A rebound in bank shares lifted Egypt's blue-chip stock index on Monday, while petrochemicals boosted Saudi Arabia's index.

The Egyptian blue-chip index was up 1.7 percent- about twice the rise of the broader EGX100 index- as the biggest bank, Commercial International Bank (COMI), increased 3.5 percent.

The market has suffered sharp corrections since May and that has taken a lot of stocks to attractive entry points, said Radwa El-Swaify, head of research at Pharos Holding in Cairo.

COMI, along with other banks, had tumbled in recent weeks on concerns over an official proposal for higher taxation of their Treasury holdings. The final decision on the tax changes is not out yet and the proposal may be modified; this has allowed a recovery in bank stocks, though they have not returned to levels reached before news of the proposal, El-Swaify noted.

The banks will probably pay an effective tax rate around 5-7 percent higher than their current rate, she added.

Orascom Investment Holding gained 2.7 percent after agreeing with the government to provide services to tourists at the Pyramids of Giza.

Telecom Egypt climbed 3.5 percent after saying it expected revenue growth in the mid- to high single digits in 2019. The firm expects its revenue for 2018 to beat guidance.

Ezz Steel gained for a third straight day, rising 4.8 percent to 18.95 Egyptian pounds; brokerage CI Capital had raised its rating on the stock to "neutral" with a target of 19 pounds.

The Saudi Arabian index rose 0.8 percent with top petrochemical maker Saudi Basic Industries adding 2.3 percent and the largest lender, National Commercial Bank 1180.SE , gaining 2.0 percent.

Saudi Telecom climbed 3.2 percent to 90.5 riyals after it announced its dividend policy for the next three years; it will pay a minimum of 1 riyal per share each quarter, and an additional 2 riyals as an annual dividend for 2018.

Arqaam Capital rated the stock a "core buy" and raised its target price to 103 riyals.

But another telecommunications firm, Etihad Etisalat (Mobily), was down 4.3 percent at 17.20 riyals, continuing to drop after disclosing a new system of royalty payments to the government on Sunday. Arqaam Capital downgraded the stock to "sell" from "hold" and cut its target to 16 riyals.

Al Khaleej Training and Education jumped 4.7 percent after it was awarded a 42.2 million riyal ($11.3 million) contract by the Ministry of Labor and Social Development.

The Abu Dhabi index rose 0.7 percent with First Abu Dhabi Bank , United Arab Emirates' largest lender, increasing 1.2 percent and energy firm Dana Gas DANA.AD climbing 2.3 percent.

In Dubai, the index inched up 0.3 percent after sliding 1.6 percent in the last session, with DAMAC Properties gaining 4.8 percent and blue chip Emaar Properties adding 2.4 percent.

Qatar's index was flat with Middle East's largest lender, Qatar National Bank, rising 1.0 percent. Recently listed Qatar Aluminiumlost 4.7 percent to 12.40 riyals, a day after rising 29 percent on its debut.

SAUDI ARABIA * The index was up 0.8 percent to 7,968 points DUBAI * The index rose 0.3 percent to 2,564 points ABU DHABI * The index added 0.7 percent to 4,866 points QATAR * The index was flat at 10,489 points EGYPT * The index rose 1.7 percent to 13,215 points KUWAIT * The index was flat at 5,402 points BAHRAIN * The index was flat at 1,319 points OMAN * The index was down 0.2 percent to 4,408 points

(Editing by Andrew Torchia and Alexander Smith) ((shakeel.ahmad.thomsonreuters.com@reuters.net;))