Investment in Stocks

Answered by Sidi Salman Younas

Question: What does Islam say about investment in stocks. Although there is no interest involved, some people call it forbidden. Any details please?

Answer: assalamu `alaykum

Investing in stocks is permitting if certain conditions are met, as outlined by Mufti Taqi Usmani and others. which are:

1. The main business of the company being invested in is permitted by the shari`ah.
2. The share holder must voice his disapproval of company policy if the company is involved in impermissible dealings such as interest based transactions (e.g. taking out interest-bearing loans or depositing money in interest-bearing accounts).
3. The proportion of the income from interest included in the company income must be removed from the respective shareholders dividend and given in charity.
4. The company must own some non-liquid assets.

For more details, please see: “Conditions for Investment in Shares“.

Wasalam
Salman

Checked & Approved by Faraz Rabbani