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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 Q2-2022

1111
TADAWUL GROUP
2082
ACWA POWER
8180
AL SAGR CO-OPERATIVE INSURANCE
6014
ALAMAR
4071
ALARABIA
4163
ALDAWAA
4162
ALMUNAJEM
1322
AMAK
7040
ATHEEB TELECOM
6013
DWF
1321
EAST PIPES
7203
ELM
4014
EQUIPMENT HOUSE
4164
NAHDI
2282
NAQI
4081
NAYIFAT
4322
RETAL
1183
SHL
7202
SOLUTIONS
4001
Abdullah Al Othaim Markets
4191
Abdullah Saad Mohammed Abo Moati for Bookstores
2330
ADVANCED
8280
Al Alamiya for Cooperative Insurance
2320
ALBABTAIN
8240
CHUBB Arabia Cooperative Insurance
8170
Al Etihad Cooperative Insurance
4007
Al Hammadi Company for Development and Investment
1214
SHAKER
6070
AL JOUF AGRICULTURE DEVELOPMENT
3091
JOUF CEMENT
2380
PETRO RABIGH
2060
TASNEE
3008
Al Kathiri Holding Co
4290
AL KHALEEJ TRAINING AND EDUCATION CO
4334
Al Mather REIT
4002
AL MOUWASAT MEDICAL SERVICES
4141
Al OMRAN INDUSTRIAL TRADING Company
6020
AL QASSIM AGRICULTURAL CO
1120
AL RAJHI BANK
4340
Al Rajhi REIT
8230
Al Rajhi Takaful
1304
ALYAMAMAH STEEL
2340
ALABDULLATIF
4338
ALAHLI REIT 1
4320
ALANDALUS PROPERTY COMPANY
4012
Al-Aseel Co
4130
AL-BAHA DEVELOPMENT AND INVESTMENT Co
4200
ALDREES PETROLEUM AND TRANSPORT SERVICES Co
1820
ALHOKAIR GROUP
1150
ALINMA BANK
8312
ALINMA TOKIO MARINE CO
4331
ALJAZIRA REIT
8012
ALJAZIRA TAKAFUL
4348
Alkhabeer REIT Fund
2081
AWPT
8150
ALLIED COOPERATIVE INSURANCE
2280
ALMARAI
2281
TANMIAH
4321
ALMRAKEZ
1213
Naseej
2170
ALUJAIN
1182
Amlak
4061
ANAAM INTERNATIONAL HOLDING
7201
ARAB SEA INFORMATION SYSTEM COMPANY
8160
ARABIA INSURANCE COOPERATIVE
3010
ACC
2200​
APC
8070
ARABIAN SHIELD COOPERATIVE INSURANCE
4150
ARRIYADH DEVELOPMENT COMPANY
4080
SINAD HOLDING
6060
ASH-SHARQIYAH DEVELOPMENT CO
1301
ASLAK
1212
ASTRA INDUSTRIAL GROUP
4292
Ataa Educational
2140
AYYAN
4051
BAAZEEM TRADING COMPANY
1140
BANK ALBILAD
1020
BANK AL-JAZIRA
1210
BCI
1302
BAWAN
4161
Bin Dawood Holding Co
4347
Bonyan REIT
8210​
BUPA ARABIA FOR COOPERATIVE INSURANCE
4005
NATIONAL MEDICAL CARE COMPANY​
3003​
CITY CEMENT
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
EPCCO
1303
EIC
4220
EMAAR ECONOMIC CITY
8311
Enaya
7020
ETIHAD ETISALAT CO
4003
EXTRA
4240
FAWAZ ABDULAZIZ ALHOKAIR & CO
2180
FIPCO
4180
FITAIHI HOLDING GROUP
1830
FITNESS TIME
2100
WAFRAH
3001
HCC
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
SICO SAUDI REIT
8030
MEDITERRANEAN AND GULF INSURANCE
4346
MEFIC REIT
2001
CHEMANOL
4009
SAUDI GERMAN HEALTH
1202
MEPCO
2370
MESC
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
GASCO
2090
NGC
4030
NATIONAL SHIPPING CO OF SAUDI ARABIA
4291
NCLE
3004
NORTHERN CEMENT
3007
OASIS
4230
RED SEA HOUSING SERVICES CO
6012
Raydan Co.
4330
RIYAD REIT
8080
SABB TAKAFUL
4008
SACO
1832
SADR
4050
SASCO
2120
SAIC
6004
SAUDI AIRLINES CATERING COMPANY
2160
AMIANTIT
2020
SABIC Agri-Nutrients
1211
MAADEN
2030
SARCO
2222
Saudi ARAMCO
2010
SAUDI BASIC INDUSTRIES CORP
2110
SAUDI CABLE
3030
SAUDI CEMENT
2040
SAUDI CERAMICS
2230
CHEMICAL
8050
SAUDI COOPERATIVE IAIC INSURANCE
2270
SADAFCO
5110
SAUDI ELECTRICITY CO
6050
SAUDI FISHERIES
4031
SAUDI GROUND SERVICES COMPANY
4010
SAUDI HOTELS AND RESORT
2130
SIDC
4140
SAUDI INDUSTRIAL EXPORT CO
2250
SIIG
2190
SISCO
2310
SIPCHEM
2350
SAUDI KAYAN
4006
SAUDI MARKETING COMPANY
2300
SPM
2070
SPIMACO
4270
SAUDI PRINTING AND PACKAGING Co
4040
SAUDI PUBLIC TRANSPORT CO
8200
SAUDI RE FOR COOPERATIVE REINSURANCE
4020
SAUDI REAL ESTATE CO
1320
SSP
7010
SAUDI TELECOM CO
4110
SAUDI TRANSPORT AND INVESTMENT
8060
SAUDI UNITED COOPERATIVE INSURANCE
2360
SVCP
2050
SAVOLA GROUP
4344
SEDCO CAPITAL REIT
1810
SEERA
3050
SPCC
4345
ALINMA RETAIL REIT
6040
TABUK AGRICULTURAL DEVELOPMENT
3090
TCC
4090
TAIBA HOLDING CO
1201
TAKWEEN
4333
TALEEM REIT
8010
THE COMPANY FOR COOPERATIVE INSURANCE
2150
ZOUJAJ
3040
QACCO
4261
THEEB
4160
THIMAR
4070
TIHAMA
4170
TOURISM ENTERPRISE CO SHAMS
3005
UACC
4260
UNITED INTERNATIONAL TRANSPORTATION CO
8300
WATANIYA INSURANCE CO
3020
YSCC
3060
YCC
2290
YANSAB
2240
ZAMIL INDUST
4210
SAUDI RESEARCH AND MARKETING GROUP
8040
ALLIANZ SAUDI FRANSI COOPERATIVE INSURANCE
8310
AMANA COOPERATIVE INSURANCE
1080
ARAB NATIONAL BANK
8250
GIG
1050
BANQUE SAUDI FRANSI
8270
BURUJ COOPERATIVE INSURANCE
8260
GULF GENERAL COOPERATIVE INSURANCE
8120
Gulf Union Alahlia Cooperative Insurance
4280
KINGDOM HOLDING COMPANY
4011
LAZURDE COMPANY FOR JEWELRY
1010
RIYAD BANK
8100
Saudi Arabian Cooperative Insrnc Co
1060
SAUDI BRITISH BANK
1030
SAUDI INVESTMENT BANK
1180
Saudi National Bank
8190
UNITED CO-OPERATIVE ASSURANC

