Nasdaq 100. Can we buy shares?

In the Name of Allah, the Most Gracious, the Most Merciful.

As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.

The Nasdaq 100 Index is a basket of the 100 most significant, most actively traded U.S companies listed on the Nasdaq stock exchange. The index includes companies from various industries except for the financial industry, like commercial and investment banks. These non-financial sectors include retail, biotechnology, industrial, technology, health care, and others.

Purchasing shares in a company will be subject to the following conditions:

1) The primary business of the company should not be unlawful. Therefore, acquiring shares of such a company whose primary business consists of unlawful activities, such as conventional banks, film industries, manufacturing or selling of unlawful substances such as pork, liquor will be impermissible.

If the primary business is halal, it will be permissible to buy the shares.

2) If a company, besides the main halal business, has other activities, out of which a few deals in interest-bearing transactions, then one must object to the interest dealings by expressing his disapproval against such dealings in the annual general meeting. By doing so, the responsibility will be deemed fulfilled.

3) After receiving the dividends, the proportion of the company’s income that was attained through haram means should be given in charity without the intention of receiving a reward.

4) The company whose shares one intends to purchase should have some illiquid assets (land, machinery, etc.) in its possession. If the liquid assets (money, stocks, government bonds, etc.) of the company exceed 50% of the total asset, then that cannot be purchased or sold, except on par value, because in this case the share represents money only, and the money cannot be traded in except at par value.^[i]

And Allah Ta’āla Knows Best

Ikraam Elias Gangat

Student Darul Iftaa
Zambia

Checked and Approved by,
Mufti Ebrahim Desai.

__________

^[i]

فتاویٰ عثمانی :٣/١٧٧

جدید مالیاتی ادارے - فقہ اسلام کی روشنی میں: 71/70

An introduction to Islamic finance by Mufti Taqi Uthmani Damat Barakatuh Pg. 207-208 (Maktaba Ma’āriful Qur’ān)