That has got people at the top of the bank increasingly nervous. Sandy Flockhart, HSBC chief executive for the Asia-Pacific, said he hoped investors would look at the long-term prospects of the bank and not at short-term price movements.

He added that the rights issue would proceed even though the share price could hypothetically fall below HK$28.

Mr Flockhart said the bank had performed better than expected in January and doubled its loan fund for small and medium-sized enterprises in Hong Kong to HK$8 billion.

Mr Chan, a retired teacher who acquired his 4,000 HSBC shares at between HK$50 and HK$120 each, is one investor no longer in love with the bank.

'I wanted to join the rights issue as I have held HSBC for more than 20 years and it had given me generous dividends in the past,' Mr Chan said. 'But the sharp slump over the past few days has shocked me a lot and it's not worth to put any new money in it.'

Stephen Leung, the director of institutional sales at UOB Kay Hian, said it would be worthwhile for investors to buy into the rights issue if the offer price was at least at a 30 to 40 per cent discount to the current trading price.

'It is irrational to join [HSBC's rights issue] at only a 10 to 20 per cent discount. Investors should know that they could earn a reasonable risk premium in a rights issue,' Mr Leung said.

Billy Mak Sui-choi, an associate professor at the department of finance and decision science of the Hong Kong Baptist University, said Hong Kong's investors had lost patience with the bank.

HSBC shares rebounded 13.94 per cent yesterday after plunging 24.14 per cent on Monday to a low of HK$33.

In London, the stock rose 14.33 per cent to close at ?3.99 (HK$42.84).

Ricky Tam Siu-hing, the chairman of the Hong Kong Institute of Investors, said the recent price weakness in the shares had forced small investors to shy away from the rights offering.

'Hong Kong investors are longtime supporters of HSBC, but some of them have changed their minds and given up their rights to join the offering,' Mr Tam said.

'If you are a supporter of HSBC, why don't you buy in the secondary market at a cheaper valuation after the rights issue, or keep cash on hand and adopt a wait-and-see strategy?'

Ivan Li, a banking analyst at Kim Eng Securities, said small shareholders who used to believe the stock was 'pretty safe' had started to lose their confidence.

'Its fundamentals seem not as good as before even though its performance was better than other European and US banks,' Mr Li said.