Are oil prices hitting a record high at $88 per barrel a good or a bad thing for an oil company?  

Well, for OMV — which has more conservative price estimate — it means that the company should see a positive effect on earnings, OMV Chief Executive Wolfgang Ruttenstorfer told the Reuters Central European Summit.

Yet it also could bring about a fierce battle on the cost side over the next two years.

To read a story on Ruttenstorfer’s take on recent oil price developments, click here. If you want to read the latest about OMV’s takeover battle for Hungary’s MOL and what MOL had to say, click here.

Energy and telecommunications will lead merger and acquisition activities in eastern Europe over the next year. Willi Hemetsberger, head of global markets at UniCredit told the Reuters Central European Investment Summit.

And both western and eastern European companies will drive be the drivers for consolidation, said Hemetsberger.

For a story on Hemetsberger speaking of opportunities in Turkey, click here.

A slipping of the euro adoption agenda does not harm the attractiveness of the European Union’s new member states to private equity firms, Thierry Baudon, managing partner at private equity firm Mid Europa Partners, told the Reuters Central European Investment Summit.

Yet there are different trade-offs for smaller and bigger countries.

Most interest rate-setters on Poland’s Monetary Policy Council are ready to act immediately if needed and don’t believe in a “wait and see” approach, MPC member Dariusz Filar told the Reuters Central European Investment Summit.

Filar also said it was unclear how many more interest rate hikes would be needed by March 2008 and said the period until then was “extremely delicate” for the council.

If you want to read a story on Filar’s comments, click here.

Slovak EU-norm inflation has picked up more than expected due to food price growth but there is no big need to tighten monetary conditions, central bank (NBS) board member Ludovit Odor told Reuters Correspondent Peter Laca during the Reuters Central European Investment Summit.

Odor says he saw no huge need to tighten monetary policy conditions very much because he thought they were ”close to some optimal level at this stage”.

Slovak EU-norm inflation jumped to 1.7 percent on an annual
basis in September, from a historical minimum of 1.2 percent
booked in both August and July, above market expectations of a
1.6 percent rise.

Hungary’s OTP bank is on track to meet its 2007 profit target, although one might want to account for a 2-percent margin of error, Chief Financial Officer Laszlo Urban told the Reuters Central European Investment Summit.

The Serb and Russian units at the bank — one of the biggest listed firms in central Europe — were performing under target but a management revamp at the Russian unit means it could regain lost ground in the third quarter, said Urban.

 The recent global credit crunch has turned up the heat on small banks in Russia, which could present opportunities for OTP, the Hungarian bank’s Chief Financial Officer Laszlo Urban told the Reuters Central European Investment summit.

OTP remains in the market for a small Russian regional bank and expects to spend $50 million on an acquisition which could be announced as early as this year, said Urban.

While others will also be looking for targets in Russia, there will be enough for everyone, said Urban.

To read the full story on OTP’s acquisition plans, click here. 

Poland’s credit rating has been constrained by its uncertain political outlook, a lack of reforms as well as the need for more fiscal consolidation and for tackling the system of social security, Standard and Poor’s credit analyst Kai Stukenbrock told the Reuters Central European Investment Summit.

But if Sunday’s vote would lead to a government that was decisive and ready to tackle those issues, Poland could see an upgrade in the medium term to its current A/minus foreign and local currency debt rating.

Conservative Prime Minister Jaroslaw Kaczynski faces a tough
challenge in the Oct. 21 election from the main opposition
party, the centre-right Civic Platform (PO). Unless winning an
outright majority, the conservatives may lose power if the
pro-business PO and the centre-left form a coalition.
To read a story on Poland’s credit rating potentially getting a boost, click here.

Stukenbrock also said that Slovakia would likely adopt the euro in 2009 and that S&P was unlikely to up its rating on Hungary soon.

Ever fancied launching your own hotel in central Europe?

Well, here is what to look out for, according to Chief Executive Franz Jurkowitsch of Austrian real estate company Warimpex. Clean and clear land titles, strong economic growth in the region, a good transport infrastructure and a local fairground are all part of the recipe.

For a story on Warimpex’s latest acquisition plans, click here.

The strength of the Czech currency will likely lead to a lowering of the interest rate trajectory in the central bank’s next quarterly forecast, CNB Vice Governor Ludek Niedermayer told the Reuters Central European Investment Summit.

While some other factors, like a tight labour market, were working in the opposite direction, there was a general shift down with regard to the likely path were rates were heading, Niedermayer said.

Last month the Czech currency has hit record highs against the euro, pushed up by investors unwinding carry trades that used the crown to hold positions in higher-yielding assets.

The Czech central bank’s new quarterly forecast is due on Oct. 25.

To read the full Reuters story, click here.