KUALA LUMPUR/TOKYO -- It wasn't just pollsters who were wrong-footed by the surprising outcome to Malaysia's election. Business leaders were caught out, too.
In the runup to the election, Tony Fernandes, AirAsia's group chief executive and Malaysia's most famous businessman, threw his support behind the ruling party and then-Prime Minister Najib Razak with apparent gusto. He posed with Najib on an AirAsia airplane and had one of its planes painted in the blue color of Najib's coalition. He put out a video message emphasizing that Najib "puts the country first."
It seemed a safe bet, with polls showing Najib's party in the lead.
Four days after the result, however, Fernandes felt compelled to apologize in another video. He suggested that his endorsement was the result of hardball tactics from Najib's campaign.
"I came under intense pressure, day by day ... it was getting harder and harder to resist pressure from the prime minister's office," he said.
"I buckled," Fernandes said in the video, which he uploaded to Facebook. "It wasn't right. I will forever regret it."
Despite the mea culpa, Air Asia shares fell almost 13% at one point on the first day of trading after the election.
Other companies linked to Najib saw their shares fall after the result, including CIMB Group Holdings, Malaysia's second-largest bank. The group's chairman is Nazir Razak, Najib's younger brother.
These market reactions appeared to be temporary. But there are real signs that the election of Mahathir Mohamad will usher in a broader shift in Malaysian business and in the economy.
State-linked companies, which account for over a third of the top 100 listed on the country's stock exchange, will come into focus. Mahathir has entrusted the restructuring of these companies to Daim Zainuddin, who heads the Council of Eminent Persons.
Daim, a two-term finance minister under Mahathir's earlier leadership, has met with the country's top six institutional fund managers who hold controlling stakes in these companies to review state projects.
One of the major changes expected is the removal of politicians who sit on the boards of these companies in order to stem political interference in their management. Such measures are aimed at strengthening governance and accountability as the new government seeks to fulfill campaign promises to minimize corruption and waste.
The market could expect these financially strong funds to be given more of a free hand to invest and prop up the domestic stock exchange, in line with the government's hope for an increase in capitalization of the stock market.
As the government aims to abolish the country's goods and services tax, investors are focusing on companies that might benefit from higher private consumption. Consumer companies and banks, including Maybank and Public Bank, could get a boost, analysts said.
The policies pursued by the new government are aimed at creating jobs and boosting consumption, said Bernard Aw, an economist with IHS Markit.
Mahathir said he wanted to make sure that foreign direct investment in Malaysia will really create local jobs for Malaysian workers and companies, and not just benefit Chinese companies, Aw said.
But Aw does not believe Mahathir is seeking a break from China or putting his country's finances at risk. He expects there to be "a big change" but not "a radical change," and puts his faith in Mahathir's experience of leading the country for 22 years until 2003.
"Mahathir helped navigate Malaysia through two financial crises," he said.
While the Malaysian stock market sold off early on the first day of post-election trading, analysts now expect a reversal of net foreign inflows.
"Now that election overhang for Malaysia is now over, from a regional perspective, election worry among foreign funds should shift to Thailand and Indonesia," where elections are scheduled for this year and next, KAF-Seagroatt & Campbell Securities wrote in a note to investors on May 14.