
The questioner: Yes.
The Shaykh: Is it clear?
The questioner : Yes, yes.
The Shaykh : Ah, another thing I want to mention is another religious violation, but this occurs before these stocks become a real company, whether a factory, a store, or whatever. These stocks are offered in the market, as you mentioned, and are bought and sold at prices either higher than their value or lower.
The questioner: Yes.
The Shaykh : This constitutes open riba (usury or interest).
The questioner : That is.
The Shaykh : Yes?
The questioner : This is also riba (usury or interest).
The Shaykh : This is open riba (usury or interest), because the share belonging to one of the people is worth a thousand, but in the market it is sold for a thousand and one hundred, or for nine hundred, depending on the rise and fall.
The questioner: All right.
The Shaykh : And this is still cash money, did you understand?
The questioner: Yes.
The Shaykh : I told you, before these dirhams or dinars
The questioner : are converted into stocks.
The Shaykh : No, they are stocks; do not rush me.
The questioner : ...
The Shaykh : I mean, let us assume the following scenario.
The questioner: Yes.
The Shaykh : One hundred people subscribed, for example, to establish a factory.
The questioner: Yes.
The Shaykh : So they made each share worth a thousand dinars, so they had ten thousand dinars, okay?
The questioner: All right.
The Shaykh : The ten thousand dinars have not yet been converted into a factory, meaning they have not been used to buy it.
The questioner : Yes, yes.
The Shaykh : It is still cash.
The questioner: Correct.
The Shaykh : And the company grew and its capital increased, so it gained value, and the share worth a thousand is sold for a thousand and one hundred, for example. Here, it becomes open riba (usury or interest): a thousand for a thousand and one hundred.
The questioner: Yes.
The Shaykh : What is the one hundred for? The share is still a physical share. But if it is converted into a factory, then it becomes trade, clear?
The questioner : Yes.
The Shaykh : Ah, so before it is converted into a factory or converted into a type of goods, etc., it is not permissible to sell these stocks. And this happens frequently, where they are bought and sold either for more than their capital if they are successful in terms of reputation, or for less. If they are not converted into a factory, company, or goods, the problem arises that the money invested because of these goods is transferred to the bank, and then they also take what is called, unjustly, interest. So at that time, they fall into another problem. Therefore, we do not encourage any righteous Muslim to participate in stocks in any company unless there is a company, and perhaps soon there will be one, that does not deal with banks.
The questioner : We ask Allah for that. So now, the second prohibition that I know of here is that some of the brothers, before them, are dealing in the buying and selling of stocks.
Source
www.al-albany.com
The Arabic text is copied verbatim from the original source, without any edits.