Why is trading in some of the stocks currently in the market considered gambling?
Machine translationRead the Arabic original
The questioner : A questioner is asking, saying: These stocks that are called in the Amman Stock Exchange, trading in them, he is asking why it is gambling, meaning, do you say it is gambling?
The Shaykh : Because they go up and down without commercial regulations!
The questioner : They are subject to the benefit; these stocks are subject to the factory according to its profit and loss. So if the factory profits, the price of the stocks goes up; if the factory loses, its production decreases, and the stocks decrease. So on this basis, the stock rises and becomes cheap.
The Shaykh : I do not think it is only like that, meaning, I compared this process to the process of the dollar and the pound going down and up, and so on. This has no commercial reasons, but rather reasons that go back to the state that owns the currency; so it is the one that raises it and it is the one that lowers it. Likewise, these stocks; provided that stocks are of two types: stocks that remain a currency that will not turn into a factory or a workshop or actual trade. This is clear, of course, the picture is this.
The questioner : ... .
The Shaykh : This is a natural matter, meaning, every company that is intended to be established, every factory, every workshop, before this workshop has an existence and an entity on the ground, it has stocks.
The questioner : ... .
The Shaykh : This is a natural matter.
The questioner : ... .
The Shaykh : Yes?
The questioner: Yes.
Another questioner : It is based on the stocks, and if the stocks did not exist, the factory would not exist.
The Shaykh : Absolutely not; so these stocks, before they turn—as we said—into a factory, they are listed in the market. So the stock whose value is, for example, one hundred, becomes ninety, ninety-five, or one hundred and five, or one hundred and ten. This has become like what is it called? Buying cash with cash; meaning, debt with debt, or buying a dirham with two dirhams, or a dirham and a half, and so on; because there is no trade in the matter except with the currency itself; meaning, the one who has a stock of one hundred pays one hundred to take one hundred and five, or he will take one hundred minus five. Who brought the profit, who brought the loss, is it? The matter is still currency. Is this clear?
Another questioner: Yes.
The Shaykh : This is the most prominent case of it being gambling. The other picture that you asked about is that there is an established company, meaning, those stocks have turned into a commercial company or a workshop or a factory or something similar to that.
The Shaykh: If we assume that the rise and fall of these stocks is based on the fruit of this company or this trade and its profit and loss; then this appears at first glance to have nothing wrong with it. But I do not picture the matter in the way you are picturing it. This goes back to the founders of this company, so they are the ones who raise it and they are the ones who lower it. So if there is an expert who says that the matter does not exceed profit and loss in any trade of the types of trades, then it is like them; in that case, it can be said that there is nothing wrong with it.
The Shaykh: What is your knowledge of the matter?
The questioner : By Allah, both exist.
The Shaykh: It is a problem.
The questioner : They work like this and they work like that.
Another questioner : ... The controller is the Amman Stock Exchange, it is the controller of the stocks, not the production capacity of ... The same market is the controller, meaning, people buy certain stocks and raise them, and other people lower them, so they go down with them.
The Shaykh: Yes, that is it.
Another questioner : The Arab Bank, meaning, stagnant ... In the eleventh month it will be at one hundred and twenty-four dinars, then it suddenly becomes one hundred and fifty dinars. Why? Because they want to distribute the profits, so people buy stocks ... , meaning, I watched it with my own eyes in the newspaper ... .
The Shaykh : Very good.
The questioner : Selling stocks, their transaction in the banks, meaning ... .
The Shaykh : This is another aspect, cooperation, meaning, with the banks.
The questioner : The company's interest-bearing profits with the original ones together.
The Shaykh : To the banks.
The Shaykh : Because they go up and down without commercial regulations!
The questioner : They are subject to the benefit; these stocks are subject to the factory according to its profit and loss. So if the factory profits, the price of the stocks goes up; if the factory loses, its production decreases, and the stocks decrease. So on this basis, the stock rises and becomes cheap.
The Shaykh : I do not think it is only like that, meaning, I compared this process to the process of the dollar and the pound going down and up, and so on. This has no commercial reasons, but rather reasons that go back to the state that owns the currency; so it is the one that raises it and it is the one that lowers it. Likewise, these stocks; provided that stocks are of two types: stocks that remain a currency that will not turn into a factory or a workshop or actual trade. This is clear, of course, the picture is this.
The questioner : ... .
The Shaykh : This is a natural matter, meaning, every company that is intended to be established, every factory, every workshop, before this workshop has an existence and an entity on the ground, it has stocks.
The questioner : ... .
The Shaykh : This is a natural matter.
The questioner : ... .
The Shaykh : Yes?
The questioner: Yes.
Another questioner : It is based on the stocks, and if the stocks did not exist, the factory would not exist.
The Shaykh : Absolutely not; so these stocks, before they turn—as we said—into a factory, they are listed in the market. So the stock whose value is, for example, one hundred, becomes ninety, ninety-five, or one hundred and five, or one hundred and ten. This has become like what is it called? Buying cash with cash; meaning, debt with debt, or buying a dirham with two dirhams, or a dirham and a half, and so on; because there is no trade in the matter except with the currency itself; meaning, the one who has a stock of one hundred pays one hundred to take one hundred and five, or he will take one hundred minus five. Who brought the profit, who brought the loss, is it? The matter is still currency. Is this clear?
Another questioner: Yes.
The Shaykh : This is the most prominent case of it being gambling. The other picture that you asked about is that there is an established company, meaning, those stocks have turned into a commercial company or a workshop or a factory or something similar to that.
The Shaykh: If we assume that the rise and fall of these stocks is based on the fruit of this company or this trade and its profit and loss; then this appears at first glance to have nothing wrong with it. But I do not picture the matter in the way you are picturing it. This goes back to the founders of this company, so they are the ones who raise it and they are the ones who lower it. So if there is an expert who says that the matter does not exceed profit and loss in any trade of the types of trades, then it is like them; in that case, it can be said that there is nothing wrong with it.
The Shaykh: What is your knowledge of the matter?
The questioner : By Allah, both exist.
The Shaykh: It is a problem.
The questioner : They work like this and they work like that.
Another questioner : ... The controller is the Amman Stock Exchange, it is the controller of the stocks, not the production capacity of ... The same market is the controller, meaning, people buy certain stocks and raise them, and other people lower them, so they go down with them.
The Shaykh: Yes, that is it.
Another questioner : The Arab Bank, meaning, stagnant ... In the eleventh month it will be at one hundred and twenty-four dinars, then it suddenly becomes one hundred and fifty dinars. Why? Because they want to distribute the profits, so people buy stocks ... , meaning, I watched it with my own eyes in the newspaper ... .
The Shaykh : Very good.
The questioner : Selling stocks, their transaction in the banks, meaning ... .
The Shaykh : This is another aspect, cooperation, meaning, with the banks.
The questioner : The company's interest-bearing profits with the original ones together.
The Shaykh : To the banks.
Source
www.al-albany.com
The Arabic text is copied verbatim from the original source, without any edits.