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MIDEAST STOCKS-ADCB merger update lifts Abu Dhabi, most Gulf markets up

* Abu Dhabi Commercial Bank hits highest level since 2014 * Saudi Industrial Investment falls after slide in Q4 profit * Most petchems in Saudi drop * Property stocks continue to weigh on Dubai By Ateeq Shariff and Abinaya Vijayaraghavan Jan 24 (Reuters) - Abu Dhabi's stock market rose sharply on Thursday, lifted by financials and Abu Dhabi Commercial Bank's update on a three-way bank merger, while Saudi Arabia edged down as its petrochemical firms slid.

The Abu Dhabi index was up one percent, partially lifted by a 5.3 percent hike in Abu Dhabi Commercial bank (ADCB), which enjoyed a four-year high, and a 2.4 percent gain by Union National Bank.

ADCB said its board will meet next week to discuss the potential merger between the firm, Union National Bank and Al Hilal Bank.

If it goes ahead, a merger of the three could create an entity with $113 billion in assets, according to Thomson Reuters data, and the United Arab Emirates' third-biggest lender after First Abu Dhabi Bank and Emirates NBD.

Abu Dhabi, the capital of the United Arab Emirates, is reshaping its economy and consolidating state-owned companies to cope with lower oil prices.

Saudi Arabia's index fell 0.4 percent, with industry heavyweight Saudi Basic Industries Corp slipping 2 percent.

Saudi Industrial Investment lost 4.2 percent after posting a 93.2 percent drop in its fourth-quarter net profit. The company reported net profit after tax of 27 million riyals ($7.20 million) compared with 398 million riyals a year earlier.

The Dubai index slid 0.1 percent as its property stocks continued to decline.

Dubai's largest-listed developer Emaar Properties dropped 0.5 percent and DAMAC Properties shed 0.8 percent.

DAMAC saw its annual profit fall in 2018 and earnings will be similar for the next two years, although Dubai property prices may have hit the bottom, its chairman said. The company is yet to disclose its financial results for the fourth quarter.

Dubai property prices have fallen since a mid-2014 peak, hurting earnings of developers and forcing construction and engineering firms to cut jobs and halt expansion plans.

DAMAC has plunged by about two thirds in value in the past 12 months, while Emaar Malls and Emaar Development are both down 33 percent. That performance sets them up for exclusion from the MSCI Emerging Markets Index in May under the compiler's criteria for membership, said Mohamad Al Hajj, equities strategist at the research arm of EFG-Hermes Holding.

The departure of these stocks could lead to combined investment outflows of about $220 million, he added.

Qatar's index increased 0.6 percent, with Industries Qatar adding 2.6 percent and Qatar Navigation rising 3.6 percent.

The Egyptian stock market was closed for a public holiday. SAUDI ARABIA The index was down 0.4 pct at 8,435 points DUBAI The index slid 0.1 pct to 2,514 points QATAR The index gained 0.6 pct to 10,712 points ABU DHABI The index was up 1 pct at 5,019 points KUWAIT The index rose 0.2 pct to 5,493 points OMAN The index was up 0.3 pct at 4,180 points BAHRAIN The index added 0.9 pct to 1,374 points ($1 = 3.7503 riyals) (Reporting by Ateeq Shariff and Abinaya Vijayaraghavan in Bengaluru; Additional reporting by Saeed Azhar in Dubai, Editing by William Maclean)