❖ Shar‘i Ruling on Investing in the Stock Exchange ❖
✍ Response by: Shaykh Khidr Hayat ḥafiẓahullāh
What is the Shar‘i ruling on investing in the stock exchange?
Generally speaking, investment and business dealings in the stock exchange are not permissible, because several Shar‘i prohibitions are involved. These include:
➊ Interest (Ribā):
Many stock market transactions involve interest-based dealings, which are categorically ḥarām in Islamic law.
➋ Gambling (Qimār):
The frequent speculative price fluctuations based on mere guesswork or uncertainty often fall under the category of gambling.
➌ Deception (Gharar):
Certain market practices are non-transparent and deceptive, which are forbidden in Sharī‘ah.
The Lajnah al-‘Ulamāʾ for Fatwā (Fatwa No. 31) has issued a detailed ruling addressing these prohibitions.
The fatwa is available in the Fatāwā section of the ʿUlamāʾ website and should be referred to for detailed guidance.
✔ As a rule, investment in the stock market is not Sharʿī compliant due to the involvement of interest, gambling, and deceit.
✔ Only those companies may be invested in whose operations are:
It is highly recommended to consult qualified Islamic scholars or reliable fatwa bodies for case-specific guidance.
✍ Response by: Shaykh Khidr Hayat ḥafiẓahullāh
❖ Question:
What is the Shar‘i ruling on investing in the stock exchange?
✦ The Sharī‘ah Position on the Stock Market
Generally speaking, investment and business dealings in the stock exchange are not permissible, because several Shar‘i prohibitions are involved. These include:
✿ Major Shar‘i Violations:
➊ Interest (Ribā):
Many stock market transactions involve interest-based dealings, which are categorically ḥarām in Islamic law.
➋ Gambling (Qimār):
The frequent speculative price fluctuations based on mere guesswork or uncertainty often fall under the category of gambling.
➌ Deception (Gharar):
Certain market practices are non-transparent and deceptive, which are forbidden in Sharī‘ah.
✦ Scholarly Verdict
The Lajnah al-‘Ulamāʾ for Fatwā (Fatwa No. 31) has issued a detailed ruling addressing these prohibitions.
The fatwa is available in the Fatāwā section of the ʿUlamāʾ website and should be referred to for detailed guidance.
Summary
✔ As a rule, investment in the stock market is not Sharʿī compliant due to the involvement of interest, gambling, and deceit.
✔ Only those companies may be invested in whose operations are:
- Based on ḥalāl business activities,
- Free from interest-bearing transactions,
- And conducted with financial transparency.
It is highly recommended to consult qualified Islamic scholars or reliable fatwa bodies for case-specific guidance.