9 replies to this topic

[azri]

Assalamualaykum

I would like to know the rules regarding investment in the form of preferred stock in which the investors are promised a fixed amount/rate of dividend for each lot invested for every month. Is this kind of investment permissible?
I would be very glad if anyone can give the answer according to Ayatollah Sistani's rulings.

thank you very much

Edited by azri, 31 January 2012 - 06:30 AM.

[azri]

may i know, what is goldquest?

[titumir]

azri, on 31 January 2012 - 06:13 AM, said:

Assalamualaykum

I would like to know the rules regarding investment in the form of preferred stock in which the investors are promised a fixed amount/rate of dividend for each lot invested for every month. Is this kind of investment permissible?
I would be very glad if anyone can give the answer according to Ayatollah Sistani's rulings.

thank you very much

Absolutely forbidden. Any investment that "guarantees" a return is interest.

[xstatik2]

titumir, on 01 February 2012 - 12:21 AM, said:

Absolutely forbidden. Any investment that "guarantees" a return is interest.

Any investment which "does not guarantee" a return is speculation.

What sort of a catch22 illogical deduction is this ??

[md. ammar ali]

investing in gold is a good option

[xstatik2]

Very good call, Gold Mining should fetch u returns. Sales will not be affected due to a higher market price since it is straight out of the Mine, and also quantity is huge. To entice the buyers, the mining corporations sell at lower prices (sometimes at a discount of 3-4 percent on LME) therefore they generate volumes (Sales / Volumes = Profit and Profit=Appreciation in Stocks, Divendend Payouts)

Therefore ............... good call !!!

[Waiting for HIM]

titumir, on 01 February 2012 - 12:21 AM, said:

Absolutely forbidden. Any investment that "guarantees" a return is interest.

This is only one dimension of things. What about the rent of a building or a rental car. It guarantees the payment, you just lock in the tenants' credit card number. So you are guaranteed a payment does not mean its interest.

Guaranteed return on money many be aninterest but again what do you say about "rent" being an interest on a building as well?

[Haji 2003]

Guaranteed a payment is one thing (halal afaik). Guaranteed a return is something completely different (haram afaik).

As for preference shares, it may depend. They do pay a fixed return, but that is only on the par value. This means that the actual return can vary depending on what you get for the shares when you come to sell them, the value could be less than what you paid. So you are bearing a risk, which I think is a characteristic of halal investment (but this is not sufficient, there are other necessary conditions as well).

I remember in the banking crisis a few years ago RBS preference shares which had originally been issued at $25 and whose yield was 5% dropped in value to around $1. This applied to a lot of other banking pref shares as well. So the people who bought at $25 suffered a heavy loss. Those who bought at $1 basically began earning fantastic rates of interest.