Election over, new Malaysia PM Mahathir Mohamad gets down to business

Reuters photo

KUALA LUMPUR (Reuters) - Malaysian Prime Minister Mahathir Mohamad held a meeting of top alliance partners on Friday as he got down to the business of forming a government that, for the first time in the country`s history, will not be from the Barisan Nasional coalition.

Mahathir, 92, was sworn into office by Malaysia`s constitutional monarch late on Thursday, becoming the world`s oldest elected leader.

He called a meeting of senior members from all four parties in his Pakatan Harapan (Alliance of Hope) to gather views on formation of the Cabinet and will later address a news conference, alliance sources said.

Mahathir`s alliance defeated Barisan in a stunning election upset on Wednesday, ousting the coalition that has ruled the nation for six decades since independence from Britain.

Mahathir used his first news conference after being sworn in to reassure the financial community and said he would prioritise stabilising the economy and return billions of dollars lost in a graft scandal at state fund 1Malaysia Development Berhad (1MDB).

The scandal became a major factor in the election and in the ouster of Najib Razak, Mahathir`s predecessor and former protege.

Malaysian markets were closed and will reopen on Monday, but overseas investors were nervous about Najib`s ouster after a decade in office.

Malaysia`s 5-year credit default swaps, the cost to insure against a Malaysia debt default in the next five years, climbed to an 11-month peak in late U.S. trading on Thursday.

But calm returned to offshore trading of the ringgit currency, which lost four percent on Thursday.

Mahathir, dubbed the "Father of Modern Malaysia" during his previous 22 years in power until 2003, told reporters at the news conference he would try to make the ringgit as steady as possible but did not announce any policy moves.

He was known for his strongarm, sometimes pugnacious style of rule, marked by an intolerance for dissent, from 1981 to 2003, but also for transforming his Southeast Asian country from a sleepy backwater into a modern industrialised nation.