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Monday, March 1, 2010

Buying Online Shares

Q: My question revolves around online share trading. Is it permissable to trade in company's shares? Nowadays, everything is done electronically, but when you purchase a share, you don't physically receive a share certificate as everything is now digital. However, you definitely own a share in the company as you will receive correspondence as well as be able to vote in company meetings.

If we are allowed to trade in shares, would it be permissable to invest in companies who earn interest. This is not their primary business, but due to monies being in a bank account, it accrues to the company.

When one purchases a share on the stock exchange then it means one has become the owner of a share in a particular company. All information related to the share purchases is communicated to the shareholder; hence it will be permissible to buy into these companies as long as the company is not a casino, a brewery or any enterprise that deals in haraam.

Based on the above, it will be permissible to purchases these shares online, via the internet.

And Allah Ta’ala knows best

Mufti Siraj Desai