* Saudi Electricity up on plan to build two solar plants

* But Dar Al Arkan falls on profit-taking

* MSCI decisions on Tuesday to affect markets

* Blue chips weigh on Dubai, Abu Dhabi

* Egypt's OTMT extends loss after acquisition called off

By Celine Aswad

DUBAI, June 13 (Reuters) - Most stock markets in the Middle East edged down on Monday after global bourses and oil prices fell further and Egypt's Orascom Telecom saw a second day of steep losses after an acquisition plan was called off but Saudi Arabian shares were firm.

Riyadh's index recovered from early weakness to end up 0.3 percent as Saudi Electricity Co 5110.SE (SEC) climbed 2.5 percent.

SEC said at the weekend that it was inviting expressions of interest from companies to build two solar power plants; the firms would invest in the plants and sell electricity to SEC in deals that could become models for future infrastructure projects under Saudi Arabia's economic reform plan.

Other blue chips also supported the market with the largest listed Islamic lender, Al Rajhi Banking , gaining 1.7 percent. Retailer Fawaz Al Hokair rose 3.4 percent.

But Dar Al Arkan Real Estate , which had surged nearly 30 percent since news that it was in talks with the government to build housing units under last week's economic plan, fell 1.6 percent to 6.35 riyals. Eight analysts polled by Reuters have a 5.94 riyal mean price target for the stock.

Many portfolio managers are still sizing up the likely impact of the economic reform plan on companies' earnings; they have largely stayed clear of making long-term commitments to Saudi shares.

Another factor looming for the market is international index compiler MSCI, which is to announce after the close on Tuesday whether it will put Saudi Arabia on review for possible inclusion in its emerging markets index as early as mid-2017.

Inclusion would bring billions of dollars of passive foreign funds into the market but fund managers are split on whether Saudi Arabia is likely to be put on review this year.

Mohammad Shabbir, head of equity funds at Dubai-based Rasmala Investment Bank, said there was a high possibility for MSCI to include Saudi Arabia in its index next year because of an easing of foreign ownership restrictions and reforms to the trading environment announced in early May.

MSCI will also announce on Tuesday whether China A-shares will be upgraded to its emerging markets index. If they are, this would dilute the weightings of other Middle Eastern markets in the index - the United Arab Emirates, Qatar and Egypt - causing outflows of passive funds from them. "The impact of the outflow will be short-lived," said Shabbir.

Mohamed el-Jamal, head of capital markets at Abu Dhabi's Waha Capital, said he was expecting about $100 million of outflows from the UAE, Qatar and Egypt if China A-share inclusion went ahead.


Dubai's index lost 0.4 percent, weighed down by further declines in large caps. Emaar Properties fell 1 percent, leaving it down 9 percent from its late April high.

In Abu Dhabi, heavyweight banking shares were the main drag on the index , which slipped 0.1 percent. National Bank of Abu Dhabi declined 2.4 percent.

Qatar's main index dropped 0.9 percent to close at the day's low of 9,704 points. A sell-off in blue chips weighed on the bourse, with real estate developer Ezdan Holding slumping 3.2 percent.

Cairo's main index edged down 0.1 percent as Orascom Telecom retreated a further 4.6 percent. It slid 5.7 percent on Sunday after a plan by its unit Beltone to acquire CI Capital from Commercial International Bank (CIB) was called off because it failed to win regulatory approval.

Orascom said it would re-engage in the acquisition once all "regulatory obstacles" were overcome, but the failure of the deal was seen by some investors as a blow to prominent businessman Naguib Sawiris, who family controls Orascom, and to the Egyptian investment climate in general. However, shares in CIB bounced 1.7 percent on Monday.



* The index added 0.3 percent to 6,590 points.


* The index dropped 0.4 percent to 3,323 points.


* The index edged down 0.1 percent to 4,365 points.


* The index lost 0.9 percent to 9,704 points.


* The index edged down 0.1 percent to 7,645 points.


* The index fell 0.2 percent to 5,412 points.


* The index declined 0.4 percent to 5,847 points.


* The index gained 0.7 percent to 1,123 points.

(Editing by Andrew Torchia) ((celine.aswad@thomsonreuters.com; +971 562 247 653 Reuters Messaging: celine.aswad.thomsonreuters.com@reuters.net))