What is the ruling on buying stocks?
Machine translationRead the Arabic original
The questioner : Some people buy stocks; after the allocation, their prices rise, and he buys.
The Shaykh : After what?
The questioner : After the allocation, once the cost is allocated, the stocks rise and their prices go up, so I profit from this. He wants the company to profit; that is his only aim. What is your opinion?
The Shaykh : We must know that in buying stocks, we must know what it is that he wants to invest in. If it is something forbidden, such as banks, then investing in them is absolutely forbidden, and it is not permissible for anyone to invest in them.
As for other investments, the original ruling is permissibility until evidence establishes that this investment is forbidden.
And among the forbidden things in investment is if the company deals in riba (usury or interest), even if its original nature is not riba-based, such as if it deposits its surplus funds in banks and takes riba on them, or if it borrows from banks and pays riba. In that case, it becomes one who consumes riba and one who facilitates it, andMusannaf Ibn Abi Shaybah 12:2040.
So if we know that the company does this and it is necessary, then it is not permissible to participate in it or invest in it. And if we do not know, then as I told you: the original ruling is permissibility, the original ruling is permissibility.
But if you invested and then it became clear to you later that the company deals with banks in this manner that I described, then if you know the amount of the riba proportion, you should extract it to purify yourself from it. And if you do not know, you should give half of the profit in charity as a precaution, not for your benefit and not to your detriment.
So if you know this rule regarding investments, which is summarized in the following:
First: Investing in banks is forbidden without exception. Investing in others, the original ruling is permissibility, unless you know that it deals with banks in a riba-based manner, in which case it is not permissible to participate. And if you have become entangled in it, extract the riba proportion from the profit given to you. And if you do not know the proportion, extract half, half of the profit.
This is the summary of the statement regarding investments. As for a person investing before the allocation in order to wait for the stock prices to rise, there is nothing wrong with that. Yes.
The questioner : ... companies if they are making a lot of profit ... .
The Shaykh : There is nothing wrong with that.
The questioner : He does not want anything but the stock, he does not want.
The Shaykh : Yes, yes, he wants only to trade in the stock, he does not want it to remain his property. Yes.
The questioner : Yes.
The Shaykh : After what?
The questioner : After the allocation, once the cost is allocated, the stocks rise and their prices go up, so I profit from this. He wants the company to profit; that is his only aim. What is your opinion?
The Shaykh : We must know that in buying stocks, we must know what it is that he wants to invest in. If it is something forbidden, such as banks, then investing in them is absolutely forbidden, and it is not permissible for anyone to invest in them.
As for other investments, the original ruling is permissibility until evidence establishes that this investment is forbidden.
And among the forbidden things in investment is if the company deals in riba (usury or interest), even if its original nature is not riba-based, such as if it deposits its surplus funds in banks and takes riba on them, or if it borrows from banks and pays riba. In that case, it becomes one who consumes riba and one who facilitates it, and
The Prophet (peace and blessings be upon him) cursed the one who consumes riba and the one who facilitates it.
لعن النبي صلى الله عليه وسلم آكل الربا وموكلهSo if we know that the company does this and it is necessary, then it is not permissible to participate in it or invest in it. And if we do not know, then as I told you: the original ruling is permissibility, the original ruling is permissibility.
But if you invested and then it became clear to you later that the company deals with banks in this manner that I described, then if you know the amount of the riba proportion, you should extract it to purify yourself from it. And if you do not know, you should give half of the profit in charity as a precaution, not for your benefit and not to your detriment.
So if you know this rule regarding investments, which is summarized in the following:
First: Investing in banks is forbidden without exception. Investing in others, the original ruling is permissibility, unless you know that it deals with banks in a riba-based manner, in which case it is not permissible to participate. And if you have become entangled in it, extract the riba proportion from the profit given to you. And if you do not know the proportion, extract half, half of the profit.
This is the summary of the statement regarding investments. As for a person investing before the allocation in order to wait for the stock prices to rise, there is nothing wrong with that. Yes.
The questioner : ... companies if they are making a lot of profit ... .
The Shaykh : There is nothing wrong with that.
The questioner : He does not want anything but the stock, he does not want.
The Shaykh : Yes, yes, he wants only to trade in the stock, he does not want it to remain his property. Yes.
The questioner : Yes.