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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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