Ordinary shares of Mitsubishi UFJ Financial Group (NYSE:MTU), Japan's largest bank, have been unable to rebound from the recent market wide sell-off even though the government is finished cashing in on funds MUFG owed it by selling its shares in the open market (click here for a recap). Short sellers are now moving in as long margin investors are trying to back out.
A Radio Nikkei report (Japanese language) published today on Yahoo! Finance Japan said that long margin positions fell by 6,074 shares as of last Friday to 52,284 shares bought on margin. Short positions however increased by 14,703 shares to 24,609 shares sold short. Although MUFG has 10.3 million shares outstanding it only has an average daily trading volume of 39,000 over the past three months.
Also impacting the stock is the fact that bargain hunters are unloading shares that keep getting cheaper. The last time MUFG sold at this price level was at the end of October.
Overnight in Tokyo, MUFG ordinary shares (Tokyo: 8306) lost 1.40% to close at 1,410,000 yen. Since its ADRs are listed at a 1,000:1 ratio to its ordinary shares, Wednesday's close in Tokyo is equal to 1,410 yen or $12.34. MUFG ADRs closed yesterday at $12.40. Its ordinary shares are now trading at 15.12 times trailing earnings and have a yield of 0.50%.
Mitsubishi UFJ Financial Group (MTU) 1-year chart: