04-18-2006, 04:44 PM
<blockquote id="quote"><font size="1" face="Verdana, Tahoma, Arial" id="quote">quote<hr height="1" noshade id="quote"><i>Originally posted by AvgJoe</i>
<br />Hmm....I beleive the question was on "Dividend on Shares". )
Firstly, you must understand that there is a distinction between a stock market "investor" & a stock market "day trader" or "speculator". People in Pakistan have the impression that our stock market (KSE) is 99% speculative. I do not agree. There are long-term investors who have invested in this market with a horizon ranging from 2 months to 10 years. Personally, I think these are the most succesful traders.
Now personally I beleive that buying & selling shares every 10 mins or secs @ the speed of light is "SATTA" or a crude form of gambling. Now whether that is UnIslamic or not, is for u to decide.
But, If you buy a share of a company for lets say 1 month or 2 months (at the min) then you are becoming a SHARE-HOLDER of that company. This means that for that duration you are a part-OWNER of that company. And if during that duration the company announces a dividend then you are entitled to receive it.
Now in ISLAM, it is unlawful for any muslim to engage in or become a partner or a business whose earnings come from a HARAM source. Therefore, in principle, you should NOT buy Banking, Insurance or Leasing company, beer manufacuring company stocks etc, because when u buy their stocks (even for 2 mins) u do become a partner in their business !!!
Dividends are paid from the profits of a company. THEREFORE, any dividend given by a Bank or Insurance company etc is ALSO UNLAWFUL in Islam.
Furthermore, it must be beared in mind that some companies like Pal Suzuki Motor Company or INDUS motors in Pakistan earn SUBSTANTIAL part of their income throught INTEREST earned on the HUGE CASH they have of ppl who book cars in advance. Thus, when such companies declare Dividends, a muslim should calculate the amt owing to such interest & give it AWAY as a charity.
I hope this clarifies a bit.
<hr height="1" noshade id="quote"></font id="quote"></blockquote id="quote">
I donât know why people think that share dealing is like gambling it doesnât make any sense to me. In one of my earlier post I gave reference in which it was said that share dealing (buying and selling share) is permitted in Islam as long as Concern Company donât do such trade which is forbidden in Islam.
Now let me make it clear what is gamble. When you gamble either you win or lose i.e you put £100 in gamble in result either you will lose £100 as whole or make 1,000.
Share Dealing,
You buy a company share for Rs 1.20 in next minute you sell it for Rs 1.00 which mean you lost 0.20 per share or you sell your share at Rs 2.00 and make a profit of 0.80. In both cases you donât lose your capital investment completely. i.e. you donât sell your share for 0.00.
If I take Avgjoeâs meaning for gambling than every business is like gambling because every business has risks associated with it. I know many people including my brother who are in business of selling and buying property and some time they donât have property but have customer, some time they sell property in next minute, some time in few days and some time in few months. According to some of my forum fellows the property which they sell in few minute is gamble and therefore forbidden (haram) in Islam which I think make no sense at all.
look beyound the share dealing........
<br />Hmm....I beleive the question was on "Dividend on Shares". )
Firstly, you must understand that there is a distinction between a stock market "investor" & a stock market "day trader" or "speculator". People in Pakistan have the impression that our stock market (KSE) is 99% speculative. I do not agree. There are long-term investors who have invested in this market with a horizon ranging from 2 months to 10 years. Personally, I think these are the most succesful traders.
Now personally I beleive that buying & selling shares every 10 mins or secs @ the speed of light is "SATTA" or a crude form of gambling. Now whether that is UnIslamic or not, is for u to decide.
But, If you buy a share of a company for lets say 1 month or 2 months (at the min) then you are becoming a SHARE-HOLDER of that company. This means that for that duration you are a part-OWNER of that company. And if during that duration the company announces a dividend then you are entitled to receive it.
Now in ISLAM, it is unlawful for any muslim to engage in or become a partner or a business whose earnings come from a HARAM source. Therefore, in principle, you should NOT buy Banking, Insurance or Leasing company, beer manufacuring company stocks etc, because when u buy their stocks (even for 2 mins) u do become a partner in their business !!!
Dividends are paid from the profits of a company. THEREFORE, any dividend given by a Bank or Insurance company etc is ALSO UNLAWFUL in Islam.
Furthermore, it must be beared in mind that some companies like Pal Suzuki Motor Company or INDUS motors in Pakistan earn SUBSTANTIAL part of their income throught INTEREST earned on the HUGE CASH they have of ppl who book cars in advance. Thus, when such companies declare Dividends, a muslim should calculate the amt owing to such interest & give it AWAY as a charity.
I hope this clarifies a bit.
<hr height="1" noshade id="quote"></font id="quote"></blockquote id="quote">
I donât know why people think that share dealing is like gambling it doesnât make any sense to me. In one of my earlier post I gave reference in which it was said that share dealing (buying and selling share) is permitted in Islam as long as Concern Company donât do such trade which is forbidden in Islam.
Now let me make it clear what is gamble. When you gamble either you win or lose i.e you put £100 in gamble in result either you will lose £100 as whole or make 1,000.
Share Dealing,
You buy a company share for Rs 1.20 in next minute you sell it for Rs 1.00 which mean you lost 0.20 per share or you sell your share at Rs 2.00 and make a profit of 0.80. In both cases you donât lose your capital investment completely. i.e. you donât sell your share for 0.00.
If I take Avgjoeâs meaning for gambling than every business is like gambling because every business has risks associated with it. I know many people including my brother who are in business of selling and buying property and some time they donât have property but have customer, some time they sell property in next minute, some time in few days and some time in few months. According to some of my forum fellows the property which they sell in few minute is gamble and therefore forbidden (haram) in Islam which I think make no sense at all.
look beyound the share dealing........
