What kind of stocks are halal? Many Muslims want to know about Halal Stocks. Today I am going to share with you some strategies to find out Halal stock. This article is totally for educational purposes. Before investing you should analyze deeply.
What kind of stocks are halal?
Muslims are increasingly interested in halal investing. Before investing everyone should know about Halal stock because good Muslims always try to consume Halal. when they want to invest their money in stocks they search in search engines that ‘ what kind of stocks are halal?” because they want to avoid investing in non-Shariah-compliant stocks.
Companies that manufacture Halal Products or trade in Halal, their shares are also Halal. There is a question that arises in your mind about ‘who to find Halal stocks?’ The simple answer is to do a fundamental analysis of companies and find out what kind of business they have.
What is fundamental analysis in stocks?
(A) Fundamental analysis is a method to determine the value of Companies by analyzing.
(B) Fundamental analysis attempts to identify stocks, the company’s business, the company’s Products, as well as conditions within its industry or in the broader economy.
(C) Fundamental analysis is a holistic approach to understanding and studying a business. It helps in determining fundamentally strong companies.
The definition of fundamental analysis in sample language is, what kind of business they have, what is the current status of companies, financial reports of companies, check the debt, and Review all the aspects from time to time.
How to do a fundamental analysis?
The method of fundamental analysis to find out the halal stock for investment.
The six Methods to perform fundamental analysis-
(1) Understand the company (its business model, management structure, and so on)
(2) Study the financial reports
(3) Know what type of business a company has.
(4) Check the debt. If a company has taken more than 30% debt then then avoid stocks.
(5) Observe whether the company is associated with any type of interest (Riba) if associated then avoid these companies’ shares.
(6) Analyze prospects.
So Understanding the companies (fundamental analysis) is very important before investing. If you do analyze then you can easily find out Halal Stocks.
Example of Halal Stocks
Analysis best yourself as much as possible and find Halal industries. Some examples of Halal industries are below:
- Medical and pharmaceutical equipment
- Real estate
- Furniture and home goods
- Shipping and Transportation
- Clothing and shoes
- Motor vehicles
- Electricity
- Restaurant
- Technology
- Oil corporation
- Education
- Automobile
If any companies do Halal business then there stock Halal as well.
If a company deals with interest (riba) or haram things, it is essential to withdraw from it and get rid of any profit by giving it to the poor and needy.” (Shaykh ‘Abd al-‘Aziz ibn ‘Abdullah ibn Baz)
Conclusion:
The basic principle is that it is permissible to invest in any company if it does not deal with haram things such as riba, But if a company does deal with haram things, then it is not permissible to hold shares in it. So it would be best to analyze before investing in any company. if the company deal with halal then invest otherwise leave it. Click here to read another article…