Islam is a religion that governs many aspects of the lives of its adherents. One of them is the economic aspect. in Islamic economics There are many types of transactions that are prohibited. One of the most well-known types of prohibited transactions is usury.
This is because the Quran expressly forbids this transaction. Sayings of Al-Baqarah, verses 275-280 It literally states that Allah permits buying and selling (bai), prohibits the giving of interest and explains the consequences of this transaction. It is therefore not surprising that usury laws continue to overshadow innovation in the Islamic finance industry. Including the stock part as well.
But are stocks considered usury? Check the following description:
What is stock interest?
Definition of stocks
Stocks are securities or securities that show that a person or agent also owns equity shares in a company. In the past, shares were in the form of paper certificates. But along with technological development Currently, stocks are in the form of electronic documents (No script–
Simply put, if you cooperate with your friends, To establish a business with a capital of 100,000,000 IDR, IDR 100,000,000 is divided into 100 small notes of 1,000,000 IDR. These documents are called shares. If you collect IDR 30,000,000 to set up a business. It can be said that you own 30 shares of your company’s stock.
in indonesia These documents can be transferred by selling them to the general public through the Indonesian Stock Exchange. Because it can be traded The value of each share certificate can thus change according to the demand and supply of shares.
When shares are transferred The rights that come with the shares are also transferred from the seller to the buyer. These rights include the right to share in the company’s business profits (dividends), the right to make company business decisions. (voting rights) and, of course, the right to profit from stock price fluctuations (capital increase–
Definition of interest
In Arabic, interest means growth or increase. In terms of Islamic finance Interest refers to the increase or profit earned by borrowing money. Interest expenses are divided into several types, including:
- Riba Fadhl It is interest which accrues when there is an exchange between the same goods or assets. But the quantity and quality are different. For example, 1 kg. of pandanus rice is exchanged for 2 kg. of Rojolele rice.
- Yad interest, Is the interest that accrues when the price is not confirmed when buying and selling transactions. For example, if you purchase with cash, the value will be IDR 10,000,000, but if you purchase with credit, The value will be IDR 19,000,000.
- Riba NaziahThis is additional debt that arises from the borrower not repaying the loan on time.
- interest on qadhUsury is usury which occurs when one person lends money to another person for a period of time on the condition that there will be an increase in the value of the money to be repaid. For example, you borrow 100,000 rupiah from a friend. Then the friend said you have to pay 110,000 rupiah.
What is stock interest?
From the above discussion it can be concluded that stocks and interest are two different things. A stock is a document of ownership of capital in a publicly traded company. Interest, on the other hand, is a variety of additional types generated by borrowing money and other leveraged assets such as gold or food staples.
And what about stock interest? The answer is no. Stock transactions cannot be said to be usury if you do not borrow money to buy stocks with the promise to return the loan with a larger value (Margin Trading–
The laws regarding stock investing in Islam can be found in the DSN MUI fatwa number 80/DSN-MUI/III/2011. In the fatwa, the MUI clearly states that the law on buying and selling stocks in Indonesia is Halal or allowed But there is a note as follows.
- The contract used is a contract to buy and sell (‘card’).
- The selling and buying prices are determined by constant negotiation (ba’i al-musawamah).
- The buyer and seller agree on a specified price and trading volume.
- The securities traded are those that comply with Islamic principles.
- The buyer may not buy or sell shares before the settlement period has expired.
Understand Halal and Haram laws in investing
The law on investing in stocks in Islam is basically permissible (allowed to do) or halal, as long as there are no elements that may constitute haram, such as fraud (Tadlis) Buying and selling fakes (Garar) hoarding (try) interest, speculation, etc. Therefore, some of these types of transactions are prohibited in Islam:
1. Trading securities that do not comply with Sharia law
For example, buying shares of a company that trades beer or other products. which is prohibited in Islam What about investing in companies operating in the general banking sector or borrowing money from general banks? In this case, DSN-MUI has established special criteria to filter whether a company can be said to be. Islamic Impact Or not from a financial perspective? You can check this company’s information on the Indonesian Sharia Stock Index (ISSI).
2. Margin trading
Simply put, Margin trading is Stock buying and selling transactions use capital or capital borrowed from a broker or securities company. It is hoped that when the debt matures, the price of the stock purchased will rise. The existence of margin trading allows investors to buy stocks that are worth a nominal value rather than their true capabilities. In addition to the element of interest, interest Margin trading is also prohibited due to speculation.
3. Preparing for futures trading
As the name suggests A prearranged trade occurs when a pair of sellers and buyers enter orders for the same stock at similar times to increase the stock’s selling price. This transaction includes Pump and dump To buy fried stock
4. Short selling
Short selling is A practice that occurs when an investor sells stocks that he does not own. The shares the investor sells are shares borrowed from the broker. Therefore, the investor hopes that the share price will drop so that the shares can be returned to the broker at a lower value.
Buying and selling stocks in Islam can be prohibited by law. If there is an element of gambling (maysir) and speculation in the transaction. in a broad definition This includes cases where you buy stocks without adequate analysis and just because you are following them. Trend Fomo–
Are the stocks halal or not?
From the above discussion, it can be concluded that share laws in Islam are Halal (permissible) and do not consume usury. However, stock investors must be careful when selecting stocks in order not to fall into the trap of buying shares that are illegal both in terms of Business and Finance and get caught in transactions that have elements of fraud, gambling, usury and speculation.
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