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Shariah Guidelines for Trading and Investment in Stocks

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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 Q1-2020

1330
ABDULLAH A M AL KHODARI SON
4001
ABDULLAH AL OTHAIM MARKETS
4290
AL KHALEEJ TRAINING AND EDUCATION CO
8160
ARABIA INSURANCE COOPERATIVE
2030
SAUDI ARABIAN REFINERY COMPANY
8200
SAUDI RE FOR COOPERATIVE REINSURANCE
1820
ABDULMOHSEN ALHOKAIR GROUP FOR TOURISM AND DEV CO
4141
Al OMRAN INDUSTRIAL TRADING Company
2330
ADVANCED PETROCHEMICALS CO
8280
AL ALAMIYA COOPERATIVE INSURANCE
2320
AL BABTAIN POWER AND TELECOMMUNICATION
4007
AL HAMMADI COMPANY FOR DEVELOPMENT AND INVESTMENT
7201
ARAB SEA INFORMATION SYSTEM COMPANY
1214
AL HASSAN G I SHAKER CO
6070
AL JOUF AGRICULTURE DEVELOPMENT
3091
AL JOUF CEMENT
3008
Al Kathiri Holding Co
4334
Al Mather REIT
4002
AL MOUWASAT MEDICAL SERVICES
6020
AL QASSIM AGRICULTURAL CO
1120
AL RAJHI BANK
8230
AL RAJHI CO FOR CO-OPERATIVE
4340
Al Rajhi REIT
1304
Al YAMAMAH STEEL INDUSTRIES COMPANY
2340
ALABDULLATIF INDUSTRIAL INVESTMENT CO
4338
ALAHLI REIT 1
8130
ALAHLI TAKAFUL CO
2140
AL-AHSA DEVELOPMENT CO
4320
ALANDALUS PROPERTY COMPANY
4130
AL-BAHA DEVELOPMENT AND INVESTMENT Co
4200
ALDREES PETROLEUM AND TRANSPORT SERVICES Co
1150
ALINMA BANK
8312
ALINMA TOKIO MARINE CO
4331
ALJAZIRA REIT
8012
ALJAZIRA TAKAFUL
4348
Alkhabeer REIT Fund
8150
ALLIED COOPERATIVE INSURANCE
2280
ALMARAI CO LTD
4321
ALMRAKEZ
1213
ALSORAYAI GROUP
2170
ALUJAIN CORPORATION ALCO
4061
ANAAM INTERNATIONAL HOLDING
3010
ARABIAN CEMENT
2200​
ARABIAN PIPES COMPANY​
8070
ARABIAN SHIELD COOPERATIVE INSURANCE
4150
ARRIYADH DEVELOPMENT COMPANY
4080
ASEER
6060
ASH-SHARQIYAH DEVELOPMENT CO
1301
ASLAK
1182
Amlak International for Real Estate Finance
1212
ASTRA INDUSTRIAL GROUP
4292
Ataa Educational
4051
BAAZEEM TRADING COMPANY
1140
BANK ALBILAD
1020
BANK AL-JAZIRA
1210
BASIC CHEMICAL INDUSTRIES
1302
BAWAN COMPANY
4347
Bonyan REIT
8210​
BUPA ARABIA FOR COOPERATIVE INSURANCE
4005
NATIONAL MEDICAL CARE COMPANY​
3003​
CITY CEMENT COMPANY
4004
DALLAH HEALTHCARE HOLDING COMPANY
4300
DAR AL ARKAN REAL ESTATE DEVELOPMENT
4339
Derayah Reit Fund
4013
Dr. Sulaiman Al Habib Medical Services Group
3080
EASTERN CEMENT
1303
ELECTRICAL INDUSTRIES COMPANY
4220
EMAAR ECONOMIC CITY
8311
Enaya
7040
ETIHAD ATHEEB TELECOMMUNICATION Co
7020
ETIHAD ETISALAT CO
4003
EXTRA
4240
FAWAZ ABDULAZIZ ALHOKAIR & CO
2180
FILING AND PACKING MATERIALS M
4180
FITAIHI HOLDING GROUP
1830
FITNESS TIME
2100
FOOD PRODUCTS COMPANY
3001
HAIL CEMENT COMPANY
6001
HALWANI BROS CO
6002
HERFY FOOD SERVICES CO
4250
JABAL OMAR DEVELOPMENT CO
4332
JADWA REIT Al HARAMAIN
4342
JADWA REIT SAUDI
4190
JARIR MARKETING CO
6090
JAZAN DEVELOPMENT CO
4310
KNOWLEDGE ECONOMIC CITY
2220
MAADANIYAH
1831
MAHARAH
4100
MAKKAH CONSTRUCTION and DEVELOPMENT
8020
MALATH INSURANCE
4337
MASHAAR REIT
8030
MEDITERRANEAN AND GULF INSURANCE
4346
MEFIC REIT
2001
METHANOL CHEMICALS CO
4009
MIDDLE EAST HEALTHCARE COMPANY
1202
MIDDLE EAST PAPER COMPANY
2370
MIDDLE EAST SPECIALIZED CABLES Co
7200
MIS
7030
MOBILE TELECOMMUNICATIONS CO
4336
MULKIA REIT
4335
MUSHARAKA REIT
3002
NAJRAN CEMENT COMPANY
2210
NAMA CHEMICALS CO
6010
