Fatwa: Is share/stock trading halal? Can you invest in the stock market?

Islamic Finance Fatwa
#21

Assalamualikum, You can check on Islamicly App.

#22

Thanks Jahid23 :slight_smile:

#23

Asalamualaikum,

Iā€™m wondering if you can advise on the following companies and whether they are halal?

  1. JD Sports
  2. Facebook
  3. Tencent
  4. Ali Baba
  5. BT Group
  6. EasyJet
  7. Royal Dutch Shell

Jazakhalah khiar

#24

WA
There are two articles in resources: (1) FTSE 100 - which companies are halal (2) US-UK debt free companies. If you go through these two articles you will find most of the companies are listed there. You probably still need to purify by giving away 5% max from profit.

#25

Jzk for the reply.

Iā€™ve had a look at the resources and searched for the companies but canā€™t find them there unfortunately.

Please can you help further with this?

Btw, I thought this question was directed to the Muftiā€™s on the platform personally? I was hoping to ask these questions privately (as well as others).

Jzk

#26

Assalaamu alaykum,

We do not do shares screening here, we request you to undertake the following to get a better understanding:

Alternatively, you can subscribe to a stock screener who will keep you up to date with the Shariah compliance of any stock.

#27

Walaikumusalam,

Ok Jzk.

Is there any way I can get in touch privately to ask a question?

Thanks

#28

Assalamualikum Brother

You can try an app called ā€œIslamiclyā€ to find out which companies are halal to invest. ZazakAllah.

#29

Walaikumusalam brother,

Jzk

#30

Iā€™m considering opening an account with Admiral markets. Their invest MT5 platform offers clients trading of physical shares but the shares will not be on the clientā€™s name. Is this considered Halal?

#31

Are you sure they donā€™t trade using CFDs etc?

#32

The CFD account is separate from the invest account, Invest account involves physical shares, and you can receive dividends on them.

#33

What is the reason why the shares are not in your name?

#34

Iā€™ve emailed for the reason but from what Iā€™m reading it seems to be a business practice. The securities are registered under the name of Admiral markets Estonia, and can only be transferred by way of sale. If Admiral markets Estonia(or and involved third part broker) becomes insolvent these shares will become liquidated at a price which may not reflect the purchase price.
You may read further at the link, its on page 3 section D:

#35

Here is the reply to the email: Shares will be under Admiral Markets as it is the broker through the shares are bought. Clients as the buyer will own the shares through Admiral Markets systems. Looking forward to your reply @Mufti_Faraz_Adam.

#36

Wa alaykum salaam,

This is fine and not an issue.

Allah knows best

#37

@Mufti_Faraz_Adam @Mufti_Billal
Salaam brothers, can you please respond to my question from 25th August. I know itā€™s an extremely complex and tough question, but I would really appreciate your response. Even if your answer is ā€˜not sureā€™ or ā€˜donā€™t knowā€™ then that would also be appreciated.

JazakAllah khair
Nabeel

#38

Wasalam

Where is your question?

Kind regards

#39

You can see it above, but Iā€™ll post here for convenience:

I think one area which has not been covered yet is something which a lot of US listed companies have been doing for years, Iā€™ll use Apple as my example. The screening criteria approved by IFG (and also by Islamicly) would deem Apple a permissible stock. But can you please confirm Apple is still deemed permissible even though theyā€™ve consistently been increasing their debt to record levels (as debt is cheaper than ever before) and then they use that money to do share buy backs which has pushed their share price to record levels (from $100 to $500+).

If you could please provide some clarity on this, iā€™d very much appreciate it and hopefully it will benefit all of the users of this forum.

JazakAllah khair

#40

I have not looked at the balance sheet of Apple, however, as you have mentioned, if they have passed the shariah screening test, then they will be considered as shariah compliant. If they have increased their debt level, then this may impact the shariah compliance of their stock. Hence the need to audit the accounts from time to time.
A company might be considered shariah compliant to invest in today but next year they might fail the screening test, and therefore, would be deemed as impermissible to invest in.
Some brokers or Islamic stock exchange would usually do the screening to ensure that they are offering shariah compliant stocks to customers. Otherwise, you will have to do the screening test yourself at the time of buying the shares and also at a later stage to ensure the shares are still halal.

And Allah knows best!