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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 Q3-2022

1111
TADAWUL GROUP
1020
BANK AL-JAZIRA
1120
AL RAJHI BANK
1140
BANK ALBILAD
1150
ALINMA BANK
1182
Amlak
1183
SHL
1201
TAKWEEN
1202
MEPCO
1210
BCI
1211
MAADEN
1212
ASTRA INDUSTRIAL GROUP
1213
Naseej
1214
SHAKER
1301
ASLAK
1302
BAWAN
1303
EIC
1304
ALYAMAMAH STEEL
1320
SSP
1321
EAST PIPES
1322
AMAK
1810
SEERA
1820
ALHOKAIR GROUP
1830
FITNESS TIME
1831
MAHARAH
1832
SADR
2001
CHEMANOL
2010
SAUDI BASIC INDUSTRIES CORP
2020
SABIC Agri-Nutrients
2030
SARCO
2040
SAUDI CERAMICS
2050
SAVOLA GROUP
2060
TASNEE
2070
SPIMACO
2080
GASCO
2081
AWPT
2082
ACWA POWER
2083
MARAFIQ
2090
NGC
2100
WAFRAH
2110
SAUDI CABLE
2120
SAIC
2130
SIDC
2140
AYYAN
2150
ZOUJAJ
2160
AMIANTIT
2170
ALUJAIN
2180
FIPCO
2190
SISCO
2200​
APC
2210
NAMA CHEMICALS CO
2220
MAADANIYAH
2222
Saudi ARAMCO
2230
CHEMICAL
2240
ZAMIL INDUST
2250
SIIG
2270
SADAFCO
2280
ALMARAI
2281
TANMIAH
2282
NAQI
2290
YANSAB
2300
SPM
2310
SIPCHEM
2320
ALBABTAIN
2330
ADVANCED
2340
ALABDULLATIF
2350
SAUDI KAYAN
2360
SVCP
2370
MESC
2380
PETRO RABIGH
2381
ARABIAN DRILLING
3001
HCC
3002
NAJRAN CEMENT
3003​
CITY CEMENT
3004
NORTHERN CEMENT
3005
UACC
3007
OASIS
3008
Al Kathiri Holding Co
3010
ACC
3020
YSCC
3030
SAUDI CEMENT
3040
QACCO
3050
SPCC
3060
YCC
3080
EPCCO
3090
TCC
3091
JOUF CEMENT
4001
Abdullah Al Othaim Markets
4002
MOUWASAT
4003
EXTRA
4004
DALLAH HEALTH
4005
CARE
4006
FARM SUPERSTORES
4007
ALHAMMADI
4008
SACO
4009
SAUDI GERMAN HEALTH
4010
DUR
4012
ALASEEL
4013
SULAIMAN ALHABIB
4014
EQUIPMENT HOUSE
4020
ALAKARIA
4030
BAHRI
4031
SGS
4040
SAPTCO
4050
SASCO
4051
BAAZEEM
4061
ANAAM HOLDING
4070
TIHAMA
4071
ALARABIA
4080
SINAD HOLDING
4081
NAYIFAT
4090
TAIBA HOLDING CO
4100
MCDC
4110
BATIC
4130
ALBAHA
4140
SAUDI INDUSTRIAL EXPORT CO
4141
ALOMRAN
4150
ARRIYADH DEVELOPMENT COMPANY
4160
THIMAR
4161
Bin Dawood Holding Co
4162
ALMUNAJEM
4163
ALDAWAA
4164
NAHDI
4170
TECO
4180
FITAIHI HOLDING GROUP
4190
JARIR MARKETING CO
4191
ABO MOATI
4200
ALDREES
4210
SRMG
4220
EMAAR ECONOMIC CITY
4230
RED SEA HOUSING SERVICES CO
4240
FAWAZ ABDULAZIZ ALHOKAIR & CO
4250
JABAL OMAR DEVELOPMENT CO
4260
UNITED INTERNATIONAL TRANSPORTATION CO
4261
THEEB
4270
SAUDI PRINTING AND PACKAGING Co
4290
AL KHALEEJ TRAINING AND EDUCATION CO
4291
NCLE
4292
Ataa Educational
4300
DAR AL ARKAN REAL ESTATE DEVELOPMENT
