* Saudi blue chips seen as expensive after recent gains
* Dallah Healthcare, Arabian Cement slump after poor earnings
* Dubai index hits new two-year low as Emaar sags
* DAMAC erases most early losses
* Kuwait's HumanSoft slips on dividend decision
By Saeed Azhar
DUBAI, April 24 (Reuters) - Saudi Arabia's stock index fell back on Tuesday as many blue chips were seen as fully valued or expensive after the market hit a more than two-year high the previous day. Other Gulf markets were mixed, with property stocks dragging Dubai lower.
The Saudi index ended 0.2 percent lower, remaining near levels last seen in August 2015. The index is up 15 percent this year because of inflows of foreign funds and strong corporate earnings.
Saudi Basic Industries (SABIC) and Al Rajhi Bank both dropped 0.3 percent.
"In terms of broad valuation metrics at a 16 times price to earnings multiple, it is definitely not cheap, given earnings growth is not yet visible," Vrajesh Bhandari, portfolio manager at Al Mal Capital in Dubai, said of Saudi Arabia.
"For instance, SABIC at 19 times is a good 15 percent more expensive than its historical average ratios. In fact, I feel most large caps are either full or have built a 5-10 percent froth over their fair market value."
Dallah Healthcare dropped 3.6 percent to its lowest close this year after its first-quarter net profit fell 32 percent.
The company said it was hit by higher start-up expenses from a new hospital project, the imposition of value-added tax, and provisions for credit losses as it adopted International Financial Reporting Standards.
Arabian Cement tumbled 8.3 percent in its heaviest trade since April 2016 after reporting a surprise first-quarter net loss of 6.1 million riyals ($1.6 million). Three analysts surveyed by Reuters had on average forecast a profit of 69 million riyals.
Dubai's index fell 0.9 percent to a two-year low, hurt by selling in property stocks. Emaar Properties closed 1.6 percent lower after opening higher; the stock is down 16 percent so far this year.
DAMAC Properties ended the day 0.4 percent lower but erased some of its losses in early trade, when it was down 2.9 percent.
The stock suffered on Monday after it lowered its annual dividend, which was not a shock for institutional investors who track the company's cash flow, but caught retail investors by surprise, analysts said.
Qatar's index fell 0.7 percent on profit-taking after a spate of strong earnings helped recent gains. Qatar National Bank dropped 1.6 percent and Qatar Electricity & Water fell 2.5 percent The index is up nearly 7 percent so far this year.
Kuwaiti education company HumanSoft dropped 2.8 percent after a shareholder meeting declined to approve a board proposal to distribute a stock dividend of 70 shares for every 100 shares, though it did approve a motion to raise the annual cash dividend to 175 fils per share from an originally proposed 160 fils.
SAUDI ARABIA * The index fell 0.2 percent to 8,315 points. DUBAI * The index dropped 0.9 percent to 3,034 points. ABU DHABI * The index edged down 0.1 percent to 4,689 points. QATAR * The index fell 0.7 percent to 9,091 points. EGYPT * The index rose 0.2 percent to 18,122 points. KUWAIT * The index edged up 0.3 percent to 4,794 points. OMAN * The index edged up 0.1 percent to 4,762 points. BAHRAIN * The index was down 1.2 percent at 1,282 points. (Editing by Andrew Torchia and Dale Hudson)