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     Question Forum :  Stock Market Date Posted:  10 - January  -  2003

 

 

 

Please let me know is stock market business allowed in Islam?

Whilst there is no prohibition in Islam relating to investment in companies in expectation of a profit return, whilst also taking the risk of a loss, the problem arises when these shares are traded on the stock exchange, as the value of shares so traded does no longer reflect the actual worth of the company and how well it is doing in real terms, but is dependent on speculation, thus becoming a form of gambling. The Islamic rules governing economics are designed to ensure that all contracting parties know with certainty the factors involved in a deal and the outcome is not left to chance. Thus the trading in futures and speculation on the prospective value of a share irrespective of the assets and turnover of a company are not permissible. This makes the stock market largely a no-go area for Muslims, even though many companies try to lure Muslim investors by offering so-called ethical investment opportunities.

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