NATIONAL AGRICULTURE DEVELOPMENT
2080
NATIONAL GAS AND INDUSTRIALIZA
2090
NATIONAL GYPSUM
2060
NATIONAL INDUSTRIALIZATION C
4030
NATIONAL SHIPPING CO OF SAUDI ARABIA
4291
NCLE
3004
NORTHERN REGION CEMENT COMPANY
3007
OASIS
4230
RED SEA HOUSING SERVICES CO
4330
RIYAD REIT
8080
SABB TAKAFUL
4008
SACO
4050
SASCO
2120
SAUDI ADVANCED INDUSTRIES
6004
SAUDI AIRLINES CATERING COMPANY
2160
SAUDI ARABIAN AMIANTIT CO
2020
SAUDI ARABIAN FERTILIZER CO
1211
SAUDI ARABIAN MINING CO
2222
Saudi ARAMCO
2010
SAUDI BASIC INDUSTRIES CORP
2110
SAUDI CABLE CO
3030
SAUDI CEMENT
2040
SAUDI CERAMIC
2230
SAUDI CHEMICAL COMPANY
8050
SAUDI COOPERATIVE IAIC INSURANCE
2270
SAUDI DAIRY AND FOODSTUFF CO
5110
SAUDI ELECTRICITY CO
6050
SAUDI FISHERIES
4031
SAUDI GROUND SERVICES COMPANY
4010
SAUDI HOTELS AND RESORT
8110
SAUDI INDIAN COMPANY
2130
SAUDI INDUSTRIAL DEVELOPMENT
4140
SAUDI INDUSTRIAL EXPORT CO
2250
Saudi Industrial Investment Group
2190
SAUDI INDUSTRIAL SERVICES CO
2310
SAUDI INTERNATIONAL PETROCHEMICAL
2350
SAUDI KAYAN PETROCHEMICAL CO
4006
SAUDI MARKETING COMPANY
2002
SAUDI NATIONAL PETROCHEMICAL
2300
SAUDI PAPER MANUFACTURING CO
2070
SAUDI PHARMACEUTICAL INDUST AND MED
4270
SAUDI PRINTING AND PACKAGING Co
4040
SAUDI PUBLIC TRANSPORT CO
4020
SAUDI REAL ESTATE CO
1320
SAUDI STEEL PIPE CO
7010
SAUDI TELECOM CO
4110
SAUDI TRANSPORT AND INVESTMENT
8060
SAUDI UNITED COOPERATIVE INSURANCE
2360
SAUDI VITRIFIED CLAY PIPE CO
2050
SAVOLA
4344
SEDCO CAPITAL REIT
1810
SEERA Group Holding
8290
SOLIDARITY SAUDI TAKAFUL CO
3050
SOUTHERN PROVINCE CEMENT CO
9511
Sumou Real Estate Co
4345
SWICORP WABEL REIT
6040
TABUK AGRICULTURAL DEVELOPMENT
3090
TABUK CEMENT
4090
TAIBA HOLDING CO
1201
TAKWEEN ADVANCED INDUSTRIES
4333
TALEEM REIT
8010
THE COMPANY FOR COOPERATIVE INSURANCE
2150
THE NATIONAL CO FOR GLASS INDUSTRIES
3040
THE QASSIM CEMENT Co
4160
THIMAR
4070
TIHAMA
4170
TOURISM ENTERPRISE CO SHAMS
3005
UMM AL-QURA CEMENT COMPANY
4260
UNITED INTERNATIONAL TRANSPORTATION CO
8300
WATANIYA INSURANCE CO
3020
YAMAMAH SAUDI CEMENT CO LTD
3060
YANBU CEMENT
2290
YANBU NATIONAL PETROCHEMICAL
2240
ZAMIL INDUSTRIAL INVESTMENT
4191
ABDULLAH ABO MOATI FOR BOOKSTORES COMPANY
4012
Al-Aseel Co
6012
Raydan Co.
8180
AL SAGR CO-OPERATIVE INSURANCE
8140
AL-AHLIA COOPERATIVE INSURANCE
8040
ALLIANZ SAUDI FRANSI COOPERATIVE INSURANCE
8310
AMANA COOPERATIVE INSURANCE
1080
ARAB NATIONAL BANK
8250
AXA COOPERATIVE INSURANCE
1050
BANQUE SAUDI FRANSI
8270
BURUJ COOPERATIVE INSURANCE
8240
CHUBB Arabia Cooperative Insurance
8260
GULF GENERAL COOPERATIVE INSURANCE
8120
GULF UNION COOPERATIVE INSURANCE
4280
KINGDOM HOLDING COMPANY
4011
LAZURDE COMPANY FOR JEWELRY
1180
NATIONAL COMMERCIAL BANK
2380
RABIGH REFINING AND PETROCHEMICAL CO
1010
RIYAD BANK
1090
SAMBA FINANCIAL GROUP
8100
Saudi Arabian Cooperative Insrnc Co
1060
SAUDI BRITISH BANK
1030
SAUDI INVESTMENT BANK
4210
SAUDI RESEARCH AND MARKETING GROUP
8170
TRADE UNION COOPERATIVE INSURANCE
8190
UNITED CO-OPERATIVE ASSURANC

9501
DEVELOPMENT WORKS FOOD COMPANY
9512
SAUDI WHITE CEMENT
9504
Al SAMAANI FACTORY FOR METAL INDUSTRIES COMPANY
9510
NBM
9401
FALCOM PETROCHEMICAL
9400
FALCOM 30
9403
ALBILAD SUKUK
9404
ALINMA SUKUK
9405
ALBILAD GOLD

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