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MIDEAST STOCKS-Wall Street surge buoys Gulf, Saudi banks strong

* Riyad Bank continues to climb on merger talks * Saudi's SABB, Samba rise on dividend proposals * Six of seven Qatari banks rise * Qatar's United Development gains on plot sale deal * El Sewedy Electric top gainer in Egypt By Shakeel Ahmad and Ateeq Shariff Dec 27 (Reuters) - Saudi Arabia and other Gulf stock markets gained on Thursday as the sharp rebound on Wall Street overnight and Brent oil's recovery from below $50 a barrel lifted investor sentiment.

Saudi Arabia's index rose 0.5 percent with Al Rajhi Bank adding 1.1 percent.

Riyad Bank climbed for a fourth straight day, adding 1.3 percent. The stock has been buoyed by news of merger discussions with National Commercial Bank, the kingdom's biggest lender by assets, which edged down 0.3 percent.

Saudi British Bank increased 1.4 percent after its board proposed a higher dividend of 1.0 riyal per share for the second half of the year, after 0.96 riyal for the first half. Samba Financial Group gained 1.7 percent after proposing a dividend of 1.0 riyal for the same period.

Saudi Cable Co, which jumped its 10 percent daily limit in the last session, added a further 3.4 percent in its heaviest trade for a month; on Wednesday, it said it reached a final settlement with creditors on 313.6 million riyals ($83.60 million) of loans.

Qatar's index rose 0.6 percent with six of seven banks gaining. Qatar Islamic Bank increased 1.6 percent and Doha Bank climbed 1.8 percent; it said on Wednesday it had raised a $525 million syndicated loan.

United Development gained 3.0 percent in its heaviest trade since March 2017. On Wednesday, the firm said it finalised a sale agreement with an unnamed strategic Qatari investor for a plot at The Pearl Qatar project, for which it is master developer.

Rami Jamal, portfolio manager at Amwal in Doha, said the deal appeared to solidify investor confidence that the firm would keep an attractive dividend policy. Its dividend yield is 8.7 percent and price/book ratio under 0.5, Refinitiv data shows.

The Dubai index was flat but some real estate shares gained, with Emaar Properties rising 2.1 percent and Emaar Development up 0.8 percent.

Egypt's blue-chip index, which had snapped a three-day losing streak on Wednesday, rose 1.2 percent. El Sewedy Electric was the top gainer, jumping 5.6 percent, while tobacco firm Eastern Co increased 2.6 percent.

SAUDI The index gained 0.5 percent to 7,749 ARABIA points EGYPT The EGX 30 Index rose 1.1 percent to 12,984 points DUBAI The index was flat at 2,469 points ABU DHABI The index was up 0.3 percent at 4,831 points QATAR The Index increased 0.6 percent to 10,288 points KUWAIT The index edged up 0.2 percent to 5,267 points BAHRAIN The index rose 0.3 percent to 1,322 points OMAN The index was up 0.4 percent at 4,344 points (Reporting by Shakeel Ahmad and Ateeq Shariff in Bengaluru)