Investing is one of the
most discussed topic for everyone, most of Muslims have the added challenge of
ensuring of their investments are Shariah compliant. The strict prohibition of
interest in Islam makes many conventional investment limits to observant
Muslims. Shariah based stock investment is in accordance to the requirements of
Shariah laws and the principles of Islam.
There
are three basic rules which needed to be adhered to investment from the
standpoint of Shariah.
1.
Absence of interest
2.
Potential for ‘unethical concerns’ in the investment
mix.
3.
Nature of the contract between the parties involved.
Basics of
Shariah based Stock Investment:
For
an investment to be HALAL, it must be in equity instead of debt. Investing in
equity means having partial ownership by buying shares of the company, instead
investor giving a loan and getting paid interest regardless of how the company
does, with equity, the investor shares in the profit if the company does well
and shares in the losses if it does poorly.
The
most common way to get equity of a company is to buy its shares on the stock
market. Not every company who is offering its equity through selling
shares in the stock market represents a HALAL Investment though. Strictly no
investment also in the stocks that engage in short selling and the use of
leverage products is Shariah Compliant.
Shariah
based Stock Investment in Pakistan:
If
you have the means and the capital, and you really wanted to invest in Pakistan
Stock Market, but how do you ensure that your investments are Shariah
compliant? Fortunately, Pakistani investors need not to remain concerned
anymore, which stocks pass the filter of Shariah compliance.
KSE Meezan Index (KMI-30) is Islamic stock market
index in PSX – Pakistan Stock Exchange. In Pakistan thirty companies that have
been screened for Islamic Shariah Criteria. The index was introduced in 2009 and
recomposed last from Jan 2018 with the guidance of qualified and well reputed
Shariah experts when Shariah compliance of stocks is done.
A
stock market index is a measurement of the value of a certain section of the
stock market. What Muslim investors want
to know is not the value of that index or how that value goes up or down, but
exactly which companies are included in the Islamic index. Even today Pakistani’s
or across the world Investors can access Azeetrade.Com a division of AZEE
Securities online trade
app
developed which tells you all the index watches of Shariah Compliant Stocks. Company's
stock symbol in the trading app's function will pull up all the list of stocks.
Such resources make it much
easier for Muslims to invest with peace of mind knowing that their investments
are Halal.