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* MSCI's top Saudi stocks rise * Saudi's Al-Etihad Cooperative gains after ban lifted * Qatar's Mesaieed Petrochemical rise ahead of MSCI entry * Dubai's Arabtec up after unit wins construction deal By Shakeel Ahmad May 28 (Reuters) - Saudi Arabia's stock market rose sharply on Tuesday ahead of its introduction into the MSCI emerging markets index after this session's close, while all major Gulf bourses rallied.
Saudi's index rose 2% for its biggest single-day gain since October 2018. Al Rajhi Bank increased 2.1% and petrochemical maker Saudi Basic Industries added 2%.
The two stocks will be among the largest additions to the MSCI emerging markets index measured by full company market capitalization.
MSCI said this month it would include MSCI Saudi Arabia in its emerging-markets index, effective from Tuesday's close, a move that could draw billions of dollars into the market.
Al-Etihad Cooperative Insurance rose 2.1% after the regulator lifted the ban on new vehicle insurance subscriptions.
Saudi Steel Pipes jumped 5.9%. It had surged 10% on Monday after saying its accumulated losses were reduced to zero as of December 2018.
The Qatari index rose 1.2% with blue-chip lender, Qatar National Bank, adding 1.8%.
Petrochemical maker Mesaieed Petrochemical Holding rose 2.9%. The stock has risen in most recent sessions after MSCI decided to include the stock in its emerging market index.
Qatar's stock exchange is developing two new Exchange Traded Funds, part of efforts by the Middle East's strongest performing stock market in 2018 to boost foreign investment, Reuters reported last week, citing CEO Rashid al-Mansoori.
Companies on Qatar's exchange in 2018 increased foreign ownership limits to 49%, most of which had previously been set at 25%, attracting a flood of cash that helped boost the main index by more than 20% last year.
"Now the minimum will be 49% for all Qatari companies ... this will attract more liquidity and more room for foreign investors to invest," said Mansoori.
In Dubai, the index was up 1.2%, led higher by real estate stocks. Major developer Emaar Properties traded 4.2% higher while its unit Emaar Malls closed 4.9% up in heavy trade.
The stock exchange data showed that native investors supported the rise while foreigners were the net sellers.
Arabtec Holding rose 4.8% after its unit Target Engineering won a construction contract for 192 million dirhams ($52.28 million).
Egypt's blue-chip index closed 0.5% higher with Alexandria Mineral Oils surging 6.8% after its board last week approved launching a study for the second phase of a heavy refining project to extract high economic-value products.
The Abu Dhabi index was also up 0.3%, with Dana Gas gaining 4.5.% and Abu Dhabi Commercial Bank climbing 3%. ($1 = 3.6728 UAE dirham) SAUDI The index added 2% to 8,551 points ARABIA ABU DHABI The index was up 0.3% to 4,791 points DUBAI The index rose 1.2% to 2,607 points QATAR The index rose 1.2% to 9,896 points EGYPT The index was up 0.5% at 14,028 points BAHRAIN The index gained 1% to 1,428 points OMAN The index was up 1.4% at 3,919 points KUWAIT The index was up 1% at 6,154 points (Reporting by Shakeel Ahmad in Bengaluru Editing by Mark Heinrich)