Investments in Shares

Regarding shares and stock market investments, Ulama' have classified this
under the category of Awraq al-Naqdiyyah. Basically this is something, which
is allowed, with certain conditions and it is also subjected to Zakah payment,

provided that it fulfils the Nisab and Hawl and its Nisbah is 2.5% of its value.

"Shares is defined as, one of the equal parts into which the capital of a
company is divided, entitling the holder of the share to a proportion of
the profits. [...] Dealing in shares is permissible in the Shari'ah."
(Fiqh al-Islam Wa Adillatuh, vol. 2, pg. 774)

Concerning investments, Shaykh Syed Mutawalli ad-Darsh says:

"Money in Islam has a role to play. It should not be kept away,
hoarded in a vault or safe but should circulate to allow people to
make use of it's benefits. That is why the books of Fiqh say that the
guardian of an orphan must invest that inheritance in a good manner
so that Zakah would not deplete the wealth of the child.

You can buy shares in any company, which is offering good services
to the community, and companies, which do not pursue unlawful trade.

For example, we are not allowed to buy into the banking sector
because it is ridden with interest. We are not allowed to buy shares
into breweries because they are producing something, which is
Haram. We are not permitted to buy shares in chemical companies,
which produce products, which damage people and the environment.
But companies, which are good, pose no problem.

[...] There is no harm in investing in the stock exchange, provided
the above considerations are kept in mind.

Muslims can invest in shares in BT, in water, in gas and in so many
other things which are services to the community and which is not
directed towards things which are not Islamically-acceptable and
that should be the general guide for investments by the Muslim
community."

May this be of benefit.

And the last of our prayers,

"Glory to your Lord, the Lord of Honour & Power! He is better from what
they ascribe to Him! Peace be upon the Messengers! Praise be to Allah,
the Lord of the worlds." (37:180-182)

Muhammad 'Afifi al-'Akiti.

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