Shariah Guidelines for Trading and Investment in Stocks

The Sharia Board of Alrajhi Bank has issued its resolution No. (485) regarding the legal rule (sharia opinion) on the investment and trading in the stocks of the joint stock companies, as follows:

Joint stock companies, in terms of their objectives, activities and controls of dealing in their stocks, are classified into three types:

A. Type One:
Joint stock companies with permissible objectives and activities: It is permissible to invest and deal in the stocks of this type of companies in accordance with the stated Terms and Conditions of sale (trading). 
 
B. Type Two:
Joint stock companies with illicit objectives and activities, including trading in wine, tobacco, pork, gambling, interest bearing banking activities, companies with insolent activities or films, funds dealing in interest-bearing bonds, and companies specialized in debt handling and dealing.  It is to be pointed out here that it is categorically impermissible to invest and trade in the stocks of this type of companies.
 
C. Type Three:
Companies whose objectives and activities are permissible but may have illicit matters in their dealings, such as dealing in usurious interest-bearing loans or deposits. The Shariah Board has approved the permissibility of investment and trading in the stocks of these companies (type three), subject to the following controls:
 
   I. The following safeguards and controls shall be in place upon investment and trading in this type of joint stock companies:
 
- Permissibility of dealing in the stocks of this type of companies shall be restricted to exigency. In this regard, if certain joint stock companies are found to comply with avoidance of dealing in usury and are found to satisfy the need for such dealing, they should be preferred to similar but non complying companies.
     
- Total amount of interest-bearing (long or short term) loans shall not exceed 30% of the total market value of assets of the borrowing company unless this value goes below the book value of the assets, with due consideration to the fact that interest-bearing borrowing is impressible regardless of the volume of the borrowed amount.
 
- The earnings generated from the illicit component shall not exceed 5% of the total earnings of the respective company, whether such earnings are generated from interest-bearing investment or from the practice of illicit activity, ownership of an illicit item or otherwise. In case certain earnings are not disclosed, they shall be explored with due diligence and prudence.
 
- The rates stated in this decision are solely based on diligence and discretion and may therefore be subject to review as necessary.
 
   II. If the conditions of this type of companies change to the extent that the foregoing controls are rendered inapplicable, the stocks of these companies shall be sold as soon as practically possible, preferably within a deadline not to exceed ninety (90) days from the date of confirmed change of such conditions.
 
   III. In determining company activities and the stated rates for permissibility to invest or deal in their stocks, reference shall be made to the latest audited or non-audited annual, quarterly or monthly financial statements of these companies.
 
   IV. It is not permissible to participate in the incorporation of companies whose articles of association state that their objectives or activities provide for dealing in illicit transactions.
 
