Lee has also subscribed to US$100 million (HK$780 million) in shares of hot listing candidate BBMG Corp.

"The bull market has begun, otherwise it would not have risen so much," the chairman of Henderson Land Development (0012) said yesterday, adding that China's surging economy will be beneficial to the stock market.

The outspoken billionaire investor said the local stock market will consolidate from July to September. He expects stocks to hover between 16,000 and over 20,000 points in the second half. Lee said he will start buying stocks if the Hang Seng Index falls to 16,000, but plans to reduce his holdings in some shares when it reaches 20,000 to 25,000.

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Lee said he will cut shares 10 percent for each 1,000-point rise. "When [the HSI] ranges from 20,000 to 21,000, I will cut 10 percent; 21,000 to 22,000, I will cut up to 20 percent; ... and 24,000 to 25,000, I will cut up to 50 percent [of my portfolio]," he said, adding that he will hold the remaining 50 percent if the index rises above 25,000.

His long-term picks are Industrial and Commercial Bank of China (1398), China Life Insurance (2628), China Shenhua Energy (1088), CNOOC (0883) and China Overseas Land and Investment (0688). The index moved down 0.64 points yesterday to end at 19,501.73. On Monday, it rose to the highest level since the financial crisis hit.

Fund distributor Fundsupermart.com said the bourse may face a correction of 10 percent before it reaches 20,000 by the end of this year. The benchmark is expected to climb to 36,000 by the end of 2011, assuming the HSI trades at 17 times its price-to-earnings ratio and corporate earnings grow at 8 percent a year, said analyst Will Shum Ka-lun.

Meanwhile, Lee is not optimistic about his bid for shares in mainland building materials maker BBMG.

The fund size of IPOs in general is relatively small this year, he said.

"Unlike in the past, they just allot a very small portion to investors now... It's not [that] I don't want to invest, it's they do not allow me to invest."

BBMG froze more than HK$102.7 billion in subscriptions financed by margin loans, according to 12 brokerages, which is 172 times its retail tranche of HK$595.46 million. The retail book closes today and the firm is set to go public on July 29. It plans to reap HK$5.96 billion by floating 933.33 million shares at HK$5.18 to HK$6.38 each.

Sun Hung Kai Properties (0016) non- executive director Walter Kwok Ping- sheung has subscribed, a source said, as has Cheng Yu-tung, chairman of New World Development (0017).