How To Find Halal Stocks?

You want to grow your wealth? At the same time, you are concerned about keeping it halal? You have landed on the right site. Lets answer the question every Muslim should ask, how to find halal stocks?

Investing in stocks is one of the best ways to grow your money. There are now almost 630,000 public companies around the world. It is hard to navigate if you don’t know what you are doing. Hence, which one is halal though? How do I know if they are halal? 

Do Halal stocks exist?

Of course! Not all stocks in the market are halal but a lot of them are. Shariah scholars around the world have come up with different stock screening procedures to identify if a stock is halal or Shariah-compliant. Some of the procedures are created by scholars from AAOIFI, FTSE, S&P, DowJones, and MSCI. The high increase in demand for Shariah-compliant financial products has raised the importance of a more refined Shariah investment screening process. This is crucial due to the complexity of modern capital markets with the existence of complex investment instruments and the involvement of companies from various sectors worldwide.

How to tell if a stock is halal? 

You can tell if a stock is halal by following the Shariah-compliant screening process. It is generally compiled of two stages:

  1. Qualitative Assessment by Operational Screening
  2. Quantitative Assessment by Financial Screening

1. Qualitative Assessment by Operational Screening

It is crucial to look into the company’s core business activity. Companies operating in alcohol, gambling, tobacco industries, and porn movies will not pass this filter. This is because the core of the business itself reflects unethical and haram operations. The business screen focuses on the commercial activities of the business. If the business is involved in activities considered Shariah non-compliant, then the Shariah-sensitive investor is prohibited from investing in it.

2. Quantitative Assessment by Financial Screening 

There are four components that must be financially screened before claiming it is Shariah-compliant. Interest-based activities, cash, debt, and accounts receivables. 

What resources are there to help me find halal stocks?

There are a few websites and apps you can use to help you find if a stock is halal or not. For example, you can use Zoya and Finispia to help you understand if a stock is compliant or not. By paying a monthly fee, you can also check why they are compliant or non-compliant.

Musaffa has launched the most comprehensive halal stock screening service. Now you can search for halal stocks from Indonesia, Malaysia, Singapore, the United States, the United Kingdom, and Canada. Musaffa Halal stock screener provides you with the Shariah-compliant rating that will make your halal investment decision easier.

Sign up the the most comprehensive halal stock screener by Musaffa at musaffa.com.

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