I spoke to a sheikh myself about this.
according to islamic finance, it is deemed haram if there are elements of uncertainty and/or risk and if the business engages in haram things (obviously). It is halal if the share holders make money along with the stock (or company itself). If markets were fully efficient then it would be halal- that's essentially what halal investments or islamic finance is.
Now in the example of running a halal butcher with partnersi s that, if the store makes money, the partners makes money. nothing dodgy, and only risk you assume is the risk of running a business, which is fair.
now if you buy shares in a company, that company could have pathetic balance sheets and never makes, but stock prices go through the roof- enron
now that's just stocks, if you were to discuss derivatives and everything evelse, then from my discissions with sheikhs, they all deem it haram simply because they fail to first udnerstand what derivatives are and what the yare used for. Authoritive figures just look at the compelxity of financial instruments and deem it haram. Now maybe being conservative like that is the way to go, but I beg to differ.
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