* Qatar index's biggest leap since January 2016
* Higher QNB ownership ceiling would boost weight in indexes
* Industries Qatar surges on expectation for similar action
* Data shows strong foreign buying of Saudi stocks last week
* Dubai near two-year lows despite ENBD's surge
DUBAI, March 12 (Reuters) - Qatar's stock market soared on Monday after Qatar National Bank said it would raise its ceiling for foreign ownership, while expectations for more inflows of foreign money lifted Saudi Arabia.
The Qatari stock index added 5.0 percent, its biggest leap since January 2016, in its heaviest trade this year as QNB, the Middle East's biggest bank, rocketed its 10 percent daily limit.
QNB, in which the government is by far the biggest shareholder, said it would recommend to shareholders increasing its non-Qatari ownership ceiling to 49 percent of capital from 25 percent.
This may have little immediate impact on ownership; at present, foreign and Gulf Cooperation Council investors own only 7.2 percent of QNB, exchange data shows.
But Rami Jamal, portfolio manager at Amwal in Doha, said raising the ceiling was likely to increase -- possibly almost double -- QNB's weighting in emerging market equity indexes, eventually causing new flows of passive funds into the stock.
Jamal noted that the Qatari market had pulled back sharply, leaving valuations relatively attractive, after the passing of Qatar's annual dividend system earlier this year; QNB shares were down nearly 17 percent from their peak in January.
"The market already had good conditions for a rebound when the QNB news came," he said.
Shares in some other government-affiliated Qatari companies with 25 percent foreign ownership limits also surged on expectations they would take the same action. Industries Qatar jumped 10 percent and Qatar Electricity & Water gained 8.7 percent.
In Saudi Arabia, the index climbed 1.1 percent, surpassing its January peak to close at its highest level since October 2015.
Petrochemicals were particularly strong as National Petrochemical, which had jumped 10 percent on Sunday after reporting annual net profit more than doubled, rose by the same margin again.
Saudi Industrial Investment Group, which had gained 10 percent on Monday after reporting annual profit increased more than ten-fold, added 5.3 percent.
Exchange data released after the close on Sunday showed foreign investors were net buyers of Saudi stocks last week to the tune of $115 million, as they positioned for expected decisions by equity index compilers in the next few months to upgrade Riyadh to emerging market status.
Dubai's index fell 0.7 percent despite a 4.5 percent gain by banking giant Emirates NBD. ENBD had soared 13.6 percent on Sunday after saying it planned a big capital increase, which analysts think will mean raising its 5 percent ceiling for foreign ownership.
Losing stocks outnumbered gainers in Dubai by 25 to six. The market has been trading near two-year lows as money flows out for investment in the Saudi bull run.
Egypt's index rose 2.1 percent. El Sewedy Electric last traded 10 percent higher after saying it had signed a contract with Egyptian Electricity Transmission Co to provide power transmission lines worth 2.12 billion Egyptian pounds ($121 million).
* The index climbed 1.1 percent to 7,781 points.
* The index fell 0.7 percent to 3,166 points.
* The index was flat at 4,534 points.
* The index jumped 5.0 percent to 8,663 points.
* The index surged 2.1 percent to 16,742 points.
* The index fell 0.6 percent to 6,726 points.
* The index slipped 1.1 percent to 1,353 points.
* The index dropped 0.6 percent to 4,875 points. (Editing by Louise Heavens)