4310
KNOWLEDGE ECONOMIC CITY
4320
ALANDALUS PROPERTY COMPANY
4321
ALMRAKEZ
4322
RETAL
4330
RIYAD REIT
4331
ALJAZIRA REIT
4332
JADWA REIT Al HARAMAIN
4333
TALEEM REIT
4334
Al Mather REIT
4335
MUSHARAKA REIT
4336
MULKIA REIT
4337
SICO SAUDI REIT
4338
ALAHLI REIT 1
4339
Derayah Reit Fund
4340
Al Rajhi REIT
4342
JADWA REIT SAUDI
4344
SEDCO CAPITAL REIT
4345
ALINMA RETAIL REIT
4346
MEFIC REIT
4347
Bonyan REIT
4348
Alkhabeer REIT Fund
4349
ALINMA HOSPITALITY REIT
5110
SAUDI ELECTRICITY
6001
HALWANI BROS CO
6002
HERFY FOOD SERVICES CO
6004
CATERING
6010
NADEC
6012
RAYDAN
6013
DWF
6014
ALAMAR
6020
GACO
6040
TABUK AGRICULTURAL DEVELOPMENT
6050
SAUDI FISHERIES
6060
ASH-SHARQIYAH DEVELOPMENT CO
6070
AL JOUF AGRICULTURE DEVELOPMENT
6090
JAZADCO
7010
STC
7020
ETIHAD ETISALAT CO
7030
MOBILE TELECOMMUNICATIONS CO
7040
ATHEEB TELECOM
7200
MIS
7201
ARAB SEA INFORMATION SYSTEM COMPANY
7202
SOLUTIONS
7203
ELM
7204
2P
8010
THE COMPANY FOR COOPERATIVE INSURANCE
8012
ALJAZIRA TAKAFUL
8020
MALATH INSURANCE
8030
MEDITERRANEAN AND GULF INSURANCE
8050
SAUDI COOPERATIVE IAIC INSURANCE
8060
SAUDI UNITED COOPERATIVE INSURANCE
8070
ARABIAN SHIELD COOPERATIVE INSURANCE
8150
ALLIED COOPERATIVE INSURANCE
8160
ARABIA INSURANCE COOPERATIVE
8170
Al Etihad Cooperative Insurance
8180
AL SAGR CO-OPERATIVE INSURANCE
8200
SAUDI RE FOR COOPERATIVE REINSURANCE
8210​
BUPA ARABIA
8230
Al Rajhi Takaful
8240
CHUBB Arabia Cooperative Insurance
8250
GIG
8280
Al Alamiya for Cooperative Insurance
8300
WATANIYA INSURANCE CO
8311
Enaya
8312
ALINMA TOKIO MARINE CO
1010
RIYAD BANK
1030
SAUDI INVESTMENT BANK
1050
BANQUE SAUDI FRANSI
1060
SAUDI BRITISH BANK
1080
ARAB NATIONAL BANK
1180
Saudi National Bank
4011
LAZURDE
4280
KINGDOM
8040
ALLIANZ SF
8100
SAICO
8120
GULF UNION ALAHLIA
8190
UCA
8260
GULF GENERAL
8270
BURUJ
8310
AMANA INSURANCE

9300
ALWAHA REIT
9510
NBM
9511
Sumou Real Estate Co
9512
Riyadh Cement
9513
WATANI STEEL
9514
ALNAQOOL
9515
FESH FASH
9516
NGDC
9517
MOBI
9518
CMCER
9519
BANAN
9520
BURGERIZZR
9521
ENMA ALRAWABI
9522
ALHASOOB
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
FADECO
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
9549
ALBABTAIN FOOD
9550
SURE
9551
KNOWLEDGE TOWER
9400
YAQEEN 30
9401
YAQEEN PETROCHEMICAL
9403
ALBILAD SUKUK
9404
ALINMA SUKUK
9405
ALBILAD GOLD
9406
ALBILAD MSCI

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