Subject Matter of Murabahah
All commodities which may be subject matter of sale with profit can be subject matter of murabahah, because it is a particular kind of sale. Therefore, the shares of a lawful company may be sold or purchased on murabahah basis, because according to the Islamic principles, the shares of a company represent the holder’s proportionate ownership in the assets of the company. If the assets of a company can be sold with profit, its shares can also be sold by way of murabahah. But it goes without saying that the transaction must fulfil all the basic conditions, already discussed, for the validity of a murabahah transaction. Therefore, the seller must first acquire the possession of the shares with all their rights and obligations, then sell them to his client. A buy back arrangement or selling the shares without taking their possession is not allowed at all.
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Conversely, no murabahah can be effected on things which cannot be subject - matter of sale, For example murabahah is not possible in exchange of currencies, because it must be spontaneous or, if deferred, on the market rate prevalent on the date of the transaction. Similarly, the commercial papers representing a debt receivable by the holder cannot be sold or purchased except at par value, and therefore no murabahah can be effected in respect of such papers. Similarly, any paper entitling the holder to receive a specified amount of money from the issuer cannot be negotiated. The only way of its sale is to transfer if for its face value. Therefore, they cannot be sold on murabahah basis.
Source: Republished with the kind permission of Sheikh Muhammad Taqi Usmani.
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