China Telecom pulled the Hang Seng Index up by its bootstraps yesterday as investors built cheap acquisitions into the mobile telephone giant's share price. The index jumped 282.65 points, or 1.75 per cent, to close at 16,438.42, with China Telecom accounting for 216 points of the rise. The counter, which announced at the weekend that it would buy seven more networks from its parent, rose a further 5.09 per cent to HK$72.25 and now makes up 27.18 per cent of the index. 'The market is factoring in the acquisitions at a substantial discount to fair market value,' Prudential-Bache Securities research head Sanjeet Devgan said. A market value for the networks would be between US$2,000 and $3,000 per subscriber but Telecom was expected to pay just $1,500 to $2,000. Turnover was a relatively heavy $11.28 billion, even though some players stayed sidelined before the rates decision by the United States Federal Reserve. Going against the consensus belief there would be no change, Prudential-Bache was betting on the Fed making a 25-basis-point rise and calling it quits for the year. 'Historically, the Fed has refrained from any tightening activity six months prior to an election,' Mr Devgan said. The Hong Kong market should rally when it perceived at least a long pause in the Fed's tightening campaign, with laggard interest-rate sensitive stocks leading the way, he said. The exchange itself powered ahead on its second day of trading, rising 32.12 per cent to HK$10.90 and defying analysts who believed Tuesday's 112.62 per cent debut gain had made the exchange fully priced. Pacific Challenge Securities research head Alan Hutcheson argued that Hong Kong Exchanges and Clearing should trade on a higher multiple than its peer in Australia. Considering the US$15 billion in capitalisation of big new mainland issues - due in the second half - alone, the Hong Kong exchange had better growth prospects, he said. 'HKEx is rocketing. A lot of people want to price it higher than the PE for Australia,' he said. Wheelock fell 4.62 per cent to HK$5.15 despite reporting a 9.97 per cent rise in profits for the year to March. Core Pacific-Yamaichi Securities analyst Arthur Law Kung-hang said the earnings per share of 35.6 cents did not even make the low end of analysts' forecasts of 44 cents. Given that most of Wheelock's non-Wharf earnings were from real estate development and property prices were expected to be flat this year, 'Wheelock's outlook is unexciting,' Mr Law said. However, Worldsec International yesterday upgraded Wheelock from 'sell' to label it a 'speculative buy'. Worldsec analyst Jean Hydleman said: 'As far as we are concerned there is little downside.' There was considerable upside if a hunch played out that the group would acquire third generation wireless assets and inject them into Wheelock. Television Broadcasts extended Tuesday's gains, rising 4.96 per cent to $51.75 as investors hopped back on board with fears fading that the Government would bar it from obtaining a pay-television licence. Ms Hydleman said: 'Given that the Government is keen to see Hong Kong become a global player, it would be shooting yourself in the foot not to give your biggest television operator a pay-TV licence.' Even without a pay-TV licence the stock was fairly valued at $50 to $60 and should revisit its high for this year of $84.25, she said.