https://zamzam-capital.com/

1. Prohibition of Riba (Interest)

All forms of interest-based income are strictly prohibited. Therefore, companies whose stocks are Halal will not earn or pay interest in significant amounts.

2. Ethical Investment

Investments must be made only in companies that do not engage in Haram or unethical industries such as gambling, alcohol, pork, tobacco, pornography, conventional financial services, movies or weapons manufacturing. This forms the basis for the first criteria in our Halal stock Sharia screening framework.

3. Prohibition of Gharar (Uncertainty)

Halal investments excludes excessive uncertainty or risk, speculation, deceit and uncertain contracts. Transactions should be transparent, and all parties must have a clear and unambiguous understanding of the terms and conditions of the investment. Sharia-compliant investments thus avoid products like derivatives or contracts with unclear outcomes.

4. Prohibition of Maysir (Speculation)

Instruments like options, futures, derivatives, swaps, CDOs, and CFDs are considered Haram due to their inherent speculative nature and resemblance to gambling.

5. Prohibition of Principal Guarantee

Halal investments are prohibited from providing guaranteed returns or principal protection (capital guarantee). All investments carry an element of risk and reward, and that is essential to maintain Islamic investing ethics. Investing in Halal stocks by their nature do not offer principal protection and are thus an ideal asset for Halal investments.

6. Ownership & Possession

Halal investments must result in full ownership and constructive possession to the investor for the asset or share invested in, for the returns to be permissible. Thus short selling and intraday trading are not considered Halal trades and are impermissible.

7. Prohibition of Fixing Return

Returns from Halal investments can only be forecasted or expected but must not be fixed or guaranteed as there will always be an element of risk that can lead to a loss or lower than forecasted returns. Any return must be based on actual performance and subject to market risk.