Thursday | 22 April 2021 | 10 Ramadhan 1442
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Fatwa Answer

Question ID: 1287 Category: Dealings and Transactions
Stocks Purchase

Assalamualaikum Mufti Saab

  1. Can we buy stocks? If yes then I heard there is app called Zoya which is used by Muslim communities widely in Canada and USA. It shows whether that particular stock is shariah compliant or not
  2. And then we have to buy using apps like E-trade/ Robinhood apps

Your valuable guidance on this will be highly helpful.

Jazakallah Khair

 

بسم اللہ الرحمن الرحیم

الجواب وباللہ التوفیق

The trading of shares is legal with certain conditions:

(1) The company whose shares are being bought and sold, exists physically, and is not only registered on paper. Total assets of the company are not only in the form of cash but static/immovable assets in the ownership of that company.

(2) The total or at least most of the capital of the company is halal.

(3) The real business of the company should be lawful and should not involve business of haraam things.

(4) In buying and selling of shares, all the conditions of buying and selling shall be observed. (For example: after buying the shares, they should be fully owned by the buyer, before they are sold further, the shares should not be sold before the buyer's ownership is completed and before the acquisition.  Similarly, fictitious purchase and sale should not be done.)

(5) If the company conducts interest based transactions, it should be acquitted, and a voice should be raised against it in the annual meeting that we do not consider interest transactions valid, we do not agree to interest transactions so it be closed

(6) When the profit is distributed, then part of the profit received from the interest deposit should be given as a charity.

Get information about the company whose shares are to be bought. If it meets the above conditions, it will be permissible to buy and sell its shares, otherwise it will not.

فقط واللہ اعلم بالصواب