Q: I have bought a number of shares in a Saudi Cement Company. The value of each share is 200 riyals. One month later, the value of the share rose and reached 220 riyals a share.
The first question: Is the money I get from selling these shares lawful? Or is it a kind of Riba (usury/interest)? Moreover, I received a purchasing certificate at the time of buying these shares.
The second question: At the end of every year, some of these companies working in the field of shares such as the Cement Company, Riyadh Construction Company and Jizan Agricultural Company distribute revenues among shareholders. Are these revenues lawful or considered Riba? Moreover, all of these companies determine the value of each share in advance. What will the ruling be if these companies do not determine the revenue of every share until they count the whole revenue at the end of the year according to what they have achieved of profits?
It is permissible to
sell and buy shares of production companies such as (Part No. 13; Page No. 325) the Cement Company and Agricultural Company because they are lawful properties. Therefore, if these companies make a profit, the profit they make is lawful. It is permissible to receive the revenue of these stocks because they are the outcome of lawful work which is the production of Cement and agricultural goods. The same applies to the Construction Companies, provided that these companies do not use capitals in usurious investments.
May Allah grant us success. May peace and blessings be upon our Prophet Muhammad, his family, and Companions.