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Komfie Manalo, Opalesque Asia:

The hotly contested general election in the UK has attracted the attention of some of the top hedge funds as they start placing their bets in the coming May polls.

Joseph Oughourlian, co-founder and portfolio manager at U.S.-based hedge fund Amber Capital with roughly $1.5bn of assets under management, was quoted as saying, "Everyone is focused on political risk in the Eurozone and nobody is talking about political risk in the UK. Relative to people's expectations, I think the biggest surprise to the markets could come from the UK. I'd be very cautious on UK-based assets or assets denominated in sterling. I have a hard time being bullish for the pound, the economy or the market."

The European markets have shown significant swings since early this year, starting with the surprise decision of the Swiss National Bank to scrap its currency cap, the European Central Bank’s quantitative easing (QE) stimulus and the election of a new government in Greece. But many insiders say the UK election in May could provide the biggest market swing.

A research commissioned by one of Europe’s biggest equity hedge funds, Toscafund, has predicted that the Conservative party would form a new government if it wins a majority of the seats. However, the research also said the Conservative Party would likely win fe......................

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