I spent the weekend at the Washington D.C., Money show. The show has shrunk from last year, and the opinions ranged from "this is an incredible time to buy" to "Aaaaaaiiiiiii!!!!!" I'll have more about that in Wednesday's Money and Markets column.This morning, the market is rising on news of a $586 stimulus plan in China and a new A.I.G. bailout in Washington. I'm not sure why the market thinks this is good news. Last time I looked, the Federal Debt had soared to such levels that each American now owes over $32,000. I think that's unsustainable, as long as the US dollar holds its present value.In other words, it would be a lot easier to bear if that debt was only (in relative terms) $3,200. That's not so scary, is it? I wonder if Uncle Sam is thinking the same thing. The Russians

BASF (BASFY) is witnessing sales and earnings growth due to better end-markets. All segments are experiencing improvements with the Oil & Gas segment depicting the strongest sales growth due to higher crude oil prices and increased natural gas production.

However, the company is susceptible to the harsh cyclicality of the chemical industry. Slowdown in the U.S. economy and rising feedstock costs are likely to limit the top-line growth of the company. Hence, we rate the stock a Hold and set a six-month target price of $53.

The company is executing its share purchase program successfully. It completed its 3 billion ($4.7 billion) share repurchase program for 2007 and 2008 ahead of schedule. A total of 33.7 million shares were repurchased at an average price of 88.91 ($138.52) per share. Recently, the company launched its new repurchase program for 3 billion ($4.7 billion), which will continue until mid-2010.

Recently, the company announced its

BASF (BASFY) is witnessing sales and earnings growth due to better end-markets. All segments are experiencing improvements with the Oil & Gas segment depicting the strongest sales growth due to higher crude oil prices and increased natural gas production.

However, the company is susceptible to the harsh cyclicality of the chemical industry. Slowdown in the U.S. economy and rising feedstock costs are likely to limit the top-line growth of the company. Hence, we rate the stock a Hold and set a six-month target price of $53.

The company is executing its share purchase program successfully. It completed its 3 billion ($4.7 billion) share repurchase program for 2007 and 2008 ahead of schedule. A total of 33.7 million shares were repurchased at an average price of 88.91 ($138.52) per share. Recently, the company launched its new repurchase program for 3 billion ($4.7 billion), which will continue until mid-2010.

Recently, the company announced its

Shanghai PetrochemicalÂ’s (SHI) exposure to the fast-expanding Chinese economy and strong petrochemical product demand make us confident of strong volume growth. However, revocation of government price controls in the future, higher crude oil prices and increased competition are some of the major concerns for the company.

As expected, the companyÂ’s first half 2008 net profit declined by more than 50% from the year-ago period. The company expects profits to fall further in the second half of the year. Thus, we rate the stock a Hold with a six-month target price of $33.

On August 27, Shanghai Petrochemical reported first-half 2008 results. In the first six months of 2008, the company recorded a net loss of $47.72 million, compared to a profit of $230 million in the prior-year period. The company reported diluted loss per ADS of $0.01 in the first half of 2008.

Substantial increase in international crude oil prices

You might be tempted to think that the equation "Chinese Company + Oil Firm = Huge Success," based on the fact that economic growth in China continues to lead the world, and oil companies are still performing at or near record levels.  But you'd be wrong, in the Chinese petrochemical sub-sector, at least.

An AP report this morning talks about how PetroChina (PTR) has taken it on the chin in net profit for the first half of 2008, down 34.5%.  Price controls implemented by the communist Chinese government have forced petrochemical companies in the country to absorb higher costs themselves, rather than pass them along to consumers.  The article quoted Sinopec's (SHI) chairman as saying this is "the worst year ever for the Chinese petrochemical sector, and the worst is still not yet to pass."

Zacks senior analyst Sheraz Mian has been ahead of this story, and has a Hold recommendations on PTR

Shanghai Petrochemicals (SHI) exposure to the fast-expanding Chinese economy and strong petrochemical product demand make us confident of strong volume growth. However, revocation of government price controls in the future, higher crude oil prices and increased competition are some of the major concerns for the company.

The company expects its first half 2008 net profit to decline 50% from the year-ago period. Thus, we rate the stock a Hold with a six-month target price of $33.00. Currently, the ADS is trading at 7.0x our 2008 EPADS estimate of $4.31.

Revocation of government price controls in the future, higher crude oil prices, and increased competition are some of the major concerns for the company. However, its strong fundamentals, strong management and operating efficiency are expected to improve stock performance in the future. Hence, we rate it a Hold. Our target price of $33.00 is 7.7x our 2008 EPADS estimate.

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