Aoa
I have spent hours and days in the last few months trying to understand the various criteria, methodologies and schools of thought, and to select an approach that I would like to apply and follow for my investments. Unfortunately, as is the case in other aspects of life, there is so much difference of opinion between reputed scholars and organisations, that it has become quite challenging for me to seek the answer on my own.
- Please help me understand logically the following points:
- Liquid assets
A company, especially nowadays with ground-breaking and ingenious innovations that we are seeing, is surely much more than the cash or other assets it has. Does this ratio (still) really makes sense?
- Illiquid assets
Similar to above. Consider Airbnb (ABNB) when looking at this. Airbnb had become a universal example of innovation wherein it is touted as ‘The world’s largest accommodation provider, but with no real estate of its own’. Unfortunately, Shariah application doesn’t seem to be evolving to consider such innovations and radical business models.
Interest-bearing Debt
- Shouldn’t it be the interest expense rather than the debt that should be considered?
- There seems to be some misalignment between IFG’s methodology as mentioned in various places:
i. https://www.islamicfinanceguru.com/investment/how-to-screen-for-halal-sharia-compliant-shares/
ii. https://www.islamicfinanceguru.com/investment/is-apple-stock-halal/?fbclid=IwAR3bmvczsbGRd0c4qMC4FDfRwwkJPcs3b861j7U9WTGuK6Y6iErTnNH4bww (note inventories have not been considered in illiquid assets)
iii. Fatwa: Is share/stock trading halal? Can you invest in the stock market? (doesn’t mention the illiquid asset ratio)
It would really help if the methodologies can be summarised accurately once (including explanation of what actually to include in Liquid Assets, Illiquid Assets, Debt) - at least IFG’s and Mufti Faraz’s.
JZK