As far as I can tell the whole "township exchange" thing is just journalistic license.... The actual Exchange mentioned is 4AX or 4 Africa Exchange. This, along with ZAR X, are hoping to be licensed as proper exchanges by the FSB. They will probably focus initially on the Agri Co-ops (member share schemes) such as Senwes etc., as well as the previous OTC trades in BEE share schemes. Remember that the FSB pulled the plug on these OTC trading schemes a couple of years ago.
As these exchanges will be virtual and online, trades can take place anywhere. Therefore, it's quite feasible to organise a "trading pit" of brokers in a township as the cash collection agents, on behalf of the exchange. That's certainly what I would do if I were 4AX i.e. get these township brokers to execute trades on behalf of locals and other township societies such as stokvels, collect the cash and provide feedback and market reporting to their clients.
The problem of course for these new exchanges is the quality of companies to be listed. Quality has a direct result on liquidity. And a golden rule is that liquidity breeds liquidity i.e. if a counter is very illiquid it will have a wide bid:offer spread and trading volumes will die off. The more liquid the tighter bid:offer and the more interest from punters. It is going to be very hard to beat the JSE at this as there is only so much free investment cash out there and it likes to congregate in liquid places. Going after the township market is an option but I suspect it is misplaced. Those who have free cash in the township also want to play on the JSE, not some second-rate market trying to pander to them. Those who don't have free cash are going to be using every last cent for basic necessities, not trading.
