Kind: captions
Language: en
[Music]
But fordul
[Music]
today's times
are different than the times of the
past.
The beauty of Islam is that it governs
all aspects of life whether in the past,
in the present or even in the future.
It has the tools and means to do so
because it was placed by Allahel who
created the whole universe. So Allah
knows
what he had created.
So he did not leave us to go astray. He
clarified everything to us in the Quran
and through his messenger sallall.aii
wasallam.
Some of the contemporary financial
issues that
were not present at the past
are selling of shares. And what is a
share? A share is what you own as a
shareholder
in a company. So when you buy shares in
a company, you're allocated
a portion of that capital of the
company. So you have 0001% of it. If
you're richer, maybe you'd have 1%, 10,
50, 70%.
That's why you're called a shareholder.
And what's the ruling on it?
Buying and selling shares and companies
is basically and simply it means that
you're becoming a partner in that
company.
Someone who owns a country company 100%.
Wants
money. So he sells 50% of his shares and
I'm willing to
invest. So I give him the money. So now
it's 5050 between him and me. We are
partners in that company. And this is
permissible
depending on a number of factors. So
when people say can we
trade
in buying and selling shares the answer
would be it depends on
the line of work of the company.
So what do you mean by that? If the line
of work of the company is halal,
then you can
take a portion of it. You can buy its
shares.
If they work in agriculture
and it's an industrial company, it deals
with consultation.
It deals with um selling and buying
halal goods. that's fine. But when it
deals with haram,
if it is or if they are these shares are
in a conventional bank, a conventional
insurance company, an entertainment
company that deals with music and movies
and haram stuff, company that sells
haram such as tobacco or alcohol and the
likes.
These
companies it is prohibited for you to
buy a share or to have any affiliation
with such as working or advising or
assisting and the likes. All of this is
haram.
Number two, it is not permissible even
if the line of work is halal to involve
yourself in such a company if they deal
with ribba. How a lot of companies
nowadays especially in the west and
unfortunately some in the Muslim world
their line of work is fine. They
manufacture
furniture.
That's halal. Totally.
It's all legit. But in order to expand,
they finance their projects through
REBA.
So they go to the banks and say, "We
need a loan of 100,000 or a million or
20 million. So we we would be able to
build a new factory to manufacture more
furniture
and the bank agrees with interest ribba.
So now as a shareholder your partner in
dealing with ribba or the or the company
itself makes a lot of money and they
deposited in banks taking ribba on their
savings and distributing the dividends
of that ribba as profit to the
shareholders. And this is also haram and
Muslims must not deal with this. So a
lot of the Muslims say well
unfortunately 95% of the companies deal
with such things. So if we don't we're
not allowed to trade in such stocks and
shares. This means that we're out of the
stock market. So be it. It's either you
deal in halal or you definitely stay
away from haram. Another
contemporary issue that has risen
nowadays but the origin of it is
clarified in the Quran the Sunnah the
issue of selling bonds.
So what is a bond? A bond is actually a
contract
where
a government
or a bank or a financial institution
gives you a document in exchange of your
money
stating that you have lent them. But
they would not say lending them that
you're investing with them an x amount
of money where they're obliged to give
you an x amount of interest on that
money either indefinitely
for years to come. They're always
obliged to give you 7% 10% for that loan
you have given them or for a particular
period of time. And this is
totally prohibited because it's an
interest based ribba loan. There is no
ambiguity in this. And unfortunately a
lot of governments do this and this is
crystal clear. No, no blind man can't
see that either.
And companies do this, banks do this
because they want
to have cash on their hands so that they
can either lend it to other people and
get a higher percentage of it, give you
your ribba profit or interest and take a
small margin. more because they have
projects they want to execute or they
have debts to pay off that have a higher
interest rate than the one they're
giving to you.
Either way, it is totally haram.
One would say, "So, what's the
difference between a share in a company
and bonds?" The difference is huge.
The difference is that a share is an
actual portion of that company. So you
can indefinitely keep it with you, get
the dividends
or share the fall of the price of your
share due to losses. And sometimes if
the company goes bankrupt, you've lost
the whole thing. Bonds don't do that.
bonds is a loan. Whether the whole
government collapses or the bank
loses a lot of money and doesn't make
any profit, it's none of your business.
You're going to get your haram ribba
interest on time. And this is a huge
difference. The Islamic
alternative for bonds would be suk
which is something that
is recently introduced
where the company comes and says okay
our capital is x amount of money. We're
willing to take investments for you from
you. Let's assume you give us $100
million
for the period of three years where we
will invest it in this particular
project. So your hund00 million would
constitute
45%
of the capital and in three years we
forecast that we will be able to do this
and do that and the revenue would be
approximately between this and that. And
after these three years are over, we
will liquidate
your suk
and give you whatever is there with the
profit.
When you look at it and you trust their
due diligence and their feasibility
study and the project itself, that's
very lucrative.
But there is the risk of losing if they
don't run the project well, which is an
Islamic risk. This is how you invest.
There is always a risk. Not like in
ribba where you're always on the win
regardless of the others. Let them go to
hell. It's none of your business. No, it
doesn't work this way. So in suk if it's
Islamic governed by a Sharia board
controlling it supervising it it is
halal alternative and allahel knows
best.
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That's
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