VIETNAM'S leading foreign investment official says the country hopes to establish its first stock exchange by the end of 1994, allowing foreign investors to buy shares in state enterprises. Nguyen Mai, first vice-chairman of the State Committee for Co-operation and Investment, told the Vietnam Business Association in Hong Kong, the stock exchange would initially be ''small and primitive'' like Shanghai's before it developed into a full-fledged market. He said the Government had already selected seven state enterprises to be listed but the plan faced two major obstacles. ''The stock market is a new thing to Vietnamese and they do not want to invest in it, they'd rather put their money in the bank,'' Mr Mai said. ''The directors of the enterprises are also not willing to sell.'' Mr Mai said the Vietnamese Government has attempted to make the investment environment more attractive to foreigners by streamlining the approval process for new projects and simplifying the taxation system. The local economy has also stabilised, with inflation at just 4.8 per cent so far this year compared with 15.8 per cent in 1992, he said. Foreign investment in Vietnam was US$1.8 billion in the first seven months of the year compared with $2 billion for all of 1992 and $1.2 billion in 1991. Excluding investment in oil and gas exploration, Mr Mai said Ho Chi Minh City had attracted about 40 per cent of foreign investment while the capital Hanoi had received half. Mr Mai said a priority in Vietnam's economic development was improving infrastructure. The Government wanted to attract investment through build-operate-transfer schemes, he said. This would take different forms, ranging from projects completely financed by foreign investors who would then operate the project for 15 to 20 years, to joint ventures whose shares could eventually be listed. Mr Mai visited Hong Kong after spending a week in China where he met the Minister of Foreign Economic Relations and Trade and government officials from Shanghai and Shenzhen. He said a 200-person delegation from Shanghai would hold an exhibition and trade fair in Hanoi in November. American investors and corporations are anxiously awaiting to see what action President Bill Clinton takes on the United States trade embargo of Vietnam, a contentious issue with strong support for both its continuation and elimination. Under the terms of the Trading with the Enemy Act, which prohibits US firms and citizens from dealing with countries such as Vietnam, Cuba and North Korea, the president is required by Congress to submit a list of countries subject to the act each year by September 14 to maintain his authority to conduct embargoes against these countries. Although Mr Clinton will renew this authority, there has been little indication whether the embargo on Vietnam will be lifted.