Why does the Jimmy Lai verdict matter for markets?

It signals higher political and legal risk in Hong Kong. That can lift discount rates, narrow disclosure, and slow approvals. Investors may demand a bigger margin of safety, which pressures valuations. Research quality can also suffer when press freedom tightens, reducing confidence in forward estimates.

Which German assets are most exposed to Hong Kong political risk?

Holdings with meaningful Hong Kong or China revenue, supply chains, or financing links face more risk. That includes exporters, autos, chemicals, capital goods, insurers, and banks with Asia units. ETFs tracking Hong Kong or China also carry event risk that can widen bid-ask spreads during stress.

How should I adjust Hong Kong exposure now?

Recheck legal terms, disclosure quality, and cash upstreaming. Reduce concentration, use staggered orders, and set stop-loss and review triggers. Favor companies with diversified earnings and net cash. Add hedges in EUR. Keep some dry powder for high-quality names if risk premia widen further.

Does this change the Hong Kong dollar peg risk today?

The verdict does not directly change the peg, but political shocks can raise currency and funding risk. We would not trade on peg breaks, yet we would hold extra liquidity, stress test exposures, and watch funding costs and central bank signals for any early signs of strain.

Law and Government

February 10: Jimmy Lai Verdict Raises Hong Kong Political-Risk Premium

ByDanny Kontos February 10, 2026

Jimmy Lai received a 20-year sentence under the Hong Kong security law, the toughest yet. For German investors, the verdict raises the Hong Kong political risk and questions information access and rule-of-law stability. We explain how this may affect valuations, funding costs, and exits for Hong Kong and China-facing assets. We also review implications for Hong Kong press freedom and why it matters for research quality. Our focus is on practical steps to protect EUR portfolios while keeping optionality for future recovery.