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Emirates NBD lifts Dubai, rest of Gulf modestly firmer

* Emirates NBD is top gainer in Dubai

* Abu Dhabi's Etisalat jumps after share buy-back approval

* Saudi Investment Bank firm as it buys back stake from JPMorgan

* Al Tayyar Travel up sharply for second day on tourist visa plan

* Egyptian Iron and Steel buoyed by iron scrap sales deal

* Banks boost Qatar's index

By Abinaya Vijayaraghavan

Sept 27 (Reuters) - A leap by Dubai's biggest bank boosted the stock market index sharply on Thursday while most Gulf bourses registered only marginal gains.

The Dubai index closed up 1.8 percent, its biggest gain since May, as Emirates NBD jumped 6.2 percent to 9.50 dirhams. It was the market's strongest stock; 5.6 million of its shares changed hands, or 7.3 times the 30-day average for volume.

Many analysts consider the stock undervalued. Eleven analysts covering the stock have a median target price of 13.20 dirhams, according to Thomson Reuters data.

In addition, ENBD's unit Emirates Islamic on Tuesday said it would launch mortgages to help non-residents buy property in the United Arab Emirates.

The bank said last week that it was moving towards raising its foreign ownership ceiling. Vrajesh Bhandari, portfolio manager at Al Mal Capital in Dubai, said investors were more confident about the increase after interacting with the bank's management at a recent conference.

He also cited the positive impact of a rising interest rate environment on the bank's net interest margins; along with other Gulf central banks, the United Arab Emirates central bank hiked rates on Wednesday in response to U.S. monetary tightening.

Builder Arabtec jumped 3.8 percent after issuing additional information about a 3.2 billion dirham ($871 million) contract won by a consortium involving one of its units. It said the unit expected to have a 40-50 percent share of the contract, for a liquefied natural gas project in Abu Dhabi.

Abu Dhabi's index added 0.4 percent as telecommunications group Etisalat gained 3.7 percent, its biggest rise in well over a year. The company said it had obtained regulatory approval for a share buy-back programme.

Real estate developer Aldar Properties rose 2.8 percent. Aldar said on Wednesday it had bought the 40 percent stake it did not already own in Khidmah, an integrated property services company; it did not disclose the purchase price.

Saudi Arabia's stock index edged up 0.1 percent. Samba Financial gained 1.1 percent, while Saudi Investment Bank rose 0.6 percent to 17.90 riyals as it completed the purchase of a 7.5 percent stake in the firm from JPMorgan International Finance for 759.3 million riyals ($202.5 million), or 13.50 riyals a share.

Al Tayyar Travel surged 6.2 percent, rising sharply for a second day after the government said it was introducing a system of tourist visas for special events, a step towards developing the tourism industry.

Qatar's index reversed early weakness to trade higher, boosted by bank stocks. Qatar National Bank was the top gainer on the index, rising 1.7 percent. The index was up 0.6 percent.

In Egypt, Commercial International Bank rose 1.6 percent, and Egyptian Iron and Steel jumped 2.8 percent after it signed a contract to sell iron scrap to Egyptian Steel Co. The index edged up 0.1 percent.

SAUDI ARABIA * The index gained 0.1 percent to 7,899 points. DUBAI * The index rose 1.8 percent to 2,826 points. ABU DHABI * The index increased 0.4 percent to 4,948 points. QATAR * The index gained 0.6 percent to 9,784 points. KUWAIT * The index rose 0.2 percent to 5,346 points. BAHRAIN * The index fell 0.1 percent to 1,349 points. OMAN * The index .MSI rose 0.5 percent to 4,524 points. EGYPT * The index rose 0.1 percent to 14,632 points. (Editing by Andrew Torchia Editing by Robin Pomeroy)