can you please forward me your views on the Albaraka equity fund.
In the name of Allah, Most Gracious, Most Merciful
Assalaamu `alaykum waRahmatullahi Wabarakatoh
1.
The surplus funds in the absence of a bonafide Shariah Compliant transaction, between two financial exchanges, is interest (Riba).
Consider the following illustration.
A => B = surplus = Profit permissible.
Seller (valid and Purchaser
recognized sale)
The surplus is through a recognized transaction, hence it is profit and permissible.
A => B = Surplus = Not permissible.
Seller (not a valid Purchaser
(company) transaction) Of shares
The surplus in the purchase of the shares is not through a recognized
The surplus will be in lieu of money – hence it is interest and haram.
2.
The transaction of purchasing shares in a stock market is not a valid purchase and sale for various reasons.
Kindly find attached our detailed research on the matter.
3.
It should also be borne in mind that interest is clearly haram. In principle, any transaction that even borders on the brinks of interest (shibhe Riba) is haram. In the face of such clear facts, the spirit of an Allah conscious person should be to steer away from haram and even that which is doubtful.
4.
It is therefore not permissible to invest in any shares of the stock market even though it may be through any Bank or Financial Institution.
And Allah knows best
Wassalam
Mufti Ebrahim Desai
Darul Iftaa, Madrassah In’aamiyyah
Detailed Research
1.debate on shares.pdf ( http://www.al-inaam.com/debate_on_shares.pdf )
2.Shares Appendix A.pdf (http://www.al-inaam.com/Shares_appendix_A.pdf )
3.Shares Appendix B.pdf (http://www.al-inaam.com/Shares_appendix_B.pdf )
4.Shares Appendix C.pdf (http://www.al-inaam.com/Shares_appendix_C.pdf )