What is the attitude of Islam towards buying and selling shares as a profession? May Allaah reward you with good.
Praise be to Allaah. 1 – Definition of shares.
A share is a defined portion of the total capital of a company.
A share is defined as being the share that the shareholder has in a company, or a portion of the total capital of a company, written on a certificate that has a nominal value, so that the shares in totality represent the capital of the company, and are all of equal value.
Based on that, the share is an independent document, given to the shareholder, that contains information specific to the company, such as the company name, the amount of its capital, its nationality, the location of its headquarters, the number and value of the share and the name of its holder if it is a nominal share, or the statement that the share belongs to the bearer.
2 – Ruling on shares
In principle there is nothing wrong with buying or selling shares, but there are some things that should be avoided, such as:
Buying and selling shares in companies in which it is haraam to hold shares because they sell things that are not permissible, or they help in spreading corruption and falsehood.
Buying and selling shares in riba-based banks.
Putting share money in riba-based banks, because that leads to the profits being mixed with riba money.
A – The Standing Committee was asked about holding shares in private companies that deal in charity work, agriculture, banks, insurance and petroleum. They replied:
It is permissible for a person to hold shares in these companies if they do not deal with riba. If they deal with riba then it is not permissible.
That is because it is proven from the Qur’aan, Sunnah and scholarly consensus that dealing with riba is haraam.
Similarly it is not permissible for a person to hold shares in commercial insurance companies, because the insurance policies involve ambiguity, uncertainty and riba, which are all haraam according to Islamic sharee’ah.