Q ) I have attempted to give examples of some financial contracts which can be used for various purposes – for risk reduction or hedging and speculation involving options, futures, and swaps; and direct and indirect investment in equity. Kindly let me know to what extent these are permissible under Islam.
An example of a future contract in shares :
i) Two individuals, A and B enter into a contract on 1st January 1996 under which A would sell a share of company X at a price of $ 100 to B after an expiry of six months. B has an obligation to purchase at this price irrespective of the market price on 31st june 1996. Read more... (1884 words, estimated 7:32 mins reading time)
Q. “How is zakah calculated and paid on the unquoted shares which cannot be sold through stock Exchange? “
(Nafesa Raja Hong Chik, Malaysia)
A. Zakah is obligatory on the market value of the shares of every joint stock company. Although the market value of the unquoted shares cannot be determined through the stock Exchange, yet there are two ways to determine their value.
1. Some unquoted shares are sold and bought through “over the counter” transactions i.e. by mutual agreement of the buyer and seller and without the meditation of a stock Exchange. These “over the counter” transactions may determine the market value of the unquoted shares. Read more... (185 words, estimated 44 secs reading time)