9510
NBM
9511
Sumou Real Estate Co
9512
Riyadh Cement
9513
Watani Iron & Steel
9514
Mohammed Hasan AlNaqool Sons Co.
9515
FESH FASH
9516
NGDC
9517
MOBI
9518
CMCER
9519
BANAN
9520
BURGERIZZR
9521
ENMA ALRAWABI
9522
ALHASOOB
9523
GROUP FIVE
9524
AICTEC
9525
ALWASAIL
9526
Jahez
9527
AME
9528
GAS
9529
RAOOM
9530
TIBBIYAH
9531
OBEIKAN GLASS
9532
ALJOUF WATER
9533
SPC
9534
AZM
9535
LADUN
9536
FADECOL
9537
AMWAJ INTERNATIONAL
9538
NASEEJ TECH
9539
AQASEEM
9540
TADWEEER
9541
ACADEMY OF LEARNING
9542
KEIR
9543
NETWORKERS
9544
FUTURE CARE
9545
ALDAWLIAH
9546
NABA ALSAHA
9547
RAWASI
9548
APICO
9401
FALCOM PETROCHEMICAL
9400
FALCOM 30
9403
ALBILAD SUKUK
9404
ALINMA SUKUK
9405
ALBILAD GOLD
9406
ALBILAD MSCI

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