Index loses more than 1,000 points for second time in 3 days The Hong Kong stock market, battered by the global financial crisis, dropped by more than 1,000 points yesterday for the second time in three days. The Hang Seng Index fell below the 15,000-point level to its lowest in almost three years. The sell-off in the city's stock market intensified amid the poor performance of other markets around the world, causing the benchmark index to lose as many as 1,544.7 points during the day. The index clawed back some losses to close down 1,146.37 points, or 7.19 per cent, at 14,796.87 - a level not seen since November 17, 2005. The blue-chip index lost 1,372.03 points or 8.17 per cent on Wednesday. The value of stocks listed in Hong Kong fell by HK$726 billion yesterday, bringing the loss during the week to HK$2.07 trillion. A total of HK$3.37 trillion in market capitalisation has been wiped out since September 15, the day Lehman Brothers Holdings filed for bankruptcy protection in the United States. Property developers were the biggest losers among yesterday's sell-off as interest rates remained unchanged despite the global intervention of central banks to lower interest rates. Henderson Land Development tumbled 14.29 per cent and Sun Hung Kai Properties closed 11.63 per cent lower. The Hang Seng Index suffered a loss over the week of 16.32 per cent, the worst percentage loss since the Asian financial crisis in 1998. The H-share index dropped 7.85 per cent to end at 7,135.8 points. It fell 20.83 per cent on the week. Hedge and mutual funds rushed to liquidate their portfolios. Some even halted investor redemptions as they built up cash to handle yet more redemptions. 'I am not surprised that they have to stop client redemptions,' said Winson Fong, a managing director at SG Asset Management. 'Investors are always a bit nervous about getting back cash first when the market heads south.' It is normal practice for hedge funds to stop client redemptions when amounts requested exceed 10 per cent of the asset size of the fund. Remaining requests are handled a month later. Atlantis Investment Management, one of the largest hedge funds in the region, suspended redemptions from its Atlantis China Fortune Fund on Thursday owing to market volatility. 'The market seems unlikely to bottom out in the near future,' said Adam Tam, an assistant portfolio manager at Pacific Sun, a hedge fund company. The market was also battered by the city's weaker economic prospects. 'Hong Kong is the so-called financial hub in the region, and the recent financial crisis has raised an alarm of a deeper downturn,' said a fund manager. 'The US crisis is having a snowball effect and is spreading to Asia after it destroyed the economic system in Europe. Hong Kong will be the next victim.' US investment bank Citi cut its forecast for economic growth in Hong Kong for this year to 3.6 per cent from 4.2 per cent. For next year, it lowered growth prospects to 2.8 per cent from 3.8 per cent. 'The slump in trade and finance has hit consumer confidence,' said the Citi report. 'News of lay-offs in the financial and real estate sectors has alerted people to the risk of unemployment. 'It will definitely make people more cautious on spending and investment.'