   V. The investor customer shall dispose of the illicit component of the said companies.
 
 
To view the list of Sharia Compliant and Non-Compliant companies Q4-2018
 
 
1120 AL RAJHI BANK
1140 BANK ALBILAD
1150 ALINMA BANK
1020 BANK AL-JAZIRA
4070 TIHAMA
2020 SAUDI ARABIAN FERTILIZER CO
6020 AL QASSIM AGRICULTURAL CO
6040 TABUK AGRICULTURAL DEVELOPMENT
6060 ASH-SHARQIYAH DEVELOPMENT CO
6070 AL JOUF AGRICULTURE DEVELOPMENT
6090 JAZAN DEVELOPMENT CO
4050 SASCO
2090 NATIONAL GYPSUM
2160 SAUDI ARABIAN AMIANTIT CO
3010 ARABIAN CEMENT
3020 YAMAMAH SAUDI CEMENT CO. LTD
3030 SAUDI CEMENT
3040 THE QASSIM CEMENT Co
3050 SOUTHERN PROVINCE CEMENT CO
3060 YANBU CEMENT
3080 EASTERN CEMENT
3090 TABUK CEMENT
3091 AL JOUF CEMENT
3002 NAJRAN CEMENT COMPANY
4230 RED SEA HOUSING SERVICES CO
4150 ARRIYADH DEVELOPMENT COMPANY
1202 MIDDLE EAST PAPER COMPANY
1330 ABDULLAH A.M. AL-KHODARI SON
4100 MAKKAH CONSTRUCTION & DEVELOPMENT
2320 AL-BABTAIN POWER & TELECOMMUNICATION
1830 FITNESS TIME
2040 SAUDI CERAMIC
1210 BASIC CHEMICAL INDUSTRIES
2001 METHANOL CHEMICALS CO
2010 SAUDI BASIC INDUSTRIES CORP
2330 ADVANCED PETROCHEMICALS CO
2210 NAMA CHEMICALS CO
2150 THE NATIONAL CO FOR GLASS INDUSTRIES
2180 FILING & PACKING MATERIALS M
2130 SAUDI INDUSTRIAL DEVELOPMENT
1212 ASTRA INDUSTRIAL GROUP
2060 NATIONAL INDUSTRIALIZATION C
4080 ASEER
4130 AL-BAHA DEVELOPMENT & INVESTMENT Co
5110 SAUDI ELECTRICITY CO
6050 SAUDI FISHERIES
2280 ALMARAI CO LTD
6010 NATIONAL AGRICULTURE DEVELOPMENT
2050 SAVOLA
2100 FOOD PRODUCTS COMPANY
2270 SAUDI DAIRY & FOODSTUFF CO
6001 HALWANI BROS CO
6002 HERFY FOOD SERVICES CO
4160 THIMAR
2080 NATIONAL GAS & INDUSTRIALIZA
4010 SAUDI HOTELS & RESORT
1214 AL-HASSAN G.I. SHAKER CO
4140 SAUDI INDUSTRIAL EXPORT CO
2120 SAUDI ADVANCED INDUSTRIES
2140 AL-AHSA DEVELOPMENT CO
2110 SAUDI CABLE CO
2070 SAUDI PHARMACEUTICAL INDUST. & MED.
2230 SAUDI CHEMICAL COMPANY
4002 AL MOUWASAT MEDICAL SERVICES
1211 SAUDI ARABIAN MINING CO
2190 SAUDI INDUSTRIAL SERVICES CO
4200 ALDREES PETROLEUM & TRANSPORT SERVICES Co
2300 SAUDI PAPER MANUFACTURING CO
2260 SAHARA PETROCHEMICAL CO
2310 SAUDI INTERNATIONAL PETROCHEMICAL
4270 SAUDI PRINTING & PACKAGING Co
4020 SAUDI REAL ESTATE CO
4090 TAIBA HOLDING CO
4220 EMAAR ECONOMIC CITY
4250 JABAL OMAR DEVELOPMENT CO
4300 DAR AL ARKAN REAL ESTATE DEVELOPMENT
4310 KNOWLEDGE ECONOMIC CITY
4260 UNITED INTERNATIONAL TRANSPORTATION CO
4170 TOURISM ENTERPRISE CO/ SHAMS
4240 FAWAZ ABDULAZIZ ALHOKAIR & CO
4001 ABDULLAH AL OTHAIM MARKETS
4180 FITAIHI HOLDING GROUP
4190 JARIR MARKETING CO
1320 SAUDI STEEL PIPE CO
2220 MAADANIYAH
2240 ZAMIL INDUSTRIAL INVESTMENT
7010 SAUDI TELECOM CO
7020 ETIHAD ETISALAT CO
7040 ETIHAD ATHEEB TELECOMMUNICATION Co
1213 ALSORAYAI GROUP
2340 ALABDULLATIF INDUSTRIAL INVESTMENT CO
4030 NATIONAL SHIPPING CO OF SAUDI ARABIA
4040 SAUDI PUBLIC TRANSPORT CO
4061 ANAAM INTERNATIONAL HOLDING
4110 SAUDI TRANSPORT AND INVESTMENT
2370 MIDDLE EAST SPECIALIZED CABLES Co
8020 MALATH INSURANCE
8130 ALAHLI TAKAFUL CO
8230 AL RAJHI CO FOR CO-OPERATIVE
8030 MEDITERRANEAN & GULF INSURANCE
8050 SAUDI COOPERATIVE IAIC INSURANCE
8060 SAUDI UNITED COOPERATIVE INSURANCE
8290 SOLIDARITY SAUDI TAKAFUL CO
8150 ALLIED COOPERATIVE INSURANCE
8312 ALINMA TOKIO MARINE CO.
8080 SABB TAKAFUL
8110 SAUDI INDIAN COMPANY
3001 HAIL CEMENT COMPANY
8012 ALJAZIRA TAKAFUL
4003 EXTRA
1301 ASLAK
2290 YANBU NATIONAL PETROCHEMICAL
1303 ELECTRICAL INDUSTRIES COMPANY
1810 ALTAYYAR TRAVEL GROUP
6004 SAUDI AIRLINES CATERING COMPANY
4004 DALLAH HEALTHCARE HOLDING COMPANY
3004 NORTHERN REGION CEMENT COMPANY
3003​ CITY CEMENT COMPANY
2170 ALUJAIN CORPORATION (ALCO)
4005​ NATIONAL MEDICAL CARE COMPANY
1302 BAWAN COMPANY
8210​ BUPA ARABIA FOR COOPERATIVE INSURANCE
4006 SAUDI MARKETING COMPANY
2200​ ARABIAN PIPES COMPANY
1201 TAKWEEN ADVANCED INDUSTRIES
3005 UMM AL-QURA CEMENT COMPANY
1820 ABDULMOHSEN ALHOKAIR GROUP FOR TOURISM AND DEV. CO.
4007 AL HAMMADI COMPANY FOR DEVELOPMENT AND INVESTMENT
2030 SAUDI ARABIAN REFINERY COMPANY
4008 SACO
4031 SAUDI GROUND SERVICES COMPANY
4320 ALANDALUS PROPERTY COMPANY
4009 MIDDLE EAST HEALTHCARE COMPANY
1304 Al YAMAMAH STEEL INDUSTRIES COMPANY
8280 AL ALAMIYA COOPERATIVE INSURANCE
2360 SAUDI VITRIFIED CLAY PIPE CO
4330 RIYAD REIT
4331 ALJAZIRA REIT
8070 ARABIAN SHIELD COOPERATIVE INSURANCE
4332 JADWA REIT Al HARAMAIN
4333 TALEEM REIT
4334 Al Mather REIT
8300 WATANIYA INSURANCE CO.
8010 THE COMPANY FOR COOPERATIVE INSURANCE
4335 MUSHARAKA REIT
3007 OASIS
4336 MULKIA REIT
4340 Al Rajhi REIT
4338 ALAHLI REIT 1
4337 MASHAAR REIT
4342 JADWA REIT SAUDI
2350 SAUDI KAYAN PETROCHEMICAL CO.
4339 Derayah Reit Fund
2250 Saudi Industrial Investment Group
4344 SEDCO CAPITAL REIT
4347 Bonyan REIT
4345 SWICORP WABEL REIT
4346 MEFIC REIT
4291 NCLE
2002 SAUDI NATIONAL PETROCHEMICAL
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