Partnership: Ruling on Trading Shares in the Stock Exchange and Dealing with Ribā-Based Companies

Practical Laws of Islam as per the teachings of Imam Khamenei

Partnership: Ruling on Trading Shares in the Stock Exchange and Dealing with Ribā-Based Companies

English:

Question #1681:

What is the ruling in the matter of dealing in shares in the stock exchange? It is to be noted, however, that the share itself is subject to the deal, rather than the capital of the company and that the price of the shares might go up as well as down. And what is the view if the activities of some companies are either ribā-based or doubtful?

Answer #1681:

If the value of the shares of a company or a bank is based on the shares themselves and their credit was issued by an authorised person, there is no objection to buying and selling them.

If the value of the shares is regarded as the value of the entire plant, mill, company, or bank as the capital thereof, in that each share constitutes part of the capital, there is no objection to buying and selling such shares provided that the total number of shares is known, besides other information with a view to avoiding any risk that could be thus perceived in the common view.

-Imam Khamenei, Practical Laws of Islam, Importance and Conditions of Partnership