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These companies need to see if the risk involved is worth the money they make and if it is a good investment. Take KFC as an example, if they started doing halal meat in an area that has no Muslims around, they’d be paying more than the normal amount meat is worth due to it being halal, and then losing money from buying it, as the customers remain the same, or worst case scenario, lose customers! But if they invest in halal meat in areas where there are loads of muslims, then this is a good investment because now every customer can eat that product.
It depends on the risk, if it makes sense, if it is suitable, does it go with the companies ethos and many more tactical or business decisions. I believe they also see their projections that are predicted from rigorous research to come to a conclusion to see if they are worth it.
In regards to the question itself, stocks can be halal as long as they are not involved in anything that is haram (which is such a basic answer). I would clarify by saying, if these stocks don’t support things like the adult entertainment industry, alcohol industry, haram services, or haram products, then I would say this would be a halal option, such as clothing or businesses. I believe there are way more halal things than haraam, so companies coming and showing their stocks, are generally halal until proven haram.
I would also add, if the money they make goes to places that kill Muslims like certain countries, then I wouldn’t see a justifiable reason why this stock would be halal because you are now buying a share of a company that supports the killing and persecution of Muslims and innocent people.
I like the way Wahed does this. They apply a few layers of screening. One being a broad check on whether any of the companies operations involve Haram activities like gambling, alcohol, adult entertainment etc
Then I believe there’sa range of financial checks to determine, based on certain criteria, whether or not the proportion of the companies balance sheet etc is halal enough from a RIBA perspective
This is usually done based on a set of criteria. These criteria can vary based on scholars. A famous criteria set is the AAOIFA standard but there’s others too
I don’t think we need over complicate things. Generally, anything is halal if it is socially beneficial and avoids clear harams.
KFC is perhaps a bad example since it generally deals with a haram product. Something like Apple is easily halal. Because its core business offering is a general good. After that it’s just business practices that need to be considered.
We also need to consider what companies do with their excess wealth. Some companies give out interest-based loans with their surplus wealth.
There’s a really good app called Zoya that makes it super easy to halal check a stock
Not to mention it’s free too Masha Allah Tabarak Allah.
They also seem to err on the side of caution given they’ll mark some companies as questionable even if they don’t necessarily fail a check directly
What is the criteria you are referring to?
What does this app use to verify the stock and how do we know to trust it?
Yhh this is good, why don’t all banks do this ?
I have used this, verryyy good but for you to see everything, you do have to pay for it, but the amount they show now, is good for beginners.
It is backed by a council of scholars who have set the criteria. The app implements the criteria and based on the latest financial information of the stock, calculates whether or not each rule is met
You only have to pay if you want a detailed report of if something is halal or Haram. But you don’t need to see that if all you’re interested in is if it’s halal or not - which they do let you see unlimited on a free account
Agreed I think that’s the first thing
‘Socially beneficial’ is quite subjective- I would hope this isn’t used as a criteria to judge for the topic at hand