Fusion Antibody Share News (FAB)

* Qatar index at three-week high

* In Saudi, Al Rajhi Bank up 1.7 percent

* Kingdom Holding barely moves on Alwaleed comments

* Abu Dhabi index down, Dubai flat

* Emaar Properties up, Aldar down before partnership news

By Tom Arnold

DUBAI, March 20 (Reuters) - Qatar's stocks outperformed ingenerally weak Gulf markets on Tuesday as investors awaited aU.S. interest rate hike expected at the Federal Reserve policymeeting on Wednesday.

In Qatar, the index rose 1.0 percent to its highestlevel in just over three weeks. The Al Rayan Qatarexchange-traded fund will list on Wednesday, giving the market asecond locally listed ETF as part of efforts to improveliquidity and attract more investment.

Drilling rig provider Gulf International Serviceswas the top gainer, rising 9.8 percent in unusually heavy trade,while Qatari Investors Group climbed 4.1 percent.

Qatar National Bank, which had attracted buying inrecent days due to its move to boost foreign ownership limit,was sold off on Tuesday. It closed 0.4 percent lower.

The region's biggest market, Saudi Arabia, was up0.2 percent with financial stocks among the largest gainersahead of an expected decision by FTSE at the end of this monthto include Riyadh in its secondary emerging market index.

Al Rajhi Bank, the kingdom's second largest bankby assets, rose 1.7 percent, while Saudi British Bankwas up 2.3 percent.

"It's been a waiting game until March 28 when a decision byFTSE is expected," said Khaled Feda, senior research manager atAlistithmar Capital. "The banking sector is outperforming theSaudi market year-to-date. We expect nine out of the 12 listedbanks to be included in the index."

Kingdom Holding barely moved, edging up just 0.2percent after chairman Prince Alwaleed bin Talal, in aninterview with Bloomberg after his release from detention in thecountry's crackdown on corruption, said he had signed a secretagreement with authorities and declined to give any details.

He also said Kingdom was looking at splitting its $13billion of assets by spinning off some domestic property andother holdings.

The Abu Dhabi index was down 0.4 percent with FirstAbu Dhabi Bank (FAB) unchanged. On Monday FAB, theUnited Arab Emirates' biggest lender, denied a claim by Qatariauthorities that it had tried to manipulate the Qatari riyal.

Aldar Properties was down 2.7 percent. In anannouncement after the market close, Dubai's ruler said Aldarand Emaar Properties, the top Dubai-based developer,were partnering to launch local and international projects worth30 billion dirhams ($8.2 billion).

The Dubai index was flat as banks dropped buthealthcare and industrial firms edged higher. Emaar Propertiesrose 1.0 percent.

SAUDI ARABIA

* The index rose 0.2 percent to 7,725 points.

DUBAI

* The index lost 0.02 percent to 3,183 points.

ABU DHABI

* The index fell 0.4 percent to 4,525 points.

QATAR

* The index rose 1.0 percent to 8,978 points.

EGYPT

* The index dipped 0.3 percent to 17,114 points.

KUWAIT

* The index edged down 0.6 to 6,706 points.

BAHRAIN

* The index went down 0.5 percent to 1,341 points.

OMAN

* The index edged down 1.05 percent to 4,782 points.(Editing by Andrew Torchia and David Evans)