Recent events in the world have seriously affected stock markets around the world, the shares of many companies have fallen, substantially. I believe that this might be an opportunity to buy shares in a company, however most of the companies over here are financed through bank loans, on which they pay interest and so I am afraid to do so. Keeping this in mind what is your opinion regarding this matter (i.e. is it permissible)?
If a company is not involved in a business, which is either prohibited by the Shari`ah or is illegal, then there is no harm in buying its shares, even if it owes an interest bearing loan or has issued interest bearing debentures. A Muslim should, however, refrain from purchasing shares of a company which is involved in a business, which is not approved by the Shari`ah (as for instance, the shares of a banking company or a company, which produces liquor).
I hope this helps.
September 30, 2001