KUALA LUMPUR - Malaysia's Mahathir Mohamad will be sworn in as the world's oldest elected leader on Thursday after his opposition alliance pulled off a stunning election win, ending six decades of rule by a coalition he once led.
Malaysians celebrated the 92-year-old's unexpected victory over Prime Minister Najib Razak, whose popularity had plunged over rising living costs and in the wake of a multi-billion-dollar graft scandal at 1Malaysia Development Berhad (1MDB).
Mahathir led the Southeast Asian nation for 22 years and his unexpected return to the prime ministership ends the previously unbroken rule of Barisan Nasional (BN), the coalition that had governed Malaysia since independence from Britain in 1957.
"We are not seeking revenge ... what we want is to restore the rule of law," Mahathir said of Najib's scandal-plagued rule.
Mahathir appeared jubilant and sprightly at a news conference claiming victory overnight, even joking with reporters, and will have an audience with Malaysia's king later on Thursday.
The king will sign his letter of appointment as prime minister of Malaysia's constitutional monarchy during a ceremony at the royal palace in the capital, Kuala Lumpur.
Najib is also expected to address the media at 9.45 a.m. local time (0145 GMT). He has not spoken publicly since the results were declared but a member of his Cabinet said they would accept the will of the people.
The stunning election outcome was expected to ruffle financial markets that were expecting a comfortable win for Najib and the BN.
Malaysia's currency weakened in offshore trading on Thursday, with the ringgit one-month non-deliverable forward falling 1.7 per cent. The US-traded iShares MSCI Malaysia ETF fell 6 per cent.
The national stock market will be closed on Thursday and Friday after Mahathir declared a public holiday, but the ringgit currency weakened in offshore trading.
Mahathir's alliance, which counts on urban votes and support from the minority ethnic Chinese and Indian communities, had hoped the veteran Malay leader would win over voters usually loyal to BN. That strategy appeared to have paid off.
Official results showed that Mahathir's Pakatan Harapan (Alliance of Hope) won 113 of parliament's 222 seats, clinching the simple majority required to rule. Najib's BN coalition only managed 79 seats.
Mahathir has promised to reverse a goods and services tax (GST) introduced by Najib during his first 100 days in power and review foreign investments.
Global ratings agency Moody's said some of his campaign promises, including the GST and a reintroduction of fuel subsidies, could be credit negative for Malaysia's sovereign debt rating.
Mahathir was once Najib's mentor but they clashed after differences over the 1MDB graft scandal, in which billions of dollars were allegedly siphoned off to foreign countries.
The scandal is being investigated by at least six countries, although Malaysia's attorney general cleared Najib of any wrongdoing.
Mahathir vowed to investigate the scandal if elected and to bring the funds back to Malaysia.
Asked on Thursday if Najib would be prosecuted, Mahathir said: "If anybody breaks the law, and that includes a journalist, they will be brought before the court."
Mahathir must now manage a fractious alliance of four parties and make way for jailed opposition leader Anwar Ibrahim to become the next prime minister, another former protege with whom he split acrimoniously before reuniting to topple Najib.
"I have to manage presidents of four different parties. It's going to be a headache," Mahathir told reporters.