Selling shares purification

Investment Questions and Chats Stocks
1

Salam all

Hope everyone is well

I have a few questions regarding my current situation on selling shares if this could kindly be answered that would be great

When I first got into investing I didn’t know much about the in-depth requirements of shariah-compliant stocks my thought process was that if it wasn’t in a market/sector that was Haram e.g gambling alcohol etc. then it would be fine.

  1. I bought and sold stock in NVAX and made a profit. now having used halal stock screeners I have come to find out that the company is not shariah compliant. I assume having read the other questions here on the forum that my ALL my profits from this investment need to be purified, and I keep what I used to buy the stocks. as an example I paid £100 for stocks and its rise to £150 then £50 needs to be purified and the 100 I keep?

  2. the second point to the above scenario regarding non-shariah compliant stocks where I bought other stocks (FTI and FANG) and it’s now sold at a loss is there any purification involved in that? can I deduct my losses from the profits made above? example the above scenario where I have £50 profit from (NVAX) and (FTI and FANG) stocks that have lost me £20 can I pay £30 instead of or the full £50 as purification?

  3. Finally, 3rd point I was told my a fellow investor that when we sell a shariah-compliant stock we need to pay the % of interest a company has on their balance sheet to charity/purification. Example: if I bought a stock at £100 and it makes £50 profit, I need to check their balance sheet of that company regarding their interest ratio and apply it to the 50 if anyone can confirm this?

I thank you for your time and look forward to your responses

Jzk

Shareef

1 Like
2

Hi @Mufti_Faraz_Adam and @Mufti_Billal

Was wondering if you could kindly shed some light on the above

Jzk

3

Wasalam

May Allah bless you

1)Yes you are correct.

  1. Yes you are correct.

  2. Well it depends. Some companies are certified as shariah compliant. They will have a shariah board who usually, will ensure that the purification is done, before distribution of the dividends to the investors. If they do have a shariah board, then you best enquire with them about it.
    However, if a company is shariah compliant but does not have shariah board for example, then you will have to ensure that you do the purification yourself.

And Allah knows best!

4

Salaam,

Regarding point 3: what if no dividends are provided in this stock? So then we only receive money at the moment we sell the stock. I think the purification in this case needs to be done once, namely when selling, and this should be over the total price e.g. 5% of the 150 pounds. Could you please tell me whether this is correct or that purification needs to be done differently? And what if the stock does provide dividends, then the purification needs to be done over the dividend as well as when selling the stock or not?

5

According to the page provided on the link above it states that NVAX is Sharia compliant
PASS: Novavax Inc’s Debt passes all the three screens we check against.

  1. FTSE Sharia & MSCI Islamic*** (Debt/Assets < 33%)
  2. AAOIFI** (Debt/12-month Avg. Marketcap < 30%)
  3. Indonesia** (Debt/Assets < 45%)

So the question is how can one be so sure in this case of such information ?

6

Salam bro hope you are well,

Regarding the site you mentiones i use the app Islamicly it is a paid service but they scan through stocks on a daily basis for changes. so for example NIO is not compliant since the 2nd of March looking at their Debt ratio not below 33.33% till now so those who hold NIO have a few days left to sell it before the 90 day window expires from which they have to purify the profits. MX havent updated this ratio so not sure when they check and update