Saudi Arabia's stock market inched up on Monday, its first day as a member of the FTSE Russell's emerging-market index, which is expected to attract billions in passive fund inflows.

"We believe there is some leeway on how the FTSE inflows get affected – passive trackers can build positions over a few days prior to the actual date. On Thursday, the market traded more than 1.4 billion Saudi riyals, which is unusual. Nevertheless, we may still see strong inflows at close today," said Vrajesh Bhandari at Al Mal Capital.

Saudi's index rose 0.2 percent, with Abdullah Abdul Mohsin Al Khodari Sons surging 10 percent. The stock has risen since shareholders voted against the dissolution of the company. The company cancelled the completion of a contract, citing increased costs.

Saudi shares, which have gained 9.6 percent so far this year, will now join the FTSE Emerging All Cap Index with a weighting of 2.9 percent. The market is positioned for passive fund inflows of around $20 billion.

Foreigners have been net-buyers of Saudi stocks every week this year and purchased 1.6 billion riyals ($426.64 million)worth of stocks in the week ending March 14. Foreign investors are now net buyers of 9.6 billion riyals of stocks year-to-date, Arqaam Capital said.

The kingdom is hoping the inclusions will fuel its drive to become a major destination for foreign capital, after its global reputation was tainted by the murder of journalist Jamal Khashoggi in October.

Market heavyweight Saudi Basic Industries (SABIC) added 0.3 percent on Monday and Al Rajhi Bank increased 0.4 percent.

"We expect SABIC to see the biggest inflow of more than $110 million while Al Rajhi and National Commercial Bank are close behind," Nick Wilson, chairman of the Gulf Investment Fund Plc said.

In Dubai, the index was up 0.5 percent with its largest listed developer, Emaar Properties, gaining 1.1 percent and Emaar Malls adding 1.7 percent.

The Abu Dhabi index rose 0.9 percent, lifted by a 1.7 percent rise in First Abu Dhabi Bank.

Dana Gas gained 1.4 percent. On Sunday, the firm approved plans for a sukuk buyback and said it plans to seek shareholder approval to buy back 690 million of shares.

Qatar's index increased 0.7 3 percent. The Middle East's largest lender Qatar National Bank rose 1.1 percent.

($1 = 3.7502 riyals)

(Reporting by Shakeel Ahmad and Abinaya Vijayaraghavanin Bengaluru; additional reporting by Stanley Carvalho in Dubai; editing by Larry King) ((shakeel.ahmad.thomsonreuters.com@reuters.net;))