Tel Aviv stocks have started Monday with slim gains as Teva Pharmaceuticals (Nasdaq:TEVA) hogs the limelight, rising half a point on huge opening turnover of NIS 11 million.

The Israeli drugmaker is rising on the strength of its positve second-quarter statement. The company beat the average Street forecast by 10 cents per share with an EPS of 68 cents. Sales rose 11.4% from the parallel quarter to $572 million, compared with $513.6 million in the year-ago quarter. Teva's operating profit came to $111.6 million, up a steep 28% from $86.9 million in the parallel quarter.

That aside, the Maof-25 index is inching up by 0.2% and the Tel Aviv-100 index is rising by only 0.1%. Tech stocks are under the flatline.

DBM Investment House manager Rami Dror does not see Tel Aviv stocks moving anywhere in the near future, because of the usual summer sluggishness and lowered expectations regarding budget cuts in 2003. While the treasury did submit a budget proposal to Knesset, the parliamentarians vehemently rejected it. At some point budget cuts will be made, Dror predicts, with the backing of the prime minister, the central bank and the treasury.

Other stocks attracting attention this morning are Bank Mizrahi and First International Bank of Israel. According to some media reports, the Ofer Bros (Mizrahi) and Safra family (FIBI) are in early-stage talks to merge the two banks. Mozi Wertheim, who also owns a controlling interest in Mizrahi, is not known to have approved any such move. The merger talks are expected to boost the shares of both the banks, but especially FIBI which has been trading at a bigger discount to its equity. At the moment Mizrahi is unchanged and FIBI is rising by 2%.

Discount Investment Corporation said today that it will be writing off NIS 34 million for the second quarter on its holdings in Sintec (50%). Discount Investment Corporation stock is down 0.6%.