CAPITAL GAINS...HALAL or HARAM???

[idreesdurrani]

Dear SMR,

Really delighted by ur informative reply. Again I wud say that I don’t disagree with u but just need some clarifications….
Do u really think that there is any real or productive effort involved in investing in the stock market. I think an ordinary investor doesn’t bother to carry out the research and the analysis…..he simply speculates an upward trend in the share price and that motivates him to invest.
The basic philosophy behind prohibition of gambling is I think it expose one to a lot of risk of loss, and the uncertainties associated with it these are the elements of stock market trading as well. Study of the behaviour of stock market reveals that it has the potential to cause a serious break down. The degrees of risks to which the company is exposed, can be so high that large unpredictable market moves in underlying prices may even lead to the insolvency. One recent example I can quote in this regard is the share price of AKD securities which was Rs. 320 on one day and within a short span perhaps the very next day it fell down to as low as Rs. 74 per share. Now u can imagine the plight of the investor. I think this was the main motive to prohibit gambling and such factors.
Apart from that, when talking specifically of Pakistan capital markets, I think they are mainly under the influence of five to ten BIG BROKERS who mould the market behavior to their own requirements ( this can be judged from a very recent example, upon imposition of CVT by the government, The stock market crashed down to 4800 points from around 5450 points….a very significant downfall in recent times when the market was continuously on upward trend & after the meetings of brokers with the Prime Minister when they were unable to convince him of their plea to eliminate CVT, they restored the market).
Further what are ur views about SHORT SELLING & COTS (Carry Over Transactions, now replaced by margin financing) BADLA?

Anticipating a more informative reply
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O Lord! Increase me in knowledge...Ameen!