NU board okays trade in stocks
NU board okays trade in stocks
JAKARTA (JP): The East Java chapter of the Nahdlatul Ulama
(NU) has ruled that buying and selling shares is permitted under
Islam.
Antara reported from Surabaya, the capital of East Java, that
20 syuriah (experts in Islamic law) of the NU regional executive
board gave their approval after studying the matter and
discussing it with executives of the Surabaya Stock Exchange.
This is the first time that a branch of NU, which has more
than 30 million members nationwide, has publicly endorsed share
transactions. Antara reported that the East Java chapter plans to
recommend that the NU central executive board do likewise.
It is not immediately clear whether the ruling would unleash
mass buying of stocks and a fresh injection into the Surabaya and
Jakarta stock markets.
NU, whose members live mainly in rural areas, has never
publicly banned its members from trading in shares, an activity
that is considered to be an urban pastime.
According to Antara, the NU lawmakers ruled that the
establishment of the Surabaya Stock Exchange does not contravene
Islamic law.
They also ruled that buying and selling shares, either in the
primary or secondary market, is permissible.
They further ruled that there must be transparency about the
management and condition of companies whose shares are being
listed on the stock markets, and that there must be "fairness" in
the way profits, or dividends, are divided.
Imron Hamzah, the head of the lawmaking body of the NU chapter
in East Java, said the legality of share buying and selling was
first questioned during the NU congress in Yogyakarta in 1989.
The delay in taking a position was largely because the ulemas'
knowledge about share transactions was sketchy, Imron said.
Harjo Sumitro, the director of trade of the Surabaya Stock
Exchange, told a delegation of the NU regional board on Tuesday
that the stock exchange regulations in Indonesia have been
designed to minimize speculation.
"Abroad, share trading is highly speculative that it may be
haram (religiously forbidden), because Islam bars speculation,"
Harjo said. "In Indonesia, we have quite strict regulations that
all forms of speculation and the likelihood of fraud are
eliminated."
"Any fraud is likely to occur after the transactions," he
added. (emb)